AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

Exhibit 10.18

 

AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

Dated as of August 27, 2003

 

by and among

 

WASTE INDUSTRIES USA, INC.

AND ITS SUBSIDIARIES

(the “Borrowers”)

 

THE LENDING INSTITUTIONS PARTY HERETO

(the “Banks”)

 

and

 

FLEET NATIONAL BANK, as Administrative Agent

 

FLEET SECURITIES, INC.,

as Arranger

 

WACHOVIA BANK, N.A., as Syndication Agent

 

BRANCH BANKING AND TRUST COMPANY, as Documentation Agent

 

TABLE OF CONTENTS

 

 

 

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AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT

 

This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of August 27, 2003, by and among (a) WASTE INDUSTRIES USA, INC. , a North Carolina corporation having its principal place of business at 3301 Benson Drive, Suite 601, Raleigh, North Carolina 27609 (the “Parent” ), and each of the subsidiaries of the Parent (the “Subsidiaries” and together with the Parent, the “Borrowers” ), (b) FLEET NATIONAL BANK , a national banking association having a place of business at 100 Federal Street, Boston, Massachusetts 02110 (acting in its individual capacity, “Fleet” ), and the other lending institutions listed on Schedule 1 (collectively, the “Banks” ), (c) FLEET NATIONAL BANK, as Administrative Agent for the Banks (the “Administrative Agent” ), (d) WACHOVIA BANK, N.A., as Syndication Agent for the Banks (the “Syndication Agent” ) and (e) BRANCH BANKING AND TRUST COMPANY, as Documentation Agent for the Banks (the “Documentation Agent” ).

 

WHEREAS, the Borrowers, the Administrative Agent and certain lending institutions are parties to that certain Revolving Credit Agreement, dated as of November 9, 1999 (the “ Existing Credit Agreement ”), pursuant to which the banks under the Existing Credit Agreement have made loans and other extensions of credit to the Borrowers;

 

WHEREAS, the Banks are willing to amend and restate the Existing Credit Agreement, and the Banks are willing to make loans and other extensions of credit to the Borrowers on the terms and conditions set forth herein;

 

WHEREAS, Citizens Bank of Massachusetts (as successor to USTRUST) (the “ Retiring Bank ”), a bank under the Existing Credit Agreement, will not be Bank hereunder;

 

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged (these recitals being an integral part of this Credit Agreement), the Borrowers, the Administrative Agent and the Banks hereby agree that, as of the Closing Date (as defined below), the Existing Credit Agreement shall be amended and restated in its entirety and shall remain in full force and effect only as set forth herein:

 

1. DEFINITIONS AND RULES OF INTERPRETATION .

 

1.1. Definitions . The following terms shall have the meanings set forth in this §1 or elsewhere in the provisions of this Credit Agreement referred to below:

 

Accountants . An independent accounting firm of national standing acceptable to the Administrative Agent and the Banks.

 

Administrative Agent . As defined in the preamble hereto.

 

Administrative Agent’s Office . The Administrative Agent’s office located at 100 Federal Street, Boston, Massachusetts 02110, or such other location as the Administrative Agent may designate from time to time.

 

Administrative Agent’s Special Counsel . Bingham McCutchen LLP or such other counsel as may be approved by the Administrative Agent.

 

Affiliate . Any Person that would be considered to be an affiliate of any of the Borrowers under Rule 144(a) of the Rules and Regulations of the Securities and Exchange Commission, as in effect on the date hereof, if any of the Borrowers were issuing securities.

 

Applicable Commitment Rate . The applicable rate with respect to the Commitment Fee shall be as set forth in the Pricing Table.

 

Applicable Base Rate Margin . The Applicable Base Rate Margin on Base Rate Loans shall be as set forth in the Pricing Table.

 

Applicable Eurodollar Rate Margin . The Applicable Eurodollar Margin on Eurodollar Loans shall be as set forth in the Pricing Table.

 

Applicable L/C Margin . The Applicable L/C Margin on Letters of Credit shall be as set forth in the Pricing Table.

 

Applicable Laws . See §6.10.

 

Approved Fund . Any Fund that is administered or managed by (a) a Bank, (b) an Affiliate of a Bank or (c) an entity or an Affiliate of an entity that administers or manages a Bank.

 

Arranger . Fleet Securities, Inc.

 

Assignment and Acceptance . See §18.

 

Balance Sheet Date . December 31, 2002.

 

Bank Affiliate . With respect to any Bank, (a) an Affiliate of such Bank or (b) any Approved Fund.

 

Banks . As defined in the preamble hereto.

 

Base Rate . The higher of (a) the variable annual rate of interest so designated from time to time by Fleet as its “prime rate”, such rate being a reference rate and not necessarily representing the lowest or best rate being charged to any customer, and (b) one-half of one percent (1/2%) above the Federal Funds Effective Rate. For the purposes of this definition, “ Federal Funds Effective Rate ” shall mean for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next preceding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day that is a Business Day, the average of the quotations for such day on such transactions received by the Administrative Agent from three funds brokers of recognized standing selected by the Administrative Agent. Changes in the Base Rate resulting from any changes in Fleet’s “ prime rate ” shall take place immediately without notice or demand of any kind.

 

Base Rate Loans . Loans bearing interest calculated by reference to the Base Rate.

 

BBT . Branch Banking and Trust Company.

 

Borrowers . As defined in the preamble hereto.

 

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Business Day . Any day on which lending institutions in Boston, Massachusetts, are open for the transaction of banking business.

 

Capital Assets . Fixed assets, both tangible (such as land, buildings, fixtures, machinery and equipment) and intangible (such as patents, copyrights, trademarks, franchises and good will); provided that Capital Assets shall not include (a) any item customarily charged directly to expense or depreciated over a useful life of twelve (12) months or less in accordance with GAAP, or (b) any item obtained through an acquisition permitted by §7.4 hereof.

 

Capital Expenditures . Amounts paid or Indebtedness incurred by the Borrowers in connection with the purchase or lease of Capital Assets that would be required to be capitalized and shown on the balance sheet of such Person in accordance with generally accepted accounting principles.

 

Capitalized Leases . Leases under which any Borrower is the lessee or obligor, the discounted future rental payment obligations under which are required to be capitalized on the balance sheet of the lessee or obligor in accordance with generally accepted accounting principles.

 

CERCLA . See the definition of Release.

 

Certified . With respect to the financial statements of any Person, such statements as audited by a firm of independent auditors, whose report expresses the opinion without qualifications, that such financial statements present fairly the financial position of such Person.

 

CFO . See §6.4(b).

 

Closing Date . The date on which the conditions precedent set forth in §9 are satisfied.

 

Code . The Internal Revenue Code of 1986.

 

Collateral . All of the property, rights and interests of the Borrowers that are or are intended to be subject to the security interests created by the Security Documents.

 

Collateral Agent . Fleet acting in its role as collateral agent under the Security Documents for itself and the other Banks and the Noteholders, as set forth in the Intercreditor Agreement.

 

Commitment . With respect to each Bank, the amount determined by multiplying such Bank’s Commitment Percentage by the Total Commitment specified in §2.1 hereof, as the same may be reduced from time to time.

 

Commitment Fee . See §4.1(b).

 

Commitment Percentage . With respect to each Bank, the percentage set forth beside its name on Schedule 1 attached hereto (subject to adjustment upon any assignments pursuant to §18).

 

Compliance Certificate . See § 6.4(c).

 

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Conforming Amendment . The amendment to the Purchase Agreements to conform the financial covenants and negative covenants therein to the corresponding covenants hereof, in a form reasonably satisfactory to the Administrative Agent.

 

Consolidated or consolidated . With reference to any term defined herein, shall mean that term as applied to the accounts of the Borrowers, consolidated in accordance with generally accepted accounting principles.

 

Consolidated Earnings Before Interest and Taxes or EBIT . For any period, the Consolidated Net Income (or Deficit) of the Borrowers, plus (a) interest expense and (b) income taxes, determined in accordance with GAAP.

 

Consolidated Earnings Before Interest, Taxes and Amortization or EBITA . For any period (without duplication), EBIT plus amortization expense, to the extent that it was deducted in determining Consolidated Net Income (or Deficit), determined in accordance with GAAP.

 

For purposes of calculating the financial covenants set forth in §8, the Borrowers may include the EBITA for the prior twelve (12) months of companies acquired by the Borrowers during the respective reporting period (without duplication with respect to the adjustments set forth above) only if (A) the financial statements of such acquired Borrowers have been audited for the period sought to be included by an independent accounting firm satisfactory to the Administrative Agent, or (B) the Administrative Agent consents to such inclusion after being furnished with other acceptable financial statements. Such acquired EBITA may be further adjusted to add back non-recurring private company expenses which are discontinued upon acquisition (including, without limitation, owner’s compensation), as approved by the Administrative Agent. Simultaneously with the delivery of the financial statements referred to in (A) and (B) above, the CFO of the Parent shall deliver to the Administrative Agent a Compliance Certificate and appropriate documentation certifying the historical operating results, adjustments and balance sheet of the acquired company.

 

Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization or EBITDA . For any period (without duplication), EBITA plus depreciation expense, to the extent that it was deducted in determining Consolidated Net Income (or Deficit), determined in accordance with GAAP.

 

For purposes of calculating the financial covenants set forth in §8 (other than §8.4), the Borrowers may include the EBITDA for the prior twelve (12) months of companies acquired by the Borrowers during the respective reporting period (without duplication with respect to the adjustments set forth above) only if (A) the financial statements of such acquired Borrowers have been audited for the period sought to be included by an independent accounting firm satisfactory to the Administrative Agent, or (B) the Administrative Agent consents to such inclusion after being furnished with other acceptable financial statements. Such acquired EBITDA may be further adjusted to add back non-recurring private company expenses which are discontinued upon acquisition (including, without limitation, owner’s compensation), as approved by the Administrative Agent. Simultaneously with the delivery of the financial statements referred to in (A) and (B) above, the CFO of the Parent shall deliver to the Administrative Agent a Compliance Certificate and appropriate documentation certifying the historical operating results, adjustments and balance sheet of the acquired company.

 

Consolidated Net Income . The consolidated net income of the Borrowers after deduction of all expenses, taxes, and other proper charges, determined in accordance with GAAP.

 

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Consolidated Net Worth . The excess of Consolidated Total Assets over Consolidated Total Liabilities.

 

Consolidated Total Assets . All assets of the Borrowers determined on a consolidated basis in accordance with GAAP.

 

Consolidated Total Debt Service . For any period, the sum, without duplication, of (a) Consolidated Total Interest Expense for such period, plus (b) any and all scheduled repayments of principal during such period in respect of Indebtedness that becomes due and payable or that is to become due and payable during such period pursuant to any agreement or instrument to which any Borrower is a party (or, in the case of clause (iii), for which the Borrowers or any of their Subsidiaries is a guarantor) relating to (i) the borrowing of money or the obtaining of credit, including the issuance of notes or bonds, (ii) any Synthetic Leases or any Capitalized Leases, and (iii) Indebtedness of the type referred to above of another Person guaranteed by the Borrowers or any of their Subsidiaries.

 

Consolidated Total Interest Expense . For any period, the aggregate amount of interest required to be paid or accrued by the Borrowers during such period on all Indebtedness of the Borrowers outstanding during all or any part of such period, whether such interest was or is required to be reflected as an item of expense or capitalized, including payments consisting of interest in respect of any Capitalized Lease or any Synthetic Lease and including commitment fees, agency fees, facility fees, balance deficiency fees and similar fees or expenses in connection with the borrowing of money, but excluding therefrom the non-cash amortization of debt issuance costs.

 

Consolidated Total Liabilities . All liabilities of the Borrowers determined on a consolidated basis in accordance with GAAP.

 

Consulting Engineer . An environmental consulting firm reasonably acceptable to the Administrative Agent.

 

Credit Agreement . This Amended and Restated Revolving Credit Agreement, including the Schedules and Exhibits hereto.

 

Default . See §12.1.

 

Designated Intellectual Property . Those patents, patent applications, trademarks, trademark applications, trade names, copyrights, copyright applications, rights to sue and recover for past infringement of patents, trademarks and copyrights, computer programs, computer software, engineering drawings, service marks, customer lists, goodwill owned by Waste Industries of Mississippi, LLC or Waste Industries Property Co, LLC (each, an “IP Holder” and, collectively, the “IP Holders”), and all licenses, permits (to the full extent such permits are assignable by law, subject to regulatory approval if required, and pursuant to their terms), agreements of any kind or nature pursuant to which one or both of the IP Holders possesses, uses or has authority to possess or use property (whether tangible or intangible) of others, or by which others hold the right to possess, use or have authority to possess or use property (whether tangible or intangible) of one or both of the IP Holders, and all recorded data of any kind or nature, regardless of the medium of recording including, without limitation, all software, writings, plans, specifications and schematics of one or both of the IP Holders.

 

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Designated Intercompany Debentures . Subordinated intercompany debentures held by Waste Services of Memphis, LLC, issued by a Borrower in the form of Exhibit G hereto and which shall be pledged to the Collateral Agent.

 

Designated LLCs . Waste Industries of Mississippi, LLC; Waste Services of Memphis, LLC; WasteCo, LLC; and Waste Services of Tennessee, LLC, each a Delaware limited liability company, so long as such company is treated as a corporation or partnership for federal tax purposes.

 

Designated Property . Includes (a) the applicable Borrower’s ownership interests in the Designated LLCs; (b) annuity contracts; (c) Investments held principally as a passive vehicle for the production of income held by a Borrower, (d) the Designated Intercompany Debentures; (e) prior to its conversion into an LLC, the stock of S&S Enterprises, Inc.; (f) the cash and cash equivalents, overnight sweep investments (such as repurchase agreements), and intercompany notes, loans and accounts payable of the Borrowers; and (g) the Designated Intellectual Property.

 

Designated Property Notice Period . After the occurrence and continuation of a Default or an Event of Default, the period beginning three days after the receipt by the Parent of written notice from the Administrative Agent of its election to terminate the rights granted in Section 7.12 hereof, and ending upon receipt by the Parent of written notice that the Administrative Agent has elected to restore the rights granted in Section 7.12 hereof.

 

Disposal (or Disposed) . See the definition of Release.

 

Distribution . The declaration or payment of any dividend on or in respect of any shares of any class of capital stock, any partnership interests or any membership units of any Person, other than dividends or other distributions payable solely in shares of common stock, partnership interests or membership units of such Person, as the case may be; the purchase, redemption, or other retirement of any shares of any class of capital stock, partnership interests or membership units of such Person, directly or indirectly through a Subsidiary or otherwise; the return of equity capital by any Person to its shareholders, partners or members as such; or any other distribution on or in respect of any shares of any class of capital stock, partnership interests or membership units of such Person.

 

Documentation Agent . As defined in the preamble hereto.

 

Dollars or $ . Dollars in lawful currency of the United States of America.

 

Drawdown Date . The date on which any Loan is made or is to be made, and the date on which any Revolving Credit Loan is converted or continued in accordance with §2.5, or the date that any draft or other form of demand for payment is honored with respect to a Letter of Credit.

 

EBIT . See the definition of Consolidated Earnings Before Interest and Taxes.

 

EBITA . See the definition of Consolidated Earnings Before Interest, Taxes and Amortization.

 

EBITDA . See the definition of Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization.

 

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Eligible Assignee . Any of (a) a commercial bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having total assets in excess of $1,000,000,000; (b) a savings and loan association or savings bank organized under the laws of the United States, or any State thereof or the District of Columbia, and having a net worth of at least $100,000,000, calculated in accordance with generally accepted accounting principles; (c) an Eligible Foreign Bank; (d) the central bank of any country which is a member of the OECD; and (e) if, but only if, any Event of Default has occurred and is continuing, any other bank, insurance company, commercial finance company or other financial institution or other Person approved by the Administrative Agent, such approval not to be unreasonably withheld or delayed.

 

Eligible Foreign Bank . (a) Any commercial bank organized under the laws of any other country which is a member of the Organization for Economic Cooperation and Development (the “OECD”), or a political subdivision of any such country, provided that such bank is acting through a branch or agency located in the Cayman Islands, in the country in which it is organized or another country which is also a member of the OECD; or (b) the central bank of any country which is a member of the OECD.

 

Employee Benefit Plan . Any employee benefit plan within the meaning of §3(3) of ERISA maintained or contributed to by the Borrowers or any ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.

 

Environmental Laws . See §5.16(a).

 

EPA . See §5.16(b).

 

ERISA . The Employee Retirement Income Security Act of 1974.

 

ERISA Affiliate . Any Person which is treated as a single employer with any Borrower under §414 of the Code.

 

ERISA Reportable Event . A reportable event with respect to a Guaranteed Pension Plan within the meaning of §4043 of ERISA and the regulations promulgated thereunder.

 

Eurodollar Business Day . Any Business Day on which dealings in foreign currency and exchange are carried on among banks in London, England.

 

Eurodollar Interest Determination Date . For any Interest Period, the date two (2) Eurodollar Business Days prior to the first day of such interest period.

 

Eurodollar Loans . Loans bearing interest calculated by reference to the Eurodollar Rate.

 

Eurodollar Offered Rate . The rate per annum at which Dollar deposits are offered to the Administrative Agent by prime banks in whatever Eurodollar interbank market may be selected by the Administrative Agent, in its sole discretion, acting in good faith, at or about 11:00 a.m. local time in such interbank market, on the Eurodollar Interest Determination Date for a period equal to the period of such Interest Period in an amount substantially equal to the principal amount requested to be loaned or converted to a rate based on the Eurodollar Rate.

 

Eurodollar Rate . The rate per annum, rounded upwards to the nearest 1/16 of one percent (1%), determined by the Administrative Agent with respect to the Interest Period in accordance with the following formula:

 

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Eurodollar Rate = Eurodollar Offered Rate

1 - Reserve Rate

 

Event of Default . See §12.1.

 

Existing Credit Agreement . As defined in the recitals hereto.

 

FHA Transaction . The transactions whereby the Federal Housing Authority, the City of Norfolk and/or a certain other purchaser will purchase the operating facility located at 1371 Hanson Avenue in Norfolk, Virginia from the Parent and/or one of its Subsidiaries in exchange for consideration in the form of cash and notes, on terms and conditions satisfactory to the Administrative Agent.

 

Financial Affiliate . A Subsidiary of the bank holding company controlling any Bank, which Subsidiary is engaging in any of the activities permitted by §4(e) of the Bank Holding Company Act of 1956 (12 U.S.C. §1843).

 

Financial Letter of Credit . A Letter of Credit where the event which triggers payment is financial, such as the failure to pay money, and not performance-related, such as failure to ship a product or provide a service, as set forth in greater detail in the letter dated March 30,1995 from the Board of Governors of the Federal Reserve System or in any applicable directive or letter ruling of the Board of Governors of the Federal Reserve System issued subsequent thereto.

 

Fixed Charge Coverage Ratio . For any period, the ratio of (a) an amount equal to the result of (i) EBITDA for such period (excluding gains (or losses) from asset dispositions which occurred during such period), plus (ii) net cash proceeds from asset dispositions permitted by §7.4.2 for such period less (iii) Capital Expenditures for such period, less (iv) cash taxes paid during such period to (b) an amount equal to the sum of (i) Consolidated Total Debt Service for such period, plus (ii) cash dividends paid or payable during such period.

 

Fleet . As defined in the preamble hereto.

 

Foreign Subsidiary . Each Subsidiary of any Borrower (whether direct or indirect, existing on the date hereof or acquired or formed hereafter in accordance with the provisions hereof) which is incorporated under the laws of a jurisdiction other than a State or other jurisdiction of the United States of America.

 

Fuel Derivatives Obligations . See §7.1(m).

 

Fund . Any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

Funded Debt . Collectively, without duplication, whether classified as indebtedness, an Investment or otherwise on the Borrowers’ consolidated balance sheet, (a) all indebtedness for borrowed money or credit obtained or other similar monetary obligations, direct or indirect, (including any unpaid reimbursement obligations with respect to letters of credit, but excluding any contingent obligations with respect to letters of credit outstanding, performance or guarantee bonds, Swap Contracts or Fuel Derivatives Obligations), (b) all obligations evidenced by notes, bonds, debentures or other similar debt instruments, (c) all obligations, liabilities and indebtedness under Capitalized Leases which corresponds to principal, (d) guaranties of the

 

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Funded Debt of others referred to in clauses (a) through (c) above, and (e) the deferred purchase price of assets and companies (typically known as holdbacks) other than short-term trade credit incurred in the ordinary course of business.

 

generally accepted accounting principles or GAAP . When used in general, generally accepted accounting principles means (a) principles that are consistent with the principles promulgated or adopted by the Financial Accounting Standards Board and its predecessors, in effect for the fiscal year ended on the Balance Sheet Date, as shall be concurred in by independent certified public accountants of recognized standing whose report expresses an unqualified opinion (other than a qualification regarding changes in generally accepted accounting principles) as to financial statements in which such principles have been applied; and (b) when used with reference to the Borrowers, such principles shall include (to the extent consistent with such principles) the accounting practices reflected in the consolidated financial statements for the year ended on the Balance Sheet Date.

 

Guaranteed Pension Plan . Any employee pension benefit plan within the meaning of §3(2) of ERISA maintained or contributed to by the Borrowers or any ERISA Affiliate the benefits of which are guarantied on termination in full or in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer Plan.

 

Guaranty Agreement . Those guaranties of the Noteholders’ Debt by the Subsidiaries, in the form agreed to by the Administrative Agent.

 

Hazardous Substances . See §5.16(b).

 

Indebtedness . As to any Person and whether recourse is secured by or is otherwise available against all or only a portion of the assets of such Person and whether or not contingent, but without duplication:

 

(i) every obligation of such Person for money borrowed,

 

(ii) every obligation of such Person evidenced by bonds, debentures, notes or other similar instruments, including obligations incurred in connection with the acquisition of property, assets or businesses,

 

(iii) every reimbursement obligation of such Person with respect to letters of credit, bankers’ acceptances or similar facilities issued for the account of such Person,

 

(iv) every obligation of such Person issued or assumed as the deferred purchase price of property or services (including securities repurchase agreements but excluding trade accounts payable or accrued liabilities arising in the ordinary course of business which are not overdue or which are being contested in good faith),

 

(v) every obligation of such Person under any Capitalized Lease,

 

(vi) every obligation of such Person under any Synthetic Lease,

 

(vii) all sales by such Person of (A) accounts or general intangibles for money due or to become due, (B) chattel paper, instruments or documents creating or evidencing a right to payment of money or (C) other receivables (collectively “receivables”), whether pursuant to a purchase facility or otherwise, other than in

 

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connection with the disposition of the business operations of such Person relating thereto or a disposition of defaulted receivables for collection and not as a financing arrangement, and together with any obligation of such Person to pay any discount, interest, fees, indemnities, penalties, recourse, expenses or other amounts in connection therewith,

 

(viii) every obligation of such Person (an “equity related purchase obligation”) to purchase, redeem, retire or otherwise acquire for value any shares of capital stock of any class issued by such Person, any warrants, options or other rights to acquire any such shares, or any rights measured by the value of such shares, warrants, options or other rights,

 

(ix) every obligation of such Person under any forward contract, futures contract, swap, option or other financing agreement or arrangement (including, without limitation, caps, floors, collars and similar agreements), the value of which is dependent upon interest rates, currency exchange rates, commodities or other indices (a “derivative contract”),

 

(x) every obligation in respect of Indebtedness of any other entity (including any partnership in which such Person is a general partner) to the extent that such Person is liable therefor as a result of such Person’s ownership interest in or other relationship with such entity, except to the extent that the terms of such Indebtedness provide that such Person is not liable therefor and such terms are enforceable under applicable law,

 

(xi) every obligation, contingent or otherwise, of such Person guarantying, or having the economic effect of guarantying or otherwise acting as surety for, any obligation of a type described in any of clauses (i) through (x) (the “primary obligation”) of another Person (the “primary obligor”), in any manner, whether directly or indirectly, and including, without limitation, any obligation of such Person (A) to purchase or pay (or advance or supply funds for the purchase of) any security for the payment of such primary obligation, (B) to purchase property, securities or services for the purpose of assuring the payment of such primary obligation, or (C) to maintain working capital, equity capital or other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such primary obligation.

 

The “amount” or “principal amount” of any Indebtedness at any time of determination represented by (u) any Indebtedness, issued at a price that is less than the principal amount at maturity thereof, shall be the amount of the liability in respect thereof determined in accordance with generally accepted accounting principles, (v) any Capitalized Lease shall be the principal component of the aggregate of the rentals obligation under such Capitalized Lease payable over the term thereof that is not subject to termination by the lessee, (w) any sale of receivables shall be the amount of unrecovered capital or principal investment of the purchaser (other than the Borrowers) thereof, excluding amounts representative of yield or interest earned on such investment, (x) any synthetic lease shall be the stipulated loss value, termination value or other equivalent amount, (y) any derivative contract shall be the maximum amount of any termination or loss payment required to be paid by such Person if such derivative contract were, at the time of determination, to be terminated by reason of any event of default or early termination event thereunder, whether or not such event of default or early termination event has in fact occurred and (z) any equity related purchase obligation shall be the maximum fixed redemption or purchase price thereof inclusive of any accrued and unpaid dividends to be comprised in such redemption or purchase price.

 

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Ineligible Securities . Securities which may not be underwritten or dealt in by member banks of the Federal Reserve System under Section 16 of the Banking Act of 1933 (12 U.S.C. §24, Seventh), as amended.

 

Intercompany Subordination Agreement . The Intercompany Subordination Agreement, dated as of March 31, 2001, by and among the Parent, each of the Subsidiaries of the Parent and the Collateral Agent, as amended.

 

Intercreditor Agreement . The Intercreditor Agreement, dated as of November 9, 1999, between the Administrative Agent (acting on behalf of itself and the Banks) and the Noteholders, as amended.

 

Interest Period . With respect to each Eurodollar Loan:

 

(a) initially, the period commencing on the making of a Eurodollar Loan or the conversion from a Base Rate Loan into a Eurodollar Loan and ending one (1), two (2), three (3), or six (6) months thereafter, as the case may be and subject to the availability thereof, as the Borrowers may select; and

 

(b) thereafter, each subsequent Interest Period shall begin on the last day of the preceding Interest Period and end one (1), two (2), three (3), or six (6) months thereafter, as the case may be and subject to the availability thereof, as the Borrowers may select;

 

provided , however , that whenever a payment hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment shall extend to the next succeeding Business Day; provided that for any Interest Period for any Eurodollar Loan if such next succeeding Business Day falls in the next succeeding calendar month or after the Maturity Date, it shall be deemed to end on the immediately preceding Business Day.

 

Interim Balance Sheet Date . March 31, 2003.

 

International Standby Practices . With respect to any Financial Letter of Credit, the International Standby Practices (ISP98), International Chamber of Commerce Publication No. 590, or any successor code of standby letter of credit practices among banks adopted by the Issuing Bank in the ordinary course of its business as a standby letter of credit issuer and in effect at the time of issuance of such Letter of Credit.

 

Investments . All expenditures made and all liabilities incurred (contingently or otherwise) for the acquisition of stock or Indebtedness of, or for loans, advances, capital contributions or transfers of property to, or in respect of any guaranties (or other commitments as described under Indebtedness), or obligations of, any Person. In determining the aggregate amount of Investments outstanding at any particular time: (i) the amount of any Investment represented by a guaranty shall be taken at not less than the principal amount of the obligations guarantied and still outstanding; (ii) there shall be included as an Investment all interest accrued with respect to Indebtedness constituting an Investment unless and until such interest is paid; (iii) there shall be deducted in respect of each such Investment any amount received as a return of capital (but only by repurchase, redemption, retirement, repayment, liquidating dividend or liquidating distribution); (iv) there shall not be deducted in respect of any Investment any amounts received as earnings on such Investment, whether as dividends, interest or otherwise, except that accrued interest included as provided in the foregoing clause (ii) may be deducted

 

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when paid; and (v) there shall not be deducted from the aggregate amount of Investments any decrease in the value thereof.

 

Issuing Bank(s) . Fleet and/or the other Banks, as approved by the Administrative Agent and the Parent.

 

Letter of Credit Application . Letter of Credit Applications in such form as may be agreed upon by any Borrower and the applicable Issuing Bank from time to time which are entered into pursuant to §3 hereof, as amended, varied or supplemental from time to time.

 

Letter of Credit Fee . See §4.1(c).

 

Letter of Credit Participation . See §3.1(b).

 

Letters of Credit . Standby Letters of Credit issued or to be issued by the Issuing Banks under §3 hereof for the account of the Borrowers.

 

Loan and Letter of Credit Request . See §2.6.

 

Loan Documents . This Credit Agreement, the Notes, the Letter of Credit Applications, the Letters of Credit and the Security Documents.

 

Loans . Collectively, the Revolving Credit Loans and the Swing Line Loans.

 

Majority Banks . As of any date, the Banks holding at least sixty-six and two-thirds percent (66 2/3%) of the outstanding principal amount of the Revolving Credit Loans on such date; and if no such principal is outstanding, the Banks whose aggregate Commitments constitutes at least sixty-six and two-thirds percent (66 2/3%) of the Total Commitment.

 

Material Acquisition . See §7.4.1(a).

 

Material Adverse Change . With respect to any event or occurrence of whatever nature (including any adverse determination in any litigation, arbitration or governmental investigation or proceeding):

 

(a) a material adverse change in the business, properties, prospects, condition (financial or otherwise), assets, operations or income of the Borrowers, taken as a whole;

 

(b) an adverse change in the ability of the Borrowers to perform any of their respective Obligations under any of the Loan Documents to which they are a party; or

 

(c) any impairment of the validity, binding effect or enforceability of this Credit Agreement or any of the other Loan Documents, any impairment of the rights, remedies or benefits available to the Administrative Agent or any Bank under any Loan Document or any impairment of the attachment, perfection or priority of any Lien of the Collateral Agent under the Security Documents.

 

Maturity Date . February 27, 2007.

 

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Maximum Drawing Amount . The maximum aggregate amount that the beneficiaries may at any time draw under outstanding Letters of Credit, as such aggregate amount may be reduced from time to time pursuant to the terms of the Letters of Credit.

 

Maximum Rate . With respect to each Bank, the maximum lawful nonusurious rate of interest (if any) which under Applicable Law such Bank may charge the Borrowers on the Loans and other Obligations from time to time.

 

Membership Interest Pledge Agreements . Collectively, (i) those certain Amended and Restated Membership Interest Pledge Agreements, each dated as of March 31, 2001, among certain Borrowers and the Collateral Agent (on behalf of the Banks and the Noteholders), as amended, (ii) that certain Membership Interest Pledge Agreement, dated as of December 29, 2000, between Waste Services of Tennessee, LLC and the Collateral Agent (on behalf of the Banks and the Noteholders), as amended, (iii) that certain Membership Interest Pledge Agreement, dated as of December 29, 2000, between Waste Industries of Tennessee, LLC and the Collateral Agent (on behalf of the Banks and the Noteholders), as amended and (iv) any other membership interest pledge agreements to be entered into from time to time, on terms and conditions acceptable to the Administrative Agent.

 

Multiemployer Plan . Any multiemployer plan within the meaning of §3(37) of ERISA maintained or contributed to by the Borrowers or any ERISA Affiliate.

 

Notes . Collectively, the Revolving Credit Notes and the Swing Line Note.

 

Noteholders . Collectively, The Prudential Insurance Company of America, Pruco Life Insurance Company, Pruco Life Insurance Company of New Jersey, and U.S. Private Placement Fund and any other holder of the Noteholders’ Debt executing an acknowledgement to the Intercreditor Agreement.

 

Noteholders’ Debt . Indebtedness of the Parent to the Noteholders evidenced by each of (a) the Amended and Restated Note Purchase and Private Shelf Agreement, dated as of March 31, 2001, pursuant to which $25,000,000 in 7.28% Series A Senior Notes due April 3, 2006 have been issued by the Parent, with an additional $25,000,000 Private Shelf Facility available, as amended, and (b) the Amended and Restated Note Purchase and Private Shelf Agreement, dated as of March 31, 2001, pursuant to which $25,000,000 in 6.96% Series A Senior Notes due June 30, 2008 and $25,000,000 in 6.84% Series B Senior Notes due February 2, 2009 have been issued by the Parent, as amended.

 

Noteholders’ Documents . Collectively, (a) the Purchase Agreements, (b) the Guaranty Agreement, (c) any prior, concurrent or subsequent promissory notes executed in connection therewith, and (d) any and all guaranties and security interests, mortgages and other liens directly or indirectly guarantying or securing any of the Noteholders’ Debt (in each case subject to the Intercreditor Agreement), and any and all other documents or instruments evidencing the Noteholders’ Debt, as amended through the date hereof and as further amended from time to time in accordance with the terms hereof.

 

Obligations . All indebtedness, obligations and liabilities of the Borrowers to any of the Banks or the Administrative Agent, individually or collectively, existing on the date of this Credit Agreement or arising thereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under, or with respect to, any Swap Contract or

 

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Fuel Derivative Obligations between the Borrowers and any Bank, this Credit Agreement or any of the other Loan Documents or any of the Loans made or Reimbursement Obligations incurred or any of the Notes, Letters of Credit or other instruments at any time evidencing any thereof.

 

PBGC . The Pension Benefit Guaranty Corporation created by §4002 of ERISA and any successor entity or entities having similar responsibilities.

 

Perfection Certificate . The Perfection Certificate as defined in the Security Agreement.

 

Performance Letter of Credit . A Letter of Credit which is not a Financial Letter of Credit.

 

Permitted Liens . Liens, security interests and other encumbrances permitted by §7.2.

 

Permitted Transfer . See §7.12.

 

Person . Any individual, corporation, partnership, limited liability company, trust, unincorporated association, business, or other legal entity, and any government or any governmental agency or political subdivision thereof.

 

Pricing Ratio . As of the end of any fiscal quarter of the Borrowers, the ratio of (a) Funded Debt as at the end of such fiscal quarter to (b) EBITDA for the period of four (4) consecutive fiscal quarters ending on such date.

 

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Pricing Table:

 

 

Any change in the applicable margin shall become effective on the first day after receipt by the Banks of the financial statements delivered pursuant to §6.4(a) or (b) which indicate a change in the Pricing Ratio. Notwithstanding the foregoing, (a) for the Applicable Eurodollar Margin, Applicable Base Rate Margin, Applicable L/C Margin and Applicable Commitment Rate payable during the period commencing on the Closing Date through the date six months after the Closing Date, the applicable margin rate shall not be lower than Level 3 above, and (b) if at any time such financial statements are not delivered within the time periods specified in §6.4(a) or (b), the applicable margin shall be the highest rate set forth in the respective column of the Pricing Table, subject to adjustment upon actual receipt of such financial statements.

 

Purchase Agreements . The note purchase agreements referenced in the definition of Noteholders’ Debt above.

 

RCRA . See definition of Release.

 

Real Property . All real property, now or hereafter owned or leased (as lessee or sublessee) by any of the Borrowers.

 

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Reimbursement Obligation . The Borrowers’ obligation to reimburse the applicable Issuing Bank and the Banks on account of any drawing under any Letter of Credit as provided in §3.2.

 

Release . Shall have the meaning specified in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§9601 et seq. (“CERCLA”) and the term “Disposal” (or “Disposed”) shall have the meaning specified in the Resource Conservation and Recovery Act of 1976, 42 U.S.C. §§6901 et seq. (“RCRA”) and regulations promulgated thereunder; provided, that in the event either CERCLA or RCRA is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply as of the effective date of such amendment and provided further, to the extent that the laws of a state wherein the property lies establishes a meaning for “Release” or “Disposal” which is broader than specified in either CERCLA or RCRA, such broader meaning shall apply.

 

Replacement Bank . See §4.11.

 

Replacement Notice . See §4.11.

 

Reserve Rate . The rate, expressed as a decimal, at which the Banks would be required to maintain reserves under Regulation D of the Board of Governors of the Federal Reserve System (or any subsequent or similar regulation relating to such reserve requirements) against “Eurocurrency Liabilities” (as such term is defined in Regulation D), or against any other category of liabilities which might be incurred by the Banks to fund Loans bearing interest based on the Eurodollar Rate, if such liabilities were outstanding.

 

Retiring Bank . As defined in the recitals hereto.

 

Revolving Credit Loans . Revolving credit loans made or to be made by the Banks to the Borrowers pursuant to §2.

 

Revolving Credit Note Record . The grid attached to a Revolving Credit Note, or the continuation of such grid, or any other similar record, including computer records, maintained by any Bank with respect to any Revolving Credit Loan referred to in such Revolving Credit Note.

 

Revolving Credit Notes . See §2.3.

 

Sampson County Bonds . The Tax-Exempt Adjustable Mode Environmental Facilities Revenue Bonds (Sampson County Disposal, Inc. Project) Series 2000 in the aggregate principal amount of $33,700,000 (the “Series 2000 Bonds”) and the Tax-Exempt Adjustable Mode Environmental Facilities Revenue Bonds (Sampson County Disposal, LLC Project) Series 2003 in the aggregate principal amount of $9,500,000 (the “Series 2003 Bonds”), in each case issued by The Sampson County Industrial Facilities and Pollution Control Financing Authority and, in the case of the Series 2003 Bonds, issued on terms and conditions satisfactory to the Administrative Agent.

 

Secured Obligations . Obligations, as defined in the Security Agreement.

 

Security Agreement . The Amended and Restated Security Agreement, dated as of March 31, 2001, among the Borrowers and the Collateral Agent (on behalf of the Banks and the Noteholders), as amended.

 

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Security Documents . The Security Agreement, the Membership Interest Pledge Agreements, the Security Documents Amendment, the Intercompany Subordination Agreement and all other instruments and documents, including without limitation Uniform Commercial Code financing statements, required to be executed or delivered pursuant to any Security Document.

 

Security Documents Amendment . The Omnibus Amendment of Security Documents and Joinder, dated as of the date hereof, among the Borrowers and the Collateral Agent, and consented to by the Administrative Agent, the Banks and the Noteholders.

 

Senior Funded Debt . At any time of determination, the result of Funded Debt minus the aggregate principal amount of Subordinated Debt outstanding as of such date.

 

Series 2000 Bonds . See definition of Sampson County Bonds.

 

Series 2003 Bonds . See definition of Sampson County Bonds.

 

Settlement . The making or receiving of payments, in immediately available funds, by the Banks to or from the Administrative Agent in accordance with §2.7 hereof to the extent necessary to cause each such Bank’s actual share of the outstanding amount of the Swing Line Loans to be equal to such Bank’s Commitment Percentage of the outstanding amount of such Swing Line Loans, in any case when, prior to such action, the actual share is not so equal.

 

Settlement Amount . See §2.7(b).

 

Settlement Date . See §2.7(b).

 

Settling Bank . See §2.7(b)

 

Subordinated Debt . Unsecured Indebtedness of the Borrowers that is expressly subordinated and made junior to the payment and performance in full of the Obligations, and evidenced as such by a subordination agreement or by another written instrument containing subordination provisions in form and substance approved by the Administrative Agent in writing.

 

Subsidiary . Any corporation, association, trust, or other business entity of which the designated parent shall at any time own directly or indirectly through a Subsidiary or Subsidiaries at least a majority (by number of votes) of the outstanding Voting Stock.

 

Swap Contracts . Any agreement (including any master agreement and any agreement, whether or not in writing, relating to any single transaction) that is an interest rate swap agreement, basis swap, forward rate agreement, commodity swap, commodity option, equity or equity index swap or option, bond option, interest rate option, forward foreign exchange agreement, rate cap, collar or floor agreement, currency swap agreement, cross-currency rate swap agreement, swaption, currency option or other similar agreement (including any option to enter into any of the foregoing).

 

Swing Line Bank . BBT.

 

Swing Line Loan(s) . See §2.7(a).

 

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Swing Line Note . See §2.7(a).

 

Syndication Agent . As defined in the preamble hereto.

 

Synthetic Lease . Any lease treated as an operating lease under generally accepted accounting principles and as a loan or financing for U.S. income tax purposes.

 

Total Commitment . See §2.1.

 

Uniform Customs . With respect to any Letter of Credit, the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500 or any successor version thereto adopted by the Issuing Bank in the ordinary course of its business as a letter of credit issuer and in effect at the time of issuance of such Letter of Credit.

 

Wachovia . Wachovia Bank, N.A., a national banking association.

 

Wachovia Letters of Credit . Each of (i) the $34,969,367 letter of credit issued by Wachovia in connection with the Series 2000 Bonds, and (ii) the $9,804,000 letter of credit issued by Wachovia in connection with the Series 2003 Bonds.

 

1.2. Rules of Interpretation .

 

(a) A reference to any document or agreement shall include such document or agreement as amended, modified or supplemented from time to time in accordance with its terms and the terms of this Credit Agreement.

 

(b) The singular includes the plural and the plural includes the singular.

 

(c) A reference to any law includes any amendment or modification to such law.

 

(d) A reference to any Person includes its permitted successors and permitted assigns.

 

(e) Accounting terms not otherwise defined herein have the meanings assigned to them by generally accepted accounting principles applied on a consistent basis by the accounting entity to which they refer.

 

(f) The words “include”, “includes” and “including” are not limiting.

 

(g) All terms not specifically defined herein or by generally accepted accounting principles, which terms are defined in the Uniform Commercial Code as in effect in The Commonwealth of Massachusetts, have the meanings assigned to them therein, with the term “instrument” being that defined under Article 9 of the Uniform Commercial Code.

 

(h) Reference to a particular “§” refers to that section of this Credit Agreement unless otherwise indicated.

 

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(i) The words “herein”, “hereof”, “hereunder” and words of like import shall refer to this Credit Agreement as a whole and not to any particular section or subdivision of this Credit Agreement.

 

(j) Unless otherwise expressly indicated, in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including,” the words “to” and “until” each mean “to but excluding,” and the word “through” means “to and including.”

 

(k) This Credit Agreement and the other Loan Documents may use several different limitations, tests or measurements to regulate the same or similar matters. All such limitations, tests and measurements are, however, cumulative and are to be performed in accordance with the terms thereof.

 

(l) This Credit Agreement and the other Loan Documents are the result of negotiation among, and have been reviewed by counsel to, among others, the Administrative Agent and the Borrowers and are the product of discussions and negotiations among all parties. Accordingly, this Credit Agreement and the other Loan Documents are not intended to be construed against the Administrative Agent or any of the Banks merely on account of the Administrative Agent’s or any Bank’s involvement in the preparation of such documents.

 

2. THE REVOLVING CREDIT FACILITY .

 

2.1. Commitment to Lend . Subject to the terms and conditions set forth in this Credit Agreement, each of the Banks severally agrees to lend to the Borrowers and the Borrowers may borrow, repay, and reborrow from time to time from the Closing Date up to but not including the Maturity Date upon notice by the Borrowers to the Administrative Agent given in accordance with §2.6, such sums as are requested by the Borrowers up to a maximum aggregate amount outstanding (after giving effect to all amounts requested) at any one time equal to such Bank’s Commitment minus such Bank’s Commitment Percentage of the sum of the Maximum Drawing Amount and all unpaid Reimbursement Obligations, provided that the sum of the outstanding amount of the Revolving Credit Loans, Swing Line Loans, unpaid Reimbursement Obligations and the Maximum Drawing Amount (after giving effect to all amounts requested) shall not exceed a maximum aggregate amount outstanding of $175,000,000 at any time, as such amount may be reduced or increased pursuant to §2.2 hereof (the “Total Commitment”). The Revolving Credit Loans shall be made pro rata in accordance with each Bank’s Commitment Percentage. Each request for a Loan hereunder shall constitute a representation and warranty by the Borrowers that the conditions set forth in §9 and §10, as the case may be, have been satisfied on the date of such request.

 

2.2. Reduction and Increase of Total Commitment .

 

2.2.1. Reduction of Total Commitment .

 

(a) The Borrowers shall have the right at any time and from time to time upon three (3) Business Days prior written notice to the Administrative Agent to reduce by $5,000,000 or integral multiples of $1,000,000 in excess thereof or terminate entirely the Total Commitment, whereupon the Commitments of the Banks shall be reduced pro rata in accordance with their respective Commitment Percentages of the amount specified in such notice or, as the case may be, terminated. The Administrative Agent will notify the

 

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Banks promptly after receiving any notice of the Borrowers delivered pursuant to this §2.2.

 

(b) No reduction or termination of the Commitments once made may be revoked; the portion of the Commitments reduced or terminated may not be reinstated and amounts in respect of such reduced or terminated portion may not be reborrowed.

 

2.2.2. Increase of Total Commitment .

 

Unless a Default or Event of Default has occurred and is continuing, the Borrowers may request, in consultation with the Administrative Agent but without the requirement of consent from any Bank except as provided below in connection with any increase in such Bank’s Commitment, that the Total Commitment be increased to an amount not to exceed Two Hundred Million Dollars ($200,000,000) hereunder. Upon such request, the Total Commitment shall be increased to the requested amount not to exceed Two Hundred Million Dollars ($200,000,000) provided , however , that (i) no Bank’s Commitment hereunder shall be increased without such Bank’s prior written consent to such increase, (ii) in the event that a new Bank (the “Incoming Bank”) is included to provide the requested increase in the Total Commitment under this §2.2.2, such Incoming Bank must be reasonably acceptable to the Administrative Agent and the Borrowers, (iii) the Banks’ Commitment Percentages shall be correspondingly adjusted, as necessary, to reflect any increase in the Total Commitment and the Banks’ and any Incoming Bank’s adjusted participation therein and Schedule 1 shall be amended to reflect such adjustments and (iv) the Borrowers shall indemnify the Banks and the Administrative Agent for any costs or expenses incurred as a consequence of the reallocation of any Eurodollar Rate Loan to an Incoming Bank pursuant to the provisions of §4.8. The Banks, including any Incoming Bank, shall promptly make such adjustments among themselves, as instructed by the Administrative Agent, in order to insure that each Bank, including any Incoming Bank, has funded its Commitment Percentage (adjusted after giving effect to the transactions increasing the Total Commitment pursuant to this §2.2.2) of the outstanding amount of the Revolving Credit Loans and all unpaid Reimbursement Obligations.

 

2.3. The Revolving Credit Notes . The Revolving Credit Loans shall be evidenced by separate promissory notes of the Borrowers in substantially the form of Exhibit A hereto (each a “Revolving Credit Note”), dated as of the Closing Date or date of assignment and completed with appropriate insertions. One Revolving Credit Note shall be payable to the order of each Bank in a principal amount equal to such Bank’s Commitment or, if less, the outstanding amount of all Revolving Credit Loans made by such Bank, plus interest accrued thereon, as set forth below. The Borrowers irrevocably authorize each Bank in connection with the Drawdown Date of any Revolving Credit Loan or at the time of receipt of any payment of principal on such Bank’s Revolving Credit Note, an appropriate notation on such Bank’s Revolving Credit Note Record reflecting the making of such Revolving Credit Loan or (as the case may be) the receipt of such payment. The outstanding amount of the Revolving Credit Loans set forth on such Bank’s Revolving Credit Note Record shall be prima facie evidence of the principal amount thereof owing and unpaid to such Bank, but the failure to record, or any error in so recording, any such amount on such Bank’s Revolving Credit Note Record shall not limit or otherwise affect the obligations of the Borrowers hereunder or under any Revolving Credit Note to make payments of principal of or interest on any Revolving Credit Note when due.

 

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2.4. Interest on Revolving Credit Loans . The outstanding principal amount of the Revolving Credit Loans and Swing Line Loans shall bear interest at the rate per annum equal to (a) the Base Rate plus the Applicable Base Rate Margin, or (b) at the Borrowers’ option as provided herein, the Revolving Credit Loans may bear interest at the Eurodollar Rate plus the Applicable Eurodollar Margin. Interest shall be payable (x) quarterly in arrears on the first Business Day of each calendar quarter, with the first such payment commencing October 1, 2003, on Base Rate Loans, (y) on the last day of the applicable Interest Period, and if such Interest Period is longer than three (3) months, also on the last day of the third month following the commencement of such Interest Period, on Eurodollar Loans, and (z) on the Maturity Date.

 

2.5. Election of Eurodollar Rate; Notice of Election; Interest Periods; Minimum Amounts .

 

(a) At the Borrowers’ option, so long as no Default or Event of Default has occurred and is then continuing, the Borrowers may (i) elect to convert any Base Rate Loan or a portion thereof or any Swing Line Loan to a Eurodollar Loan, (ii) at the time of any Loan and Letter of Credit Request, specify that such requested Revolving Credit Loan shall be a Eurodollar Loan, or (iii) upon expiration of the applicable Interest Period, elect to maintain an existing Eurodollar Loan as such, provided that the Borrowers give notice to the Administrative Agent pursuant to §2.5(b) hereof. Upon determining any Eurodollar Rate, the Administrative Agent shall forthwith provide notice thereof to the Borrowers and the Banks, and each such notice to the Borrowers and the Banks shall be considered prima facie correct and binding, absent manifest error.

 

(b) Three (3) Eurodollar Business Days prior to the making of any Eurodollar Loan or the conversion of any Base Rate Loan to a Eurodollar Loan, or, in the case of an outstanding Eurodollar Loan, the expiration date of the applicable Interest Period, the Borrowers shall give telephonic notice (confirmed by telecopy on the same Eurodollar Business Day) to the Administrative Agent not later than 11:00 a.m. (Boston time) of its election pursuant to §2.5(a). Each such notice delivered to the Administrative Agent shall specify the aggregate principal amount of the Revolving Credit Loans to be borrowed or maintained as or converted to Eurodollar Loans or the aggregate principal amount of the Swing Line Loans to be converted to Revolving Credit Loans which are Eurodollar Loans and the requested duration of the Interest Period that will be applicable to such Eurodollar Loan, and shall be irrevocable and binding upon the Borrowers. If the Borrowers shall fail to give the Administrative Agent notice of their election hereunder together with all of the other information required by this §2.5(b) with respect to any Revolving Credit Loan, such Revolving Credit Loan shall be deemed a Base Rate Loan. In the event that the Borrowers fail to provide any such notice with respect to the continuation of any Eurodollar Loan as such, then such Eurodollar Loan shall be automatically converted to a Base Rate Loan at the end of the then expiring Interest Period relating thereto.

 

(c) Notwithstanding anything herein to the contrary, the Borrowers may not specify an Interest Period that would extend beyond the Maturity Date.

 

(d) All Eurodollar Loans shall be in a minimum amount of not less than $1,000,000 and in integral multiples of $500,000 above such amount. In no event shall the Borrowers have more than eight (8) different maturities of Eurodollar Loans outstanding at any time.

 

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(e) All Base Rate Loans (other than Swing Line Loans) shall be in a minimum amount of not less than $1,000,000 and in integral multiples of $500,000 above such amount.

 

2.6. Requests for Revolving Credit Loans . The Borrowers shall give to the Administrative Agent written notice in the form of Exhibit B hereto (or telephonic notice confirmed by telecopy on the same Business Day in the form of Exhibit B hereto) of each Revolving Credit Loan requested hereunder (a “Loan and Letter of Credit Request”) not later than (a) 11:00 a.m. (Boston time) one (1) Business Day prior to the proposed Drawdown Date of any Loan which is a Base Rate Loan, or (b) 1:00 p.m. (Boston time) three (3) Eurodollar Business Days prior to the proposed Drawdown Date of any Eurodollar Loan. Each such notice shall be given by the Borrowers and shall specify the principal amount of the Revolving Credit Loan requested, whether such Loan is a Base Rate Loan or a Eurodollar Loan, the Drawdown Date of such Loan and shall include a current Loan and Letter of Credit Request reflecting the Maximum Drawing Amount and the outstanding Loans. Each Loan and Letter of Credit Request shall be irrevocable and binding on the Borrowers and shall obligate the Borrowers to accept the Loan requested from the Banks on the proposed Drawdown Date. Each of the representations and warranties made by or on behalf of the Borrowers to the Banks or the Administrative Agent in this Credit Agreement or any other Loan Document shall be true and correct in all material respects when made and shall, for all purposes of this Credit Agreement, be deemed to be repeated on and as of the date of the submission of any Loan and Letter of Credit Request and on and as of the Drawdown Date of such Loan, or the date of issuance of such Letter of Credit (except to the extent of changes resulting from transactions contemplated or permitted by this Credit Agreement and the other Loan Documents and changes occurring in the ordinary course of business that singly or in the aggregate are not materially adverse, or to the extent that such representations and warranties expressly relate solely to an earlier date). The Administrative Agent shall notify each Bank of each Loan and Letter of Credit received by the Administrative Agent hereunder within one (1) Business Day of receipt and no later than 11:00 a.m. (Boston time) on the Drawdown Date of any Base Rate Loan, and provide, upon request by any Bank, a monthly summary with respect to Letters of Credit issued hereunder.

 

2.6.1. Funds for Revolving Credit Loans

 

(a) Not later than 1:00 p.m. (Boston time) on the proposed Drawdown Date of any Revolving Credit Loan, each of the Banks will make available to the Administrative Agent, at the Administrative Agent’s Office, in immediately available funds, the amount of such Bank’s Commitment Percentage of the amount of the requested Revolving Credit Loan. Upon receipt from each Bank of such amount, and upon receipt of the documents required by §§9 and 10 and the satisfaction of the other conditions set forth therein, to the extent applicable, the Administrative Agent will make available to the Borrowers in immediately available funds the aggregate amount of such Revolving Credit Loan made available to the Administrative Agent by the Banks. The failure or refusal of any Bank to make available to the Administrative Agent at the aforesaid time and place on any Drawdown Date the amount of its Commitment Percentage of the requested Revolving Credit Loan shall not relieve any other Bank from its several obligation hereunder to make available to the Administrative Agent the amount of such other Bank’s Commitment Percentage of any requested Revolving Credit Loan.

 

(b) The Administrative Agent may, unless notified to the contrary by any Bank prior to a Drawdown Date, assume that such Bank has made available to the Administrative Agent on such Drawdown Date of which such Bank has received the

 

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notice required hereunder, the amount of such Bank’s Commitment Percentage of the Revolving Credit Loans to be made on such Drawdown Date, and the Administrative Agent may (but shall not be required to), in reliance upon such assumption, make available to the Borrowers a corresponding amount. If any Bank makes available to the Administrative Agent such amount on a date after such Drawdown Date, such Bank shall pay to the Administrative Agent on demand an amount equal to the product of (i) the average computed for the period referred to in clause (iii) below, of the weighted average interest rate paid by the Administrative Agent for federal funds acquired by the Administrative Agent during each day included in such period, times (ii) the amount of such Bank’s Commitment Percentage of such Revolving Credit Loans, times (iii) a fraction, the numerator of which is the number of days that elapse from and including such Drawdown Date to the date on which the amount of such Bank’s Commitment Percentage of such Revolving Credit Loans shall become immediately available to the Administrative Agent, and the denominator of which is 365. A statement of the Administrative Agent submitted to such Bank with respect to any amounts owing under this paragraph shall be prima facie evidence, absent manifest error, of the amount due and owing to the Administrative Agent by such Bank. If the amount of such Bank’s Commitment Percentage of such Revolving Credit Loans is not made available to the Administrative Agent by such Bank within three (3) Business Days following such Drawdown Date, the Administrative Agent shall be entitled to recover such amount from the Borrowers on demand, with interest thereon at the rate per annum applicable to the Revolving Credit Loans made on such Drawdown Date.

 

2.7. Swing Line Loans ; Settlements .

 

(a) Solely for ease of administration of the Revolving Credit Loans, the Swing Line Bank may, upon receipt of a Loan and Letter of Credit Request no later than 1:00 p.m. (Boston time) on the proposed date of funding, but shall not be required to, fund Base Rate Loans made in accordance with the provisions of this Credit Agreement (“Swing Line Loans”), bearing interest as set forth in §2.4. The Swing Line Bank may, in its sole discretion and without conferring with the Banks, make Swing Line Loans to the appropriate Borrowers by entry of credits to such Borrowers’ operating account(s) with the Swing Line Bank to cover checks which the applicable Borrowers have drawn or made against such account and shall notify the Administrative Agent of any overdrafts being advanced as Swing Line Loans. The Borrowers hereby request and authorize the Swing Line Bank to make from time to time such Swing Line Loans by means of appropriate entries of such credits sufficient to cover checks then presented. The Borrowers acknowledge and agree that the making of such Swing Line Loans shall be subject in all respects to the provisions of this Credit Agreement as if they were Swing Line Loans covered by a Loan and Letter of Credit Request, including, without limitation, the limitations set forth in §2.1 and the requirements that the applicable provisions of §9 (in the case of Swing Line Loans made on the Closing Date) and §10 be satisfied. All actions taken by the Swing Line Bank pursuant to the provisions of this §2.8(a) shall be conclusive and binding on the Borrowers absent manifest error or such Swing Line Bank’s gross negligence or willful misconduct. The Swing Line Loans shall be evidenced by a note in substantially the form of Exhibit C hereto (the “Swing Line Note”), provided that the outstanding amount of Swing Line Loans advanced by the Swing Line Bank hereunder shall not exceed $10,000,000 at any time. Each Bank shall remain severally and unconditionally liable to fund its pro rata share (based upon each Bank’s Commitment Percentage) of such Swing Line Loans on each Settlement Date and, in the event the Swing Line Bank chooses not to fund all Base Rate Loans requested on

 

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any date, to fund its Commitment Percentage of the Base Rate Loans requested, subject to satisfaction of the provisions hereof relating to the making of Base Rate Loans. Prior to each Settlement, all payments or repayments of the principal of, and interest on, Swing Line Loans shall be credited to the account of the Swing Line Bank. The Borrowers shall have the right, at their election, to prepay the outstanding amount of the Swing Line Loans, as a whole or in part, at any time without penalty or premium.

 

(b) The Banks shall effect Settlements on (i) the Business Day immediately following any day which the Swing Line Bank gives written notice to the Administrative Agent to effect a Settlement, (ii) the Business Day immediately following the Swing Line Bank’s or the Administrative Agent’s becoming aware of the existence of any Default or Event of Default, (iii) the Maturity Date, (iii) any date on which the Borrowers wish to convert a Swing Line Loan into a Revolving Credit Loan, and (iv) in any event, on the first Business Day of each calendar quarter for the immediately preceding calendar quarter (each such date, a “Settlement Date”). One (1) Business Day prior to each such Settlement Date, the Administrative Agent shall give notice by facsimile or telecopier to the Banks of (A) the respective outstanding amount of Revolving Credit Loans made by each Bank as at the close of business on the prior day, and (B) the amount that any Bank, as applicable (a “Settling Bank”), shall pay to effect a Settlement (a “Settlement Amount”). A statement of the Administrative Agent submitted to the Banks with respect to any amounts owing hereunder shall be prima facie evidence of the amount due and owing. Each Settling Bank shall, not later than 1:00 p.m. (Boston time) on each Settlement Date, effect a wire transfer of immediately available funds to the Administrative Agent, for the benefit of the Swing Line Bank, at the Administrative Agent’s Office in the amount of such Bank’s Settlement Amount. All funds advanced by any Bank as a Settling Bank pursuant to this §2.7 shall for all purposes be treated as a Base Rate Loan to the Borrowers.

 

(c) Subject to the Settling Bank’s receipt of the notice required pursuant to §2.7(b), the Administrative Agent may (unless notified to the contrary by any Settling Bank by 12:00 noon (Boston time) one (1) Business Day prior to the Settlement Date) assume that each Settling Bank has made available (or will make available by the time specified in §2.7(b)) to the Administrative Agent its Settlement Amount, and the Administrative Agent may (but shall not be required to), in reliance upon such assumption, effect Settlements. If the Settlement Amount of such Settling Bank is made available to the Administrative Agent on a date after such Settlement Date, such Settling Bank shall pay the Administrative Agent, for the benefit of the Swing Line Bank, on demand an amount equal to the product of (i) the average, computed for the period referred to in clause (iii) below, of the weighted average annual interest rate paid by the Administrative Agent for federal funds acquired by the Administrative Agent during each day included in such period times (ii) such Settlement Amount times (iii) a fraction, the numerator of which is the number of days that elapse from and including such Settlement Date to but not including the date on which such Settlement Amount shall become immediately available to the Administrative Agent, and the denominator of which is 365. Upon payment of such amount such Settling Bank shall be deemed to have delivered its Settlement Amount on the Settlement Date and shall become entitled to interest payable by the Borrowers with respect to such Settling Bank’s Settlement Amount as if such share were delivered on the Settlement Date. If such Settlement Amount is not in fact made available to the Administrative Agent by such Settling Bank within three (3) Business Days of such Settlement Date, the Administrative Agent shall

 

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be entitled to recover such amount from the Borrowers, with interest thereon at the Base Rate.

 

(d) After any Settlement Date, any payment by the Borrowers of Swing Line Loans hereunder shall be allocated pro rata among the Banks, in accordance with such Bank’s Commitment Percentage.

 

(e) If, prior to the making of a Revolving Credit Loan pursuant to paragraph (b) of this §2.7, a Default or Event of Default has occurred and is continuing, each Bank will, on the date such Revolving Credit Loan was to have been made, purchase an undivided participating interest in the outstanding Swing Line Loans in an amount equal to its Commitment Percentage of such Swing Line Loans. Each Bank will immediately transfer to the Administrative Agent, for the benefit of the Swing Line Bank, in immediately available funds, the amount of its participation and upon receipt thereof the Administrative Agent will deliver to such Bank a Swing Line participation certificate dated the date of receipt of such funds and in such amount.

 

(f) Whenever, at any time after the Administrative Agent has received from any Bank such Bank’s participating interest in the Swing Line Loans pursuant to clause (e) above, the Administrative Agent receives any payment on account thereof, the Administrative Agent will distribute to such Bank its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Bank’s participating interest was outstanding and funded) in like funds as received; provided , however , that in the event that such payment received by the Administrative Agent is required to be returned, such Bank will return to the Administrative Agent any portion thereof previously distributed by the Administrative Agent to it in like funds as such payment is required to be returned by the Administrative Agent.

 

(g) Each Bank’s obligation to purchase participating interests pursuant to clause (e) above shall be absolute and unconditional and shall not be affected by any circumstance, including, without limitation, (i) any set-off, counterclaim, recoupment, defense or other right which such Bank may have against the Administrative Agent, the Borrowers or any other Person for any reason whatsoever; (ii) the occurrence or continuance of a Default or Event of Default; (iii) any adverse change in the condition (financial or otherwise) of the Borrowers or any other Person; (iv) any breach of this Credit Agreement by the Borrowers or any other Bank or the Administrative Agent; or (v) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing.

 

2.8. Maturity of the Revolving Credit Loans . The Revolving Credit Loans and Swing Line Loans shall be due and payable on the Maturity Date. The Borrowers jointly and severally promise to pay on the Maturity Date all Revolving Credit Loans and Swing Line Loans outstanding on such date, together with any and all accrued and unpaid interest thereon.

 

2.9. Mandatory Repayments of the Revolving Credit Loans and Swing Line Loans and Reimbursement Obligations. If at any time the sum of the outstanding amount of the Revolving Credit Loans plus the Swing Line Loans plus the Maximum Drawing Amount plus unpaid Reimbursement Obligations exceeds the Total Commitment, whether by reduction of the Total Commitment or otherwise, then the Borrowers shall immediately pay the amount of such excess to the Administrative Agent for application first, to any Swing Line Loans, second, to unpaid

 

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Reimbursement Obligations, third, to the Revolving Credit Loans, or if no Revolving Credit Loans shall be outstanding, to be held by the Administrative Agent as collateral security for the Reimbursement Obligations, provided , however , that if the amount of cash collateral held by the Administrative Agent pursuant to this §2.9 exceeds the amount of the Reimbursement Obligations, the Administrative Agent shall return such excess to the Borrowers. In addition, the Borrower shall, within three (3) Business Days of receipt thereof, repay the outstanding Revolving Credit Loans in an amount equal to 100% of the net cash proceeds received from the issuance of the Sampson County Bonds.

 

2.10. Optional Prepayments of Revolving Credit Loans . The Borrowers shall have the right, at their election, to prepay the outstanding amount of the Revolving Credit Loans, as a whole or in part, at any time without penalty or premium (other than the obligation to reimburse the Banks and the Administrative Agent pursuant to §4.8 hereof). The Borrowers shall give written notice to the Administrative Agent (or telephonic notice confirmed in writing) no later than (a) 1:00 p.m. (Boston time) on the Business Day of the proposed prepayment of any Base Rate Loan, (b) 1:00 p.m. (Boston time) three (3) Eurodollar Business Days prior to the proposed prepayment of any Eurodollar Loan, in each case specifying the proposed date of prepayment of the Revolving Credit Loans and the principal amount to be paid. Each such partial repayment of the Revolving Credit Loans shall be in the amount of $1,000,000 or an integral multiple of $500,000 in excess thereof, and shall be accompanied by the payment of accrued interest on the principal prepaid to the date of prepayment and shall be applied, in the absence of instruction by the Borrowers, first to the principal of Base Rate Loans and then to the principal of Eurodollar Loans. Each partial prepayment of Revolving Credit Loans shall be allocated among the Banks, in proportion, as nearly as practicable, to the respective unpaid principal amount of each Bank’s Revolving Credit Loans, with adjustments to the extent practicable to equalize any prior repayments not exactly in proportion.

 

3. LETTERS OF CREDIT .

 

3.1. Letter of Credit Commitments .

 

(a) Subject to the terms and conditions hereof and the execution and receipt of a Loan and Letter of Credit Request by any Issuing Bank, with a copy to the Administrative Agent, reflecting the Maximum Drawing Amount of all Letters of Credit (including the requested Letter of Credit) and a Letter of Credit Application, such Issuing Bank on behalf of the Banks and in reliance upon the agreement of the Banks set forth in §3.1(b) and upon the representations and warranties of the Borrowers contained herein, agrees to issue standby Letters of Credit in such form as may be requested from time to time by the Borrowers and agreed to by such Issuing Bank; provided , however , that, after giving effect to such request, the Maximum Drawing Amount of all Letters of Credit issued under this Credit Agreement shall not exceed the lesser of (i) $80,000,000 or (ii) the Total Commitment minus the aggregate outstanding amount of the Revolving Credit Loans and Swing Line Loans. No Letter of Credit shall have an expiration date later than thirty (30) days prior to the Maturity Date and no Letter of Credit shall have an expiration date later than one (1) year after the date of issuance of such Letter of Credit (which may incorporate automatic renewals for periods of up to one (1) year in accordance with subsection (e) hereof). Each Letter of Credit so issued, extended or renewed shall (i) provide for the payment of sight drafts for honor thereunder when presented in accordance with the terms thereof and when accompanied by the documents described therein and (ii) be subject to the Uniform Customs or, in the case of a Financial Letter of Credit, either the Uniform Customs or the International Standby

 

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Practices. Notwithstanding the foregoing, the Issuing Banks shall have no obligation to issue any Letter of Credit to support or secure any Indebtedness of any Borrower to the extent that such Indebtedness was incurred prior to the proposed issuance date of such Letter of Credit, unless in any such case such Borrower demonstrates to the satisfaction of such Issuing Bank that (x) such prior incurred Indebtedness was then fully secured by a prior perfected and unavoidable security interest in collateral provided by such Borrower to the proposed beneficiary of such Letter of Credit or (y) such prior incurred Indebtedness was then secured or supported by a letter of credit issued for the account of such Borrower and the reimbursement obligation with respect to such letter of credit was fully secured by a prior perfected and unavoidable security interest in collateral provided to the issuer of such letter of credit by such Borrower.

 

(b) Each Bank severally agrees that it shall be absolutely liable, without regard to the occurrence of any Default or Event of Default or any other condition precedent whatsoever, to the extent of such Bank’s Commitment Percentage thereof, to reimburse the applicable Issuing Bank on demand for the amount of each draft paid by such Issuing Bank under each Letter of Credit to the extent that such amount is not reimbursed by the Borrowers pursuant to §3.2 (such agreement for a Bank being called herein the “Letter of Credit Participation” of such Bank).

 

(c) Each such payment made by a Bank shall be treated as the purchase by such Bank of a participating interest in the Borrowers’ Reimbursement Obligation under §3.2 in an amount equal to such payment. Each Bank shall share in accordance with its participating interest in any interest which accrues pursuant to §3.2.

 

(d) All “Letters of Credit” (as defined in the Existing Credit Agreement) outstanding under the Existing Credit Agreement on the Closing Date shall become Letters of Credit hereunder. For the avoidance of doubt, the Wachovia Letters of Credit shall constitute a Letter of Credit issued under the Credit Agreement and Wachovia shall constitute an Issuing Bank solely for the Wachovia Letters of Credit.

 

(e) If any Borrower so requests in an application for a Letter of Credit, the applicable Issuing Bank may, in its sole and absolute discretion, agree to issue a Letter of Credit that has automatic renewal provisions (each, an “ Auto-Renewal Letter of Credit ”); provided that any such Auto-Renewal Letter of Credit must permit the Issuing Bank to prevent any such renewal at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than thirty (30) days prior to the renewal date (the “ Nonrenewal Notice Date ”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Once an Auto-Renewal Letter of Credit has been issued, the Banks shall be deemed to have authorized (but may not require) the applicable Issuing Bank to permit the renewal of such Letter of Credit at any time to an expiry date not later than thirty (30) days prior to the Revolving Credit Maturity Date; provided , however, that the applicable Issuing Bank shall not permit any such renewal if (A) such Issuing Bank has determined that it would have no obligation at such time to issue such Letter of Credit in its renewed form under the terms hereof, or (B) it has received notice (which may be by telephone or in writing) on or before the day that is two (2) Business Days before the Nonrenewal Notice Date (1) from the Administrative Agent that the Majority Banks have elected not to permit such renewal or (2) from the Administrative Agent, any Bank or the Borrowers that one or more of the applicable conditions specified in §10 is not then satisfied.

 

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(f) In the event of any conflict or inconsistency between the terms of any Letter of Credit Application and this Agreement, the terms of this Agreement shall control.

 

3.2. Reimbursement Obligation of the Borrowers . In order to induce the Issuing Banks to issue, extend and renew the Letters of Credit and the Banks to participate therein, the Borrowers hereby agree to reimburse or pay to the applicable Issuing Bank, for the account of such Issuing Bank or (as the case may be) the Banks, with respect to each Letter of Credit issued, extended or renewed by such Issuing Bank hereunder,

 

(a) on each date that any draft presented under such Letter of Credit is honored by such Issuing Bank, or such Issuing Bank otherwise makes a payment with respect thereto, (i) the amount paid by such Issuing Bank under or with respect to such Letter of Credit, and (ii) the amount of any taxes, fees, charges or other costs and expenses whatsoever incurred by such Issuing Bank or any Bank in connection with any payment made by such Issuing Bank or any Bank under, or with respect to, such Letter of Credit, provided , however , that if the Borrowers do not reimburse such Issuing Bank on the date such Issuing Bank makes payment with respect to such Letter of Credit, such amount shall, provided that an Event of Default specified in §§12.1(g) or 12.1(h) has not occurred, become automatically a Loan which is a Base Rate Loan;

 

(b) upon the reduction (but not termination) of the Total Commitment to an amount less than the Maximum Drawing Amount, an amount equal to such difference, which amount shall be held by the Administrative Agent for the benefit of the Banks and the Administrative Agent as cash collateral for all Reimbursement Obligations of the Borrowers; and

 

(c) upon the Maturity Date, the termination of the Total Commitment or the acceleration of the Reimbursement Obligations with respect to all Letters of Credit in accordance with §12, an amount equal to the then Maximum Drawing Amount of all Letters of Credit and any unpaid Reimbursement Obligations, which amount shall be held by the Administrative Agent for the benefit of the Banks and the Administrative Agent as cash collateral for all Reimbursement Obligations.

 

Each such payment shall be made to the Administrative Agent, for the benefit of the Issuing Bank, at the Administrative Agent’s Office in immediately available funds. Interest on any and all amounts remaining unpaid by the Borrowers under this §3.2 at any time from the date such amounts become due and payable (whether as stated in this §3.2, by acceleration or otherwise) until payment in full (whether before or after judgment) shall be payable to the Issuing Bank on demand at the rate specified in §4.6 for overdue amounts.

 

3.3. Letter of Credit Payments . If any draft shall be presented or other demand for payment shall be made under any Letter of Credit, the applicable Issuing Bank shall notify the Borrowers of the date and amount of the draft presented or demand for payment and of the date and time when it expects to pay such draft or honor such demand for payment. On the date that such draft is paid or other payment is made by such Issuing Bank, such Issuing Bank shall promptly notify the Banks of the amount of any unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston time) on the Business Day next following the receipt of such notice, each Bank shall make available to the Administrative Agent, for the benefit of such Issuing Bank, at the Administrative Agent’s Office, in immediately available funds, such Bank’s Commitment Percentage of such unpaid Reimbursement Obligation, together with an amount equal to the

 

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product of (i) the average, computed for the period referred to in clause (iii) below, of the weighted average interest rate paid by such Issuing Bank for federal funds acquired by such Issuing Bank during each day included in such period, times (ii) the amount equal to such Bank’s Commitment Percentage of such unpaid Reimbursement Obligation, times (iii) a fraction, the numerator of which is the number of days that elapse from and including the date such Issuing Bank paid the draft presented for honor or otherwise made payment to the date on which such Bank’s Commitment Percentage of such unpaid Reimbursement Obligation shall become immediately available to such Issuing Bank, and the denominator of which is 360. The responsibility of each Issuing Bank to the Borrowers and the Banks shall be only to determine that the documents (including each draft) delivered under each Letter of Credit in connection with such presentment shall be in conformity in all material respects with such Letter of Credit.

 

3.4. Obligations Absolute . The Borrowers’ respective obligations under this §3 shall be absolute and unconditional under any and all circumstances and irrespective of the occurrence of any Default or Event of Default or any condition precedent whatsoever or any setoff, counterclaim or defense to payment which the Borrowers may have or have had against any Issuing Bank, any Bank or any beneficiary of a Letter of Credit. The Borrowers further agree with the Issuing Banks and the Banks that the Issuing Banks and the Banks shall not be responsible for, and the Borrowers’ Reimbursement Obligations under §3.2 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even if such documents should in fact prove to be in any or all respects invalid, fraudulent or forged, or any dispute between or among the Borrowers, the beneficiary of any Letter of Credit or any financing institution or other party to which any Letter of Credit may be transferred or any claims or defenses whatsoever of the Borrowers against the beneficiary of any Letter of Credit or any such transferee. The Issuing Banks and the Banks shall not be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit. The Borrowers agree that any action taken or omitted by the Issuing Banks or any Bank under or in connection with each Letter of Credit and the related drafts and documents, if done in good faith, shall be binding upon the Borrowers and shall not result in any liability on the part of the Issuing Banks or any Bank to the Borrowers.

 

3.5. Reliance by Issuer . To the extent not inconsistent with §3.4, each Issuing Bank shall be entitled to rely, and shall be fully protected in relying upon, any Letter of Credit, draft, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel, independent accountants and other experts selected by such Issuing Bank. Each Issuing Bank shall be fully justified in failing or refusing to take any action under this Credit Agreement unless it shall first have received such advice or concurrence of the Majority Banks as it reasonably deems appropriate or it shall first be indemnified to its reasonable satisfaction by the Banks against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. Each Issuing Bank shall in all cases be fully protected in acting, or in refraining from acting, under this Credit Agreement in accordance with a request of the Majority Banks, and such request and any action taken or failure to act pursuant thereto shall be binding upon the Banks and all future holders of the Revolving Credit Notes or of a Letter of Credit Participation.

 

3.6. Notice Regarding Letters of Credit . One (1) Business Day prior to the issuance of any Letter of Credit or amendments, extensions or terminations thereof, the applicable Issuing Bank shall notify the Administrative Agent of the terms of such Letter of Credit, amendment,

 

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extension or termination. On the day of any drawing under any Letter of Credit, such Issuing Bank shall notify the Administrative Agent of such drawing under any Letter of Credit.

 

4. CERTAIN GENERAL PROVISIONS .

 

4.1. Fees .

 

(a) Administrative Agent’s Fee . The Borrowers jointly and severally agree to pay to the Administrative Agent annually in advance, for the Administrative Agent’s own account, a fee (the “Administrative Agent’s Fee”) on the dates and in the amounts mutually determined by the Administrative Agent and the Borrowers.

 

(b) Commitment Fee . The Borrowers agree to pay to the Administrative Agent, for the pro rata account of the Banks, a fee (the “Commitment Fee”) equal to the Applicable Commitment Rate multiplied by the amount of the average daily unused portion of the Total Commitment during each calendar quarter or portion thereof from the Closing Date to the Maturity Date (or to the date of termination in full of the Total Commitment, if earlier). The Commitment Fee shall be payable quarterly in arrears on the first Business Day of each calendar quarter for the immediately preceding calendar quarter with the first such payment commencing on October 1, 2003, and with a final payment on the Maturity Date.

 

(c) Letter of Credit Fees . The Borrowers shall pay in advance on the date of issuance of each Letter of Credit a fronting fee to the applicable Issuing Bank equal to one eighth of one percent (1/8%) per annum (the “Fronting Fee”) on the Maximum Drawing Amount of each Letter of Credit, plus a fee (the “Letter of Credit Fee”) equal to (a) the Applicable Eurodollar Margin multiplied by the Maximum Drawing Amount of each outstanding Financial Letter of Credit, or (b) the Applicable Eurodollar Margin times 0.50%, multiplied by the Maximum Drawing Amount of all Performance Letters of Credit. Such Letter of Credit Fee (but not the Fronting Fee) shall be paid quarterly in arrears on the first Business Day of each fiscal quarter for the immediately preceding calendar quarter with the first such payment commencing on October 1, 2003, and shall be for the accounts of the Banks in accordance with their respective Commitment Percentages. In addition to the Fronting Fee and the Letter of Credit Fee, the Borrowers shall pay to the Issuing Banks, for their own accounts, all related customary administrative fees in accordance with customary practice.

 

4.2. Payments .

 

(a) All payments of principal, interest, Reimbursement Obligations, fees and any other amounts due hereunder or under any of the other Loan Documents (other than with respect to payments to be made to the Swing Line Bank in accordance with §2.8) shall be made on the due date thereof to the Administrative Agent, for the respective accounts of the Banks and the Administrative Agent, at the Administrative Agent’s Office or at such other place that the Administrative Agent may from time to time designate, in each case at or about 11:00 a.m. (Boston, Massachusetts, time or other local time at the place of payment) and in immediately available funds.

 

(b) All payments by the Borrowers hereunder and under any of the other Loan Documents shall be made without recoupment, setoff or counterclaim and free and clear of and without deduction for any taxes, levies, imposts, duties, charges, fees,

 

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deductions, withholdings, compulsory loans, restrictions or conditions of any nature now or hereafter imposed or levied by any jurisdiction or any political subdivision thereof or taxing or other authority therein unless the Borrowers are compelled by law to make such deduction or withholding. If any such obligation is imposed upon the Borrowers with respect to any amount payable by them hereunder or under any of the other Loan Documents, the Borrowers will pay to the Administrative Agent, for the account of the Banks or (as the case may be) the Administrative Agent, on the date on which such amount is due and payable hereunder or under such other Loan Document, such additional amount in Dollars as shall be necessary to enable the Banks or the Administrative Agent to receive the same net amount which the Banks or the Administrative Agent would have received on such due date had no such obligation been imposed upon the Borrowers. The Borrowers will deliver promptly to the Administrative Agent certificates or other valid vouchers for all taxes or other charges deducted from or paid with respect to payments made by the Borrower hereunder or under such other Loan Document.

 

(c) Whenever a payment or fee hereunder or under any of the other Loan Documents becomes due on a day that is not a Business Day, the due date for such payment or fee shall be extended to the next succeeding Business Day, and interest shall accrue during such extension; provided that any Interest Period for any Eurodollar Loan which ends on a day that is not a Eurodollar Business Day shall end on the next succeeding Eurodollar 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 Eurodollar Business Day.

 

4.3. Computations . All computations of interest on Base Rate Loans and of Commitment Fees, Letter of Credit Fees or other fees shall, unless otherwise expressly provided herein, be based on a 365-day year (or 366-day year, as applicable) and paid for the actual number of days elapsed. All computations of interest on Eurodollar Loans shall, unless otherwise expressly provided herein, be based on a 360-day year and paid for the actual number of days elapsed.

 

4.4. Capital Adequacy . If any present or future law, governmental rule, regulation, policy, guideline or directive (whether or not having the force of law) or the interpretation thereof by a court or governmental authority with appropriate jurisdiction affects the amount of capital required or expected to be maintained by any Bank or the Administrative Agent or any corporation controlling such Bank or the Administrative Agent, and such Bank or the Administrative Agent determines that the amount of capital required to be maintained by it is increased by or based upon the existence of such Bank’s or the Administrative Agent’s Loans, Letter of Credit Participations or Letters of Credit, or commitment with respect thereto, then such Bank or the Administrative Agent may notify the Borrowers of such fact. To the extent that the costs of such increased capital requirements are not reflected in the Base Rate (if relating to Base Rate Loans), the Borrowers and such Bank or (as the case may be) the Administrative Agent shall thereafter attempt to negotiate in good faith, within thirty (30) days of the day on which the Borrowers receive such notice, an adjustment payable hereunder that will adequately compensate such Bank or the Administrative Agent in light of these circumstances. If the Borrowers and such Bank or the Administrative Agent are unable to agree to such adjustment within thirty (30) days of the date on which the Borrowers receive such notice, then commencing on the date of such notice (but not earlier than the effective date of any such increased capital requirement), the fees payable hereunder shall increase by an amount that will, in such Bank’s or the Administrative Agent’s reasonable determination, provide adequate compensation. Each

 

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Bank and the Administrative Agent shall allocate such cost increases among its customers in good faith and on an equitable basis.

 

4.5. Certificate . A certificate setting forth any additional amounts payable pursuant to §4.4 and a reasonable explanation of such amounts which are due, submitted by any Bank or the Administrative Agent to the Borrowers, shall be conclusive, absent manifest error, that such amounts are due and owing.

 

4.6. Interest After Default .

 

4.6.1. Overdue Amounts.

 

Overdue principal and (to the extent permitted by applicable law) interest on the Loans and all other overdue amounts payable hereunder or under any of the other Loan Documents shall bear interest compounded monthly and payable on demand at a rate per annum equal to the Base Rate plus the Applicable Base Rate Margin plus two percentage points (2.00%) until such amount shall be paid in full (after as well as before judgment).

 

4.6.2. Amounts Not Overdue.

 

Upon written notice from the Administrative Agent and the Majority Banks, during the continuance of a Default or an Event of Default the principal of the Loans not overdue shall, until such Default or Event of Default has been cured or remedied or such Default or Event of Default has been waived by the Majority Banks pursuant to §14.8, bear interest at a rate per annum equal to two percent (2%) above the rate of interest otherwise applicable to such Loans pursuant to §2.4.

 

4.7. Interest Limitation . Notwithstanding any other term of this Credit Agreement or any Note or any other document referred to herein or therein, the maximum amount of interest which may be charged to or collected from any person liable hereunder or under any Note by any Bank shall be absolutely limited to, and shall in no event exceed, the maximum amount of interest which could lawfully be charged or collected under applicable law (including, to the extent applicable, the provisions of Section 5197 of the Revised Statutes of the United States of America, as amended, 12 U.S.C. Section 85, as amended), so that the maximum of all amounts constituting interest under applicable law, howsoever computed, shall never exceed as to any Person liable therefor such lawful maximum, and any term of this Agreement, the Notes, the Letter of Credit Applications, or any other document referred to herein or therein which could be construed as providing for interest in excess of such lawful maximum shall be and hereby is made expressly subject to and modified by the provisions of this paragraph.

 

4.8. Eurodollar Indemnity . The Borrowers agree to indemnify the applicable Banks and the Administrative Agent and to hold them harmless from and against any loss, cost or expenses (including loss of anticipated profits) that the Banks and the Administrative Agent may sustain or incur as a consequence of (a) default by the Borrowers in payment of the principal amount of or any interest on any Eurodollar Loans as and when due and payable, including any such loss or expense arising from interest or fees payable by any Bank or the Administrative Agent to Banks of funds obtained by it in order to maintain its Eurodollar Loans, or (b) default by the Borrowers in making a borrowing or conversion after the Borrowers have given (or are deemed to have given) notice pursuant to §2.5 or §2.6, the making of any payment of a Eurodollar Loan or the making of any conversion of any such Eurodollar Loan to a Base Rate Loan on a day that is not

 

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the last day of the applicable Interest Period with respect thereto, including interest or fees payable by any Bank to Banks of funds obtained by it in order to maintain any such Loans.

 

4.9. Illegality; Inability to Determine Eurodollar Rate . Notwithstanding any other provision of this Agreement, if (a) the introduction of, any change in, or any change in the interpretation of, any law or regulation applicable to the Administrative Agent or any Bank shall make it unlawful, or any central bank or other governmental authority having jurisdiction thereof shall assert that it is unlawful, for any Bank or the Administrative Agent to perform its obligations in respect of any Eurodollar Loans, or (b) if the Banks or the Administrative Agent shall reasonably determine with respect to Eurodollar Loans that (i) by reason of circumstances affecting any Eurodollar interbank market, adequate and reasonable methods do not exist for ascertaining the Eurodollar Rate which would otherwise be applicable during any Interest Period, or (ii) deposits of Dollars in the relevant amount for the relevant Interest Period are not available to the Banks or the Administrative Agent in any Eurodollar interbank market, or (iii) the Eurodollar Rate does not or will not accurately reflect the cost to the Banks or the Administrative Agent of obtaining or maintaining the appl