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$225,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of September 2, 1997
Among
EQUITY CORPORATION INTERNATIONAL
as Borrower,
THE BANKS NAMED IN THIS CREDIT AGREEMENT
as Banks,
and
NATIONSBANK OF TEXAS, N.A.
as Agent
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ARTICLE I DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms
Section 1.02. Computation of Time Periods
Section 1.03. Accounting Terms; Changes in GAAP
Section 1.04. Classes and Types of Advances
Section 1.05. Miscellaneous
ARTICLE II THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01. Tranche A Advances and Tranche B Advances;
Extension of Maturity Dates
Section 2.02. Method of Borrowing
Section 2.03. Fees
Section 2.04. Reduction of the Commitments
Section 2.05. Repayment
Section 2.06. Interest
Section 2.07. Prepayments
Section 2.08. Breakage Costs
Section 2.09. Increased Costs
Section 2.10. Payments and Computations
Section 2.11. Taxes
Section 2.12. Sharing of Payments, Etc.
Section 2.13. Letters of Credit
Section 2.14. Bank Replacement
ARTICLE III CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Initial Borrowings
and Issuance of Letters of Credit
Section 3.02. Conditions Precedent to Each Borrowing
ARTICLE IV REPRESENTATIONS AND WARRANTIES
Section 4.01. Existence; Subsidiaries
Section 4.02. Corporate Power
Section 4.03. Authorization and Approvals
Section 4.04. Enforceable Obligations
Section 4.05. Financial Statements
Section 4.06. True and Complete Disclosure
Section 4.07. Litigation
Section 4.08. Use of Proceeds
Section 4.09. Investment Company Act
Section 4.10. Public Utility Holding Company Act
Section 4.11. Taxes
Section 4.12. Pension Plans
Section 4.13. Condition of Property; Casualties
Section 4.14. Insurance
Section 4.15. No Burdensome Restrictions; No Defaults
Section 4.16. Environmental Condition
Section 4.17. Permits, Licenses, etc.
Section 4.18. Debt and Equity Rights
ARTICLE V AFFIRMATIVE COVENANTS
Section 5.01. Compliance with Laws, Etc.
Section 5.02. Maintenance of Insurance
Section 5.03. Preservation of Existence, Etc.
Section 5.04. Payment of Taxes, Etc.
Section 5.05. Visitation Rights
Section 5.06. Reporting Requirements
Section 5.07. Maintenance of Property
Section 5.08. New Subsidiaries
ARTICLE VI NEGATIVE COVENANTS
Section 6.01. Liens, Etc.
Section 6.02. Debts, Guaranties and Other Obligations
Section 6.03. Agreements Restricting Liens and Distributions
Section 6.04. Merger or Consolidation; Asset Sales
Section 6.05. Restricted Payments
Section 6.06. Investments
Section 6.07. Acquisitions
Section 6.08. Affiliate Transactions
Section 6.09. Compliance with ERISA
Section 6.10. Maintenance of Ownership of Subsidiaries
Section 6.11. Cash Flow Coverage Ratio
Section 6.12. Leverage Ratio
Section 6.13. Net Worth
ARTICLE VII REMEDIES
Section 7.01. Events of Default
Section 7.02. Optional Acceleration of Maturity
Section 7.03. Automatic Acceleration of Maturity
Section 7.04. Cash Collateral Account
Section 7.05. Non-exclusivity of Remedies
Section 7.06. Right of Set-off
ARTICLE VIII THE AGENT AND THE ISSUING BANK
Section 8.01. Authorization and Action
Section 8.02. Agents' Reliance, Etc.
Section 8.03. The Agent and Its Affiliates
Section 8.04. Bank Credit Decision
Section 8.05. Indemnification
Section 8.06. Successor Agent and Issuing Bank
ARTICLE IX MISCELLANEOUS
Section 9.01. Amendments, Etc.
Section 9.02. Notices, Etc.
Section 9.03. No Waiver; Remedies
Section 9.04. Costs and Expenses
Section 9.05. Binding Effect
Section 9.06. Bank Assignments and Participations
Section 9.07. Indemnification
Section 9.08. Execution in Counterparts
Section 9.09. Survival of Representations, etc.
Section 9.10. Severability
Section 9.11. Business Loans
Section 9.12. Usury Not Intended
Section 9.13. Governing Law
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Guaranty
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Notice of Conversion or Continuation
Exhibit E - Form of Stock Pledge Agreement
Exhibit F-1 - Form of Tranche A Note
Exhibit ▇-▇ - ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇ Note
Exhibit G - Form of NationsBank Letter of Credit Application
Exhibit H - Form of Borrower's and Subsidiaries' Outside Counsel Opinion
Exhibit I - Form of Agent's Counsel Opinion
Exhibit J - Form of Compliance Certificate
SCHEDULES:
Schedule 1 - Notice Information for Banks
Schedule 4.01 - Subsidiaries
Schedule 4.07 - Existing Litigation
Schedule 4.16(a) - Existing Environmental Concerns
Schedule 4.16(b) - Designated Environmental Sites
Schedule 4.18 - Permitted Existing Debt
Schedule 6.06 - Certain Permitted Investments
AMENDED AND RESTATED CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of September 2, 1997 is
among (a) Equity Corporation International, a Delaware corporation
("Borrower"); (b) the Banks (as defined below); and (c) NationsBank of Texas,
N.A., as Agent for the Banks.
A. The Borrower, the Agent and certain banks ("Existing Banks") have
previously executed the Credit Agreement dated as of October 26, 1994, as
amended by Amendment No. 1 dated as of August 31, 1995, by Amendment No. 2
dated as of February 12, 1996, and by Amendment No. 3 dated as of April 22,
1997 (as so amended, the "Existing Credit Agreement").
B. The Borrower, the Agent and the Existing Banks wish to amend and restate
the Existing Credit Agreement to (1) increase and rearrange the existing
revolving credit facility, (2) add certain new banks as parties thereto, and
(3) make certain other changes to the Existing Credit Agreement.
Therefore, the Borrower, the Banks, and the Agent hereby agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
Section 1.01. Certain Defined Terms.
As used in this Agreement, the terms "Borrower", "Existing Banks", and
"Existing Credit Agreement" shall have the meanings set forth above and the
following terms shall have the following meanings (unless otherwise indicated,
such meanings to be equally applicable to both the singular and plural forms of
the terms defined):
"Acceptable Security Interest" in any Property means a Lien (a) which exists in
favor of the Agent for the benefit of the Banks, (ii) which is superior to all
other Liens except Liens permitted by this Agreement, (iii) which secures the
Obligations, and (iv) which is perfected and enforceable against all Persons in
preference to any rights of any Person therein.
"Acquisition" means the purchase by the Borrower or any of its Subsidiaries of
a funeral home or cemetery, including the purchase of associated assets or
operations or of stock (or other ownership interests) of a Person whose primary
business is owning or operating a funeral home or cemetery.
"Adjusted Base Rate" means, for any day, the fluctuating rate per annum of
interest equal to the greater of (a) the Base Rate in effect on such day or (b)
the Federal Funds Rate in effect on such day plus 1/2%.
"Advance" means any Tranche A Advance or Tranche B Advance.
"Affiliate" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person.
The term "control" (including the terms "controlled by" or "under common
control with") means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of a Control Percentage, by contract or otherwise.
"Agent" means NationsBank of Texas, N.A. in its capacity as an agent pursuant
to Article VIII and any successor agent pursuant to Section 8.06.
"Agreement" means this Amended and Restated Credit Agreement dated as of
September 2, 1997 among the Borrower, the Banks, and the Agent, as it may be
amended, restated, modified or supplemented from time-to-time.
"Applicable Lending Office" means, with respect to each Bank, such Bank's
Domestic Lending Office in the case of a Base Rate Advance and such Bank's
Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Applicable Margin" means, at any time with respect to any Advance, any
commitment fee, or any Letter of Credit Fee under Section 2.03, the following
percentages during the following time periods determined as a function of the
Borrower's Leverage Ratio on the last day of the immediately preceding fiscal
quarter:
▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ Level V
------ -------- --------- -------- -------
Ratio Ratio Ratio
Ratio greater greater greater Ratio
Less than or than or than or greater
Than equal to equal to equal to than or
.20 .20, but .30, but .40, but equal to
less than less than less than .50
.30 .40 .50
Eurodollar Rate .50% .75% .90% 1.00% 1.25%
Advance - Tranche
A Advance
Eurodollar Rate .50% .75% .90% 1.00% 1.25%
Advance - Tranche
B Advance
Base Rate Advance 0% 0% 0% 0% 0.0%
Commitment Fee - .175% .225% .25% .25% .30%
Tranche A
Commitment
Commitment Fee - .15% .20% .225% .225% .25%
Tranche B
Commitment
The foregoing ratio (a) shall be deemed to be Level III to and including
September 30, 1997 and (b) shall thereafter be determined from the financial
statements of the Borrower and its Subsidiaries most recently delivered
pursuant to Section 5.06 and certified to in a Compliance Certificate executed
by the Chief Financial Officer of the Borrower in accordance with Section 5.06.
Any change in the Applicable Margin (including, without limitation, changes in
the Applicable Margin with respect to outstanding Eurodollar Rate Advances)
after September 30, 1997 shall be effective upon the 15th day of the second
calendar month following the date of such financial statements (except for
changes with respect to the December 31 financial statements, which changes
shall be effective on the following March 31). If the Borrower fails to
deliver such financial statements after September 30, 1997 within the times
specified in Section 5.06, such ratio shall be deemed to be greater than .50
until the Borrower delivers such financial statements to the Agent and the
Banks.
"Assignment and Acceptance" means an assignment and acceptance entered into by
a Bank and an Eligible Assignee, and accepted by the Agent, in substantially
the form of the attached Exhibit A.
"Banks" means the lenders listed on the signature pages of this Agreement and
each Eligible Assignee that shall become a party to this Agreement pursuant to
Section 9.06.
"Base Rate" means a fluctuating interest rate per annum as shall be in effect
from time to time equal to the rate of interest publicly announced by
NationsBank of Texas, N.A. as its base rate, whether or not the Borrower has
notice thereof.
"Base Rate Advance" means an Advance which bears interest as provided in
Section 2.06(a).
"Borrowing" means a Tranche A Borrowing or a Tranche B Borrowing.
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City and Dallas, Texas and, if the applicable
Business Day relates to any Eurodollar Rate Advances, on which dealings are
carried on by banks in the London interbank market.
"Canadian Acquisition" means any Acquisition in which the stock (or other
ownership interests) or assets of a Person incorporated, chartered or otherwise
located in Canada is acquired by the Borrower or any of its Subsidiaries.
"Canadian Subsidiary" means any Subsidiary of the Borrower that is
incorporated, chartered or otherwise located in Canada.
"Capital Leases" means, as applied to any Person, any lease of any Property by
such Person as lessee which would, in accordance with GAAP, be required to be
classified and accounted for as a capital lease on the balance sheet of such
Person.
"Cash Collateral Account" means a special noninterest bearing cash collateral
account containing cash deposited pursuant to Sections 2.13(a), 7.02(b) or
7.03(b) to be maintained at the Agent's office in accordance with Section 7.04.
"Cash Flow Coverage Ratio" means, for any Person as of the end of any period,
the ratio of (a) such Person's EBITDA as of the last day of its most recent
fiscal quarter for the four fiscal quarters then ended minus its cash taxes
paid during such period to (b) its Interest Expense for such period plus the
amount of its Debt (other than the Advances) which is due within one year
existing on the last day of such period plus its current maturities of long-
term Debt (other than the Advances) on the last day of such period plus cash
dividends and treasury stock repurchases during such period plus, without
duplication of any of the foregoing, 10% of the amount of its non-amortizing
long-term Debt (other than the Advances) of such Person owing in connection
with the financing of Acquisitions.
"CERCLA" means the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, state and local analogs, and all rules and
regulations and requirements thereunder in each case as now or hereafter in
effect.
"Class" has the meaning set forth in Section 1.04.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor
statute.
"Commitments" means, as to any Bank, its Tranche A Commitment and its Tranche B
Commitment.
"Control Percentage" means, with respect to any Person, the percentage of the
outstanding capital stock or other ownership interests of such Person having
ordinary voting power which gives the direct or indirect holder of such stock
or interests the power to elect a majority of the Board of Directors or similar
governing body of such Person.
"Controlled Group" means all members of a controlled group of corporations and
all trades (whether or not incorporated) under common control which, together
with the Borrower, are treated as a single employer under Section 414 of the
Code.
"Convert", "Conversion", and "Converted" each refers to a conversion of
Advances of one Type into Advances of another Type pursuant to Section 2.02(b).
"Credit Documents" means this Agreement, the Notes, the Guaranties, the Letter
of Credit Documents, the Pledge Agreement and each other agreement, instrument
or document executed by the Borrower or any of its Subsidiaries at any time in
connection with this Agreement.
"Debt," for any Person, means without duplication (a) indebtedness of such
Person for borrowed money, including, without limitation, obligations under
letters of credit and agreements relating to the issuance of letters of credit
or acceptance financing; (b) obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments; (c) obligations of such Person
to pay the deferred purchase price of property or services; (d) obligations of
such Person as lessee under Capital Leases; (e) obligations of such Person
under direct or indirect guaranties in respect of, and obligations (contingent
or otherwise) of such Person to purchase or otherwise acquire, or otherwise to
assure a creditor against loss in respect of, indebtedness or obligations of
others of the kinds referred to in the immediately preceding clauses (a)
through (d) above; (f) indebtedness or obligations of others of the kinds
referred to in clauses (a) through (e) secured by any Lien on or in respect of
any Property of such Person; and (g) all liabilities of such Person in respect
of unfunded vested benefits under any Plan; provided that, Debt shall not
include obligations under agreements not to compete and Pre-need Obligations.
"Default" means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"Dollar Equivalent" means for all purposes of this Agreement, the equivalent in
another currency of an amount in Dollars to be determined by reference to the
rate of exchange quoted by NationsBank of Texas, N.A., at 10:00 a.m. (Dallas,
Texas time) on the date of determination, for the spot purchase in the foreign
exchange market of such amount of Dollars with such other currency.
"Dollars" and "$" means lawful money of the United States of America.
"Domestic Lending Office" means, with respect to any Bank, the office of such
Bank specified as its "Domestic Lending Office" opposite its name on Schedule 1
or such other office of such Bank as such Bank may from time-to-time specify to
the Borrower and the Agent.
"EBITDA" means, for any Person during any period, (a) net income of such Person
for such period after taxes, as determined in accordance with GAAP, excluding,
however, extraordinary items, such as (i) any net gain or loss during such
period arising from the sale, exchange, or other disposition of capital assets
(such term to include all fixed assets and all securities) other than in the
ordinary course of business and (ii) any write-up of assets plus (b) to the
extent deducted in determining net income pursuant to the foregoing clause (a),
Interest Expense, income taxes and other taxes measured by net income, and
depreciation and amortization for such period.
"Effective Date" means the date on which the initial Borrowing is made.
"Eligible Assignee" means (a) a commercial bank organized under the laws of the
United States, or any State thereof, and having primary capital of not less
than $500,000,000 and approved by the Agent and the Borrower, which approval by
the Agent and the Borrower will not be unreasonably withheld, and (b) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Cooperation and Development and having primary
capital (or its equivalent) of not less than $500,000,000 (or its Dollar
Equivalent) and approved by the Agent and the Borrower, which approval by the
Agent and the Borrower will not be unreasonably withheld.
"Environment" or "Environmental" shall have the meanings set forth in 43
U.S.C. Section 9601(8) (1988).
"Environmental Claim" means any action, lawsuit, claim, demand, regulatory
action or proceeding, order, decree, consent agreement or notice of potential
or actual responsibility or violation (including claims or proceedings under
the Occupational Safety and Health Acts or similar laws or requirements
relating to health or safety of employees) brought by a Governmental Authority
which seeks to impose a material liability under any Environmental Law.
"Environmental Law" means all Legal Requirements arising from, relating to, or
in connection with the Environment, health, or safety, including without
limitation CERCLA, relating to (a) pollution, contamination, injury,
destruction, loss, protection, cleanup, reclamation or restoration of the air,
surface water, groundwater, land surface or subsurface strata, or other natural
resources; (b) solid, gaseous or liquid waste generation, treatment,
processing, recycling, reclamation, cleanup, storage, disposal or
transportation; (c) exposure to pollutants, contaminants, hazardous, medical,
infectious, or toxic substances, materials or wastes; (d) the safety or health
of employees; or (e) the manufacture, processing, handling, transportation,
distribution in commerce, use, storage or disposal of hazardous, medical,
infectious, or toxic substances, materials or wastes.
"Environmental Permit" means any permit, license, order, approval or other
authorization under Environmental Law material to the business of the Borrower.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time-to-time.
"Eurocurrency Liabilities" has the meaning assigned to that term in Regulation
D.
"Eurodollar Lending Office" means, with respect to any Bank, the office of such
Bank specified as its "Eurodollar Lending Office" opposite its name on Schedule
1 (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Bank as such Bank may from time-to-time specify to the
Borrower and the Agent.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar Rate
Advance, the interest rate per annum (rounded upward to the nearest 1/100 of 1%
per annum) appearing on Telerate Page 3750 (or any successor page) as the
London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days before the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for the Interest
Period for each Eurodollar Rate Advance, the interest rate per annum (rounded
upward to the nearest 1/100 of 1% per annum) appearing on Reuters Screen LIBO
page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days before the first day
of such Interest Period for a term comparable to such Interest Period;
provided, however, if more than one rate is specified on Reuters Screen LIBO
page, the applicable rate shall be the arithmetic mean of all such rates.
"Eurodollar Rate Advance" means an Advance which bears interest as provided in
Section 2.06(b).
"Eurodollar Rate Reserve Percentage" of any Bank for the Interest Period for
any Eurodollar Rate Advance means the reserve percentage applicable during such
Interest Period (or if more than one such percentage shall be so applicable,
the daily average of such percentages for those days in such Interest Period
during which any such percentage shall be so applicable) under regulations
issued from time-to-time by the Federal Reserve Board (or other similar
Governmental Authority) for determining the maximum reserve requirement
(including, without limitation, any emergency, supplemental or other marginal
reserve requirement) for such Bank with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities having a term equal to such
Interest Period.
"Events of Default" has the meaning set forth in Section 7.01.
"Expiration Date" means, with respect to any Letter of Credit, the date on
which such Letter of Credit will expire or terminate in accordance with its
terms.
"Federal Funds Rate" means, for any period, a fluctuating interest rate per
annum equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for 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 which is a Business Day, the average of the quotations for any such day
on such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System or any of its successors.
"Financial Statements" means the balance sheet and income, retained earnings
and cash flow statements dated December 31, 1996 referred to in Section 4.05,
copies of which have been delivered to the Agent and the Banks.
"Fund," "Trust Fund," or "Superfund" means the Hazardous Substance Response
Trust Fund, established pursuant to 42 U.S.C. Section 9631 (1988) and the Post-
closure Liability Trust Fund, established pursuant to 42 U.S.C. Section 9641
(1988), which statutory provisions have been amended or repealed by the
Superfunds Amendments and Reauthorization Act of 1986, and the "Fund," "Trust
Fund," or "Superfund" that are now maintained pursuant to Section 9507 of the
Code.
"Funded Debt" means all indebtedness for borrowed money of any Person (other
than intercompany indebtedness), but in any event shall include, without
duplication:
(a) any Debt outstanding under a revolving credit or similar agreement for
borrowings or representing indebtedness for borrowed money;
(b) any obligation with respect to a Capital Lease to the extent as a
liability under GAAP;
(c) the face amount of any standby letters of credit supporting the
repayment indebtedness for borrowed money issued for the account of such
Person; and
(d) obligations of such Person under direct or indirect guaranties in
respect of, and obligations (contingent or otherwise) of such Person to
purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness for borrowed money of others other than a
Subsidiary of such Person, including obligations of a type described in clauses
(a) through (c) of this definition of another Person.
"GAAP" means United States generally accepted accounting principles as in
effect from time-to-time, applied on a basis consistent with the requirements
of Section 1.03.
"Governmental Authority" means any foreign governmental authority, the United
States of America, any state of the United States of America and any
subdivision of any of the foregoing, and any agency, department, commission,
board, authority or instrumentality, bureau or court having jurisdiction over
any Bank, the Borrower, or the Borrower's Subsidiaries or any of their
respective Properties.
"Guaranty" means a guaranty in the form of the attached Exhibit B executed by a
Subsidiary of the Borrower, as the same may be amended, restated, modified, or
supplemented from time-to-time, and "Guaranties" means all such Guaranties.
"Hazardous Substance" means the substances identified as such pursuant to
CERCLA and those regulated under any other Environmental Law, including without
limitation pollutants, contaminants, petroleum, petroleum products,
radionuclides, radioactive materials, and medical and infectious waste.
"Hazardous Waste" means the substances regulated as such pursuant to any
Environmental Law.
"Interest Expense" means, for any Person during any period, total interest
expense for such Person during such period, whether paid or accrued (including
that attributable to obligations which have been or should be, in accordance
with GAAP, recorded as Capital Leases), including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs under any interest
hedge, rate swap, cap, or similar arrangement providing for the exchange of
nominal interest obligations or a cap of the interest rates applicable to Debt
of such Person, all as determined in accordance with GAAP.
"Interest Period" means, for each Eurodollar Rate Advance, the period
commencing on the date of such Advance or the date of the Conversion of any
Base Rate Advance into such an Advance and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and Section 2.02 and,
thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below and Section 2.02,
which period shall be one, two, three, or six months, in each case as the
Borrower may, upon notice received by the Agent not later than 10:00 a.m.
(Dallas, Texas time) on, the third Business Day prior to the first day of such
Interest Period select; provided, however, that:
(a) no Interest Period for a Tranche A Advance may extend beyond the Tranche
A Maturity Date;
(b) no Interest Period for a Tranche B Advance may extend beyond the Tranche
B Maturity Date (or, if the Tranche B Advances shall be converted to a term
loan pursuant to Section 2.05(b), the date such term loan is required to be
repaid pursuant to such Section).
(c) Interest Periods commencing on the same date for Advances comprising
part of the same Borrowing shall be of the same duration;
(d) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day, provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day; and
(e) any Interest Period which begins on the last Business Day of a calendar
month (or on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month.
"Interim Financial Statements" means the unaudited balance sheet and income,
retained earnings, and cash flow statements dated June 30, 1997 referred to in
Section 4.05, copies of which have been delivered to the Agent and the Banks.
"Issuing Bank" means NationsBank of Texas, N.A. and any successor issuing bank
pursuant to Section 8.06.
"Knowledge" means, with respect to the Borrower, the actual knowledge of any
member of the Borrower's or any of its Subsidiaries' senior management and does
not include constructive knowledge.
"Legal Requirement" means any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or official interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority, including, but not limited to, Regulations D, G, T, U
and X.
"Letter of Credit" means, individually, any letter of credit issued by the
Issuing Bank which is subject to this Agreement, and "Letters of Credit" means
all such letters of credit collectively.
"Letter of Credit Documents" means, with respect to any Letter of Credit, such
Letter of Credit and any agreements, documents, and instruments entered into in
connection with or relating to such Letter of Credit.
"Letter of Credit Exposure" means, at any time, without duplication the sum of
(a) the aggregate undrawn maximum face amount of each Letter of Credit
outstanding at such time and (b) the aggregate unpaid amount of all
Reimbursement Obligations at such time.
"Letter of Credit Obligations" means any obligations of the Borrower under this
Agreement in connection with the Letters of Credit.
"Leverage Ratio" means, for any period, the ratio of (a) the Borrower's Debt to
(b) its Debt plus its Net Worth for such period.
"Lien" means any mortgage, lien, pledge, charge, deed of trust, security
interest, or encumbrance to secure or provide for the payment of any obligation
of any Person, whether arising by contract, operation of law or otherwise
(including, without limitation, the interest of a vendor or lessor under any
conditional sale agreement, Capital Lease or other title retention agreement).
"Liquid Investments" means (a) direct or indirect obligations of, or
obligations the principal of and interest on which are unconditionally
guaranteed by, the United States; (b) mutual funds investing in securities
issued by the United States, (c) (i) negotiable or nonnegotiable certificates
of deposit, time deposits, or other similar banking arrangements maturing
within 180 days from the date of acquisition thereof ("bank debt securities"),
issued by (A) any Bank or (B) any other bank or trust company which has either
(I) obtained insurance from the Federal Depositor's Insurance Corporation
supporting such bank's or trust company's obligation to repay the bank debt
securities or (II) a combined capital surplus and undivided profit of not less
than $250,000,000 or the Dollar Equivalent thereof, if at the time of deposit
or purchase, such bank debt securities are rated not less than "A" (or the then
equivalent) by the rating service of Standard & Poor's Ratings Group or of
▇▇▇▇▇'▇ Investors Service, Inc., and (ii) commercial paper issued by (A) any
Bank or (B) any other Person if at the time of purchase such commercial paper
is rated not less than "A-2" (or the then equivalent) by the rating service of
Standard & Poor's Ratings Group or not less than "P-2" (or the then equivalent)
by the rating service of ▇▇▇▇▇'▇ Investors Service, Inc., or upon the
discontinuance of both of such services, such other nationally recognized
rating service or services, as the case may be, as shall be selected by the
Borrower with the consent of the Majority Banks; (d) repurchase agreements
relating to investments described in clauses (a) and (c) above with a market
value at least equal to the consideration paid in connection therewith, with
any Person who regularly engages in the business of entering into repurchase
agreements and has a combined capital surplus and undivided profit of not less
than $250,000,000 or the Dollar Equivalent thereof, if at the time of entering
into such agreement the debt securities of such Person are rated not less than
"BBB" (or the then equivalent) by the rating service of Standard & Poor's
Ratings Group or of ▇▇▇▇▇'▇ Investors Service, Inc.; and (e) such other
instruments (within the meaning of Article 9 of the Texas Business and Commerce
Code) as the Borrower may request and the Agent may approve in writing, which
approval will not be unreasonably withheld.
"Majority Banks" means, at any time, Banks holding at least 66-2/3% of the then
aggregate unpaid principal amount of the Advances owed to the Banks and the
Letter of Credit Exposure of the Banks at such time, or, if no such principal
amount and Letter of Credit Exposure is then outstanding, Banks having at least
66-2/3% of the aggregate amount of the Commitments at such time.
"Material Adverse Change" shall mean (a) a material adverse change in the
business, financial condition, or results of operations of the Borrower and its
Subsidiaries taken as a whole, or (b) the occurrence and continuance of any
event or circumstance which could reasonably be expected (i) to have a material
adverse effect on the Borrower's ability to perform its obligations under this
Agreement, any Note or any other Credit Document or (ii) to cause a Default.
"Maturity Dates" means, collectively, the Tranche A Maturity Date and the
Tranche B Maturity Date.
"Maximum Rate" means the maximum nonusurious interest rate under applicable
law.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any member of the Controlled Group
is making or accruing an obligation to make contributions.
"Net Proceeds" means the cash proceeds received by the Borrower from the
issuance of Subordinated Debt after deducting the amount of all reasonable
transaction costs associated therewith.
"Net Worth" means, at any date for any Person that is a corporation, the sum of
(a) the par value (or value stated on the books of such Person) of the capital
stock of all classes of such Person, (b) the additional paid-in capital of such
Person, and (c) the amount of the surplus and retained earnings, whether
capital or earned, of such Person, all determined in accordance with GAAP,
excluding, however, the value of any redeemable preferred stock or similar
capital stock of such Person.
"Non-Profit Entity" means (a) Lakeview Memorial Gardens and (b) any other not
for profit Subsidiary of the Borrower that is engaged in the operation or
maintenance of a cemetery.
"NRO Company" means ECI Capital Corporation Limited and any other Canadian
Subsidiary of the Borrower that is a non-resident owned investment corporation
and that is formed for the purpose of holding loans or advances made to a
Canadian Subsidiary.
"Note" means a Tranche A Note or a Tranche B Note.
"Notice of Borrowing" means a notice of borrowing in the form of the attached
Exhibit C signed by a Responsible Officer of the Borrower.
"Notice of Conversion or Continuation" means a notice of conversion or
continuation in the form of the attached Exhibit D signed by a Responsible
Officer of the Borrower.
"Obligations" means all Advances, Reimbursement Obligations, and other amounts
payable by the Borrower to the Agent, the Issuing Bank or the Banks under the
Credit Documents.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity succeeding
to any or all of its functions under ERISA.
"Permitted Liens" means the Liens permitted to exist pursuant to Section 6.01.
"Person" means an individual, partnership, corporation (including a business
trust), joint stock company, limited liability corporation, limited liability
partnership, trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof or any trustee,
receiver, custodian or similar official.
"Plan" means an employee benefit plan (other than a Multiemployer Plan)
maintained for employees of the Borrower or any member of the Controlled Group
and covered by Title IV of ERISA or subject to the minimum funding standards
under Section 412 of the Code, except that "Plan" shall not include any
employee benefit plan maintained for employees of the funeral homes or
cemeteries acquired by the Borrower and its Subsidiaries after the date of this
Agreement,unless such employee benefit plan continues to exist more than six
months after the applicable acquisition, in which event such employee benefit
plan shall be included as a "Plan".
"Pledge Agreement" means a Pledge Agreement executed by the Borrower or a
Subsidiary of the Borrower in the form of the attached Exhibit E, and "Pledge
Agreements" means all such Pledge Agreements collectively.
"Pre-need Obligations" means the liabilities and obligations of the Borrower
and its Subsidiaries to perform funeral or cemetery related services or provide
funeral or cemetery property, merchandise or inventory pursuant to written
contracts with their customers.
"Property" of any Person means any property or assets (whether real, personal,
or mixed, tangible or intangible) of such Person.
"Pro Rata Share" means, at any time with respect to any Bank, either (a) the
ratio (expressed as a percentage) of such Bank's Commitments at such time to
the aggregate Commitments at such time, (b) if the Commitments have been
terminated, the ratio (expressed as a percentage) of such Bank's aggregate
outstanding Advances and Letter of Credit Exposure at such time to the
aggregate outstanding Advances and Letter of Credit Exposure of all the Banks
at such time, or (c) if no Advances are then outstanding and no Commitments
then in effect, the ratio (expressed as a percentage) of the aggregate
principal amount of such Bank's Advances most recently outstanding to the
aggregate principal amount of all Advances most recently outstanding.
"Register" has the meaning set forth in paragraph (c) of Section 9.06.
"Regulations D, G, T, U and X" mean Regulations D, G, T, U and X of the Federal
Reserve Board, as each is from time-to-time in effect, and all official rulings
and interpretations thereunder or thereof.
"Reimbursement Obligations" means all of the obligations of the Borrower set
forth in paragraph (c) of Section 2.13.
"Release" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"Response" shall have the meaning set forth in CERCLA or under any other
Environmental Law.
"Responsible Officer" means either the Borrower's Chief Executive Officer or
its Chief Financial Officer.
"Restricted Payment" means the declaration or making by any Person of any
dividends or other distributions (in cash, property, or otherwise) on, or any
payment for the purchase, redemption or other acquisition of, any shares of any
capital stock (or other ownership interests) of such Person, other than
dividends payable in such Person's stock or ownership interests, as applicable.
"Subordinated Debt" means Debt issued by the Borrower that (a) is debt for
borrowed money, (b) is unsecured, (c) has no recourse to any of the
Subsidiaries of the Borrower (whether through a guaranty executed by any such
Subsidiary, a pledge of assets by such Subsidiary or otherwise), and (d) is
subordinated on terms that are acceptable to the Agent and Majority Banks.
"Subsidiary" means, with respect to any Person, any other Person, (a) a
majority of whose outstanding Voting Securities (other than director's
qualifying shares) shall at any time be owned by such Person or one or more
Subsidiaries of such Person or (b) that is controlled by such Person or one or
more Subsidiaries of such Person through a trustee agreement or other
contractual arrangement.
"Terminating Bank" has the meaning set forth in Section 2.01(c)(iii)(B) or
Section 2.01(c)(iv)(B), as applicable.
"Termination Event" means (a) the occurrence of a Reportable Event with respect
to a Plan, as described in Section 4043 of ERISA and the regulations issued
thereunder (other than a Reportable Event not subject to the provision for 30-
day notice to the PBGC under such regulations), (b) the withdrawal of the
Borrower or any of its Affiliates from a Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the
giving of a notice of intent to terminate a Plan or the treatment of a Plan
amendment as a termination under Section 4041 of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC, or (e) any other event or
condition which constitutes grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan.
"Tranche A Advance" means any advance by a Bank to the Borrower as part of a
Tranche A Borrowing and refers to a Base Rate Advance or a Eurodollar Rate
Advance.
"Tranche A Borrowing" means a borrowing consisting of simultaneous Tranche A
Advances made by each Bank pursuant to Section 2.01(a) or Converted by each
Bank to Tranche A Advances of a different Type pursuant to Section 2.02(b).
Except as provided in Sections 2.02(c) and 2.07(e), all Advances included in a
Borrowing shall be of the same Type.
"Tranche A Commitment" means, for each Bank, the amount set opposite such
Bank's name on the signature pages of this Agreement as its Tranche A
Commitment or, if such Bank has entered into any Assignment and Acceptance
after the Effective Date, set forth for such Bank as its Tranche A Commitment
in the Register maintained by the Administrative Agent pursuant to Section
9.06(c), as such amount may be reduced pursuant to Section 2.04.
"Tranche A Maturity Date" means the earlier of (a) September 2, 2002, as such
date may be extended pursuant to Section 2.01(c), provided that the Tranche A
Maturity Date for any Terminating Bank shall be the date such Bank's Tranche A
Advances are payable in full pursuant to Section 2.01(c)(iii)(B) and (b) the
earlier termination in whole of the Commitments pursuant to Section 2.04 or
Article VII.
"Tranche A Note" means a promissory note of the Borrower payable to the order
of any Bank, in substantially the form of the attached Exhibit F-1, evidencing
indebtedness of the Borrower to such Bank resulting from Tranche A Advances
owing to such Bank.
"Tranche B Advance" means any advance by a Bank to the Borrower as part of a
Tranche B Borrowing and refers to a Base Rate Advance or a Eurodollar Rate
Advance.
"Tranche B Borrowing" means a borrowing consisting of simultaneous Tranche B
Advances of the same Type made by each Bank pursuant to Section 2.01(b) or
Converted by each Bank to Tranche B Advances of a different Type pursuant to
Section 2.02(b). Except as provided in Sections 2.02(c) and 2.07(e), all
Advances included in a Borrowing shall be of the same Type.
"Tranche B Commitment" means, for each Bank, the amount set opposite such
Bank's name on the signature pages of this Agreement as its Tranche B
Commitment or, if such Bank has entered into any Assignment and Acceptance
after the Effective Date, set forth for such Bank as its Tranche B Commitment
in the Register maintained by the Administrative Agent pursuant to Section
9.06(c), as such amount may be reduced pursuant to Section 2.04.
"Tranche B Maturity Date" means the earlier of (a) September 1, 1998, as such
date may be extended pursuant to Section 2.01(c); provided that the Tranche B
Maturity Date for any Terminating Bank shall be the date such Bank's Tranche B
Advances are payable in full pursuant to Section 2.01(c)(iv)(B) and (b) the
earlier termination in whole of the Commitments pursuant to Section 2.04 or
Article VII.
"Tranche B Note" means a promissory note of the Borrower payable to the order
of any Bank, in substantially the form of the attached Exhibit F-2, evidencing
indebtedness of the Borrower to such Bank resulting from Tranche B Advances
owing to such Bank.
"Type" has the meaning set forth in Section 1.04.
"Voting Securities" means (a) with respect to any corporation, capital stock of
the corporation having general voting power under ordinary circumstances to
elect directors of such corporation (irrespective of whether at the time stock
of any other class or classes shall have or might have special voting power or
rights by reason of the happening of any contingency), (b) with respect to any
partnership, any partnership interest or other ownership interest having
general voting power to elect the general partner or other management of the
partnership or other Person, and (c) with respect to any limited liability
company, membership certificates or interests having general voting power under
ordinary circumstances to elect the managers of such limited liability company.
Section 1.02. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
means "to but excluding".
Section 1.03. Accounting Terms; Changes in GAAP.
(a) All accounting terms not specifically defined in this Agreement shall be
construed in accordance with GAAP applied on a consistent basis with those
applied in the preparation of the Financial Statements.
(b) Unless otherwise indicated, all financial statements of the Borrower,
all calculations for compliance with covenants in this Agreement, all
determinations of the Applicable Margin, the commitment fees and Letter of
Credit fees required by Section 2.03, and all calculations of any amounts to be
calculated under the definitions in Section 1.01 shall be based upon the
consolidated accounts of the Borrower and its Subsidiaries in accordance with
GAAP and consistent with the principles of consolidation applied in preparing
the Financial Statements.
Section 1.04. Classes and Types of Advances. Advances are distinguished by
"Class" and "Type". The "Class" of an Advance refers to the determination of
whether such Advance is a Tranche A Advance or Tranche B Advance, each of which
constitutes a Class. The "Type" of an Advance refers to the determination
whether such Advance is a Eurodollar Rate Advance or Base Rate Advance, each of
which constitutes a Type.
Section 1.05. Miscellaneous. Article, Section, Schedule and Exhibit
references are to Articles and Sections of and Schedules and Exhibits to this
Agreement, unless otherwise specified.
ARTICLE II
THE ADVANCES AND THE LETTERS OF CREDIT
Section 2.01. Tranche A Advances and Tranche B Advances; Extension of Maturity
Dates
(a) The Tranche A Advances. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make Tranche A Advances to the
Borrower from time-to-time on any Business Day during the period from the date
of this Agreement until the Tranche A Maturity Date in an aggregate amount not
to exceed at any time outstanding (i) such Bank's Tranche A Commitment less
(ii) such Bank's Pro Rata Share of the Letter of Credit Exposure at such time;
provided that, following the making of each Borrowing comprised of Tranche A
Advances, the aggregate outstanding principal amount of the Tranche A Advances
shall not exceed the aggregate amount of the Tranche A Commitments. Each
Borrowing shall, in the case of Tranche A Advances consisting of Base Rate
Advances, be in an aggregate amount not less than $1,000,000 and in integral
multiples of $100,000 in excess thereof, and in the case of Borrowings
consisting of Eurodollar Rate Advances, be in an aggregate amount not less than
$5,000,000 or in integral multiples of $1,000,000 in excess thereof, and in
each case shall consist of Tranche A Advances of the same Type made on the same
day by the Banks ratably according to their respective Tranche A Commitments.
Within the limits of each Bank's Tranche A Commitment and subject to the other
terms and conditions of this Agreement, the Borrower may from time-to-time
borrow, prepay pursuant to Section 2.07 and reborrow under this Section
2.01(a).
(b) The Tranche B Advances. Each Bank severally agrees, on the terms and
conditions set forth in this Agreement, to make Tranche B Advances to the
Borrower from time-to-time on any Business Day during the period from the date
of this Agreement until the Tranche B Maturity Date in an aggregate amount not
to exceed at any time outstanding such Bank's Tranche B Commitment; provided
that, following the making of each Borrowing comprised of Tranche B Advances,
the aggregate outstanding principal amount of the Tranche B Advances shall not
exceed the aggregate amount of the Tranche B Commitments. Each Borrowing
shall, in the case of Tranche B Advances consisting of Base Rate Advances, be
in an aggregate amount not less than $1,000,000 and in integral multiples of
$100,000 in excess thereof, and in the case of Borrowings consisting of
Eurodollar Rate Advances, be in an aggregate amount not less than $5,000,000 or
in integral multiples of $1,000,000 in excess thereof, and in each case shall
consist of Tranche B Advances of the same Type made on the same day by the
Banks ratably according to their respective Tranche B Commitments. Within the
limits of each Bank's Tranche B Commitment and subject to the other terms and
conditions of this Agreement, the Borrower may from time-to-time borrow, prepay
pursuant to Section 2.07 and reborrow under this Section 2.01(b).
(c) Extension of Maturity Dates.
(i) So long as no Default shall have occurred and be continuing at such
time, at least 60 but not more than 90 days before each August 1 beginning
August 1, 1998, the Borrower may request in writing to the Agent and each Bank
that the Banks extend either or both of the Maturity Dates by one year from the
scheduled dates; provided that, the Borrower may not request more than two
extensions of the Tranche A Maturity Date. On or before the immediately
following June 30 after each such request, each Bank shall notify the Agent and
the Borrower in writing whether it elects to so extend the Maturity Date
referenced in such request. Any failure by a Bank to so notify the Agent and
the Borrower shall be deemed to be a decision by such Bank to not extend the
applicable Maturity Date.
(ii) If each Bank elects to extend the Tranche A Maturity Date pursuant
to an extension request made in clause (i), the Tranche A Maturity Date shall
automatically extend for one year from the scheduled date. If each Bank elects
to extend the Tranche B Maturity Date pursuant to an extension request made in
clause (i), the Tranche B Maturity Date shall automatically extend for 364 days
from the scheduled date.
(iii) If the Majority Banks (calculated taking into account the Tranche A
Advances, Letter of Credit Exposure and Tranche A Commitments only), but not
all the Banks elect to extend the Tranche A Maturity Date (A) the Tranche A
Maturity Date and the Tranche A Commitments of the Banks electing to extend
shall extend by one year from the scheduled date, (B) the Tranche A Maturity
Date for the Banks not electing to extend (each a "Terminating Bank") shall be
the Tranche A Maturity Date then existing for such Bank and each Terminating
Bank's Tranche A Commitment shall terminate on such Tranche A Maturity Date and
the Borrower shall repay the outstanding Tranche A Advances made by each such
Terminating Bank on such Tranche A Maturity Date to the extent that the Tranche
A Advances under such Terminating Bank's Tranche A Commitments are not assumed
pursuant to Section 2.14, (C) the Tranche A Commitments of the Terminating
Banks may be assumed and the Terminating Banks may be replaced in accordance
with the procedures in Section 2.14, and (D) if not all of the Terminating
Banks' Tranche A Commitments are assumed in accordance with Section 2.14, each
extending Bank's Pro Rata Share shall be recalculated to take into account the
termination of the Tranche A Commitments of the Terminating Banks on the
Tranche A Maturity Date for such Terminating Banks.
(iv) If the Majority Banks (calculated taking into account the Tranche B
Advances and Tranche B Commitments only), but not all the Banks elect to extend
the Tranche B Maturity Date (A) the Tranche B Maturity Date and the Tranche B
Commitments of the Banks electing to extend shall extend by one year from the
scheduled date, (B) the Tranche B Maturity Date for the Banks not electing to
extend (each a "Terminating Bank") shall be the Tranche B Maturity Date then
existing for such Bank and each Terminating Bank's Tranche B Commitment shall
terminate on such Tranche B Maturity Date and the Borrower shall repay the
outstanding Tranche B Advances made by each such Terminating Bank on such
Tranche B Maturity Date (or, if the Borrower so elects and no Event of Default
shall have occurred and be continuing, the thirteen-month anniversary of such
Tranche B Maturity Date) to the extent that the Tranche B Advances under such
Terminating Bank's Tranche B Commitments are not assumed pursuant to Section
2.14, (C) the Tranche B Commitments of the Terminating Banks may be assumed and
the Terminating Banks may be replaced in accordance with the procedures in
Section 2.14, and (D) if not all of the Terminating Banks' Tranche B
Commitments are assumed in accordance with Section 2.14, each extending Bank's
Pro Rata Share shall be recalculated to take into account the termination of
the Tranche B Commitments of the Terminating Banks on the Tranche B Maturity
Date for such Terminating Banks.
(v) If the Borrower requests an extension of both Maturity Dates, any
Bank that elects to not extend either of the Maturity Dates shall automatically
be deemed to have elected not to extend both Maturity Dates. Notwithstanding
the foregoing, if the Borrower requests only an extension of the Tranche B
Maturity Date and a Bank declines such request, the Borrower shall not be
required to prepay the Tranche A Advances on the Tranche B Maturity Date
existing for such Terminating Bank.
(vi) If less than the Majority Banks (calculated with respect to the
applicable Commitments) elect to extend the Maturity Date applicable to either
the Tranche A Commitments or the Tranche B Commitments, the Maturity Date with
respect to such Commitments shall not be extended for any Bank.
Section 2.02. Method of Borrowing.
(a) Notice. Each Borrowing shall be made pursuant to a Notice of Borrowing
(or by telephone notice promptly confirmed in writing by a Notice of
Borrowing), given not later than 10:00 a.m. (Dallas, Texas time) (i) on the
third Business Day before the date of the proposed Borrowing, in the case of a
Eurodollar Rate Advance or (ii) on the Business Day of the proposed Borrowing,
in the case of a Base Rate Advance, by the Borrower to the Agent, which shall
give to each Bank prompt notice of such proposed Borrowing by telecopier or
telex. Each Notice of a Borrowing shall be by telecopier or telex, confirmed
immediately in writing specifying the requested (i) date of such Borrowing,
(ii) Type and Class of Advances comprising such Borrowing, (iii) aggregate
amount of such Borrowing, and (iv) if such Borrowing is to be comprised of
Eurodollar Rate Advances, the Interest Period for each such Advance. In the
case of a proposed Borrowing comprised of Eurodollar Rate Advances, the Agent
shall promptly notify each Bank of the applicable interest rate under Section
2.06(b). Each Bank shall, before 12:00 p.m. (Dallas, Texas time) on the date of
such Borrowing, make available for the account of its Applicable Lending Office
to the Agent at its address referred to in Section 9.02, or such other location
as the Agent may specify by notice to the Banks, in same day funds, such Bank's
Pro Rata Share of such Borrowing. After the Agent's receipt of such funds and
upon fulfillment of the applicable conditions set forth in Article III, the
Agent will make such funds available to the Borrower at its account with the
Agent.
(b) Conversions and Continuations. In order to elect to Convert or continue
an Advance under this Section, the Borrower shall deliver an irrevocable Notice
of Conversion or Continuation to the Agent at the Agent's office no later than
10:00 a.m. (Dallas, Texas time) (i) on the Business Day of the proposed
conversion date in the case of a Conversion to a Base Rate Advance and (ii) on
the date which is at least three Business Days in advance of the proposed
Conversion or continuation date in the case of a Conversion to, or a
continuation of, a Eurodollar Rate Advance. Each such Notice of Conversion or
Continuation shall be in writing or by telex or telecopier confirmed
immediately in writing specifying (i) the requested Conversion or continuation
date (which shall be a Business Day), (ii) the amount, Type and Class of the
Advance to be Converted or continued, (iii) whether a Conversion or
continuation is requested, and if a Conversion, into what Type of Advance, and
(iv) in the case of a Conversion to, or a continuation of, a Eurodollar Rate
Advance, the requested Interest Period. Promptly after receipt of a Notice of
Conversion or Continuation under this paragraph, the Agent shall provide each
Bank with a copy thereof and, in the case of a Conversion to or a continuation
of a Eurodollar Rate Advance, notify each Bank of the applicable interest rate
under Section 2.06(b).
(c) Certain Limitations. Notwithstanding anything in paragraphs (a) and (b)
above:
(i) at no time shall there be more than seven Interest Periods
applicable to outstanding Eurodollar Rate Advances;
(ii) if any Bank shall, at least one Business Day before the date of any
requested Borrowing, notify the Agent that the introduction of or any change in
or in the interpretation of any law or regulation makes it unlawful, or that
any central bank or other Governmental Authority asserts that it is unlawful,
for such Bank or its Eurodollar Lending Office to perform its obligations under
this Agreement to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances, the right of the Borrower to select Eurodollar Rate
Advances for such Borrowing or for any subsequent Borrowing shall be suspended
until such Bank shall notify the Agent that the circumstances causing such
suspension no longer exist, and each Advance comprising such Borrowing shall be
a Base Rate Advance;
(iii) if the Agent is, in good faith after reasonable efforts, unable to
determine the Eurodollar Rate for Eurodollar Rate Advances comprising any
requested Borrowing, the Agent shall give written notice to the Borrower
stating the reason for such determination and, after the giving of such notice,
the right of the Borrower to select Eurodollar Rate Advances for such Borrowing
or for any subsequent Borrowing shall be suspended until the Agent shall notify
the Borrower and the Banks that the circumstances causing such suspension no
longer exist, and each Advance comprising such Borrowing shall be a Base Rate
Advance;
(iv) if the Majority Banks shall in good faith, at least one Business
Day before the date of any requested Borrowing, notify the Agent that the
Eurodollar Rate for Eurodollar Rate Advances comprising such Borrowing will not
adequately reflect the cost to such Banks of making or funding their respective
Eurodollar Rate Advances, as the case may be, for such Borrowing, the right of
the Borrower to select Eurodollar Rate Advances for such Borrowing or for any
subsequent Borrowing shall be suspended (and such notice shall also include the
rationale for such suspension) until the Agent shall notify the Borrower and
the Banks that the circumstances causing such suspension no longer exist, and
each Advance comprising such Borrowing shall be a Base Rate Advance; and if the
Borrower shall fail to select the duration or continuation of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01 and paragraph
(b) above, the Agent will forthwith so notify the Borrower and the Banks and
such Advances will be made available to the Borrower on the date of such
Borrowing as Base Rate Advances or, if an existing Advance, Convert into Base
Rate Advances.
(d) Notices Irrevocable. Each Notice of Borrowing and Notice of Conversion
orContinuation shall be irrevocable and binding on the Borrower. In the case
of any Borrowing which the related Notice of Borrowing specifies is to be
comprised of Eurodollar Rate Advances, the Borrower shall indemnify each Bank
against any loss, reasonable out-of-pocket cost or expense incurred by such
Bank as a result of any failure to fulfill on or before the date specified in
such Notice of Borrowing for such Borrowing the applicable conditions set forth
in Article III, or any failure to Convert such Advances to Eurodollar Rate
Advances on the applicable date for Conversion or continuation, including,
without limitation, any loss (including any loss of anticipated profits), cost
or expense reasonably incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Bank to fund the Advance to be made by
such Bank as part of such Borrowing when such Advance, as a result of such
failure, is not made on such date.
(e) Agent Reliance. Unless the Agent shall have received notice from a Bank
before the date of any Borrowing that such Bank will not make available to the
Agent such Bank's Pro Rata Share of such Borrowing, the Agent may assume that
such Bank has made its Pro Rata Share of such Borrowing available to the Agent
on the date of such Borrowing in accordance with paragraph (a) of this Section
2.02 and the Agent may, in reliance upon such assumption, make available to the
Borrower on such date a corresponding amount. If and to the extent that such
Bank shall not have so made its Pro Rata Share of such Borrowing available to
the Agent, such Bank and the Borrower severally agree to immediately repay to
the Agent on demand such corresponding amount, together with interest on such
amount, for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at (i) in the case
of the Borrower, the interest rate applicable on such day to Advances
comprising such Borrowing and (ii) in the case of such Bank, the Federal Funds
Rate for such day. If such Bank shall repay to the Agent such corresponding
amount and interest as provided above, such corresponding amount so repaid
shall constitute such Bank's Advance as part of such Borrowing for purposes of
this Agreement even though not made on the same day as the other Advances
comprising such Borrowing.
(f) Bank Obligations Several. The failure of any Bank to make the Advance
to be made by it as part of any Borrowing shall not relieve any other Bank of
its obligation, if any, to make its Advance on the date of such Borrowing. No
Bank shall be responsible for the failure of any other Bank to make the Advance
to be made by such other Bank on the date of any Borrowing.
(g) Notes. The indebtedness of the Borrower to each Bank resulting from
Tranche A Advances owing to such Bank shall be evidenced by a Tranche A Note
of the Borrower payable to the order of such Bank in substantially the form of
Exhibit F-1. The indebtedness of the Borrower to each Bank resulting from
Tranche B Advances owing to such Bank shall be evidenced bya Tranche B Note of
the Borrower payable to the order of such Bank in substantially the form of
Exhibit F-2.
Section 2.03. Fees.
(a) Commitment Fees. The Borrower agrees to pay to the Agent for the
account of each Bank a commitment fee on the average daily amount by which such
Bank's Tranche A Commitment exceeds the sum of such Bank's outstanding Tranche
A Advances and Pro Rata Share of the Letter of Credit Exposure from the date of
this Agreement until the Tranche A Maturity Date at a per annum rate equal to
the Applicable Margin for commitment fees for the Tranche A Commitments. The
Borrower agrees to pay to the Agent for the account of each Bank a commitment
fee on the average daily amount by which such Bank's Tranche B Commitment
exceeds the sum of such Bank's outstanding Tranche B Advances from the date of
this Agreement until the Tranche B Maturity Date at a per annum rate equal to
the Applicable Margin for commitment fees for the Tranche B Commitments. The
fees payable pursuant to this clause (a) shall be due and payable quarterly in
arrears on the first day of each January, April, July, and October commencing
October 1, 1997 and on the applicable Maturity Date.
(b) Agent Fees. The Borrower agrees to pay to the Agent the agent's fees
described in the letter agreement dated July 9, 1997 from the Agent and
NationsBanc Capital Markets, Inc. to the Borrower.
(c) Letter of Credit Fees. The Borrower agrees to pay (i) to the Agent for
the pro rata benefit of the Banks, a per annum fee for each Letter of Credit
equal to the product of (A) the Applicable Margin for Eurodollar Rate Advances
less .125% and (B) the face amount of such Letter of Credit and (ii) to the
Issuing Bank, a per annum fee for each Letter of Credit equal to the greater of
(A) the product of (I) .125% and (II) the face amount of such Letter of Credit
and (B) $350. Each such fee shall be based on the maximum amount available to
be drawn under such Letter of Credit from the date of issuance of the Letter of
Credit until its Expiration Date and be payable quarterly in advance on the
date of the issuance of the Letter of Credit for the period from such date
until the end of the calendar quarter in which such Letter of Credit is issued
and on the first day of each January, April, July and October thereafter until
its Expiration Date.
Section 2.04. Reduction of the Commitments. The Borrower shall have the
right, upon at least three Business Days' irrevocable notice to the Agent, to
terminate in whole or reduce ratably in part the unused portion of the Tranche
A Commitments or the Tranche B Commitments; provided that each partial
reduction shall be in the aggregate amount of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof. Any reduction or termination of the
Commitments pursuant to this Section 2.04 shall be permanent, with no
obligation of the Banks to reinstate such Commitments and the commitment fees
provided for in Section 2.03(a) shall thereafter be computed on the basis of
the Commitments, as so reduced.
Section 2.05. Repayment.
(a) Tranche A Advances. The Borrower shall repay the outstanding principal
amount of each Tranche A Advance on the Tranche A Maturity Date; provided that,
the principal amount of any outstanding Tranche A Advance may be prepaid in
accordance with the terms of Section 2.07.
(b) Tranche B Advances. The Borrower shall repay the outstanding principal
amount of each Tranche B Advance on the Tranche B Maturity Date or, if the
Tranche B Commitments shall not have been terminated pursuant to Article VII,
such Tranche B Advances may, at the Borrower's option, be converted into a term
loan and, in such event, shall be repaid ratably based on each Bank's Pro Rata
Share on the thirteen-month anniversary of the Tranche B Maturity Date.
Section 2.06. Interest. The Borrower shall pay interest on the unpaid
principal amount of each Advance made by each Bank from the date of such
Advance until such principal amount shall be paid in full, at the following
rates per annum:
(a) Base Rate Advances. If such Advance is a Base Rate Advance, a rate per
annum equal at all times to the Adjusted Base Rate in effect from time-to-time
plus the Applicable Margin, payable in arrears on the first day of each
January, April, July, and October and on the date such Base Rate Advance shall
be paid in full, provided that any amount of principal which is not paid when
due (whether at stated maturity, by acceleration or otherwise) shall bear
interest from the date on which such amount is due until such amount is paid in
full, payable on demand, at a rate per annum equal at all times to the Adjusted
Base Rate in effect from time-to-time plus the Applicable Margin plus 3%.
(b) Eurodollar Rate Advances. If such Advance is a Eurodollar Rate Advance,
a rate per annum equal at all times during the Interest Period for such Advance
to the Eurodollar Rate for such Interest Period plus the Applicable Margin,
payable on the last day of such Interest Period, and, in the case of six-month
Interest Periods, on the day which occurs during such Interest Period three
months from the first day of such Interest Period; provided that any amount of
principal which is not paid when due (whether at stated maturity, by
acceleration or otherwise) shall bear interest from the date on which such
amount is due until such amount is paid in full, payable on demand, at a rate
per annum equal at all times to the rate required to be paid on such Advance
immediately prior to the date on which such amount became due plus 3%; provided
further that, if such overdue amount has not been paid within three Business
Days of the date due, such rate of interest shall be increased to the greater
of (i) the Adjusted Base Rate in effect from time-to-time plus the Applicable
Margin on Base Rate Advances plus 3% and (ii) the rate required to be paid on
such Advance immediately prior to the date on which such amount became due plus
3%.
(c) Additional Interest on Eurodollar Rate Advances. The Borrower shall pay
to each Bank, so long as any such Bank shall be required under regulations of
the Federal Reserve Board to maintain reserves with respect to liabilities or
assets consisting of or including Eurocurrency Liabilities, additional interest
on the unpaid principal amount of each Eurodollar Rate Advance of such Bank,
from the effective date of such Advance until such principal amount is paid in
full, at an interest rate per annum equal at all times to the remainder
obtained by subtracting (A) the Eurodollar Rate for the Interest Period for
such Advance from (B) the rate obtained by dividing such Eurodollar Rate by a
percentage equal to 100% minus the Eurodollar Rate Reserve Percentage of such
Bank for such Interest Period, payable on each date on which interest is
payable on such Advance. Such additional interest payable to any Bank shall be
determined by such Bank and notified to the Borrower through the Agent (such
notice to include the calculation of such additional interest, which
calculation shall be conclusive in the absence of manifest error, and be
accompanied by any evidence indicating the need for such additional interest as
the Borrower may reasonably request).
(d) Usury Recapture. In the event the rate of interest chargeable under
this Agreement or the Notes at any time is greater than the Maximum Rate, the
unpaid principal amount of the Notes shall bear interest at the Maximum Rate
until the total amount of interest paid or accrued on the Notes equals the
amount of interest which would have been paid or accrued on the Notes if the
stated rates of interest set forth in this Agreement had at all times been in
effect.
In the event, upon payment in full of the Notes, the total amount of interest
paid or accrued under the terms of this Agreement and the Notes is less than
the total amount of interest which would have been paid or accrued if the rates
of interest set forth in this Agreement had, at all times, been in effect, then
the Borrower shall, to the extent permitted by applicable law, pay the Agent
for the account of the Banks an amount equal to the difference between (i) the
lesser of (A) the amount of interest which would have been charged on the Notes
if the Maximum Rate had, at all times, been in effect or (B) the amount of
interest which would have accrued on the Notes if the rates of interest set
forth in this Agreement had at all times been in effect and (ii) the amount of
interest actually paid or accrued under this Agreement on the Notes.
In the event the Banks ever receive, collect or apply as interest any sum in
excess of the Maximum Rate, such excess amount shall, to the extent permitted
by law, be applied to the reduction of the principal balance of the Notes, and
if no such principal is then outstanding, such excess or part thereof remaining
shall be paid to the Borrower.
Section 2.07. Prepayments.
(a) Right to Prepay. The Borrower shall have no right to prepay any
principal amount of any Advance except as provided in this Section 2.07.
(b) Optional. The Borrower may elect to prepay any of the Advances, after
giving by 10:00 a.m. (Dallas, Texas time) (i) in the case of Eurodollar Rate
Advances, at least two Business Days' or (ii) in case of Base Rate Advances,
same Business Day's prior written notice to the Agent stating theproposed date,
aggregate principal amount of such prepayment, whether such prepayment should
be applied to reduce outstanding Tranche A Advances or Tranche B Advances and,
if applicable, the relevant Interest Period for the Advances to be repaid. If
any such notice is given, the Borrower shall prepay Advances comprising part of
the same Borrowing in whole or ratably in part in an aggregate principal amount
equal to the amount specified in such notice, together with accrued interest to
the date of such prepayment on the principal amount prepaid and amounts, if
any, required to be paid pursuant to Section 2.08 as a result of such
prepayment being made on such date; provided, however, that each partial
prepayment shall be in an aggregate principal amount not less than $2,000,000.
(c) Mandatory.
(i) On any date on which the outstanding principal amount of the Tranche
A Advances plus the Letter of Credit Exposure exceeds the Tranche A Commitment,
the Borrower agrees to make a prepayment of the Tranche A Advances in an amount
equal to such excess.
(ii) On any date on which the outstanding principal amount of the Tranche
B Advances exceeds the Tranche B Commitment, the Borrower agrees to make a
prepayment of the Tranche B Advances in an amount equal to such excess.
(iii) On the date of the issuance of any Subordinated Debt, the Borrower
shall, if the Tranche B Advances shall have been converted to a term loan
pursuant to Section 2.05(b), prepay such term loan using the Net Proceeds
received from the Subordinated Debt.
(iv) Each prepayment pursuant to this Section 2.07(c) shall be
accompanied by accrued interest on the amount prepaid to the date of such
prepayment and amounts, if any, required to be paid pursuant to Section 2.08 as
a result of such prepayment being made on such date.
(d) Illegality. If any Bank shall notify the Agent and the Borrower that
the introduction of or any change in or in the interpretation of any law or
regulation by the Governmental Authority charged with the administration or
interpretation thereof makes it unlawful, or that any central bank or other
Governmental Authority asserts that it is unlawful for such Bank or its
Eurodollar Lending Office to perform its obligations under this Agreement to
maintain any Eurodollar Rate Advances of such Bank then outstanding hereunder,
(i) the Borrower shall, no later than 10:00 a.m. (Dallas, Texas time) (A) if
not prohibited by law, on the last day of the Interest Period for each
outstanding Eurodollar Rate Advance or (B) if required by such notice, on the
second Business Day following its receipt of such notice prepay all of the
Eurodollar Rate Advances of all of the Banks then outstanding, together with
accrued interest on the principal amount prepaid to the date of such prepayment
and amounts, if any, required to be paid pursuant to Section 2.08 as a result
of such prepayment being made on such date, (ii) each Bank shall simultaneously
make a Base Rate Advance to the Borrower on such date in an amount equal to the
aggregate principal amount of the Eurodollar Rate Advances prepaid to such
Bank, and (iii) the right of the Borrower to select Eurodollar Rate Advances
for any subsequent Borrowing shall be suspended until the Bank which gave
notice referred to above shall notify the Agent that the circumstances causing
such suspension no longer exist.
(e) Ratable Payments; Effect of Notice. Each payment of any Advance
pursuant to this Section 2.07 or any other provision of this Agreement shall be
made in a manner such that all Advances comprising part of the same Borrowing
are paid in whole or ratably in part. All notices given pursuant to this
Section 2.07 shall be irrevocable and binding upon the Borrower.
Section 2.08. Breakage Costs. If (a) any payment of principal of any
Eurodollar Rate Advance is made other than on the last day of the Interest
Period for such Advance, except as a result of Section 2.07(d) or (b) the
Borrower fails to make a principal or interest payment with respect to any
Eurodollar Rate Advance on the last day of the Interest Period applicable to
such Advance, the Borrower shall, within 10 days of any written demand sent by
any Bank to the Borrower through the Agent, pay to the Agent for the account of
such Bank any amounts required to compensate such Bank for any additional
losses, reasonable out-of-pocket costs or expenses which it may reasonably
incur as a result of such payment or nonpayment, including, without limitation,
any loss (including loss of anticipated profits), cost or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired
by any Bank reasonably necessary to fund or maintain such Advance.
Section 2.09. Increased Costs.
(a) Eurodollar Rate Advances. If, due to either (i) the introduction of or
any change (other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to any Bank of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances, then the Borrower shall from time-to-time, upon
demand by such Bank (with a copy of such demand to the Agent), immediately pay
to the Agent for the account of such Bank additional amounts sufficient to
compensate such Bank for such increased cost. A certificate as to the amount
of such increased cost and detailing the calculation of such cost submitted to
the Borrower and the Agent by such Bank shall be conclusive and binding for all
purposes, absent manifest error, and shall be accompanied with any evidence of
such increased cost as the Borrower may reasonably request.
(b) Capital Adequacy. If any Bank or the Issuing Bank determines in good
faith that compliance with any law or regulation or any guideline or request
from any central bank or other Governmental Authority (whether or not having
the force of law) affects or would affect the amount of capital required or
expected to be maintained by such Bank or the Issuing Bank or any corporation
controlling such Bank or the Issuing Bank and that the amount of such capital
is increased by or based upon the existence of such Bank's commitment to lend
or the Issuing Bank's commitment to issue the Letters of Credit and other
commitments of this type, then, upon 30 days' prior written notice by such Bank
or the Issuing Bank (with a copy of any such demand to the Agent), the Borrower
shall immediately pay to the Agent for the account of such Bank or to the
Issuing Bank, as the case may be, from time-to-time as specified by such Bank
or the Issuing Bank, additional amounts sufficient to compensate such Bank or
the Issuing Bank, in light of such circumstances, (i) with respect to such
Bank, to the extent that such Bank reasonably determines such increase in
capital to be allocable to the existence of such Bank's commitment to lend
under this Agreement and (ii) with respect to the Issuing Bank, to the extent
that the Issuing Bank reasonably determines such increase in capital to be
allocable to the issuance or maintenance of the Letters of Credit. A
certificate as to such amounts and detailing the calculation of such amounts
submitted to the Borrower by such Bank or the Issuing Bank shall be conclusive
and binding for all purposes, absent manifest error, and shall be accompanied
with any evidence of the need for maintenance of such increased capital as the
Borrower may reasonably request.
(c) Letters of Credit. If any change in any law or regulation or in the
interpretation thereof by any court or administrative or Governmental Authority
charged with the administration thereof shall either (i) impose, modify, or
deem applicable any reserve, special deposit, or similar requirement against
letters of credit issued by, or assets held by, or deposits in or for the
account of, the Issuing Bank or (ii) impose on the Issuing Bank any other
condition regarding the provisions of this Agreement relating to the Letters of
Credit or any Letter of Credit Obligations, and the result of any event
referred to in the preceding clause (i) or (ii) shall be to increase the cost
to the Issuing Bank of issuing or maintaining any Letter of Credit (which
increase in cost shall be determined by the Issuing Bank's reasonable
allocation of the aggregate of such cost increases resulting from such event),
then, upon demand by the Issuing Bank, the Borrower shall pay to the Issuing
Bank, from time-to-time as specified by the Issuing Bank, additional amounts
which shall be sufficient to compensate the Issuing Bank for such increased
cost. A certificate as to such increased cost incurred by the Issuing Bank, as
a result of any event mentioned in clause (i) or (ii) above, and detailing the
calculation of such increased costs submitted by the Issuing Bank to the
Borrower, shall be conclusive and binding for all purposes, absent manifest
error, and shall be accompanied with any evidence of such increased cost as the
Borrower may reasonably request.
Section 2.10. Payments and Computations.
(a) Payment Procedures. The Borrower shall make each payment under this
Agreement and under the Notes not later than 10:00 a.m. (Dallas, Texas time) on
the day when due in Dollars to the Agent at the location referred to in the
Notes (or such other location as the Agent shall designate in writing to the
Borrower) in same day funds without deduction, setoff, or counterclaim of any
kind. The Agent will promptly thereafter cause to be distributed like funds
relating to the payment of principal, interest or fees ratably (other than
amounts payable solely to the Agent, the Issuing Bank, or a specific Bank
pursuant to Section 2.03(b), 2.03(c), 2.06(c), 2.08, 2.09, or 2.11, but after
taking into account payments effected pursuant to Section 9.04) to the Banks
for the account of their respective Applicable Lending Offices, and like funds
relating to the payment of any other amount payable to any Bank or the Issuing
Bank to such Bank for the account of its Applicable Lending Office, in each
case to be applied in accordance with the terms of this Agreement. If and to
the extent that the Agent receives any payment or prepayment from the Borrower
and fails to distribute such payment or prepayment to the Banks ratably on the
basis of their respective Pro Rata Shares on the day the Agent receives such
payment or prepayment (if received prior to 10:00 a.m. on such day) or the next
Business Day (if received after 10:00 a.m. on such day), then the Agent shall
pay to each Bank such Bank's Pro Rata Share of such payment or prepayment
together with interest thereon at the Federal Funds Rate for each day from the
date such amount should have been distributed by the Agent until such payment
or prepayment is actually distributed to the Banks.
(b) Computations. All computations of interest based on the Base Rate shall
be made by the Agent on the basis of a year of 365 or 366 days, as the case may
be, and all computations of interest based on the Eurodollar Rate, the Federal
Funds Rate, and of fees shall be made by the Agent, on the basis of a year of
360 days, in each case for the actual number of days (including the first day,
but excluding the last day) occurring in the period for which such interest or
fees are payable. Each determination by the Agent of an interest rate shall be
conclusive and binding for all purposes, absent manifest error.
(c) Non-Business Day Payments. Whenever any payment shall be stated to be
due on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or fees, as the case may be;
provided, however, that if such extension would cause payment of interest on or
principal of Eurodollar Rate Advances to be made in the next following calendar
month, such payment shall be made on the next preceding Business Day.
(d) Agent Reliance. Unless the Agent shall have received written notice
from the Borrower prior to the date on which any payment is due to the Banks
that the Borrower will not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such date an amount equal to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank, together with interest, for each day from the date
such amount is distributed to such Bank until the date such Bank repays such
amount to the Agent, at the Federal Funds Rate for such day.
Section 2.11. Taxes.
(a) No Deduction for Certain Taxes. Any and all payments by the Borrower
shall be made, in accordance with Section 2.10, free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholdings, and all liabilities with respect thereto, excluding,
in the case of each Bank, the Issuing Bank, and the Agent, taxes imposed on its
income, and franchise taxes imposed on it, by the jurisdiction under the laws
of which such Bank, the Issuing Bank, or the Agent (as the case may be) is
organized or any political subdivision of the jurisdiction (all such
nonexcluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes") and, in the case of each
Bank and the Issuing Bank, Taxes by the jurisdiction of such Bank's Applicable
Lending Office or any political subdivision of such jurisdiction. If the
Borrower shall be required by law to deduct any Taxes from or in respect of any
sum payable to any Bank, the Issuing Bank, or the Agent, (i) the sum payable
shall be increased as may be necessary so that, after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.11), such Bank, the Issuing Bank, or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made; provided, however, that if the Borrower's obligation to
deduct or withhold Taxes is caused solely by such Bank's, the Issuing Bank's,
or the Agent's failure to provide the forms described in paragraph (e) of this
Section 2.11 and such Bank, the Issuing Bank, or the Agent could have provided
such forms, no such increase shall be required; (ii) the Borrower shall make
such deductions; and (iii) the Borrower shall pay the full amount deducted to
the relevant taxation authority or other authority in accordance with
applicable law and provide to the Agent a receipt or a copy of a payment
voucher from such relevant taxation authority or other authority evidencing
such payment.
(b) Other Taxes. In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement, the Notes, or the other Credit Documents (hereinafter referred to as
"Other Taxes").
(c) Indemnification. THE BORROWER INDEMNIFIES EACH BANK, THE ISSUING BANK,
AND THE AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES (INCLUDING, WITHOUT
LIMITATION, ANY TAXES (AS DEFINED IN SECTION 2.11(a) ABOVE) OR OTHER TAXES (AS
DEFINED IN SECTION 2.11(a) ABOVE) IMPOSED BY ANY JURISDICTION ON AMOUNTS
PAYABLE UNDER THIS SECTION 2.11) PAID BY SUCH BANK, THE ISSUING BANK, OR THE
AGENT (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING INTEREST, PENALTIES AND
EXPENSES (OTHER THAN INTEREST, PENALTIES AND EXPENSES ARISING SOLELY FROM THE
FAILURE OF THE AGENT, THE ISSUING BANK, OR ANY BANK TO PROVIDE THE FORMS
DESCRIBED IN PARAGRAPH (d) OF THIS SECTION 2.11)) ARISING THEREFROM OR WITH
RESPECT THERETO, WHETHER OR NOT SUCH TAXES (AS DEFINED IN SECTION 2.11(a)
ABOVE) OR OTHER TAXES (AS DEFINED IN SECTION 2.11(a) ABOVE) WERE CORRECTLY OR
LEGALLY ASSERTED. EACH PAYMENT REQUIRED TO BE MADE BY THE BORROWER IN RESPECT
OF THIS INDEMNIFICATION SHALL BE MADE TO THE AGENT FOR THE BENEFIT OF ANY PARTY
CLAIMING SUCH INDEMNIFICATION WITHIN 30 DAYS FROM THE DATE THE BORROWER
RECEIVES WRITTEN DEMAND THEREFOR FROM THE AGENT ON BEHALF OF ITSELF AS AGENT,
THE ISSUING BANK, OR ANY SUCH BANK. IF ANY BANK, THE AGENT, OR THE ISSUING
BANK RECEIVES A REFUND OR TAX CREDIT IN RESPECT OF ANY TAXES (AS DEFINED IN
SECTION 2.11(a) ABOVE) PAID BY THE BORROWER UNDER THIS PARAGRAPH (C), SUCH
BANK, THE AGENT, OR THE ISSUING BANK, AS THE CASE MAY BE, SHALL PROMPTLY PAY TO
THE BORROWER THE BORROWER'S SHARE OF SUCH REFUND OR TAX CREDIT.
(d) Foreign Bank Withholding Exemption. Each Bank and Issuing Bank that is
not incorporated under the laws of the United States of America or a state
thereof agrees that it will deliver to the Borrower and the Agent (i) two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224 or
successor applicable form, as the case may be, certifying in each case that
such Bank is entitled to receive payments under this Agreement and the Notes
payable to it, without deduction or withholding of any United States federal
income taxes, (ii) if applicable, an Internal Revenue Service Form W-8 or W-9
or successor applicable form, as the case may be, to establish an exemption
from United States backup withholding tax, and (iii) any other governmental
forms which are necessary or required under an applicable tax treaty or
otherwise by law to reduce or eliminate any withholding tax, which have been
reasonably requested by the Borrower. Each Bank which delivers to the Borrower
and the Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the next
preceding sentence further undertakes to deliver to the Borrower and the Agent
two further copies of the said letter and Form 1001 or 4224 and Form W-8 or W-
9, or successor applicable forms, or other manner of certification, as the case
may be, on or before the date that any such letter or form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent letter and form previously delivered by it to the Borrower and the
Agent, and such extensions or renewals thereof as may reasonably be requested
by the Borrower and the Agent certifying in the case of a Form 1001 or 4224
that such Bank is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes. If an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any delivery required by the preceding
sentence would otherwise be required which renders all such forms inapplicable
or which would prevent any Bank from duly completing and delivering any such
letter or form with respect to it and such Bank advises the Borrower and the
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, and in the case of a Form W-8
or W-9, establishing an exemption from United States backup withholding tax,
such Bank shall not be required to deliver such letter or forms. The Borrower
shall withhold tax at the rate and in the manner required by the laws of the
United States with respect to payments made to a Bank failing to timely provide
the requisite Internal Revenue Service forms.
Section 2.12. Sharing of Payments, Etc. If any Bank shall obtain any payment
(whether voluntary, involuntary, through the exercise of any right of set-off
or otherwise) on account of the Advances or Letter of Credit Obligations made
by it in excess of its Pro Rata Share of payments on account of the Advances or
Letter of Credit Obligations obtained by all the Banks, such Bank shall notify
the Agent and forthwith purchase from the other Banks such participations in
the Advances made by them or Letter of Credit Obligations held by them as shall
be necessary to cause such purchasing Bank to share the excess payment ratably
with each of them; provided, however, that if all or any portion of such excess
payment is thereafter recovered from such purchasing Bank, such purchase from
each Bank shall be rescinded and such Bank shall repay to the purchasing Bank
the purchase price to the extent of such Bank's ratable share (according to the
proportion of (a) the amount of the participation sold by such Bank to the
purchasing Bank as a result of such excess payment to (b) the total amount of
such excess payment) of such recovery, together with an amount equal to such
Bank's ratable share (according to the proportion of (i) the amount of such
Bank's required repayment to the purchasing Bank to (ii) the total amount of
all such required repayments to the purchasing Bank) of any interest or other
amount paid or payable by the purchasing Bank in respect of the total amount so
recovered. The Borrower agrees that any Bank so purchasing a participation
from another Bank pursuant to this Section 2.12 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off) with respect to such participation as fully as if such Bank were the
direct creditor of the Borrower in the amount of such participation.
Section 2.13. Letters of Credit.
(a) Issuance. From time-to-time from the date of this Agreement until four
months before the Tranche A Maturity Date, at the request of the Borrower, the
Issuing Bank shall, on the terms and conditions hereinafter set forth, issue,
increase, or extend the expiration date of Letters of Credit for the account of
the Borrower on any Business Day. No Letter of Credit will be issued,
increased, or extended:
(i) if such issuance, increase, or extension would cause (A) the Letter
of Credit Exposure to exceed the lesser of (1) $20,000,000 or (2) the aggregate
Tranche A Commitments less the aggregate outstanding principal amount of all
Tranche A Advances;
(ii) unless such Letter of Credit has an Expiration Date not later than
the earlier of (A) 13 months after the date of issuance thereof (or, if
extendable beyond such period, unless such Letter of Credit is cancellable upon
120 days' notice given by the Issuing Bank to the beneficiary of such Letter of
Credit) and (B) the Tranche A Maturity Date;
(iii) unless such Letter of Credit is in form and substance acceptable to
the Issuing Bank in its sole discretion;
(iv) unless such Letter of Credit is a standby letter of credit not
supporting the repayment of indebtedness for borrowed money of any Person;
(v) unless the Borrower has delivered to the Issuing Bank a completed
and executed letter of credit application on the Issuing Bank's standard form,
which application for the initial Issuing Bank is in the form of the attached
Exhibit G; and
(vi) unless such Letter of Credit is governed by the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500 or any successor publication. If the terms of
any letter of credit application referred to in the foregoing clause (v)
conflicts with the terms of this Agreement, the terms of this Agreement shall
control.
Notwithstanding the foregoing, if the Agent and the Banks permit the Expiration
Date of any Letter of Credit to extend beyond the Tranche A Maturity Date, the
Borrower shall deposit with the Agent into the Cash Collateral Account on the
Tranche A Maturity Date an amount of cash equal to the outstanding Letter of
Credit Exposure as security for the Obligations to the extent the Letter of
Credit Obligations are not otherwise paid at such time.
(b) Participations. (i) On the Effective Date, the Issuing Bank shall be
deemed to have sold to each Bank and each other Bank shall be deemed to have
purchased from the Issuing Bank a participation equal to such Bank's Pro Rata
Share at such date in the Letter of Credit Obligations related to each Letter
of Credit issued under the Existing Credit Agreement and outstanding on the
Effective Date and (ii) upon the date of the issuance or increase of a Letter
of Credit occurring on or after the Effective Date, the Issuing Bank shall be
deemed to have sold to each other Bank and each other Bank shall have been
deemed to have purchased from the Issuing Bank a participation in the related
Letter of Credit Obligations equal to such Bank's Pro Rata Share at such date
and such sale and purchase shall otherwise be in accordance with the terms of
this Agreement. The Issuing Bank shall promptly notify each such participant
Bank by telex, telephone, or telecopy of each Letter of Credit issued or
increased and the actual dollar amount of such Bank's participation in such
Letter of Credit.
(c) Reimbursement. The Borrower hereby agrees to pay on demand to the
Issuing Bank for the benefit of the Banks in respect of each Letter of Credit
an amount equal to any amount paid by the Issuing Bank under or in respect of
such Letter of Credit. In the event the Issuing Bank makes a payment pursuant
to a request for draw presented under a Letter of Credit and such payment is
not promptly reimbursed by the Borrower upon demand, the Issuing Bank shall
give notice of such payment to the Agent and the Banks, and each Bank shall
promptly reimburse the Issuing Bank for such Bank's Pro Rata Share of such
payment, and such reimbursement shall be deemed for all purposes of this
Agreement to constitute a Tranche A Borrowing comprised of Base Rate Advances
to the Borrower from such Bank. If such reimbursement is not made by any Bank
to the Issuing Bank on the same day on which the Issuing Bank shall have made
payment on any such draw, such Bank shall pay interest thereon to the Issuing
Bank at a rate per annum equal to the Federal Funds Rate. The Borrower hereby
unconditionally and irrevocably authorizes, empowers, and directs the Agent and
the Banks to record and otherwise treat such payment under a Letter of Credit
not immediately reimbursed by the Borrower as a Tranche A Borrowing comprised
of Base Rate Advances to the Borrower.
(d) Obligations Unconditional. The obligations of the Borrower under this
Agreement in respect of each Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, notwithstanding the following circumstances:
(i) any lack of validity or enforceability of any Letter of Credit
Documents;
(ii) any amendment or waiver of or any consent to departure from any
Letter of Credit Documents;
(iii) the existence of any claim, set-off, defense or other right which
the Borrower may have at any time against any beneficiary or transferee of such
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other person or entity,
whether in connection with this Agreement, the transactions contemplated in
this Agreement or in any Letter of Credit Documents or any unrelated
transaction;
(iv) any statement or any other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect to the
extent the Issuing Bank would not be liable therefor pursuant to the following
paragraph (e);
(v) payment by the Issuing Bank under such Letter of Credit against
presentation of a draft or certificate which does not comply with the terms of
such Letter of Credit (unless such failure to comply is evident on the face of
such draft or certificate and such payment would constitute gross negligence or
willful misconduct by the Issuing Bank); or
(vi) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; provided, however, that nothing contained in
this paragraph (d) shall be deemed to constitute a waiver of any remedies of
the Borrower against the Issuing Bank in connection with the Letters of Credit.
(e) Liability of Issuing Bank. Except as otherwise provided herein, the
Borrower assumes all risks of the acts or omissions of any beneficiary or
transferee of any Letter of Credit with respect to its use of such Letter of
Credit. Neither the Issuing Bank nor any of its officers or directors shall be
liable or responsible for:
(i) the use which may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith;
(ii) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged;
(iii) payment by the Issuing Bank against presentation of documents which
do not comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the relevant Letter of
Credit (unless such failure to comply is evident on the face of the draft or
certificate and such payment would constitute gross negligence or willful
misconduct by the Issuing Bank); or
(iv) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit (including the Issuing Bank's own
negligence), except that the Borrower shall have a claim against the Issuing
Bank, and the Issuing Bank shall be liable to the Borrower, to the extent of
any direct, as opposed to consequential, damages suffered by the Borrower which
the Borrower proves were caused by (A) the Issuing Bank's willful misconduct or
gross negligence in determining whether documents presented under a Letter of
Credit comply with the terms of such Letter of Credit or (B) the Issuing Bank's
willful failure to make lawful payment under any Letter of Credit after the
presentation to it of a draft and certificate strictly complying with the terms
and conditions of such Letter of Credit.
In furtherance and not in limitation of the foregoing, the Issuing Bank may
accept documents that appear on their face to be in order, without
responsibility for further investigation, regardless of any notice or
information to the contrary.
Section 2.14. Bank Replacement. Each Bank seeking compensation pursuant to
Sections 2.06(c), 2.07(d), 2.09(a), 2.09(b) or 2.11 shall deliver the notices
required by such Sections as promptly as practicable, and in any event within
90 days after it becomes aware thereof and determines to request compensation.
In no event shall the Borrower be required to pay any such compensation for
periods occurring more than 90 days before the giving of such notice. In the
event any Bank shall give any notice to the Borrower or the Agent pursuant to
Sections 2.06(c), 2.07(d), 2.09(a), 2.09(b) or 2.11 or any Terminating Bank
shall elect not to extend one of the Maturity Dates, the Borrower may give
notice to such Bank (with a copy to the Agent) that it wishes to seek one or
more Eligible Assignees (which may be one or more of the Banks) to assume the
Commitments of such Bank and to purchase its Pro Rata Share of the Obligations
and its Notes. Each Bank delivering a notice pursuant to the foregoing
Sections and each Terminating Bank agrees to sell its Commitments, and its Pro
Rata Share of the Obligations and its Notes to any such Eligible Assignee for
an amount equal to the sum of the outstanding principal amount of and accrued
interest on the Advances owing to such Bank plus all fees and other amounts
owing to such Bank under the Credit Documents (including, without limitation,
any compensation owing to such Bank pursuant to the foregoing Sections) until
the date such Commitments, Notes and amounts are purchased, whereupon such Bank
shall have no further Commitments or other obligations to the Borrower under
this Agreement or any other Credit Document.
ARTICLE III
CONDITIONS OF LENDING
Section 3.01. Conditions Precedent to Initial Borrowings and Issuance of
Letters of Credit. The obligation of each Bank to make its initial Advance as
part of the initial Borrowing and of the Issuing Bank to issue the initial
Letters of Credit is subject to the conditions precedent that:
(a) Documentation. On or before the day on which the initial Borrowing is
made or the initial Letters of Credit are issued, the Agent shall have received
the following duly executed by all the parties thereto, in form and substance
satisfactory to the Agent and the Banks, and (except for the Notes) in
sufficient copies for each Bank:
(i) this Agreement and all attached Exhibits and Schedules and the Notes
payable to the order of each of the Banks, respectively;
(ii) a Reaffirmation of Guaranty executed by each of the Borrower's
Subsidiaries (other than the Non-Profit Entities and the Canadian
Subsidiaries);
(iii) (A) a Reaffirmation of Pledge Agreement executed by ECI Capital
Corporation reaffirming its obligations under the Pledge Agreement and (B) such
other documents, opinions or agreements as the Agent may request to evidence
the perfection of the Liens created thereby;
(iv) a certificate from the President or Chief Financial Officer of the
Borrower dated as of the Effective Date stating that (A) all representations
and warranties of the Borrower set forth in this Agreement and the other Credit
Documents are true and correct in all material respects; (B) no Default has
occurred and is continuing; and (C) the conditions in this Section 3.01 have
been met;
(v) (A) certified copies of the resolutions of the Board of Directors of
the Borrower and each Subsidiary (other than the Non-Profit Entities) approving
this Agreement, the Notes, and the other Credit Documents, and of the articles
or certificate of incorporation and bylaws of the Borrower and each such
Subsidiary, and all documents evidencing other necessary corporate action and
governmental approvals, if any, with respect to this Agreement, the Notes, and
the other Credit Documents, and (B) certificates of good standing, existence
and authority for each of the Borrower and the consolidated Subsidiaries;
(vi) a certificate of the Secretary or an Assistant Secretary of the
Borrower and each Subsidiary dated as of the date of this Agreement certifying
the names and true signatures of officers of the Borrower and each Subsidiary
authorized to sign this Agreement, the Notes, Notices of Borrowing, Notices of
Conversion or Continuation and the other Credit Documents;
(vii) a favorable opinion of ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Craft, L.L.P., outside
counsel to the Borrower and the Subsidiaries, dated as of the Effective Date
and substantially in the form of the attached Exhibit H and as to such other
matters as any Bank through the Agent may reasonably request; and
(viii) a favorable opinion of Messrs. ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.,
counsel to the Agent, dated as of the Effective Date and substantially in the
form of the attached Exhibit I.
(b) No Material Adverse Change. No event or events which, individually or
in the aggregate has had or is reasonably likely to cause a Material Adverse
Change shall have occurred.
(c) Payment of Fees. On the date of this Agreement, the Borrower shall have
paid the fees required by paragraph (b) of Section 2.03 and all costs and
expenses which have been invoiced and are payable pursuant to Section 9.04.
(d) No Default. No Default shall have occurred and be continuing or would
result from such Borrowing or from the application of the proceeds therefrom or
from the issuance, increase or extension of such Letter of Credit.
(e) Representations and Warranties. The representations and warranties
contained in Article IV of this Agreement, Section 6 of the Guaranties and in
Section 2 of the Pledge Agreement shall be true and correct in all material
respects on and as of the Effective Date before and after giving effect to the
initial Borrowing and to the application of the proceeds from such Borrowing or
to the issuance, increase or extension of the initial Letters of Credit, as
though made on and as of such date.
(f) No Material Litigation. No legal or regulatory action or proceeding has
commenced and is continuing against the Borrower or any Subsidiary since the
date of this Agreement which could reasonably be expected to cause a Material
Adverse Change.
Section 3.02. Conditions Precedent to Each Borrowing. The obligation of each
Bank to make an Advance on the occasion of each Borrowing (including the
initial Borrowing) and of the Issuing Bank to issue, increase, or extend any
Letter of Credit shall be subject to the further conditions precedent that on
the date of such Borrowing or the issuance, increase, or extension of such
Letter of Credit:
(a) the following statements shall be true (and each of the giving of the
applicable Notice of Borrowing and the acceptance by the Borrower of the
proceeds of such Borrowing or the issuance, increase, or extension of such
Letter of Credit shall constitute a representation and warranty by the Borrower
that on the date of such Borrowing or the issuance, increase, or extension of
such Letter of Credit such statements are true):
(i) the representations and warranties contained in Article IV of this
Agreement, Section 6 of the Guaranties and Section 2 of the Pledge Agreement
are correct in all material respects on and as of the date of such Borrowing or
the issuance, increase, or extension of such Letter of Credit, before and after
giving effect to such Borrowing or to the issuance, increase, or extension of
such Letter of Credit and to the application of the proceeds from such
Borrowing, as though made on and as of such date and
(ii) no Default has occurred and is continuing or would result from such
Borrowing or from the application of the proceeds therefrom or from the
issuance, increase or extension of such Letter of Credit; and
(b) the Agent shall have received such other approvals or documents deemed
necessary by any Bank as a result of circumstances occurring after the date of
this Agreement, as any Bank through the Agent may reasonably request.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows:
Section 4.01. Existence; Subsidiaries. The Borrower is a corporation duly
organized, validly existing, and in good standing under the laws of Delaware
and in good standing and qualified to do business in each jurisdiction where
its ownership or lease of property or conduct of its business requires such
qualification and where a failure to be qualified could reasonably be expected
to cause a Material Adverse Change. Each Subsidiary of the Borrower is an
entity duly organized, validly existing, and in good standing under the laws of
its jurisdiction of organization and in good standing and qualified to do
business in each jurisdiction where its ownership or lease of property or
conduct of its business requires such qualification and where a failure to be
qualified could reasonably be expected to cause a Material Adverse Change. The
Borrower has no Subsidiaries on the date of this Agreement other than the
Subsidiaries listed on the attached Schedule 4.01, and Schedule 4.01 lists the
jurisdiction of organization and the address of the principal office of each
such Subsidiary existing on the date of this Agreement.
Section 4.02. Corporate Power. The execution, delivery, and performance by
the Borrower of this Agreement, the Notes, and the other Credit Documents to
which it is a party and by the Subsidiaries of the Guaranties and other Credit
Documents to which they are a party, and the consummation of the transactions
contemplated hereby and thereby (a) are within the Borrower's and such
Subsidiaries' corporate powers, (b) have been duly authorized by all necessary
corporate action, (c) do not contravene (i) the Borrower's or any Subsidiary's
certificate or articles, as the case may be, of incorporation or by-laws or
(ii) any law or any contractual restriction binding on or affecting the
Borrower or any Subsidiary, and (d) will not result in or require the creation
or imposition of any Lien prohibited by this Agreement. At the time of each
Borrowing, such Borrowing and the use of the proceeds of such Borrowing will be
within the Borrower's corporate ▇▇▇▇▇▇, ▇▇▇▇ have been duly authorized by all
necessary corporate action, (a) will not contravene (i) the Borrower's
certificate of incorporation or by-laws or (ii) any law or any contractual
restriction binding on or affecting the Borrower and (b) will not result in or
require the creation or imposition of any Lien prohibited by this Agreement.
Section 4.03. Authorization and Approvals. No authorization or approval or
other action by, and no notice to or filing with, any Governmental Authority is
required for the due execution, delivery and performance by the Borrower of
this Agreement, the Notes, or the other Credit Documents to which the Borrower
is a party or by each Subsidiary of its Guaranty or Pledge Agreement, as
applicable, or the consummation of the transactions contemplated thereby. At
the time of each Borrowing, no further authorization or approval or other
action by, and no notice to or filing with, any Governmental Authority will be
required for such Borrowing or the use of the proceeds of such Borrowing.
Section 4.04. Enforceable Obligations. This Agreement, the Notes, and the
other Credit Documents to which the Borrower is a party have been duly executed
and delivered by the Borrower and the Guaranties and Pledge Agreement, as
applicable, have been duly executed and delivered by the respective
Subsidiaries. Each Credit Document is the legal, valid, and binding obligation
of the Borrower and each Subsidiary which is a party to it enforceable against
the Borrower and each such Subsidiary in accordance with its terms, except as
such enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium, or similar law affecting creditors' rights
generally and by general principles of equity.
Section 4.05. Financial Statements. The consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at December 31, 1996, and the
related consolidated statements of income, cash flow, and retained earnings of
the Borrower and its consolidated Subsidiaries for the fiscal year then ended,
copies of which have been furnished to the Agent, and the consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at June 30, 1997,
and the related consolidated statements of income, cash flow, and retained
earnings of the Borrower and its consolidated Subsidiaries for the three months
then ended, duly certified by the Chief Financial Officer of the Borrower,
copies of which have been furnished to each Bank, fairly present, in all
material respects, subject, in the case of said balance sheet as at June 30,
1997 and said statements of income, cash flow and retained earnings for the
three months then ended, to year-end audit adjustments, the consolidated
financial condition of the Borrower and its consolidated Subsidiaries as at
such dates and the consolidated results of the operations of the Borrower and
its consolidated Subsidiaries for the periods ended on such dates, and such
consolidated balance sheets and consolidated statements of income, cash flow,
and retained earnings were prepared in accordance with GAAP. Since December
31, 1996, no Material Adverse Change has occurred.
Section 4.06. True and Complete Disclosure. All factual information
(excluding projections, estimates and pro forma financial information)
heretofore or contemporaneously furnished by the Borrower or any of its
Subsidiaries in writing to the Agent for purposes of or in connection with this
Agreement, any other Credit Document or any transaction contemplated hereby or
thereby is (taken as a whole) true and accurate in all material respects on the
date as of which such information is dated or certified and does not contain
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements contained therein not misleading as of the
date of this Agreement. All projections, estimates, and pro forma financial
information furnished by the Borrower were prepared on the basis of
assumptions, data, information, tests, or conditions believed to be reasonable
at the time such projections, estimates, and pro forma financial information
were furnished.
Section 4.07. Litigation. Set forth on Schedule 4.07 is an accurate
description of all of the Borrower's and its Subsidiaries' pending litigation
existing on the date of this Agreement that could individually, if any adverse
final judgment were rendered, result in liabilities or obligations of the
Borrower or such Subsidiaries of $500,000 (without giving effect to any
insurance policies in effect with respect to such litigation). There is no
pending or, to the Knowledge of the Borrower, threatened action or proceeding
affecting the Borrower or any of its Subsidiaries before any court,
Governmental Agency or arbitrator, which could reasonably be expected to cause
a Material Adverse Change or which purports to affect the legality, validity,
binding effect or enforceability of this Agreement, any Note, or any other
Credit Document.
Section 4.08.Use of Proceeds. The proceeds of Advances and the Letters of
Credit will be used by the Borrower for general corporate purposes including,
but not limited to, the Borrower's expansion and acquisition program. The
Borrower is not engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock (within the meaning of Regulation U). No
proceeds of any Advance will be used to purchase or carry any margin stock in
violation of Regulation G, T, U or X.
Section 4.09. Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 4.10. Public Utility Holding Company Act. Neither the Borrower nor
any of its Subsidiaries is a "holding company", or a "Subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "Subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
Section 4.11. Taxes. Proper and accurate (in all material respects), federal,
state, local and foreign tax returns, reports and statements required to be
filed (after giving effect to any extension granted in the time for filing) by
the Borrower, its Subsidiaries or any member of the Controlled Group (hereafter
collectively called the "Tax Group") have been filed with the appropriate
governmental agencies in all jurisdictions in which such returns, reports and
statements are required to be filed and where the failure to file would cause a
Material Adverse Change, and all taxes (which are material in amount) and other
impositions due and payable have been timely paid prior to the date on which
any fine, penalty, interest, late charge or loss may be added thereto for non-
payment thereof except where contested in good faith and by appropriate
proceedings. Neither the Borrower nor any member of the Tax Group has given,
or been requested to give, a waiver of the statute of limitations relating to
the payment of any federal, state, local or foreign taxes or other impositions.
Proper and accurate amounts have been withheld by the Borrower and all other
members of the Tax Group from their employees for all periods to comply in all
material respects with the tax, social security and unemployment withholding
provisions of applicable federal, state, local and foreign law. Timely payment
of all material sales and use taxes required by applicable law have been made
by the Borrower and all other members of the Tax Group. The amounts shown on
all tax returns to be due and payable have been paid in full or adequate
provision therefor is included on the books of the appropriate member of the
Tax Group.
Section 4.12. Pension Plans. All Plans are in compliance in all material
respects with all applicable provisions of ERISA. No Termination Event has
occurred with respect to any Plan (other than Termination Events occurring with
respect to an employee benefit plan maintained for employees of a funeral home
or cemetery acquired by the Borrower or one of its Subsidiaries after the date
of this Agreement that could not reasonably be expected to result in a Material
Adverse Change), and each Plan has complied with and been administered in all
material respects with applicable provisions of ERISA and the Code. No
"accumulated funding deficiency" (as defined in Section 302 of ERISA) has
occurred and there has been no excise tax imposed under Section 4971 of the
Code. No Reportable Event has occurred with respect to any Multiemployer Plan,
and each Multiemployer Plan has complied with and been administered in all
material respects with applicable provisions of ERISA and the Code. The
present value of all benefits vested under each Plan (based on the assumptions
used to fund such Plan) did not, as of the last annual valuation date
applicable thereto, exceed the value of the assets of such Plan allocable to
such vested benefits. Neither the Borrower nor any member of the Controlled
Group has had a complete or partial withdrawal from any Multiemployer Plan for
which there is any withdrawal liability. As of the most recent valuation date
applicable thereto, neither the Borrower nor any member of the Controlled Group
would become subject to any liability under ERISA if the Borrower or any member
of the Controlled Group has received notice that any Multiemployer Plan is
insolvent or in reorganization. Based upon GAAP existing as of the date of
this Agreement and current factual circumstances, the Borrower has no reason to
believe that the annual cost during the term of this Agreement to the Borrower
or any member of the Controlled Group for post-retirement benefits to be
provided to the current and former employees of the Borrower or any member of
the Controlled Group under Plans that are welfare benefit plans (as defined in
Section 3(a) of ERISA) could, in the aggregate, reasonably be expected to cause
a Material Adverse Change.
Section 4.13. Condition of Property; Casualties. The material Properties used
or to be used in the continuing operations of the Borrower and each of its
Subsidiaries are in the condition required to adequately service the function
for which such Properties are used. Since December 31, 1996, neither the
business nor the material Properties of the Borrower and each of its
Subsidiaries, taken as a whole, has been materially and adversely affected as a
result of any fire, explosion, earthquake, flood, drought, windstorm, accident,
strike or other labor disturbance, embargo, requisition or taking of property
or cancellation of contracts, permits or concessions by a Governmental
Authority, riot, activities of armed forces or acts of God or of any public
enemy.
Section 4.14. Insurance. The Borrower and each of its Subsidiaries carry
insurance with reputable insurers in respect of such of their respective
Properties, in such amounts and against such risks as is customarily maintained
by other Persons of similar size engaged in similar businesses.
Section 4.15. No Burdensome Restrictions; No Defaults. Neither the Borrower
nor any of its Subsidiaries is a party to any indenture, loan or credit
agreement or any lease or other agreement or instrument or subject to any
charter or corporate restriction or provision of applicable law or governmental
regulation which could reasonably be expected to cause a Material Adverse
Change. The Borrower and the Subsidiaries are not in default under or with
respect to any contract, agreement, lease or other instrument to which the
Borrower or any Subsidiary is a party and which, if defaulted on, could
reasonably be expected to cause a Material Adverse Change. Neither the
Borrower nor any Subsidiary has received any notice of default under any
material contract, agreement, lease or other instrument to which the Borrower
or such Subsidiary is a party and which, if defaulted on, could reasonably be
expected to cause a Material Adverse Change. No Default has occurred and is
continuing.
Section 4.16. Environmental Condition.
(a) Permits, Etc. Except as set forth on Schedule 4.16(a), the Borrower and
its Subsidiaries (i) have obtained all Environmental Permits required by
Governmental Authorities necessary for the ownership and operation of their
respective Properties and the conduct of their respective businesses; (ii) to
the Borrower's Knowledge, have been and are in compliance with all terms and
conditions of such Environmental Permits, if any, and with all other material
requirements of applicable Environmental Laws; (iii) have not received notice
of any violation or alleged violation of any Environmental Law or Environmental
Permit; and (iv) are not subject to any actual or contingent Environmental
Claim, which could reasonably be expected to cause a Material Adverse Change.
(b) Certain Liabilities. Except as set forth on Schedule 4.16(b), to the
Borrower's Knowledge, none of the present or previously owned or operated
Property of the Borrower or of any of its present or former Subsidiaries,
wherever located, (i) has been placed on or proposed to be placed on the
National Priorities List, the Comprehensive Environmental Response Compensation
Liability Information System list, or their state or local analogs, or have
been otherwise investigated, designated, listed, or identified as a potential
site for removal, remediation, cleanup, closure, restoration, reclamation, or
other response activity under any Environmental Laws; (ii) is subject to a
Lien, arising under or in connection with any Environmental Laws, that attaches
to any revenues or to any Property owned or operated by the Borrower or any of
its Subsidiaries, wherever located, which could reasonably be expected to cause
a Material Adverse Change; or (iii) has been the site of any Release of
Hazardous Substances or Hazardous Wastes from present or past operations which
has caused at the site or at any third-party site any condition that has
resulted in or could reasonably be expected to result in the need for Response
that would cause a Material Adverse Change.
(c) Certain Actions. Without limiting the foregoing, (i) all necessary
notices have been properly filed, and no further action is required under
current Environmental Law as to each Response or other restoration or remedial
project taken by the Borrower, or its present or former Subsidiaries on any of
their presently or formerly owned or operated Property and (ii) the present
and, to the Borrower's Knowledge, future liability, if any, of the Borrower and
its Subsidiaries which could reasonably be expected to arise in connection with
requirements under Environmental Laws will not result in a Material Adverse
Change.
Section 4.17. Permits, Licenses, etc. The Borrower and its Subsidiaries
possess all permits, licenses, patents, patent rights or licenses, trademarks,
trademark rights, trade names rights and copyrights which are necessary and
material to the conduct of its business. To the Borrower's Knowledge the
Borrower and its Subsidiaries manage and operate their business in all material
respects in accordance with all applicable Legal Requirements and standard
industry practices.
Section 4.18. Debt and Equity Rights.
(a) Debt Instruments. Except as disclosed in Schedule 4.18, as of June 30,
1997 there are no other loan agreements, notes, indentures, note purchase
agreements, guaranties, hedge agreements, swap agreements, capital leases, or
other investments, agreements, and arrangements presently in effect relating to
extensions of credit in respect of which the Borrower or the Subsidiaries is in
any manner directly or contingently liable. Set forth on Schedule 4.18 is a
list of all indebtedness of the Borrower and its Subsidiaries existing on the
date of this Agreement (such list to include, without limitation, information
regarding the Person to whom such indebtedness is owed and the amount, maturity
date and collateral (if any) of such indebtedness).
(b) Equity Instruments. Except as disclosed on Schedule 4.18, there are no
outstanding (i) rights, warrants, options, contracts, commitments, conversion
rights or similar agreements or understandings of any kind to which the
Borrower or the Subsidiaries is a party entitling any Person to purchase or
otherwise acquire (A) any shares of the capital stock or (B) any securities
convertible into or exchangeable for any shares of capital stock of the
Subsidiary or the Borrowers (except that the Borrower or any Subsidiary may
purchase or otherwise acquire any such shares or securities described in
clauses (A) and (B) if such purchase or acquisition would not, after giving
effect thereto, cause a Default) and (ii) put, calls, redemption or repurchase
rights, or similar rights or agreements exist with respect to any security
issued by the Borrower or the Subsidiaries.
ARTICLE V
AFFIRMATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit shall remain outstanding, or any Bank shall have
any Commitment hereunder, the Borrower agrees, unless the Majority Banks shall
otherwise consent in writing, to comply with the following covenants.
Section 5.01. Compliance with Laws, Etc. The Borrower will comply, and cause
each of its Subsidiaries to comply, in all material respects with all Legal
Requirements. Without limiting the generality and coverage of the foregoing,
the Borrower shall comply, and shall cause each of its Subsidiaries to comply,
in all material respects, with all Environmental Laws and all laws,
regulations, or directives with respect to equal employment opportunity and
employee safety in all jurisdictions in which the Borrower, or any of its
Subsidiaries do business; provided, however, that this Section 5.01 shall not
prevent the Borrower, or any of its Subsidiaries from, in good faith and with
reasonable diligence, contesting the validity or application of any such laws
or regulations by appropriate legal proceedings.
Section 5.02. Maintenance of Insurance. The Borrower will maintain, and cause
each of its Subsidiaries to maintain, insurance with responsible and reputable
insurance companies or associations in such amounts and covering such risks as
are usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which the Borrower or such
Subsidiary operates, provided that the Borrower or such Subsidiary may self-
insure to the extent and in the manner normal for similarly situated companies
of like size, type and financial condition that are part of a group of
companies under common control.
Section 5.03. Preservation of Existence, Etc. The Borrower will preserve and
maintain, and cause each of its Subsidiaries to preserve and maintain, its
existence, rights, franchises and privileges in the jurisdiction of its
incorporation, and qualify and remain qualified, and cause each such Subsidiary
to qualify and remain qualified, as a foreign corporation in each jurisdiction
in which qualification is necessary or desirable in view of its business and
operations or the ownership of its properties, and, in each case, where failure
to qualify or preserve and maintain its rights and franchises could reasonably
be expected to cause a Material Adverse Change; provided, however, that nothing
herein contained shall prevent any transaction permitted by Section 6.04.
Section 5.04. Payment of Taxes, Etc. The Borrower will pay and discharge, and
cause each of its Subsidiaries to pay and discharge, before the same shall
become delinquent, (a) all taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits or Property that are
material in amount, prior to the date on which penalties attach thereto and (b)
all lawful claims that are material in amount which, if unpaid, might by law
become a Lien upon its Property; provided, however, that neither the Borrower
nor any such Subsidiary shall be required to pay or discharge any such tax,
assessment, charge, levy, or claim which is being contested in good faith and
by appropriate proceedings, and with respect to which reserves in conformity
with GAAP have been provided.
Section 5.05. Visitation Rights. At any reasonable time and from time-to-
time, upon reasonable notice, the Borrower will, and will cause its
Subsidiaries to, permit the Agent and any Bank or any of its agents or
representatives thereof, to (a) examine and make copies of and abstracts from
the records and books of account of, and visit and inspect at its reasonable
discretion the properties of, the Borrower and any such Subsidiary, and (b)
discuss the affairs, finances and accounts of the Borrower and any such
Subsidiary with any of their respective officers or directors. The Borrower
shall pay all reasonable expenses in connection with such visits and
inspections; provided that, the Borrower shall not be obligated to pay travel
and hotel expenses incurred by representatives of the Agent or any Bank in
connection with inspections or visits made before the occurrence of an Event of
Default.
Section 5.06. Reporting Requirements. The Borrower will furnish to the Agent
and each Bank:
(a) Defaults. As soon as possible and in any event within five days after
the occurrence of each Default known to a Responsible Officer of the Borrower
which is continuing on the date of such statement, a written statement of the
Chief Financial Officer of the Borrower setting forth the details of such
Default and the actions which the Borrower has taken and proposes to take with
respect thereto;
(b) Quarterly Financials. As soon as available and in any event not later
than 45 days after the end of each of the first three quarters of each fiscal
year of the Borrower, the consolidated balance sheets of Borrower and its
consolidated Subsidiaries as of the end of such quarter and the consolidated
statements of income, cash flows and retained earnings of the Borrower and its
consolidated Subsidiaries for the period commencing at the end of the previous
year and ending with the end of such quarter, all in reasonable detail and duly
certified with respect to such consolidated statements (subject to year-end
audit adjustments) by the Chief Financial Officer of the Borrower on behalf of
the Borrower as having been prepared in accordance with GAAP, together with a
compliance certificate executed by the Chief Financial Officer of the Borrower
on behalf of the Borrower and in the form of the attached Exhibit J;
(c) Annual Financials. As soon as available and in any event not later than
90 days after the end of each fiscal year of the Borrower, a copy of the annual
audit report for such year for the Borrower and its consolidated Subsidiaries,
including therein consolidated balance sheets of the Borrower and its
consolidated Subsidiaries as of the end of such fiscal year and consolidated
statements of income, cash flows and retained earnings of the Borrower and its
consolidated Subsidiaries for such fiscal year, in each case certified by
Coopers & ▇▇▇▇▇▇▇ L.L.P. or other independent certified public accountants of
recognized standing reasonably acceptable to the Agent and including any
management letters delivered by such accountants to the Borrower in connection
with such audit together with an unqualified opinion and a certificate of such
accounting firm to the Banks stating that, in the course of the regular audit
of the business of the Borrower and its consolidated Subsidiaries, which audit
was conducted by such accounting firm in accordance with generally accepted
auditing standards, such accounting firm has obtained no knowledge that a
Default has occurred and is continuing, or if, in the opinion of such
accounting firm, a Default has occurred and is continuing, a statement as to
the nature thereof, together with a compliance certificate executed by the
Chief Financial Officer of the Borrower on behalf of the Borrower and in the
form of the attached Exhibit J;
(d) Securities Law Filings. Promptly and in any event within 15 days after
the sending or filing thereof, copies of all proxy material, reports and other
information which the Borrower or any of its Subsidiaries sends to or files
with the United States Securities and Exchange Commission or generally
distributes to the Borrower's shareholders;
(e) Termination Events. As soon as possible and in any event (i) within 30
days after the Borrower or any member of the Controlled Group knows or has
reason to know that any Termination Event described in clause (a) of the
definition of Termination Event with respect to any Plan has occurred, and (ii)
within 10 days after the Borrower or any of its Affiliates knows or has reason
to know that any other Termination Event with respect to any Plan has occurred,
a statement of the Chief Financial Officer of the Borrower describing such
Termination Event and the action, if any, which the Borrower or such Affiliate
proposes to take with respect thereto; provided that, no such notice shall be
required if such Termination Event has occurred with respect to an employee
benefit plan maintained for employees of a funeral home or cemetery acquired by
the Borrower or one of its Subsidiaries after the date of this Agreement if
such Termination Event could not reasonably be expected to result in a Material
Adverse Change;
(f) Termination of Plans. Promptly and in any event within five Business
Days after receipt thereof by the Borrower or any member of the Controlled
Group from the PBGC, copies of each notice received by the Borrower or any such
member of the Controlled Group of the PBGC's intention to terminate any Plan or
to have a trustee appointed to administer any such Plan;
(g) Other ERISA Notices. Promptly and in any event within five Business
Days after receipt thereof by the Borrower or any member of the Controlled
Group from a Multiemployer Plan sponsor, a copy of each notice received by the
Borrower or any member of the Controlled Group concerning the imposition or
amount of withdrawal liability pursuant to Section 4202 of ERISA;
(h) Environmental Notices. Promptly upon the receipt thereof by the
Borrower or any of its Subsidiaries, a copy of any form of written notice,
summons or citation received from the EPA, or any other Governmental Authority,
concerning (i) violations or alleged violations of Environmental Laws, which
seeks to impose any material liability therefor, (ii) any action or omission on
the part of the Borrower or any of its present or former Subsidiaries in
connection with Hazardous Waste or Hazardous Substances which could reasonably
result in the imposition of any material liability therefor, including without
limitation any notice of potential responsibility under CERCLA, or (iii)
concerning the filing of a Lien upon, against or in connection with the
Borrower, its present or former Subsidiaries, or any of their leased or owned
Property, wherever located;
(i) Other Governmental Notices. Promptly and in any event within five
Business Days after receipt thereof by the Borrower or any Subsidiary, a copy
of any notice, summons, citation, or proceeding seeking to modify in any
material respect, revoke, or suspend any material contract, license or
Agreement with any Governmental Authority;
(j) Material Changes. Prompt written notice of any condition or event of
which the Borrower has knowledge, which condition or event has resulted or may
reasonably be expected to result in (i) a Material Adverse Change or (ii) a
breach of or noncompliance with any material term, condition, or covenant of
any contract to which the Borrower or any of its Subsidiaries is a party or by
which they or their properties may be bound and which is material to the
business of the Borrower and its Subsidiaries, taken as a whole;
(k) Disputes, etc. Prompt written notice of any claims, proceedings, or
disputes, or to the knowledge of the Borrower threatened, or affecting the
Borrower, or any of its Subsidiaries which, if adversely determined, could
reasonably be expected to cause a Material Adverse Change, or any material
labor controversy of which the Borrower or any of its Subsidiaries has
knowledge resulting in or reasonably considered to be likely to result in a
strike against the Borrower or any of its Subsidiaries; and
(l) Other Information. Such other information respecting the business or
Properties, or the condition or operations, financial or otherwise, of the
Borrower, or any of its Subsidiaries, as any Bank through the Agent may from
time-to-time reasonably request.
Section 5.07. Maintenance of Property. Borrower shall, and shall cause each
of its Subsidiaries to, maintain their owned, leased, or operated property,
equipment, buildings and fixtures necessary for the operation of their business
in good condition (ordinary wear and tear excepted) and shall make all repairs
necessary to maintain such condition; and shall abstain, and cause each of its
Subsidiaries to abstain from and not knowingly or willfully permit the
commission of waste or other injury, destruction or loss of natural resources,
or the occurrence of pollution, contamination or any other condition in, on or
about the owned or operated property involving the Environment that could
reasonably be expected to result in Response activities the costs of which
would exceed the accrual established by Borrower or by any of its Subsidiaries
for those purposes.
Section 5.08. New Subsidiaries. Within 90 days after the creation of any new
Subsidiary (other than a Canadian Subsidiary) permitted by this Agreement, and
within 12 months after the purchase by the Borrower or any of its Subsidiaries
of the capital stock of any Person (which purchase results in such Person
becoming a Subsidiary of the Borrower) permitted by this Agreement, the
Borrower shall cause such Subsidiary to execute and deliver to each Bank a
Guaranty in the form of the attached Exhibit B and such evidence of corporate
authority to enter into such Guaranty as the Agent may reasonably request;
provided that, with respect to any such acquired Subsidiary, no Guaranty shall
be required to be executed by such Person if it has been liquidated, merged out
of existence or otherwise dissolved before the expiration of the 12-month
period referred to above. Within 75 days of the consummation of any Canadian
Acquisition, the Borrower shall cause at least 65% of the stock or other
ownership interests of each Canadian Subsidiary created or existing in
connection with such Canadian Acquisition to be pledged to the Agent for the
benefit of the Banks as collateral for the Obligations. Any such pledge
required by the preceding sentence will be registered in the books of such
Canadian Subsidiary and will be further evidenced by (a) the execution and
delivery by the applicable Person of a Pledge Agreement in the form of the
attached Exhibit E, and (b) the delivery by such Person to the Agent of the
pledge shares or interests and corresponding stock powers executed in blank.
Notwithstanding the foregoing, no Non-Profit Entity shall be required to
execute a Guaranty as long as it maintains its non-profit status.
ARTICLE VI
NEGATIVE COVENANTS
So long as any Note or any amount under any Credit Document shall remain
unpaid, any Letter of Credit remain outstanding, or any Bank shall have any
Commitment, the Borrower agrees, unless the Majority Banks otherwise consent in
writing, to comply with the following covenants.
Section 6.01. Liens, Etc. The Borrower will not create, assume, incur or
suffer to exist, or permit any of its Subsidiaries to create, assume, incur, or
suffer to exist, any Lien on or in respect of any of its Property whether now
owned or hereafter acquired, or assign any right to receive income, except that
the Borrower and its Subsidiaries may create, incur, assume or suffer to exist
Liens:
(a) securing the Obligations;
(b) for taxes, assessments or governmental charges or levies on Property of
the Borrower or any Subsidiary to the extent not required to be paid pursuant
to Sections 5.01 and 5.04;
(c) imposed by law, such as landlords', carriers', warehousemen's and
mechanics' liens and other similar Liens arising in the ordinary course of
business securing obligations which are not overdue for a period of more than
30 days and which are being contested in good faith and by appropriate
proceedings if adequate reserves with respect thereto are maintained on the
books of the Borrower and its Subsidiaries in accordance with GAAP;
(d) arising in the ordinary course of business out of pledges or deposits
under workers' compensation laws, unemployment insurance, old age pensions or
other social security or retirement benefits, or similar legislation or to
secure public or statutory obligations of the Borrower or any of its
Subsidiaries;
(e) existing on Property acquired by the Borrower or any of its Subsidiaries
prior to the Borrower's or such Subsidiaries' acquisition of such Property or
existing on Property of a newly acquired Subsidiary prior to the Borrower's or
any other Subsidiary's acquisition of stock of such newly acquired Subsidiary;
provided that the aggregate principal amount of the indebtedness secured by the
Liens permitted by this paragraph (e) shall not, when combined with the
aggregate principal amount of indebtedness secured by Liens permitted by
paragraph (f) of this Section 6.01, exceed 12.12% of the Borrower's Net Worth;
(f) purchase money liens or purchase money security interests upon or in any
Property acquired or held by the Borrower or any of its Subsidiaries to secure
the purchase price of such property or to secure indebtedness incurred solely
for the purpose of financing the acquisition of such property, provided that
the aggregate principal amount of the indebtedness secured by the Liens
permitted by this paragraph (f) shall not, when combined with the aggregate
principal amount of indebtedness secured by Liens permitted by paragraph (e) of
this Section 6.01, exceed 12.12% of the Borrower's Net Worth; and
(g) easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business and encumbrances consisting of
zoning restrictions, easements, licenses, restrictions on the use of Property
or minor imperfections in title thereto which, in the aggregate, are not
material in amount, and which do not in any case materially detract from the
value of the Property subject thereto or interfere with the ordinary conduct of
the business of the Borrower and its Subsidiaries.
Section 6.02. Debts, Guaranties and Other Obligations. The Borrower will not,
and will not permit any of its Subsidiaries to, create, assume, suffer to exist
or in any manner become or be liable, in respect of any Debt except:
(a) Debt of the Borrower and its Subsidiaries under the Credit Documents;
(b) intercompany indebtedness owed between any Subsidiary and the Borrower;
(c) Debt of the Borrower not otherwise permitted by this Section 6.02 in an
aggregate outstanding principal amount not to exceed, without duplication of,
and when combined with, Debt permitted by paragraphs (d) and (e) of this
Section 6.02, 20% of the Borrower's Net Worth;
(d) Debt secured by the Liens permitted under paragraphs (e) and (f) of
Section 6.01 in an amount not to exceed, without duplication of, and when
combined with, Debt permitted by paragraphs (c) and (e) of this Section 6.02,
20% of the Borrower's Net Worth;
(e) Debt existing in connection with Property or assets acquired by the
Borrower and its Subsidiaries after the Effective Date; provided that, such
Debt shall (i) not be increased, and (ii) not, without duplication of, and when
combined with, Debt permitted by paragraphs (c) and (d) of this Section 6.02,
20% of the Borrower's Net Worth;
(f) Debt incurred in connection with the financing of Acquisitions by the
Borrower and its Subsidiaries that (i) is subordinated to the Obligations on
terms satisfactory to the Agent and (ii) contains provisions satisfactory to
the Agent for the conversion of such Debt into common stock or other equity
interests in the Borrower; provided that, all such Debt under this clause (f)
shall not exceed 20% of the Borrower's Net Worth;
(g) Debt of any Canadian Subsidiary existing in connection with the
financing of a Canadian Acquisition if (i) no stock (or other ownership
interests) or assets of the Borrower or any of its Subsidiaries have been
pledged as collateral for such Debt; provided that, so long as such Debt is
owing to a Person that is not an NRO Company, such Debt may be equally and
ratably secured by any Liens granted by the Borrower and its Subsidiaries in
favor of the Agent and Banks as security for the Obligations, (ii) such Debt is
either (A) owing by a Canadian Subsidiary to any Person (other than an NRO
Company); provided that, such Debt shall be repaid within 90 days after the
consummation of such Canadian Acquisition or (B) owing by a Canadian Subsidiary
to any NRO Company and (iii) such Debt does not constitute more than 75% of the
purchase price of such Canadian Acquisition.
(h) Debt of the Borrower existing in connection with any guaranty, put
option or other contingent obligation of the Borrower to repay Debt permitted
by clause (g) above; and
(i) Subordinated Debt in an aggregate principal amount not to exceed
$125,000,000 at any time.
Section 6.03. Agreements Restricting Liens and Distributions. The Borrower
will not, nor will it permit any of its Subsidiaries to, enter into any
agreement (other than a Credit Document) which (a) except with respect to
specific Property encumbered to secure payment of Debt related to such
Property, imposes restrictions upon the creation or assumption of any Lien upon
its Properties, revenues or assets, whether now owned or hereafter acquired or
(b) limits Restricted Payments to or any advance by any of the Borrower's
Subsidiaries to the Borrower.
Section 6.04. Merger or Consolidation; Asset Sales. The Borrower will not,
and will not permit any of its Subsidiaries to,
(a) merge or consolidate with or into any other Person, except that the
Borrower may merge with any of its wholly-owned Subsidiaries and any of the
Borrower's wholly-owned Subsidiaries may merge with another of the Borrower's
wholly-owned Subsidiaries, provided that immediately after giving effect to any
such proposed transaction no Default would exist and in the case of any such
merger to which the Borrower is a party, the Borrower is the surviving
corporation or
(b) sell, lease, transfer, or otherwise dispose of any of its Property,
except (i) for sales of funeral merchandise, cemetery property, mausoleum
spaces and related merchandise, and other inventory and Property of the
Borrower and its Subsidiaries in the ordinary course of business, (ii) sales of
assets outside the ordinary course of business in an aggregate amount for any
fiscal year not to exceed $5,000,000, and (iii) sales, leases, transfers and
dispositions between the Borrower and its Subsidiaries or between two
Subsidiaries of the Borrower.
Section 6.05. Restricted Payments. The Borrower will not make or pay any
Restricted Payment if a Default exists or would result therefrom.
Section 6.06. Investments. The Borrower will not, and will not permit any of
its Subsidiaries to, make or permit to exist any loans, advances or capital
contributions to, or make any investment in, or purchase or commit to purchase
any stock or other securities or evidences of indebtedness of or interests in
any Person, except the following:
(a) as shown on the attached Schedule 6.06;
(b) the purchase of Liquid Investments or the making of Acquisitions
permitted by Section 6.07;
(c) trade and customer accounts receivable which are for goods furnished or
services rendered in the ordinary course of business and are payable in
accordance with customary trade terms;
(d) ordinary course of business contributions, loans or advances to, or
investments in, (i) a direct or indirect wholly-owned Subsidiary of the
Borrower, or (ii) the Borrower;
(e) investments in or by any perpetual care trust, merchandise trust,
preneed trust, preconstruction trust or other trust arrangements established by
the Borrower or any of its Subsidiaries in accordance with applicable laws,
regulations and interpretations;
(f) accounts receivable owing to the Borrower or its Subsidiaries by Non-
Profit Entities; and
(g) investments not covered by clauses (a) through (f) above in an aggregate
amount not to exceed at any time an amount equal to 5% of the Borrower's Net
Worth as reported in its most recently delivered financial statements.
Section 6.07. Acquisitions. The Borrower will not, and will not permit any of
its Subsidiaries to, make an Acquisition in a transaction or related series of
transactions unless:
(a) such Acquisition would not, after giving effect thereto, result in a
Default;
(b) such Acquisition is substantially related to business of the Borrower
and its Subsidiaries; and
(c) in the case of any Canadian Acquisition, the aggregate amount of
revenues of the Borrower's existing Canadian Subsidiaries during the four-
quarter period most recently ended is less than 15% of the aggregate amount of
revenues for the Borrower and its Subsidiaries during such four-quarter period.
Section 6.08. Affiliate Transactions. Except as expressly permitted elsewhere
in this Agreement, the Borrower will not, and will not permit any of its
Subsidiaries to, make, directly or indirectly: (a) any investment in any
Affiliate (other than a wholly-owned Subsidiary of the Borrower); (b) any
transfer, sale, lease, assignment or other disposal of any assets to any such
Affiliate or any purchase or acquisition of assets from any such Affiliate; or
(c) any arrangement or other transaction directly or indirectly with or for the
benefit of an such Affiliate (including without limitation, guaranties and
assumptions of obligations of an Affiliate); provided that the Borrower and its
Subsidiaries may enter into any arrangement or other transaction with any such
Affiliate providing for the leasing of property, the making of Acquisitions,
the rendering or receipt of services or the purchase or sale of inventory and
other assets in the ordinary course of business if the monetary or business
consideration arising therefrom would be substantially as advantageous to the
Borrower and its Subsidiaries as the monetary or business consideration which
it would obtain in a comparable arm's length transaction with a Person not such
an Affiliate.
Section 6.09. Compliance with ERISA. The Borrower will not, and will not
permit any of its Subsidiaries to, (a) terminate any Plan so as to result in
any material (in the opinion of the Majority Banks) liability of the Borrower
or any of its Subsidiaries to the PBGC or (b) permit to exist any occurrence of
any Reportable Event (as defined in Title IV of ERISA), or any other event or
condition, which presents a material (in the opinion of the Majority Banks)
risk of such a termination by the PBGC of any Plan.
Section 6.10. Maintenance of Ownership of Subsidiaries. Except as permitted
by Section 6.04 or disclosed on Schedule 4.18, the Borrower will not, and will
not permit any of its Subsidiaries to, sell or otherwise dispose of any shares
of capital stock of any of the Borrower's Subsidiaries or permit any Subsidiary
to issue, sell or otherwise dispose of any shares of its capital stock or the
capital stock of any of the Borrower's Subsidiaries.
Section 6.11. Cash Flow Coverage Ratio. The Borrower will not permit its Cash
Flow Coverage Ratio to be less than 2.00 to 1.00 at any time.
Section 6.12. Leverage Ratio. The Borrower will not permit the Borrower's
Leverage Ratio to be greater than .60 to 1.00.
Section 6.13. Net Worth. The Borrower will not permit its Net Worth to be
less than the sum of (a) $190,000,000 plus (b) 75% of its cumulative positive
Net Income since June 30, 1997, and (c) 75% of any paid-in capital received by
the Borrower since June 30, 1997.
ARTICLE VII
REMEDIES
Section 7.01. Events of Default. The occurrence of any of the following
events shall constitute an "Event of Default" under any Credit Document:
(a) Payment. The Borrower shall fail to pay any principal of any Note or
any Reimbursement Obligation when the same becomes due and payable, or any
interest on any Note or any fee or other amount payable hereunder or under any
other Credit Document within five Business Days after the same becomes due and
payable;
(b) Representation and Warranties. Any representation or warranty made or
deemed to be made (i) by the Borrower in this Agreement or in any other Credit
Document, (ii) by the Borrower (or any of its officers) in connection with this
Agreement or any other Credit Document, or (iii) by any Subsidiary in any
Credit Document shall prove to have been incorrect in any material respect when
made or deemed to be made;
(c) Covenant Breaches. (i) The Borrower shall (A) fail to perform or
observe any covenant contained in Section 5.01, 5.02, 5.05, 5.06, 5.07, 5.08,
or Article VI of this Agreement or (B) fail to perform or observe any other
term or covenant set forth in this Agreement or in any other Credit Document
which is not covered by clause (i)(A) above or any other provision of this
Section 7.01 if such failure shall remain unremedied for 30 days after the
earlier of written notice of such default shall have been given to the Borrower
by the Agent or any Bank or the Borrower's actual knowledge of such default,
(ii) any Subsidiary shall fail to perform or observe any covenant contained in
its Guaranty (after any applicable grace period), or (iii) any Subsidiary
executing a Pledge Agreement shall fail to perform or observe any covenant
contained in such Pledge Agreement and such failure shall remain unremedied for
30 days after the earlier of written notice of such default shall have been
given to the pledgor by the Agent or any Bank or the pledgor's actual knowledge
of such Default;
(d) Cross-Defaults. (i) The Borrower or any its Subsidiaries shall fail to
pay any principal of or premium or interest on its Debt which is outstanding in
a principal amount of at least $5,000,000 individually or when aggregated with
all such Debt of the Borrower or its Subsidiaries so in default (but excluding
Debt evidenced by the Notes) when the same becomes due and payable (whether by
scheduled maturity, required prepayment, acceleration, demand or otherwise),
and such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such Debt; (ii) any other
event shall occur or condition shall exist under any agreement or instrument
relating to Debt which is outstanding in a principal amount of at least
$5,000,000 individually or when aggregated with all such Debt of the Borrower
and its Subsidiaries so in default, and shall continue after the applicable
grace period, if any, specified in such agreement or instrument, if the effect
of such event or condition is to accelerate the maturity of such Debt; or (iii)
any such Debt shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), prior to the
stated maturity thereof;
(e) Insolvency. (i) The Borrower or any of its Subsidiaries shall generally
not pay its debts as such debts become due, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors; (ii) any proceeding shall be instituted by or against
the Borrower or any of its Subsidiaries seeking to adjudicate it a bankrupt or
insolvent, or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts under any law
relating to bankruptcy, insolvency or reorganization or relief of debtors, or
seeking the entry of an order for relief or the appointment of a receiver,
trustee or other similar official for it or for any substantial part of its
property and, in the case of any such proceeding instituted against the
Borrower or any such Subsidiary, either such proceeding shall remain
undismissed for a period of 60 days or any of the actions sought in such
proceeding shall occur; or (iii) the Borrower or any of its Subsidiaries shall
take any action to authorize any of the actions set forth above in this
paragraph (e);
(f) Judgments. One or more judgments or orders for the payment of money in
excess of $2,500,000 in the aggregate (after giving effect to insurance, if
any) shall be rendered against the Borrower or any of its Subsidiaries and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of 60 consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect;
(g) Termination Events. Any Termination Event with respect to a Plan shall
have occurred, and, 30 days after notice thereof shall have been given to the
Borrower by the Agent, (i) such Termination Event shall not have been corrected
and (ii) the then present value of such Plan's vested benefits exceeds the then
current value of assets accumulated in such Plan by more than the amount of
$2,500,000 (or in the case of a Termination Event involving the withdrawal of a
"substantial employer" (as defined in Section 4001(a)(2) of ERISA), the
withdrawing employer's proportionate share of such excess shall exceed such
amount);
(h) Plan Withdrawals. The Borrower or any member of the Controlled Group as
employer under a Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan shall have notified such withdrawing employer that such
employer has incurred a withdrawal liability in an annual amount exceeding
$2,500,000;
(i) Material Changes. A Material Adverse Change shall have occurred and be
continuing 30 days after the Borrower shall have received written notice of the
occurrence of such Material Adverse Change from the Agent or any Bank;
(j) Guaranties. Any material provision of any Guaranty shall for any reason
cease to be valid and binding on the appropriate Subsidiary or the applicable
Subsidiary shall so state in writing;
(k) Change of Control. (i) As a result of one or more transactions after
the date of this Agreement, any "person" or "group" of persons shall have
"beneficial ownership" of more than 20% of the outstanding common stock of the
Borrower (within the meaning of Section 13(d) or 14(d) of the Securities
Exchange Act of 1934, as amended, and the applicable rules and regulations
thereunder), provided that the relationships among the respective shareholders
of the Borrower on the date of this Agreement shall not be deemed to constitute
all or any combination of them as a "group" or (ii) during any period of 12
consecutive months, beginning with and after the Effective Date, individuals
who at the beginning of such 12-month period were directors of the Borrower
shall cease for any reason to constitute a majority of the board of directors
of the Borrower at any time during such period; or
(l) (i) the Agent and the Banks shall fail to have an Acceptable Security
Interest in the Collateral (as defined in each Pledge Agreement), or (ii) any
material provision of any Pledge Agreement shall for any reason cease to be
valid and binding on the appropriate Subsidiary or such Subsidiary shall so
state in writing.
Section 7.02. Optional Acceleration of Maturity. If any Event of Default
(other than an Event of Default pursuant to paragraph (e) of Section 7.01)
shall have occurred and be continuing, then, and in any such event,
(a) the Agent (i) shall at the request, or may with the consent, of the
Majority Banks, by notice to the Borrower, declare the obligation of each Bank
to make Advances and the obligation of the Issuing Bank to issue Letters of
Credit to be terminated, whereupon the same shall forthwith terminate, and (ii)
shall at the request, or may with the consent, of the Majority Banks, by notice
to the Borrower, declare the Notes, all interest thereon, the Letter of Credit
Obligations, and all other amounts payable under this Agreement to be forthwith
due and payable, whereupon the Notes, all such interest, all such Letter of
Credit Obligations and all such amounts shall become and be forthwith due and
payable in full, without presentment, demand, protest or further notice of any
kind (including, without limitation, any notice of intent to accelerate or
notice of acceleration), all of which are (unless otherwise provided for
herein) hereby expressly waived by the Borrower and
(b) the Borrower shall, on demand of the Agent at the request or with the
consent of the Majority Banks, deposit with the Agent into the Cash Collateral
Account an amount of cash equal to the outstanding Letter of Credit Exposure as
security for the Obligations to the extent the Letter of Credit Obligations are
not otherwise paid at such time.
Section 7.03. Automatic Acceleration of Maturity. If any Event of Default
pursuant to paragraph (e) of Section 7.01 shall occur,
(a) the obligation of each Bank to make Advances and the obligation of the
Issuing Bank to issue, increase, or extend Letters of Credit shall immediately
and automatically be terminated and the Notes, all interest on the Notes, all
Letter of Credit Obligations, and all other amounts payable under this
Agreement shall immediately and automatically become and be due and payable in
full, without presentment, demand, protest or any notice of any kind
(including, without limitation, any notice of intent to accelerate or notice of
acceleration), all of which are (unless otherwise provided for herein) hereby
expressly waived by the Borrower and
(b) the Borrower shall deposit with the Agent into the Cash Collateral
Account an amount of cash equal to the outstanding Letter of Credit Exposure as
security for the Obligations to the extent the Letter of Credit Obligations are
not otherwise paid at such time.
Section 7.04. Cash Collateral Account.
(a) Pledge. To the extent provided in Sections 7.02(b) and 7.03(b), the
Borrower hereby pledges, and grants to the Agent for the benefit of the Banks,
a security interest in all funds held in the Cash Collateral Account from time-
to-time and all proceeds thereof, as security for the payment of the
Obligations, including all Letter of Credit Obligations owing to the Issuing
Bank or any other Bank due and to become due from the Borrower to the Issuing
Bank or any other Bank under this Agreement in connection with the Letters of
Credit. Nothing in this Section 7.04, however, shall either obligate the Agent
to require any funds to be deposited in the Cash Collateral Account or limit
the right of the Agent, which it may exercise at any time and from time-to-
time, to release to the Borrower any funds held in the Cash Collateral Account
pursuant to the other provisions of this Section 7.04.
(b) Application against Letter of Credit Obligations; Release of Funds. The
Agent may, at any time or from time-to-time apply funds then held in the Cash
Collateral Account to the payment of any Letter of Credit Obligations owing to
the Issuing Bank, in such order as the Agent may elect, as shall have become or
shall become due and payable by the Borrower to the Issuing Bank under this
Agreement in connection with the Letters of Credit. So long as no Event of
Default referred to in paragraph (a) or (e) of Section 7.01 shall have occurred
and be continuing, the Agent will release to the Borrower at the Borrower's
written request, funds held in the Cash Collateral Account in an amount up to
but not exceeding the excess, if any (immediately prior to the release of any
such funds), of (A) the total amount of funds held in the Cash Collateral
Account over (B) the Letter of Credit Exposure.
(c) Duty of Care. The Agent shall exercise reasonable care in the custody
and preservation of any funds held in the Cash Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own property, it
being understood that the Agent shall not have any responsibility for taking
any necessary steps to preserve rights against any parties with respect to any
such funds.
Section 7.05. Non-exclusivity of Remedies. No remedy conferred upon the Agent
is intended to be exclusive of any other remedy, and each remedy shall be
cumulative of all other remedies existing by contract, at law, in equity, by
statute or otherwise.
Section 7.06. Right of Set-off. Upon the occurrence and during the
continuance of any Event of Default, the Agent and each Bank is hereby
authorized at any time and from time-to-time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other indebtedness at any
time owing by the Agent or such Bank to or for the credit or the account of the
Borrower (other than deposits specifically maintained to support Pre-need
Obligations) against any and all of the obligations of the Borrower now or
hereafter existing under this Agreement, the Note held by the Agent or such
Bank, and the other Credit Documents, irrespective of whether or not the Agent
or such Bank shall have made any demand under this Agreement, such Note, or
such other Credit Documents, and although such obligations may be unmatured.
The Agent and each Bank agrees to promptly notify the Borrower after any such
set-off and application made by the Agent or such Bank, provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Agent and each Bank under this Section are in
addition to any other rights and remedies (including, without limitation, other
rights of set-off) which the Agent or such Bank may have.
ARTICLE VIII
THE AGENT AND THE ISSUING BANK
Section 8.01. Authorization and Action. Each Bank hereby appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof and of the other Credit Documents, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Banks (or all the Banks
where unanimity is required), and such instructions shall be binding upon all
Banks and all holders of Notes; provided, however, that the Agent shall not be
required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement, any other Credit Document, or applicable
law.
Section 8.02. Agents' Reliance, Etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any action taken
or omitted to be taken (including the Agent's own negligence) by it or them
under or in connection with this Agreement or the other Credit Documents,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent: (a) may treat the
payee of any Note as the holder thereof until the Agent receives written notice
of the assignment or transfer thereof signed by such payee and in form
satisfactory to the Agent; (b) may consult with legal counsel (including
counsel for the Borrower), independent public accountants and other experts
selected by it and shall not be liable for any action taken or omitted to be
taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (c) makes no warranty or representation to any Bank and
shall not be responsible to any Bank for any statements, warranties or
representations made in or in connection with this Agreement or the other
Credit Documents; (d) shall not have any duty to ascertain or to inquire as to
the performance or observance of any of the terms, covenants or conditions of
this Agreement or any other Credit Document on the part of the Borrower or its
Subsidiaries or to inspect the property (including the books and records) of
the Borrower or its Subsidiaries; (e) shall not be responsible to any Bank for
the due execution, legality, validity, enforceability, genuineness, sufficiency
or value of this Agreement or any other Credit Document; and (f) shall incur no
liability under or in respect of this Agreement or any other Credit Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopier, telegram, cable or telex) reasonably believed by
it to be genuine and signed or sent by the proper party or parties.
Section 8.03. The Agent and Its Affiliates. With respect to its Commitments,
the Advances made by it and the Notes issued to it, the Agent shall have the
same rights and powers under this Agreement as any other Bank and may exercise
the same as though it were not the Agent. The term "Bank" or "Banks" shall,
unless otherwise expressly indicated, include the Agent in its individual
capacity. The Agent and its Affiliates may accept deposits from, lend money
to, act as trustee under indentures of, and generally engage in any kind of
business with, the Borrower or any of its Subsidiaries, and any Person who may
do business with or own securities of the Borrower or any such Subsidiary, all
as if the Agent were not an agent hereunder and without any duty to account
therefor to the Banks.
Section 8.04. Bank Credit Decision. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based
on the financial statements referred to in Section 4.05 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also
acknowledges that it will, independently and without reliance upon the Agent or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement.
Section 8.05. Indemnification. THE BANKS SEVERALLY AGREE TO INDEMNIFY THE
AGENT AND THE ISSUING BANK AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS (TO THE EXTENT NOT REIMBURSED BY THE
BORROWER), ACCORDING TO THEIR RESPECTIVE PRO RATA SHARES FROM AND AGAINST ANY
AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST THE AGENT
AND THE ISSUING BANK IN ANY WAY RELATING TO OR ARISING OUT OF THIS AGREEMENT OR
ANY ACTION TAKEN OR OMITTED BY THE AGENT OR THE ISSUING BANK UNDER THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT (INCLUDING THE AGENT'S AND THE ISSUING
BANK'S OWN NEGLIGENCE), PROVIDED THAT NO BANK SHALL BE LIABLE FOR ANY PORTION
OF SUCH LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE AGENT'S
OR THE ISSUING BANK'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT
LIMITATION OF THE FOREGOING, EACH BANK AGREES TO REIMBURSE THE AGENT PROMPTLY
UPON DEMAND FOR ITS RATABLE SHARE OF ANY OUT-OF-POCKET EXPENSES (INCLUDING
COUNSEL FEES) INCURRED BY THE AGENT IN CONNECTION WITH THE PREPARATION,
EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR ENFORCEMENT
(WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS OR OTHERWISE) OF, OR LEGAL
ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT, TO THE EXTENT THAT THE AGENT IS NOT REIMBURSED FOR SUCH
EXPENSES BY THE BORROWER.
Section 8.06. Successor Agent and Issuing Bank. The Agent or the Issuing Bank
may resign at any time by giving written notice thereof to the Banks and the
Borrower and may be removed at any time with cause by the Majority Banks upon
receipt of written notice from the Majority Banks to such effect. Upon receipt
of notice of any such resignation or removal, the Majority Banks shall have the
right to appoint a successor Agent or Issuing Bank with the consent of the
Borrower, which consent shall not be unreasonably withheld. If no successor
Agent or Issuing Bank shall have been so appointed by the Majority Banks with
the consent of the Borrower, and shall have accepted such appointment, within
30 days after the retiring Agent's or Issuing Bank's giving of notice of
resignation or the Majority Banks' removal of the retiring Agent or Issuing
Bank, then the retiring Agent or Issuing Bank may, on behalf of the Banks and
the Borrower, appoint a successor Agent or Issuing Bank, which shall be, in the
case of a successor agent, a commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined capital
and surplus of at least $500,000,000 and, in the case of the Issuing Bank, a
Bank. Upon the acceptance of any appointment as Agent or Issuing Bank by a
successor Agent or Issuing Bank, such successor Agent or Issuing Bank shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent or Issuing Bank, and the retiring Agent or
Issuing Bank shall be discharged from its duties and obligations under this
Agreement and the other Credit Documents, except that the retiring Issuing Bank
shall remain the Issuing Bank with respect to any Letters of Credit outstanding
on the effective date of its resignation or removal and the provisions
affecting the Issuing Bank with respect to such Letters of Credit shall inure
to the benefit of the retiring Issuing Bank until the termination of all such
Letters of Credit. After any retiring Agent's or Issuing Bank's resignation or
removal hereunder as Agent or Issuing Bank, the provisions of this Article VIII
shall inure to its benefit as to any actions taken or omitted to be taken by it
while it was Agent or Issuing Bank under this Agreement and the other Credit
Documents.
ARTICLE IX
MISCELLANEOUS
Section 9.01. Amendments, Etc. No amendment or waiver of any provision of this
Agreement, the Notes, or any other Credit Document, nor consent to any
departure by the Borrower or any Subsidiary therefrom, shall in any event be
effective unless the same shall be in writing and signed by the Majority Banks
and the Borrower, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in writing and
signed by all the Banks, do any of the following: (a) waive any of the
conditions specified in Section 3.01 or 3.02, (b) increase the Commitments of
the Banks, (c) reduce the principal of, or interest on, the Notes or any fees
or other amounts payable hereunder or under any other Credit Document, (d)
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees or other amounts payable hereunder, including any change in
required amortization of the Tranche B Advances under Section 2.05(b), (e)
change the number of Banks which shall be required for the Banks or any of them
to take any action hereunder or under any other Credit Document, (f) amend
Section 2.01(b), Section 2.12, Section 2.13(a) or this Section 9.01, (g) amend
the definitions of "Majority Banks", "Maturity Date", "Tranche A Maturity
Date" or "Tranche B Maturity Date", or (h) release any collateral or the
obligations of any Subsidiary under its Guaranty; and provided, further, that
no amendment, waiver or consent shall, unless in writing and signed by the
Agent or the Issuing Bank in addition to the Banks required above to take such
action, affect the rights or duties of the Agent or the Issuing Bank, as the
case may be, under this Agreement or any other Credit Document.
Section 9.02. Notices, Etc. All notices and other communications shall be in
writing (including telecopy or telex) and mailed, telecopied, telexed, hand
delivered or delivered by a nationally recognized overnight courier, if to the
Borrower, at its address at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇, Attention: ▇▇. ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Financial Officer (telecopy:
(▇▇▇) ▇▇▇-▇▇▇▇; telephone: (▇▇▇) ▇▇▇-▇▇▇▇), with a copy to: Mr. J. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ & Craft, L.L.P., ▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ (telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; telephone (▇▇▇) ▇▇▇-▇▇▇▇; if to
any Bank at its Domestic Lending Office specified opposite its name on Schedule
1 or pursuant to Section 2.10(b); and if to the Agent or the Issuing Bank, at
its address at ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Attention: Mr. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ (telecopy: (▇▇▇) ▇▇▇-▇▇▇▇; telephone: (▇▇▇) ▇▇▇-▇▇▇▇); and, if a Notice
of Borrowing or a Notice of Conversion or Continuation, to the Agent at the
Domestic Lending Office for the Agent specified opposite its name on Schedule
1, or, as to each party, at such other address or teletransmission number as
shall be designated by such party in a written notice to the other parties.
All such notices and communications shall, when mailed, telecopied,
telegraphed, telexed, hand delivered or delivered, be effective three days
after deposited in the mails, telecopy transmission is completed, confirmed by
telex answer-back or, if hand delivered or delivered by a courier, when
received, respectively, except that notices and communications to the Agent
pursuant to Article II or VIII shall not be effective until received by the
Agent.
Section 9.03. No Waiver; Remedies. No failure on the part of any Bank, the
Agent, or the Issuing Bank to exercise, and no delay in exercising, any right
hereunder or under any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 9.04. Costs and Expenses. The Borrower agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent (including the
reasonable fees and expenses of its legal counsel) in connection with the
preparation, execution, delivery, administration, modification and amendment of
this Agreement, the Notes and the other Credit Documents including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for the
Agent and with respect to advising the Agent as to its rights and
responsibilities under this Agreement (excluding facility fees to be paid by
the Agent to the Banks pursuant to the various fee letters each dated the date
of this Agreement between the Agent and the Banks), and all reasonable out-of-
pocket costs and expenses, if any, of Agent, the Issuing Bank, and each Bank
(including, without limitation, reasonable counsel fees and expenses of the
Agent, the Issuing Bank, and each Bank) in connection with the enforcement
(whether through negotiations, legal proceedings or otherwise) of this
Agreement, the Notes and the other Credit Documents.
Section 9.05. Binding Effect. This Agreement shall become effective when it
shall have been executed by the Borrower and the Agent, and when the Agent
shall have, as to each Bank, either received a counterpart hereof executed by
such Bank or been notified by such Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Borrower, the
Agent, the Issuing Bank, and each Bank and their respective successors and
assigns, except that the Borrower shall not have the right to assign its rights
or delegate its duties under this Agreement or any interest in this Agreement
without the prior written consent of each Bank.
Section 9.06. Bank Assignments and Participations.
(a) Assignments. Any Bank may assign to one or more banks or other entities
all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it, the Note held by it, and the participation interest in
the Letter of Credit Obligations held by it); provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of all of
such Bank's rights and obligations under this Agreement, (ii) the amount of the
Commitments, Advances, and Letter of Credit Exposure of such Bank being
assigned pursuant to each such assignment (determined as of the date of the
Assignment and Acceptance with respect to such assignment) shall be, if to an
entity other than a Bank, not less than $10,000,000 shall be an integral
multiple of $1,000,000 (unless such assignment represents the entire amount of
such Bank's Commitments, Advances and Letter of Credit Exposure), (iii) each
such assignment shall be an assignment of equal percentages of the assigning
Bank's Tranche A Commitments, Tranche B Commitments, Tranche A Advances and
Tranche B Advances, (iv) each such assignment shall be to an Eligible Assignee,
(v) the parties to each such assignment shall execute and deliver to the Agent,
for its acceptance and recording in the Register, an Assignment and Acceptance,
together with the Note subject to such assignment, and (vi) each Eligible
Assignee (other than the Eligible Assignee of the Agent) shall pay to the Agent
a $3,000 administrative fee. Upon such execution, delivery, acceptance and
recording, from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least three Business Days after
the execution thereof, (A) the assignee thereunder shall be a party hereto for
all purposes and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder and (B) such Bank thereunder shall, to the
extent that rights and obligations hereunder have been assigned by it pursuant
to such Assignment and Acceptance, relinquish its rights and be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of such Bank's rights and
obligations under this Agreement, such Bank shall cease to be a party hereto
but all indemnification provisions contained herein shall continue to inure for
the benefit of such departing Bank with respect to matters arising during the
period such Bank was a party hereto).
(b) Term of Assignments. By executing and delivering an Assignment and
Acceptance, the Bank thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other than
as provided in such Assignment and Acceptance, such Bank makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency of value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Bank makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or the Subsidiaries or the performance or observance by the Borrower
or the Subsidiaries of any of their obligations under this Agreement or any
other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 4.05 (or its most recently
furnished financial statements pursuant to Section 5.06) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee will, independently and without reliance upon the Agent, such Bank or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vi) such assignee agrees that it will perform in accordance with their terms
all of the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(c) The Register. The Agent shall maintain at its address referred to in
Section 9.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Banks and the Commitments of, and principal amount of the Advances owing to,
each Bank from time-to-time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and
the Borrower, the Agent, the Issuing Bank, and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
or any Bank at any reasonable time and from time-to-time upon reasonable prior
notice.
(d) Procedures. Upon its receipt of an Assignment and Acceptance executed
by a Bank and an Eligible Assignee, together with the Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of the attached Exhibit A, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt notice thereof to the Borrower.
Within five Business Days after its receipt of such notice, the Borrower, with
its own attorney's fees being its own expense, shall execute and deliver to the
Agent in exchange for the surrendered Notes a new Tranche A Note and Tranche B
Note to the order of such Eligible Assignee in an amount equal to its
respective the Commitments assumed by it pursuant to such Assignment and
Acceptance and, if such Bank has retained any Commitments hereunder, a new
Tranche A Note and Tranche B Note to the order of such Bank in an amount equal
to the respective Commitments retained by it hereunder. Such new Notes shall
be dated the effective date of such Assignment and Acceptance and shall
otherwise be in substantially the form of the attached Exhibits F-1 and F-2.
(e) Participations. Each Bank may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitments, the Advances owing to it, its participation interest in the Letter
of Credit Obligations, and the Notes held by it); provided, however, that (i)
such Bank's obligations under this Agreement (including, without limitation,
its Commitments to the Borrower hereunder) shall remain unchanged, (ii) such
Bank shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Bank shall remain the holder of any
such Notes for all purposes of this Agreement, (iv) the Borrower, the Agent,
and the Issuing Bank and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement, and (v) such Bank shall not require the participant's
consent to any matter under this Agreement, except for change in the principal
amount of the Notes, reductions in fees or interest, releases of collateral or
the obligations of any Subsidiary under its Guaranty, change in amortization of
Tranche B Advances, or except as so specifically provided in Section 2.01(c),
extending the Tranche A Maturity Date or the Tranche B Maturity Date. The
Borrower hereby agrees that participants shall have the same rights under
Sections 2.08, 2.09, 2.11(c), and 9.07 as a Bank to the extent of their
respective participations.
(f) Confidentiality. Each Bank may furnish any information concerning the
Borrower and its Subsidiaries in the possession of such Bank from time-to-time
to assignees and participants (including prospective assignees and
participants); provided that, prior to any such disclosure, the assignee or
participant or proposed assignee or participant shall agree in writing to
preserve the confidentiality of any confidential information relating to the
Borrower and its Subsidiaries received by it from such Bank. Such Bank shall,
upon the Borrower's request, deliver a signed copy of any such confidentiality
agreement to the Borrower.
(g) Notwithstanding anything to the contrary in Section 9.06(a), any Bank
may assign as collateral or otherwise, any of its rights (including, without
limitation, rights to payments of principal of and interest on the Notes) under
any Credit Document to any Federal Reserve Bank without notice to or consent of
the Borrower or the Agent. Any Bank making such an assignment agrees to
promptly notify the Borrower and the Agent of such assignment, but the failure
to so notify shall not affect the validity of such assignment.
Section 9.07. Indemnification. THE BORROWER SHALL INDEMNIFY THE AGENT, THE
BANKS, THE ISSUING BANK, AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS FROM, AND DISCHARGE, RELEASE, AND
HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS OR
DAMAGES TO WHICH ANY OF THEM MAY BECOME SUBJECT, INSOFAR AS SUCH LOSSES,
LIABILITIES, CLAIMS OR DAMAGES ARISE OUT OF OR RESULT FROM (I) ANY ACTUAL OR
PROPOSED USE BY THE BORROWER OR ANY AFFILIATE OF THE BORROWER OF THE PROCEEDS
OF ANY ADVANCE, (II) ANY BREACH BY THE BORROWER OF ANY PROVISION OF THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT, (III) ANY INVESTIGATION, LITIGATION OR
OTHER PROCEEDING (INCLUDING ANY THREATENED INVESTIGATION OR PROCEEDING)
RELATING TO THE FOREGOING, OR (IV) ANY ENVIRONMENTAL CLAIM OR REQUIREMENT OF
ENVIRONMENTAL LAWS CONCERNING OR RELATING TO THE PRESENT OR PREVIOUSLY-OWNED OR
OPERATED PROPERTIES, OR THE OPERATIONS OR BUSINESS, OF THE BORROWER OR ANY OF
ITS SUBSIDIARIES, INCLUDING WITHOUT LIMITATION THOSE MATTERS SET FORTH IN
SCHEDULES 4.16(A) AND (B), AND THE BORROWER SHALL REIMBURSE THE AGENT, THE
ISSUING BANK, AND EACH BANK, AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS, UPON DEMAND FOR ANY REASONABLE OUT-
OF-POCKET EXPENSES (INCLUDING LEGAL FEES) INCURRED IN CONNECTION WITH ANY SUCH
INVESTIGATION, LITIGATION OR OTHER PROCEEDING; AND EXPRESSLY INCLUDING ANY SUCH
LOSSES, LIABILITIES, CLAIMS, DAMAGES, OR EXPENSE INCURRED BY REASON OF THE
PERSON BEING INDEMNIFIED'S OWN NEGLIGENCE, BUT EXCLUDING ANY SUCH LOSSES,
LIABILITIES, CLAIMS, DAMAGES OR EXPENSES INCURRED BY REASON OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED.
Section 9.08. Execution in Counterparts. This Agreement may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Section 9.09. Survival of Representations, etc. All representations and
warranties contained in this Agreement or made in writing by or on behalf of
the Borrower in connection herewith shall survive the execution and delivery of
this Agreement and the Credit Documents, the making of the Advances and any
investigation made by or on behalf of the Banks, none of which investigations
shall diminish any Bank's right to rely on such representations and warranties.
All obligations of the Borrower provided for in Sections 2.08, 2.09, 2.11(c),
and 9.07 shall survive any termination of this Agreement and repayment in full
of the Obligations.
Section 9.10. Severability. In case one or more provisions of this Agreement
or the other Credit Documents shall be invalid, illegal or unenforceable in
any respect under any applicable law, the validity, legality and enforceability
of the remaining provisions contained herein or therein shall not be affected
or impaired thereby.
Section 9.11. Business Loans. The Borrower warrants and represents that the
Loans evidenced by the Notes are and shall be for business, commercial,
investment or other similar purposes and not primarily for personal, family,
household or agricultural use, as such terms are used in Chapter One ("Chapter
One") of the Texas Credit Code. At all such times, if any, as Chapter One
shall establish a Maximum Rate, the Maximum Rate shall be the "indicated rate
ceiling" (as such term is defined in Chapter One) from time to time in effect.
Section 9.12. Usury Not Intended. It is the intent of the Borrower and each
Bank in the execution and performance of this Agreement and the other Credit
Documents to contract in strict compliance with applicable usury laws,
including conflicts of law concepts, governing the Advances of each Bank
including such applicable laws of the State of Texas and the United States of
America from time-to-time in effect. In furtherance thereof, each Bank and the
Borrower stipulate and agree that none of the terms and provisions contained in
this Agreement or the other Credit Documents shall ever be construed to create
a contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate applicable to such Bank
and that for purposes hereof "interest" shall include the aggregate of all
charges which constitute interest under such laws that are contracted for,
charged or received under this Agreement; and in the event that,
notwithstanding the foregoing, under any circumstances the aggregate amounts
taken, reserved, charged, received or paid on the Advances, include amounts
which by applicable law are deemed interest which would exceed the Maximum Rate
applicable to such Bank, then such excess shall be deemed to be a mistake and
such Bank shall credit the same on the principal of its Note (or if such Note
shall have been paid in full, refund said excess to the Borrower). In the
event that the maturity of the Notes are accelerated by reason of any election
of the Majority Banks resulting from any Event of Default under this Agreement
or otherwise, or in the event of any required or permitted prepayment, then
such consideration to any Bank that constitutes interest may never include more
than the Maximum Rate for such Bank and excess interest, if any, provided for
in this Agreement or otherwise shall be canceled automatically as of the date
of such acceleration or prepayment and, if theretofore paid, shall be credited
by such Bank on its Note (or, if its Note shall have been paid in full,
refunded to the Borrower of such interest). The provisions of this Section
shall control over all other provisions of this Agreement or the other Credit
Documents which may be in apparent conflict herewith. In determining whether
or not the interest paid or payable under any specific contingencies exceeds
the Maximum Rate applicable to a Bank, the Borrower and such Bank shall to the
maximum extent permitted under applicable law give effect to Section 2.06(d)
and amortize, prorate, allocate and spread in equal parts during the period of
the full stated term of its Note all amounts considered to be interest under
applicable law at any time contracted for, charged, received or reserved in
connection with the Obligations.
Section 9.13. Governing Law. This Agreement, the Notes and the other Credit
Documents shall be governed by, and construed and enforced in accordance with,
the laws of the State of Texas.
THE BORROWER, THE BANKS, THE ISSUING BANK AND THE AGENT HEREBY IRREVOCABLY
WAIVE ANY AND ALL RIGHT TO TRIAL BY JURY IN RESPECT OF ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, OR ANY
OF THE TRANSACTIONS CONTEMPLATED HEREBY.
PURSUANT TO SECTION 26.02 OF THE TEXAS BUSINESS AND COMMERCE CODE, A CREDIT
AGREEMENT IN WHICH THE AMOUNT INVOLVED IN THE CREDIT AGREEMENT EXCEEDS $50,000
IN VALUE IS NOT ENFORCEABLE UNLESS THE LOAN AGREEMENT IS IN WRITING AND SIGNED
BY THE PARTY TO BE BOUND OR THAT PARTY'S AUTHORIZED REPRESENTATIVE.
THE RIGHTS AND OBLIGATIONS OF THE PARTIES TO AN AGREEMENT SUBJECT TO THE
PRECEDING PARAGRAPH SHALL BE DETERMINED SOLELY FROM THE WRITTEN CREDIT
AGREEMENT, AND ANY PRIOR ORAL AGREEMENTS BETWEEN THE PARTIES ARE SUPERSEDED BY
AND MERGED INTO THE CREDIT AGREEMENT. THIS WRITTEN AGREEMENT AND THE CREDIT
DOCUMENTS, AS DEFINED IN THIS AGREEMENT, REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
EXECUTED as of the 2nd day of September, 1997.
BORROWER:
EQUITY CORPORATION INTERNATIONAL
By: _________________________
▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President and
Chief Financial Officer
AGENT:
NATIONSBANK OF TEXAS, N.A., as Agent
By: _________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Vice President
BANKS:
TRANCHE A COMMITMENT NATIONSBANK OF TEXAS, N.A.
$21,666,666.67
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$10,833,333.33 Title:________________________________
TRANCHE A COMMITMENT SOCIETE GENERALE,
$20,000,000.00 SOUTHWEST AGENCY
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$10,000,000.00 Title:________________________________
TRANCHE A COMMITMENT ▇▇▇▇▇ FARGO BANK, (TEXAS)
$16,666,666.67 NATIONAL ASSOCIATION
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$8,333,333.33 Title:________________________________
TRANCHE A COMMITMENT THE SUMITOMO BANK, LTD.
$15,000,000.00
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$7,500,000.00 Title:________________________________
By:___________________________________
Name:_________________________________
Title:________________________________
TRANCHE A COMMITMENT CIBC, INC.
$13,333,333.33
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$6,666,666.67 Title:________________________________
TRANCHE A COMMITMENT TORONTO-DOMINION (TEXAS), INC.
$13,333,333.33
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$6,666,666.67 Title:________________________________
TRANCHE A COMMITMENT BANK OF AMERICA T4EXAS, N.A.
$11,333,333.33
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$5,666,666.67 Title:________________________________
TRANCHE A COMMITMENT CORESTATES BANK, N.A.
$11,333,333.33
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$5,666,666.67 Title:________________________________
TRANCHE A COMMITMENT COOPERATIVE CENTRALE RAIFFEISEN-
$11,333,333.33 BOERENLEENBANK, B.A. "RABOBANK
NEDERLAND", NEW YORK BRANCH
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$5,666,666.67 Title:________________________________
TRANCHE A COMMITMENT THE BANK OF TOKYO-MITSUBISHI, LTD.,
$8,000,000.00 HOUSTON AGENCY
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$4,000,000.00 Title:________________________________
TRANCHE A COMMITMENT BANQUE PARIBAS
$8,000,000.00
By:___________________________________
TRANCHE B COMMITMENT Name:_________________________________
$4,000,000.00 Title:________________________________
By:___________________________________
Name:_________________________________
Title:________________________________
$225,000,000 TOTAL COMMITMENTS
-----------------
(..continued)