EXHIBIT 10.2
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CREDIT AGREEMENT
Dated as of September 4, 1998
among
CALMAT CO.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Agent
and
THE OTHER FINANCIAL INSTITUTIONS PARTIES HERETO
Arranged by
BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC.
[LOGO OF BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, INC. APPEARS HERE]
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CALMAT CO.
CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINITIONS 1
1.1 CERTAIN DEFINED TERMS.......................................... 1
1.2 COMPUTATION OF TIME PERIODS.................................... 19
1.3 ACCOUNTING TERMS............................................... 19
1.4 OTHER DEFINITIONAL PROVISIONS.................................. 19
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND COMMITTED LOANS....... 20
2.1 COMMITTED LOANS................................................ 20
2.2 BID LOANS...................................................... 22
2.3 FEES........................................................... 27
2.4 REDUCTIONS OF COMMITMENTS; EXTENSION OF COMMITMENTS............ 27
2.5 OPTIONAL PREPAYMENTS AND MANDATORY PAYMENTS AND PREPAYMENTS.... 28
2.6 INTEREST....................................................... 29
2.7 INTEREST RATE DETERMINATION AND PROTECTION..................... 30
2.8 ILLEGALITY AND EURODOLLAR RATE LOANS........................... 31
2.9 VOLUNTARY CONVERSION OR CONTINUATION OF LOANS.................. 32
2.10 INCREASED COSTS AND FUNDING LOSSES; SUBSTITUTION OF A BANK.... 33
2.11 TAXES......................................................... 34
2.12 PAYMENTS AND COMPUTATIONS..................................... 35
2.13 SHARING OF PAYMENTS, ETC...................................... 36
2.14 USE OF PROCEEDS............................................... 37
SECTION 3. CONDITIONS TO EFFECTIVENESS; CONDITIONS WITH
RESPECT TO LOANS......................................... 37
3.1 CONDITIONS TO EFFECTIVENESS.................................... 37
3.2 CONDITIONS TO ALL LOANS........................................ 39
SECTION 4. REPRESENTATIONS AND WARRANTIES 39
4.1 ORGANIZATION, POWERS, GOOD STANDING AND SUBSIDIARIES........... 39
4.2 AUTHORIZATION OF BORROWING, ETC................................ 40
4.3 FINANCIAL CONDITION............................................ 40
4.4 CHANGES, ETC................................................... 41
4.5 LITIGATION; ADVERSE FACTS...................................... 41
4.6 PAYMENT OF TAX................................................. 41
4.7 MATERIALLY ADVERSE AGREEMENTS; PERFORMANCE..................... 41
4.8 GOVERNMENTAL REGULATION........................................ 42
4.9 SECURITIES ACTIVITIES.......................................... 42
4.10 EMPLOYEE BENEFIT PLANS........................................ 42
4.11 PATENTS, TRADEMARKS AND LICENSES.............................. 43
4.12 TITLE TO PROPERTIES; LIENS.................................... 43
4.13 ENVIRONMENTAL PROTECTION...................................... 43
4.14 LABOR MATTERS................................................. 44
4.15 DISCLOSURE.................................................... 44
SECTION 5. AFFIRMATIVE COVENANTS 45
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS......................... 45
5.2 CORPORATE EXISTENCE, ETC....................................... 47
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION................. 47
5.4 MAINTENANCE OF PROPERTIES; INSURANCE........................... 48
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5.5 EQUAL SECURITY FOR OBLIGATIONS; NO FURTHER NEGATIVE PLEDGES.... 48
5.6 INSPECTION; RECORDS, ETC.; CONFIDENTIALITY..................... 48
5.7 COMPLIANCE WITH LAWS, ETC...................................... 49
5.8 FURTHER ASSURANCES............................................. 49
5.9 ENVIRONMENTAL NOTICE AND INSPECTION............................ 49
SECTION 6. NEGATIVE COVENANTS 51
6.1 LIENS.......................................................... 51
6.2 INVESTMENTS.................................................... 51
6.3 FINANCIAL COVENANTS............................................ 52
6.4 RESTRICTION ON FUNDAMENTAL CHANGES............................. 52
6.5 RESTRICTION ON ASSET SALES..................................... 53
6.6 SALES AND LEASE-BACKS.......................................... 54
6.7 TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES.................. 54
6.8 CONDUCT OF BUSINESS............................................ 54
6.9 INDEPENDENCE OF COVENANTS...................................... 55
6.10 USE OF PROCEEDS............................................... 55
6.11 SUBSIDIARY INDEBTEDNESS....................................... 55
SECTION 7. EVENTS OF DEFAULT 55
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE.............................. 55
7.2 BREACH OF WARRANTY............................................. 56
7.3 BREACH OF COVENANTS............................................ 56
7.4 BREACH OF OTHER AGREEMENTS..................................... 56
7.5 BANKRUPTCY..................................................... 56
7.6 JUDGMENTS...................................................... 57
7.7 DISSOLUTION.................................................... 57
7.8 ERISA.......................................................... 57
7.9 CONTROL OF THE BORROWER........................................
SECTION 8. THE AGENT 59
8.1 AUTHORIZATION AND APPOINTMENT.................................. 59
8.2 DELEGATION OF DUTIES........................................... 59
8.3 LIABILITY OF AGENT............................................. 59
8.4 RELIANCE BY AGENT.............................................. 59
8.5 NOTICE OF DEFAULT.............................................. 60
8.6 CREDIT DECISION................................................ 61
8.7 INDEMNIFICATION................................................ 61
8.8 AGENT IN INDIVIDUAL CAPACITY................................... 61
8.9 SUCCESSOR AGENT................................................ 62
8.10 WITHHOLDING TAX............................................... 62
SECTION 9. MISCELLANEOUS 64
9.1 AMENDMENTS, ETC................................................ 64
9.2 NOTICES, ETC................................................... 64
9.3 NO WAIVER; REMEDIES............................................ 65
9.4 COSTS AND EXPENSES............................................. 65
9.5 INDEMNIFICATION................................................ 65
9.6 BINDING EFFECT................................................. 66
9.7 ASSIGNMENTS AND PARTICIPATIONS................................. 66
9.8 SEVERABILITY................................................... 69
9.9 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS.................. 69
9.10 HEADINGS...................................................... 69
9.11 APPLICABLE LAW; JURISDICTION; WAIVER OF JURY TRIAL............ 69
9.12 EXECUTION IN COUNTERPARTS; EFFECTIVENESS...................... 70
9.13 OBLIGATIONS SEVERAL........................................... 70
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9.14 COMPLETE AGREEMENT............................................. 70
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF ASSIGNMENT AND ACCEPTANCE
IV FORM OF COMPLIANCE CERTIFICATE
V FORM OF OPINION OF BORROWER'S COUNSEL
VI FORM OF COMPETITIVE BID REQUEST
VII FORM OF INVITATION FOR COMPETITIVE BIDS
VIII FORM OF COMPETITIVE BID
IX FORM OF BID LOAN NOTE
X FORM OF COMMITTED LOAN NOTE
SCHEDULES
A COMMITMENTS
B APPLICABLE LENDING OFFICES
C SUBSIDIARIES
D EMPLOYEE BENEFIT PLANS
E EXISTING LIENS
F ENVIRONMENTAL MATTERS
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CALMAT CO.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of September 4, 1998, and is entered into
by and among CALMAT CO., a Delaware corporation (the "BORROWER"), the financial
institutions listed on the signature pages hereto (such financial institutions,
together with each Person that may become a party hereto pursuant to Section 9.7
hereof, are referred to herein individually as a "BANK" and collectively as the
"BANKS"), and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BOFA"),
as agent for the Banks (in its capacity as agent, the "AGENT").
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS
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The following terms used in this Agreement shall have the following
meanings:
"ABSOLUTE RATE" has the meaning specified in Section 2.2B(iii)(b)(D).
"ABSOLUTE RATE AUCTION" means a solicitation of Competitive Bids setting
forth Absolute Rates pursuant to Section 2.2B.
"ABSOLUTE RATE BID LOAN" means a Bid Loan that bears interest at a rate
determined with reference to the Absolute Rate.
"ADJUSTED CD RATE" means a rate per annum equal to the following:
CD Base Rate + CD Assessment Rate
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1.00 - CD Rate Reserve Percentage
"CD BASE RATE" means, for the Interest Period for each CD Rate Loan
comprising part of the same Borrowing, the rate of interest determined by the
Agent to be the average (rounded, if necessary, upward to the nearest whole
multiple of 1/100th of 1%) of the prevailing rates per annum bid at the time
the Agent quotes the rate to the Borrower on the first day of such Interest
Period by at least one certificate of deposit dealer of recognized standing
selected by each Reference Bank for the purchase at face value from such
Reference Bank of its certificates of deposit in an amount substantially
equal to the CD Rate Loan comprising part of such Borrowing and for a period
equal to such Interest Period.
"CD ASSESSMENT RATE" means, for any day of such Interest Period, the
rate determined by the Agent as equal to the annual assessment rate in effect
on such day payable to the FDIC by a member of the Bank Insurance Fund that
is classified as adequately capitalized and within supervisory subgroup "A"
(or a comparable successor assessment risk classification within the meaning
of 12 C.F.R. (S)327.3(d)) for insuring time deposits at offices of such
member in the United States; or, in the event that the FDIC shall at any time
hereafter cease to assess time deposits based upon such classifications or
successor classifications, equal to the maximum annual assessment rate in
effect on such day that is payable to the FDIC by commercial banks (whether
or not applicable to any particular Bank) for insuring time deposits at
offices of such banks in the United States.
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"CD RATE RESERVE PERCENTAGE" means, for any day of such Interest Period,
the maximum reserve percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%), as determined by the Agent, in effect on such day
(including any ordinary, marginal, emergency, supplemental, special and other
reserve percentages), prescribed by the Board of Governors of the Federal
Reserve System for determining the maximum reserves to be maintained by
member banks of the Federal Reserve System with deposits exceeding
$1,000,000,000 for new non-personal time deposits for a period comparable to
such Interest Period and in an amount of $100,000 or more.
"ADJUSTED EURODOLLAR RATE" means, for the Interest Period for each
Eurodollar Rate Loan comprising part of the same Borrowing, an interest rate
per annum equal to the rate per annum (rounded upward to the nearest whole
multiple of 1/100th of 1%) obtained by dividing (i) the Eurodollar Rate by
(ii) a percentage equal to 100% minus the Eurodollar Rate Reserve Percentage
(as defined below) for such Interest Period. The "EURODOLLAR RATE RESERVE
PERCENTAGE" means for any day for any Interest Period the maximum reserve
percentage (expressed as a decimal, rounded upward to the next 1/100th of 1%)
in effect on such day (whether or not applicable to any Bank) under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency liabilities")
having a term comparable to such Interest Period for the Interest Period for
each Eurodollar Rate Loan comprising part of the same Borrowing.
"AFFILIATE", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the ownership of
voting securities or by contract or otherwise.
"AGENT" means BofA and any successor thereto appointed pursuant to
Section 8.9.
"AGENT AUCTION" means a Bid Loan auction managed by the Agent in
accordance with Section 2.2B.
"AGENT-RELATED PERSONS" means BofA and any successor agent arising under
Section 8.9, together with their respective Affiliates (including, in the
case of BofA, the Arranger), and the officers, directors, employees, agents
and attorneys-in-fact of such Persons and Affiliates.
"AGREEMENT" means this Credit Agreement, as it may hereafter be amended,
supplemented, restated or otherwise modified from time to time.
"APPLICABLE LENDING OFFICE" means, with respect to any Bank, such Bank's
Domestic Lending Office in the case of a Base Rate Loan, such Bank's CD
Lending Office in the case of a CD Rate Loan and such Bank's Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.
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"APPLICABLE AMOUNT" means, for any period, the amount (expressed in
basis points) shown in the table below when the Consolidated Funded
Indebtedness to Consolidated EBITDA Ratio for the Borrower is as indicated:
(In basis points)
CONSOLIDATED FUNDED **1.50:1.00 **2.50:1.00 **3.00:1.00 **3.50
DEBT/EBITDA RATIO *1.50:1.00 *2.50:1.00 *3.00:1.00 *3.50:1.00
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Facility Fee
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Adjusted Eurodollar Rate
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Adjusted CD Rate
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** greater than or equal to
* less than
The Applicable Amount shall be based on the Consolidated Funded
Indebtedness to Consolidated EBITDA Ratio for the Borrower set forth in the
most recent Attachment No. 2 to Compliance Certificate, and shall be
effective from and including the date the Agent receives such Compliance
Certificate to but excluding the date on which Agent receives the next
Compliance Certificate; provided, however, that if Agent does not receive a
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Compliance Certificate by the date required by Section 5.1(iii), the
Applicable Amount shall, effective as of such date, be the highest Applicable
Amount to but excluding the date the Agent receives such Compliance
Certificate. . Notwithstanding the foregoing proviso, until delivery of the
Compliance Certificate for the fiscal quarter ending March 31, 1999, the
Applicable Amount shall not be lower than that set forth for a Consolidated
Funded Indebtedness to Consolidated EBITDA Ratio of 2.0 to 1.0.
"ARRANGER" means BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Inc., a Delaware
corporation.
"ASSET SALE" means the sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person of any asset (other than
sales and discounts of accounts receivable) of the Borrower or any such
Subsidiary.
"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 EXHIBIT III annexed hereto.
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the reasonable
allocated cost of internal legal services and all disbursements of internal
counsel.
"AUTHORIZED OFFICER" means the Chief Executive Officer, Chief Financial
Officer, Controller or Treasurer of the Borrower; provided, however, that
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solely for the purposes of requesting a Loan hereunder or giving notice with
respect to the conversion or continuation of any Loan, the Assistant
Treasurer shall also be an Authorized Officer.
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"BANKS" has the meaning assigned to that term in the introductory
paragraph of this Agreement.
"BOFA" has the meaning assigned to that term in the introductory
paragraph of this Agreement.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy" as now and hereafter in effect, or any successor statute.
"BASE RATE" means, for any period, a fluctuating interest rate per annum
as shall be in effect from time to time which rate per annum shall at all
times be equal to the higher of:
(i) the rate of interest announced publicly by BofA in San
Francisco, California, from time to time, as BofA's reference rate; such
reference rate is a rate set by BofA based upon various factors
including BofA's costs and desired return, general economic conditions
and other factors, and is used as a reference point for pricing some
loans, which may be priced at, above or below such announced rate; or
(ii) the sum (rounded upward to the nearest whole multiple of
1/100th of 1%) of (a) the Federal Funds Rate, as determined by BofA for
such period, which determination shall be conclusive absent manifest
error, and (b) 1/2 of one percent per annum.
"BASE RATE LOAN" means a Loan which bears interest as provided in
Section 2.6A.
"BID BORROWING" means a Borrowing hereunder consisting of one or more
Bid Loans made to the Borrower on the same day by one or more Banks.
"BID LOAN" means a Loan by a Bank to the Borrower pursuant to Section
2.2A, which may be a Eurodollar Rate Bid Loan or an Absolute Rate Bid Loan.
"BID LOAN BANK" means, in respect of any Bid Loan, the Bank making such
Loan to the Borrower.
"BID LOAN NOTES" means those master promissory notes, if any, issued by
the Borrower pursuant to Section 9.7G, payable to the Banks and evidencing
the Bid Loans made by the Banks pursuant to Section 2.2, such notes being
substantially in the form of EXHIBIT IX annexed hereto, as such notes may
hereafter be amended, supplemented or otherwise modified from time to time.
"BOOK VALUE OF ASSETS SOLD" means, with respect to any Asset Sale, the
net book value of the assets sold pursuant to such Asset Sale calculated in
conformity with GAAP.
"BORROWER" has the meaning assigned to that term in the introductory
paragraph of this Agreement.
"BORROWER AUCTION" means a Bid Loan auction managed by the Borrower in
accordance with Section 2.2B.
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"BORROWING" means either or both of a Committed Borrowing and a Bid
Borrowing.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of California or New York or is a
day on which banking institutions located in such states are authorized by
law or other governmental action to close and (ii) with respect to all
notices, determinations, fundings and payments in connection with Eurodollar
Rate Loans and Eurodollar Rate Bid Loans, any day which is a Business Day
described in clause (i) and which is also a day for trading by and between
banks in Dollar deposits in the Eurodollar market.
"CD LENDING OFFICE" means, with respect to any Bank, the office of such
Bank specified as its "CD Lending Office" opposite its name on SCHEDULE B
annexed hereto or in the Assignment and Acceptance pursuant to which it
became a Bank (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.
"CD RATE LOAN" means a Loan which bears interest as provided in Section
2.6B.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as a lessee that,
in conformity with GAAP, should be accounted for as a capital lease on the
balance sheet of that Person.
"CASH" means money, currency, a credit balance in a deposit account
maintained with any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia having
combined capital and surplus of not less than $500,000,000 or that portion of
a credit balance in a deposit account which is fully insured by the FDIC.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guarantied by the United States Government or issued by any
agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition thereof;
(ii) marketable direct obligations issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof maturing within one year from the date of acquisition
thereof and, at the time of acquisition, having a rating of at least "A2" by
Standard & Poor's Corporation and at least "P2" by ▇▇▇▇▇'▇ Investors Service,
Inc.; (iii) commercial paper maturing no more than one year from the date of
creation thereof and, at the time of acquisition, having a rating of at least
"A2" by Standard & Poor's Corporation and at least "P2" by ▇▇▇▇▇'▇ Investors
Service, Inc.; (iv) certificates of deposit or bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any Bank or by
any other commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia having combined
capital and surplus of not less than $500,000,000; (v) repurchase agreements
with any commercial bank organized under the laws of the United States of
America or any state thereof or the District of Columbia having combined
capital and surplus of not less than $500,000,000, with any Bank or with any
investment bank with its long-term debt rated at least "A" by Standard &
Poor's Corporation and at least "A2" by ▇▇▇▇▇'▇ Investors Service, Inc. and
having combined capital and surplus of not less than $500,000,000, in each
case relating to marketable direct obligations
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issued or unconditionally guarantied by the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States; provided that the terms of such agreements comply with the
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guidelines set forth in the Federal Financial Institutions Examination
Council Supervisory Policy-Repurchase Agreements of Depository Institutions
With Securities Dealers and Others as adopted by the Comptroller of the
Currency on October 31, 1985; and (vi) mutual funds which invest primarily in
the types of investments enumerated in clauses (i) through (v) above.
"COMMITMENT" means the commitment or commitments of a Bank or the Banks
to make Loans as set forth in Section 2.1A. The amount of the original
Commitment of each Bank is set forth on the SCHEDULE A annexed hereto and
such Commitment shall be adjusted from time to time pursuant to Section 2.4.
"COMMITTED BORROWING" means a Borrowing hereunder consisting of one or
more Committed Loans made to the Borrower on the same day by the Banks
ratably according to their respective Pro Rata Shares and, in the case of CD
Rate Loans and Eurodollar Rate Loans, having the same Interest Periods.
"COMMITTED LOAN" means a Loan by a Bank to the Borrower pursuant to
Section 2.1, which may be a Base Rate Loan, a CD Rate Loan or a Eurodollar
Rate Loan.
"COMMITTED LOAN NOTES" means the promissory notes, if any, issued by the
Borrower to the Banks pursuant to Section 9.7G evidencing the Committed Loans
made by the Banks pursuant to Section 2.1, such notes being substantially in
the form of EXHIBIT X annexed hereto, as such notes may hereafter be amended,
supplemented, restated or otherwise modified from time to time.
"COMPETITIVE BID" means an offer by a Bank to make a Bid Loan in
accordance with Section 2.2.
"COMPETITIVE BID REQUEST" has the meaning assigned to that term in
Section 2.2B(i).
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT IV annexed hereto, delivered to the Agent and the Banks by the
Borrower pursuant to Section 5.1(iii).
"CONSOLIDATED", when used with respect to any of the terms defined
herein, refers to such terms as reflected in a consolidation of the accounts
of the Borrower and its Subsidiaries in conformity with GAAP (including
giving effect to the elimination of all intercompany items in conformity with
GAAP).
"CONSOLIDATED EBIT" means, for any period, the sum (without duplication)
of (i) Consolidated Net Income for such period, (ii) provision for taxes in
respect of, or measured by, income or excess profits, calculated on a
Consolidated basis for such period and (iii) Consolidated Interest Expense
for such period.
"CONSOLIDATED EBITDA" means, for any period, the sum (without
duplication) of (i) Consolidated Net Income for such period, (ii) provision
for taxes in respect of, or measured by,
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income or excess profits, calculated on a Consolidated basis for such period,
(iii) Consolidated Interest Expense for such period, and (iv) depreciation
and amortization expense, calculated on a Consolidated basis for such period.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, for the Borrower and its
Subsidiaries on a consolidated basis, the sum of (a) all obligations and
liabilities, whether current or long-term, for borrowed money, (b) that
portion of obligations with respect to Capital Leases which is capitalized on
the Consolidated balance sheet of the Borrower and its Subsidiaries and (c)
the amount included in the definition of Indebtedness with respect to
Contingent Obligations, all determined in conformity with GAAP.
"CONSOLIDATED FUNDED INDEBTEDNESS TO CONSOLIDATED EBITDA RATIO" means,
as of date of determination, for the Borrower and its Subsidiaries on a
Consolidated basis, the ratio of Consolidated Funded Indebtedness to
Consolidated EBITDA for the four previous consecutive fiscal quarters ending
on or prior to such date, all determined in conformity with GAAP.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, as of date of
determination, for the Borrower and its Subsidiaries on a Consolidated basis,
the ratio of Consolidated EBIT to Consolidated Interest Expense for the four
previous consecutive fiscal quarters ending on or prior to such date, all
determined in conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the sum, without
duplication, of (i) total interest expense (including that portion
attributable to Capital Leases in conformity with GAAP) of the Borrower and
its Subsidiaries for such period on a Consolidated basis, including the fees
referred to in Section 2.3A, (ii) the aggregate amount of all interest and
finance charges on Consolidated Off Balance Sheet Obligations for such
period, and (iii) Consolidated Rent Payments paid or payable during such
period.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of the Borrower and its Subsidiaries on a Consolidated basis determined
in conformity with GAAP for such period taken as a single accounting period;
provided that there shall be excluded (i) the income (or loss) of any Person
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(other than a Subsidiary of the Borrower) in which any other Person (other
than the Borrower or any of its Subsidiaries) has a joint interest, except to
the extent of the amount of dividends or other distributions actually paid to
the Borrower or any of its Subsidiaries by such Person during such period,
but net of any additional Investment made by the Borrower or any of its
Subsidiaries in such Person during such period, (ii) the income (or loss) of
any Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its
Subsidiaries or that Person's assets are acquired by the Borrower or any of
its Subsidiaries, and (iii) the income of any Subsidiary of the Borrower to
the extent that the declaration or payment of dividends or similar
distributions by that Subsidiary of that income is not at the time permitted
by operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation applicable
to that Subsidiary.
"CONSOLIDATED NET WORTH" means, at any date of determination, the
Consolidated stockholders' equity of the Borrower and its Subsidiaries,
determined in accordance with GAAP.
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"CONSOLIDATED OFF BALANCE SHEET OBLIGATIONS" means, as at any date of
determination, the sum (without duplication) of (i) any Indebtedness of an
Affiliate or a Subsidiary of the Borrower or any of their respective
Subsidiaries or any partnership in which the Borrower or any of its
Subsidiaries or any of their respective Affiliates is a general partner, (ii)
any outstanding amount of accounts receivable or notes sold by the Borrower
or any of its Subsidiaries, (iii) any non-recourse financing of real
property, equipment or other asset by the Borrower or any of its Subsidiaries
or Affiliates, (iv) any obligations under a sale and lease back transaction
entered into by the Borrower or any of its Subsidiaries as lessee, and (v)
any other transaction, regardless of form, which is the functional equivalent
of borrowing by the Borrower or any of its Subsidiaries; provided, that (a)
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such Indebtedness or obligation shall be included only to the extent that it
does not appear on the Consolidated financial statements of the Borrower and
(b) if such Indebtedness or other obligation is owed by an entity other than
the Borrower or one of its wholly-owned Subsidiaries, it shall be reduced by
the amount attributable to other ownership interests.
"CONSOLIDATED RENT PAYMENTS" means, for any period, the aggregate amount
of the rental payments and other amounts incurred by the Borrower and its
Subsidiaries as lessees under all leases of the Borrower or its Subsidiaries
during such period, excluding (a) any amounts incurred in connection with
Capital Leases to the extent such amounts are included in the calculation of
Consolidated Interest Expense and (b) rental payments on land leases which
permit the Company or its Subsidiaries to extract minerals or other raw
materials.
"CONSOLIDATED SENIOR FUNDED INDEBTEDNESS" means Consolidated Funded
Indebtedness minus any Indebtedness that has been subordinated, on terms
reasonably satisfactory to Required Banks, to all Indebtedness to the Banks
incurred hereunder.
"CONTINGENT OBLIGATION" as applied to any Person, means (i) any direct or
indirect liability, contingent or otherwise, of that Person with respect to
any Indebtedness, lease, dividend, letter of credit, accounts receivable or
other obligation of another, including, without limitation and without
duplication, any such obligation directly or indirectly guarantied, endorsed
(otherwise than for collection or deposit in the ordinary course of business),
co-made, or discounted or sold with recourse by that Person, or in respect of
which that Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation for which that Person is in effect
liable through any agreement (contingent or otherwise) to purchase, repurchase
or otherwise acquire such obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain the solvency or any balance sheet item, level of income or other
financial condition of the obligor of such obligation, or to make payment for
any products, materials or supplies or for any transportation, services or
lease regardless of the non-delivery or non-furnishing thereof, in any case if
the purpose or intent of such agreement is to provide assurance that such
obligation will be paid or discharged, or that any agreements relating thereto
will be complied with, or that the holders of such obligation will be
protected (in whole or in part) against loss in respect thereof; and (ii) any
direct or indirect liability of that Person which is contingent upon the
happening of specified events or conditions or the passage of time, or both,
with respect to any Indebtedness, lease, dividend, letter of credit, accounts
receivable or other obligations, including, without limitation any obligation
to purchase, repurchase or otherwise acquire property; provided, however, that
-------- -------
excluded from this definition shall be contingent
-8-
obligations in an aggregate amount not to exceed $55,000,000, to the extent
such obligations are indemnified by Onoda Cement Co., Ltd. pursuant to the
agreement among the Borrower, California Portland Cement Co., and Onoda
U.S.A., Inc. dated July 19, 1988. The amount of any Contingent Obligation
shall be equal to the amount of, in the case of clause (i) above, the
obligation so guarantied or otherwise supported, or in the case of clause (ii)
above, such liability.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any material indenture, mortgage, deed of trust, contract, undertaking,
agreement or other instrument to which that Person is a party or by which it
or any of its properties is bound or to which it or any of its properties is
subject.
"CONVERSION" and "CONVERT" and "CONVERTED" each refers to a conversion
of Eurodollar Rate Loans, CD Rate Loans or Base Rate Loans, into Loans of
another Type in accordance with the terms of this Agreement.
"DOLLARS" or the sign "$" means the 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 B annexed hereto or in the Assignment and Acceptance pursuant to
which it became a Bank, or such other office of such Bank as such Bank may
from time to time specify to the Borrower and the Agent.
"EFFECTIVE DATE" means the date on or before September 4, 1998 that is
the date on which the conditions set forth in Section 3.1 are satisfied or
waived.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the laws
of the United States, or any State thereof and (ii) a commercial bank
organized under the laws of any other country, or a political subdivision
thereof, provided that (a) such bank is acting through a branch or agency
--------
located in the United States or (b) such bank is organized under the laws of
a country that is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country and has surplus and
capital of at least $500,000,000; and (iii) a Person that is primarily
engaged in the business of commercial banking and that is (A) a Subsidiary of
a Bank, (B) a Subsidiary of a Person of which a Bank is a Subsidiary, or (C)
a Person of which a Bank is a Subsidiary.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" which is
defined in Section 3(3) of ERISA and which is at the relevant time maintained
or contributed to by the Borrower or any ERISA Affiliate of the Borrower.
"ENVIRONMENTAL LIABILITIES AND COSTS" means all liabilities,
obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, expert and consulting
fees and costs of investigation and feasibility studies), fines, penalties,
sanctions and interest, incurred as a result of any claim or demand, by any
Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute, including any Hazardous Materials Law,
permit or agreement with a governmental authority or other Person, arising
from environmental, health or safety conditions related to, or the Release or
threatened
-9-
Release by reason of, the past, present or future operations of the Borrower
or any of its Subsidiaries.
"ENVIRONMENTAL LIEN" means any Lien in favor of any governmental
authority for Environmental Liabilities and Costs.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA AFFILIATE", as applied to any Person, means (i) any corporation
which is at the relevant time a member of a controlled group of corporations
within the meaning of Section 414(b) of the Internal Revenue Code of which
that Person is at the relevant time a member; (ii) any trade or business
(whether or not incorporated) which is at the relevant time a member of a
group of trades or businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person is at the
relevant time a member; and (iii) any member of an affiliated service group
within the meaning of Section 414(m) or (o) of the Internal Revenue Code of
which that Person, any corporation described in clause (i) above or any trade
or business described in clause (ii) above is a member.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice
to the PBGC has been waived by regulation); (ii) the failure to meet the
minimum funding standard of Section 412 of the Internal Revenue Code with
respect to any Pension Plan (whether or not waived in accordance with Section
412(d) of the Internal Revenue Code) or the failure to make by its due date a
required installment under Section 412(m) of the Internal Revenue Code with
respect to any Pension Plan or the failure to make any required contribution
to a Multiemployer Plan; (iii) the provision by the administrator of any
Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to
terminate such plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by the Borrower or any of its ERISA Affiliates
from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability pursuant to
Sections 4063 or 4064 of ERISA; (v) the institution by the PBGC of
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which might constitute grounds under ERISA for the PBGC to initiate
proceedings for the termination of, or the appointment of a trustee to
administer, any Pension Plan; (vi) the imposition of liability in excess of
$5,000,000 on the Borrower or any of its ERISA Affiliates pursuant to
Sections 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of the Borrower or any of its ERISA
Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any
liability therefor in excess of $5,000,000, or the receipt by the Borrower or
any of its ERISA Affiliates of notice from any Multiemployer Plan that it is
in reorganization or insolvency pursuant to Sections 4241 or 4245 of ERISA,
or that it intends to terminate or has terminated under Sections 4041A or
4042 of ERISA which would result in a liability in excess of $5,000,000;
(viii) the occurrence of an act or omission which could give rise to the
imposition on the Borrower or any of its ERISA Affiliates of fines,
penalties, taxes or related charges under Chapter 43 of the Code or under
Sections 409, 502(c), (i) or (1) or 4071 of ERISA in respect of any Employee
Benefit Plan which would result in a liability in excess of $5,000,000; (ix)
the assertion of a claim (other than routine
-10-
claims for benefits) against any Employee Benefit Plan other than a
Multiemployer Plan or the assets thereof, or against the Borrower or any of
its ERISA Affiliates in connection with any such plan which would result in a
liability in excess of $5,000,000; or (x) receipt from the Internal Revenue
Service or any successor thereto of notice of the failure of any Pension Plan
(or any other Employee Benefit Plan intended to be qualified under Section
401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or notice of the failure of any trust forming part of
any Pension Plan to qualify for exemption from taxation under Section 401(a)
of the Internal Revenue Code; or (xi) the imposition of a lien pursuant to
Sections 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to
ERISA with respect to any Pension Plan.
"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 B annexed hereto or in the Assignment and Acceptance pursuant to
which it became a Bank (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 Loan or Eurodollar Rate Bid Loan, as applicable, comprising part of the
same Borrowing, an interest rate per annum determined by the Agent to be the
arithmetic average of the rates per annum at which deposits in Dollars are
offered by each Reference Bank in London, England to prime banks in the
London interbank market at 11:00 A.M. (London time) two Business Days before
the first day of such Interest Period in an amount substantially equal to the
Eurodollar Rate Loan or Eurodollar Rate Bid Loan, as applicable, comprising
part of such Borrowing and for a period equal to such Interest Period. If
any Reference Bank fails to provide its offered rate to the Agent by 11:00
A.M. (London time) two Business Days before the first day of such Interest
Period, the Eurodollar Rate shall be determined on the basis of the average
of the offered rate(s) furnished by the Reference Bank(s) which so notify the
Agent at or prior to said 11:00 A.M. (London time).
"EURODOLLAR RATE AUCTION" means a solicitation of Competitive Bids
setting forth a Eurodollar Rate Bid Margin pursuant to Section 2.2B.
"EURODOLLAR RATE BID LOAN" means any Bid Loan that bears interest at a
rate determined with reference to the Eurodollar Rate.
"EURODOLLAR RATE BID MARGIN" has the meaning assigned to that term in
Section 2.2B(iii)(b)(C).
"EURODOLLAR RATE LOAN" means a Committed Loan which bears interest as
provided in Section 2.6C.
"EVENT OF DEFAULT" means each of the events set forth in Section 7.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
-11-
"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 such
day on such transactions received by the Agent from three federal funds
brokers of recognized standing selected by it.
"FUNDING DATE" means the date of the funding of a Loan.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment
of the accounting profession.
"HAZARDOUS MATERIALS" means as of the date hereof and as of any Funding
Date (i) any chemical, material or substance defined as or included in the
definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous waste," "restricted hazardous waste," or
"toxic substances" or words of similar import under any applicable local,
state or federal law or under the regulations adopted or promulgated pursuant
thereto, including, without limitation, Hazardous Materials Laws, (ii) any
oil, petroleum or petroleum derived substance, any drilling fluids, produced
waters and other wastes associated with the exploration, development or
production of crude oil, any flammable substances or explosives, any
radioactive materials, (iii) asbestos in any form which is or could become
friable, urea formaldehyde foam insulation, electrical equipment which
contains any oil or dielectric fluid containing levels of polychlorinated
biphenyls in excess of fifty parts per million, and (iv) any other chemical,
material or substance, exposure to which would reasonably be expected to pose
a hazard to the health and safety of the owners or occupants or any Persons
surrounding any of the properties owned or occupied by the Borrower or any of
its Subsidiaries.
"HAZARDOUS MATERIALS LAWS" means all statutes, ordinances, orders,
rules, regulations, or decrees relating to human health or protection of the
environment, including, without limitation, those relating to fines, orders,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of
Hazardous Materials and to the generation, use, storage, transportation, or
disposal of Hazardous Materials, in any manner applicable to the Borrower or
any of its Subsidiaries or any of their respective properties, each as in
effect as of the date hereof and as of any Funding Date.
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness for
borrowed money, (ii) that portion of obligations with respect to Capital
Leases which is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money, (iv) any obligation owed for all or any part of the deferred purchase
price of property or services which purchase price is due more than six
months from the date of incurrence of the obligation in respect thereof or
evidenced by a note or similar written instrument, (v) the proceeds received
by such Person from the sale or discount of accounts receivable net of
collections which are
-12-
retained by the Borrower, (vi) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
non-recourse to the credit of that Person, and (vii) the amount of Contingent
Obligations (except with respect to guaranties resulting from endorsement of
negotiable instruments for collection in the ordinary course of business) not
incurred in the ordinary course of business outstanding in excess of 10% of
Consolidated Net Worth at any time.
"INDEMNIFIED LIABILITIES" has the meaning assigned to that term in
Section 9.5.
"INITIAL AGGREGATE BOOK VALUE" means the Book Value of all accounts
receivable of the Borrower and its Subsidiaries on the date any Permitted
Accounts Receivable Financing Facility is entered into or increased
(excluding extensions or concurrent replacements where the amount is not
increased).
"INTEREST PERIOD" means, (i) with respect to each CD Rate Loan
comprising part of the same Borrowing, the period commencing on the Funding
Date of such CD Rate Loan or the date of the Conversion of any Base Rate Loan
or Eurodollar Rate Loan into such a CD Rate Loan and ending on the last day
of the period selected by the Borrower pursuant to the provisions below 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. The
duration of each such Interest Period with respect to a CD Rate Loan shall be
30, 60, 90 or 180 days, as the Borrower may, upon notice received by the
Agent not later than 9:00 A.M. (San Francisco time) on the second Business
Day prior to the first day of such Interest Period, select; (ii) with respect
to each Eurodollar Rate Loan comprising part of the same Borrowing, the
period commencing on the Funding Date of such Eurodollar Rate Loan or the
date of the Conversion of any Base Rate Loan or CD Rate Loan into such a
Eurodollar Rate Loan and ending on the last day of the period selected by the
Borrower pursuant to the provisions below 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. The duration of each such Interest Period
with respect to a Eurodollar Rate Loan shall be two weeks or one, two, three
or six months, as the Borrower may, upon notice received by the Agent not
later than 9:00 A.M. (San Francisco time) on the third Business Day prior to
the first day of such Interest Period, select; and (iii) with respect to each
Bid Loan comprising the same Borrowing, the period commencing on the Funding
Date of such Bid Loan and ending on the last day of the period selected by
the Borrower pursuant to the provisions below. The duration of each such
Interest Period with respect to (a) an Absolute Rate Bid Loan shall be at
least seven (7) days and not more than one hundred and eighty-three (183)
days and (b) a Eurodollar Rate Bid Loan shall be a one, two, three or six-
month Interest Period, as the Borrower may, in accordance with the provisions
of Section 2.2, select;
provided that the foregoing provisions relating to Interest Periods are
--------
subject to the following:
(i) the Borrower may not select any Interest Period which ends
after the Maturity Date;
-13-
(ii) 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 with respect to a Eurodollar Rate Loan or a Eurodollar
--------
Rate Bid Loan, 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
(iii) there shall be no more than ten (10) Interest Periods with
respect to CD Rate Loans, Eurodollar Rate Loans and Bid Loans
outstanding at any one time.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
"INVENTORY" means, for any Person as at any date of determination, all
goods held by such Person for sale or to be furnished under contracts for
services and all goods that have been so furnished, and all work in process
and raw materials used or consumed in the business of such Person.
"INVESTMENT", as applied to any Person, means any direct or indirect
purchase or other acquisition by that Person of, or a beneficial interest in,
stock or other securities of any other Person, or any direct or indirect
loan, advance (other than advances to employees for moving and travel
expenses, drawing accounts and similar expenditures in the ordinary course of
business) or capital contribution by that Person to any other Person,
including all Indebtedness and accounts receivable from that other Person
which did not arise from sales to that other Person in the ordinary course of
business. The amount of any Investment (for purposes of the limitations set
forth in Section 6.2) shall be the original cost of such Investment plus the
cost of all additions thereto, without any adjustments for increases or
decreases in value, or write-ups, write-downs or write-offs with respect to
such Investment.
"INVITATION FOR COMPETITIVE BIDS" means a solicitation for Competitive
Bids, substantially in the form of EXHIBIT VII annexed hereto.
"LIEN" means any lien, mortgage, pledge, security interest, charge or
encumbrance of any kind, including any conditional sale or other title
retention agreement, any lease in the nature thereof, and any agreement to
give any security interest, the filing of any financing statement naming the
owner of the asset to which such lien relates as debtor, under the UCC or any
comparable law and any sale or discount of accounts receivables, and any
contingent or other agreement to provide any of the foregoing.
"LOAN" or "LOANS" means one or more of the loans made by the Banks
pursuant to Section 2.1 and/or Section 2.2 and refers to a Base Rate Loan, CD
Rate Loan, a Eurodollar Rate Loan or a Bid Loan.
"LOAN DOCUMENTS" means this Agreement and the Notes.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U of
the Board of Governors of the Federal Reserve System, as in effect from time
to time.
-14-
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (i) the
business, operations, properties, assets or condition (financial or
otherwise) of the Borrower and its Subsidiaries, taken as a whole, or (ii)
the ability of the Borrower to perform, or of the Banks to enforce, the
Obligations.
"MATURITY DATE" means the earlier of (i) September 4, 2003, or if such
date is not a Business Day, the Business Day next succeeding such date, or if
the Commitments are extended to a later date in accordance with the
provisions of Section 2.4C, such later date and (ii) the date upon which the
Commitments terminate in accordance with Section 2.4 or any other provision
contained in this Agreement.
"MULTIEMPLOYER PLAN" means a "multiemployer plan" as defined in Section
3(37) of ERISA to which the Borrower or any of its ERISA Affiliates is
contributing or ever has contributed or to which the Borrower or any of its
ERISA Affiliates has, or ever has had, an obligation to contribute.
"NON-HOSTILE ACQUISITION" means an acquisition (whether by purchase of
capital stock or assets, merger or otherwise) which has been approved by
resolutions of the Board of Directors of the Person being acquired or by
similar action if the Person is not a corporation and as to which such
approval has not been withdrawn.
"NOTES" means one or more of the Bid Loan Notes or Committed Loan Notes
or any combination thereof.
"NOTICE OF BORROWING" means a notice substantially in the form of
EXHIBIT I annexed hereto with respect to a proposed Borrowing.
"NOTICE OF CONVERSION/CONTINUATION" means a notice substantially in the
form of EXHIBIT II annexed hereto delivered by the Borrower to the Agent
pursuant to Section 2.8.
"OBLIGATIONS" means all obligations of every nature from time to time by
the Borrower to any Bank, the Agent, any Affiliate of any Bank or the Agent,
or Person entitled to indemnification pursuant to Section 9.5 of this
Agreement. The term includes, without limitation, all interest, charges,
expenses, fees, Attorney Costs and any other sum chargeable to the Borrower
under this Agreement or any of the other Loan Documents.
"OFFICERS' CERTIFICATE" means a certificate executed on behalf of the
Borrower, by (i) any of its Chief Executive Officer, its President or its
Chief Financial Officer and (ii) any of its Treasurer, Controller or
Assistant Treasurer, in each case acting in such capacity; provided that
--------
every Officers' Certificate with respect to the compliance with a condition
precedent to the making of any Loans hereunder shall include (a) a statement
that the officers making or giving such Officers' Certificate have read such
condition and any definitions or other provisions contained in this Agreement
relating thereto, (b) a statement that, in the opinion of the signers, they
have made or have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to whether or not
such condition has been complied with, and (c) a statement as to whether, in
the opinion of the signers, such condition has been complied with.
-15-
"OPERATING LEASE" means, as applied to any Person, any lease (including,
without limitation, leases that may be terminated by the lessee at any time)
of any property (whether real, personal or mixed) that is not a Capital Lease
other than any such lease under which that Person is the lessor.
"ORIGINAL AGREEMENT" means the First Amended and Restated Credit
Agreement dated as of June 30, 1994, as amended, among the Borrower, the
lenders party thereto and BofA as agent thereunder.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue
Code or Section 302 or ERISA.
"PERMITTED ACCOUNTS RECEIVABLE FINANCING FACILITY" means a facility
involving the sale or discount of accounts receivable of the Borrower and its
Subsidiaries that does not involve the creation of a Lien or negative pledge
on any accounts receivable not so sold or discounted.
"PERMITTED LIENS" means the following types and amounts of Liens (other
than any Lien imposed pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges or
claims not yet due and payable;
(ii) statutory Liens of landlords and Liens of carriers,
warehousemen, mechanics, materialmen and other similar Persons and
other Liens imposed by law incurred in any case in the ordinary course
of business for amounts not yet delinquent or being contested in good
faith;
(iii) Liens, deposits, standby letters of credit, surety bonds,
pledges, or pledges of assets (i) incurred, made or given as security
for the performance of any contract, tender, statutory obligation,
lease or other undertaking not directly or indirectly related to the
borrowing of money or the securing of Indebtedness and incurred, made
or given in the ordinary course of business, or (ii) with, or for the
benefit of, any governmental agency, which Lien, deposit, standby
letter of credit, surety bond pledge, or pledge of assets is required
or permitted to qualify the Company to conduct business, maintain
self-insurance, or to obtain the benefit of any law pertaining to
workers' compensation, unemployment insurance, pensions, social
security or similar matters;
(iv) any attachment, Lien, deposit, pledge, or pledge of assets
with any surety company or clerk of any court in connection with any
litigation or other legal proceeding, or in escrow as collateral in
connection with or in lieu of any bond on appeal from any judgment or
decree against the Company or any Subsidiary in connection with any
litigation or other legal proceeding, or in connection with other
proceedings or actions at law or in equity by or against the Company
or any Subsidiary, so long as any such attachment or Lien is
effectively stayed while the underlying claims are being contested in
good faith and by appropriate proceedings
-16-
and with respect to which the Company or any such Subsidiary has
established adequate reserves in accordance with GAAP;
(v) Liens, easements, rights of way, servitudes or zoning or
building restrictions and other minor encumbrances on real property
which are not incurred in connection with the incurrence of
Indebtedness and which do not in the aggregate materially interfere
with or impair the operation of such property for the purposes for
which it is or may reasonably be expected to be used;
(vi) Liens in existence on the Effective Date and listed in
Schedule E and any extension, renewal or replacement of any such Lien
provided that the principal amount of Indebtedness secured thereby
immediately prior thereto is not increased and such Lien does not
extend to or cover any other property of the Company or any
Subsidiary;
(vii) Liens on real estate, equipment, or other physical
property used in the conduct of the Company's ordinary course of
business, acquired after the Effective Date in the ordinary course of
business, which Liens are created at the time of the acquisition of
such property or within 270 days thereafter, to secure all or part of
the Indebtedness incurred to purchase, finance or refinance the
purchase price of such real estate, equipment, or other physical
property encumbered by such Lien, provided that (i) the aggregate
principal amount of Indebtedness secured by any such Lien in respect
of any such real estate, equipment or other property does not exceed
the fair market value of such real estate, equipment or other
property, (ii) the aggregate unpaid principal amount of Indebtedness
secured by Liens pursuant to this Subsection (vii) shall not at any
time exceed 50% of the aggregate purchase price of all real estate,
equipment and other physical property acquired by the Company or any
Subsidiary after the Effective Date in the ordinary course of business
and used in the conduct of the Company's ordinary course of business
and (iii) no such Lien extends to or covers any other property of the
Company or any Subsidiary;
(viii) Liens on assets and property acquired by the Company or
any Subsidiary after the Effective Date, provided that any such Lien
existed at the time the respective assets and properties were acquired
and was not created in anticipation thereof and does not extend to or
cover any other assets or property of the Company or any Subsidiary;
(ix) Liens on assets of the Company or any Subsidiary which
assets are acquired in connection with, or result from the Company's
or such Subsidiary's participation in, any project or development of
the Company or such Subsidiary in order to secure the financing of
such assets or such project on a basis that is non-recourse to the
Company or such Subsidiary; provided that (i) such Liens shall be
--------
confined solely to such assets as are so acquired by the Company or
such Subsidiary and (ii) the principal amount of indebtedness secured
by such Liens shall not exceed the cost of acquisition, lease or
development of such assets; and
-17-
(x) banker's liens and rights of offset in the holders of
Indebtedness of the Company or any Subsidiary or monies deposited by
the Company or any Subsidiary with such holders of Indebtedness in the
ordinary course of business of the Company or any such Subsidiary.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, joint stock companies, joint ventures,
associations, companies, trusts, banks, trust companies, land trusts,
business trusts or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"POTENTIAL EVENT OF DEFAULT" means a condition or event which, after
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or waived within any applicable grace or
cure period, if any.
"PRINCIPAL SUBSIDIARY" means, as of any date of determination, a
Subsidiary of the Borrower owning assets comprising at least 15% of the
Consolidated Net Worth of the Borrower.
"PRO RATA SHARE" means, with respect to the Commitment of each Bank, or,
if such Commitment has terminated, the Loans or participations held by such
Bank with respect to such Commitment, the percentage designated as such
Bank's Pro Rata Share under the name of such Bank on the applicable signature
page of this Agreement with respect to such Commitment, in each case as such
percentage may be adjusted as a result of assignments permitted under Section
9.7.
"REFERENCE BANKS" means BofA, The First National Bank of Chicago and
▇▇▇▇▇ Fargo Bank, N.A.
"REGISTER" has the meaning specified in Section 9.7C.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, unlawful disposal, discharge, other dispersal or leaching
of any Hazardous Materials into the environment (including, without
limitation, the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Materials) or into or out of any
property owned, used or operated by the Borrower or any of its Subsidiaries,
including the movement of any Hazardous Materials through or in the air,
soil, surface water, groundwater or property.
"REMEDIAL ACTION" means all actions required to (i) clean up, remove,
treat or in any other way address Hazardous Materials in the environment;
(ii) prevent the Release or threat of Release or minimize the further Release
of Hazardous Materials so they do not endanger or threaten to endanger public
health or welfare or the environment; or (iii) perform pre-remedial studies
and investigations and post-remedial monitoring and care.
"REQUISITE BANKS" means at least two Banks holding at any time fifty-one
percent (51%) or more of the Commitments, or, if the Commitments have been
terminated, of the then aggregate unpaid principal amount of the Loans.
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"SEC" means the Securities and Exchange Commission, and any successor
thereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time, and any successor statute.
"SUBSIDIARY", with respect to any Person, means any corporation,
association or other business entity of which more than 50% of the total
voting power of shares of stock entitled to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof.
"TOTAL CAPITALIZATION" means the sum of Consolidated Funded Indebtedness
and Consolidated Net Worth.
"TYPE" has the meaning specified in Section 2.1B(ii).
1.2 COMPUTATION OF TIME PERIODS
---------------------------
In this Agreement, in the computation of periods of time from a specified
date to a later specified date, unless otherwise specifically provided, the word
"from" means "from and including" and the words "to" and "until" each means "to
but excluding".
1.3 ACCOUNTING TERMS
----------------
All accounting terms not specifically defined herein shall be construed in
accordance with GAAP. In the event that there are any changes in GAAP from the
date hereof and such changes result in a change in the method of calculation of
financial covenants, standards or terms in this Agreement, then the Borrower and
the Agent shall enter into negotiations in order to amend such provisions of
this Agreement as are necessary to equitably reflect such changes with the
desired result that the criteria for evaluating the Borrower's financial
condition shall be the same after such changes as if such changes had not been
made.
1.4 OTHER DEFINITIONAL PROVISIONS
-----------------------------
References to "Sections" and "Section" shall be to Sections and a Section,
respectively, of this Agreement unless otherwise specifically provided. Any of
the terms defined in Section 1.1 may, unless the context otherwise requires, be
used in the singular or the plural depending on the reference.
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SECTION 2. AMOUNT AND TERMS OF COMMITMENTS AND COMMITTED LOANS
2.1 COMMITTED LOANS
---------------
A. COMMITMENTS. Each Bank severally agrees, on the terms and conditions
hereinafter set forth, to make Committed Loans to the Borrower from time to time
on any Business Day during the period from the Effective Date until the Maturity
Date in an aggregate amount not to exceed at any time outstanding the amount set
forth opposite such Bank's name on the signature pages hereof, or, if such Bank
has entered into one or more Assignments and Acceptances, set forth for such
Bank in the Register maintained by the Agent, as such amount may be reduced or
rendered unavailable pursuant to Section 2.2B(ix) or 2.4 or any other provision
contained in this Agreement (such Bank's "Commitment"). The aggregate original
amount of the Commitments is seventy-five million dollars ($75,000,000). Each
Committed Borrowing of CD Rate Loans and Eurodollar Rate Loans shall be in an
aggregate amount of not less than $5,000,000 or an integral multiple of
$1,000,000 in excess thereof. Each Committed Borrowing of Base Rate Loans shall
be in an aggregate amount of not less than $250,000. Each Committed Borrowing
shall be made by the Banks proportionately to their Pro Rata Shares of the
available Commitments. At no time shall the sum of (x) the outstanding
aggregate principal amount of all Committed Loans made by all Banks plus (y) the
----
outstanding aggregate principal amount of all Bid Loans made by all Banks exceed
the aggregate Commitments then in effect. Within the limits of each Bank's
Commitment, the Borrower may from time to time, borrow, repay and reborrow under
this Section 2.1A. The Banks' Commitments shall expire on the Maturity Date and
all Loans and all other amounts owed hereunder with respect to the Loans shall
be paid in full no later than that date.
B. NOTICE OF BORROWING. Each Borrowing of Committed Loans shall be made
on irrevocable notice, given not later than 9:00 A.M. (San Francisco time), (i)
in the case of Base Rate Loans, on the Business Day of such proposed Borrowing,
(ii) in the case of CD Rate Loans, on the second Business Day prior to the date
of the proposed Borrowing, and (iii) in the case of Eurodollar Rate Loans, on
the third Business Day prior to the date of the proposed Borrowing, by the
Borrower to the Agent, which shall give to each Bank prompt notice thereof by
telecopy, telex or cable. Each such Notice of Borrowing shall be by telecopy,
telex or cable, confirmed immediately in writing, in substantially the form of
EXHIBIT I annexed hereto, specifying therein (i) the requested Funding Date
(which shall be a Business Day), (ii) whether such Borrowing is to consist of
Base Rate Loans, CD Rate Loans or Eurodollar Rate Loans (each a "Type" of Loan),
(iii) in the case of CD Rate Loans or Eurodollar Rate Loans, the requested
Interest Period therefor, and (iv) the requested aggregate amount of such
Borrowing. In addition, a Notice of Borrowing with respect to a Committed Loan
shall certify that the amount of the proposed Borrowing when added to the
aggregate principal amount of outstanding Committed Loans and Bid Loans
immediately prior to such Borrowing will not exceed the Commitments then in
effect. Each Bank shall, before 10:00 A.M. (San Francisco time) on the date of
such Borrowing, make available for the account of its Applicable Lending Office
to the Agent, such Bank's Pro Rata Share of such Borrowing by depositing same
day funds in the Agent's Account No. 12330-15415, re: CalMat Co., Attention:
Agency Administrative Services #5596, maintained at BofA, Agency Management, ABA
No. 1210-0035-8-BKAMER-SF or in such other account as the Agent may from time to
time specify in writing to the Banks. Upon fulfillment of the applicable
conditions set forth in Section 3, the Agent will make the proceeds of the
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Committed Loans received by it available to the Borrower, solely by promptly
crediting the Borrower's account maintained at such office of the Agent.
With respect to any Committed Borrowing, in lieu of delivering the above
described Notice of Borrowing, the Borrower may give the Agent telephonic notice
(followed immediately by telecopy delivery to the Agent of a Notice of
Borrowing) by the required time of any notice of proposed Borrowing under this
Section 2.1B. Neither the Agent nor any Bank shall incur any liability to the
Borrower or any other Bank in acting upon any telephonic notice referred to
above (or with respect to any other Borrowing hereunder) which the Agent
believes in good faith to have been given by a duly authorized officer or other
Person authorized to borrow on behalf of the Borrower or for otherwise acting in
good faith under this Section 2.1B and in making any Loans in accordance with
this Agreement pursuant to any telephonic notice.
C. INDEMNIFICATION. Each Notice of Borrowing (or telephonic notice in
lieu thereof) shall be irrevocable and binding on the Borrower. The Borrower
shall indemnify each Bank against any monetary loss, 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 Committed Borrowing the applicable
conditions set forth in Section 3, including, without limitation, any loss
(including loss of anticipated profits which loss shall be limited to the
present value of the difference between the interest rate payable on the
applicable Loan for the remainder of the applicable Interest Period and the rate
at which the Bank could redeploy its funds for the remainder of the applicable
Interest Period), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to fund the
Committed Loan to be made by such Bank as a part of such Borrowing when such
Loan, as a result of such failure, is not made on such date; provided, however,
-------- -------
that such indemnification shall not include any obligation with respect to
consequential damages.
D. FAILURE TO FUND. Unless the Agent shall have received notice from a
Bank prior to the date of any such Committed 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 such amount available to the Agent on
the date of such Borrowing in accordance with Section 2.1B and the Agent may,
but shall not be required to, in reliance upon such assumption, make available
to the Borrower on such date a corresponding amount. If and to the extent that
a Bank not providing such notice shall not have so made its Pro Rata Share of
such Borrowing available to the Agent, such Bank and the Borrower severally
agree to repay to the Agent forthwith on demand such corresponding amount
together with interest thereon, 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 at the time to
Loans comprising such Borrowing and (ii) in the case of such Bank, the Federal
Funds Rate. If such Bank shall repay to the Agent such corresponding amount,
such amount so repaid shall constitute such Bank's Loan as part of such
Borrowing for purposes of this Agreement. Any Bank failing to fund a Loan when
it is required to do so hereunder shall indemnify the Borrower against any
monetary loss, cost or expense incurred by the Borrower as a result thereof;
provided, however, that such indemnification shall not include any obligation
-------- -------
with respect to consequential damages.
The failure of any Bank to make the Loan to be made by it as part of any
Committed Borrowing shall not relieve any other Bank of its obligation, if any,
hereunder to make its Committed
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Loan on the date of such Borrowing, but no Bank shall be responsible for the
failure of any other Bank to make the Loan to be made by such other Bank on the
date of any Committed Borrowing.
2.2 BID LOANS.
---------
A. BID LOAN BORROWINGS. In addition to Committed Borrowings pursuant to
Section 2.1, each Bank severally agrees that the Borrower may, as set forth in
Section 2.2B, from time to time request the Banks during the period from the
Effective Date until the Maturity Date to submit offers to make Bid Loans to the
Borrower; provided, however, that the Banks may, but shall have no obligation
-------- -------
to, submit such offers and the Borrower may, but shall have no obligation to,
accept any such offers; and provided further that (a) at no time shall the
-------- -------
outstanding aggregate principal amount of all Bid Loans made by all Banks, plus
----
the outstanding aggregate principal amount of all Committed Loans made by all
Banks exceed the aggregate Commitments then in effect; (b) at no time shall the
number of different Interest Periods for Bid Loans then outstanding plus the
----
number of different Interest Periods for Committed Loans then outstanding exceed
ten (10); and (c) at no time shall the outstanding aggregate principal amount of
all Bid Loans made by all Banks exceed the aggregate Commitments then in effect.
At the discretion of the Borrower, any Bid Loan auction may be either an Agent
Auction conducted in accordance with the terms set forth below for an Agent
Auction, or a Borrower Auction conducted in accordance with the terms set forth
below for a Borrower Auction.
B. PROCEDURE FOR BID BORROWINGS.
(i) AGENT AUCTIONS. (a) When the Borrower wishes to request the Banks to
submit offers to make Bid Loans pursuant to an Agent Auction hereunder, it shall
transmit to the Agent by telephone call, followed promptly by facsimile
transmission, a notice in substantially the form of EXHIBIT VI (a "Competitive
Bid Request") so as to be received no later than 9:00 A.M. (San Francisco time)
(x) four (4) Business Days prior to the date of a proposed Bid Borrowing in the
case of a Eurodollar Rate Auction, (y) one (1) Business Day prior to the date of
a proposed Bid Borrowing in the case of an Absolute Rate Auction or (z) on the
date of a Bid Borrowing proposed to be made on the Effective Date in the case of
an Absolute Rate Auction, specifying:
(A) the date of such Borrowing, which shall be a Business Day;
(B) the aggregate amount of such Borrowing, which shall be a minimum
amount of $2,000,000 or in multiples of $1,000,000 in excess thereof;
(C) whether the Competitive Bids requested are to be for Eurodollar Rate
Bid Loans or Absolute Rate Bid Loans; and
(D) the duration of the Interest Period applicable thereto, subject to the
provisions of the definition of Interest Period.
Subject to Section 2.2A(c), the Borrower may not request Competitive Bids
for more than three (3) Interest Periods in a single Competitive Bid Request and
may not request Competitive Bids in Agent Auctions and Borrower Auctions
together more than three (3) times in any business week or more than ten (10)
times in any calendar month. To compensate the Agent for its services in
managing an Agent Auction relating to the prospective Bid Loans requested by
such Competitive Bid
-22-
Request, the Borrower shall pay to the Agent for its account in connection with
each Agent Auction, a bid fee of $150.00 for each Bank submitting a Competitive
Bid. In connection with each Agent Auction, the Borrower shall pay a
nonrefundable minimum bid fee of $300.00 together with the submission of each
Competitive Bid Request. If more than two Banks submit a Competitive Bid, the
Borrower shall pay the remainder of such bid fee for such Competitive Bid
Request on the Business Day following the submission of Competitive Bids in
response thereto. The bid fee shall be nonrefundable and payable whether or not
any of such Competitive Bids is accepted.
(b) Upon receipt of a Competitive Bid Request, the Agent will
promptly send to the Banks by telex or facsimile transmission an
Invitation for Competitive Bids substantially in the form of EXHIBIT
VII, which shall constitute an invitation by the Borrower to each Bank
to submit Competitive Bids offering to make Bid Loans to which such
Competitive Bid Request relates in accordance with this Section 2.2.
(ii) BORROWER AUCTIONS. When the Borrower wishes to request the Banks to
submit offers to make Bid Loans pursuant to a Borrower Auction hereunder, it
shall transmit to each Bank and the Agent by telephone call, followed promptly
by facsimile transmission (with a copy to the Agent), an Invitation for
Competitive Bids substantially in the form of EXHIBIT VII so as to be received
no later than 9:00 A.M. (San Francisco time) (x) four (4) Business Days prior to
the date of a proposed Bid Borrowing in the case of a Eurodollar Rate Auction,
or (y) one (1) Business Day prior to the date of a proposed Bid Borrowing in the
case of an Absolute Rate Auction, specifying:
(a) the date of such Borrowing, which shall be a Business Day;
(b) the aggregate amount of such Borrowing, which shall be a minimum
amount of $2,000,000 or in multiples of $1,000,000 in excess thereof;
(c) whether the Competitive Bids requested are to be for Eurodollar
Rate Bid Loans or Absolute Rate Bid Loans; and
(d) the duration of the Interest Period applicable thereto, subject
to the provisions of the definition of Interest Period.
Subject to Section 2.2A(c), the Borrower may not request Competitive
Bids for more than three (3) Interest Periods in a single Invitation for
Competitive Bids and may not request Competitive Bids in Agent Auctions and
Borrower Auctions together more than three (3) times in any business week
or more than ten (10) times in any calendar month.
(iii) (a) Each Bank may at its discretion submit a Competitive Bid
containing an offer or offers to make Bid Loans in response to any Invitation
for Competitive Bids. Each Competitive Bid must comply with the requirements of
this Section 2.2B(iii) and must be submitted (A) to the Agent, in the case of an
Agent Auction, or (B) to the Borrower in the case of a Borrower Auction, in each
case by telex or facsimile transmission at the office for notices set forth on
the signature pages hereto not later than (A) 7:00 A.M. (San Francisco time)
three Business Days prior to the proposed date of Borrowing, in the case of a
Eurodollar Rate Auction or (B) 7:00 A.M. (San Francisco time) on the proposed
date of Borrowing, in the case of an Absolute Rate Auction; provided that, in
--------
the case of an Agent Auction, Competitive Bids submitted by BofA (or any
Affiliate of BofA) in the capacity of a Bank may be submitted, and may only be
submitted, if BofA or such Affiliate notifies the Agent of
-23-
the terms of the offer or offers contained therein not later than (A) 6:45 A.M.
(San Francisco time) three (3) Business Days prior to the proposed date of
Borrowing, in the case of a Eurodollar Rate Auction or (B) 6:45 A.M. (San
Francisco time) on the proposed date of Borrowing, in the case of an Absolute
Rate Auction.
(b) Each Competitive Bid shall be in substantially the form of
EXHIBIT VIII specifying therein:
(A) the proposed date of Borrowing;
(B) the principal amount of each Bid Loan for which such
Competitive Bid is being made, which principal amount (x) may be
equal to, greater than or less than the Commitment of the quoting
Bank, (y) must be $2,000,000 or in multiplies of $1,000,000 in
excess thereof, and (z) may not exceed the principal amount of Bid
Loans for which Competitive Bids were requested; and the maximum
aggregate principal amount of all Bid Loans for which such
Competitive Bid is being made;
(C) in case the Borrower elects a Eurodollar Rate Auction,
the margin above or below the Eurodollar Rate (the "Eurodollar Rate
Bid Margin") offered for each such Bid Loan, expressed as a
percentage (rounded to the nearest 1/100th of 1%) to be added to or
subtracted from the applicable Eurodollar Rate Bid Loan and the
Interest Period applicable thereto;
(D) in case the Borrower elects an Absolute Rate Auction, the
rate of interest per annum (rounded to the nearest 1/100th of 1%)
(the "Absolute Rate") offered for each such Bid Loan; and
(E) the identity of the quoting Bank.
A Competitive Bid may contain up to three (3) separate offers
by the quoting Bank with respect to each Interest Period specified
in the related Invitation for Competitive Bids
(c) Any Competitive Bid shall be disregarded if it:
(A) is not substantially in conformity with EXHIBIT VIII or
does not specify all of the information required by Section
2.2B(iii)(b);
(B) contains qualifying, conditional or similar language;
(C) proposes terms other than or in addition to those set
forth in the applicable Invitation for Competitive Bids; or
(D) arrives after the time set forth in Section 2.2B(iii)(a).
(iv) In the case of an Agent Auction, promptly on receipt and not
later than 7:30 A.M. (San Francisco time) three (3) Business Days prior to
the proposed date of Borrowing in
-24-
the case of a Eurodollar Rate Auction, or 7:30 A.M. (San Francisco time) on
the proposed date of Borrowing in the case of an Absolute Rate Auction, the
Agent will notify the Borrower of the terms (a) of any Competitive Bid
submitted by a Bank that is in accordance with Section 2.2B(iii), and (b)
of any Competitive Bid that amends, modifies or is otherwise inconsistent
with a previous Competitive Bid submitted by such Bank with respect to the
same Competitive Bid Request. Any such subsequent Competitive Bid shall be
disregarded by the Agent unless such subsequent Competitive Bid is
submitted solely to correct a manifest error in such former Competitive Bid
and only if received within the times set forth in this Section
2.2B(iii)(a). The Agent's notice to the Borrower in an Agent Auction shall
specify (A) the aggregate principal amount of Bid Loans for which offers
have been received for each Interest Period specified in the related
Competitive Bid Request; and (B) the respective principal amounts and
Eurodollar Rate Bid Margins or Absolute Rates, as the case may be, so
offered. Subject only to the provisions of Section 3.2 hereof and the
provisions of this Section 2.2B(iv), any Competitive Bid shall be
irrevocable except with the written consent of the Agent given on the
written instructions of the Borrower.
(v) Not later than 9:00 A.M. (San Francisco time) three (3)
Business Days prior to the proposed date of Borrowing in the case of a
Eurodollar Rate Auction, or 8:00 A.M. (San Francisco time) on the proposed
date of Borrowing in the case of an Absolute Rate Auction, the Borrower shall
notify the Agent of its acceptance or non-acceptance of the offers so
notified to it pursuant to Section 2.2B(iv). The Borrower shall be under no
obligation to accept any offer and may choose to reject all offers. Any
offers not accepted by the Borrower by such times shall be deemed rejected.
In the case of acceptance, the Borrower shall submit to the Agent a Notice of
Borrowing which shall specify the aggregate principal amount of offers for
each Interest Period that is accepted. The Borrower may accept any
Competitive Bid in whole or in part; provided that:
--------
(a) the aggregate principal amount of each Bid Borrowing may
not exceed the applicable amount set forth in the related Competitive
Bid Request;
(b) the principal amount of each Bid Borrowing must be
$2,000,000 or any integral multiple of $1,000,000 in excess thereof;
(c) acceptance of offers may only be made on the basis of
ascending Eurodollar Rate Bid Margins or Absolute Rates within each
Interest Period, as the case may be; and
(d) the Borrower may not accept any offer other than as is
described in Section 2.2B(iii)(c) or that otherwise fails to comply
with the requirements of this Agreement.
Each Notice of Borrowing with respect to a Bid Loan shall be irrevocable
and binding on the Borrower. The Borrower shall indemnify each Bank against
any loss, 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 Bid Borrowing the applicable conditions set forth in Section 3,
including, without limitation, any loss (including loss of anticipated
profits which loss shall be limited to the present value of the difference
between the interest rate payable on the applicable
-25-
Loan for the remainder of the applicable Interest Period and the rate at
which the Bank could redeploy its funds for the remainder of the applicable
Interest Period), cost or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by such Bank to fund the
Bid Loan to be made by such Bank as a part of such Borrowing when such
Loan, as a result of such failure, is not made on such date; provided,
--------
however, that such indemnification shall not include any obligation with
-------
respect to consequential damages. Any Bank failing to fund a Bid Loan when
it is required to do so hereunder shall indemnify the Borrower against any
monetary loss, cost or expense incurred by the Borrower as a result
thereof; provided, however, that such indemnification shall not include any
-------- -------
obligation with respect to consequential damages.
(vi) If offers are made by two or more Banks with the same
Eurodollar Rate Bid Margins or Absolute Rates, as the case may be, for a
greater aggregate principal amount than the amount in respect of which such
offers are accepted for the related Interest Period, the principal amount of
Bid Loans in respect of which such offers are accepted shall be allocated by
the Agent, in the case of an Agent Auction, or the Borrower, in the case of a
Borrower Auction, among such Banks as nearly as possible (in such multiples,
not less than $500,000, as the Agent, in the case of an Agent Auction, or the
Borrower, in the case of a Borrower Auction, may deem appropriate) in
proportion to the aggregate principal amounts of such offers. Determination
by the Agent, in the case of an Agent Auction, or the Borrower, in the case
of a Borrower Auction, of the amounts of Bid Loans shall be conclusive in the
absence of manifest error.
(vii) (a) The Agent, in the case of an Agent Auction, or the
Borrower, in the case of a Borrower Auction, will promptly, but in no case
later than 8:30 A.M. (San Francisco time), notify each Bank having submitted
====
a Competitive Bid if its offer has been accepted and, if its offer has been
accepted, of the amount of the Bid Loan or Bid Loans to be made by it on the
date of the Bid Borrowing.
(b) In the case of an Agent Auction, each Bank, which has
received notice pursuant to Section 2.2B(vii)(a) that its
Competitive Bid has been accepted, shall make the amounts of such
Bid Loans available to the Agent for the account of the Borrower
by 10:00 A.M. (San Francisco time), on such date of Bid Borrowing,
by depositing same day funds in the Agent's Account No. 12330-
15415, re: CalMat Co., Attention: Agency Administrative Services
#5596, maintained at BofA, ABA No. 1210-0035-8-BKAMER-SF or in
such other account as the Agent may from time to time specify in
writing to the Banks.
(c) In the case of a Borrower Auction, each Bank, which has
received notice pursuant to Section 2.2B(vii)(a) that its
Competitive Bid has been accepted, shall make the amounts of such
Bid Loans available to the Borrower by 10:00 A.M. (San Francisco
time), on such date of Bid Borrowing, by depositing same day funds
in the account designated by Borrower in its notice of acceptance.
(d) Promptly following each Bid Borrowing, the Agent shall
notify each Bank and the Borrower, in the case of an Agent
Auction, or the Borrower shall notify the Agent and each Bank, in
the case of a Borrower Auction, of the ranges of Competitive Bids
submitted and the highest and lowest Competitive Bids accepted for
-26-
each Interest Period requested by the Borrower and the aggregate
amount borrowed pursuant to such Bid Borrowing.
(e) From time to time, the Borrower and the Banks shall
promptly furnish such information to the Agent as the Agent may
request relating to the making of Bid Loans, including, without
limitation, the amounts, interest rates, dates of borrowings and
maturities thereof, for purposes of the allocation of amounts
received from the Borrower for payment of all amounts owing
hereunder.
(viii) If, on or prior to the proposed date and time of Borrowing,
the Commitments have not been terminated and if, on such proposed date of
Borrowing all applicable conditions to funding referenced in Section 3.1
and Section 3.2 hereof are satisfied, the Bank or Banks whose offers the
Borrower has accepted will fund each Bid Loan so accepted. Nothing in this
Section 2.2 shall be construed as a right of first offer in favor of the
Banks or to otherwise limit the ability of the Borrower to request and
accept credit facilities from any Person (including any of the Banks),
provided that no Potential Event of Default or Event of Default would
--------
otherwise arise or exist as a result of the Borrower executing, delivering
or performing under such credit facilities.
(ix) Each outstanding Bid Loan shall reduce pro tanto the
--- -----
availability of the aggregate Commitments, and shall reduce the
availability of each Bank's (including the Bid Loan Bank's) Commitment on a
pro rata basis.
2.3 FEES
----
A. FACILITY FEE. The Borrower agrees to pay to the Agent for the ratable
------------
benefit of the Banks a facility fee on the actual daily Commitments (regardless
of usage) from the Effective Date to but not including the Maturity Date in an
amount equal to the Applicable Amount for the Facility Fee. Such facility fee
shall be payable on the first Business Day of each fiscal quarter of the
Borrower in arrears for the immediately preceding fiscal quarter of the Borrower
(or portion thereof), and on the Maturity Date.
B. ARRANGER, AGENT'S FEES. The Borrower agrees to pay to the Arranger
----------------------
and the Agent, for their own respective accounts, such fees as may be agreed
upon in the amounts and at the times agreed upon.
2.4 REDUCTIONS OF COMMITMENTS; EXTENSION OF COMMITMENTS
---------------------------------------------------
A. VOLUNTARY REDUCTIONS OF COMMITMENTS. The Borrower shall have the
-----------------------------------
right, at any time and from time to time, to terminate in whole or permanently
reduce ratably in part, without premium or penalty, the unused portions of the
Commitments, by giving not less than three (3) Business Days' prior written
notice to the Agent or telephonic notice, followed immediately by telecopied
delivery and promptly confirmed in writing, delivered by mail, designating that
the Commitments are to be reduced, the date (which shall be a Business Day) of
any such termination or reduction and the amount of any partial reduction. Such
termination or partial reduction of the Commitments shall be effective on the
date specified in such notice and shall reduce the respective Commitment of each
Bank proportionately to its Pro Rata Share. Any such partial reduction of the
-27-
Commitments shall be in an aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount.
B. MATURITY DATE. The Commitments shall be reduced to zero on the
-------------
Maturity Date.
C. EXTENSION OF COMMITMENTS. On or before the date that is sixty (60)
------------------------
days prior to the first anniversary of the Effective Date and on or prior to the
date that is sixty (60) days prior to each subsequent anniversary of the
Effective Date, the Borrower may request that the Banks extend the availability
of the Commitments for a one (1) year period. The Agent shall promptly notify
the Banks of such a request. On or before any such anniversary of the Effective
Date, as applicable, the Banks shall have the right, in their sole discretion,
to consent to the extension of the Commitments on terms and conditions
satisfactory to the Banks or to reject such extension request. If any Bank
rejects the extension of the Commitments, the Commitments shall terminate on the
then scheduled Maturity Date and all Loans shall be repaid in accordance with
the terms of this Agreement. If the Agent has not responded in writing to the
Borrower by the respective anniversary of the Effective Date, as applicable, the
Banks shall be deemed to have rejected the extension of the Commitments.
If the Banks consent to the extension of the Commitments for a one-year
period, the Maturity Date shall be automatically extended by such one-year
period without any further action by the Borrower, the Agent or the Banks and
the Borrower shall execute such documents, agreements and instruments, and
perform such acts as the Agent may request, to effect such extension.
2.5 OPTIONAL PREPAYMENTS AND MANDATORY PAYMENTS AND PREPAYMENTS
-----------------------------------------------------------
A. OPTIONAL PREPAYMENTS. The Borrower may, upon notice to the Agent
--------------------
stating the Type of the Loans to be prepaid and the Borrowing of which such
Loans were a part, and the proposed date and aggregate principal amount of the
prepayment (provided that such notice shall be given not later than 9:00 A.M.
--------
(San Francisco time) (i) on the proposed date of such prepayment in the case of
Base Rate Loans, and (ii) at least five (5) Business Days prior to the proposed
date of such prepayment in the case of CD Rate Loans and Eurodollar Rate Loans,
and if such notice is given, the Borrower shall, prepay without premium or
penalty the outstanding principal amounts of the Loans of the Type specified
comprising part of the same Borrowing in whole or ratably in part; provided that
--------
any voluntary prepayment of any CD Rate Loans or Eurodollar Rate Loans shall be
made on, and only on, the last day of an Interest Period for such Loans;
provided, further, that no Bid Loans may be prepaid without the express written
-------- -------
consent of the applicable Bid Loan Bank, with a copy of such consent provided to
the Agent, and provided, further, that each partial prepayment of CD Rate Loans
-------- -------
or Eurodollar Loans shall be in an aggregate principal amount not less than
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and each
partial prepayment of Base Rate Loans shall be in an aggregate principal amount
not less than $250,000 or multiples thereof. Notice of prepayment having been
given as aforesaid, the principal amount of the Loans specified in such notice
and, in the case of any prepayment of CD Rate Loans or Eurodollar Rate Loans,
all interest accrued thereon through the date of prepayment, shall become due
and payable on the prepayment date.
-28-
B. MANDATORY PAYMENTS AND PREPAYMENTS.
(I) Repayment of Loans. The Borrower shall repay to the Agent the
principal amount of each Committed Loan owing to each Bank for the account
of each Bank and all other amounts owing hereunder with respect to the
Commitments on the Maturity Date for the account of each Bank. The
Borrower shall repay to the Agent for the account of each Bid Loan Bank (in
the case of a Bid Loan made through an Agent Auction) or to the Bid Loan
Bank (in the case of a Bid Loan made through a Borrower Auction) the
principal amount of each Bid Loan on the last day of the Interest Period
applicable thereto.
(II) PREPAYMENT OF LOANS When Loans Exceed Commitments. If at any
time the aggregate principal amount of the Loans outstanding exceeds the
aggregate Commitments then in effect, the Borrower shall, if notified (by
telephone, writing or otherwise) of such excess by 10:00 A.M. (San
Francisco time) on any day, prepay the Loans on the date of such
notification in an amount equal to the applicable excess and, if notified
(by telephone, writing or otherwise) of such excess later than 10:00 A.M.
(San Francisco time) on any day, prepay the Loans on the first Business Day
immediately succeeding the date of such notification in an amount equal to
the applicable excess.
C. APPLICATION OF PREPAYMENTS.
--------------------------
(I) APPLICATION BY TYPE OF LOAN. Any mandatory prepayment shall be
---------------------------
applied (a) first, pro rata to Base Rate Loans to the full extent thereof,
(b) second, pro rata to CD Rate Loans and Eurodollar Rate Loans to the full
extent thereof and (c) third, pro rata to outstanding Bid Loans.
(II) APPLICATION TO PRINCIPAL AND INTEREST OF LOANS. All prepayments
----------------------------------------------
of CD Rate Loans and Eurodollar Rate Loans shall include payment of accrued
interest on the principal amount so prepaid and shall be applied to payment
of interest before application to principal.
2.6 INTEREST
--------
The Borrower shall pay interest on the unpaid principal amount of each Loan
(including any Bid Loan) made by each Bank from the date each such Loan is
funded until such principal amount shall be paid in full, at the applicable rate
set forth below:
A. BASE RATE LOANS. Subject to the provisions of Section 2.6E,
---------------
during such periods as such Loan is a Base Rate Loan, at a rate per annum
equal at all times to the Base Rate in effect from time to time, payable in
arrears on the first Business Day of each fiscal quarter of the Borrower
for the immediately preceding fiscal quarter of the Borrower during such
periods and on the Maturity Date.
B. CD RATE LOANS. Subject to the provisions of Section 2.6E, during
-------------
such periods as such Loan is a CD Rate Loan, at a rate per annum equal at
all times during each Interest Period for such Loan to the Adjusted CD Rate
for such Interest Period plus the Applicable Amount for the Adjusted CD
----
Rate, payable in arrears on the last day of such Interest Period and, in
the case of each Interest Period of 180 days, on each 90-day
-29-
anniversary of the commencement of such Interest Period, and on each date
such Loan shall be paid or due and payable in full or in part (with respect
to the portion paid in part).
C. EURODOLLAR RATE LOANS. Subject to the provisions of Section 2.6E,
---------------------
during such periods as such Loan is a Eurodollar Rate Loan, at a rate per
annum equal at all times during each Interest Period for such Loan to the
Adjusted Eurodollar Rate for such Interest Period plus the Applicable
----
Amount for the Adjusted Eurodollar Rate, payable in arrears on the last day
of such Interest Period and, in the case of each Interest Period of six
months, on each three-month anniversary of the commencement of such
Interest Period, and on each date such Loan shall be paid or due and
payable in full or in part (with respect to the portion paid in part).
D. BID LOANS. Subject to the provisions of Section 2.6E, for Bid
---------
Loans, at a rate per annum equal at all times to that offered by the
applicable Bid Loan Bank and accepted by the Borrower pursuant to Section
2.2, payable in arrears in accordance with the terms of such Bid Loan.
E. DEFAULT RATE. After the occurrence and during the continuation of
------------
any Event of Default, to the extent permitted by applicable law, the Loans
shall bear interest, payable on demand, at a rate per annum equal at all
times to 2.00% per annum above the rate of interest otherwise payable under
this Agreement; provided, that upon the cure or waiver of such Event of
--------
Default, the applicable interest rate shall revert to the rate otherwise
payable under this Agreement.
If an Event of Default or Potential Event of Default occurs and is
continuing, none of the Loans made pursuant to Sections 2.1 or 2.2 shall, at
the direction of the Requisite Banks, constitute a CD Rate Loan, Eurodollar
Rate Loan or Bid Loan (or shall bear interest at the rate provided in Section
2.2B, 2.6B, 2.6C or 2.6D). With respect to an outstanding CD Rate Loan,
Eurodollar Rate Loan or Bid Loan, at the end of the Interest Period in effect
at the time of any Event of Default, such Loan shall constitute a Base Rate
Loan and shall bear interest at a rate which is 2.00% per annum above the
rate otherwise payable on Base Rate Loans.
2.7 INTEREST RATE DETERMINATION AND PROTECTION
------------------------------------------
A. The Agent shall give prompt notice to the Borrower and the Banks of
the applicable interest rate determined by the Agent for Committed Loans for
purposes of Section 2.6; provided, that any failure to do so shall not relieve
--------
the Borrower of any liability hereunder. Any change in the interest rate on a
Loan resulting from a change in the Eurodollar Rate Reserve Percentage, CD Rate
Reserve Percentage, CD Assessment Rate or Base Rate shall become effective as of
the opening of business on the day on which such change in the Eurodollar Rate
Reserve Percentage, CD Rate Reserve Percentage, CD Assessment Rate or Base Rate
becomes effective.
B. If, with respect to any CD Rate Loans or Eurodollar Rate Loans, any
Bank notifies (and provides a certificate in reasonable detail as to the reasons
and amounts relating thereto) the Agent that, as a result of circumstances
affecting the domestic certificate of deposit market or the Eurodollar markets,
as the case may be, the Adjusted CD Rate or the Adjusted Eurodollar Rate for any
Interest Period for such Loans will not adequately reflect the cost to such Bank
of making,
-30-
funding or maintaining its CD Rate Loans or Eurodollar Rate Loans for such
Interest Period, the Agent shall forthwith so notify the Borrower and the Banks,
whereupon:
(i) the Borrower shall from time to time, upon demand of such Bank,
pay to the Agent for the account of such Bank all amounts payable under
Section 2.10A and 2.10B,
(ii) each such Loan by such Bank will automatically, on the last day
of the then existing Interest Period therefor, Convert into a Base Rate
Loan (or, if such Loan is then a Base Rate Loan, will continue as a Base
Rate Loan), and
(iii) the obligations of such Bank to make, or to Convert Loans into,
CD Rate Loans or Eurodollar Rate Loans, as the case may be, shall be
suspended until the Agent shall notify the Borrower that the circumstances
causing such suspension by such Bank no longer exist (and such Bank shall
make all of its Loans as Base Rate Loans notwithstanding any election by
the Borrower to have the Banks make, or to Convert any Loans into, CD Rate
Loans or Eurodollar Rate Loans, as the case may be).
C. If the Borrower shall fail timely to select the duration of any
Interest Period for any CD Rate Loan or Eurodollar Rate Loan in accordance with
the provisions contained in the definition of "Interest Period" in Section 1.1,
the Agent will forthwith so notify the Borrower and the Banks and such Loans
will automatically, on the last day of the then existing Interest Period
therefor, Convert into Base Rate Loans.
2.8 ILLEGALITY AND EURODOLLAR RATE LOANS Notwithstanding any other
------------------------------------
provision of this Agreement, if the introduction of or any change in or in the
interpretation of any law or regulation shall make it unlawful, or any central
bank or other governmental authority shall assert that it is unlawful, for any
Bank or its Eurodollar Lending Office to perform its obligations hereunder to
make Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate
Loans hereunder (any such introduction, change or assertion being an "Event of
Illegality"), then, on notice thereof (which notice shall specify the basis
therefor) and demand therefor by such Bank to the Borrower through the Agent,
(i) the obligation of such Bank to make Eurodollar Rate Loans and to Convert
Base Rate Loans or CD Rate Loans into Eurodollar Rate Loans shall terminate (and
such Bank shall make all of its Loans as Base Rate Loans or CD Rate Loans
notwithstanding any election by the Borrower to have the Banks make, or to
Convert any Loans into, Eurodollar Rate Loans) and (ii) the Borrower shall
within five Business Days of such notice and demand, Convert all Eurodollar Rate
Loans of such Bank then outstanding into Base Rate Loans or CD Rate Loans in
accordance with Section 2.9; provided that, before making any such demand, such
--------
Bank agrees to use reasonable efforts (consistent with its internal policy and
legal and regulatory restrictions) to designate a different Eurodollar Lending
Office if the making of such a designation would allow such Bank or its
Eurodollar Lending office to continue to perform its obligations to make
Eurodollar Rate Loans or to continue to fund or maintain Eurodollar Rate Loans
and would not, in the sole judgment of such Bank, be otherwise disadvantageous
to such Bank; provided, further, that if at any time after such Conversion no
-------- -------
such Event of Illegality shall be continuing, such Bank shall promptly so notify
the Agent and the Borrower, and the obligation of such Bank to make Eurodollar
Rate Loans shall be reinstated; and provided, further, that neither the Agent
-------- -------
nor such Bank shall have any liability for the manner or timeliness of such
notice.
-31-
2.9 VOLUNTARY CONVERSION OR CONTINUATION OF LOANS The Borrower may,
---------------------------------------------
subject to the definition of the term Interest Period and the provisions of
Sections 2.7 and 2.8, (i) Convert all or any portion of Loans (other than Bid
Loans) of one Type into Loans (other than Bid Loans) of another Type and (ii)
upon the expiration of any Interest Period applicable to a CD Rate Loan or
Eurodollar Rate Loan, as the case may be, continue all or any portion of such
Loan as a CD Rate Loan or Eurodollar Rate Loan, as the case may be; provided
--------
that any such Conversion of any CD Rate Loan or Eurodollar Rate Loan into Loans
of another Type shall be made on, and only on, the last day of an Interest
Period for such CD Rate Loan or Eurodollar Rate Loan, and any such Conversion of
Loans into CD Rate Loans or Eurodollar Rate Loans, or continuation of CD Rate
Loans or Eurodollar Rate Loans, as applicable, shall (a) be in an amount not
less than the minimum amount specified in Section 2.1 for a Borrowing of the
relevant Type and (b) not be made if an Event of Default or Potential Event of
Default has occurred and is continuing.
The Borrower shall deliver a Notice of Conversion/Continuation (executed by
the Borrower) to the Agent no later than 9:00 A.M. (San Francisco time) (i) at
least two (2) Business Days in advance of the proposed conversion/continuation
date (in the case of a Conversion to, or a continuation of, a CD Rate Loan),
(ii) at least three (3) Business Days in advance of the proposed
conversion/continuation date (in the case of a Conversion to, or a continuation
of, a Eurodollar Rate Loan) and (iii) on the Business Day of the proposed
conversion/continuation date (in the case of a Conversion to a Base Rate Loan).
A Notice of Conversion/Continuation shall certify (i) the proposed
conversion/continuation date (which shall be a Business Day), (ii) the Type and
amount of the Loan to be converted/continued, (iii) the nature of the proposed
conversion/continuation, (iv) in the case of a Conversion to, or a continuation
of, a CD Rate Loan or a Eurodollar Rate Loan, the requested Interest Period, and
(v) that no Potential Event of Default or Event of Default has occurred and is
continuing or would result from the proposed conversion/continuation. In lieu
of delivering the above described Notice of Conversion/Continuation, the
Borrower may give the Agent telephonic notice (immediately confirmed by
telecopied delivery of the Notice of Conversion/Continuation) by the required
time of any proposed conversion/continuation under this Section 2.9.
Neither the Agent nor any Bank shall incur any liability to the Borrower or
any other Bank in acting upon any telephonic notice referred to above that the
Agent believes in good faith to have been given by a duly authorized officer or
other Person authorized to borrow on behalf of the Borrower or for otherwise
acting in good faith under this Section 2.9 and upon conversion/continuation by
the Agent in accordance with this Agreement pursuant to any telephonic notice,
the Borrower shall have effected the conversion/continuation of Loans hereunder.
A Notice of Conversion/Continuation for Conversion to, or continuation of,
a CD Rate Loan or a Eurodollar Rate Loan (or telephonic notice in lieu thereof)
shall be irrevocable on and after such notice is given and the Borrower shall be
bound to Convert or continue in accordance therewith.
After the occurrence of and during the continuance of a Potential Event of
Default or Event of Default, the Borrower may not elect to have a Loan made or
continued as, or Converted to, a CD Rate Loan or a Eurodollar Rate Loan, in each
case after the expiration of any Interest Period then in effect for that Loan.
-32-
2.10 INCREASED COSTS AND FUNDING LOSSES; SUBSTITUTION OF A BANK
----------------------------------------------------------
A. If, due to either (i) the introduction of or any change after the
date hereof (other than any change by way of imposition or increase of reserve
requirements, in the case of CD Rate Loans, included in the CD Rate Reserve
Percentage, or in the case of Eurodollar Rate Loans, 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 issued or made after the date
hereof 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 CD Rate Loans or Eurodollar
Rate Loans under this Agreement, then the Borrower shall from time to time, upon
demand by such Bank (with a copy of such demand to the Agent), pay to the Agent
for the account of such Bank additional amounts sufficient to compensate such
Bank for such increased cost; provided, however, that the Borrower's obligation
-------- -------
to pay such Bank shall be limited to the increased cost that is reasonably
allocable to this Agreement and attributable to the period commencing nine (9)
months prior to the date such Bank gives notice to the Borrower of the event
entitling such Bank to compensation. A certificate signed by an officer of such
Bank specifying in reasonable detail the amount of such increased cost, the
calculation thereof and the basis therefor submitted to the Borrower by such
Bank, shall be conclusive and binding for all purposes, absent manifest error.
B. If any Bank determines that compliance with any law or regulation or
with any guideline or request issued or made from any central bank or
governmental authority (whether or not having the force of law) has or would
have the effect of reducing the rate of return on the capital of such Bank or
any corporation controlling such Bank as a consequence of, or with reference to,
such Bank's Commitment to lend hereunder and other commitments of this type
below the rate which such Bank or such other corporation could have achieved but
for such compliance (taking into account the policies of such Bank or
corporation with regard to capital) then, upon demand by such Bank (with a copy
of such demand to the Agent), the Borrower shall immediately pay to the Agent
for the account of such Bank, from time to time as specified by such Bank,
additional amounts sufficient to compensate such Bank or other corporation for
such reduction that are reasonably allocable to this Agreement. A certificate
signed by an officer of such Bank specifying in reasonable detail the amounts,
the calculation of such amounts and the basis therefor submitted to the Borrower
by such Bank shall be conclusive and binding for all purposes, absent manifest
error.
C. The Borrower shall compensate each Bank, upon written request by that
Bank, with a copy to the Agent, (which request shall set forth in reasonable
detail the basis for requesting such amounts), for all losses, expenses and
liabilities (including, without limitation, any loss or expense arising from
interest or fees paid or payable by that Bank to lenders of funds borrowed by it
to make or carry its CD Rate Loans or Eurodollar Rate Loans and any loss
sustained by that Bank in connection with the re-employment of such funds), that
such Bank may sustain: (i) if for any reason (other than a default or error by
that Bank) a borrowing of any CD Rate Loan or Eurodollar Rate Loan does not
occur on a date specified therefor in a Notice of Borrowing, a Notice of
Conversion/Continuation or a telephonic request for borrowing or
conversion/continuation or a successive Interest Period does not commence after
notice therefor is given pursuant to Section 2.9, (ii) if any payment or
prepayment (by acceleration of maturity, mandatory prepayments or otherwise) of
any of its CD Rate Loans or Eurodollar Rate Loans occurs on a date that is not
the last day of an Interest Period applicable to that Loan, or (iii) if any
payment or prepayment (by acceleration of maturity, mandatory prepayments or
otherwise) of any of its CD Rate Loans or Eurodollar Rate
-33-
Loans is not made on any date specified in a notice of prepayment given by the
Borrower. Such written determination of such amount by such Bank shall be
conclusive and binding in all matters in the absence of manifest error.
D. In the event the Borrower receives notice of demand or is otherwise
required under the provisions of Section 2.10A to make payments in a material
amount to any Bank, and the event giving rise to such payment continues for
ninety (90) days, the Borrower may, within thirty (30) days after the end of the
applicable ninety (90) day period and so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing, elect to
terminate such Bank as a party to this Agreement; provided that, concurrently
--------
with such termination the Borrower shall (i) pay that Bank all principal,
interest and fees and other amounts (including amounts, if any, owed under this
Section 2.10) owed to such Bank through such date of termination, (ii) have
arranged for an Eligible Assignee satisfactory to the Agent to become a Bank for
all purposes under this Agreement (whether by assignment or amendment) and to
assume as of such date all obligations of the Bank to be terminated as of such
date and (iii) all documents and supporting materials necessary to evidence the
substitution of such Bank shall have been received by the Agent as of such date.
2.11 TAXES
-----
A. Any and all payments by the Borrower hereunder shall be made, in
accordance with Section 2.12, 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 and the Agent, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction under the laws of which such Bank or the
Agent (as the case may be) is organized or any political subdivision thereof
and, in the case of each Bank, taxes imposed on its income, and franchise taxes
imposed on it, by the jurisdiction of such Bank's Applicable Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to any 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 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,
(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; provided that the Borrower shall not be
--------
required pursuant to clause (i) above to increase the sum payable to any Bank or
the Agent organized under the laws of a jurisdiction outside of the United
States if such Bank or the Agent shall have failed to provide the forms or
documents referred to in Section 2.11E; provided, further, that to the extent a
-------- -------
Bank receives a refund of taxes in respect of which the Borrower has made a
payment to such Bank pursuant to clause (i) above, such Bank will refund such
payment to the Borrower.
B. 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 hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
(hereinafter referred to as "Other Taxes").
-34-
C. The Borrower will indemnify each Bank and the Agent for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this Section
2.11) paid by such Bank or the Agent (as the case may be) and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within thirty days from the date
such Bank or the Agent (as the case may be) makes written demand therefor. Each
Bank and the Agent agrees to reimburse the Borrower for amounts paid by the
Borrower pursuant to this Section 2.11 to the extent that such Bank or the Agent
actually recovers all or any portion of such amounts from the applicable taxing
authority.
D. Within sixty (60) days after the date of any payment of Taxes, the
Borrower will furnish to the Agent, at its address referred to in Section 9.2,
the original or a certified copy of a receipt evidencing payment thereof or
other evidence of the payment thereof satisfactory to the Agent.
E. Each Bank organized under the laws of a jurisdiction outside the United
States shall provide, prior to the date of the initial Borrowing in the case of
each Bank listed on the signature pages hereof, and on the date of the
Assignment and Acceptance pursuant to which it became a Bank in the case of each
other Bank, the Agent and the Borrower with the forms prescribed by the Internal
Revenue Service of the United States certifying as to such Bank's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to such Bank hereunder or other documents
satisfactory to the Borrower and the Agent indicating that all payments to be
made to such Bank hereunder are subject to such taxes at a rate reduced by an
applicable tax treaty. Unless the Borrower and the Agent have received forms or
other documents satisfactory to them indicating that payments hereunder are not
subject to United States withholding tax or are subject to such tax at a rate
reduced by an applicable tax treaty, the Borrower or the Agent shall withhold
taxes from such payments at the applicable statutory rate in the case of
payments to or for any Bank organized under the laws of a jurisdiction outside
the United States.
2.12 PAYMENTS AND COMPUTATIONS
-------------------------
A. MANNER AND TIME OF PAYMENT. The Borrower shall make each payment
hereunder irrespective of and without condition or deduction for any
counterclaim, defense, recoupment or setoff in Dollars and in same day funds not
later than 12:00 Noon (San Francisco time) on the date when due (i) in the case
of payments of principal of, or interest on, each Bid Loan made through a
Borrower Auction, to the applicable Bid Loan Bank, or (ii) for all other
payments, by deposit of such funds to the Agent's Account No. 12330-15415, re:
CalMat Co., Attention: Agency Administrative Services #5596, maintained at
BofA, Agency Management, ABA No. 1210-0035-8-BKAMER-SF, or at such other account
as the Agent may from time to time designate by notice to the Borrower. Any
payment which is received by the Agent or a Bid Loan Bank later than 12:00 Noon
(San Francisco time) shall be deemed to have been received on the immediately
succeeding Business Day. The Agent will promptly thereafter cause to be
distributed like funds relating to Committed Loans ratably (other than amounts
payable pursuant to Sections 2.10 or 2.11) to the Banks for the account of their
respective Applicable Lending Offices, and the payment of any other amount
payable to any Bank (other than with respect to Bid Loans) 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. In the case of each Bid Loan made
through an Agent Auction, the Agent will cause an amount of same day funds equal
to the
-35-
amount of such payments of principal of, or interest on, each such Bid Loan on
which the Borrower makes a payment to be available to the applicable Bid Loan
Bank at the office of such Bank designated by such Bank. In the case of each Bid
Loan made through a Borrower Auction, the applicable Bid Loan Bank shall notify
the Borrower of the payment instructions relating to such Bid Loan promptly
after the funding thereof, and the Borrower will make payments in same day funds
equal to the amount of principal of, or interest on, on each such Bid Loan when
due in accordance with such payment instructions. The Borrower may not prepay
any Bid Loan without the consent of the Bank which made the Bid Loan. Upon its
acceptance of an Assignment and Acceptance and recording of the information
contained therein in the Register pursuant to Section 9.7D, the Agent shall make
all payments hereunder in respect of the interest assigned thereby to the Bank
assignee thereunder, and the parties to such Assignment and Acceptance shall
make all appropriate adjustments in such payments for periods prior to such
effective date directly between themselves.
B. COMPUTATIONS. All computations of interest and facility fees shall be
made by the Agent, and all computations of interest pursuant to Section 2.10
shall be made by a Bank, on the basis of a year of (i) 365 or 366 days in the
case of calculation of interest on Base Rate Loans and fees and (ii) 360 days in
all other cases, 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 facility fees are payable; provided that if a Loan is repaid on the same day
--------
on which it is made, one day's interest shall be paid on that Loan. Each
determination by the Agent (or, in the case of Section 2.7, by a Bank) of an
interest rate hereunder shall be conclusive and binding for all purposes, absent
manifest error.
C. PAYMENT ON NON-BUSINESS DAYS. Whenever any payment hereunder 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 facility fee, as
the case may be; provided that if such extension would cause payment of interest
--------
on or principal of Eurodollar Rate Loans or Eurodollar Rate Bid Loans to be made
in the next following calendar month, such payment shall be made on the next
preceding Business Day.
2.13 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
Loans owing to it (other than payments on account of Bid Loans which are
received on a date during which no Event of Default or Potential Event of
Default has occurred and is continuing and other than payments pursuant to
Section 2.10 or 2.11) in excess of its ratable share of payments on account of
the Loans obtained by all the Banks, such Bank shall forthwith purchase from the
other Banks such participations in the Loans owing to them as shall be necessary
to cause such purchasing Bank to share the excess payment ratably with each of
them; provided 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 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 (ii) the total amount so recovered from 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 2.13 or any other
provision of this Agreement may, to the fullest extent permitted by law,
-36-
exercise all of its rights of payment (including the right to 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.
2.14 USE OF PROCEEDS
---------------
A. LOANS. The proceeds of the Loans made by the Banks shall be used for
the general corporate purposes of the Borrower, including, without limitation,
working capital purposes and capital expenditures, and for any Non-Hostile
Acquisition. In addition, the proceeds of the first Loan made hereunder shall
be used by the Borrower to prepay any indebtedness remaining outstanding under
the Original Agreement.
B. PROHIBITED USES. No portion of the proceeds of any Borrowing under
this Agreement shall be used by the Borrower to finance acquisitions not
approved by the Board of Directors of the entity to be acquired or in any manner
which might cause the Borrowing or the application of such proceeds to violate
Regulation U, Regulation T, or Regulation X of the Board of Governors of the
Federal Reserve System or any other regulation of the Board or to violate the
Exchange Act, in each case as in effect on the date or dates of such Borrowing
and such use of proceeds.
C. INELIGIBLE SECURITIES. The Borrower shall not, directly or
indirectly, use any portion of the Loan proceeds (i) knowingly to purchase
Ineligible Securities from a Section 20 Subsidiary during any period in which
such Section 20 Subsidiary makes a market in such Ineligible Securities, (ii)
knowingly to purchase during the underwriting or placement period Ineligible
Securities being underwritten or placed by a Section 20 Subsidiary, or (iii) to
make payments of principal or interest on Ineligible Securities underwritten or
privately placed by a Section 20 Subsidiary and issued by or for the benefit of
the Borrower or any Affiliate of the Borrower. As used in this Section, "SECTION
20 SUBSIDIARY" means the Subsidiary of the bank holding company controlling any
Bank, which Subsidiary has been granted authority by the Federal Reserve Board
to underwrite and deal in certain Ineligible Securities; and "INELIGIBLE
SECURITIES" means securities which may not be underwritten or dealt in by member
banks of the Federal Reserve System under Section 16 of the Banking Act of 1933
(12 U.S.C. (S)24, Seventh), as amended.
SECTION 3. CONDITIONS TO EFFECTIVENESS; CONDITIONS WITH RESPECT TO LOANS
3.1 CONDITIONS TO EFFECTIVENESS
---------------------------
This Agreement shall become effective only upon the satisfaction of the
following conditions:
A. DELIVERY OF THE BORROWER DOCUMENTS. On or before the Effective Date,
the Borrower shall deliver the following to the Agent for the Banks with
sufficient originally executed copies or certified copies for each Bank and its
counsel each, unless otherwise noted, dated the Effective Date:
(i) Certified copies of the Certificate of Incorporation of the
Borrower, together with good standing certificates (including verification
of tax status) and telegrams, if available, from the Secretary of State of
Delaware, and good standing certificates (including verification of tax
status) from each State in which the Borrower is required to be qualified
to transact business as a foreign corporation, each to be dated a recent
date prior to the Effective
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Date and, in the case of the Certificate of Incorporation, to be certified
as of the Effective Date by the Borrower's corporate secretary or an
assistant secretary;
(ii) Copies of the Borrower's Bylaws certified by its corporate
secretary or an assistant secretary;
(iii) Resolutions of the Borrower's Board of Directors approving and
authorizing the execution, delivery and performance of this Agreement and
the other Loan Documents and any other documents, instruments and
certificates required to be executed by the Borrower in connection herewith
or therewith, each certified by its corporate secretary or an assistant
secretary;
(iv) Signature and incumbency certificates of the Borrower's
officers executing this Agreement and the other Loan Documents and any
other documents, instruments and certificates required to be executed by
the Borrower in connection herewith or therewith;
(v) Executed copies of this Agreement, and the other Loan
Documents, if any, to which the Borrower is a party; and
(vi) Such other documents as the Agent may reasonably request.
B. FEES. On or before the Effective Date, the Borrower shall have paid
to the Agent and Arranger the fees payable on or prior to the Effective Date,
together with Attorney Costs of BofA to the extent invoiced prior to or on the
Effective Date, plus such additional amounts of Attorney Costs as shall
constitute BofA's reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that such estimate
shall not thereafter preclude final settling of accounts between the Borrower
and BofA).
C. DELIVERY OF OPINION OF COUNSEL TO THE BORROWER. On the Effective
Date, the Banks and their respective counsel shall have received originally
executed copies of one or more favorable written opinions of ▇▇▇▇ ▇▇▇▇▇▇▇▇,
Esq., General Counsel of the Borrower, substantially in the form of EXHIBIT V
annexed hereto.
D. A certificate dated as of the Effective Date from an Authorized
Officer certifying that (A) the representations and warranties contained in
Section 4 are true and correct; (B) no Potential Event of Default or Event of
Default exists; and (C) since December 31, 1997, no Material Adverse Effect has
occurred.
E. PAYING BANKS UNDER ORIGINAL AGREEMENT. Concurrently with the funding
of the initial Loans hereunder, the Borrower shall have terminated the
commitments of, and shall have paid all amounts owing to, any lenders party to
the Original Agreement.
F. OTHER CORPORATE ACTIONS. On or before the Effective Date, all
corporate and other proceedings taken or to be taken in connection with the
transactions contemplated hereby and all documents incidental thereto not
previously found acceptable by the Requisite Banks, and their counsel shall be
reasonably satisfactory in form and substance to the Requisite Banks and such
counsel, and the Requisite Banks and such counsel shall have received all such
counterpart originals or certified copies of such documents as the Requisite
Banks may reasonably request.
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G. OTHER DOCUMENTS. On or before the Effective Date, the Borrower shall
have delivered to the Banks such other documents as the Banks may reasonably
request.
3.2 CONDITIONS TO ALL LOANS
-----------------------
The obligation of each Bank to make each Loan is subject to prior or
concurrent fulfillment to such Bank's satisfactio of the following conditions
precedent in addition to those set forth in Section 3.1:
A. DELIVERY OF NOTICE. Prior to a Funding Date, the Agent shall have
received, in accordance with the provisions of Section 2.1B, an originally
executed Notice of Borrowing signed by an Authorized Officer of the Borrower.
The giving of such Notice of Borrowing shall be deemed to be a representation by
the Borrower that all of the conditions to Borrowing set forth in this Section
3.2 shall have been satisfied as of the date of such Notice of Borrowing.
B. OTHER REQUIREMENTS.
(i) The representations and warranties of the Borrower contained
herein shall be true, correct and complete in all material respects on and
as of each Funding Date to the same extent as though made on and as of that
date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the Borrowing contemplated by the applicable
Notice of Borrowing that would constitute an Event of Default or a
Potential Event of Default; and
(iii) The making of any Loan and the use of the proceeds thereof,
shall not violate Regulation U, Regulation T or Regulation X of the Board
of Governors of the Federal Reserve System, and the Agent shall on each
Funding Date have received from the Borrower such documents and information
as it may reasonably request relating to the satisfaction of such
conditions.
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to make the
Loans, the Borrower represents and warrants to the Banks that the following
statements are true, correct and complete.
4.1 ORGANIZATION, POWERS, GOOD STANDING AND SUBSIDIARIES
----------------------------------------------------
A. ORGANIZATION AND POWERS. Each of the Borrower and its Subsidiaries is
a corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite corporate power
and authority to own and operate its properties and to carry on its business as
now conducted and proposed to be conducted. The Borrower has all requisite
corporate power and authority to enter into this Agreement and each of the other
Loan Documents and to carry out the transactions contemplated hereby.
-39-
B. GOOD STANDING. Each of the Borrower and its Subsidiaries is in good
standing wherever necessary to carry on its present business and operations,
except in jurisdictions where the failure to be in good standing has not and
will not have a Material Adverse Effect.
C. SUBSIDIARIES. All of the Subsidiaries of the Borrower as of the
Effective Date are identified on SCHEDULE C annexed hereto. SCHEDULE C
correctly sets forth as of the Effective Date the ownership interest of the
Borrower in each of its Subsidiaries.
4.2 AUTHORIZATION OF BORROWING, ETC.
--------------------------------
A. AUTHORIZATION. The execution, delivery and performance by the
Borrower of this Agreement and each of the other Loan Documents are within the
Borrower's corporate powers and have been duly authorized by all necessary
corporate action.
B. NO CONFLICT. The execution, delivery and performance by the Borrower
of this Agreement and each of the other Loan Documents, the application of the
proceeds of the Loans and the consummation of any other transactions
contemplated by this Agreement and each of the other Loan Documents do not and
will not (i) violate any provision of law applicable to the Borrower, the
Certificate or Articles of Incorporation or Bylaws (or other charter documents)
of, or any order, judgment or decree of any court or other agency of government
binding on, the Borrower, (ii) conflict with, result in a breach of or
constitute (with due notice or lapse of time or both) a default under any
Contractual Obligation of the Borrower, (iii) result in or require the creation
or imposition of any Lien, charge or encumbrance of any nature whatsoever upon
any of the properties or assets of the Borrower or (iv) require any approval of
stockholders or any approval or consent of any Person under any Contractual
Obligation of the Borrower.
C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by the
Borrower of this Agreement and each of the other Loan Documents, and the
application of the proceeds of the Loans and the consummation of any other
transactions contemplated by this Agreement and each of the other Loan Documents
do not and will not require any registration with, consent or approval of, or
notice to, or other action with or by, any federal, state or other governmental
authority or regulatory body or other Person.
D. BINDING OBLIGATION. This Agreement and each of the other Loan
Documents is the legally valid and binding obligations of the Borrower,
enforceable against the Borrower in accordance with its terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally and subject to the
availability of equitable remedies.
4.3 FINANCIAL CONDITION
-------------------
The Borrower has heretofore delivered to the Agent and the Banks, at the
Banks' request, a Consolidated balance sheet of the Borrower and its
Subsidiaries for the Borrower's fiscal quarter ending December 31, 1997 and the
related Consolidated statements of income, retained earnings and cash flows for
such fiscal quarter. All such statements, and all future statements delivered
pursuant to Section 5.1 will, present fairly the financial condition of the
Borrower and its Subsidiaries as of the date indicated and the results of their
operations for the fiscal quarter indicated in conformity with GAAP applied on a
basis consistent with prior years (except as otherwise stated therein). The
-40-
Borrower and its Subsidiaries have no material Contingent Obligation, contingent
liability or liability for taxes, long term lease or unusual forward or long
term commitments, which is not reflected in the foregoing financial statements
or the notes thereto other than as has been incurred in the ordinary course of
business since December 31, 1997.
4.4 CHANGES, ETC.
-------------
Since December 31, 1997 there has been no change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
4.5 LITIGATION; ADVERSE FACTS
-------------------------
There is no action, suit, proceeding or arbitration (whether or not
purportedly on behalf of the Borrower) at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, pending against the
Borrower or any of its Subsidiaries or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any of its Subsidiaries or any
property of the Borrower or any of its Subsidiaries which is reasonably expected
to result in a Material Adverse Effect, and there is no basis known to the
Borrower for any such action, suit or proceeding. There is no action, suit,
proceeding or investigation pending or, to the best knowledge of the Borrower,
threatened against or affecting the Borrower which questions the validity or the
enforceability of this Agreement or any of the other Loan Documents. None of
the Borrower or any of its Subsidiaries is (i) in violation of any applicable
law in a manner which has had or is reasonably expected to have a Material
Adverse Effect or (ii) subject to or in default with respect to any final
judgment, order, writ, injunction, decree, rule or regulation of any court or
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, in a manner which has
had or is reasonably expected to have a Material Adverse Effect.
4.6 PAYMENT OF TAX
--------------
All tax returns and reports of the Borrower and its Subsidiaries required
to be filed by the Borrower and its Subsidiaries have been timely filed (after
giving effect to any extensions for filing obtained), and all taxes,
assessments, fees and other governmental charges upon the Borrower and its
Subsidiaries and their properties, assets, income and franchises (if any) which
are due and payable have been paid when due and payable, except (i) to the
extent contemplated by the proviso in Section 5.3A hereof or (ii) to the extent
that such taxes, assessments, fees and other governmental charges or the failure
to pay the same would not have a Material Adverse Effect. The Borrower knows of
no proposed tax assessment against the Borrower or any of its Subsidiaries that
would be material to the condition (financial or otherwise) of the Borrower and
its Subsidiaries, taken as a whole.
4.7 MATERIALLY ADVERSE AGREEMENTS; PERFORMANCE
------------------------------------------
A. AGREEMENTS. Neither the Borrower nor any of its Subsidiaries is a
party to or subject to any material agreement or instrument or charter or other
internal restriction materially adversely affecting the business, properties,
assets, operations or condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole.
-41-
B. PERFORMANCE. Neither the Borrower nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any of its Contractual Obligations, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute such a default, except where the consequences, direct or
indirect, of such default or defaults, if any, would not have a Material Adverse
Effect.
4.8 GOVERNMENTAL REGULATION
-----------------------
Neither the Borrower nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or to any United
States federal or state statute or regulation limiting its ability to incur
Indebtedness for money borrowed or to become contingently liable for the
Indebtedness of another.
4.9 SECURITIES ACTIVITIES
---------------------
Neither the Borrower nor any of its Subsidiaries is engaged principally, or
as one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying any Margin Stock.
4.10 EMPLOYEE BENEFIT PLANS
----------------------
A. Each of the Borrower and each of its ERISA Affiliates is in compliance
in all material respects with any applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder with respect
to each Employee Benefit Plan and has performed all of its obligations under
each Employee Benefit Plan.
B. No ERISA Event has occurred on or after January 1, 1996 or is
reasonably expected to occur.
C. Except to the extent required under Section 4980B of the Internal
Revenue Code or except as described on SCHEDULE D annexed hereto, no Employee
Benefit Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employee of Borrower or any of
its ERISA Affiliates.
D. As of the most recent valuation date for any Pension Plan, the amount
of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),
individually or in the aggregate for all Pension Plans (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), does not exceed $5,000,000.
4.11 PATENTS, TRADEMARKS AND LICENSES
--------------------------------
The Borrower possesses all of the licenses, patents, patent applications,
copyrights, service marks, trademarks and trade names necessary to continue to
conduct its business as heretofore conducted by it.
-42-
4.12 TITLE TO PROPERTIES; LIENS
--------------------------
The Borrower and its Subsidiaries have good, sufficient and legal title to
all of their properties and assets reflected in the Consolidated balance sheet
of the Borrower and its Subsidiaries as of June 30, 1998 or in the most recent
financial statements delivered pursuant to Section 5.1, except for assets
acquired or disposed of since the date of such financial statements. All such
properties and assets are free and clear of Liens, except as permitted under
this Agreement.
4.13 ENVIRONMENTAL PROTECTION Except as disclosed on SCHEDULE F annexed
------------------------
hereto:
A. The operations of the Borrower and its Subsidiaries comply in all
material respects with all Hazardous Materials Laws, except where such
noncompliance would not reasonably be expected to result in liability, together
with any other Environmental Liabilities and Costs of Borrower and its
Subsidiaries, in excess of $15,000,000 in the aggregate.
B. The Borrower and its Subsidiaries have obtained all permits, licenses
and approvals under all Hazardous Materials Laws necessary for their respective
operations, and all such permits, licenses and approvals are in good standing
and the Borrower and its Subsidiaries are in compliance with all material terms
and conditions of such permits, licenses and approvals, except where the lack of
such permits, licenses and approvals would not reasonably be expected to result
in liability, together with any other Environmental Liabilities and Costs of
Borrower and its Subsidiaries described in this Section 4.13, in excess of
$15,000,000 in the aggregate.
C. The Borrower and its Subsidiaries and all of their present property or
operations, and to the best of the Borrower's knowledge without investigation,
their past property or operations, are not subject to any outstanding written
order from or agreement with any governmental authority or other Person or to
any judicial or docketed administrative proceeding, respecting (i) any Hazardous
Materials Laws, (ii) any Remedial Action or (iii) any material Environmental
Liabilities and Costs, which order, agreement or proceeding would reasonably be
expected to result in liability, together with any other Environmental
Liabilities and Costs of Borrower and its Subsidiaries described in this Section
4.13, in excess of $15,000,000 in the aggregate.
D. None of the Borrower or any of its Subsidiaries owns or operates an
offsite hazardous waste treatment, storage or disposal facility requiring a
permit under the Resource Conservation and Recovery Act, 42 U.S.C. (S) 6901 et
--
seq., related regulations or any other state equivalent.
---
E. None of the Borrower or any of its Subsidiaries has filed or should
have filed any notice required under any Hazardous Materials Laws reporting a
Release into the environment which Release has, or would reasonably be expected
to have, a Material Adverse Effect.
F. There is not now on or in any property of the Borrower or any of its
Subsidiaries to the best of the borrower's knowledge without investigation:
(i) any underground storage tanks or surface impoundments,
(ii) any Hazardous Materials, or
-43-
(iii) any polychlorinated biphenyls (PCBs) used in electrical or
other equipment owned or maintained by the Borrower or any of its
Subsidiaries,
the presence of which is reasonably expected to have a Material Adverse
Effect.
G. None of the Borrower or any of its Subsidiaries has received in the
past three years (i) any notice or claim to the effect that it is or may be
liable to any Person as a result of a Release or threatened Release which
Release or threatened Release is reasonably expected to have a Material Adverse
Effect, or (ii) any mandatory request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act or
comparable State laws.
H. To the best of the Borrower's knowledge without investigation, no
material Environmental Lien (whether recorded or unrecorded) has attached to any
real or personal property currently owned, used or operated by the Borrower or
any of its Subsidiaries.
4.14 LABOR MATTERS
-------------
There are no strikes or other labor disputes or grievances pending or, to
the knowledge of the Borrower, threatened against the Borrower or its
Subsidiaries that could reasonably be expected to have a Material Adverse
Effect.
4.15 DISCLOSURE
----------
As of the Effective Date and as of any date thereafter on which
representations and warranties are made, no representation or warranty of the
Borrower contained in this Agreement, any other Loan Document or any other
document, certificate or written statement furnished to the Agent, the Banks, or
any of them, by or on behalf of the Borrower for use in connection with the
transactions contemplated by this Agreement and each of the other Loan
Documents, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact (known to the Borrower in the case
of any document not furnished by it) necessary in order to make the statements
contained herein or therein not misleading. The projections and pro forma
financial information contained in such materials are based upon good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Banks that such projections as to future events
are not to be viewed as facts or guarantees and that actual results during the
period or periods covered by any such projections may differ from the projected
results.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any portion of the
aggregate Commitments hereunder shall be in effect and until payment in full of
all of the Loans, and all other amounts owing hereunder, unless Requisite Banks
shall otherwise give prior written consent in accordance with Section 9.1 of
this Agreement, the Borrower shall perform all covenants in this Section 5.
-44-
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS
--------------------------------------
The Borrower will maintain a system of accounting established and
administered in accordance with sound business practices to permit preparation
of financial statements in conformity with GAAP applied on a consistent basis.
The Borrower will deliver to the Agent and the Banks:
(i) as soon as practicable and in any event within sixty (60) days after
the end of each of the first three fiscal quarters in each fiscal year of the
Borrower, a copy of the Borrower's Quarterly Report on Form 10-Q which includes
the Consolidated balance sheet of the Borrower as at the end of such period and
the related Consolidated statements of income and retained earnings of the
Borrower for such fiscal quarter and the related statement of cash flow for the
period from the beginning of the then current fiscal year to the end of such
fiscal quarter, setting forth in comparative form the corresponding figures for
the corresponding periods of the previous fiscal year;
(ii) as soon as practicable and in any event within one hundred (100)
days after the end of each fiscal year of the Borrower, a copy of the Borrower's
Annual Report on Form 10-K and Annual Report to Stockholders which include (a)
the Consolidated balance sheet of the Borrower as at the end of such fiscal year
and the related Consolidated statements of income, retained earnings and cash
flow of the Borrower for such fiscal year, setting forth in comparative form the
corresponding figures from the audited financial statements from the previous
Fiscal Year, and (b) in the case of such Consolidated financial statements,
accompanied by a report thereon of an independent certified public accountant of
recognized national standing selected by the Borrower, which report shall be
unqualified as to going concern and scope of audit and shall state that such
Consolidated financial statements present fairly the financial position of the
Borrower and its Subsidiaries as at the dates indicated and the results of their
operations and changes in their financial position for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except as
otherwise stated therein) and that the examination by such accountants in
connection with such Consolidated financial statements has been made in
accordance with generally accepted auditing standards;
(iii) together with each delivery of financial statements of the Borrower
and its Subsidiaries pursuant to subsections (i) and (ii) above, a Compliance
Certificate, substantially in the form of EXHIBIT IV annexed hereto and
demonstrating in reasonable detail compliance by the Borrower at the end of such
accounting periods with the restrictions contained in Sections 6.1 through 6.6,
inclusive, and calculating the Consolidated Funded Indebtedness to Consolidated
EBITDA Ratio and, if not specified in the financial statements delivered
pursuant to subdivision (i) or (ii) above, as the case may be, specifying the
aggregate amount of interest paid or accrued by the Borrower and its
Subsidiaries, and the aggregate amount of depreciation, depletion and
amortization charged on the books of the Borrower and its Subsidiaries during
such accounting period and, with respect to the Compliance Certificate delivered
together with the financial statements pursuant to subsection (ii) above, which
will confirm that the independent certified public accountants who have reported
on the Borrower's Consolidated financial statements have reviewed the financial
matters covered by the Compliance Certificate;
(iv) promptly upon their becoming available, copies of (a) all reports,
notices and proxy statements sent or made available generally by any of the
Borrower and its Subsidiaries to their security holders, (b) all regular and
periodic reports and all registration statements and prospectuses,
-45-
if any, filed by any of the Borrower and its Subsidiaries with any securities
exchange or with the SEC or any governmental orregulatory authority and (c) all
press releases and other statements regarding management or financial matters
made available generally by any of the Borrower and its Subsidiaries to the
public concerning material developments in the business of the Borrower;
(v) promptly upon any officer of the Borrower obtaining knowledge (a)
that a condition or event has occurred and is continuing that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any Bank
or the Agent has given any notice or taken any other action with respect to a
claimed Event of Default or Potential Event of Default under this Agreement, (b)
that any Person has given any notice to the Borrower or any of its Subsidiaries
or taken any other action with respect to a claimed default or event or
condition of the type referred to in Section 7.4, or (c) of a material adverse
change in the business, operations, properties, assets or condition (financial
or otherwise) of the Borrower and its Subsidiaries taken as a whole, an
Officers' Certificate specifying the nature and period of existence of such
condition or event, or specifying the notice given or action taken by such
holder or Person and the nature of such claimed default, Event of Default,
Potential Event of Default, event or condition, and what action the Borrower has
taken, is taking and proposes to take with respect thereto;
(vi) promptly upon any officer of the Borrower obtaining knowledge of (a)
the institution of, or nonfrivolous threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the Borrower or
any of its Subsidiaries or any property of the Borrower or any of its
Subsidiaries not previously disclosed by the Borrower to the Banks, or (b) any
material development in any such action, suit, proceeding, governmental
investigation or arbitration, that, in either case:
(y) creates a reasonable possibility of a Material Adverse Effect;
or
(z) seeks to enjoin or otherwise prevent the consummation of the
Loans, or to recover any damages in excess of $10,000,000;
the Borrower shall promptly give notice thereof to the Agent and the Banks
and provide such other information as may be reasonably available to it to
enable the Agent, the Banks and their respective counsel to evaluate such
matters;
(vii) promptly upon becoming aware of the occurrence of or forthcoming
occurrence of any ERISA Event, a written notice specifying the nature thereof,
what action the Borrower or any of its ERISA Affiliates has taken, is taking or
proposes to take with respect thereto, and, when known, any action taken or
threatened by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto;
(viii) with reasonable promptness after a reasonable request by the Agent,
copies of (a) each Schedule B (Actuarial Information) to the annual report (Form
5500 Series) filed by the Borrower or any of its ERISA Affiliates with the
Internal Revenue Service with respect to each Pension Plan; (b) all notices
received by the Borrower or any of its ERISA Affiliates from a Multiemployer
Plan sponsor concerning an ERISA Event; and (c) copies of such other documents
or governmental reports or filings relating to any Employee Benefit Plan as the
Agent shall reasonably request;
(ix) as soon as practicable and in any event within one-hundred (100)
days after the beginning of each fiscal year, a Consolidated long range plan
which includes a financial forecast for
-46-
the Borrower and its Subsidiaries for the then current fiscal year and each
subsequent fiscal year through the end of the fiscal year which contains the
then scheduled Maturity Date, including, without limitation, a forecasted
Consolidated balance sheet and Consolidated statements of income and cash flow
for each such fiscal year, each such plan and forecast to be in form similar to
the plans and forecasts delivered to the Agent prior to the Effective Date; and
(x) with reasonable promptness, such other information and data with
respect to any of the Borrower and its Subsidiaries as from time to time may be
reasonably requested by the Agent or any Bank.
5.2 CORPORATE EXISTENCE, ETC.
-------------------------
The Borrower will, and will cause each of its Subsidiaries to, at all times
preserve and keep in full force and effect its corporate existence, licenses,
bonds, franchises, leases, patents, trademarks, contracts and other rights
material to its business, except where the failure to maintain the existence of
a Subsidiary would not have a Material Adverse Effect.
5.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION
----------------------------------------------
A. PAYMENT OF TAXES AND CLAIMS. The Borrower will, and will cause each
of its Subsidiaries to, pay all taxes, assessments and other governmental
charges imposed upon it or any of its material properties or assets or in
respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien upon any
of its material properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such tax, assessment,
--------
charge or claim need be paid if being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if such reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor.
B. TAX CONSOLIDATION. The Borrower will not, nor will it permit any of
its Subsidiaries to, file or consent to the filing of any Consolidated income
tax return with any Person (other than the Borrower or any of its Subsidiaries).
5.4 MAINTENANCE OF PROPERTIES; INSURANCE
------------------------------------
The Borrower will maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all material
properties used or useful in the business of the Borrower and its Subsidiaries
and from time to time will make or cause to be made all appropriate repairs,
renewals and replacements thereof consistent with past practices. The Borrower
will maintain or cause to be maintained, with financially sound and reputable
insurers (or self-insurance consistent with the Borrower's past practices),
insurance with respect to its properties and business and the properties and
business of its Subsidiaries against loss or damage of the kinds customarily
insured against by corporations of established reputation engaged in the same or
similar businesses and similarly situated, of such types and in such amounts as
are customarily carried under similar circumstances by such other corporations.
-47-
5.5 EQUAL SECURITY FOR OBLIGATIONS; NO FURTHER NEGATIVE PLEDGES
-----------------------------------------------------------
A. If the Borrower or any of its Subsidiaries shall create or assume or
suffer to exist any Lien upon any of its property or assets, whether now owned
or hereafter acquired, other than Liens excepted by the provisions of Section
6.1, it shall make or cause to be made effective provision whereby the
Obligations will be secured by such Lien equally and ratably with any and all
other Indebtedness thereby secured as long as any such Indebtedness shall be
secured; provided that, notwithstanding the foregoing, this covenant shall not
--------
be construed as a consent by the Requisite Banks to any creation or assumption
of any such Lien not permitted by the provisions of Section 6.1.
B. The Borrower shall not, and shall not permit any of its Subsidiaries
to, be a party to any agreement prohibiting, or amend any agreement to prohibit,
the creation or assumption of any Lien in favor of the Agent and the Banks upon
its properties or assets, whether now owned or hereafter acquired; provided,
--------
however, that the Borrower may incur Indebtedness otherwise permitted under this
-------
Agreement which provides that if the Obligations are at any time secured by a
Lien on the property or assets of the Borrower or any of its Subsidiaries, such
Indebtedness shall be secured by such Lien equally and ratably with the
Obligations.
5.6 INSPECTION; RECORDS, ETC.; CONFIDENTIALITY
------------------------------------------
A. The Borrower will permit any Persons designated by the Agent or by any
Bank to visit and inspect any of the properties of the Borrower and its
Subsidiaries including the Borrower and its Subsidiaries' financial and
accounting records, and to make copies and take extracts therefrom, and to
discuss their respective affairs, finances and accounts with their respective
officers and independent public accountants, all during regular business hours,
upon reasonable notice to the office of the chief financial officer or treasurer
of the Borrower and as often as may be reasonably requested.
B. The Agent and each Bank acknowledges that the Borrower is a public
company subject to the Securities Exchange Act of 1934, as amended from time to
time, and that in the course of complying with this Agreement, the Agent and
Banks may obtain material, non-public information and the Agent and each Bank
hereby agrees to exercise its best efforts to keep any non-public information
delivered or made available to the Agent or any such Bank pursuant to the Loan
Documents confidential from any Person other than Persons employed by or
retained by the Agent or such Bank who are or are expected to become engaged in
evaluating, approving, structuring or administering the Loans; provided, that
--------
nothing herein shall prevent any Bank from disclosing such information to any
bona fide assignee, transferee or participant who agrees to be bound by the
confidentiality provisions contained herein in connection with the contemplated
assignment or transfer of any Loans or participation therein (whether or not
such assignment, transfer or participation actually occurs), or as required or
requested by a governmental agency or representative thereof, or pursuant to
legal process or otherwise required by law, or as required in connection with
the exercise of any remedy under the Loan Documents; provided, however, that
-------- -------
this Section shall no longer apply to information which has become public other
than through a breach by the Agent or any Bank of this Section.
-48-
5.7 COMPLIANCE WITH LAWS, ETC.
--------------------------
The Borrower shall, and shall cause its Subsidiaries to, (i) comply with
all applicable laws, rules, regulations and orders of all governmental
authorities, noncompliance of which could materially adversely affect or impair
the Agent's or the Banks' rights, remedies or privileges under or enforceability
of this Agreement or any of the other Loan Documents, including, without
limitation, the Fair Labor Standards Act, and (ii) exercise all due diligence in
order to comply with the requirements of all other applicable laws, rules,
regulations and orders of any governmental authority (including without
limitation, all Hazardous Materials Laws), noncompliance with which could
reasonably be expected to result in a Material Adverse Effect.
5.8 FURTHER ASSURANCES
------------------
At any time or from time to time upon the request of any Bank, the Borrower
shall, and shall cause its Subsidiaries to, execute and deliver such further
documents and do such other acts and things as the Agent may reasonably request
in order to effect fully the purposes of this Agreement and each of the other
Loan Documents and to provide for payment of the Loans and interest thereon, in
accordance with the terms of this Agreement.
5.9 ENVIRONMENTAL NOTICE AND INSPECTION
-----------------------------------
The Borrower shall:
(i) comply and shall cause each of its Subsidiaries to comply, and
shall use its reasonable efforts in order to cause (a) all tenants under any
lease or occupancy agreement affecting any portion of any property owned,
used, leased or operated by the Borrower or any of its Subsidiaries and (b)
all other Persons on or occupying such property to comply in all material
respects, with all applicable Hazardous Materials Laws;
(ii) notify the Agent and the Banks in writing and in reasonable
detail, promptly, and in any event within thirty days of the Borrower or any
of its Subsidiaries receiving any of the following:
(a) written notice or claim to the effect that the Borrower or
any of its Subsidiaries is or may be liable to any Person as a result of
the Release or threatened Release or has or is in violation of any
Hazardous Materials Laws, in each case if the same is reasonably
expected to have a Material Adverse Effect;
(b) written notice that any real or personal property of the
Borrower or any of its Subsidiaries is subject to an Environmental Lien
on a material property; and
(c) written notice of the commencement of any judicial or
administrative proceeding or investigation alleging a violation of any
Hazardous Materials Laws or subjecting the Borrower or any of its
Subsidiaries to Environmental Liabilities and Costs, in each case if the
same is reasonably expected to have a Material Adverse Effect;
(iii) notify the Banks promptly and in any event within thirty days, of:
-49-
(a) any Release which is reasonably expected to have a Material
Adverse Effect and which is required to be reported to any federal,
state or local governmental or regulatory agency under any applicable
Hazardous Materials Laws;
(b) any and all written communications with respect to any
Environmental Liabilities and Costs that are reasonably expected to have
a Material Adverse Effect;
(c) any Remedial Action taken by the Borrower, any of its
Subsidiaries or any other Person in response to (1) any Hazardous
Materials on, under or about any property owned, used or operated by the
Borrower or any of its Subsidiaries, the existence of which is
reasonably expected to have a Material Adverse Effect or (2) any
Environmental Liabilities and Costs that are reasonably expected to have
a Material Adverse Effect;
(d) the Borrower's or any of its Subsidiaries' discovery of any
occurrence or condition on any real property adjoining any material
facility owned or operated by the Borrower or any of its Subsidiaries
that could reasonably be expected to cause such property to be subject
to any restrictions on the ownership, occupancy, transferability or use
thereof under any Hazardous Materials Laws;
(e) any mandatory request for information from any governmental
agency that indicates that such agency is investigating whether the
Borrower or any of its Subsidiaries may be potentially responsible for a
Release which Release is reasonably expected to have a Material Adverse
Effect; and
(f) any proposed acquisition of assets, real estate, or leasing
of property by the Borrower or any of its Subsidiaries that could
reasonably be expected to subject the Borrower or any of its
Subsidiaries to a Material Adverse Effect resulting from Environmental
Liabilities and Costs;
(iv) submit, upon reasonable written request by the Agent, a report
providing an update of the status of any environmental, health or safety
compliance, issue identified in any notice or report required pursuant to
this Section 5.9 and any other environmental, health or safety compliance
obligation, remedial obligation or liability that would reasonably be
expected to have a Material Adverse Effect.
SECTION 6. NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any portion of the
aggregate Commitments shall be in effect and until payment in full of all of the
Loans and all other amounts owing hereunder, unless the Requisite Banks shall
otherwise give prior written consent in accordance with Section 9.1 of this
Agreement, the Borrower shall perform all covenants in this Section 6.
6.1 LIENS
-----
The Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any property or asset of the Borrower or any of its
Subsidiaries, whether now owned or hereafter acquired, or any income or profits
therefrom, except:
-50-
(i) Permitted Liens;
(ii) Liens securing Indebtedness, provided, that the sum (without
--------
duplication) of the aggregate unpaid principal amount of all (A) Indebtedness
of Subsidiaries (excluding Indebtedness of the type described in Section
6.11A), plus (B) Indebtedness secured by such Liens, (C) Indebtedness
incurred in connection with, or related to, sale / leaseback transactions,
plus (D) Indebtedness related to Permitted Accounts Receivable Financing
Facilities exceeding 45% of the initial aggregate book value thereof does
not, at the time of incurrence thereof, exceed 20% of Consolidated Net
Worth.;
(iii) Liens in connection with Permitted Accounts Receivable Financing
Facilities to the extent permitted by Section 6.5(ii); and
(iv) Liens securing the Obligations so long as such Liens secure all
other senior debt of the Borrower and its Subsidiaries on an equal and
ratable basis to the extent required by such other senior debt.
6.2 INVESTMENTS
-----------
The Borrower will not, and will not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, except:
(i) the Borrower may make and own Investments in Cash and Cash
Equivalents;
(ii) the Borrower and its Subsidiaries may make and own Investments
consisting of the intercompany Indebtedness;
(iii) the Borrower and its Subsidiaries may make and own Investments in
newly formed wholly-owned Subsidiaries; and
(iv) the Borrower and its Subsidiaries may make and own Investments;
provided that (a) no Event of Default has occurred or Event of Default or
--------
Potential Event of Default would occur as a result of the making or the
owning of such Investment and (b) the amount of any one Investment or a group
of Investments related to the same transaction permitted pursuant to this
Section 6.2(iv) shall not exceed $150,000,000 without the consent of the
Requisite Banks in their sole discretion.
6.3 FINANCIAL COVENANTS
-------------------
A. MINIMUM CONSOLIDATED NET WORTH. The Borrower will not permit
Consolidated Net Worth on the last day of any fiscal quarter of the Borrower to
be less than the sum of (i) eighty percent (80%) of actual Consolidated Net
Worth at June 30, 1998, plus (ii) on a cumulative basis for each fiscal quarter
----
commencing with the fiscal quarter ending September 30, 1998, an amount equal to
fifty percent (50%) of positive Consolidated Net Income (without reduction for
any losses), if any, for such fiscal quarter, plus (iii) fifty percent (50%) of
----
the proceeds of any new equity securities issued by Borrower or any Affiliate
thereof after the Effective Date.
-51-
B. MAXIMUM CONSOLIDATED FUNDED INDEBTEDNESS TO TOTAL CAPITALIZATION
RATIO. (i) The Borrower will not permit its ratio of Consolidated Funded
Indebtedness to Total Capitalization on the last day of each fiscal quarter of
the Borrower to be more than 0.55 to 1.00. (ii) The Borrower will not permit its
ratio of Consolidated Senior Funded Indebtedness to Total Capitalization on the
last day of each fiscal quarter of the Borrower to be more than 0.45 to 1.00.
C. MINIMUM CONSOLIDATED INTEREST COVERAGE RATIO. The Borrower will not
permit its Consolidated Interest Coverage Ratio on the last day of any fiscal
quarter of the Borrower to be less than 2.00 to 1.00.
6.4 RESTRICTION ON FUNDAMENTAL CHANGES
----------------------------------
The Borrower will not, and will not permit any of its Subsidiaries to,
enter into any transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or acquire by
purchase or otherwise a division, business unit or all or substantially all of
the business, property or fixed assets of, or stock or other evidence of
beneficial ownership of, any Person, except:
(i) the Borrower may acquire by purchase or otherwise a division,
business unit or all or substantially all of the business, property or fixed
assets of, or acquire stock or other evidence of beneficial ownership of, any
Person; provided that:
--------
(a) no Event of Default or Potential Event of Default has occurred
and is continuing, or would occur as a result of such acquisition,
(b) the acquisition is of a Person engaged in, or assets utilized in, a
similar, or vertically integrated, line of business as that of the Borrower,
(c) if the consideration paid (including, without limitation,
liabilities incurred) for any one such acquisition or any series of
acquisitions related to the same transaction shall exceed $75,000,000, (A) on
a pro forma basis, after giving effect to the proposed acquisition, the
Consolidated Funded Indebtedness to Consolidated EBITDA Ratio shall not
exceed 3.5 to 1.0, and (B) the Borrower shall provide the Banks with a
Compliance Certificate demonstrating pro forma compliance with Section 6.3
hereof after giving effect to such acquisition, and
(d) the consideration paid (including, without limitation, liabilities
incurred) for any one such acquisition or any series of acquisitions related
to the same transaction shall not exceed $150,000,000 without the consent of
the Requisite Banks in their sole discretion; and
(ii) a wholly-owned Subsidiary of the Borrower or a Subsidiary of the
Borrower acquired pursuant to Section 6.4(i) may be merged or consolidated
with the Borrower; provided, that (a) the Borrower shall be the continuing or
--------
surviving corporation, and (b) no Event of Default or Potential Event of
Default has occurred and is continuing, or would occur as a result of such
merger or consolidation.
-52-
6.5 RESTRICTION ON ASSET SALES
--------------------------
The Borrower or any of its Subsidiaries will not convey, sell, lease,
sublease, transfer or otherwise dispose of, any of its assets, whether now owned
or hereafter acquired, except that the Borrower and its Subsidiaries may:
(i) sell or dispose of Inventory and worn-out, obsolete or surplus
equipment or property in the ordinary course of business;
(ii) enter into, or increase the amount of, Permitted Accounts
Receivable Financing Facilities; provided, that the aggregate Book Value of
--------
all accounts receivable sold or discounted through Permitted Accounts
Receivable Financing Facilities (net of collections which are retained by the
Borrower) will not exceed 60% of the Initial Aggregate Book Value of all
accounts receivable of the Borrower and its Subsidiaries; provided, further,
-------- -------
that the Book Value of accounts receivable sold or discounted through
Permitted Accounts Receivable Financing Facilities may exceed 45% of the
Initial Aggregate Book Value only to the extent permitted by Section 6.1(ii);
(iii) in addition to Asset Sales permitted pursuant to Section 6.5(i),
convey, sell, transfer or otherwise dispose of their respective assets if the
aggregate Book Value of Assets Sold of all such Asset Sales in any
consecutive twelve-month period of the Borrower does not exceed fifteen
percent (15%) of Consolidated Net Worth at any time; provided, however, that
-------- -------
Asset Sales where (A) the proceeds thereof are invested, or committed to be
invested, in the business of Borrower and its Subsidiaries within 180 days of
the receipt of such proceeds (and in the case of investments committed within
such 180 days, such proceeds are in fact invested within 270 days of the
receipt of such proceeds) or (B) are used to pay or prepay Consolidated
Funded Indebtedness to the extent thereof within 270 days of the receipt of
such proceeds, shall be excluded from the limitation set forth in this
Section 6.5(iii).
6.6 SALES AND LEASE-BACKS
---------------------
The Borrower will not, and will not permit any of its Subsidiaries,
directly or indirectly, to become or remain liable as lessee or as guarantor or
other surety with respect to any lease with any Person, whether an Operating
Lease or a Capital Lease, of any property (whether real or personal or mixed)
whether now owned or hereafter acquired, (i) which the Borrower or any of its
Subsidiaries has sold or transferred or is to sell or transfer to such Person or
such Person's Affiliate, or (ii) which the Borrower or any such Subsidiary
intends to use for substantially the same purpose as any other property which
has been or is to be sold or transferred by the Borrower or any such Subsidiary
to such Person or such Person's Affiliate in connection with such lease, except
that the Borrower and its Subsidiaries may enter into such transactions if:
(i) such lease is entered into less than 180 days after the
acquisition or occupancy of such property; and
(ii) the aggregate principal amount of (A) Indebtedness relating to
such leases plus (B) Indebtedness secured by any Lien on any property or
----
asset owned or held by Borrower or its Subsidiaries, regardless of whether
the Indebtedness secured thereby shall have been assumed by Borrower or its
Subsidiaries or is non-recourse does not exceed the limitation set forth in
Section
-53-
6.1(ii); provided, however, Indebtedness secured solely by Permitted Liens
-------- -------
and Indebtedness incurred in connection with sale-leaseback transactions
where (A) the proceeds thereof are invested, or committed to be invested, in
the business of Borrower and its Subsidiaries within 90 days of the receipt
of such proceeds (and in the case of investments committed within such 90
days, such proceeds are in fact invested within 180 days of such commitment)
or (B) are used to pay or prepay Consolidated Funded Indebtedness to the
extent thereof within 90 days of the receipt of such proceeds, shall be
excluded from the limitation set forth in this Section 6.6(ii).
6.7 TRANSACTIONS WITH STOCKHOLDERS AND AFFILIATES
---------------------------------------------
The Borrower will not, and will not permit any of its Subsidiaries to,
enter into any transaction (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service) with any
holder of 5% or more of any class of equity securities of the Borrower or with
any Affiliate of the Borrower or any such holder on terms that are less
favorable to the Borrower or any such Subsidiary than those which might be
obtained at the time from Persons who are not such a holder or Affiliate;
provided, however, that the Borrower may make sales to its wholly-owned
-------- -------
Subsidiaries on a basis consistent with past practices; provided, further, that
-------- -------
the Borrower may enter into such transactions with non-wholly-owned Subsidiaries
as long as the transactions are not, either individually or in the aggregate,
material to the Borrower.
6.8 CONDUCT OF BUSINESS
-------------------
The Borrower will not, and will not permit any of its Subsidiaries to,
engage in any business other than the business engaged in by it on the date
hereof and any businesses or activities substantially similar to, vertically
integrated with, or related thereto.
6.9 INDEPENDENCE OF COVENANTS
-------------------------
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or be otherwise within the
limitations of, another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or condition
exists.
6.10 USE OF PROCEEDS
---------------
The Borrower will not use all or any portion of the proceeds of any Loan
for any purpose other than the purposes set forth in Section 2.14.
6.11 SUBSIDIARY INDEBTEDNESS. The Borrower will not permit any
-----------------------
Subsidiary to at any time create, assume, incur or guarantee or otherwise be
liable for any Indebtedness other than:
A. Indebtedness of a Subsidiary acquired after the Effective Date that is
outstanding at the time of the respective acquisition, but only if the principal
amount of such Indebtedness was not increased immediately prior to such
acquisition or thereafter; and
-54-
B. unsecured Indebtedness not otherwise permitted pursuant to clause (A)
above, provided, that the sum (without duplication) of the aggregate unpaid
--------
principal amount of all (i) Indebtedness of Subsidiaries (excluding Indebtedness
of the type described in clause (A) above), plus (ii) Indebtedness secured by
Liens, plus (iii) Indebtedness incurred in connection with, or related to, sale
/ leaseback transactions, plus (iv) Indebtedness related to Permitted Accounts
Receivable Financing Facilities exceeding 45% of the initial aggregate book
value thereof does not, at the time of incurrence thereof, exceed 20% of
Consolidated Net Worth.
SECTION 7. EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default") shall
occur and be continuing:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE
---------------------------------
The Borrower shall fail to pay any principal of any Loan or shall fail to
pay any other amount due under this Agreement (other than interest on the Loans
and fees due to the Banks hereunder) when the same becomes due and payable; or
the Borrower shall fail to pay any interest on any Loan or shall fail to pay any
fees due to the Banks under this Agreement within three (3) Business Days after
the same becomes due and payable; or
7.2 BREACH OF WARRANTY
------------------
Any representation or warranty made or deemed made by the Borrower (or any
of its officers) in this Agreement or any of the other Loan Documents or
certificate or other writing delivered pursuant hereto or thereto shall prove to
have been incorrect or misleading in any material respect when made or deemed
made; or
7.3 BREACH OF COVENANTS
-------------------
The Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 6; or the Borrower shall fail to perform or
observe any other term, covenant or agreement contained in this Agreement or any
of the other Loan Documents on its part to be performed or observed if such
failure shall remain unremedied or unwaived for thirty (30) days after written
notice thereof shall have been given to the Borrower by the Agent; or
-55-
7.4 BREACH OF OTHER AGREEMENTS
--------------------------
The Borrower shall fail to pay any portion of principal of or premium or
interest on any item or items of Indebtedness, which Indebtedness is in an
individual or aggregate principal amount greater than $12,000,000 (but excluding
Indebtedness outstanding hereunder), or shall fail to pay any portion of one or
more Contingent Obligations, which Contingent Obligations are in an individual
or aggregate principal amount greater than $12,000,000, when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise), and such failure shall continue unwaived
after the applicable grace period, if any, specified in the agreement or
instrument relating to such Indebtedness or Contingent Obligation; or any other
event shall occur or condition shall exist under any agreement or instrument
relating to any such Indebtedness or Contingent Obligation 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, or to
permit the acceleration of, the maturity of such Indebtedness or Contingent
Obligation; or any such Indebtedness or Contingent Obligation 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; or
7.5 BANKRUPTCY
----------
(i) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Borrower or any of its Principal
Subsidiaries in an involuntary case under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect, which decree or
order remains unstayed or undischarged for 60 days; or any other similar
relief shall be granted under any applicable federal or state law and remains
unstayed or undischarged for 60 days; or
(ii) an involuntary case is commenced against the Borrower or any of
its Principal Subsidiaries under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect; or a decree or order of a court
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having similar
powers over the Borrower or any Principal Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or there shall be
the involuntary appointment of an interim receiver, trustee or other
custodian of the Borrower or any Principal Subsidiaries for all or a
substantial part of its property; or there shall be the issuance of a warrant
of attachment, execution or similar process against any substantial part of
the property of the Borrower or any of its Principal Subsidiaries, and the
continuance of any such event referred to in this clause (ii) for sixty (60)
days unless dismissed, bonded or discharged; or
(iii) the Borrower or any of its Principal Subsidiaries shall commence
a voluntary case under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to
a voluntary case, under any such law, or shall consent to the appointment of
or taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property or shall make any assignment for the benefit
of creditors; or
-56-
(iv) the Borrower or any of its Principal Subsidiaries shall fail, be
unable, or admit its inability to pay its debts as such debts become due; or
the Board of Directors of the Borrower or any of its Principal Subsidiaries
(or any committee thereof) adopts any resolution to approve or otherwise
authorizes any of the actions referred to in clause (iii) above or this
clause (iv); or
7.6 JUDGMENTS
---------
Any unpaid judgments, orders for the payment of money (other than judgments
and orders covered by insurance, but only if the insurer has admitted liability
with respect to such judgments and orders), writs or warrants of attachment
involving amounts in excess of $5,000,000 in the aggregate shall be entered or
filed against any of the Borrower or any of its Principal Subsidiaries and shall
remain undischarged, unvacated, unbonded, unappealed or unstayed for a period of
thirty (30) days or in any event later than thirty (30) days prior to any sale
under any such judgment, order, writ or warrant; or
7.7 DISSOLUTION
-----------
Any order, judgment or decree shall be entered against the Borrower or any
of its Principal Subsidiaries decreeing the dissolution or split up of the
Borrower or any of its Principal Subsidiaries and such order shall remain
undischarged or unstayed for a period in excess of thirty (30) days; or
7.8 ERISA
-----
There occurs one or more ERISA Events which individually or in the
aggregate results in or might reasonably be expected to result in liability of
the Borrower or any of its ERISA Affiliates in excess of $5,000,000 during the
term of this Agreement; or there exists, an amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the
aggregate for all Pension Plans (excluding for purposes of such computation any
Pension Plans with respect to which assets exceed benefit liabilities) which
exceeds $5,000,000 for thirty (30) consecutive days; or
7.9 CONTROL OF THE BORROWER
-----------------------
Any Person or two or more Persons acting in concert shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities and Exchange Act of 1934, as amended),
directly or indirectly, of securities of the Borrower (or other securities
convertible into such securities) representing 20% or more of the combined
voting power of all securities of the Borrower entitled to vote in the election
of directors, other than securities having such power only by reason of the
happening of a contingency; provided, however, that The ▇▇▇ ▇▇▇▇▇▇ Foundation
-------- -------
and Persons acting in concert with The ▇▇▇ ▇▇▇▇▇▇ Foundation may acquire an
aggregate beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities and Exchange Act of
1934, as amended), directly or indirectly, of securities of the Borrower (or
other securities convertible into such securities) representing up to 49% of the
combined voting power of all securities of the Borrower entitled to vote in the
election of directors, other than securities having such power only by reason of
the happening of a contingency;
THEN, and in any such event, the Agent shall at the request, or may with
the consent, of the Requisite Banks, (i) by notice to the Borrower, declare the
Commitments to be terminated,
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whereupon the same shall forthwith terminate, (ii) by notice to the Borrower,
declare (a) the Loans and all interest thereon and (b) all other amounts payable
under this Agreement or any of the other Loan Documents to be forthwith due and
payable, whereupon the Loans, all such interest and all such amounts shall
become and be forthwith due and payable, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived by the
Borrower; and (iii) exercise any other remedies provided under this Agreement or
by law; provided that in the event of an Event of Default under Section 7.5, (A)
--------
the Commitments shall automatically be terminated and (B) the Loans, all
interest and all such amounts shall automatically become and be due and payable,
without presentment, demand, protest or any notice of any kind, all of which are
hereby expressly waived by the Borrower.
Upon acceleration, the Banks and the Agent, or any of them, without notice
to or demand upon the Borrower which are expressly waived by the Borrower, may
proceed (but only with the consent of Requisite Banks) to protect, exercise, and
enforce their rights and remedies under this Agreement and such other rights and
remedies as are provided by law or equity. Requisite Banks may determine in
their sole discretion the order and manner in which the Banks' rights and
remedies are to be exercised, and all payments received by the Agent or the
Banks, or any one or more of them, shall be applied as follows (regardless of
how each Bank may treat the payments for the purpose of its own accounting);
first, to all costs and expenses (including, without limitation, Attorney Costs)
-----
incurred by the Agent or the Banks, or any of them, in enforcing any Obligations
of, or in collecting any payments due from, the Borrower hereunder by reason of
such Event of Default; second, to all fees and expenses due and owing to the
------
Agent or the Banks, third, ratably to accrued interest; fourth, ratably to
----- ------
principal amounts outstanding; fifth, to other Obligations then due and owing
-----
under this Agreement and each of the other Loan Documents; and sixth to
-----
whomsoever shall be lawfully entitled to receive such funds.
Notwithstanding anything to the contrary contained in this Section, if any
Bid Loan Bank shall suffer an Event of Default under Section 7.1 due to the
Borrower's failure to pay any amount of principal on or interest on any Bid
Loan, such Bid Loan Bank may send a written request to the Agent to obtain
approval of the Requisite Banks to terminate the Commitments and, if such
approval is not obtained within ten (10) Business Days after the date such
request is received, the affected Bid Loan Bank (or assignee) may commence
enforcement of such default by any and all legal means.
SECTION 8. THE AGENT
8.1 AUTHORIZATION AND APPOINTMENT
-----------------------------
Each Bank hereby irrevocably appoints, designates and authorizes the Agent
to take such action on its behalf under the provisions of this Agreement and
each other Loan Document and to exercise such powers and perform such duties as
are expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
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8.2 DELEGATION OF DUTIES
--------------------
The Agent may execute any of its duties under this Agreement or any other
Loan Document by or through agents, employees or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agent shall not be responsible for the negligence or misconduct of any agent
or attorney-in-fact that it selects with reasonable care.
8.3 LIABILITY OF AGENT
------------------
None of the Agent-Related Persons shall (i) be liable for any action taken
or omitted to be taken by any of them under or in connection with this Agreement
or any other Loan Document or the transactions contemplated hereby (except for
its own gross negligence or willful misconduct), or (ii) be responsible in any
manner to any of the Banks for any recital, statement, representation or
warranty made by the Borrower or any Subsidiary or Affiliate of the Borrower, or
any officer thereof, contained in this Agreement or in any other Loan Document,
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Agent under or in connection with, this
Agreement or any other Loan Document, or the validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document, or for any failure of the Borrower or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Bank to ascertain or to inquire as
to the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of the Borrower or any of the Borrower's
Subsidiaries or Affiliates.
8.4 RELIANCE BY AGENT
-----------------
A. The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telegram, facsimile, telex or telephone message, statement or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and upon advice and
statements of legal counsel (including counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Requisite Banks as it deems appropriate and, if it so requests, it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement or any
other Loan Document in accordance with a request or consent of the Requisite
Banks and such request and any action taken or failure to act pursuant thereto
shall be binding upon all of the Banks.
B. For purposes of determining compliance with the conditions specified
in Section 3.1, each Bank that has executed this Agreement shall be deemed to
have consented to, approved or accepted or to be satisfied with, each document
or other matter either sent by the Agent to such Bank for consent, approval,
acceptance or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to the Bank.
8.5 NOTICE OF DEFAULT
-----------------
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The Agent shall not be deemed to have knowledge or notice of the occurrence
of any Potential Event of Default or Event of Default, except with respect to
defaults in the payment of principal, interest and fees required to be paid to
the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Borrower referring to this Agreement,
describing such Potential Event of Default or Event of Default and stating that
such notice is a "notice of default". The Agent will notify the Banks of its
receipt of any such notice. The Agent shall take such action with respect to
such Potential Event of Default or Event of Default as may be requested by the
Requisite Banks in accordance with Section 7; provided, however, that unless and
-------- -------
until the Agent has received any such request, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Potential Event of Default or Event of Default as it shall deem
advisable or in the best interest of the Banks.
8.6 CREDIT DECISION
---------------
Each Bank acknowledges that none of the Agent-Related Persons has made any
representation or warranty to it, and that no act by the Agent hereinafter
taken, including any review of the affairs of the Borrower and its Subsidiaries,
shall be deemed to constitute any representation or warranty by any Agent-
Related Person to any Bank. Each Bank represents to the Agent that it has,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, prospects, operations,
property, financial and other condition and creditworthiness of the Borrower and
its Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Borrower hereunder. Each Bank also
represents that it will, independently and without reliance upon any Agent-
Related Person and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Borrower. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of the
Borrower which may come into the possession of any of the Agent-Related Persons.
8.7 INDEMNIFICATION
---------------
Whether or not the transactions contemplated hereby are consummated, the
Banks shall indemnify upon demand the Agent-Related Persons (to the extent not
reimbursed by or on behalf of the Borrower and without limiting the obligation
of the Borrower to do so), pro rata, from and against any and all Indemnified
Liabilities; provided, however, that no Bank shall be liable for the payment to
-------- -------
the Agent-Related Persons of any portion of such Indemnified Liabilities
resulting solely from such Person's gross negligence or willful misconduct.
Without limitation of the foregoing, each Bank shall reimburse the Agent upon
demand for its ratable share of any reasonable costs or out-of-pocket expenses
(including all fees and disbursements of any law firm or other external counsel,
the allocated cost of internal legal services and all disbursements of internal
counsel) incurred by the Agent in connection with the preparation, execution,
delivery, administration, modification,
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amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Agent is not reimbursed for such
expenses by or on behalf of the Borrower. The undertaking in this Section shall
survive the payment of all Obligations hereunder and the resignation or
replacement of the Agent.
8.8 AGENT IN INDIVIDUAL CAPACITY
----------------------------
BofA and its Affiliates may make loans to, issue letters of credit for the
account of, accept deposits from, acquire equity interests in and generally
engage in any kind of banking, trust, financial advisory, underwriting or other
business with the Borrower and its Subsidiaries and Affiliates as though BofA
were not the Agent hereunder and without notice to or consent of the Banks. The
Banks acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding the Borrower or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Borrower or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, BofA
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, and the terms "Bank" and
"Banks" include BofA in its individual capacity.
8.9 SUCCESSOR AGENT
---------------
The Agent may, and at the request of the Requisite Banks shall, resign as
Agent upon 30 days' notice to the Banks. If the Agent resigns under this
Agreement, the Requisite Banks shall appoint from among the Banks a successor
agent for the Banks, which successor agent shall be subject to the reasonable
approval of Borrower. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may appoint, after consulting
with the Banks and the Borrower, a successor agent from among the Banks. Upon
the acceptance of its appointment as successor agent hereunder, such successor
agent shall succeed to all the rights, powers and duties of the retiring Agent
and the term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Section 8 and
Sections 9.4 and 9.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the Banks shall
perform all of the duties of the Agent hereunder until such time, if any, as the
Requisite Banks appoint a successor agent as provided for above.
8.10 WITHHOLDING TAX
---------------
A. If any Bank is a "foreign corporation, partnership or trust" within the
meaning of the Code and such Bank claims exemption from, or a reduction of, U.S.
withholding tax under Sections 1441 or 1442 of the Code, such Bank agrees with
and in favor of the Agent, to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS
Forms 1001 and W-8 before the payment of any
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interest in the first calendar year and before the payment of any interest in
each third succeeding calendar year during which interest may be paid under
this Agreement;
(ii) if such Bank claims that interest paid under this Agreement is
exempt from United States withholding tax because it is effectively connected
with a United States trade or business of such Bank, two properly completed
and executed copies of IRS Form 4224 before the payment of any interest is
due in the first taxable year of such Bank and in each succeeding taxable
year of such Bank during which interest may be paid under this Agreement, and
IRS Form W-9; and
(iii) such other form or forms as may be required under the Code or
other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
B. If any Bank claims exemption from, or reduction of, withholding tax
under a United States tax treaty by providing IRS Form 1001 and such Bank sells,
assigns, grants a participation in, or otherwise transfers all or part of the
Obligations of the Borrower to such Bank, such Bank agrees to notify the Agent
of the percentage amount in which it is no longer the beneficial owner of
Obligations of the Borrower to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
C. If any Bank claiming exemption from United States withholding tax by
filing IRS Form 4224 with the Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations of the Borrower to such
Bank, such Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
D. If any Bank is entitled to a reduction in the applicable withholding
tax, the Agent may withhold from any interest payment to such Bank an amount
equivalent to the applicable withholding tax after taking into account such
reduction. If the forms or other documentation required by Section (a) of this
Section are not delivered to the Agent, then the Agent may withhold from any
interest payment to such Bank not providing such forms or other documentation an
amount equivalent to the applicable withholding tax.
E. If the IRS or any other Governmental Authority of the United States or
other jurisdiction asserts a claim that the Agent did not properly withhold tax
from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered, was not properly executed, or because such Bank failed
to notify the Agent of a change in circumstances which rendered the exemption
from, or reduction of, withholding tax ineffective, or for any other reason)
such Bank shall indemnify the Agent fully for all amounts paid, directly or
indirectly, by the Agent as tax or otherwise, including penalties and interest,
and including any taxes imposed by any jurisdiction on the amounts payable to
the Agent under this Section, together with all costs and expenses (including
all fees and disbursements of any law firm or other external counsel, the
allocated cost of internal legal services and all disbursements of internal
counsel). The obligation of the Banks under this Section shall survive the
payment of all Obligations and the resignation or replacement of the Agent.
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Each Bank hereby irrevocably appoints, designates and authorizes BofA to
act as the Agent under this Agreement and each of the other Loan Documents and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement and each of the other Loan Documents as are
expressly delegated to the Agent by the terms hereof, together with such powers
as are reasonably incidental thereto. As to any matters not expressly provided
for by this Agreement and the other Loan Documents (including, without
limitation, enforcement or collection of this Agreement), the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of Requisite Banks, and such
instructions shall be binding upon all Banks; provided 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 or any of the other Loan Documents or
applicable law. The Agent shall not by reason of this Agreement or any of the
other Loan Documents have a fiduciary relationship with any Bank. The Agent
agrees to give to each Bank prompt notice of each notice given to it by the
Borrower pursuant to the terms of this Agreement and any of the other Loan
Documents and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Agent.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS, ETC. No amendment or waiver of any provision of this
----------------
Agreement nor consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Requisite Banks, the Borrower and the Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided that no amendment, waiver or consent shall, unless in
--------
writing and signed by all the Banks and the Agent, do any of the following: (a)
increase the Commitments of the Banks or subject the Banks to any additional
obligations, (b) reduce the principal of, or interest on, the Loans or any fees
or other amounts payable hereunder, (c) extend the final scheduled maturity date
of the Loans, (d) change the percentage of the Commitments or of the aggregate
unpaid principal amount of the Loans, or the number of Banks, which shall be
required for the Banks or any of them to take any action hereunder or (e) amend
this Section 9.1 or the definition of Requisite Banks; and provided, further,
-------- -------
that no amendment, waiver or consent shall, unless in writing and signed by the
Agent in addition to the Banks required above to take such action, shall affect
the rights or duties of the Agent under this Agreement or any other Loan
Document. Notwithstanding the foregoing, each Bid Loan Bank may, in its sole
discretion, if there exists no Potential Event of Default or Event of Default,
and without the consent or signature of the Agent or any other Bank (provided,
however, that prompt notice thereof is provided by such Bid Loan Bank to the
Agent), accept any prepayment on account of any such Bid Loan Bank's Bid Loans.
No notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances. Any
amendment, modification, termination, waiver or consent effected in accordance
with this Section 9.1 shall be binding upon each holder of any Indebtedness
resulting from the making of Loans hereunder at the time outstanding, each
future holder of any such Indebtedness, and if signed by the Borrower, on the
Borrower.
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9.2 NOTICES, ETC.
-------------
All notices and other communications provided for hereunder shall be in
writing (including letter, telegraph, telex, facsimile transmission or cable
communication) and mailed, telegraphed, telexed, cabled or delivered. For the
purposes hereof, the addresses of the parties named on the signature pages
hereto shall be as set forth under each party's name on the signature pages
hereto (or with respect to any Bank not listed on the signature pages hereto, at
the address specified for such Bank in the Assignment and Acceptance pursuant to
which it became a Bank) or, as to the Borrower or the Agent, at such other
address as shall be designated by such party in a written notice to the other
parties and, as to each other party, at such other address as shall be
designated by such party in a written notice to the Borrower and the Agent. All
such notices and communications shall, when mailed, when delivered by courier or
in person, telegraphed, telexed, telecopied or cabled, be effective three days
after mailing, when delivered, when delivered to the telegraph company, when
confirmed by telex answerback, when received by telecopy by the Agent or when
delivered to the cable company, respectively, except that notices and
communications to the Agent pursuant to Section 2 or 8 shall not be effective
until received by the Agent.
9.3 NO WAIVER; REMEDIES
-------------------
No failure on the part of any Bank or the Agent to exercise, and no delay
in exercising, any right hereunder 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.
9.4 COSTS AND EXPENSES
------------------
Whether or not the transactions contemplated hereby shall be consummated,
the Borrower agrees to pay on demand all reasonable costs and expenses incurred
by the Agent and the Arranger in connection with the syndication, preparation,
execution, delivery, administration, modification and amendment of this
Agreement, each of the other Loan Documents and the other documents (including
travel costs and other expenses and Attorney Costs) to be delivered under this
Agreement. In addition, the Borrower agrees to pay on demand, all reasonable
costs and expenses of each Bank and the Agent, if any (including, without
limitation, appraisal, valuation, audit and consulting costs and expenses and
Attorney Costs, independent accounting firms or other experts for the Agent and
local counsel who may be retained by such counsel) in connection with the
enforcement (whether through negotiations, legal proceedings or otherwise
including in connection with any "workout" or restructuring regarding the Loans,
and including in any Insolvency Proceeding or appellate proceeding) of this
Agreement, each of the other Loan Documents and the other documents to be
delivered under this Agreement, or in connection with any refinancing or
restructuring of the credit arrangement provided under this Agreement in the
nature of a "workout" or of any insolvency or bankruptcy proceeding.
9.5 INDEMNIFICATION
---------------
The Borrower agrees to pay, and on demand to indemnify and hold harmless
the Agent and each Bank and their respective Affiliates, and each of their
respective successors, assigns, directors, officers, employees, servants,
attorneys and agents (collectively, the "Indemnitees") from and against
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any and all claims, including claims based on strict liability in tort, damages,
losses, liabilities, demands, suits, Attorney Costs, judgments, causes of action
and all legal proceedings, whether civil, criminal, administrative or in
arbitration, whether or not such Indemnitee is a party thereto, penalties, fines
and other sanctions and expenses, including, without limitation, reasonable fees
and disbursements of counsel, which may be imposed on, incurred by or asserted
against any Indemnitee:
(i) by reason of any inaccuracy in any material respect, or any
untrue statement or alleged untrue statement of any material fact, made in
any report, exhibit or publication in connection with the effectiveness of
this Agreement or any other Loan Document, the incurrence of the Indebtedness
hereunder and the transactions contemplated hereby, or by reason of the
omission or alleged omission to state therein a material fact necessary to
make such statements, in the light of the circumstances under which they were
made, not misleading;
(ii) by reason of or in connection with the execution, delivery,
performance, administration or enforcement of this Agreement or any other
Loan Document or any proposal, fee, or commitment letter relating thereto, or
any transaction contemplated by this Agreement;
(iii) arising under or pursuant to any Hazardous Materials Laws
relating to the business, operations or properties of the Borrower;
(iv) arising out of or relating to Borrower's managing a Borrower
Auction; or
(v) arising out of or relating to the use of proceeds of the Loans;
(collectively, the "Indemnified Liabilities"); provided that the Borrower
--------
shall not be liable to any Indemnitee for (a) any portion of such claims,
damages, liabilities and expenses that a court of competent jurisdiction shall
have determined by a judgment to have directly resulted from such Indemnitee's
gross negligence or willful misconduct, (b) any settlement by such Indemnitee of
any claim or action involving the payment of monetary damages effected without
the consent of the Borrower, which consent shall not be unreasonably withheld;
provided, that such consent shall not be required if such Indemnitee determines
--------
in good faith on advice of counsel that such settlement is advisable to avoid
fines or other penalties (whether or not monetary) adverse to the interests of
such Indemnitee, (c) any claims, damages, liabilities and expenses directly
resulting from a claim by the Borrower against the Agent or any Bank and (d) any
claims, damages, liabilities and expenses directly resulting from a claim by the
Agent against a Bank or by a Bank against the Agent or another Bank which claim
did not, directly or indirectly, arise out of any actions taken, or any failure
to take action, by the Borrower or any of its Subsidiaries. To the extent that
the undertaking to indemnify, pay and hold harmless set forth in the immediately
preceding sentence may be unenforceable because it is violative of any law or
public policy, the Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law to the payment and
satisfaction of all indemnified liabilities incurred by the Indemnitees or any
of them.
If the Borrower is so requested by the Indemnitees, or the Borrower so
elects, the Borrower will assume the defense of any action or proceeding for
which the Borrower is required to indemnify the Indemnitees pursuant to this
Section 9.5, including the employment of counsel reasonably satisfactory to the
Indemnitees and the payment of the fees and disbursements of such counsel. In
any action or proceeding with respect to which the Borrower has assumed the
defense of such
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proceeding pursuant to this Section, an Indemnitee will have the right to
participate in such litigation and to retain its own counsel at such party's own
expense. In any such action or proceeding, the Borrower shall at all times use
reasonable efforts to keep the Indemnitees apprised of the status of such action
or proceeding.
9.6 BINDING EFFECT
--------------
This Agreement shall become effective when it shall have been executed by
the Borrower, the Agent and the Banks and thereafter shall be binding upon and
inure to the benefit of the Borrower, the Agent, each Bank and their respective
successors and assigns permitted under Section 9.7, except that the Borrower
shall not have the right to assign its rights hereunder or any interest herein
without the prior written consent of the Banks.
9.7 ASSIGNMENTS AND PARTICIPATIONS
------------------------------
A. Each Bank may assign to one or more banks all or a portion of its
rights and obligations under this Agreement (other than its rights in respect of
Bid Loans); provided that (i) no assignment shall, without the consent of the
--------
Borrower, require the Borrower to file a registration statement with the SEC or
apply to qualify the Loans under the blue sky laws of any state, (ii) each such
assignment by a Bank shall be of a constant, and not a varying, percentage of
all of the assigning Bank's rights and obligations under this Agreement with
respect to the Loans (other than Bid Loans) and Commitments, (iii) the amount of
the Commitments or Loans of the assigning Bank being assigned pursuant to each
such assignment (determined as of the date of the Assignment and Acceptance with
respect to such assignment) shall unless such assignment is to a Bank or an
Affiliate of a Bank in no event be less than $5,000,000; provided that the
--------
amount of the Commitment and the amount of the Loans of the assigning Bank being
assigned may be in an amount equal to such assigning Bank's entire Commitments
and such Bank's entire outstanding Loans, (iv) each such assignment shall be to
an Eligible Assignee and (except for an Eligible Assignee that is a Bank or an
Affiliate of a Bank) shall be consented to in advance in writing by the Agent
and the Borrower, and (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 a processing and recordation fee from
the assignor of $3,500. Upon such execution, delivery, acceptance and
recording, from and after the later of the effective date specified in each
Assignment and Acceptance and the date of acceptance thereof by the Agent, (x)
the assignee thereunder shall be a party hereto 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 (y) the
Bank assignor 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 an assigning Bank's rights and obligations under this Agreement, such
Bank shall cease to be a party hereto). Any Bank may at any time pledge all or
any portion of its rights relating to the Loans made under this Agreement to a
Federal Reserve Bank or an Affiliate of such Bank; provided that no such pledge
--------
shall release such Bank from its obligations hereunder.
B. By executing and delivering an Assignment and Acceptance, the Bank
assignor 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 assigning
-66-
Bank assigns without recourse and 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 any other Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto; (ii) such assigning Bank makes
no representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under this Agreement or any other Loan
Document or any other instrument or document furnished pursuant hereto or
thereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the financial statements referred to in
Section 4.3 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 assigning 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 confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agent to take such action as the 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 (vii) 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 Agent shall maintain at its address referred to in Section 9.2 a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register (the "Register") for the recordation of the names and addresses of the
Banks. The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Banks may
treat each Person whose name is recorded in the Register as a Bank hereunder for
all purposes of this Agreement. Failure to make recordation in the Register, or
any error on such recordation, shall not affect the Borrower's obligations in
respect of such Loans. The Register shall be available for inspection by the
Borrower, the Agent or any Bank at any reasonable time and from time to time
upon reasonable prior notice.
D. Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee representing that it is an Eligible Assignee, the
Agent shall, if such Assignment and Acceptance has been completed and is in
substantially the form of EXHIBIT III annexed hereto, and subject to receipt of
the written consent of the Borrower and the Agent, if required hereby, (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrower.
E. 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
and the Loans owing to it); provided, that (i) no participation shall, without
--------
the consent of the Borrower, require the Borrower to file a registration
statement with the SEC or apply to qualify the Loans under the blue sky laws of
any state, (ii) such Bank's obligations under this Agreement (including, without
limitation, its Commitment to the Borrower hereunder) shall remain unchanged,
(iii) such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iv) the Borrower, the Agent and the other
Banks shall continue to deal solely and directly with such Bank in connection
with such Bank's rights and obligations
-67-
under this Agreement, and (v) no Bank shall sell any participation under which
the participant shall have rights to approve any amendment or waiver of this
Agreement or any other Loan Document except to the extent such amendment or
waiver would (a) extend the final scheduled maturity date of the Loans , (b)
reduce the principal of, or interest on, the Loans or any fees or other amounts
payable hereunder, or (c) increase the Commitment of any such participant.
F. Any Bank may, in connection with any assignment or participation or
proposed assignment or participation pursuant to this Section 9.7, disclose to
the assignee or participant or proposed assignee or participant, any information
relating to the Borrower furnished to such Bank by or on behalf of the Borrower;
provided that, prior to any such disclosure, the assignee or participant or
--------
proposed assignee or participant shall agree to preserve the confidentiality of
any confidential information relating to the Borrower received by it from such
Bank.
G. Any Bank may, by notice to the Agent and the Borrower, request that
all or part of the principal amount of the Borrower's Obligations to such Bank
in respect of the Commitments and/or Bid Loans hereunder be evidenced by a
Committed Loan Note and/or Bid Loan Note, as applicable. Within three (3)
Business Days of the Borrower's receipt of such request, the Borrower shall
execute and deliver to the applicable Bank a Note or Notes in the principal
amount(s) specified in such request, payable to the requesting Bank or, if so
specified in such request, any Person who is an assignee of such Bank pursuant
to this Section 9.7.
9.8 SEVERABILITY
------------
In case any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
9.9 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS
---------------------------------------------
A. All agreements, representations and warranties made herein shall
survive the execution and delivery of this Agreement, the making of the Loans
hereunder and, except as set forth in Section 9.9B, terminate upon the
indefeasible payment in full of the Obligations.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of the Borrower set forth in Sections 2.10, 2.11, 9.4
and 9.5 shall survive the payment of the Loans for a period of one (1) year
after the termination of this Agreement.
9.10 HEADINGS
--------
Section and Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
-68-
9.11 APPLICABLE LAW; JURISDICTION; WAIVER OF JURY TRIAL
--------------------------------------------------
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES. The Banks retain all of their rights under
federal law, including those relating to interest rates. The Borrower and each
Bank hereby submits to the non-exclusive jurisdiction of the state courts of the
State of California and the federal courts located in the State of California
for all matters arising under this Agreement and related documents. Service of
process sufficient for personal jurisdiction in any action against the Borrower
in California may be made by registered or certified mail, return receipt
requested, to the address specified pursuant to Section 9.2.
THE BORROWER, THE AGENT AND THE BANKS HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM RELATING TO THE
SUBJECT MATTER OF THIS LOAN TRANSACTION AND THE BANK/BORROWER RELATIONSHIP THAT
IS BEING ESTABLISHED. The scope of this waiver is intended to be all-
encompassing of any and all disputes that may be filed in any court and that
relate to the subject matter of this transaction, including without limitation,
contract claims, tort claims, breach of duty claims, and all other common law
and statutory claims. The Agent, the Banks and the Borrower each acknowledge
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on the waiver in entering into this Agreement, and
that each will continue to rely on the waiver in their related future dealings.
The Agent, the Banks and the Borrower further warrant and represent that each
has reviewed this waiver with its legal counsel, and that each knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE LOAN. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
9.12 EXECUTION IN COUNTERPARTS; EFFECTIVENESS
----------------------------------------
This Agreement and any amendments, waivers, consents, or supplements may be
executed in any number of counterparts, and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.
9.13 OBLIGATIONS SEVERAL
-------------------
The obligation of each Bank hereunder is several, and no Bank shall be
responsible for the obligation or commitment of any other Bank hereunder.
Nothing contained in this Agreement and no action taken by the Banks pursuant
hereto shall be deemed to constitute the Banks to be a partnership, an
association, a joint venture or any other kind of entity.
-69-
9.14 COMPLETE AGREEMENT
------------------
This written Agreement, together with the exhibits to this Agreement and
other documents described herein is intended by the parties as a final
expression of their agreement and is intended as a complete statement of the
terms and conditions of their agreement.
WITNESS the due execution hereof by the respective duly authorized officers
of the undersigned as of the date first written above.
BORROWER:
CALMAT CO.
By __________________________________________
Name ________________________________________
Title _______________________________________
-▇▇-
▇▇▇▇▇:
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Agent
By __________________________________________
▇▇▇▇ ▇▇▇▇▇▇
Vice President
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, AS A BANK
By __________________________________________
▇▇▇▇ ▇▇▇▇
Vice President
-71-
THE FIRST NATIONAL BANK OF CHICAGO
By _________________________________________
Name _______________________________________
Title ______________________________________
-72-
▇▇▇▇▇ FARGO BANK, N.A.
By _________________________________________
Name _______________________________________
Title ______________________________________
-73-
EXHIBIT I
FORM OF NOTICE OF BORROWING
Pursuant to that certain Credit Agreement dated as of September 4, 1998
(such Agreement, as it may be amended, supplemented, restated or otherwise
modified from time to time, the "Credit Agreement"; capitalized terms used
herein without definition shall have the meanings set forth in the Credit
Agreement), by and among CALMAT CO., a Delaware corporation (the "Borrower"),
the Banks party thereto and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("BofA"), as agent for the Banks (the "Agent"), this notice
represents the Borrower's request to borrow on ___________________, ______ from:
[COMMITTED LOANS] Banks on a pro rata basis an aggregate amount of
$________________ as [Base/CD/Eurodollar] Rate Loans.
[The initial Interest Period for such Borrowing is
requested to be a ________ [month/day] period.]
[BID LOANS] [INSERT NAME OF BANK(S)] an aggregate principal amount
of offers accepted, $_____________, as Bid Loans for the
Interest Periods set forth in the copy of the
Competitive Bid Request annexed hereto.
The proceeds of such Loans are to be deposited in the Borrower's account,
Account No. ______________________, at _________________________________.
The undersigned officer, to the best of such officer's knowledge, and the
Borrower, certify that (i) the undersigned has read Sections 3.1. and 3.2 of the
Credit Agreement and any definitions or other provisions contained in the Credit
Agreement relating thereto (the "Conditions Precedent"), and have made or caused
to be made such examination or investigation as is necessary to enable him or
her to express an informed opinion as to whether or not the Conditions Precedent
have been complied with and that, in his or her opinion, each of the Conditions
Precedent has been complied with and (ii) the amount of the proposed Borrowing
when added to the aggregate principal amount of outstanding Loans immediately
prior to such Borrowing will not exceed the Commitments then in effect.
DATED: ___________________
CALMAT CO.
By________________________________
Name______________________________
Title_____________________________
I-1
Form of Notice of Borrowing
EXHIBIT II
FORM OF NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Credit Agreement dated as of September 4, 1998
(such Agreement, as it may be amended, supplemented, restated or otherwise
modified from time to time, the "Credit Agreement", by and among CALMAT CO., a
Delaware corporation (the "Borrower"), the Banks party thereto and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA"), as agent for the Banks
(the "Agent"), this notice represents the Borrower's request to:
[A*: convert $__________________ in principal amount of presently
outstanding [Base/Eurodollar/CD] Rate Loans to [Base/Eurodollar/CD]
Rate Loans on _______________, _____. [The Interest Period for such
[Eurodollar/CD] Rate Loans is requested to be a
____________[month/day] period.]
[B. continue as [Eurodollar/CD] Rate Loans $__________ in principal
amount of presently outstanding [Eurodollar/CD] Rate Loans with the
Interest period ending on _________________, ______. The Interest
period commencing on the last day of such Interest period is
requested to be a ________ [month/day] period.]
The undersigned officer, to the best of such officer's knowledge, and the
Borrower certify that no Potential Event of Default or Event of Default has
occurred and is continuing or would result from the proposed
conversion/continuation.
Capitalized terms used herein without definition shall have the meanings
set forth in the Credit Agreement.
DATED: ___________________
CALMAT CO.
By__________________________________
Name________________________________
Title_______________________________
____________________
*Insert option A to convert Loans to another Type and option B to continue
Loans of a certain type.
II-1
Form of Notice of Conversion/Continuation
EXHIBIT III
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
ASSIGNMENT AND ACCEPTANCE AGREEMENT
DATED _______________, ________
Reference is made to that certain Credit Agreement dated as of September 4,
1998 (as it may be amended, supplemented, restated or otherwise modified from
time to time, the "Credit Agreement"; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined) by and among
CALMAT CO., a Delaware corporation (the "Borrower"), the Banks party thereto and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BofA") as agent for the
Banks (the "Agent"), pursuant to which __________________ ("Assignor") has
committed to make loans (the "Loans") to the Borrower.
The Assignor and ________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, that interest in and to
[all/a portion] of the Assignor's rights and obligations under the Credit
Agreement as of the date hereof which represents the percentage interest
specified in Section 1 of Schedule 1 hereto of all outstanding rights and
obligations under the Credit Agreement (the "Assigned Interest"), including,
without limitation, the percentage interest specified in Section 1 of Schedule 1
hereto of the Assignor's Commitment and the Loans owing to the Assignor. After
giving effect to such sale and assignment, the Assignee's Commitments and the
amount of the Loans owing to the Assignee will be as set forth in Section 2 of
Schedule 1 hereto.
2. The sale and assignment contemplated hereby shall become effective as
of the date (the "Effective Date") upon which (i) this Assignment and Acceptance
Agreement has been executed by the Assignor and Assignee, (ii) the Assignee has
paid to the Assignor, in same day funds, at such address and account as the
Assignor shall advise the Assignee, $__________________, and (iii) the
applicable conditions contained in Section 9.7 of the Credit Agreement have been
satisfied. The Effective Date is set forth in Section 3 of Schedule 1 hereto.
From and after the Effective Date, the Assignor agrees that the Assignee shall
be entitled to all rights, powers and privileges of the Assignor under the
Credit Agreement to the extent of the Assigned Interest including without
limitation (a) the right to receive all payments in respect of the Assigned
Interest for the period from and after the Effective Date, whether on account of
principal, interest, fees, indemnities in respect of claims arising after the
Effective Date, increased costs, additional amounts or otherwise; (b) the right
to vote and to instruct the Agent under the Credit Agreement according to its
pro rata share based on the Assigned Interest; and (c) the right to receive
notices, requests, demands and other communications. The Assignor agrees that
it will promptly remit to the Assignee any amount received by it in respect of
the Assigned Interest (whether from the Borrower, the Agent or otherwise) in the
same funds in which such amount is received by the Assignor.
3. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) other than as provided
herein, makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in
III-1
Form of Assignment and Acceptance Agreement
or in connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; and (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or the performance or observance by the
Borrower of any of its obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto. Except as specified in this
Section 3, the assignment of the Assigned Interest contemplated hereby shall be
without recourse to the Assignor.
4. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 4.3 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance and purchase the Assigned Interest; (ii) agrees that
it will, independently and without reliance upon the Assignor, 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 the Credit Agreement; (iii) represents and warrants that
it is an Eligible Assignee as required by Section 9.7(A)(iv) of the Credit
Agreement; (iv) appoints and authorizes the Agent to take such action as the
Agent, on its behalf and to exercise such powers under the Credit Agreement as
are delegated to the Agent by the terms thereof, together with such powers which
are reasonably incidental thereto; and (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank.
5. This Assignment may be executed in any number of counterparts and by
different parties in separate counterparts, each of which when so executed shall
be deemed to be an original and all of which taken together shall constitute but
one and the same instrument.
6. THIS ASSIGNMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF CALIFORNIA WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written, such execution being made on Schedule 1 hereto.
III-2
Form of Assignment and Acceptance Agreement
SCHEDULE 1 TO
ASSIGNMENT AND ACCEPTANCE AGREEMENT
DATED _______________, ______
Section 1.
---------
Percentage Interest of all outstanding _____________%
rights and obligations under the Credit
Agreement:
Percentage Interest of Assignor's Commitments
and Loans owing to Assignor under the Credit _____________%
Agreement being assigned to Assignee hereby:
Section 2.
---------
Assignee's Commitment: $_____________
Aggregate Outstanding: Principal Amount of
Loans owing to the Assignee: $_____________
Section 3.
---------
Effective Date: __________, ______
[NAME OF ASSIGNOR]
By:______________________________
Title:
[NAME OF ASSIGNEE]
By:______________________________
Title:
CONSENTED TO AND ACKNOWLEDGED CONSENTED TO AND ACKNOWLEDGED
THIS ___ DAY OF _____________, _____ THIS ___ DAY OF _____________, _____
CALMAT CO. BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
By:_________________________ as the Agent under the Credit Agreement
Title:
By:_________________________
Title:
III-1
Form of Assignment and Acceptance Agreement
EXHIBIT IV
FORM OF COMPLIANCE CERTIFICATE
[DATE]
Bank of America National Trust
and Savings Association
Agency Management-Los Angeles #20529
Re: Compliance Certificate
----------------------
Ladies and Gentlemen:
This Certificate is given in accordance with Section 5.1(iii)(b) of the
Credit Agreement dated as of September 4, 1998 (such agreement, as it may be
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement") by and among CALMAT CO., a Delaware corporation (the
"Borrower"), the Banks party thereto and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("BofA"), as agent for the Banks (the "Agent"). Capitalized
terms used herein without definition shall have the meanings assigned to such
terms in the Credit Agreement. We hereby certify that:
(a) We are the _________________________ and _________________________
of the Borrower;
(b) We have reviewed the terms of the Credit Agreement and have made
or caused to be made under our supervision, a review in reasonable detail of the
transactions and financial condition of the Borrower during the accounting
period covered by the enclosed financial statements;
(c) To the best of our knowledge and belief no event or condition
exists which constitutes an Event of Default or Potential Event of Default as of
the date of this certificate except as set forth below;
(d) The representations and warranties set forth in Section 4 of the
Credit Agreement are true, correct and complete in all material respects on and
as of the date of this Certificate to the same extent as though made on and as
of the date hereof;
[(e)/1/ The independent certified public accountants who have reported on
the Borrower's Consolidated financial statements have reviewed the financial
matters covered by this Compliance Certificate;]
(f) The calculations supporting the Borrower's compliance with the
restrictions contained in Sections 6.1 through 6.6, inclusive, and Section 6.11
are set forth on Attachment
____________________
/1/ Paragraph (e) applies only when Compliance Certificate is delivered in
respect of fiscal year-end of Borrower.
IV-1
Form of Compliance Certificate
No. 1 hereto, and the calculations of the Consolidated Funded Indebtedness to
Consolidated EBITDA Ratio are set forth on Attachment No. 2 hereto; and
(g) The Borrower is in compliance with all of the terms and conditions of
the Credit Agreement except as set forth below.
Described below (or in a separate attachment hereto) are the exceptions, if
any, to paragraphs (d) and (g), listing in detail, the nature of the conditions
or event, the period during which it has existed and the action which the
Borrower has taken, is taking or proposes to take with respect to each such
condition or event:
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
The foregoing certifications are made and delivered this ____ day of
_______________, ______.
CALMAT CO.
By________________________________
Name______________________________
Title_____________________________
By________________________________
Name______________________________
Title_____________________________
IV-2
Form of Compliance Certificate
ATTACHMENT NO. 1
TO COMPLIANCE CERTIFICATE
(This attachment no. 1 is as of [_____________] and pertains to the period
from [________________] (the "Period"; the last day of the Period is referred to
herein as the "Period End Date"). Financial covenant information is provided
for only those covenants which are required to be tested as of the Period End
Date.) All amounts are as of the Period End Date except as noted. All items
are to be calculated as set forth in the definition of "Consolidated" in the
Credit Agreement.
Capitalized terms used herein without definition shall have the meanings
set forth in the Credit Agreement dated as of September 4, 1998 (such agreement,
as it may be amended, supplemented, restated or otherwise modified from time to
time, the "Credit Agreement") by and among CALMAT CO., a Delaware corporation
(the "Borrower"), the Banks party thereto and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("BofA"), as agent for the Banks (the "Agent"). Section
references are to the sections of the Credit Agreement.
A. LIENS (SECTION 6.1)
1. Aggregate principal amount of Indebtedness incurred after the
Effective Date secured by Liens(not including Liens relating to
accounts receivable $_______________
2. Indebtedness related to sales and discounts of accounts receivable
sold or discounted through Permitted Accounts Receivable Financing
Facilities in excess of 45% of Initial Aggregate Book Value $_______________
3. Aggregate principal amount of Indebtedness incurred in connection with
sale-leaseback transactions after the Effective Date secured by Liens
(Line I6) $_______________
4. Indebtedness of Subsidiaries (excluding Indebtedness of the type
described in Section 6.11A) (Line J1) $_______________
5. Aggregate principal amount of Indebtedness incurred after the
Effective Date secured by Liens (Lines A1+A2+A3+A4) $
===============
6. Consolidated Net Worth $
===============
7. Maximum aggregate principal amount of Indebtedness permitted to be
secured by Liens pursuant to Section 6.1 (Lines A6 x 20%) $
===============
8. Maximum Permitted: Line A5 not to exceed Line A7
B. INVESTMENTS (SECTION 6.2)
1. Largest single Investment or group of Investments related to the same
transaction included in Section 6.2(iv) during the Period $===============
IV-1
Form of Compliance Certificate
Attachment No.1
2. If the amount of any single Investment or group of Investments related
to the same transaction included in Section 6.2(iv) exceeds
$150,000,000 (including assumed Indebtedness), Requisite Banks must
approve such Investment:
C. MINIMUM CONSOLIDATED NET WORTH (SECTION 6.3A)
1. Consolidated Net Worth (Line A6) $______________
2. Positive Consolidated Net Income, measured on a cumulative basis for
each fiscal quarter commencing with the fiscal quarter ending
September 30, 1998 $______________
3. Net proceeds of any equity issued after the Closing Date $______________
4. Minimum Consolidated Net Worth required pursuant to Section 6.3A (80%
of Consolidated Net Worth on June 30, 1998 plus (Line C2 x 50%) plus
---- ----
(Line C3 x 50%) $
==============
D. MAXIMUM CONSOLIDATED FUNDED INDEBTEDNESS TO TOTAL CAPITALIZATION RATIO
(SECTION 6.3B(I))
1. All obligations and liabilities, whether current or long-term, for
borrowed money $______________
2. That portion of Capital Leases which are capitalized $______________
3. Amount of Contingent Obligations included in definition of
Indebtedness $______________
4. Consolidated Funded Indebtedness (Lines D1+D2+D3) $
==============
5. Consolidated Net Worth (Line A6) $
6. Total Capitalization (Lines D4+D5) $
==============
7. Consolidated Funded Indebtedness to Total Capitalization Ratio
(Line D4 divided by Line D6) ________ to 1.00
8. Maximum Consolidated Funded Indebtedness to Total Capitalization Ratio
pursuant to Section 6.3B(i) .55 to 1.00
E. MAXIMUM CONSOLIDATED SENIOR FUNDED INDEBTEDNESS TO TOTAL
CAPITALIZATION RATIO (SECTION 6.3B(II))
1. All obligations and liabilities, whether current or long-term, for
borrowed money not subordinated to the Obligations $______________
2. That portion of Capital Leases which are capitalized $______________
3. Amount of Contingent Obligations included in definition of
Indebtedness not subordinated to the Obligations $______________
4. Consolidated Senior Funded Indebtedness (Lines E1+E2+E3) $
==============
5. Total Capitalization (Line D6) $
==============
IV-2
Form of Compliance Certificate
Attachment No.1
6. Consolidated Senior Funded Indebtedness to Total Capitalization Ratio
(Line E4 divided by Line E5) ______ to 1.00
7. Maximum Consolidated Senior Funded Indebtedness to Total
Capitalization Ratio pursuant to Section 6.3C) 0.45 to 1.00
F. MINIMUM CONSOLIDATED INTEREST COVERAGE RATIO (SECTION 6.3C)
1. Consolidated EBIT for the current and 3 preceding fiscal quarters $____________
2. Consolidated Interest Expense for the current and 3 preceding fiscal
quarters $____________
3. Consolidated Interest Coverage Ratio(Line F1 divided by Line F2) _____ to 1.00
4. Minimum Consolidated Interest Coverage Ratio required pursuant to
Section 6.3C 2.00 to 1.00
G. FUNDAMENTAL CHANGES (SECTION 6.4)
1. If the amount of any single acquisition or group of acquisitions
related to the same transaction included in Section 6.4(i) exceeds
$75,000,000 (including assumed Indebtedness), the following will be
true on a pro forma basis after giving effect to such acquisition:
a. Borrower will be in compliance with financial covenants set forth
in Section 6.3
b. Consolidated Funded Indebtedness to Consolidated EBITDA Ratio
(Line C from attachment 2) not to exceed 3.50 to 1.00
c. Maximum amount of any single acquisition or series of
acquisitions related to the same transaction $150,000,000
H. ASSET SALES (SECTION 6.5)
1. Book Value of all accounts receivable sold or discounted through
Permitted Accounts Receivable Financing Facilities/1/ $____________
2. Most recent Initial Aggregate Book Value of accounts receivable at the
time such Permitted Accounts Receivable Facility was entered to or
increased/2/ $____________
3. Maximum Book Value of accounts receivable permitted to be sold or
discounted (60% x Line H2)/2/ $
============
________________
/1/ Needs be reported only when a Permitted Accounts Receivable Financing
Facility is in effect.
IV-3
Form of Compliance Certificate
Attachment No.1
4. Maximum Book Value of accounts receivable permitted to be sold or
discounted by Section 6.5(ii)(45% x Line H2)/2/ $_____________
5. Aggregate Book Value of Asset Sales in the current and preceding
eleven calendar months $_____________
6. Aggregate Book Value of Assets Sales from sales in the current and
preceding eleven calendar months (excluding Asset Sales permitted by
Section 6.5) $_____________
7. Asset Sales listed in Line H6 where proceeds invested or committed to
be invested or used to pay down Consolidated Funded Indebtedness
within 180 days $_____________
8. Proceeds listed in Line H7 in a prior Compliance Certificate as being
committed to be invested within 180 days but that were not actually
invested within 270 days of commitment therefor $_____________
9. Aggregate Book Value of Asset Sales counted for Section 6.5(iii)
purposes (Line H6 - Line H7 + Line H8) $
=============
10. Consolidated Net Worth (Line A6) $_____________
11. Maximum aggregate amount of Asset Sales permitted
pursuant to Section 6.5(ii) (Line H10 x 15%) $
=============
I. SALES AND LEASE-BACKS (SECTION 6.6)
1. Aggregate principal amount of Indebtedness relating to leases $_____________
2. Aggregate principal amount of Indebtedness secured by Liens $_____________
3. Aggregate amount of such Indebtedness (Lines I1+I2) $_____________
4. Indebtedness listed in Line I3 where proceeds invested or committed to
be invested or used to pay down Consolidated Funded Indebtedness
within 90 days $_____________
5. Proceeds listed in Line I4 in a prior Compliance Certificate as being
committed to be invested within 90 days but that were not actually
invested within 180 days of commitment therefor $_____________
6. Aggregate Indebtedness counted for Section 6.6(iii) purposes
(Line I3 - Line I4 + Line I5) $
=============
7. Maximum Permitted: Line A5 not to exceed Line A7
J. SUBSIDIARY INDEBTEDNESS (SECTION 6.11)
1. Indebtedness of Subsidiaries (excluding Indebtedness of the type
described in Section 6.11A) $_____________
2. Maximum Permitted: Line A5 not to exceed Line A7
IV-4
Form of Compliance Certificate
Attachment No.1
ATTACHMENT NO. 2
TO COMPLIANCE CERTIFICATE
CALCULATION OF CONSOLIDATED FUNDED INDEBTEDNESS TO
CONSOLIDATED EBITDA RATIO
(This attachment no. 2 is as of [__________________] and pertains to the
period from [_______________] (the "Period"; the last day of the Period is
referred to herein as the "Period End Date") All amounts are as of the Period
End Date except as noted. All items are to be calculated as set forth in the
definition of "Consolidated" in the Credit Agreement.
Capitalized terms used herein without definition shall have the meanings
set forth in the Credit Agreement dated as of September 4, 1998 (such agreement,
as it may be amended, supplemented, restated or otherwise modified from time to
time, the "Credit Agreement") by and among CALMAT CO., a Delaware corporation
(the "Borrower"), the Banks party thereto and BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION ("BofA"), as agent for the Banks (the "Agent").
A. Consolidated Funded Indebtedness (Line D4 from Attachment 1) $
============
B. Consolidated EBITDA
1. Consolidated EBIT for the current and 3 preceding fiscal quarters
(Line F1 from Attachment 1) ______________
2. Depreciation and amortization expense $_____________
3. Consolidated EBITDA(Line B1 + B2) $
=============
C. Consolidated Funded Indebtedness to Consolidated EBITDA Ratio
(Line A divided by Line B3) ______ to 1.00
IV-1
Form of Compliance Certificate
Attachment No.2
EXHIBIT V
FORM OF OPINION OF BORROWER'S COUNSEL
Bank of America National Trust
and Savings Association, as Agent
and
The Banks listed on Schedule A hereto
RE: CREDIT AGREEMENT DATED AS OF SEPTEMBER 4, 1998
Ladies and Gentlemen:
I am the General Counsel of CALMAT CO. (the "Borrower"), and have acted in
such capacity in connection with the execution of the Credit Agreement dated as
of even date herewith (the "Credit Agreement") among the Borrower, the Banks
listed therein (the "Banks") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as agent ("Agent"). This opinion is rendered to you pursuant to
Section 3.1C of the Credit Agreement. Capitalized terms used herein without
definition have the meanings ascribed thereto in the Credit Agreement.
In my capacity as General Counsel, I have examined or caused to be examined
under my supervision, originals or copies identified to my satisfaction as being
true copies, of such agreements, certificated and other documents as I deemed
necessary for the purpose of rendering this opinion, including without
limitation, the following:
(a) Articles of Incorporation of the Borrower, as amended to date;
(b) the Bylaws of the Borrower, as amended to date;
(c) certain records of proceedings of the Board of Directors and the
stockholders of the Borrower;
(d) the Credit Agreement; and
(e) the Notes.
The Credit Agreement and the Notes are hereinafter sometimes referred to as
the "Credit Documents".
I have been furnished with evidence of advice satisfactory to me from the
Secretary of State of the State of Delaware with respect to the corporate good
standing of the Borrower.
In all such examinations, I have assumed the genuineness of all signatures
by each party (other than those of the Borrower), the authenticity of all
documents submitted to me as originals and the conformity to authentic original
documents of all documents submitted to me as conformed or photostatic copies.
For the purpose of the opinions hereinafter expressed, I have assumed the due
execution and delivery, pursuant to the due authorization of each document
referred to in this opinion by each party thereto other than the Borrower and
that each document
V-1
Form of Opinion of Borrower's Counsel
constitutes the valid and binding obligation of each party
thereto (other than the Borrower), enforceable against such party in accordance
with its terms.
For the purpose of rendering this opinion, I have investigated such
questions of law as I have deemed necessary.
On the basis of the foregoing, and in reliance thereon, and subject to the
assumptions, qualifications, exceptions and limitations expressed herein, I am
of the opinion that:
1. The Borrower is duly organized and validly existing as a corporation
in good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own and operate its properties, to carry on its
business as now conducted, to execute and deliver the Credit Documents and to
perform its obligations thereunder. The execution, delivery and performance of
the Credit Documents have been duly authorized by all necessary corporate action
on the part of the Borrower. Each of the Credit Documents has been duly
executed and delivered by the Borrower and constitutes the valid and binding
obligation of the Borrower, enforceable against the Borrower in accordance with
its terms.
2. None of the execution and delivery of the Credit Documents, the
consummation of the transactions contemplated thereby and compliance with the
terms and conditions thereof by the Borrower (A) conflicts with, results in a
breach or violation of, or constitutes a default under, (i) the Articles of
Incorporation or Bylaws of the Borrower, (ii) any order, judgment of decree of
any court or other agency of government binding on the Borrower, (iii) any
Contractual Obligation of the Borrower, or (iv) any statute, rule or regulation
binding on the Borrower, or (B) results in the creation of any Lien, charge or
encumbrance upon any of the properties or assets of the Borrower under any
agreement referred to in clause (iii) above.
3. Except as disclosed in the Credit Agreement (including the Schedules
delivered pursuant thereto), I am aware of no action, suit or proceeding,
pending against or affecting the Borrower, at law or in equity, before any
court, arbitrator or administrative or governmental body, (A) in which an
injunction or order has been entered preventing the making of any of the Loans
or (B) which is reasonably likely to materially and adversely affect (y) the
ability of the Borrower to perform its obligations under the Credit Documents
or (z) the financial condition or results of operations of the Borrower and its
subsidiaries, taken as a whole.
4. No governmental or regulatory consents, approvals, authorizations,
registrations, declarations or filings are required by the Borrower in
connection with (i) the extensions of credit under the Credit Documents or (ii)
the due execution, delivery and performance by the Borrower of the Credit
Documents.
My opinions above as to the validity, binding effect or enforceability of
the agreements referred to therein are subject to (a) bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors rights generally, (b) general principles of equity,
including (without limitation) concepts of materiality, reasonableness, good
faith and fair dealing (regardless of whether such validity, binding effect or
enforceability is considered in a proceeding in equity or at law), (c) public
policy considerations or court decisions which may limit the rights of the Banks
to obtain indemnification or contribution, (d) the unenforceability under
certain circumstances of provisions to the effect that rights or
V-2
Form of Opinion of Borrower's Counsel
remedies are not exclusive, that rights or remedies may be exercised without
notice, that each right or remedy is cumulative and may be exercised in addition
to or with any other right or remedy, that election of a particular remedy or
remedies does not preclude recourse to one or more other remedies, or that
failure to exercise or delay in exercising rights or remedies will not operate
as a waiver of any such right or remedy, (e) the unenforceability under certain
circumstances of provisions expressly or by implication waiving broadly or
vaguely stated rights, unknown future rights, defenses to obligations, rights
granted by law or objections to the bringing of an action or proceeding in a
particular jurisdiction, where such waivers are against public policy or
prohibited by law and (f) the unenforceability under certain circumstances of
any provisions which impose penalties or forfeitures. Certain of the remedies in
the Credit Agreement may be further limited or rendered unenforceable by other
applicable laws. No opinion is expressed with respect to the effect, under
California law, which the introduction of extrinsic evidence as to the meaning
of any provision of a document may have upon the interpretation of that
document. In my opinion, however, the above qualification, exceptions and
limitations do not make the remedies, taken as a whole, contained in the Credit
Documents, inadequate for the practical realization of the rights and benefits
provided therein.
My opinions rendered above are based upon review of only those statutes,
rules and regulations which, in my experience, are normally applicable to
transactions of the type contemplated by the Credit Agreement.
In rendering my opinions above, I have assumed that the Agent and each Bank
is a sophisticated financial institution capable of evaluating the merits and
risks relating to the transactions contemplated by the Credit Documents, and
that each Bank has been provided access to such information relating to Borrower
as such Bank has requested.
I am admitted to the Bar of the State of California. In addition, I am
generally familiar with the General Corporation Law as in effect in the State of
Delaware and have made such investigation thereof as I deemed necessary for the
purpose of rendering the opinions expressed herein. This opinion is limited to
the present laws of the aforementioned jurisdictions and the United States of
America, to present judicial interpretations thereof and to the facts as they
exist at the date hereof. I assume no obligation to revise or supplement this
opinion should the present laws of such jurisdictions be changed by legislative
action, judicial decision or otherwise. This opinion is rendered as of the date
hereof, and I express no opinion as to, and disclaim any undertaking or
obligation to update this opinion in respect of, changes or circumstances or
events which occur subsequent to this date.
This opinion is rendered solely for your benefit in connection with the
execution and delivery of the Credit Documents and may not be relied upon by any
other person or by you in any other context for any other purpose, except that
it may be relied upon by the Banks which may be added pursuant to Section 9.7 of
the Credit Agreement.
V-3
Form of Opinion of Borrower's Counsel
SCHEDULE "A" TO OPINION OF COUNSEL
Bank of America National Trust and Savings Association.
The First National Bank of Chicago
▇▇▇▇▇ Fargo Bank, N.A.
V-4
Form of Opinion of Borrower's Counsel
EXHIBIT VI
FORM OF COMPETITIVE BID REQUEST
(AGENT AUCTION ONLY)
______________, ______
Bank of America National Trust
and Savings Association
Agency Management-Los Angeles #20529
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 4, 1998
(as amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined) by and among CALMAT CO. (the "Borrower"), the Banks party thereto and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent for the Banks
(in such capacity, the "Agent").
Borrower hereby requests an Agent Auction for Bid Loans. In connection
therewith, this is a Competitive Bid Request for Bid Loans pursuant to Section
2.2 of the Credit Agreement as follows:
(i) The borrowing date (which shall be a Business Day) of the proposed
Bid Borrowing is _________________, ______.
(ii) The aggregate amount of the proposed Bid Borrowing is
$__________________.
(iii) The proposed Bid Borrowing to be made pursuant to Section 2.2 shall
be comprised of [Eurodollar Rate] [Absolute Rate] Bid Loans.
(iv) The Interest Period[s] for the Bid Loans comprised in the Borrowing
shall be _________________, [_________________] and [__________________].
CALMAT CO.
By _______________________________________
Name _____________________________________
Title ____________________________________
VI-1
Form of Competitive Bid Request
EXHIBIT VII
FORM OF INVITATION FOR COMPETITIVE BIDS
[AGENT*] [BORROWER**] AUCTION
VIA FACSIMILE
To the Banks Listed on Schedule A hereto:
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of September 4,
1998 (as amended, supplemented, restated, or otherwise modified from time to
time, the "Credit Agreement") among CALMAT CO. (the "Borrower"), the Banks party
thereto and BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent for
the Banks (in such capacity, the "Agent").
Pursuant to Section 2.2B(iii) of the Credit Agreement, you are hereby
invited to submit offers to make Bid Loans to the Borrower based on the
following specifications:
1. Borrowing date: _____________, ______;
2. Aggregate amount requested by the Borrower $___________;
3. [Eurodollar Rate Bid Loan] [Absolute Rate Bid Loan]; and
4. Interest Period[s]: _____________, [___________] and
[______________].
All Competitive Bids must be substantially in the form of Exhibit VIII to
the Credit Agreement and must be received by [the Agent*] [the Borrower**] no
later than 7:00 A.M. (San Francisco time) on ____________, ______.
[BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, AS THE AGENT]*
[CALMAT CO.]**
By ______________________________________
Name ____________________________________
Title ___________________________________
* If an Agent Auction
** If a Borrower Auction
VII-1
Form of Invitation for Competitive Bids
SCHEDULE A
TO
INVITATION FOR COMPETITIVE BIDS
[List Banks]
VII-A-1
EXHIBIT VIII
FORM OF COMPETITIVE BID
________________, ______
[Bank of America National Trust
and Savings Association
Agency Management-Los Angeles #20529]
[CALMAT Co.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Senior Vice President, Treasurer
and Chief Account Officer]/1/
Ladies and Gentlemen:
Reference is made to the Credit Agreement dated as of September 4, 1998 (as
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement", the terms defined therein being used herein as therein
defined) by and among CALMAT CO. (the "Borrower"), the Banks party thereto and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as agent for Banks (in
such capacity, the "Agent").
In response to the Competitive Bid Request of the Borrower dated
______________, _______ and in accordance with Section 2.2B(iii) of the Credit
Agreement, the undersigned Bank offers to make Bid Loan[s] thereunder in the
following principal amount[s] at the following interest rates for the following
Interest Period[s]:
Date of Borrowing: ____________, ______
Aggregate Maximum Bid Amount: $____________
_______________
/1/ If a Borrower Auction
VIII-1
Form of Competitive Bid
I. Interest Period _______________
A. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
B. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
C. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
II. Interest Period
B. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
B. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
C. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
VIII-2
Form of Competitive Bud
III. Interest Period
C. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
B. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
C. Principal Amount: ________
Interest:________________________
[Absolute Rate: %] or
[Eurodollar Rate Bid Margin: +/- _______%]
[NAME OF BANK]
By ____________________________________
Name __________________________________
Title _________________________________
VIII-3
Form of Competitive Bid
EXHIBIT IX
FORM OF BID LOAN NOTE
September 4, 1998
FOR VALUE RECEIVED, the undersigned, a corporation (the "Borrower"), hereby
promises to pay to the order of [1] (the "Bank") the aggregate unpaid principal
amount of each Bid Loan made by the Bank to the Borrower pursuant to the Credit
Agreement described below on the last day of the Interest Period to which such
Bid Loan relates.
The Borrower further promises to pay to the order of the Bank interest on
the unpaid principal amount of each such Bid Loan from time to time outstanding
at the rate or rates per annum and on the dates all as set forth on Schedule A
attached hereto, or as otherwise provided in the Credit Agreement.
This Bid Loan Note is one of the "Bid Loan Notes" referred to in the Credit
Agreement and is issued pursuant to, and is entitled to the benefits of, the
Credit Agreement dated as of September 4, 1998 among the Borrower, the Banks
parties thereto and Bank of America National Trust and Savings Association, as
agent for Banks (in such capacity, the "Agent") (such agreement, as it may be
amended, supplemented, restated or otherwise modified from time to time, the
"Credit Agreement"). Reference is made to the Credit Agreement for provisions
for the prepayment of Bid Loans evidenced hereby prior to the maturity hereof
and the acceleration of the maturity hereof upon the happening of certain stated
events. Terms defined in the Credit Agreement shall have the same meanings
herein.
In the case of a Bid Loan evidenced hereby that was made through an Agent
Auction, both principal and interest are payable in lawful money of the United
States of America to Bank of America National Trust and Savings Association, as
Agent for the Bank, by deposit of such funds to the Agent's Account No. 12330-
15415 re: CalMat Co., Attention: Agency Administrative Services #5596 ABA
Number 1210-0035-8-BKAMER-SF, or at such other account as the Agent may from
time to time designate by notice to the Borrower, in immediately available
funds.
In the case of a Bid Loan evidenced hereby that was made through a Borrower
Auction, both principal and interest are payable in lawful money of the United
States of America to Bank at such account as Bank may from time to time
designate by notice to the Borrower, in immediately available funds.
The Bid Loans made by the Bank shall be evidenced by this Bid Loan Note and
the Bank shall endorse on Schedule A annexed hereto, the date, amount, rate of
interest per annum and maturity of each Bid Loan made by it and the amount of
each payment of principal and interest made by the Borrower with respect hereto.
The Bank is irrevocably authorized by the Borrower to endorse this Bid Loan Note
and the Bank's record shall be conclusive absent manifest error; provided,
--------
however, that the failure of the Bank to make, or an error in making, a notation
-------
thereon
______________________
/1/Insert name of Lender in capital letters.
IX-1
Form of Bid Loan Note
with respect to any Bid Loan shall not limit or otherwise affect the obligations
of the Borrower hereunder or under the Credit Agreement.
The Borrower and endorsers of this Note hereby expressly waive diligence,
presentment, demand, notice, protest and all other demands and notices of every
kind in connection with the delivery, acceptance, performance, default or
enforcement of this Bid Loan Note and the Credit Agreement, and an action for
amounts due hereunder or thereunder shall immediately accrue.
THIS BID LOAN NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
CALMAT CO.
By ___________________________________________
Name _________________________________________
Title ________________________________________
By ___________________________________________
Name _________________________________________
Title ________________________________________
IX-2
Form of Bid Loan Note
SCHEDULE A
GRID TO BID LOAN NOTE
=========================================================================================================
Disbursement Date of
Bid Loan/Made through Amount of Applicable Maturity Principal Interest
:Agent Auction Bid Loan Interest Rate Date Payment & Payment &
Borrower Auction Date Paid Date Paid
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------
=========================================================================================================
IX-3
Form of Bid Loan Note
EXHIBIT X
FORM OF COMMITTED LOAN NOTE
$ _________________ [/1/]
September 4, 1998
FOR VALUE RECEIVED, CALMAT CO., a Delaware corporation (the "Borrower"),
promises to pay to the order of ______________[/2/] ("Payee"), on or before the
Maturity Date, the lesser of (x)__________ [/3/] ($________________[/4/]) and
(y) the unpaid aggregate principal amount of all advances made by Payee to the
Borrower as committed Loans under the Credit Agreement referred to below.
The Borrower also promises to pay interest on the unpaid principal amount
hereof until paid at the rates, at the times and from the dates which shall be
determined in accordance with the provision of that certain Credit Agreement
dated as of September 4, 1998 (such agreement, as it may be amended,
supplemented, restated or otherwise modified from time to time, being herein
called the "Credit Agreement"; capitalized terms used herein without definition
shall have the meanings assigned those terms in the Credit Agreement), by and
among the Borrower, the lenders party thereto ("Banks") and Bank of America
National Trust and Savings Association ("BofA"), as agent for the Banks
("Agent").
This Note is one of the Borrower's "Committed Loan Notes" in the aggregate
principal amount of $75,000,000 and is issued pursuant to and entitled to the
benefits of the Credit Agreement to which reference is hereby made for a more
complete statement of the terms and conditions under which the Loans evidenced
hereby were made and are to be repaid.
Both principal and interest are payable in lawful money of the United
States of America to the Agent by deposit of such funds, in immediately
available funds, to the Agent's Account Number 12330-15415, re: CalMat Co.,
Attention: Agency Administrative Services #5596, ABA Number 1210-0035-8-BKAMER-
SF, or at such other account as the Agent may from time to time designate by
notice to the Borrower. Until notified in writing of the transfer of this Note,
the borrower and the Agent shall be entitled to deem Payee, or such Person who
has been so identified by the transferor in writing to the Borrower and the
Agent as the holder of this Note, as the owner and holder of this Note.
____________________
/1/ Insert in numbers the principal amount of Lender's Pro Rata Share of
the Commitments.
/2/ Insert name of Lender in capital letters.
/3/ Insert in words the principal amount of Lender's Pro Rata Share of the
Commitments.
/4/ Insert in numbers the principal amount of Lender's Pro Rata Share of
the Commitments.
X-1
Form of Committed Loan Note
Each of Payee and any subsequent holder of this Note agrees by its acceptance
hereof that before disposing of this Note or any part hereof it will make a
notation hereon of all principal payments previously made hereunder and of the
date to which interest hereon has been paid; provided, however, that the failure
-------- -------
to make notation of any payment made on this Note shall not limit or otherwise
affect the obligation of the Borrower hereunder with respect to payments of
principal or interest on this Note.
Whenever any payment on this Note shall be stated to be due on a day which
is not a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall be included in the computation of
the payment of interest on this Note; provided; however, that if the day on
-------- -------
which any payment relating to a Eurodollar Rate Loan is due is not a Business
Day but is a day of the month after which no further Business Day occurs in such
month, then the due date thereof shall be the next preceding Business Day.
This Note is subject to mandatory prepayment as provided in Section 2.5B of
the Credit Agreement and to prepayment at the option of the Borrower as provided
in Section 2.5A of the Credit Agreement.
This Note is subject to restriction on transfer or assignment as provided
in Sections 9.6 and 9.7 of the Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid balance of the
principal amount of this Note may become, or may be declared to be, due and
payable in the manner, upon the conditions and with the effect provided in the
Credit Agreement.
The terms of this Note are subject to amendment only in the manner provided
in the Credit Agreement.
No reference herein to the Credit Agreement and no provision of this Note
or the Credit Agreement shall alter or impair the obligation of the Borrower,
which is absolute and unconditional, to pay the principal of and interest on
this Note at the place, at the respective times, and in the currency herein
prescribed.
The Borrower and endorsers of this Note hereby consent to renewals and
extensions of time at or after the maturity hereof, without notice, and hereby
waive diligence, presentment, protest, demand and notice of every kind.
X-2
Form of Committed Laon Note
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed and
delivered by its duly authorized officer, as of the day and year and the place
first above written.
CALMAT CO.
By____________________________________
Name__________________________________
Title_________________________________
By____________________________________
Name__________________________________
Title_________________________________
X-3
Form of Committed Loan Note
TRANSACTIONS ON COMMITTED LOAN NOTE
DATE AMOUNT OF PRINCIPAL PAID OUTSTANDING PRINCIPAL NOTATION MADE BY
THIS DATE BALANCE THIS DATE
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X-4
Form of Committed Loan Note
SCHEDULE A
COMMITMENTS AND PRO RATA SHARES
BANK COMMITMENT PRO RATA SHARE
--------------------------------------------------------------------------------------------------
Bank of America National Trust $30,000,000 40.00000000%
and Savings Association
The First National Bank of
Chicago $25,000,000 33.33333334
▇▇▇▇▇ Fargo Bank, N.A. $20,000,000 26.66666666%
=========== ============
Total $75,000,000 100.00000000
-1-
SCHEDULE B
LENDING OFFICES
CALMAT CO.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: H. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Chief Financial Officer and Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
AGENT'S OFFICE:
Notices (other than Requests for Extensions of Credit):
-------------------------------------------------------
Bank of America National Trust
and Savings Association
Agency Management-Los Angeles #20529
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Requests for Extensions of Credit:
----------------------------------
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇. Agency Administrative Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Account No.: 12330-15415
Ref: CALMAT CO.
Att: Agency Administrative Services #▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇-▇▇▇▇-▇
-▇-
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ NATIONAL TRUST
AND SAVINGS ASSOCIATION, AS A BANK
Domestic and Offshore Lending Office:
-------------------------------------
Bank of America National Trust
and Savings Association
GPO/CBS Domestic Account Administration #5693
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Requests for Extensions of Credit):
-------------------------------------------------------
Bank of America National Trust and
Savings Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
Vice President
Credit Products #5618
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
THE FIRST NATIONAL BANK OF CHICAGO
Notices and Domestic and Offshore Lending Office:
-------------------------------------------------
The First National Bank of Chicago
One First ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇, ▇-▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-2-
▇▇▇▇▇ FARGO BANK, N.A.
Domestic and Offshore Lending Office:
-------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
MAC ▇▇▇▇-▇▇▇
Telephone: (415)
Facsimile: (415)
with a copy to:
▇▇▇▇▇ Fargo Bank
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇ or 477-5471
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Notices (other than Requests for Extensions of Credit):
-------------------------------------------------------
▇▇▇▇▇ Fargo Bank
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-3-
SCHEDULE C
ACTIVE SUBSIDIARIES OF CALMAT CO.
100% owned and California corporation, unless otherwise indicated)
Allied Concrete & Materials Co. (Arizona)
Allied Concrete, Inc. (Arizona) (Subsidiary of Allied Concrete & Materials
Co.)
CalMat Co. of Arizona (Arizona)
CalMat Co. of New Mexico (New Mexico)
CalMat Land Co.
CalMat Leasing Co.(Arizona)
CalMat of Central California
CalMat Properties Co.
CC Plaza Co. (Subsidiary of CalMat Properties Co.)
Mission Valley Development Co. (Subsidiary of CalMat Properties Co.)
▇▇▇▇▇ Construction Co., Inc.
Azusa Rock, Inc. (Subsidiary of ▇▇▇▇▇ construction Co., Inc.)
Palomar Transit Mix Co.
Reliance Land Co.
Reliance Transport Co.
Rio Norte Este Co.
River Bend Corp.
Rio Vista Hotel Co. (Subsidiary of CalMat Properties Co.)
Sanger Rock and Sand
▇▇▇▇▇ Canyon Sand Co.
Triangle Rock Products, Inc.
Western Environmental Contracting, Inc.
-1-
SCHEDULE C
INACTIVE SUBSIDIARIES OF CALMAT CO.
(California corporation unless otherwise indicated)
Albuquerque Gravel Products Co. (New Mexico)
Bakersfield Ready Mix, Inc.
California Materials Company
Conrock Co.
Conrock Property Development Corp.
Consolidated Rock Products Co.
Industrial Asphalt, Inc.
▇▇▇▇▇▇ Valley Sand & Gravel, Inc.
Oceanside Ready Mix Co.
River Vista Development Co. (Subsidiary of CalMat Properties Co.)
Sweetwater Aggregates Co.
Western Thermal Soils Co.
-1-
SCHEDULE D
CALMAT CO. & SUBSIDIARIES
Disclosure of Employee Benefit Plans providing Benefits for Retirees Except
as Required Under Section 4980B of the Internal Revenue Code
Borrower maintains an Employee Benefit Plan that provides health and
welfare benefits in the form of health and life insurance to approximately 104
retirees.
-1-
SCHEDULE E
CALMAT CO. & SUBSIDIARIES
LIENS SECURING INDEBTEDNESS IN EXISTENCE
AS OF AUGUST 31, 1998
MUNICIPAL IMPROVEMENT BONDS: OUTSTANDING PRINCIPAL PROPERTY DESCRIPTION
---------------------------- --------------------- --------------------
RIO VISTA WEST (FSDRIP) $ 786,108 ▇▇▇▇▇▇ ▇▇▇▇ (▇▇ ▇▇▇▇▇▇▇)
DATE AUGUST 3, 1987
ORIGINAL AMOUNT $4,235,675
CAPITAL LEASES:
---------------
AZUSA ROCK ▇▇▇▇▇▇▇ MACHINERY $ 188,365 CATERPILLAR C-11 DOZER
DATE JUNE 1, 1994
ORIGINAL AMOUNT $543,415 _______
TOTAL $ 974,473
========
-1-
SCHEDULE F
CALMAT CO. & SUBSIDIARIES
ENVIRONMENTAL MATTERS
NONE
----
-1-