EXHIBIT 10.9
[EXECUTION VERSION]
-------------------
FIRST AMENDED AND RESTATED
CREDIT AGREEMENT
Among
TETRA TECHNOLOGIES, INC.
as Borrower,
THE FINANCIAL INSTITUTIONS
NAMED IN THIS CREDIT AGREEMENT
as Banks,
and
BANK OF AMERICA, N.A.,
as Agent for the Banks
$100,000,000
May 12, 2000
Arranged by:
BANC OF AMERICA SECURITIES, L.L.C.
TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS.................................1
1.1 CERTAIN DEFINED TERMS............................................1
1.2 COMPUTATION OF TIME PERIODS.....................................20
1.3 ACCOUNTING TERMS; PREPARATION OF FINANCIALS.....................20
1.4 TYPES...........................................................20
1.5 INTERPRETATION..................................................20
ARTICLE 2. CREDIT FACILITIES...............................................21
2.1 REVOLVING LOAN FACILITY.........................................21
2.2 LETTER OF CREDIT FACILITY.......................................23
2.3 TERM LOAN FACILITY..............................................26
2.4 FEES............................................................28
2.5 INTEREST........................................................28
2.6 BREAKAGE COSTS..................................................31
2.7 INCREASED COSTS.................................................32
2.8 ILLEGALITY......................................................32
2.9 MARKET FAILURE..................................................33
2.10 ADVANCING AND PAYMENTS GENERALLY; COMPUTATIONS..................33
2.11 TAXES...........................................................36
ARTICLE 3. CONDITIONS PRECEDENT............................................37
3.1 CONDITIONS PRECEDENT TO AMENDMENT AND RESTATEMENT...............37
3.2 CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT................38
ARTICLE 4. REPRESENTATIONS AND WARRANTIES..................................38
4.1 ORGANIZATION....................................................38
4.2 AUTHORIZATION...................................................38
4.3 ENFORCEABILITY..................................................38
4.4 ABSENCE OF CONFLICTS AND APPROVALS..............................39
4.5 INVESTMENT COMPANIES............................................39
4.6 PUBLIC UTILITIES................................................39
4.7 FINANCIAL CONDITION.............................................39
4.8 CONDITION OF ASSETS.............................................39
4.9 LITIGATION......................................................40
4.10 SUBSIDIARIES AND AFFILIATES.....................................40
4.11 LAWS AND REGULATIONS............................................40
4.12 ENVIRONMENTAL COMPLIANCE........................................40
4.13 ERISA...........................................................40
4.14 TAXES...........................................................41
4.15 TRUE AND COMPLETE DISCLOSURE....................................41
4.16 YEAR 2000.......................................................41
ARTICLE 5. COVENANTS.......................................................41
5.1 ORGANIZATION; MAINTENANCE OF PROPERTIES.........................41
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5.2 REPORTING.......................................................42
5.3 INSPECTION......................................................44
5.4 USE OF PROCEEDS.................................................44
5.5 FINANCIAL COVENANTS.............................................45
5.6 DEBT............................................................46
5.7 LIENS...........................................................46
5.8 OTHER OBLIGATIONS...............................................46
5.9 CORPORATE TRANSACTIONS..........................................46
5.10 DISTRIBUTIONS...................................................48
5.11 TRANSACTIONS WITH AFFILIATES....................................48
5.12 INSURANCE.......................................................48
5.13 INVESTMENTS.....................................................49
5.14 LINES OF BUSINESS; DISTRIBUTION.................................49
5.15 COMPLIANCE WITH LAWS............................................49
5.16 ENVIRONMENTAL COMPLIANCE........................................49
5.17 ERISA COMPLIANCE................................................49
5.18 PAYMENT OF CERTAIN CLAIMS.......................................49
5.19 SUBSIDIARIES....................................................50
5.20 FURTHER ASSURANCES..............................................50
5.21 MANAGEMENT......................................................50
5.22 FOREIGN SUBSIDIARIES............................................50
5.23 BANK ACCOUNTS...................................................51
5.24 POST CLOSING ITEMS..............................................51
ARTICLE 6. DEFAULT AND REMEDIES............................................51
6.1 EVENTS OF DEFAULT...............................................51
6.2 TERMINATION OF COMMITMENTS......................................53
6.3 ACCELERATION OF CREDIT OBLIGATIONS..............................53
6.4 CASH COLLATERALIZATION OF LETTERS OF CREDIT.....................53
6.5 DEFAULT INTEREST................................................53
6.6 RIGHT OF SETOFF.................................................53
6.7 ACTIONS UNDER CREDIT DOCUMENTS..................................54
6.8 REMEDIES CUMULATIVE.............................................54
6.9 APPLICATION OF PAYMENTS.........................................54
ARTICLE 7. THE AGENT AND THE ISSUING BANK..................................55
7.1 AUTHORIZATION AND ACTION........................................55
7.2 RELIANCE, ETC...................................................55
7.3 AFFILIATES......................................................56
7.4 BANK CREDIT DECISION............................................56
7.5 EXPENSES........................................................56
7.6 INDEMNIFICATION.................................................56
7.7 SUCCESSOR AGENT AND ISSUING BANK................................57
ARTICLE 8. MISCELLANEOUS...................................................57
8.1 EXPENSES........................................................57
8.2 INDEMNIFICATION.................................................58
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8.3 MODIFICATIONS, WAIVERS, AND CONSENTS............................58
8.4 SURVIVAL OF AGREEMENTS..........................................59
8.5 ASSIGNMENT AND PARTICIPATION....................................59
8.6 NOTICE..........................................................61
8.7 CHOICE OF LAW...................................................61
8.8 FORUM SELECTION.................................................61
8.9 SERVICE OF PROCESS..............................................61
8.10 WAIVER OF JURY TRIAL............................................62
8.11 COUNTERPARTS....................................................62
8.12 CONFIDENTIALITY.................................................62
8.13 NO FURTHER AGREEMENTS...........................................62
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EXHIBITS
Exhibit A-1 - Form of Compliance Certificate
Exhibit A-2 - Form of Borrowing Base Certificate
Exhibit B - Form of Borrowing Request
Exhibit C - Form of Continuation/Conversion Request
Exhibit D-1 - Form of Revolving Credit Note
Exhibit D-2 - Form of Term Loan Note
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Closing Documents List
Exhibit G - Form of Joinder Agreement
SCHEDULES
Schedule I - Administrative Information
Schedule II - Disclosures
Schedule III - Add Back Charges
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FIRST AMENDED AND RESTATED CREDIT AGREEMENT
This First Amended and Restated Credit Agreement dated as of May 12, 2000
is among TETRA Technologies, Inc., a Delaware corporation, as Borrower, the
financial institutions named herein, as Banks, and Bank of America, N.A., as
Agent for the Banks, and is arranged by Banc of America Securities, L.L.C., as
Lead Arranger and Book Manager.
INTRODUCTION
A. The Borrower, the Banks and the Agent are parties to the Credit
Agreement dated as of April 10, 1997, as amended by Amendment No. 1 dated as of
August 31, 1997 and Amendment No. 2 and Waiver dated as of March 29, 1999 (as
amended, the "Existing Credit Agreement").
B. The parties to the Existing Credit Agreement desire to amend and
restate the Existing Credit Agreement as herein set forth.
C. To evidence the credit facility requested hereunder, the Borrower, the
Agent and the Banks have agreed that this Agreement is an amendment and
restatement of the Existing Credit Agreement, not a new or substitute credit
agreement or novation of the Existing Credit Agreement.
Now, therefore, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS.
1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (unless otherwise indicated, such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
"ACCOUNT DEBTOR" means a Person who is obligated on a Receivable.
"ACQUISITION" means the direct or indirect purchase or acquisition,
whether in one or more related transactions, of any Person or group of Persons
or any related group of assets, liabilities, or securities of any Person or
group of Persons.
"ADD-BACK CHARGES" means the consolidated non-cash, non-recurring charges
of the Borrower and its Subsidiaries listed on the attached SCHEDULE III charged
against the consolidated net income of the Borrower during the periods indicated
on such schedule.
"ADJUSTED CAPITAL EXPENDITURES" means, for each measurement period, the
greater of (a) actual consolidated Capital Expenditures (until March 31, 2000,
to be calculated net of proceeds received by the Borrower from the 1999 sale of
its headquarters office building located in the Woodlands, Texas) or (b)
$11,000,000.
"ADJUSTED EBITDA" means, with respect to the Borrower and for any period
of its determination, the sum of (a) the EBITDA of the Borrower and its
Subsidiaries that are organized
under a jurisdiction of the United States ("Domestic EBITDA") for such period;
(b) the EBITDA of the Subsidiaries of the Borrower that are not organized under
a jurisdiction of the United States ("Foreign EBITDA") for such period; PROVIDED
that the amount under this clause (b) included in Adjusted EBITDA shall not
exceed 30% of the sum of Domestic EBITDA and Foreign EBITDA for such period; and
(c) any Add-Back Charges that were charged against the EBITDA of the Borrower
and its Subsidiaries during such period.
"ADJUSTED PRIME RATE" means, for any day, the fluctuating rate per annum
of interest equal to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Rate in effect on such day plus 0.50%.
"ADVANCE" means a Revolving Credit Advance or a Term Loan Advance.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership, by contract, or otherwise.
"AGENT" means Bank of America in its capacity as an agent pursuant to
Article 7 and any successor agent pursuant to Section 7.7.
"AGENT FEE LETTER" means the confidential letter agreement dated as of
February 5, 1997, among the Borrower, NationsBank, N.A. and NationsBanc
▇▇▇▇▇▇▇▇▇▇ Securities, L.L.C., regarding certain fees owed by the Borrower to
NationsBank, N.A. and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities, L.L.C., in connection
with this Agreement.
"AGREEMENT" means this Credit Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Bank and for any
particular type of transaction, the office of such Bank set forth in SCHEDULE I
to this Agreement (or in the applicable Assignment and Acceptance by which such
Bank joined this Agreement) as its applicable lending office for such type of
transaction or such other office of such Bank as such Bank may from time to time
specify in writing to the Borrower and the Agent for such particular type of
transaction.
"APPLICABLE MARGIN" means, with respect to interest rates, letter of
credit fees, commitment fees, and leverage fees and as of any date of its
determination, an amount equal to the percentage amount set forth in the table
below opposite the applicable ratio of (i) the consolidated Debt of the Borrower
as of the end of the fiscal quarter then most recently ended to (ii) the
consolidated Adjusted EBITDA of the Borrower for the four fiscal quarters then
most recently ended:
DEBT TO ADJUSTED APPLICABLE MARGIN APPLICABLE MARGIN APPLICABLE MARGIN APPLICABLE MARGIN
EBITDA LIBOR TRANCHES PRIME RATE TRANCHES LETTER OF CREDIT FEES COMMITMENT FEES
---------------- ----------------- ------------------- --------------------- ---------------
<1.50 1.00% 0.00% 1.00% 0.25%
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>=1.50 but <2.00 1.25% 0.00% 1.25% 0.25%
>=2.00 but <2.50 1.625% 0.00% 1.625% 0.25%
>=2.50 but <3.00 2.00% 0.25% 2.00% 0.375%
>=3.00 but <3.25 2.25% 0.50% 2.25% 0.50%
>=3.25 2.75% 1.00% 2.75% 0.50%
Until the delivery of the March 31, 2000, financial statements to the Agent
pursuant to Section 5.2(b), the Applicable Margin shall be 2.75% for LIBOR
Tranches, 1.00% for Prime Rate Tranches, 2.75% for Letter of Credit Fees, and
0.50% for Commitment Fees. Thereafter, the Agent shall determine the Applicable
Margin based upon the most recent financial statements dated as of the end of a
fiscal quarter delivered to the Agent pursuant to Section 5.2(b). If such
statements are delivered when required hereunder, any adjustment to the
Applicable Margin shall become effective on the date of delivery of such
financial statements. Upon any change in the Applicable Margin, the Agent shall
promptly notify the Borrower and the Banks of the new Applicable Margin. If such
financial statements are not delivered when required hereunder, the Applicable
Margin shall increase to the maximum percentage amount set forth in the table
above from such 45th day until three days after such financial statements are
received by the Agent; PROVIDED that such increase shall not limit the Agent's
capacity to declare a default under this Agreement.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance in
substantially the form of EXHIBIT E executed by an assignor Bank, an assignee
Bank, and the Agent, in accordance with Section 8.5.
"BANK OF AMERICA" means Bank of America, N.A., in its individual capacity.
"BANKS" means the lenders listed as Banks on the signature pages of this
Agreement and each Eligible Assignee that shall become a party to this Agreement
pursuant to Section 8.5(b).
"BORROWER" means TETRA Technologies, Inc., a Delaware corporation.
"BORROWER ACCOUNT" means the principal operating account of Borrower with
the Agent or any other account of Borrower with the Agent which is designated as
Borrower's "Borrower Account" in writing by the Borrower to the Agent.
"BORROWING" means any Revolving Credit Borrowing or any Term Loan
Borrowing.
"BORROWING BASE" means, at any date of its determination, the sum of (a)
80% of the book value of the Eligible Receivables of the Borrower and its
Subsidiaries plus (b) the lesser of (i) 50% of the lesser of the cost or fair
market value of the Eligible Inventory of the Borrower and its Subsidiaries (as
reduced by an amount equal to (A) from the date of this Agreement until July 11,
2000, $1,000,000, and (B) thereafter, an amount equal to three months' aggregate
rental payments at all Inventory locations for which landlords' lien waivers, in
form and substance reasonably satisfactory to the Agent, have not been provided
as of the applicable date of determination) and (ii) 80% of the book value of
the Eligible Receivables of the Borrower and its Subsidiaries.
"BORROWING BASE CERTIFICATE" means a borrowing base certificate executed
by a Responsible Officer of the Borrower in substantially the form of EXHIBIT
A-2.
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"BORROWING BASE TERMINATION CONDITION" means the first Business Day on
which:
(a)(i) the Borrower's consolidated Debt on such day plus $10,000,000 to
(ii) its consolidated Adjusted EBITDA for the four fiscal quarter period ending
immediately preceding such day is less than 3.00; and
(b)(i) the Borrower's consolidated Adjusted EBITDA for the four fiscal
quarters ending immediately preceding such day or, before December 31, 2000, the
Borrower's consolidated Adjusted EBITDA for the period from January 1, 2000
through the last day of the fiscal quarter ending immediately preceding such day
to (ii) consolidated Fixed Charges for such period is 1.25 or greater.
"BORROWING REQUEST" means a Borrowing Request in substantially the form of
EXHIBIT B executed by a Responsible Officer of the Borrower and delivered to the
Agent.
"BUSINESS DAY" means any Monday through Friday during which commercial
banks are open for business in Houston, Texas, and Dallas, Texas, and, if the
applicable Business Day relates to any LIBOR Tranche, on which dealings are
carried on in the London interbank market.
"BUY BACK ARRANGEMENT" means an arrangement between a Credit Party and an
Account Debtor whereby the Credit Party sells certain clear brine fluids to the
Account Debtor, with an agreement that the Account Debtor shall resell to the
Credit Party any of such chemicals which are recovered by the Account Debtor
after their use.
"CAPITAL EXPENDITURES" means, with respect to any Person and with respect
to any period of its determination, the consolidated expenditures of such Person
during such period that are required to be included in or are reflected by the
consolidated property, plant, or equipment accounts of such Person, or any
similar fixed asset or long term capitalized asset accounts of such Person, on
the consolidated balance sheet of such Person in conformity with GAAP, PROVIDED,
that Capital Expenditures shall not include expenditures deemed to occur in
connection with Acquisitions made pursuant to Section 5.9.
"CAPITAL LEASES" means, with respect to any Person, any lease of any
property by such Person which would, in accordance with GAAP, be required to be
classified and accounted for as a capital lease on the balance sheet of such
Person.
"CHANGE OF CONTROL" means, with respect to the Borrower, the direct or
indirect acquisition after the date hereof by any Person or related Persons
constituting a group of (a) beneficial ownership of issued and outstanding
shares of Voting Securities of the Borrower, the result of which acquisition is
that such Person or such group possesses 30% or more of the combined voting
power of all then-issued and outstanding Voting Securities of the Borrower, or
(b) the power to elect, appoint, or cause the election or appointment of at
least a majority of the members of the board of directors of the Borrower.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
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"COLLATERAL" means any property of the Credit Parties subject to a Lien in
favor of the Agent securing the Credit Obligations.
"COMMITMENT" means, for any Bank, its Revolving Credit Commitment or its
Term Loan Commitment.
"COMMONLY CONTROLLED ENTITY" means, with respect to any Person, any other
Person which is under common control with such Person within the meaning of
Section 414 of the Code.
"COMPLIANCE CERTIFICATE" means a compliance certificate executed by a
Responsible Officer of the Borrower in substantially the form of EXHIBIT A-1.
"CONTINUATION/CONVERSION REQUEST" means a Continuation/Conversion Request
in substantially the form of EXHIBIT C executed by a Responsible Officer of the
Borrower and delivered to the Agent.
"CREDIT DOCUMENTS" means this Agreement, the Notes, the Agent Fee Letter,
the Letter of Credit Documents, the Guaranty, the Security Documents, the
Interest Hedge Agreements, and each other agreement, instrument, or document
executed at any time in connection with this Agreement.
"CREDIT OBLIGATIONS" means all principal, interest, fees, reimbursements,
indemnifications, and other amounts now or hereafter owed by the Borrower to the
Agent and the Banks (or with respect to the Interest Hedge Agreements, any
Affiliates of the Banks) under this Agreement, the Notes, the Letter of Credit
Documents, and the other Credit Documents and any increases, extensions, and
rearrangements of those obligations under any amendments, supplements, and other
modifications of the documents and agreements creating those obligations.
"CREDIT PARTIES" means the Borrower and the Guarantors.
"DEBT" means, with respect to any Person, without duplication, (a) the
Credit Obligations, (b) indebtedness of such Person for borrowed money, (c)
obligations of such Person evidenced by bonds, debentures, notes, or other
similar instruments, (d) obligations of such Person to pay the deferred purchase
price of property or services (other than trade debt and normal operating
liabilities incurred in the ordinary course of business), (e) obligations of
such Person as lessee under Capital Leases, (f) obligations of such Person under
or relating to letters of credit, guaranties, purchase agreements, or other
creditor assurances assuring a creditor against loss in respect of indebtedness
or obligations of others of the kinds referred to in clauses (b) through (e) of
this definition, and (g) nonrecourse indebtedness or obligations of others of
the kinds referred to in clauses (b) through (f) of this definition secured by
any Lien on or in respect of any property of such Person. For the purposes of
determining the amount of any Debt, the amount of any Debt described in clause
(f) of the definition of Debt shall be valued at the maximum amount of the
contingent liability thereunder and the amount of any Debt described in clause
(g) that is not covered by clause (f) shall be valued at the lesser of the
amount of the Debt secured or the book value of the property securing such Debt.
"DEBT SERVICE" means, with respect to any Person and for any period of its
determination, (a)
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the interest expense of such Person for such period, including interest expense
allocable to Capital Leases, plus (b) the scheduled and required principal
payments of Debt of such Person for such period, including scheduled principal
payments allocable to Capital Leases.
"DEFAULT" means (a) an Event of Default or (b) any event or condition
which with notice or lapse of time or both would, unless cured or waived, become
an Event of Default.
"DEFAULT RATE" means, with respect to any amount due hereunder, a per
annum interest rate equal to (a) if such amount is either outstanding principal
accruing interest based upon a rate established elsewhere in this Agreement or
accrued but unpaid interest thereon, the sum of (i) the interest rate
established elsewhere in this Agreement from time to time for such principal
amount, including any applicable margin, plus (ii) 2.00% per annum or (b) in all
other cases, the Adjusted Prime Rate in effect from time to time plus the
Applicable Margin for Prime Rate Tranches in effect from time to time plus 2.00%
per annum.
"DERIVATIVES" means any swap, hedge, cap, collar, or similar arrangement
providing for the exchange of risks related to price changes in any commodity,
including money.
"DIVIDEND PAYMENTS" means, with respect to any Person and for any period
of its determination, any cash dividends paid by such Person on the common,
preferred, or other capital stock of such Person during such period plus any
amounts paid by such Person for the purchase, redemption, retirement, or other
acquisition of any of such Person's capital stock during such period.
"DIVISION" means the "Chemicals" or "Oil and Gas Services" operating
division of the Borrower.
"DOLLARS OR $" means lawful money of the United States of America.
"EBITDA" means, with respect to any Person and for any period of its
determination, the consolidated net income of such Person for such period
(exclusive of any extraordinary gains), plus the consolidated interest expense,
income taxes, and depreciation and amortization of such Person for such period.
"ELIGIBLE ASSIGNEE" means, with respect to any assignment hereunder at the
time of such assignment, any commercial bank organized under the laws of the
United States or any of the countries parties to the Organization for Economic
Cooperation and Development or any political subdivision of any thereof which
has primary capital (or its equivalent) of not less than $250,000,000, and which
is approved by the Agent and (provided that no Default or Event of Default
exists) the Borrower, such approvals not to be unreasonably withheld.
"ELIGIBLE INVENTORY" means items of Inventory of the Credit Parties held
by any Credit Party for sale in the ordinary course of the business of any such
Credit Parties (but not including packaging or shipping materials or maintenance
supplies) which meet all of the following requirements as determined by the
Agent in its sole reasonable discretion:
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(a) such Inventory is owned by a Credit Party, is subject to a perfected
security interest in favor of the Agent securing the Credit Obligations, and is
subject to no other Lien whatsoever (other than Permitted Liens);
(b) such Inventory consists of raw materials or finished goods and does
not consist of work-in-process, supplies or consigned goods;
(c) such Inventory is in good condition and meets all standards applicable
to such goods, their use or sale imposed by any governmental agency, or
department or division thereof, having regulatory authority over such matters;
(d) such Inventory is currently either usable or saleable, at prices
approximating at least the cost thereof, in the normal course of a Credit
Party's business;
(e) such Inventory is not slow moving, obsolete or returned or repossessed
or used goods taken in trade;
(f) such Inventory is located in the United States and at one of the
locations listed in the Security Agreements except as otherwise disclosed in
writing to and consented to by the Agent;
(h) such Inventory is in the possession and control of a Credit Party and
not any third party, or, if located in a warehouse or other facility leased by
any Credit Party, the warehouseman or lessor has delivered to the Agent a
warehouseman's or landlord's waiver and consent in form and substance
satisfactory to the Agent; and
(i) such Inventory, as determined in the Agent's sole reasonable
discretion, is not otherwise ineligible.
"ELIGIBLE RECEIVABLES" means the unpaid portion of a Receivable payable in
Dollars to any Credit Party net of any returns, discounts, claims, credits,
charges or other allowances, offsets, deductions, counterclaims, disputes or
other defenses and reduced by the aggregate amount of all reserves, limits and
deductions provided for in this definition and elsewhere in this Agreement which
meets all of the following requirements:
(a) such Receivable is owned by a Credit Party, is subject to a perfected
security interest in favor of the Agent securing the Credit Obligations, and is
subject to no other Lien whatsoever (other than Permitted Liens);
(b) the time for payment for such Receivable has not been extended by any
Credit Party;
(c) such Receivable is not unpaid more than 60 days after its due date;
(d) such Receivable does not arise out of any transaction with any
Subsidiary or Affiliate of such Credit Party;
(e) such Receivable is not owing by an Account Debtor more than 50% of
whose then-
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existing accounts owing to any Credit Party do not meet the requirements for
eligibility set forth in clause (c) above;
(f) if the Account Debtor with respect thereto is located outside of the
United States of America, the goods which gave rise to such Receivable were
shipped after receipt by such Credit Party from the Account Debtor of an
irrevocable letter of credit that (i) has been confirmed by a financial
institution acceptable to the Agent, (ii) is in form and substance acceptable to
the Agent, (iii) is payable in the full face amount of the face value of the
Receivable in Dollars at a place of payment located within the United States,
and (iv) has been duly delivered to the Agent;
(g) such Receivable is not subject to the Assignment of Claims Act of
1940, as amended from time to time, or any applicable law now or hereafter
existing similar in effect thereto, as determined in the sole discretion of the
Agent, or to any provision prohibiting its assignment or requiring notice of or
consent to such assignment, unless such Receivable is duly assigned to the Agent
in compliance with all applicable governmental requirements so that the Agent is
recognized by the Account Debtor to have all of the rights of an assignee of
such Receivable;
(h) such Credit Party is not in breach of any express or implied
representation or warranty with respect to the goods the sale of which gave rise
to such Receivable;
(i) the Account Debtor with respect to such Receivable is not insolvent or
the subject of any bankruptcy or insolvency proceedings of any kind or of any
other proceeding or action, threatened or pending, which might, in the Agent's
sole reasonable judgment, cause a material adverse effect on the financial
condition of such Account Debtor;
(j) the goods the sale of which gave rise to such Receivable were shipped
or delivered to the Account Debtor on an absolute sale basis and not (except for
goods which are the subject of a Buy Back Arrangement) on a ▇▇▇▇ and hold sale
basis, a consignment sale basis, a guaranteed sale basis, a sale or return basis
or on the basis of any other similar understanding, and such goods have not been
returned (except for goods which are the subject of a Buy Back Arrangement) or
rejected;
(k) such Receivable is not owing by an Account Debtor who, individually or
along with a group of Affiliates of such Account Debtor, has then-existing
accounts owing to the Credit Parties which exceed in face amount 20% of total
Eligible Receivables of either Division, to the extent of such excess;
(l) such Receivable is evidenced by an invoice or other documentation in
form acceptable to the Agent containing only terms normally offered by any
Credit Party, and dated no later than the date of shipment;
(m) such Receivable is a valid, legally enforceable obligation of the
Account Debtor with respect thereto;
(n) if such Receivable arises from the performance of services, such
services have been fully performed;
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(o) such Receivable is subject to a security interest, which is perfected
as to such Receivable, and is subject to no other Lien whatsoever other than a
Permitted Lien and the goods giving rise to such Receivable were not, at the
time of the sale thereof, subject to any Lien other than a Permitted Lien; and
(p) such Receivable, as determined in the Agent's sole reasonable
discretion, is not otherwise ineligible.
"ENVIRONMENTAL LAW" means all federal, state, and local laws, rules,
regulations, ordinances, orders, decisions, agreements, and other requirements
now or hereafter in effect relating to the pollution, destruction, loss, or
injury of the environment, the presence of any contaminant in the environment,
the protection, cleanup, remediation, or restoration of the environment, the
creation, handling, transportation, use, or disposal of any waste product in the
environment, exposure of Persons to any contaminant, waste, or hazardous
substance in the environment, and the health and safety of employees in relation
to their environment.
"EQUITY ISSUANCE" means any issuance of equity securities (including any
preferred equity securities) by the Borrower or any of its Subsidiaries other
than (a) equity securities issued to the Borrower or one of its Subsidiaries;
(b) equity securities issued pursuant to employee benefit or dividend
reinvestment plans in the ordinary course of business; and (c) equity securities
issued as consideration in connection with any investment by the Borrower or any
of its Subsidiaries in any other Person pursuant to which such Person shall
become a Subsidiary or shall be merged into or consolidated with the Borrower or
any of its Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" has the meaning specified in Section 6.1.
"EXISTING CREDIT AGREEMENT" has the meaning set forth in the introduction
to this Agreement.
"EXISTING LETTERS OF CREDIT" means the standby letters of credit issued by
the Issuing Bank for the account of the Borrower prior to the date of this
Agreement which are listed in the attached SCHEDULE II.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating per annum
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for any such day on
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal
Reserve System or any of its successors.
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"FIXED CHARGES" means with respect to any Person and for any period of its
determination, the sum of (a) the consolidated Debt Service of such Person for
such period, plus (b) the Adjusted Capital Expenditures of such Person for such
period, plus (c) the consolidated Dividend Payments of such Person for such
period.
"FLEET MORTGAGES" means the First Preferred Fleet Mortgages made by the
Borrower in favor of the Agent securing the Credit Obligations.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the requirements of
Section 1.3.
"GUARANTOR" means (a) the Subsidiaries of the Borrower listed in SCHEDULE
II that have executed the Guaranty, and (b) any future Subsidiaries of the
Borrower that join the Guaranty pursuant to Section 5.19.
"GUARANTY" means the Guaranty dated as of May 12, 2000, made on and after
the date of this Agreement by certain Subsidiaries of the Borrower in favor of
the Agent guaranteeing the Credit Obligations.
"HAZARDOUS MATERIALS" means any substance or material identified as a
hazardous substance pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended and as now or hereafter in
effect; any substance or material regulated as a hazardous waste pursuant to the
Resource Conservation and Recovery Act of 1976, as amended and as now or
hereafter in effect; and any substance or material designated as a hazardous
substance or hazardous waste pursuant to any other Environmental Law.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to the relevant Bank which are presently in effect or,
to the extent allowed by law, under such applicable laws which may hereafter be
in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow. The "Highest Lawful Rate" under this Agreement shall
be the indicated rate ceiling under Section 303.305(b) of the Texas Finance
Code, any other lawful rate ceiling exceeds the rate ceiling so determined, and
then the higher rate ceiling shall apply.
"INTEREST HEDGE AGREEMENTS" means any swap, hedge, cap, collar, or similar
arrangement between the Borrower and any Bank (or any Affiliate of any Bank)
providing for the exchange of risks related to price changes in the interest
rate on the Advances under this Agreement.
"INTEREST PERIOD" means, with respect to each LIBOR Tranche, the period
commencing on the date of such LIBOR Tranche 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 shall be one, two, three, or six months, in each
case as the Borrower may select in the applicable Borrowing Request or
Continuation/Conversion Request (unless there shall exist any Default or Event
of Default, in which case the Borrower may only select one month Interest
Periods); provided, however, that:
(a) whenever the last day of any Interest Period would otherwise occur on
a day other
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than a Business Day, the last day of such Interest Period shall be extended to
occur on the next succeeding Business Day; provided that if such extension would
cause the last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the next
preceding Business Day;
(b) any Interest Period which begins on the last Business Day of the
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and
(c) the Borrower may not select an Interest Period for any for any LIBOR
Tranche which ends after any date when outstanding principal amounts of any Loan
must be repaid unless, after giving effect to such selection, the aggregate
outstanding principal amount of Prime Rate Tranches under such Loan and LIBOR
Tranches under such Loan having Interest Periods which end on or before such
repayment date shall be equal to or greater than the principal amount due and
payable on such date (and therefore in no event shall any Interest Period for
any LIBOR Tranche extend beyond the applicable maturity date).
"INITIAL FINANCIAL STATEMENTS" means the financial statements of the
Borrower referred to in Section 4.7(a).
"INVENTORY" means and includes, as to any Person, all of such Person's
then owned or existing and future acquired or arising (a) goods intended for
sale or lease or for display or demonstration, (b) work in process, and (c) raw
materials and other materials and supplies of every nature and description used
or which might be used in connection with the manufacture, packing, shipping,
advertising, selling, leasing or furnishing of goods or otherwise used or
consumed in the conduct of business.
"ISSUING BANK" means Bank of America and any successor issuing bank
pursuant to Section 7.7.
"LETTER OF CREDIT" means any commercial or standby letter of credit issued
by the Issuing Bank for the account of the Borrower pursuant to the terms of
this Agreement, including the Existing Letters of Credit.
"LETTER OF CREDIT APPLICATION" means the Issuing Bank's standard form
letter of credit application for either a commercial or standby letter of
credit, as the case may be, which has been executed by a Borrower and accepted
by the Issuing Bank in connection with the issuance of a Letter of Credit.
"LETTER OF CREDIT APPLICATION AMENDMENT" means the Issuing Bank's standard
form application to amend a letter of credit for either a commercial or standby
letter of credit, as the case may be, which has been executed by a Borrower and
accepted by the Issuing Bank in connection with the increase or extension of a
Letter of Credit.
"LETTER OF CREDIT COLLATERAL ACCOUNT" means a special cash collateral
account pledged to the
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Agent containing cash deposited pursuant to Section 6.4 to be maintained with
the Agent in accordance with Section 2.2(f).
"LETTER OF CREDIT DOCUMENTS" means all Letters of Credit, Letter of Credit
Applications, Letter of Credit Application Amendments, and agreements,
documents, and instruments entered into in connection with or relating thereto.
"LETTER OF CREDIT EXPOSURE" means, as of any date of its determination,
the aggregate outstanding undrawn amount of Letters of Credit plus the aggregate
of the reimbursement obligations of the Borrower under the Letter of Credit
Applications and this Agreement.
"LETTER OF CREDIT SUBLIMIT" means $10,000,000.
"LIBOR" means, for any LIBOR Tranche for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR" shall mean, for any LIBOR Tranche for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
"LIBOR TRANCHE" shall mean any Tranche which bears interest based upon the
LIBOR, as determined in accordance with Section 2.5.
"LIEN" means any mortgage, lien, pledge, charge, deed of trust, security
interest, encumbrance, or other type of preferential arrangement to secure or
provide for the payment of any obligation of any Person, whether arising by
contract, operation of law, or otherwise (including any title retention for such
purposes under any conditional sale agreement, any Capital Lease, or any other
title transfer or retention agreement).
"LOAN" means a Revolving Credit Loan or a Term Loan.
"MAJORITY BANKS" means, at any time, Banks holding more than 66_% of the
then aggregate unpaid principal amount of the Notes held by the Banks and the
Letter of Credit Exposure of the Banks at such time; provided that if no such
principal amount or Letter of Credit Exposure is then outstanding, "Majority
Banks" shall mean Banks having more than 66_% of the aggregate amount of the
Commitments at such time.
"MATERIAL ADVERSE EFFECT" means any material and adverse change in or
effect on (a) the consolidated assets, liabilities, financial condition,
business, operations, affairs, or circumstances of the Borrower from those
reflected in the most recent financial statements furnished by the Borrower
pursuant to Section 5.2(a) or from the facts represented or warranted in this
Agreement or any other
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Credit Document, or (b) the ability of the Borrower to carry out its business or
to meet its obligations under the Notes, this Agreement, or any other Credit
Document to which it is a party on a timely basis.
"MEXICAN PLEDGE AGREEMENTS" means the Pledge Agreements dated as of August
31, 1997, as amended as of the date hereof, made by each of Tetra International,
Inc., a Delaware corporation, PFI Corporation, a Delaware corporation, and the
Borrower in favor of the Agent, pledging the stock of the Mexican Subsidiaries
of such Pledgors as security for the Credit Obligations.
"MINIMUM BORROWING AMOUNT" means, with respect to any Borrowing,
$1,000,000.
"MINIMUM BORROWING MULTIPLE" means $500,000.
"MINIMUM TRANCHE AMOUNT" means, with respect to any Tranche, $1,000,000.
"MINIMUM TRANCHE MULTIPLE" means $500,000.
"MORTGAGES" means (a) the Deeds of Trust, Security Agreements, Fixture
Filings, and Assignments of Rents made by the Borrower in favor of the Agent
securing the Credit Obligations, and (b) any other deed of trust, mortgage, or
similar instrument granting the Agent a security interest in real property to
secure the Credit Obligations.
"NET CASH PROCEEDS" means:
(a) with respect to any sale, transfer, or other disposition of any of the
Property of any Credit Party (including the sale or transfer of stock or other
equity interest by such Credit Party and property insurance proceeds), all cash
and investments described in clauses (e) through (h) of the definition of
Permitted Investments received by any Credit Party from such sale, transfer, or
other disposition after, without duplication, (i) payment of, or provision for,
all brokerage commissions, legal fees, accounting fees, and other reasonable
out-of-pocket fees and expenses actually incurred; (ii) payment of, or provision
for, taxes payable as a result of such disposition, (iii) payment of any
outstanding obligations relating to such Property paid in connection with any
such sale, transfer, or other disposition; and (iv) recording of the amount of
reserves required in accordance with GAAP for indemnity or similar obligations
of the Credit Parties directly related to such sale, transfer, or other
disposition and
(b) with respect to the issuance of any Equity Issuance, all cash received
by the Borrower or any of its Subsidiaries from such Equity Issuance after
payment of or deduction for (i) all underwriter's or placement agent's discounts
and fees and (ii) reasonable legal, accounting, and other fees and expenses of
the Borrower or such Subsidiary incurred in connection with the issuance of any
such securities.
"NET WORTH" means, with respect to any Person and as of any date of its
determination, the excess of (a) the assets of such Person over (b) the
liabilities of such Person.
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"NOTE" means a Revolving Credit Note or a Term Loan Note.
"PBGC" means Pension Benefit Guaranty Corporation or its successor.
"PERMITTED DEBT" means all of the following Debt:
(a) Debt outstanding under the Credit Documents;
(b) Debt in the form of borrowed money set forth in the Initial Financial
Statements and in SCHEDULE II hereto and any extensions, renewals, or
replacements of the foregoing which do not increase the outstanding principal
amount thereof at the time of such extension, renewal, or replacement;
(c) Debt in the form of purchase money indebtedness arising in the
ordinary course of business, and Debt assumed in connection with any Acquisition
of Property of any Person pursuant to Section 5.9, and any extensions, renewals,
or replacements of the foregoing which do not increase the outstanding principal
amount thereof at the time of such extension, renewal, or replacement; PROVIDED
that such Debt does not exceed an aggregate outstanding amount equal to the
following: (i) $5,000,000 and (ii) on December 31, 2000 and thereafter, when the
maximum ratio for Debt to Adjusted EBITDA as permitted by Section 5.5(a) reduces
to 3.00 to 1.00 as provided therein, such dollar amount shall be increased to
$15,000,000; PROVIDED that for any such increase to become effective, the
Compliance Certificate delivered by the Borrower with respect to the fiscal
quarter ended December 31, 2000, shall demonstrate compliance with the
requirements of Section 5.5(a); and
(d) Debt in the form of loans and advances made by the Borrower and
Subsidiaries of the Borrower to Subsidiaries of the Borrower to the extent
permitted by Section 5.13.
"PERMITTED INVESTMENTS" means all of the following investments:
(a) advances to or investments in Subsidiaries of the Borrower that hold
substantially all of their assets in the United States and are Guarantors,
including such investments occurring in connection with Acquisitions permitted
under Section 5.9;
(b) investments in Persons (other than those described in clause (a)
above) PROVIDED that the aggregate outstanding amount of all such investments
during any fiscal quarter shall not exceed 20% of the Borrower's consolidated
Net Worth as of the end of the fiscal quarter most recently ended, and PROVIDED
further that the aggregate outstanding amount of all such investments during any
fiscal quarter in Persons which are joint ventures or which are not wholly-owned
Subsidiaries of the Borrower shall not exceed 10% of the Borrower's consolidated
Net Worth as of the end of the fiscal quarter most recently ended, including, in
each case, such investments occurring in connection with Acquisitions permitted
under Section 5.9;
(c) investments set forth in SCHEDULE II hereto;
(d) investments in the form of loans, guaranties, open accounts, and other
extensions of
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trade credit in the ordinary course of business;
(e) investments in commercial paper and bankers' acceptances maturing in
twelve months or less from the date of issuance and which, at the time of
acquisition are rated A-2 or better by Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc., and P-2 or better by ▇▇▇▇▇'▇ Investors Service,
Inc;
(f) investments in direct obligations of the United States, or investments
in any Person which investments are guaranteed by the full faith and credit of
the United States, in either case maturing in twelve months or less from the
date of acquisition thereof;
(g) investments in time deposits or certificates of deposit maturing
within one year from the date such investment is made, issued by a bank or trust
company organized under the laws of the United States or any state thereof
having capital, surplus, and undivided profits aggregating at least $250,000,000
or a foreign branch thereof and whose long-term certificates of deposit are, at
the time of acquisition thereof, rated A-2 by Standard & Poor's Ratings Group, a
division of ▇▇▇▇▇▇-▇▇▇▇, Inc., or Prime-2 by ▇▇▇▇▇'▇ Investors Service, Inc.;
and
(h) investments in money market funds holding only obligations of the
types described in clauses (e)-(g) above and repurchase agreements having a term
of less than one year that are fully collateralized by obligations of the type
described in clauses (e)-(g) above provided that such repurchase agreements are
entered into with banks or trust companies described in clause (g).
In valuing any investments for the purpose of applying the limitations set forth
in this Agreement, the amount of such investments shall be determined from the
consolidated balance sheets of the Borrower.
"PERMITTED LIENS" means all of the following Liens:
(a) Liens securing the Credit Obligations;
(b) Liens described in SCHEDULE II attached hereto provided that no such
Lien is spread to cover any additional property or indebtedness;
(c) Liens covering Property other than accounts receivable or inventory
(as such terms are defined in the Texas Uniform Commercial Code) of any
Restricted Entity, securing purchase money debt permitted under clause (c) of
the definition of Permitted Debt, including Liens on such Property acquired by
any Restricted Entity in accordance with Section 5.9, provided that no such Lien
is spread to cover any such Property not purchased or leased in connection with
the incurrence of such Debt; and
(d) Liens arising in the ordinary course of business which are not
incurred in connection with the borrowing of money or the obtaining of advances
or credit and which do not materially detract from the value of the assets of
any Restricted Entity or materially interfere with the business of any
Restricted Entity, including to the extent they meet the foregoing requirements,
(i) Liens for taxes, assessments, or other governmental charges or levies; (ii)
Liens in connection with worker's
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compensation, unemployment insurance, or other social security, old age pension,
or public liability obligations; (iii) Liens in the form of legal or equitable
encumbrances deemed to exist by reason of negative pledge covenants and other
covenants or undertakings of like nature; (iv) Liens in the form of landlords',
vendors', carriers', warehousemen's, repairmen's, mechanics', workmen's,
materialmen's, construction, or other like Liens arising by operation of law in
the ordinary course of business or incident to the construction or improvement
of any property; and (v) Liens in the form of zoning restrictions, easements,
licenses, and other restrictions on the use of real property or minor
irregularities in title thereto which do not materially impair the use of such
property in the operation of the business of any Restricted Entity or the value
of such property.
"PERMITTED SALE" has the meaning assigned to such term in Section 5.9(d)
of this Agreement.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, or other entity, or a government or any political subdivision or agency
thereof, or any trustee, receiver, custodian, or similar official.
"PLAN" means any (a) employee medical benefit plan under Section 3(1) of
ERISA, (b) employee pension benefit plan under Section 3(2) of ERISA, (c)
multiemployer plan under Section 4001(a)(3) of ERISA, and (d) employee account
benefit plan under Section 3(2) of ERISA.
"PLEDGE AGREEMENTS" means the U. S. Pledge Agreements, the Mexican Pledge
Agreements and the U.K. Pledge Agreements, together with any Pledge Agreements
made by any Restricted Entity under Section 5.22 with respect to the stock of
certain future Subsidiaries of the Restricted Entities which are not Guarantors.
"PLEDGORs" means Tetra International, Inc., a Delaware corporation, PFI
Corporation, a Delaware corporation, and the Borrower, together with any other
Restricted Entity that executes a Pledge Agreement under Section 5.22.
"PRIME RATE" means, for any day, the fluctuating per annum interest rate
in effect on such day equal to the rate of interest publicly announced by the
Agent as its prime rate, whether or not the Borrower has notice thereof.
"PRIME RATE TRANCHE" shall mean any Tranche which bears interest based
upon the Adjusted Prime Rate, as determined in accordance with Section 2.5.
"PROHIBITED TRANSACTION" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code.
"PROPERTY" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
"RATABLE SHARE" OR "PRO RATA SHARE" means, at any time with respect to any
Bank, either (a) the ratio (expressed as a percentage) of such Bank's
Commitments at such time to the aggregate Commitments at such time or (b) if the
Commitments have been terminated, the ratio (expressed as a percentage) of such
Bank's aggregate outstanding Advances and Letter of Credit Exposure at
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such time to the aggregate outstanding Advances and Letter of Credit Exposure of
all the Banks at such time.
"RECEIVABLES" means and includes, as to any Person, all of such Person's
then owned or existing and future acquired or arising (a) accounts, (b) chattel
paper (including, without limitation, installment sales contracts and personal
property leases), (c) contract rights, (d) rights to the payment of money or
other forms of consideration of any kind including, but not limited to, letters
of credit and the right to receive payment thereunder, tax refunds, insurance
proceeds, notes, drafts, instruments, documents, acceptances and all other
debts, obligations and liabilities in whatever form from any Person and
guaranties, security and Liens securing payment thereof, and (e) cash and
non-cash proceeds of any of the foregoing.
"RELATED PARTIES" means, with respect to any Person, such Person's
stockholders, directors, officers, employees, agents, Affiliates, successors,
and assigns, and their respective stockholders, directors, officers, employees,
and agents, and, with respect to any Person that is an individual, such Person's
family relations and heirs.
"REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA.
"RESPONSIBLE OFFICER" means, with respect to any Person, such Person's
Chief Executive Officer, President, Chief Financial Officer, Secretary,
Treasurer, or any other officer of such Person designated by any of the
foregoing in writing from time to time.
"RESTRICTED ENTITIES" means the Borrower and each Subsidiary of the
Borrower.
"REVOLVING CREDIT ADVANCE" means an advance of principal made by a Bank
under any Revolving Credit Borrowing.
"REVOLVING CREDIT BORROWING" means any aggregate amount of principal
advanced on the same day and pursuant to the same Borrowing Request under the
revolving credit facility created in Section 2.1.
"REVOLVING CREDIT COMMITMENT" means, for any Bank, the amount set forth
below such Bank's name on the signature pages of this Agreement as its Revolving
Credit Commitment, or if such Bank has entered into any Assignment and
Acceptance since the date of this Agreement, as set forth for such Bank as its
Revolving Credit Commitment in the Register maintained by the Agent pursuant to
Section 8.5(c), in each case, as such amount may be reduced pursuant to Section
2.1(b) or terminated pursuant to Section 6.2.
"REVOLVING CREDIT COMMITMENT TERMINATION DATE" means March 31, 2002.
"REVOLVING CREDIT LOAN" means the aggregate outstanding principal amount
of the Revolving Credit Borrowings.
"REVOLVING CREDIT MATURITY DATE" means March 31, 2002.
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"REVOLVING CREDIT NOTE" means a promissory note of the Borrower payable to
the order of a Bank, in substantially the form of EXHIBIT D-1, evidencing the
indebtedness of the Borrower to such Bank resulting from Revolving Credit
Advances made by such Bank to the Borrower.
"SECURITY AGREEMENTS" means (a) the Security Agreement dated as of May 12,
2000 made by the Borrower in favor of the Agent granting the Agent a security
interest in certain personal property of the Borrower to secure the Credit
Obligations; (b) the Security Agreement dated as of May 12, 2000 made by the
Borrower's domestic Subsidiaries in favor of the Agent granting the Agent a
security interest in certain personal property of such Subsidiaries to secure
the Credit Obligations; and (c) any other security agreement or similar
instrument granting the Agent a security interest in the personal property of a
Credit Party to secure the Credit Obligations.
"SECURITY DOCUMENTS" means the Pledge Agreements, the Security Agreements,
the Mortgages, the Fleet Mortgages, and any other document creating, perfecting,
publishing notice of, or consenting to Liens in favor of the Agent securing the
Credit Obligations.
"SUBSIDIARY" means, with respect to any Person, any other Person, a
majority of whose outstanding Voting Securities (other than directors'
qualifying shares) shall at any time be owned by such Person or one or more
Subsidiaries of such person.
"TERM LOAN" means the loan made to the Borrower under the lending
commitment created under Section 2.3(a).
"TERM LOAN ADVANCE" means an advance of principal made by a Bank under the
Term Loan Borrowing.
"TERM LOAN BORROWING" means the aggregate amount of principal advanced
pursuant to the Borrowing Request under the term loan facility created under
Section 2.3.
"TERM LOAN BORROWING BASE" means, on any date of its determination, the
sum of (a) 75% of the appraised fair market value of the Borrower's real estate
and fixtures subject to a Mortgage and no Liens other than Permitted Liens and
(b) 75% of the liquidation value in place of the Borrower's equipment (as
defined in the Texas Business and Commerce Code) subject to first perfected
security interest in favor of the Agent securing the Credit Obligations (and
otherwise subject to no other Lien whatsoever other than those Liens described
in paragraph (d) of the definition of Permitted Liens), all as determined by the
Agent in its sole reasonable discretion.
"TERM LOAN COMMITMENT" means, for any Bank, the amount set opposite such
Bank's name on the signature pages hereof as its Term Loan Commitment, or if
such Bank has entered into any Assignment and Acceptance, as set forth for such
Bank as its Term Loan Commitment in the Register maintained by the Agent
pursuant to Section 8.5(c).
"TERM LOAN MATURITY DATE" means March 31, 2002.
"TERM LOAN NOTE" means a promissory note of the Borrower payable to the
order of any Bank in substantially the form of the attached EXHIBIT D-2,
evidencing indebtedness of the Borrower
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to such Bank resulting from the Term Loan Advance of such Bank.
"TRANCHE" means any tranche of principal outstanding under a Loan accruing
interest on the same basis whether created in connection with new advances of
principal under such Loan or by the continuation or conversion of existing
tranches of principal under such Loan and shall include any Prime Rate Tranche
and any LIBOR Tranche.
"TYPE" has the meaning set forth in Section 1.4.
"U.K. PLEDGE AGREEMENTS" means the Deeds of Charge Over Shares to be dated
as of October 15, 1997, as amended as of the date hereof, made by each of Tetra
International, Inc., a Delaware corporation, and the Borrower in favor of the
Agent, pledging the stock of the Subsidiaries of such Pledgors which are not
Guarantors as security for the Credit Obligations.
"U.S. PLEDGE AGREEMENTS" means (a) the Pledge Agreement dated as of May
12, 2000 made by the Borrower pledging the equity interests of its domestic
Subsidiaries as security for the Credit Obligations; (b) the Pledge Agreement
dated as of May 12, 2000 made by certain domestic Subsidiaries of the Borrower,
pledging the equity interests of their respective domestic Subsidiaries as
security for the Credit Obligations; and (c) any other pledge agreement or
similar instrument granting the Agent a security interest in the Borrower's
domestic Subsidiaries to secure the Credit Obligations.
"VOTING SECURITIES" means (a) with respect to any corporation, any capital
stock of the corporation having general voting power under ordinary
circumstances to elect directors of such corporation, (b) with respect to any
partnership, any partnership interest having general voting power under ordinary
circumstances to elect the general partner or other management of the
partnership, and (c) with respect to any other Person, such ownership interests
in such Person having general voting power under ordinary circumstances to elect
the management of such Person, in each case irrespective of whether at the time
any other class of stock, partnership interests, or other ownership interest
might have special voting power or rights by reason of the happening of any
contingency.
"YEAR 2000 COMPLIANT" means the Credit Parties' material computer
applications will, and the Borrower has taken all reasonable steps to obtain
assurances from its key vendors and suppliers that their material computer
applications adequately address the Year 2000 Problem.
"YEAR 2000 PROBLEM" means the risk that computer applications used by the
Credit Parties (or suppliers, vendors, or customers) may be unable to recognize
and perform properly date-sensitive functions involving certain dates prior to
and any date after December 31, 1999.
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, the word "from"
means "from and including" and the words "to" and "until" each means "to but
excluding."
1.3 ACCOUNTING TERMS; PREPARATION OF FINANCIALS.
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(a) All accounting terms, definitions, ratios, and other tests described
herein shall be construed in accordance with GAAP applied on a consistent basis
with those applied in the preparation of the Initial Financial Statements,
except as expressly set forth in this Agreement.
(b) The Restricted Entities shall prepare their financial statements in
accordance with GAAP applied on a consistent basis with those applied in the
preparation of the Initial Financial Statements, unless otherwise approved in
writing by the Agent.
1.4 TYPES. The "Type" of a Tranche refers to the determination whether
such tranche is a LIBOR Tranche or a Prime Rate Tranche.
1.5 INTERPRETATION. Article, Section, Schedule, and Exhibit references are
to this Agreement, unless otherwise specified. All references to instruments,
documents, contracts, and agreements are references to such instruments,
documents, contracts, and agreements as the same may be amended, supplemented,
and otherwise modified from time to time, unless otherwise specified. The word
"including" shall mean "including but not limited to." Whenever the Borrower has
an obligation under this Agreement and the Credit Documents the expense of
complying with that obligation shall be an expense of the Borrower unless
otherwise specified. Whenever any determination is to be made by the Agent or
any Bank, such determination shall be in such Person's sole discretion unless
otherwise specified in this Agreement. If any provision in this Agreement and
the Credit Documents is held to be illegal, invalid, not binding, or
unenforceable, such provision shall be fully severable and this Agreement and
the Credit Documents shall be construed and enforced as if such illegal,
invalid, not binding, or unenforceable provision had never comprised a part of
this Agreement and the Credit Documents, and the remaining provisions shall
remain in full force and effect. This Agreement and the Credit Documents have
been reviewed and negotiated by sophisticated parties with access to legal
counsel and shall not be construed against the drafter. In the event of a
conflict between this Agreement and any other Credit Documents, this Agreement
shall control.
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ARTICLE 2. CREDIT FACILITIES.
2.1 REVOLVING LOAN FACILITY.
(a) COMMITMENT. Each Bank severally agrees, on the terms and conditions
set forth in this Agreement and for the purposes set forth in Section 5.4, to
make Revolving Credit Advances to the Borrower as such Bank's ratable share of
Revolving Credit Borrowings requested by the Borrower from time to time on any
Business Day during the period from the date of this Agreement until the
Revolving Credit Commitment Termination Date provided that (i) the outstanding
principal amount of Revolving Credit Advances made by such Bank plus such Bank's
ratable share of the Letter of Credit Exposure shall not exceed such Bank's
Revolving Credit Commitment and (ii) before the Borrowing Base Termination
Condition occurs, the outstanding principal amount of the Revolving Credit Loan
after giving effect to any Borrowing Request pursuant to which such Bank shall
make a Revolving Credit Advance plus the Letter of Credit Exposure shall not
exceed the Borrowing Base. On the date this Agreement becomes effective under
Section 3.1, the outstanding principal amount of each Bank's Advances (as
defined in the Existing Credit Agreement) less such Bank's Term Loan Commitment
shall be automatically converted into, and be deemed to be made as, a Revolving
Credit Advance. Except as provided in the prior sentence, Revolving Credit
Borrowings must be made in an amount equal to or greater than the applicable
Minimum Borrowing Amount and be made in multiples of the Minimum Borrowing
Multiple. Within the limits expressed in this Agreement, the Borrower may from
time to time borrow, prepay, and reborrow Revolving Credit Borrowings. The
indebtedness of the Borrower to the Banks resulting from the Revolving Credit
Advances made by the Banks shall be evidenced by Revolving Credit Notes made by
the Borrower.
(b) REDUCTION OF COMMITMENTS. The Borrower shall have the right, upon at
least 10 days' irrevocable written notice to the Agent, to terminate in whole or
reduce the unused portion of the Commitments (such reductions to be apportioned
ratably among each Bank's Commitment); PROVIDED that each partial reduction
shall be in the aggregate amount of $5,000,000 or in integral multiples of
$1,000,000 in excess thereof. Any such reduction of the Commitments shall be
irrevocable, and amounts by which the Commitments are reduced hereunder shall
not be available for Advances following such reduction. Upon reduction of the
Commitments under this paragraph, the commitment fee provided for in Section
2.4(b) shall thereafter be computed on the basis of the Commitments, as so
reduced. All Advances outstanding on the date of any reduction in the
Commitments are subject to prepayment in accordance with Section 2.1(d)(ii)
below.
(c) METHOD OF ADVANCING. Each Revolving Credit Borrowing shall be made
pursuant to a Borrowing Request given by the Borrower to the Agent in writing or
by telecopy not later than the time required pursuant to Section 2.5(a) to
select the interest rate basis for the Revolving Credit Borrowing. Each
Borrowing Request shall be fully completed and shall specify the information
required therein, and shall be irrevocable and binding on the Borrower.
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(d) PREPAYMENT.
(i) The Borrower may prepay the outstanding principal amount of the
Revolving Loan pursuant to written notice given by the Borrower to the
Agent in writing or by telecopy not later than 1:00 p.m. (local time at
the Applicable Lending Office of the Agent) (A) on the third Business Day
before the date of the proposed prepayment, in the case of the prepayment
of any portion of the Revolving Loan which is comprised of LIBOR Tranches,
or (B) on the same Business Day of the proposed prepayment, in the case of
the prepayment of any portion of the Revolving Loan comprised solely of
Prime Rate Tranches. Each such notice shall specify the principal amount
and the Tranches of the Revolving Loan which shall be prepaid, the date of
the prepayment, and shall be irrevocable and binding on the Borrower.
Prepayments of the Revolving Loan shall be made in integral multiples of
the Minimum Borrowing Multiple. If the prepayment would cause the
aggregate outstanding principal amount of any LIBOR Tranche comprising the
Revolving Loan or the aggregate outstanding principal amount of all Prime
Rate Tranches comprising the Revolving Loan, to be less than the Minimum
Tranche Amount, the prepayment must be in an amount equal to the entire
outstanding principal amount of such LIBOR Tranche under the Revolving
Loan or the entire outstanding principal amount of all such Prime Rate
Tranches under the Revolving Loan, as the case may be. Upon receipt of any
notice of prepayment, the Agent shall give prompt notice of the intended
prepayment to the Banks. For each such notice given by the Borrower, the
Borrower shall prepay the Revolving Loan in the specified amount on the
specified date as set forth in such notice. The Borrower shall have no
right to prepay any principal amount of the Revolving Loan except as
provided in this Section 2.1(d)(i).
(ii) If the aggregate outstanding principal amount of the Revolving Loan
plus the Letter of Credit Exposure ever exceeds the Commitment or, before
the Borrowing Base Termination Condition occurs, the Borrowing Base, the
Borrower shall, to the extent of such excess, immediately prepay to the
Agent for the ratable benefit of the Banks the outstanding principal of
the Revolving Loan, and, if the Revolving Loan has been repaid in full,
make deposits into the Letter of Credit Collateral Account to provide cash
collateral for the Letter of Credit Exposure, such that such excess is
eliminated.
(iii) Each prepayment of principal of any LIBOR Tranche under the
Revolving Loan pursuant to this Section 2.1(d) shall be accompanied by
payment of all accrued but unpaid interest on the principal amount prepaid
and any amounts required to be paid pursuant to Section 2.6 as a result of
such prepayment.
(e) REPAYMENT. The Borrower shall pay to the Agent for the ratable benefit
of the Banks the aggregate outstanding principal amount of the Revolving Loan on
the Revolving Credit Maturity Date.
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2.2 LETTER OF CREDIT FACILITY.
(a) COMMITMENT FOR LETTERS OF CREDIT. The Issuing Bank shall, on the terms
and conditions set forth in this Agreement and for the purposes set forth in
Section 5.4, issue, increase, and extend Letters of Credit at the request of the
Borrower from time to time on any Business Day during the period from the date
of this Agreement until the Revolving Credit Maturity Date provided that (i) the
Letter of Credit Exposure shall not exceed the Letter of Credit Sublimit and
(ii) the aggregate outstanding principal amount of Revolving Credit Advances
plus the Letter of Credit Exposure shall not exceed the aggregate amount of the
Commitments or, before the Borrowing Base Termination Condition occurs, the
Borrowing Base. No Letter of Credit may have an expiration date later than 12
months after its issuance date, and each Letter of Credit which is
self-extending beyond its expiration date must be cancelable upon at least 30
days notice given by the Issuing Bank to the beneficiary of such Letter of
Credit. No Letter of Credit may have an expiration date later than 12 months
after the Revolving Credit Maturity Date unless approved by the Issuing Bank,
the Agent, and the Banks. Each Letter of Credit must be in form and substance
acceptable to the Issuing Bank. The indebtedness of the Borrower to the Issuing
Bank resulting from Letters of Credit requested by the Borrower shall be
evidenced by the Letter of Credit Applications made by the Borrower.
(b) REQUESTING LETTERS OF CREDIT. Each Letter of Credit shall be issued,
increased, or extended pursuant to a Letter of Credit Application or Letter of
Credit Application Amendment, as applicable, given by the Borrower to the
Issuing Bank in writing or by telecopy promptly confirmed in writing, such
Letter of Credit Application or Letter of Credit Application Amendment being
given not later than 10:00 a.m. (local time at the Applicable Lending Office of
the Agent) on the third Business Day before the date of the proposed issuance,
increase, or extension of the Letter of Credit. Each Letter of Credit
Application or Letter of Credit Application Amendment shall be fully completed
and shall specify the information required therein (including the proposed form
of the Letter of Credit or change thereto), and shall be irrevocable and binding
on the Borrower. The Issuing Bank shall give prompt notice of the Letter of
Credit Application or Letter of Credit Application Amendment to the Agent, and
the Agent shall promptly inform the Banks of the proposed Letter of Credit or
change thereto. Subject to the satisfaction of all applicable conditions
precedent, the Issuing Bank shall before close of business on the date requested
by the Borrower for the issuance, increase, or extension of such Letter of
Credit issue, increase, or extend such Letter of Credit to the specified
beneficiary. Upon the date of the issuance, increase, or extension of a Letter
of Credit, the Issuing Bank shall be deemed to have sold to each other Bank and
each other Bank shall be deemed to have purchased from the Issuing Bank a
ratable participation in the related Letter of Credit. The Issuing Bank shall
notify the Agent of each Letter of Credit issued, increased, or extended and the
date and amount of each Bank's participation in such Letter of Credit, and the
Agent shall in turn notify the Banks.
(c REIMBURSEMENTS FOR LETTERS OF CREDIT. With respect to any Letter of
Credit and in accordance with the related Letter of Credit Application, the
Borrower agrees to pay to the Issuing Bank on demand of the Issuing Bank any
amount due to the Issuing Bank under such Letter of Credit Application (provided
that fees due with respect to such Letter of Credit shall be payable as
specified in Section 2.4(c)). If the Borrower does not pay upon demand of the
Issuing Bank any amount due to the Issuing Bank under any Letter of Credit
Application, in addition to any rights the
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Issuing Bank may have under such Letter of Credit Application, the Issuing Bank
may upon written notice to the Agent request the satisfaction of such obligation
by the making of a Revolving Credit Borrowing. Upon such request, the Borrower
shall be deemed to have requested the making of a Revolving Credit Borrowing in
the amount of such obligation and the transfer of the proceeds thereof to the
Issuing Bank. Such Revolving Credit Borrowing shall be comprised of a Prime Rate
Tranche. The Agent shall promptly forward notice of such Borrowing to the
Borrower and the Banks, and each Bank shall, in accordance with the procedures
of Section 2.10, other than limitations on the size of Revolving Credit
Borrowings, and notwithstanding the failure of any conditions precedent, make
available such Bank's ratable share of such Revolving Credit Borrowing to the
Agent, and the Agent shall promptly deliver the proceeds thereof to the Issuing
Bank for application to such Bank's share of the obligations under such Letter
of Credit. The Borrower hereby unconditionally and irrevocably authorizes,
empowers, and directs the Issuing Bank to make such requests for Revolving
Borrowings on behalf of the Borrower, and the Banks to make Revolving Credit
Advances to the Agent for the benefit of the Issuing Bank in satisfaction of
such obligations. The Agent and each Bank may record and otherwise treat the
making of such Revolving Credit Borrowings as the making of a Revolving Credit
Borrowing to the Borrower under this Agreement as if requested by the Borrower.
Nothing herein is intended to release the Borrower's obligations under any
Letter of Credit Application, but only to provide an additional method of
payment therefor. The making of any Revolving Credit Borrowing under this
Section 2.2(c) shall not constitute a cure or waiver of any Default or Event of
Default caused by the Borrower's failure to comply with the provisions of this
Agreement or any Letter of Credit Application.
(d PREPAYMENTS OF LETTERS OF CREDIT. In the event that any Letters of
Credit shall be outstanding according to their terms after the Revolving Credit
Maturity Date, the Borrower shall pay to the Agent an amount equal to the Letter
of Credit Exposure allocable to such Letters of Credit to be held in the Letter
of Credit Collateral Account and applied in accordance with paragraph (g) below.
(e OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower and each
Bank under this Agreement and the Letter of Credit Applications to reimburse the
Issuing Bank for draws under Letters of Credit and to make other payments due in
respect of Letters of Credit shall be unconditional and irrevocable, and shall
be paid strictly in accordance with the terms of this Agreement and the Letter
of Credit Applications under all circumstances, including: (i) any lack of
validity or enforceability of any Letter of Credit Document; (ii) any amendment,
waiver, or consent to departure from any Letter of Credit Document; (iii) the
existence of any claim, set-off, defense, or other right which the Borrower or
any Bank may have at any time against any beneficiary or transferee of any
Letter of Credit (or any Persons for whom any such beneficiary or any such
transferee may be acting), the Issuing Bank, or any other person or entity,
whether in connection with the transactions contemplated in this Agreement or
any unrelated transaction; (iv) any statement or any other document presented
under such Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or inaccurate
in any respect; or (v) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or certificate which does not comply with the
terms of such Letter of Credit; provided, however, that nothing contained in
this paragraph (d) shall be deemed to constitute a waiver of any remedies of the
Borrower or any Bank in connection with the Letters of Credit or the Borrower's
or such Bank's rights under paragraph (e) below.
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(f LIABILITY OF ISSUING BANK. The Issuing Bank shall not be liable or
responsible for: (i) the use which may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (ii)
the validity, sufficiency, or genuineness of documents related to Letters of
Credit, or of any endorsement thereon, even if such documents should prove to be
in any or all respects invalid, insufficient, fraudulent, or forged; (iii)
payment by the Issuing Bank against presentation of documents which do not
strictly comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the relevant Letter of
Credit; or (iv) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit (INCLUDING THE ISSUING BANK'S OWN
NEGLIGENCE); except that the Issuing Bank shall be liable to the Borrower or any
Bank to the extent of any direct, as opposed to consequential, damages suffered
by the Borrower or such Bank which the Borrower or such Bank proves were caused
by (A) the Issuing Bank's gross negligence or willful misconduct in determining
whether documents presented under a Letter of Credit comply with the terms of
such Letter of Credit, (B) the Issuing Bank's willful failure to make or delay
in making lawful payment under any Letter of Credit after the presentation to it
of documentation strictly complying with the terms and conditions of such Letter
of Credit, or (C) the Issuing Bank's negligence in the handling of money.
(g LETTER OF CREDIT COLLATERAL ACCOUNT.
(i If the Borrower is required to deposit funds in the Letter of Credit
Collateral Account pursuant to Sections 2.1(d)(ii), 2.2(d) or 6.4, then
the Borrower and the Agent shall establish the Letter of Credit Collateral
Account and the Borrower shall execute any documents and agreements,
including the Agent's standard form assignment of deposit accounts, that
the Agent requests in connection therewith to establish the Letter of
Credit Collateral Account and grant the Agent a first priority security
interest in such account and the funds therein. The Borrower hereby
pledges to the Agent and grants the Agent a security interest in the
Letter of Credit Collateral Account, whenever established, all funds held
in the Letter of Credit Collateral Account from time to time, and all
proceeds thereof as security for the payment of the Obligations.
(ii So long as no Event of Default exists, (A) the Agent shall apply the
funds held in the Letter of Credit Collateral Account only to the
reimbursement of any reimbursement obligations and other obligations under
Letter of Credit Documents, (B) the Agent shall release to the Borrower at
the Borrower's written request funds held in the Letter of Credit
Collateral Account in an amount up to but not exceeding the excess, if any
(immediately prior to the release of any such funds), of the total amount
of funds held in the Letter of Credit Collateral Account over the Letter
of Credit Exposure, and (C) the Agent shall, at the unanimous written
direction of the Banks in their sole discretion, at any time release to
the Borrower any funds held in the Letter of Credit Collateral Account.
During the existence of any Default or Event of Default, the Agent may
apply any funds held in the Letter of Credit Collateral Account to any
Credit Obligations in any order determined by the Agent, regardless of any
Letter of Credit Exposure which may remain outstanding.
(iii Funds held in the Letter of Credit Collateral Account shall be
invested in
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money market funds of the Agent or in another investment if mutually
agreed upon by the Borrower and the Agent, but the Agent shall have no
other obligation to make any other investment of the funds therein. The
Agent shall exercise reasonable care in the custody and preservation of
any funds held in the Letter of Credit Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own property,
it being understood that the Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with
respect to any such funds.
(h EXISTING LETTERS OF CREDIT. Upon the date of the execution of this
Agreement, the Issuing Bank shall be deemed to have sold to each other Bank and
each other Bank shall be deemed to have purchased from the Issuing Bank a
ratable participation in each Existing Letter of Credit, which shall thereafter
be treated as a Letters of Credit under this Agreement for all purposes. The
Issuing Bank shall arrange with the Agent and the Banks to prorate and ratably
distribute to the Banks the fees previously paid to the Issuing Bank with
respect to such Existing Letters of Credit.
2.3 TERM LOAN FACILITY.
(a COMMITMENT FOR TERM LOAN. On the date this Agreement becomes effective
under Section 3.1, an amount of each Bank's Advances (as defined in the Existing
Credit Agreement) equal to such Bank's Term Loan Commitment shall be
automatically converted into, and be deemed to be made as, a Term Loan Advance.
The Term Loan Commitment is not revolving and therefore Term Loan Advances that
have been made and then prepaid may not be readvanced. The indebtedness of the
Borrower to the Banks resulting from the Term Loan Advances made by the Banks
shall be evidenced by Term Loan Notes made by the Borrower.
(b METHOD OF ADVANCING. The Term Loan Borrowing shall be made pursuant to
the Borrowing Request given by the Borrower to the Agent in writing or by
telecopy not later than the time required pursuant to Section 2.5(a) to select
the interest rate basis for the Term Loan Borrowing. The Borrowing Request shall
be fully completed and shall specify the information required therein, and shall
be irrevocable and binding on the Borrower.
(c PREPAYMENT.
(i The Borrower may prepay the outstanding principal amount of Term
Loan pursuant to written notice given by the Borrower to the Agent in
writing or by telecopy not later than (A) 1:00 p.m. (local time at the
Applicable Lending Office of the Agent) on the third Business Day before
the date of the proposed prepayment, in the case of the prepayment of any
portion of Term Loan which is comprised of LIBOR Tranches, or (B) 11:00
a.m. (local time at the Applicable Lending Office of the Agent) on the
same Business Day of the proposed prepayment, in the case of the
prepayment of any portion of Term Loan comprised solely of the Prime Rate
Tranche. Each such notice shall specify the principal amount and Tranche
or Tranches of Term Loan which shall be prepaid, the date of the
prepayment, and shall be irrevocable and binding on the Borrower. Partial
prepayments of the Term Loan shall be made in a minimum amount equal to or
greater than the Minimum Borrowing Amount, shall not cause any Tranche to
be less than the Minimum
-▇▇-
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, and shall not cause the outstanding principal amount of
Term Loan to be less than the Minimum Borrowing Amount. Upon receipt of
any notice of prepayment, the Agent shall give prompt notice of the
intended prepayment to the Banks. For each such notice given by the
Borrower, the Borrower shall prepay Term Loan in the specified amount on
the specified date as set forth in such notice. The Borrower shall have no
right to prepay any principal amount of Term Loan except as provided in
this Section 2.3(c)(i).
(ii The Borrower shall prepay the outstanding principal amount of the
Term Loan (A) within 60 days after it has received notice from the Agent
that the outstanding principal amount of the Term Loan exceeds the Term
Loan Borrowing Base, by at least the amount of such excess; (B) on the
Business Day after the closing of sale of any assets (including stock of a
Subsidiary of the Borrower) with gross sale proceeds attributable to any
single sale (whether in one or more related transactions) of more than
$5,000,000, by an amount equal to the Net Cash Proceeds from such sale;
(C) (i) when an Event of Default has occurred and is continuing, on the
first Business Day after the occurrence of such Event of Default or the
Borrower's receipt thereof, 100% of the Net Cash Proceeds the Borrower or
any of its Subsidiaries receives from a casualty insurance policy or
condemnation award, to the extent that the same equals or exceeds
$1,000,000, while an Event of Default has occurred and is continuing or
received before such occurrence, but has not been reinvested in the
replacement assets as of the date of such occurrence and (ii) on the 185th
day after receipt of thereof, 100% of the Net Cash Proceeds the Borrower
or any of its Subsidiaries receives from an insurance policy or
condemnation award that are not reinvested in replacement assets of
comparable value and utility (or committed to be so reinvested) within six
months after receipt of such insurance proceeds or condemnation award; and
(D) on the first Business day after the receipt thereof, 50% of the Net
Cash Proceeds from any Equity Issuance.
(iii Each prepayment of principal on a LIBOR Tranche pursuant to this
Section 2.3(c) shall be accompanied by payment of any amounts required to
be paid pursuant to Section 2.6 as a result of such prepayment.
(iv Each prepayment of principal pursuant this Section 2.3(c) shall be
applied to the required principal payments on Term Loan in the inverse
order of maturity; PROVIDED that any prepayment required to be made within
60 days after receipt of the appraisals required pursuant to Section
5.2(d) hereof shall instead be applied to reduce, on a pro rata basis,
each remaining principal payment on the Term Loan.
(d REPAYMENT. The Borrower shall repay to the Agent for the ratable
benefit of the Banks the outstanding principal amount of the Term Loan in equal
monthly principal installments of $595,238.10 (as such amount may be ratably
reduced by the proviso set forth above in Section 2.3(c)(iv), which shall be due
any payable on the last day of each month beginning with July 31, 2000 and
until, but not including, the Term Loan Maturity Date. The Borrower shall repay
to the Agent for the ratable benefit of the Banks the outstanding principal
amount of Term Loan on the Term Loan Maturity Date.
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2.4 FEES.
(a UPFRONT FEES. Subject to Section 2.5(d), the Borrower shall pay to the
Agent for the ratable benefit of each Bank an upfront fee for such Bank equal to
the product of (i) the Commitments of such Bank multiplied by (ii) 0.25%.
(b COMMITMENT FEES. The Borrower shall pay to the Agent for the ratable
benefit of the Banks a commitment fee in an amount equal to the product of (i)
the Applicable Margin for Commitment Fees multiplied by (ii) the average daily
amount by which (x) the aggregate amount of the Commitments exceeds (y) the
outstanding principal amount of the Revolving Loan plus the Letter of Credit
Exposure. The commitment fee shall be due and payable quarterly in arrears on
the last day of each calendar quarter commencing June 30, 2000 and on the
Revolving Credit Maturity Date.
(c FEES FOR LETTERS OF CREDIT. For each Letter of Credit issued by the
Issuing Bank, the Borrower shall pay to the Agent for the ratable benefit of the
Banks a letter of credit fee equal to the Applicable Margin for Letter of Credit
fees per annum in effect from time to time on the original face amount of such
Letter of Credit for the stated term of such Letter of Credit. In addition, for
each Letter of Credit issued by the Issuing Bank, the Borrower shall pay to the
Agent for the benefit of the Issuing Bank a fronting fee of 0.125% per annum on
the original face amount of such Letter of Credit for the stated term of such
Letter of Credit, with a minimum fee of $500. The Borrower shall pay such letter
of credit fees for each Letter of Credit quarterly in arrears within ten days
after when billed therefor by the Issuing Bank. The Borrower shall have no right
to any refund of letter of credit fees previously paid by the Borrower,
including any refund claimed because the Borrower cancels any Letter of Credit
prior to its expiration date.
(d AGENT FEE LETTER. The Borrower shall pay to the parties specified
therein the fees and other amounts payable under Agent Fee Letter and the letter
dated March 13, 2000 between the Agent and the Borrower.
2.5 INTEREST.
(a ELECTION OF INTEREST RATE BASIS. The Borrower may select the interest
rate basis for each Borrowing in accordance with the terms of this Section
2.5(a):
(i Under the Borrowing Request provided to the Agent in connection with
the making of each Borrowing under the Revolving Loan, the Borrower shall
select the amount and the Type of the Tranches, and for each LIBOR Tranche
selected, any permitted Interest Period for each such LIBOR Tranche, which
will comprise such Borrowing, provided that (A) at no time shall there be
more than eight separate LIBOR Tranches outstanding under the Revolving
Loan and (B) each Tranche must be in a principal amount equal to or
greater than the Minimum Tranche Amount and be made in multiples of the
Minimum Tranche Multiple. Such interest rate elections must be provided to
the Agent in writing or by telecopy not later than 10:00 a.m. (local time
at the Applicable Lending Office of the Agent) (A) on the third Business
Day before the date of any proposed Borrowing comprised of a LIBOR
Tranche, or (B) on the same day of any proposed Borrowing
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comprised solely of a Prime Rate Tranche. The Agent shall promptly forward
copies of such interest rate elections to the Banks. In the case of any
Borrowing comprised of a LIBOR Tranche, upon determination by the Agent,
the Agent shall promptly notify the Borrower and the Banks of the
applicable interest rate for such Tranche.
(ii With respect to any Tranche under the Revolving Loan, the Borrower
may continue or convert any portion of any LIBOR Tranche or Prime Rate
Tranche to form new LIBOR Tranches or Prime Rate Tranches under the
Revolving Loan in accordance with this paragraph. Each such continuation
or conversion shall be made pursuant to a Continuation/Conversion Request
given by the Borrower to the Agent in writing or by telecopy not later
than 12:00 noon (local time at the Applicable Lending Office of the Agent)
on the third Business Day before the date of the proposed continuation or
conversion. Each Continuation/Conversion Request shall be fully completed
and shall specify the information required therein, and shall be
irrevocable and binding on the Borrower. The Agent shall promptly forward
notice of the continuation or conversion to the Banks. In the case of any
continuation or conversion into LIBOR Tranches, upon determination by the
Agent, the Agent shall notify the Borrower and the Banks of the applicable
interest rate. Continuations and conversions of Tranches shall be made in
integral multiples of the Minimum Tranche Multiple. No continuation or
conversion shall be permitted if such continuation or conversion would
cause the aggregate outstanding principal amount of any LIBOR Tranche
which would remain outstanding or the aggregate outstanding principal
amount of all Prime Rate Tranches which would remain outstanding to be
less than the Minimum Tranche Amount. At no time shall there be more than
eight separate LIBOR Tranches outstanding under the Revolving Loan. Any
conversion of an existing LIBOR Tranche is subject to Section 2.5. Subject
to the satisfaction of all applicable conditions precedent, the Agent and
the Banks shall before close of business on the date requested by the
Borrower for the continuation or conversion, make such continuation or
conversion.
(iii At the end of the Interest Period for any LIBOR Tranche, if the
Borrower has not continued or converted such LIBOR Tranche into new
Tranches as provided for in paragraph (ii) above, the Borrower shall be
deemed to have continued such LIBOR Tranche as a Prime Rate Tranche. Each
Prime Rate Tranche shall continue as a Prime Rate Tranche unless the
Borrower converts such Prime Rate Tranche as provided for in paragraph
(ii) above.
(b LIBOR TRANCHES. Each LIBOR Tranche shall bear interest during its
Interest Period at a per annum interest rate equal to the lesser of (i) the
Highest Lawful Rate or (ii) the sum of the LIBOR for such Tranche plus the
Applicable Margin for LIBOR Tranches in effect from time to time. The Borrower
shall pay to the Agent for the ratable benefit of the Banks all accrued but
unpaid interest on each LIBOR Tranche on the last day of the applicable Interest
Period for such LIBOR Tranche (and with respect to LIBOR Tranches with Interest
Periods of greater than three months, on the date which is three months after
the first date of the Interest Period for such LIBOR Tranche), when required
upon prepayment as specified elsewhere in this Agreement, on any date when any
portion of any LIBOR Tranche is prepaid (but only to the extent of the portion
of any such LIBOR Tranche is prepaid), and on the Revolving Credit Maturity Date
and the Term Loan Maturity Date.
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(c PRIME RATE TRANCHES. Each Prime Rate Tranche shall bear interest at a
per annum interest rate equal to the lesser of (i) the Highest Lawful Rate or
(ii) the Adjusted Prime Rate in effect from time to time plus the Applicable
Margin for Prime Rate Tranches in effect from time to time. The Borrower shall
pay to the Agent for the ratable benefit of the Banks all accrued but unpaid
interest on outstanding Prime Rate Tranches on the last day of each calendar
quarter, when required upon prepayment as specified elsewhere in this Agreement,
on any date all Prime Rate Tranches are prepaid in full, and on the Revolving
Credit Maturity Date and the Term Loan Maturity Date.
(d USURY PROTECTION.
(i Nothing contained in this Agreement or the Notes shall require the
Borrower to pay interest at a rate exceeding the Highest Lawful Rate. Each
provision in the Credit Documents and any other agreement executed in
connection herewith is expressly limited so that in no event whatsoever
shall the amount paid thereunder, or otherwise paid, by the Borrower for
the use, forbearance or detention of the money to be loaned under this
Agreement, exceed that amount of money which would cause the effective
rate of interest thereon to exceed the Highest Lawful Rate, and all
amounts payable under the Credit Documents or any other agreement executed
in connection herewith, or otherwise payable in connection therewith,
shall be subject to reduction so that such amounts paid or payable for the
use, forbearance or detention of money to be loaned under this Agreement
shall not exceed that amount of money which would cause the effective rate
of interest thereon to exceed the Highest Lawful Rate.
(ii If the amount of interest payable for the account of any Bank on any
interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Section 2.5, would exceed
the maximum amount permitted by applicable law to be charged by such Bank,
the amount of interest payable for its account on such interest payment
date shall be automatically reduced to such maximum permissible amount.
(iii If the amount of interest payable for the account of any Bank in
respect of any interest computation period is reduced pursuant to clause
(d)(ii) above and the amount of interest payable for its account in
respect of any subsequent interest computation period, computed pursuant
to this Section 2.5, would be less than the maximum amount permitted by
applicable law to be charged by such Bank, then the amount of interest
payable for its account in respect of such subsequent interest computation
period shall be automatically increased to the maximum amount permitted by
applicable law to be charged by such Bank; PROVIDED that at no time shall
the aggregate amount by which interest paid for the account of any Bank
has been increased pursuant to this clause (d)(iii) exceed the aggregate
amount by which interest paid for its account has theretofore been reduced
pursuant to clause (d)(ii) of this Section.
(iv In the event that maturity of the loans made hereunder is
accelerated for any reason, or in the event of any required or permitted
prepayment of such loans, then such consideration that constitutes
interest payable for the account of any Bank shall never include
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more than the maximum amount permitted by applicable law to be charged by
such Bank and excess interest, if any, payable for the account of such
Bank pursuant to its Note, this Agreement or otherwise shall be canceled
automatically as of the date of such acceleration or prepayment and, if
theretofore paid, shall be credited on the loans made hereunder by such
Bank (or, to the extent in excess of such loans, refunded by such Bank to
the Borrower).
(v It is further agreed that, without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received
for the account of any Bank under the Note held by it, under this
Agreement, under any other agreement executed in connection herewith or
otherwise in connection with the loans made hereunder by or the Commitment
of such Bank for the purpose of determining whether such rate exceeds the
Highest Lawful Rate, shall be made, to the extent permitted by applicable
usury law (now or hereafter enacted), by amortizing, prorating and
spreading in equal parts during the period of the full stated terms of the
loans evidenced by such Note all interest at any time contracted for,
charged or received by such Bank in connection therewith.
2.6 BREAKAGE COSTS. If (i) any payment of principal on or any conversion
of any LIBOR Tranche is made on any date other than the last day of the Interest
Period for such LIBOR Tranche, whether as a result of any voluntary or mandatory
prepayment, any acceleration of maturity, or any other cause, (ii) any payment
of principal on any LIBOR Tranche is not made when due, or (iii) any LIBOR
Tranche is not borrowed, converted, or prepaid in accordance with the respective
notice thereof provided by the Borrower to the Agent, whether as a result of any
failure to meet any applicable conditions precedent for borrowing, conversion,
or prepayment, the permitted cancellation of any request for borrowing,
conversion, or prepayment, the failure of the Borrower to provide the respective
notice of borrowing, conversion, or prepayment, or any other cause not specified
above which is created by the Borrower, then the Borrower shall pay to each Bank
upon demand any amounts required to compensate such Bank for any losses, costs,
or expenses, including lost profits and administrative expenses, which are
reasonably allocable to such action, including losses, costs, and expenses
related to the liquidation or redeployment of funds acquired or designated by
such Bank to fund or maintain such Bank's ratable share of such LIBOR Tranche or
related to the reacquisition or redesignation of funds by such Bank to fund or
maintain such Bank's ratable share of such LIBOR Tranche following any
liquidation or redeployment of such funds caused by such action. A certificate
as to the amount of such loss, cost, or expense detailing the calculation
thereof and certifying that such Bank customarily charges such amounts to its
other customers in similar circumstances submitted by such Bank to the Borrower
shall be conclusive and binding for all purposes, absent manifest error.
2.7 INCREASED COSTS.
(a COST OF FUNDS. If due to either (i) any introduction of, change in, or
change in the interpretation of any law or regulation after the date of this
Agreement or (ii) compliance with any guideline or request from any central bank
or other governmental authority having appropriate jurisdiction (whether or not
having the force of law) given after the date of this Agreement, there shall be
any increase in the costs of any Bank allocable to (x) committing to make any
Advance or obtaining funds for the making, funding, or maintaining of such
Bank's ratable share of any LIBOR
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Tranche in the relevant interbank market or (y) committing to make Letters of
Credit or issuing, funding, or maintaining Letters of Credit (including any
increase in any applicable reserve requirement specified by the Federal Reserve
Board, including those for emergency, marginal, supplemental, or other
reserves), then the Borrower shall pay to such Bank upon demand any amounts
required to compensate such Bank for such increased costs, such amounts being
due and payable upon demand by such Bank. A certificate as to the cause and
amount of such increased cost detailing the calculation of such cost and
certifying that such Bank customarily charges such amounts to its other
customers in similar circumstances submitted by such Bank to the Borrower shall
be conclusive and binding for all purposes, absent manifest error.
Notwithstanding the foregoing, the Borrower shall not be obligated to pay any
such amounts that accrued more than 90 days prior to delivery of such
certificate to the Borrower.
(b CAPITAL ADEQUACY. If, due to either (i) any introduction of, change in,
or change in the interpretation of any law or regulation after the date of this
Agreement or (ii) compliance with any guideline or request from any central bank
or other governmental authority having appropriate jurisdiction (whether or not
having the force of law) given after the date of this Agreement, there shall be
any increase in the capital requirements of any Bank or its parent or holding
company allocable to (x) committing to make Advances or making, funding, or
maintaining Advances or (y) committing to make Letters of Credit or issuing,
funding, or maintaining Letters of Credit, as such capital requirements are
allocated by such Bank, then the Borrower shall pay to such Bank upon demand any
amounts required to compensate such Bank or its parent or holding company for
such increase in costs (including an amount equal to any reduction in the rate
of return on assets or equity of such Bank or its parent or holding company),
such amounts being due and payable upon demand by such Bank. A certificate as to
the cause and amounts detailing the calculation of such amounts and certifying
that such Bank customarily charges such amounts to its other customers in
similar circumstances submitted by such Bank to the Borrower shall be conclusive
and binding for all purposes, absent manifest error. Notwithstanding the
foregoing, the Borrower shall not be obligated to pay any such amounts that
accrued more than 90 days prior to delivery of such certificate to the Borrower.
2.8 ILLEGALITY. Notwithstanding any other provision in this Agreement, if
it becomes unlawful for any Bank to obtain deposits or other funds for making or
funding such Bank's ratable share of any LIBOR Tranche in the relevant interbank
market, such Bank shall so notify the Borrower and the Agent and such Bank's
commitment to create LIBOR Tranches shall be suspended until such condition has
passed, all LIBOR Tranches applicable to such Bank shall be converted to Prime
Rate Tranches as of the end of each applicable Interest Period or earlier if
necessary, and all subsequent requests for LIBOR Tranches shall be deemed to be
requests for Prime Rate Tranches with respect to such Bank.
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2.9 MARKET FAILURE. Notwithstanding any other provision in this Agreement,
if the Agent determines that: (a) quotations of interest rates for the relevant
deposits referred to in the definition of "LIBOR" are not being provided in the
relevant amounts, or maturities for purposes of determining the rate of interest
referred to in the definition of "LIBOR" or (b) the relevant rates of interest
referred to in the definition of "LIBOR" which are used as the basis to
determine the rate of interest for LIBOR Tranches are not likely to adequately
cover the cost to any Bank of making or maintaining such Bank's ratable share of
any LIBOR Tranche, then if the Agent so notifies the Borrower, the commitment of
the Banks to make any Borrowing comprised of LIBOR Tranches shall be suspended
until such condition has passed, all LIBOR Tranches shall be converted to Prime
Rate Tranches as of the end of each applicable Interest Period or earlier if
necessary, and all subsequent requests for LIBOR Tranches shall be deemed to be
requests for Prime Rate Tranches.
2.10 ADVANCING AND PAYMENTS GENERALLY; COMPUTATIONS.
(a ADVANCING PROCEDURES. Time is of the essence in this Agreement and the
Credit Documents. All advances hereunder shall be made in Dollars. Upon receipt
of any Borrowing Request by the Agent, the Agent shall promptly forward notice
of the Borrowing to the Banks. Subject to the satisfaction of the applicable
conditions precedent, each Bank shall, before 1:00 p.m. (local time at the
Applicable Lending Office of the Agent) on the date of the requested Borrowing,
make available from its Applicable Lending Office to the Agent at the Agent's
Applicable Lending Office, in immediately available funds, such Bank's ratable
share of such Borrowing. Subject to the satisfaction of all applicable
conditions precedent, after receipt by the Agent of such funds, the Agent shall,
by 4:00 p.m. (local time at the Applicable Lending Office of the Agent) on the
date requested for such Borrowing, make such Borrowing available to the Borrower
in immediately available funds at any account of Borrower which is designated in
writing by the Borrower to the Agent.
(b AGENT RELIANCE ON BANKS IN ADVANCING. Unless the Agent shall have
received notice from a Bank before the date of any Borrowing that such Bank
shall not make available to the Agent such Bank's ratable share of such
Borrowing, the Agent may assume that such Bank has made its ratable share of
such Borrowing available to the Agent on the date of such Borrowing in
accordance with this Agreement and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made its ratable share of
such Borrowing available to the Agent, such Bank agrees that it shall pay
interest on such amount for each day from the date such amount is made available
to the Borrower by the Agent until the date such amount is paid to the Agent by
such Bank at the Federal Funds Rate in effect from time to time, provided that
with respect to such Bank if such amount is not paid by such Bank by the end of
the second day after the Agent makes such amount available to the Borrower, the
interest rates specified above shall be increased by a per annum amount equal to
2.00% on the third day and shall remain at such increased rate thereafter.
Interest on such amount shall be due and payable by such Bank upon demand by the
Agent. If such Bank shall pay to the Agent such amount and interest as provided
above, such amount so paid shall constitute such Bank's Advance as part of such
Borrowing for all purposes of this Agreement even though not made on the same
day as the other Advances comprising such Borrowing. In the event that such Bank
has not repaid such amount by the end of the fifth day after such amount was
made available to the Borrower, the Borrower agrees to repay to the Agent on
demand such amount, together with interest on such amount for each day from the
date such amount was made available to the Borrower until
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the date such amount is repaid to the Agent at the interest rate charged to the
Borrower for such Borrowing under the terms of this Agreement. The failure of
any Bank to make available its ratable share of any Borrowing shall not relieve
any other Bank of its obligation, if any, to make available its ratable share of
such Borrowing. No Bank shall be responsible for the failure of any other Bank
to honor such other Bank's obligations hereunder, including any failure to make
available any funds as part of any Borrowing.
(c PAYMENT PROCEDURES. Time is of the essence in this Agreement and the
Credit Documents. All payments hereunder shall be made in Dollars. The Borrower
shall make each payment under this Agreement and under the Notes not later than
1:00 p.m. (local time at the Applicable Lending Office of the Agent) on the day
when due to the Agent at the Agent's Applicable Lending Office in immediately
available funds. All payments by the Borrower hereunder shall be made without
any offset, abatement, withholding, deduction, counterclaim, or reduction. Upon
receipt of payment from the Borrower of any principal, interest, or fees due to
the Banks, the Agent shall promptly after receipt thereof distribute to the
Banks their ratable share of such payments for the account of their respective
Applicable Lending Offices. If and to the extent that the Agent shall not have
so distributed to any Bank its ratable share of such payments, the Agent agrees
that it shall pay interest on such amount for each day after the day when such
amount is made available to the Agent by the Borrower until the date such amount
is paid to such Bank by the Agent at the Federal Funds Rate in effect from time
to time, provided that if such amount is not paid by the Agent by the end of the
third day after the Borrower makes such amount available to the Agent, the
interest rates specified above shall be increased by a per annum amount equal to
2.00% on the fourth day and shall remain at such increased rate thereafter.
Interest on such amount shall be due and payable by the Agent upon demand by
such Bank. Upon receipt of other amounts due solely to the Agent, the Issuing
Bank, or a specific Bank, the Agent shall distribute such amounts to the
appropriate party to be applied in accordance with the terms of this Agreement.
(d AGENT RELIANCE. Unless the Agent shall have received written notice
from the Borrower prior to any date on which any payment is due to the Banks
that the Borrower shall not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such date an amount equal to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank, together with interest thereon from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Agent, at an interest rate equal to, the Federal Funds Rate in effect
from time to time, provided that with respect to such Bank, if such amount is
not repaid by such Bank by the end of the second day after the date of the
Agent's demand, the interest rates specified above shall be increased by a per
annum amount equal to 2.00% on the third day after the date of the Agent's
demand and shall remain at such increased rate thereafter.
(e SHARING OF PAYMENTS. Each Bank agrees that if it should receive any
payment (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) in respect of any obligation of the Borrower to pay principal,
interest, fees, or any other obligation incurred under the Credit Documents in a
proportion greater than the total
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amount of such principal, interest, fees, or other obligation then owed and due
by the Borrower to such Bank bears to the total amount of principal, interest,
fees, or other obligation then owed and due by the Borrower to all of the Banks
immediately prior to such receipt, then such Bank receiving such excess payment
shall purchase for cash without recourse from the other Banks an interest in the
obligations of the Borrower to such Banks in such amount as shall result in a
participation by all of the Banks, in proportion with the Banks' respective pro
rata shares, in the aggregate unpaid amount of principal, interest, fees, or any
such other obligation, as the case may be, owed by the Borrower to all of the
Banks; provided that if all or any portion of such excess payment is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, in proportion with the Banks'
respective pro rata shares, but without interest.
(f AUTHORITY TO CHARGE ACCOUNTS. The Agent, if and to the extent payment
owed to the Agent or any Bank is not made when due, may charge from time to time
against any account of the Borrower with the Agent any amount so due. The Agent
agrees promptly to notify the Borrower after any such charge and application
made by the Agent provided that the failure to give such notice shall not affect
the validity of such charge and application.
(g INTEREST AND FEES. Unless expressly provided for in this Agreement, all
computations of interest and fees shall be made on the basis of a 360 day year,
in each case for the actual number of days (including the first day, but
excluding the last day) occurring in the period for which such interest or fees
are payable; provided, however, that if the use of a 360 day year would cause
the interest contracted for, charged, or received hereunder to exceed the
Highest Lawful Rate, such computations shall instead be made on the basis of a
year of 365 or 366 days, as the case may be. Each determination by the Agent of
an interest rate or fee shall be conclusive and binding for all purposes, absent
manifest error.
(h PAYMENT DATES. Whenever any payment shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be. If the time for
payment for an amount payable is not specified in this Agreement or in any other
Credit Document, the payment shall be due and payable on demand by the Agent or
the applicable Bank.
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2.11 TAXES.
(a NO DEDUCTION FOR CERTAIN TAXES. Any and all payments by the Borrower
shall be made 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, other than taxes imposed on the income of and
franchise taxes imposed on the Agent, any Bank, or the Applicable Lending Office
thereof by any jurisdiction in which any such entity is a citizen or resident or
any political subdivision of such jurisdiction (all such nonexcluded 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 to the Agent, any Bank,
or the Applicable Lending Office thereof, (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
Person 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.
(b OTHER TAXES. The Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies which arise from any payment made or from the execution, delivery, or
registration of, or otherwise with respect to, this Agreement or the other
Credit Documents (other than those which become due as a result of any Bank
joining this Agreement as a result of any Assignment and Acceptance, which shall
be paid by the Bank which becomes a Bank hereunder as a result of such
Assignment and Acceptance).
(c FOREIGN BANK WITHHOLDING EXEMPTION. Each Bank and Issuing Bank that is
not incorporated under the laws of the United States of America or a state
thereof agrees that it shall deliver to the Borrower and the Agent (i) two duly
completed copies of United States Internal Revenue Service Form 1001 or 4224 or
successor applicable form, as the case may be, certifying in each case that such
Bank is entitled to receive payments under this Agreement and the Notes payable
to it, without deduction or withholding of any United States federal income
taxes, (ii) if applicable, an Internal Revenue Service Form W-8 or W-9 or
successor applicable form, as the case may be, to establish an exemption from
United States backup withholding tax, and (iii) any other governmental forms
which are necessary or required under an applicable tax treaty or otherwise by
law to reduce or eliminate any withholding tax, which have been reasonably
requested by the Borrower. Each Bank which delivers to the Borrower and the
Agent a Form 1001 or 4224 and Form W-8 or W-9 pursuant to the next preceding
sentence further undertakes to deliver to the Borrower and the Agent two further
copies of the said letter and Form 1001 or 4224 and Form W-8 or W-9, or
successor applicable forms, or other manner of certification, as the case may
be, on or before the date that any such letter or form expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent letter and form previously delivered by it to the Borrower and the Agent,
and such extensions or renewals thereof as may reasonably be requested by the
Borrower and the Agent certifying in the case of a Form 1001 or 4224 that such
Bank is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes. If an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any delivery required by the preceding sentence would
otherwise be required which renders all such forms inapplicable or which would
prevent any
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Bank from duly completing and delivering any such letter or form with respect to
it and such Bank advises the Borrower and the Agent that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax, and in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax, such Bank shall not be required to deliver
such letter or forms. The Borrower shall withhold tax at the rate and in the
manner required by the laws of the United States with respect to payments made
to a Bank failing to provide the requisite Internal Revenue Service forms in a
timely manner. Each Bank which fails to provide to the Borrower in a timely
manner such forms shall reimburse the Borrower upon demand for any penalties
paid by the Borrower as a result of any failure of the Borrower to withhold the
required amounts that are caused by such Bank's failure to provide the required
forms in a timely manner.
ARTICLE 3. CONDITIONS PRECEDENT.
3.1 CONDITIONS PRECEDENT TO AMENDMENT AND RESTATEMENT. This Agreement
shall become effective and the Existing Credit Agreement shall be amended and
restated as provided in this Agreement on the date the Agent sends notice to
each Bank and the Borrower that the following conditions precedent have been
met:
(a) the Borrower shall have delivered or shall have caused to be delivered
the documents and other items listed on EXHIBIT F (other than those documents
and items listed under the heading "Post Closing"), together with any other
documents requested by the Agent to document the agreements and intent of the
Credit Documents, each in form and with substance satisfactory to the Agent;
(b) immediately after giving effect to this Agreement and the outstanding
Revolving Credit Loan and the Letter of Credit Exposure, the lesser of (i)
Revolving Credit Commitments and the Borrowing Base MINUS (ii) the outstanding
Revolving Credit Loan and the Letter of Credit Exposure is at least $8,000,000;
(c) the Borrower shall have paid all fees and expenses due to the Banks
under this Agreement, including Section 2.4 and any fees and expenses of counsel
payable under Section 8.1;
(d) the Agent shall have received and be satisfied with a duly completed
and executed Borrowing Base Certificate as of date acceptable to the Agent;
(e) the Borrower shall have delivered to the Agent (i) a schedule of
Receivables as of a date acceptable to the Agent prior to the date of this
Agreement setting forth a detailed aged trail balance of all of its then
existing Receivables, specifying the name of and the balance due from each
Account Debtor obligated on a Receivable so listed; (ii) a schedule of Inventory
as of a date acceptable to the Agent prior to the date of this Agreement,
itemizing and describing the kind, type, quantity and location of Inventory of
the Credit Parties and the cost thereof; and (iii) an accounts payable aging
report setting forth a detailed aging of its then outstanding accounts payable
and the name of each vendor and balance due from each vendor as of a date
acceptable to the Agent; and
(f) all interest, fees, expenses, and other amounts then due and payable
under the
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Existing Credit Agreement shall have been paid to in full.
3.2 CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The obligation of
each Bank to make any extension of credit under this Agreement, including the
making of any Advances, and the issuance, increase, or extension of any Letters
of Credit, shall be subject to the further conditions precedent that on the date
of such extension of credit:
(a) REPRESENTATIONS AND WARRANTIES. As of the date of the making of any
extension of credit hereunder, the representations and warranties contained in
each Credit Document shall be true and correct in all material respects as of
such date (and the Borrower's request for the making of any extension of credit
hereunder shall be deemed to be a restatement, representation, and additional
warranty of the representations and warranties contained in each Credit Document
as of such date); and
(b) DEFAULT. As of the date of the making of any extension of credit
hereunder, there shall exist no Default or Event of Default, and the making of
the extension of credit would not cause or be reasonably expected to cause a
Default or Event of Default.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants
to the Agent and each Bank, and with each request for any extension of credit
hereunder, including the making of any Advances, and the issuance, increase, or
extension of any Letters of Credit, again represents and warrants to the Agent
and each Bank, as follows:
4.1 ORGANIZATION. As of the date of this Agreement, each Restricted Entity
(a) is duly organized, validly existing, and in good standing under the laws of
such Person's respective jurisdiction of organization and (b) is duly licensed,
qualified to do business, and in good standing in each jurisdiction in which
such Person is organized, owns property, or conducts operations to the extent
that any failure to be so licensed, qualified, or in good standing could
reasonably be expected to cause a Material Adverse Effect.
4.2 AUTHORIZATION. The execution, delivery, and performance by each Credit
Party of the Credit Documents to which such Credit Party is a party and the
consummation of the transactions contemplated thereby (a) do not contravene the
organizational documents of such Credit Party, (b) have been duly authorized by
all necessary corporate or limited liability company action of each Credit
Party, and (c) are within each Credit Party's corporate or limited liability
company powers.
4.3 ENFORCEABILITY. Each Credit Document to which any Credit Party is a
party has been duly executed and delivered by each Credit Party which is a party
to such Credit Document and constitutes the legal, valid, and binding obligation
of each such Credit Party, enforceable against each such Credit Party in
accordance with such Credit Document's terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws at the time
in effect affecting the rights of creditors generally and subject to the
availability of equitable remedies.
4.4 ABSENCE OF CONFLICTS AND APPROVALS. The execution, delivery, and
performance by each Credit Party of the Credit Documents to which such Credit
Party is a party and the consummation of the transactions contemplated thereby,
(a) do not result in any violation or breach
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of any provisions of, or constitute a default under, any note, indenture, credit
agreement, security agreement, credit support agreement, or other similar
agreement to which such Credit Party is a party or any other material contract
or agreement to which such Credit Party is a party, (b) do not violate any law
or regulation binding on or affecting such Credit Party, (c) do not require any
authorization, approval, or other action by, or any notice to or filing with,
any governmental authority, and (d) do not result in or require the creation or
imposition of any Lien prohibited by this Agreement.
4.5 INVESTMENT COMPANIES. No Restricted Entity or Affiliate thereof is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4.6 PUBLIC UTILITIES. No Restricted Entity or Affiliate thereof is a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended. No Restricted Entity or Affiliate thereof is a regulated public
utility.
4.7 FINANCIAL CONDITION.
(a) The Borrower has delivered to the Agent the annual audited
consolidated financial statements of the Borrower dated as of December 31, 1999,
including therein the balance sheet of the Borrower as of such date and the
statements of income, stockholders' equity, and cash flows for the Borrower for
the fiscal year ending on such date. These financial statements are accurate and
complete in all material respects and present fairly the financial condition of
the Borrower as of such date in accordance with GAAP.
(b) As of the date of the Initial Financial Statements, there were no
material contingent obligations, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses of the Borrower or
any of the Borrower's Subsidiaries, except as disclosed in the Initial Financial
Statements, and adequate reserves for such items have been made in accordance
with GAAP. Since the date of the Initial Financial Statements, no change has
occurred in the condition, financial or otherwise, of the Borrower which would
have a Material Adverse Effect. No Default exists.
4.8 CONDITION OF ASSETS. Each Restricted Entity has good and indefeasible
title to substantially all of its owned property and valid leasehold rights in
all of its leased property, as reflected in the financial statements most
recently provided to the Agent, free and clear of all Liens except Permitted
Liens. Each Restricted Entity possesses and has properly approved, recorded, and
filed, where applicable, all permits, licenses, patents, patent rights or
licenses, trademarks, trademark rights, trade names rights, and copyrights which
are useful in the conduct of its business and which the failure to possess could
reasonably be expected to cause a Material Adverse Effect. The material
properties used or to be used in the continuing operations of each Restricted
Entity are in good repair, working order, and condition, normal wear and tear
excepted. The properties of each Restricted Entity have not been adversely
affected as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of property or cancellation of contracts, permits, or concessions by a
governmental authority, riot,
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activities of armed forces, or acts of God or of any public enemy in any manner
which (after giving effect to any insurance proceeds) could reasonably be
expected to have a Material Adverse Effect.
4.9 LITIGATION. There are no actions, suits, or proceedings pending or, to
the knowledge of any Restricted Entity, threatened against any Restricted Entity
at law, in equity, or in admiralty, or by or before any governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign, or
any arbitrator which could reasonably be expected to result in a judgment or
liability not fully covered by insurance which would have a Material Adverse
Effect.
4.10 SUBSIDIARIES AND AFFILIATES. As of the date of this Agreement, the
Borrower has no Subsidiaries, except as disclosed in SCHEDULE II hereto. The
Borrower has no Subsidiaries which have not been disclosed in writing to the
Agent.
4.11 LAWS AND REGULATIONS. Each Restricted Entity has been and is in
compliance with all federal, state, and local laws and regulations which are
applicable to the operations and property of such Person and which the failure
to comply with could reasonably be expected to have a Material Adverse Effect.
4.12 ENVIRONMENTAL COMPLIANCE. Each Restricted Entity has been and is in
compliance with all Environmental Laws and has obtained and is in compliance
with all related permits necessary for the ownership and operation of any such
Person's properties which the failure to be in compliance with could reasonably
be expected to have a Material Adverse Effect. Each Restricted Entity has never
received notice of and has never been investigated for any violation or alleged
violation of any Environmental Law in connection with any such Person's
presently or previously owned properties which threaten action or suggest
liabilities which could reasonably be expected to have a Material Adverse
Effect. Each Restricted Entity does not and has not created, handled,
transported, used, or disposed of any Hazardous Materials on or about any such
Person's properties (nor has any such Person's properties been used for those
purposes), except in compliance with all Environmental Laws and related permits;
has never been responsible for the release of any Hazardous Materials into the
environment in connection with any such Person's operations and have not
contaminated any properties with Hazardous Materials; and does not and has not
owned any properties contaminated by any Hazardous Materials, in each case in
any manner which could reasonably be expected to have a Material Adverse Effect.
For the purposes of this Section 4.12, any losses covered by the Borrower's
reserve for environmental losses set forth on its most recent consolidated
balance sheet shall be excluded in determining whether any Material Adverse
Effect has occurred.
4.13 ERISA. Each Restricted Entity is in compliance in all material
respects with all provisions of ERISA. No Restricted Entity participates in or
during the past five years has participated in any employee pension benefit plan
covered by Title IV of ERISA or any multiemployer plan under Section 4001(a)(3)
of ERISA. With respect to the Plans of the Restricted Entities, no material
Reportable Event or Prohibited Transaction has occurred and exists.
4.14 TAXES. Each Restricted Entity has filed all United States federal,
state, and local income tax returns and all other domestic and foreign tax
returns which are required to be filed by such Person and has paid, or provided
for the payment before the same became delinquent of, all
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taxes due pursuant to such returns or pursuant to any assessment received by the
such Person. The charges, accruals, and reserves on the books of the Restricted
Entities in respect of taxes are adequate in accordance with GAAP.
4.15 TRUE AND COMPLETE DISCLOSURE. All factual information furnished by or
on behalf of any Credit Party in writing to the Agent or any Bank in connection
with the Credit Documents and the transactions contemplated thereby is true and
accurate in all material respects on the date as of which such information was
dated or certified and does not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements contained
therein not misleading. All projections, estimates, and pro forma financial
information furnished by any Credit Party were prepared on the basis of
assumptions, data, information, tests, or conditions believed to be reasonable
at the time such projections, estimates, and pro forma financial information
were furnished.
4.16 YEAR 2000. The Borrower has (a) completed a review and assessment of
all areas within its and each of its Subsidiaries' business and operations
(including those affected by suppliers, vendors, and customers) that could be
adversely affected by the Year 2000 Problem and (b) developed, completed, and
implemented a plan for addressing the Year 2000 Problem. Based on the foregoing,
the Borrower believes that all computer applications (including those of its
suppliers, vendors, and customers) that are material to its or any of its
Subsidiaries' business and operations are Year 2000 Compliant, except to the
extent that a failure to do so could not reasonably be expected to result in a
Material Adverse Change.
ARTICLE 5. COVENANTS. Until the Agent and the Banks receive irrevocable payment
of the Credit Obligations and have terminated this Agreement and each other
Credit Document, the Borrower shall comply with and cause compliance with the
following covenants:
5.1 ORGANIZATION; MAINTENANCE OF PROPERTIES. The Borrower shall cause each
Restricted Entity to (a) maintain itself as an entity (i) duly organized,
validly existing, and in good standing under the laws of each such Person's
respective jurisdiction of organization and (ii) duly licensed, qualified to do
business, and in good standing in each jurisdiction in which such Person is
organized, owns property, or conducts operations and which requires such
licensing or qualification and where failure to be so licensed, qualified, or in
good standing could reasonably be expected to have a Material Adverse Effect,
(b) maintain all franchises, licenses, rights, privileges, and intangible
properties necessary in the conduct of its business, if any, (c) duly observe
and conform to all material requirements of any governmental authorities
relative to the conduct of its business or the operation of its Property, if
such failure duly to observe and conform to said requirements would have a
Material Adverse Effect or is likely to result in criminal prosecution; and (d)
will at all times keep complete and accurate records of (i) Inventory on a basis
consistent with past practices of the Borrower, itemizing and describing the
kind, type and quantity of Inventory and the Borrower's cost therefor and
current pricing information for such Inventory, and (ii) all other Collateral on
a basis consistent with past practices of the Borrower.
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5.2 REPORTING. The Borrower shall furnish to the Agent all of the
following:
(a) ANNUAL FINANCIAL REPORTS. As soon as available and in any event not
later than 90 days after the end of each fiscal year of the Borrower, (i) a copy
of the annual audit report for such fiscal year for the Borrower, including
therein the consolidated balance sheets of the Borrower as of the end of such
fiscal year and the consolidated statements of income, stockholders' equity, and
cash flows for the Borrower for such fiscal year, setting forth the consolidated
financial position and results of the Borrower for such fiscal year and
certified, without any qualification or limit of the scope of the examination of
matters relevant to the financial statements, by a nationally recognized
certified public accounting firm, (ii) separately reported information regarding
operating divisions and Subsidiaries of the Borrower that are not Guarantors,
including a statement of dividends received by the Borrower and the Guarantors
from such non-guarantor Subsidiaries of the Borrower; and (iii) a completed
Compliance Certificate duly certified by a Responsible Officer of the Borrower;
(b) MONTHLY FINANCIAL REPORTS. As soon as available and in any event not
later than 30 days after the end of each month, (i) a copy of the internally
prepared consolidated financial statements of the Borrower for such month and
for the fiscal year to date period ending on the last day of such month,
including therein the consolidated balance sheets of the Borrower as of the end
of such month and the consolidated statements of income, and cash flows for such
month and for such fiscal year to date period, setting forth the consolidated
financial position and results of the Borrower for such month and fiscal year to
date period, all in reasonable detail and duly certified by a Responsible
Officer of the Borrower as having been prepared in accordance with generally
accepted accounting principles, including those applicable to interim financial
reports which permit normal year end adjustments and do not require complete
financial notes; (ii) separately reported information regarding operating
divisions and Subsidiaries of the Borrower that are not Guarantors, including a
statement of dividends received by the Borrower and the Guarantors from such
non-guarantor Subsidiaries of the Borrower; and (iii) a completed Compliance
Certificate duly certified by a Responsible Officer of the Borrower;
(c) MONTHLY REPORTS. As soon as available and in any event not later than
20 days after the end of each month, (i) an accounts receivable and accounts
payable aging report in a form satisfactory to the Agent, (ii) a schedule of
Receivables as of the last Business Day of the immediately preceding month
setting forth (A) a detailed aged trail balance of all the Credit Party's then
existing Receivables, specifying the name and the balance due from (and any
rebate due to) each Account Debtor obligated on a Receivable so listed and (B) a
reconciliation to the schedule of Receivables delivered in respect of the next
preceding month, (iii) a schedule of Inventory as of the last Business Day of
the immediately preceding month, itemizing and describing the kind, type,
quantity and location of Inventory of the Credit Parties and the cost thereof,
(iv) a completed Borrowing Base Certificate duly certified by a Responsible
Officer of the Borrower, and (v) such other information requested by the Agent;
(d) APPRAISALS. Within 45 days after the date hereof, (i) fair market
value appraisals of the Borrower's and its Subsidiaries' real estate subject to
a Mortgage and liquidation value in place appraisals of the Borrower and its
Subsidiaries' equipment and fixtures, each in form satisfactory to the Agent and
by independent appraisers reasonably satisfactory to the Agent and (ii) a Term
Loan Borrowing Base certificate giving effect to such appraisals.
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(e) INVENTORY LISTING. The Borrower will take a physical listing of all
Inventory, wherever located, at least annually and deliver a copy thereof to the
Agent and each Bank.
(f) SEC FILINGS. As soon as available and in any event not later than
thirty days after the filing or delivery thereof, copies of all financial
statements, reports, and proxy statements which the Borrower shall have sent to
its stockholders generally and copies of all regular and periodic reports, if
any, which any Restricted Entity shall have filed with the Securities and
Exchange Commission;
(g) DEFAULTS. Promptly, but in any event within five Business Days after
the discovery thereof, a notice of any facts known to any Restricted Entity
which constitute a Default, together with a statement of a Responsible Officer
of the Borrower setting forth the details of such facts and the actions which
the Borrower has taken and proposes to take with respect thereto;
(h) LITIGATION; MATERIAL CONTINGENT LIABILITIES; MATERIAL AGREEMENT
DEFAULTS. The Borrower shall provide to the Banks:
(i) promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any court or governmental department,
commission, board, bureau, agency, or instrumentality, domestic or
foreign, affecting any Restricted Entity which, if determined adversely,
could reasonably be expected to have a Material Adverse Effect;
(ii) promptly after acquiring knowledge thereof, notice of any actual or
potential material contingent liabilities, including without limitation
any actual or potential material contingent liability in an amount which
equals or exceeds $1,000,000; and
(iii) promptly after obtaining knowledge thereof, notice of any breach by
any Restricted Entity of any contract or agreement which breach could
reasonably be expected to cause a Material Adverse Effect;
(i) MATERIAL ADVERSE EFFECTS. Prompt written notice of any condition or
event of which any Restricted Entity has knowledge, which condition or event has
resulted in or could reasonably be expected to have a Material Adverse Effect;
(j) YEAR 2000 COMPLIANCE. Prompt written notice in the event the Borrower
discovers or determines that any computer application (including those of its
suppliers, vendors, and customers) that is material to its or any of its
Subsidiaries' business and operations will not be Year 2000 Compliant, except to
the extent that such failure could not reasonably be expected to result in a
Material Adverse Change; and
(k) OTHER INFORMATION. Such other information respecting the business
operations or property of any Restricted Entity, financial or otherwise, or the
Collateral as the Agent or the Banks may from time to time request in their
reasonable discretion, including the items described above in this Section 5.2
at different times than specified above.
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5.3 INSPECTION.
(a) Prior to the occurrence of the Borrowing Base Termination
Condition, each Bank (by any of its officers, employees or agents) shall have
the right (which right shall not be exercised more than once during any calendar
quarter so long as no Event of Default shall have occurred and be continuing),
to the extent that the exercise of such right shall be within the control of any
Credit Party, at any time or times during normal business hours to (i) visit the
properties of any Credit Party, inspect the Collateral and the other assets of
any Credit Party and inspect and make extracts from the books and records of any
Credit Party, including, but not limited to, management letters prepared by
independent accountants, all during customary business hours at such premises,
(ii) discuss any Credit Party's business, assets, liabilities, financial
condition, results of operations and business prospects, insofar as the same are
reasonably related to the rights of the Agents or the Banks hereunder or under
any of the Credit Documents, with any Credit Party's (A) principal officers, (B)
independent accountants and other professionals providing services to any Credit
Party, and (C) any other Person (except that any such discussion with any third
parties shall be conducted only in accordance with the Bank's standard operating
procedures relating to the maintenance of confidentiality of confidential
information of borrowers and the Borrower shall have received prior written
notice of, and the opportunity to participate in, any such discussion with any
independent accountant, any other professional, or any other Person), and (iii)
verify the amount, quantity, value and condition of, or any other matter
relating to, any of the Collateral and in this connection to review, audit and
make extracts from all records and files related to any of the Collateral. Each
Credit Party will deliver or cause to be delivered to such Bank any instrument
necessary to authorize an independent accountant or other professional to have
discussions of the type outlined above with such Bank or for such Bank to obtain
records from any service bureau maintaining records on behalf of such Credit
Party.
(b) Following the occurrence of the Borrowing Base Termination
Condition, the Borrower shall cause each Restricted Entity to permit the Agent
and the Banks to visit and inspect any of the properties of such Restricted
Entity, to examine all of such Person's books of account, records, reports, and
other papers, to make copies and extracts therefrom, and to discuss their
respective affairs, finances, and accounts with their respective officers,
employees, and independent public accountants all at such reasonable times and
as often as may be reasonably requested provided that the Borrower is given at
least one Business Day advance notice thereof and reasonable opportunity to be
present when independent public accountants or other third parties are
contacted.
5.4 USE OF PROCEEDS. The proceeds of Advances and Letters of Credit shall
be used by the Borrower only for general corporate and working capital purposes,
for Capital Expenditures, and for financing Acquisitions in accordance with
Section 5.9. The Borrower shall not, directly or indirectly, use any part of
such proceeds for any purpose which violates, or is inconsistent with,
Regulations T, U, or X of the Board of Governors of the Federal Reserve System.
5.5 FINANCIAL COVENANTS. The Agent shall determine compliance with the
following financial covenants based upon the most recent financial statements
dated as of the end of a fiscal quarter delivered to the Agent pursuant to
Section 5.2(b) (except when available at the time of testing
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the audited financial statements delivered pursuant to Section 5.2(a) shall be
used):
(a) DEBT TO ADJUSTED EBITDA RATIO. Except as provided below, as of the
last day of each period set forth below, the Borrower shall not permit the ratio
of (i) the consolidated Debt of the Borrower as of end of such period to (ii)
the consolidated Adjusted EBITDA of the Borrower for the 12 months then ended
(plus, without duplication, the consolidated Adjusted EBITDA for such period of
any Person or assets acquired by the Borrower by Acquisition during such period
to the extent permitted or required below), to be greater than the amounts set
forth in the table below for the corresponding periods set forth below:
PERIOD MAXIMUM RATIO
----------------- -------------
March 31, 2000 4.00 to 1.00
April 30, 2000 3.75 to 1.00
June 30, 2000 3.25 to 1.00
December 31, 2000
and the last day of each fiscal quarter thereafter 3.00 to 1.00
At any time after the Borrowing Base Termination Condition has been met, the
maximum ratio shall be 3.00 to 1.00;
(b) FIXED CHARGE COVERAGE RATIO. As of the last day of each fiscal quarter
of the Borrower beginning with the fiscal quarter ending December 31, 2000, the
Borrower shall not permit the ratio of (i) the consolidated Adjusted EBITDA of
the Borrower for the preceding four fiscal quarters then ended less the
consolidated cash taxes paid by the Borrower for such period to (ii) the
consolidated Fixed Charges of the Borrower for such period, to be less than 1.25
to 1.00;
(c) NET WORTH MINIMUM. The Borrower shall not permit its consolidated Net
Worth to be less than $112,093,000 plus an amount equal to the sum of (a) 50% of
the cumulative annual consolidated net earnings of the Borrower as of the end of
each fiscal year ending after December 31, 1999 during which the Borrower has
positive net earnings (and therefore without reduction for any annual net
losses), plus (b) 100% of the net proceeds of any sale or issuance of any equity
securities of the Borrower (including any equity securities issued or
transferred by the Borrower in connection with any Acquisition) since December
31, 1999, to the extent such sale or issuance increases the consolidated Net
Worth of the Borrower;
(d) MINIMUM EBITDA. The Borrower shall not permit its consolidated EBITDA
(i) for the quarter ending March 31, 2000 to be less than $6,500,000; (ii) for
the quarter ending June 30, 2000 to be less than $7,500,000; and (iii) for the
quarter ending September 30, 2000 to be less than $8,500,000; and
(e) CAPITAL EXPENDITURES. The Borrower shall not permit any Restricted
Entity to make any Capital Expenditure that, when combined with the Capital
Expenditures made by all the Restricted Entities from January 1, 2000 through
each date set forth below, would cause such Capital Expenditures to exceed the
aggregate amount set forth opposite such date:
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DATE AGGREGATE AMOUNT
------------------- ----------------------
March 31, 2000 $5,500,000
June 30, 2000 $10,000,000
September 30, 2000 $14,500,000
5.6 DEBT. The Borrower shall not permit any Restricted Entity to:
(a) create, assume, incur, suffer to exist, or in any manner become
liable, directly, indirectly, or contingently in respect of, any Debt other than
Permitted Debt; or
(b) make any unscheduled payment of principal, interest, or other amounts
owing with respect to any Debt of such Restricted Entity (other than the Credit
Obligations), or otherwise make any payment of any such amounts prior to the
date that such amounts become due and payable under the terms of the documents
creating such Debt without the prior written consent of the Agent.
5.7 LIENS. The Borrower shall not permit any Restricted Entity to (a)
create, assume, incur, or suffer to exist any Lien on any of its Property
whether now owned or hereafter acquired, or assign any right to receive its
income, except for Permitted Liens; or (b) enter into any agreement with any
Person (other than the Agent and the Banks pursuant to this Agreement)
restricting the capacity of the Borrower or any other Restricted Entity to
create Liens in favor of the Agent and the Banks.
5.8 OTHER OBLIGATIONS.
(a) The Borrower shall not permit any Restricted Entity to create, incur,
assume, or suffer to exist any obligations in respect of unfunded vested
benefits under any pension Plan or deferred compensation agreement; and
(b) The Borrower shall not permit any Restricted Entity to create, incur,
assume, or suffer to exist any obligations in respect of Derivatives, other than
Derivatives used by any Restricted Entity in such Restricted Entity's respective
business operations in aggregate notional quantities not to exceed the
reasonably anticipated consumption of such Restricted Entity of the underlying
commodity for the relevant period, but no Derivatives which are speculative in
nature.
5.9 CORPORATE TRANSACTIONS. The Borrower shall not and shall not permit
any other Restricted Entity to (1) merge or consolidate with or be a party to a
merger or consolidation with any other Person, (2) make any Acquisition, (3)
assign, sell, lease, dispose of, or otherwise transfer any assets outside of the
ordinary course of business, including wholesale sales of accounts receivable,
or (4) enter into any binding agreement regarding any of the foregoing, provided
however that:
(a) any Restricted Entity organized under a jurisdiction of the United
States may be merged or consolidated with the Borrower or any other Restricted
Entity organized under a jurisdiction of the United States provided that, in any
such merger or consolidation to which the
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Borrower is a party, the Borrower shall be the continuing or surviving
corporation;
(b) any Restricted Entity may make any Acquisition (by purchase or merger)
provided that (i) the Restricted Entity is the acquiring or surviving entity (or
the surviving entity becomes a Subsidiary of the Borrower in the transaction),
(ii) the aggregate consideration paid or incurred by the Restricted Entity (in
either case including cash, indebtedness, assumed indebtedness, and transaction
related contractual payments such as amounts payable under noncompete,
consulting, and similar agreements, but excluding stock and preferred stock of
the Borrower) in connection with any Acquisition does not exceed (A) $5,000,000,
and (B) on December 31, 2000, and thereafter, when the maximum ratio for Debt to
Adjusted EBITDA as permitted by Section 5.5(a) reduces to 3.00 to 1.00 as
provided therein, such dollar amount shall be increased to an amount equal to
20% of the consolidated Net Worth of the Borrower as of the end of the most
recent fiscal year ending prior to such Acquisition; PROVIDED that for any such
increase to become effective, the Compliance Certificate delivered by the
Borrower with respect to the fiscal quarter ended December 31, 2000, shall
demonstrate compliance with the requirements of Section 5.5(a), unless the
Borrower provides the information specified below and obtains the prior approval
of the Agent and the Majority Banks, (iii) the sum of (A) the aggregate amount
of such consideration paid or incurred by the Restricted Entities in connection
with all Acquisitions during any continuous four fiscal quarter period (the
"Aggregate Acquisition Limit") plus (B) the aggregate amount of Capital
Expenditures of the Restricted Entities during such period during such period
does not exceed an amount equal to 70% of the consolidated Net Worth of the
Borrower as of the end of the most recent fiscal year ending prior to, but not
concurrently with, the end of such four quarter period; PROVIDED, that if the
Borrower provides the information specified below and obtains the approval of
the Agent and the Majority Banks, any Acquisitions made by the Restricted
Entities during the applicable period and so approved by the Agent and the
Majority Banks shall be excluded from future calculations of the Aggregate
Acquisition Limit, (iv) the Majority Banks determine that no Default or Event of
Default exists and the Acquisition would not reasonably be expected to cause a
Default or Event of Default, (v) the acquired assets are in substantially the
same business as the Borrower or any of the Restricted Entities, and (vi) the
transaction is not hostile, as reasonably determined by the Majority Banks;
(c) any Restricted Entity organized under a jurisdiction of the United
States may sell, lease, assign, transfer, or otherwise dispose of any or all of
its assets (i) to the Borrower or (ii) to any other Restricted Entity organized
under a jurisdiction of the United States; and
(d) the Borrower and the other Restricted Entities may sell Property (i)
in the ordinary course of business, (ii) in an amount not to exceed in the
aggregate $2,000,000 in any fiscal year of the Borrower, or (iii) with the prior
written consent of the Agent and the Majority Banks (any sale pursuant to the
foregoing (d)(ii) or (iii) being a "Permitted Sale").
If the Borrower requests the approval of the Agent and the Majority Banks for
any Acquisition pursuant to Section 5.9(b)(ii) or (iii) above, the Borrower must
provide the following information to the Agent for distribution to the Banks:
(A) historical financial statements regarding the Acquisition, including at a
minimum: (x) historical financial statements for the immediately preceding three
fiscal years of the acquired assets, reviewed by an independent certified public
accounting firm reasonably acceptable to the Agent, and (y) interim historical
financial statements for the most recent fiscal quarter of the acquired assets,
duly certified by a Responsible Officer of the Borrower as being, to
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the best of such Responsible Officer's knowledge after due inquiry, accurate and
complete and having been prepared in accordance with generally accepted
accounting principles, including those applicable to interim financial reports
which permit normal year end adjustments and do not require complete financial
notes; and (B) consolidated historical proforma financial statements for the
Borrower for the most recently completed four fiscal quarters of the Borrower
giving effect to the Acquisition, and the schedules and methods used to prepare
such proforma financial statements; (C) consolidated proforma financial
statements for the Borrower for the next four fiscal quarters of the Borrower
giving effect to the Acquisition, and the schedules and methods used to prepare
such proforma financial statements; and (D) such other information regarding the
acquired assets as the Agent or the Majority Banks may reasonably request.
5.10 DISTRIBUTIONS. The Borrower shall not (a) declare or pay any
dividends; (b) purchase, redeem, retire, or otherwise acquire for value any of
its capital stock now or hereafter outstanding; or make any distribution of
assets to its stockholders as such, whether in cash, assets, or in obligations
of it; (c) allocate or otherwise set apart any sum for the payment of any
dividend or distribution on, or for the purchase, redemption, or retirement of,
any shares of its capital stock; or (d) make any other distribution by reduction
of capital or otherwise in respect of any shares of its capital stock; provided,
however, that the Borrower may make Dividend Payments so long as the same do not
cause an Event of Default.
5.11 TRANSACTIONS WITH AFFILIATES. The Borrower shall not and shall not
permit any other Restricted Entity to enter into any transaction directly or
indirectly with or for the benefit of an Affiliate except transactions with an
Affiliate for the leasing of property, the rendering or receipt of services, or
the purchase or sale of inventory or other assets in the ordinary course of
business if the monetary or business consideration arising from such a
transaction would be substantially as advantageous to such Restricted Entity as
the monetary or business consideration which such Restricted Entity would obtain
in a comparable arm's length transaction.
5.12 INSURANCE. The Borrower shall cause each Restricted Entity to
maintain insurance with responsible and reputable insurance companies or
associations reasonably acceptable to the Agent in such amounts and covering
such risks as are usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which such Persons
operate. Without limiting the foregoing, the Borrower shall maintain insurance
coverage for the Restricted Entities equal to or better than, on an item by item
basis for each item, the coverage for the Restricted Entities existing on the
date of this Agreement. The Borrower shall deliver to the Agent certificates
evidencing such policies or copies of such policies at the Agent's request
following a reasonable period to obtain such certificates taking into account
the jurisdiction where the insurance is maintained.
5.13 INVESTMENTS. The Borrower shall not and shall not permit any other
Restricted Entity to make or hold any direct or indirect investment in any
Person, including capital contributions to the Person, investments in the debt
or equity securities of the Person, and loans, guaranties, trade credit, or
other extensions of credit to the Person, except for Permitted Investments.
5.14 LINES OF BUSINESS; DISTRIBUTION. The Borrower shall not and shall not
permit any other Restricted Entity to change the character of the business of
such Restricted Entity as conducted
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on the date of this Agreement, or engage in any type of business not reasonably
related to such business as presently and normally conducted.
5.15 COMPLIANCE WITH LAWS. The Borrower shall and shall cause each
Restricted Entity to comply with all federal, state, and local laws and
regulations which are applicable to the operations and property of such Persons
and which the failure to comply with could reasonably be expected to have a
Material Adverse Effect.
5.16 ENVIRONMENTAL COMPLIANCE. The Borrower shall and shall cause each
Restricted Entity to comply with all Environmental Laws and obtain and comply
with all related permits necessary for the ownership and operation of any such
Person's properties which the failure to comply with could reasonably be
expected to have a Material Adverse Effect. The Borrower shall and shall cause
each Restricted Entity to promptly disclose to the Banks any notice to or
investigation of such Persons for any violation or alleged violation of any
Environmental Law in connection with any such Person's presently or previously
owned properties which represent liabilities which could reasonably be expected
to have a Material Adverse Effect. The Borrower shall not and shall not permit
any Restricted Entity to create, handle, transport, use, or dispose of any
Hazardous Materials on or about any such Person's properties except in
compliance with all Environmental Laws and related permits; release any
Hazardous Materials into the environment in connection with any such Person's
operations or contaminate any properties with Hazardous Materials; or own
properties contaminated by any Hazardous Materials, in each case if such action
could reasonably be expected to have a Material Adverse Effect. For the purposes
of this Section 5.16, any losses covered by the Borrower's reserve for
environmental losses set forth on its most recent consolidated balance sheet
shall be excluded in determining whether any Material Adverse Effect has
occurred.
5.17 ERISA COMPLIANCE. The Borrower shall and shall cause each Restricted
Entity to (i) comply in all material respects with all applicable provisions of
ERISA and prevent the occurrence of any Reportable Event or Prohibited
Transaction with respect to, or the termination of, any of their respective
Plans where the failure to do so could reasonably be expected to have a Material
Adverse Effect and (ii) not create or participate in any employee pension
benefit plan covered by Title IV of ERISA or any multiemployer plan under
Section 4001(a)(3) of ERISA.
5.18 PAYMENT OF CERTAIN CLAIMS. The Borrower shall and shall cause each
Restricted Entity to pay and discharge, before the same shall become delinquent,
(a) all taxes, assessments, levies, and like charges imposed upon any such
Person or upon any such Person's income, profits, or property by authorities
having competent jurisdiction prior to the date on which penalties attach
thereto except for tax payments being contested in good faith for which adequate
reserves have been made and reported in accordance with GAAP and which could not
reasonably be expected to have a Material Adverse Effect, (b) all lawful claims
which are secured by or which, if unpaid, would by law become secured by a Lien
upon any such Person's property, and (c) all trade payables and current
operating liabilities, unless the same are less than 90 days past due or are
being contested in good faith, have adequate reserves established and reported
in accordance with GAAP, and could not reasonably be expected to have a Material
Adverse Effect.
5.19 SUBSIDIARIES. Upon the formation or acquisition of any new
wholly-owned Subsidiary
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which is organized under a jurisdiction of the United States, the Borrower shall
cause such Subsidiary to promptly execute and deliver to the Agent a Joinder
Agreement in substantially the form of EXHIBIT G with such modifications thereto
as the Agent may reasonably request for the purpose of joining such Subsidiary
as a party to the Guaranty and providing to the Agent the rights of the Agent
intended to be provided thereunder. In connection therewith, the Borrower shall
provide corporate documentation and opinion letters reasonably satisfactory to
the Agent reflecting the corporate status of such new Subsidiary of the Borrower
and the enforceability of such agreements.
5.20 FURTHER ASSURANCES. Each Restricted Entity shall promptly cure any
defects in the creation and issuance of the Notes and the execution and delivery
of the other Credit Documents, including this Agreement. When requested by the
Agent, each Restricted Entity shall, at its own expense, promptly execute and
deliver or cause to be executed and delivered to the Agent all such other and
further documents, agreements, and instruments (a) to comply with or accomplish
the covenants and agreements in the Credit Documents, or (b) to correct any
omissions in the Credit Documents.
5.21 MANAGEMENT. The Borrower shall give the Agent written notification of
any change in the management structure of the Borrower simultaneously with such
change in management and disclosure to shareholders.
5.22 FOREIGN SUBSIDIARIES. The Borrower shall execute and deliver or cause
the applicable Restricted Entity to execute and deliver to the Agent the Pledge
Agreements, in form and substance reasonably satisfactory to the Agent and the
Majority Banks, for the purpose of pledging a minimum of 60% (and a maximum of
65%) of the stock of the Subsidiaries of the Pledgor which are not organized
under a jurisdiction of the United States as security for the Credit
Obligations; PROVIDED that the Borrower may elect not to provide Pledge
Agreements with respect to the stock of such Subsidiaries whose assets
constitute, in the aggregate, 5% or less of the consolidated assets of the
Borrower. If at any time the aggregate assets of such Subsidiaries of the
Restricted Entities whose stock is not pledged to the Agent exceeds 5% of the
consolidated assets of the Borrower, the Borrower shall, within 30 days of the
earlier of knowledge of such excess by the Borrower or notice from the Agent,
provide Pledge Agreements with respect to additional foreign Subsidiaries
sufficient to cure such excess to the reasonable satisfaction of the Agent. In
connection with the foregoing, the Borrower shall provide corporate
documentation and opinion letters reasonably satisfactory to the Agent
reflecting the corporate status of such new foreign Subsidiary and the
enforceability of such agreements under the law of the jurisdiction of
organization of such new foreign Subsidiary.
5.23 BANK ACCOUNTS.
(a) The Borrower shall cause the Restricted Entities to maintain, in
the aggregate, no more than $500,000 on deposit in accounts, located in the
United States, which are not controlled by the Agent or any Bank or Banks.
(b) The Borrower and its Subsidiaries shall maintain the bank
accounts indicated on the attached Schedule II for the purposes indicated on
such Schedule; shall, promptly upon request of the Agent, cause each depositary
institution maintaining a lock box, collection,
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revenue or other account in which proceeds of Collateral are deposited ("Revenue
Accounts") to enter into an agreement with the Agent in substantially the form
of Exhibit A to the Security Agreement; and agrees, promptly upon request of the
Agent, to deposit therein all proceeds of any sales attributable to the
Borrower's and its Subsidiaries' operations unless and until the Agent directs
it to act otherwise. The Borrower or its Subsidiaries, as applicable, may, prior
to the Borrower's receipt of notice to the contrary from the Agent, make
withdrawals from the Revenue Accounts to pay operating costs and expenses or to
other bank accounts used to pay operating costs and expenses. After the
Borrower's receipt of notice from the Agent, all amounts deposited in the
Revenue Accounts shall be applied to the payment of the Secured Obligations or
retained by the Agent as collateral for the Obligations. The Agent does not
waive or relinquish any of its rights or interests arising under the Credit
Documents by permitting the Borrower and its Subsidiaries to collect and deposit
the proceeds of sales of Collateral attributable to Borrower's and its
Subsidiaries' operations. The Borrower shall have no other bank accounts in the
United States other than the accounts listed on SCHEDULE II, accounts with the
Agent and any Bank or Banks, and accounts for which the Agent has consented.
5.24 POST CLOSING ITEMS. No later than 45 days after the date of this
Agreement (or 60 days with respect to the landlords' lien waivers), the Borrower
shall have delivered or caused to be delivered to the Agent the documents and
other items listed under the heading "Post Closing" on EXHIBIT F, together with
any other documents or items reasonably requested by the Agent to document the
agreements and intent of such documents, each in form and substance reasonably
acceptable to the Agent.
ARTICLE 6. DEFAULT AND REMEDIES.
6.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement and any other Credit
Document:
(a) PAYMENT FAILURE. The Borrower or any of it Subsidiaries (i) fails to
pay when due any principal amounts due under this Agreement or any other Credit
Document or (ii) fails to pay when due any interest, fees, reimbursements,
indemnifications, or other amounts due under this Agreement or any other Credit
Document and such failure has not been cured within five Business Days;
(b) FALSE REPRESENTATION. Any representation or warranty made by the
Borrower, any Credit Party, or any officer or partner thereof in this Agreement
or in any other Credit Document is materially false or erroneous at the time it
was made or deemed made;
(c) BREACH OF COVENANT. (i) Any breach by the Borrower of any of the
covenants contained in Sections 5.2(d), 5.3, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10,
5.11, 5.12, 5.13, 5.14, or 5.24 of this Agreement, (ii) any breach by the
Borrower of any of the covenants contained in Sections 5.2(c) or 5.23 of this
Agreement and such breach is not cured within 5 days following the earlier of
knowledge of such breach by the Borrower or the receipt of written notice
thereof from the Agent or any Bank, or (iii) any breach by the Borrower of any
of the other covenants contained in this Agreement and such breach is not cured
within 30 days following the earlier of knowledge of such breach by the
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Borrower or the receipt of written notice thereof from the Agent or any Bank;
(d) GUARANTY. (i) the Guaranty shall at any time and for any reason cease
to be in full force and effect or shall be contested by any party thereto, or
any Guarantor shall deny it has any further liability or obligation thereunder,
(ii) any breach by any Guarantor of any of the covenants contained in Section 1
of the Guaranty, or (iii) or any breach by any Guarantor of any other covenants
contained in the Guaranty or any other Credit Document and such breach is not
cured within 30 days following the earlier of knowledge of such breach by such
Guarantor or the receipt of written notice thereof from the Agent or any Bank;
(e) CROSS DEFAULT. (i) Any principal, interest, fees, or other amounts due
on any Debt of any Restricted Entity is not paid when due, whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise, and such
failure is not cured within the applicable grace period, if any, and the
aggregate amount of all Debt of the Restricted Entities so in default exceeds
$1,000,000; (ii) any other event shall occur or condition shall exist under any
agreement or instrument relating to any Debt of any Restricted Entity the effect
of which is to accelerate or to permit the acceleration of the maturity of any
such Debt, whether or not any such Debt is actually accelerated, and the
aggregate amount of all Debt of the Restricted Entities so in default exceeds
$1,000,000; or (iii) any Debt of any Restricted Entity shall be declared to be
due and payable, or required to be prepaid (other than by a regularly scheduled
prepayment) prior to the stated maturity thereof, and the aggregate amount of
all Debt of the Restricted Entities so accelerated exceeds $1,000,000;
(f) BANKRUPTCY AND INSOLVENCY. (i) there shall have been filed against any
Restricted Entity or any such Person's properties, without such Person's
consent, any petition or other request for relief seeking an arrangement,
receivership, reorganization, liquidation, or similar relief under bankruptcy or
other laws for the relief of debtors and such request for relief (A) remains in
effect for 60 or more days, whether or not consecutive, or (B) is approved by a
final nonappealable order, or (ii) any such Person consents to or files any
petition or other request for relief of the type described in clause (i) above
seeking relief from creditors, makes any assignment for the benefit of creditors
or other arrangement with creditors, or admits in writing such Person's
inability to pay such Person's debts as they become due (Events of Default under
clause (i) and (ii) collectively being referred to as "Bankruptcy Events of
Default");
(g) ADVERSE JUDGMENT. A judgment which has a Material Adverse Effect,
including without limitation any judgement in excess of an amount equal to 10%
of the consolidated Net Worth of the Borrower is rendered against the Borrower
or any other Restricted Entity and such judgment is not discharged or stayed
pending appeal within 30 days following its entry; or
(h) CHANGE OF CONTROL. There shall occur any Change of Control.
(i) SECURITY DOCUMENTS. Any Security Document shall at any time and for
any reason cease to create the Lien on the property purported to be subject to
such agreement in accordance with the terms of such agreement, or shall cease to
be in full force and effect, or shall be contested by any party thereto.
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6.2 TERMINATION OF COMMITMENTS. Upon the occurrence of any Bankruptcy
Event of Default, all of the commitments of the Agent and the Banks hereunder
shall terminate. During the existence of any Event of Default other than a
Bankruptcy Event of Default, the Agent shall at the request of the Majority
Banks declare by written notice to the Borrower all of the commitments of the
Agent and the Banks hereunder terminated, whereupon the same shall immediately
terminate.
6.3 ACCELERATION OF CREDIT OBLIGATIONS. Upon the occurrence of any
Bankruptcy Event of Default, the aggregate outstanding principal amount of all
loans made hereunder, all accrued interest thereon, and all other Credit
Obligations shall immediately and automatically become due and payable. During
the existence of any Event of Default other than a Bankruptcy Event of Default,
the Agent shall at the request of the Majority Banks declare by written notice
to the Borrower the aggregate outstanding principal amount of all loans made
hereunder, all accrued interest thereon, and all other Credit Obligations to be
immediately due and payable, whereupon the same shall become immediately due and
payable. In connection with the foregoing, except for the notice provided for
above, the Borrower waives notice of intent to demand, demand, presentment for
payment, notice of nonpayment, protest, notice of protest, grace, notice of
dishonor, notice of intent to accelerate, notice of acceleration, and all other
notices.
6.4 CASH COLLATERALIZATION OF LETTERS OF CREDIT. Upon the occurrence of
any Bankruptcy Event of Default, the Borrower shall pay to the Agent an amount
equal to the Letter of Credit Exposure allocable to the Letters of Credit
requested by the Borrower to be held in the Letter of Credit Collateral Account
for disposition in accordance with Section 2.2(g). During the existence of any
Event of Default other than a Bankruptcy Event of Default, the Agent shall at
the request of the Majority Banks require by written notice to the Borrower that
the Borrower pay to the Agent an amount equal to the Letter of Credit Exposure
allocable to the Letters of Credit requested by the Borrower to be held in the
Letter of Credit Collateral Account for disposition in accordance with Section
2.2(f), whereupon the Borrower shall immediately pay to the Agent such amount.
6.5 DEFAULT INTEREST. If any Event of Default exists, the Agent shall at
the request of the Majority Banks declare by written notice to the Borrower that
the Credit Obligations specified in such notice shall bear interest beginning on
the date specified in such notice until paid in full at the applicable Default
Rate for such Credit Obligations, and the Borrower shall pay such interest to
the Agent for the benefit of the Agent and the Banks, as applicable, upon
demand.
6.6 RIGHT OF SETOFF. During the existence of an Event of Default, the
Agent and each Bank is hereby authorized at any time, to the fullest extent
permitted by law, to set off and apply any indebtedness owed by the Agent or
such Bank to the Borrower against any and all of the obligations of the Borrower
under this Agreement and the Credit Documents, irrespective of whether or not
the Agent or such Bank shall have made any demand under this Agreement or the
Credit Documents and although such obligations may be contingent and unmatured.
The Agent and each Bank, as the case may be, agrees promptly to notify the
Borrower after any such setoff and application made by such party provided that
the failure to give such notice shall not affect the validity of such setoff and
application.
6.7 ACTIONS UNDER CREDIT DOCUMENTS. Following an Event of Default, the
Agent shall at the request of the Majority Banks take any and all actions
permitted under the other Credit
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Documents, including the Guaranty and the Pledge Agreements.
6.8 REMEDIES CUMULATIVE. No right, power, or remedy conferred to the Agent
or the Banks in this Agreement and the Credit Documents, or now or hereafter
existing at law, in equity, by statute, or otherwise, shall be exclusive, and
each such right, power, or remedy shall to the full extent permitted by law be
cumulative and in addition to every other such right, power, or remedy. No
course of dealing and no delay in exercising any right, power, or remedy
conferred to the Agent or the Banks in this Agreement and the Credit Documents,
or now or hereafter existing at law, in equity, by statute, or otherwise, shall
operate as a waiver of or otherwise prejudice any such right, power, or remedy.
6.9 APPLICATION OF PAYMENTS. Prior to any payment default upon any
maturity date or any acceleration of the Credit Obligations, all payments made
hereunder shall be applied to the Credit Obligations as directed by the
Borrower, subject to the rules regarding the application of payments to certain
Credit Obligations provided for hereunder and in the Credit Documents. Following
any payment default upon any maturity date or any acceleration of the Credit
Obligations, all payments and collections shall be applied to the Credit
Obligations in the following order:
First, to the payment of the costs, expenses, reimbursements (other
than reimbursement obligations with respect to draws under Letters
of Credit), and indemnifications of the Agent that are due and
payable under the Credit Documents;
Then, ratably to the payment of the costs, expenses, reimbursements
(other than reimbursement obligations with respect to draws under
Letters of Credit), and indemnifications of the Banks that are due
and payable under the Credit Documents;
Then, ratably to the payment of all accrued but unpaid interest and
fees due and payable under the Credit Documents and obligations
under Interest Hedge Agreements;
Then, ratably to the payment of all outstanding principal and
reimbursement obligations for draws under Letters of Credit due and
payable under the Credit Documents;
Then, ratably to the payment of any other amounts due and owing with
respect to the Credit Obligations; and
Finally, any surplus held by the Agent and remaining after payment
in full of all the Credit Obligations and reserve for Credit
Obligations not yet due and payable shall be promptly paid over to
the Borrower or to whomever may be lawfully entitled to receive such
surplus. All applications shall be distributed in accordance with
Section 2.10(a).
ARTICLE 7. THE AGENT AND THE ISSUING BANK
7.1 AUTHORIZATION AND ACTION. Each Bank hereby appoints and authorizes the
Agent to
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take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof and of the other
Credit Documents, together with such powers as are reasonably incidental
thereto. Statements under the Credit Documents that the Agent may take certain
actions, without further qualification, means that the Agent may take such
actions with or without the consent of the Banks or the Majority Banks, but
where the Credit Documents expressly require the determination of the Banks or
the Majority Banks, the Agent shall not take any such action without the prior
written consent thereof. As to any matters not expressly provided for by this
Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the written instructions of the Majority Banks, and such
instructions shall be binding upon all Banks and all holders of Notes; provided,
however, that the Agent shall not be required to take any action which exposes
the Agent to personal liability or which is contrary to this Agreement, any
other Credit Document, or applicable law.
7.2 RELIANCE, ETC. Neither the Agent, the Issuing Bank, nor any of their
respective Related Parties (for the purposes of this Section 7.2, collectively,
the "Indemnified Parties") shall be liable for any action taken or omitted to be
taken by any Indemnified Party under or in connection with this Agreement or the
other Credit Documents, INCLUDING ANY INDEMNIFIED PARTY'S OWN NEGLIGENCE, except
for any Indemnified Party's gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent and the Issuing Bank:
(a) may treat the payee of any Note as the holder thereof until the Agent
receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to the Agent; (b) may consult with legal counsel
(including counsel for the Borrower), independent public accountants, and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants, or experts; (c) makes no warranty or representation to any Bank and
shall not be responsible to any Bank for any statements, warranties, or
representations made in or in connection with this Agreement or the other Credit
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants, or conditions of this
Agreement or any other Credit Document on the part of the Credit Parties or to
inspect the property (including the books and records) of the Credit Parties;
(e) shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency, or value of this Agreement
or any other Credit Document; and (f) shall incur no liability under or in
respect of this Agreement or any other Credit Document by acting upon any
notice, consent, certificate, or other instrument or writing (which may be by
telecopier or telex) reasonably believed by it to be genuine and signed or sent
by the proper party or parties.
7.3 AFFILIATES. With respect to its Commitments, the Advances made by it,
its interests in the Letters of Credit, and the Notes issued to it, the Agent
and the Issuing Bank shall have the same rights and powers under this Agreement
as any other Bank and may exercise the same as though it were not the Agent. The
term "Bank" or "Banks" shall, unless otherwise expressly indicated, include the
Agent and the Issuing Bank in their individual capacity. The Agent, the Issuing
Bank, and their respective Affiliates may accept deposits from, lend money to,
act as trustee under indentures of, and generally engage in any kind of business
with, any Credit Party, and any Person who may do business with or own
securities of any Credit Party, all as if the Agent were not an agent
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hereunder and the Issuing Bank were not the issuer of Letters of Credit
hereunder and without any duty to account therefor to the Banks.
7.4 BANK CREDIT DECISION. Each Bank acknowledges that it has,
independently and without reliance upon the Agent or any other Bank and based on
the Initial Financial Statements and such other documents and information as it
has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Bank also acknowledges that it shall, independently and
without reliance upon the Agent or any other Bank and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement.
7.5 EXPENSES. To the extent not paid by the Borrower, each Bank severally
agrees to pay to the Agent and the Issuing Bank on demand such Bank's ratable
share of the following: (a) all reasonable out-of-pocket costs and expenses of
the Agent and the Issuing Bank in connection with the preparation, execution,
delivery, administration, modification, and amendment of this Agreement and the
other Credit Documents, including the reasonable fees and expenses of outside
counsel for the Agent and the Issuing Bank with respect to advising the Agent
and the Issuing Bank as to their respective rights and responsibilities under
this Agreement and the Credit Documents, and (b) all out-of-pocket costs and
expenses of the Agent and the Issuing Bank in connection with the preservation
or enforcement of the rights of the Agent, the Issuing Bank, and the Banks under
this Agreement and the other Credit Documents, whether through negotiations,
legal proceedings, or otherwise, including fees and expenses of counsel for the
Agent and the Issuing Bank. The provisions of this paragraph shall survive the
repayment and termination of the credit provided for under this Agreement and
any purported termination of this Agreement which does not expressly refer to
this paragraph.
7.6 INDEMNIFICATION. To the extent not reimbursed by the Borrower, each
Bank severally agrees to protect, defend, indemnify, and hold harmless the
Agent, the Issuing Bank, and each of their respective Related Parties (for the
purposes of this Section 7.6, collectively, the "Indemnified Parties"), from and
against all demands, claims, actions, suits, damages, judgments, fines,
penalties, liabilities, settlements, and out-of-pocket costs and expenses,
including reasonable costs of attorneys and related costs of experts such as
accountants (collectively, the "Indemnified Liabilities"), actually incurred by
any Indemnified Party which are related to any litigation or proceeding relating
to this Agreement, the Credit Documents, or the transactions contemplated
thereunder, INCLUDING ANY INDEMNIFIED LIABILITIES CAUSED BY ANY INDEMNIFIED
PARTY'S OWN NEGLIGENCE, but not Indemnified Liabilities which are a result of
any Indemnified Party's gross negligence or willful misconduct. The provisions
of this paragraph shall survive the repayment and termination of the credit
provided for under this Agreement and any purported termination of this
Agreement which does not expressly refer to this paragraph.
7.7 SUCCESSOR AGENT AND ISSUING BANK. The Agent or the Issuing Bank may
resign at any time by giving written notice thereof to the Banks and the
Borrower and may be removed at any time with or without cause by the Majority
Banks upon receipt of written notice from the Majority Banks to such effect.
Upon receipt of notice of any such resignation or removal, the Majority Banks
shall have the right to appoint a successor Agent or Issuing Bank with the
consent of the Borrower, which consent shall not be unreasonably withheld. If no
successor Agent or Issuing Bank shall have been
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so appointed by the Majority Banks with the consent of the Borrower, and shall
have accepted such appointment, within 30 days after the retiring Agent's or
Issuing Bank's giving of notice of resignation or the Majority Banks' removal of
the retiring Agent or Issuing Bank, then the retiring Agent or Issuing Bank may,
on behalf of the Banks and the Borrower, appoint a successor Agent or Issuing
Bank, which shall be, in the case of a successor agent, a commercial bank
organized under the laws of the United States of America or of any State thereof
and having a combined capital and surplus of at least $500,000,000 and, in the
case of the Issuing Bank, a Bank. Upon the acceptance of any appointment as
Agent or Issuing Bank by a successor Agent or Issuing Bank, such successor Agent
or Issuing Bank shall thereupon succeed to and become vested with all the
rights, powers, privileges, and duties of the retiring Agent or Issuing Bank,
and the retiring Agent or Issuing Bank shall be discharged from any duties and
obligations under this Agreement and the other Credit Documents after such
acceptance, except that the retiring Issuing Bank shall remain the Issuing Bank
with respect to any Letters of Credit outstanding on the effective date of its
resignation or removal and the provisions affecting the Issuing Bank with
respect to such Letters of Credit shall inure to the benefit of the retiring
Issuing Bank until the termination of all such Letters of Credit. After any
Agent's or Issuing Bank's resignation or removal hereunder as Agent or Issuing
Bank, the provisions of this Article 7 shall inure to such Person's benefit as
to any actions taken or omitted to be taken by such Person while such Person was
Agent or Issuing Bank under this Agreement and the other Credit Documents.
ARTICLE 8. MISCELLANEOUS.
8.1 EXPENSES. The Borrower shall pay on demand of the applicable party
specified herein (a) all reasonable out-of-pocket costs and expenses of the
Agent and the Issuing Bank in connection with the preparation, execution,
delivery, administration, modification, and amendment of this Agreement and the
other Credit Documents, including the reasonable fees and expenses of outside
counsel for the Agent and the Issuing Bank, but not for each Bank, and (b) all
out-of-pocket costs and expenses of the Agent, the Issuing Bank, and each Bank
in connection with the preservation or enforcement of their respective rights
under this Agreement and the other Credit Documents following any Event of
Default, whether through negotiations, legal proceedings, or otherwise,
including fees and expenses of counsel for the Agent, the Issuing Bank, and each
Bank. The provisions of this paragraph shall survive the repayment and
termination of the credit provided for under this Agreement and any purported
termination of this Agreement which does not expressly refer to this paragraph.
8.2 INDEMNIFICATION.
(a) The Borrower agrees to protect, defend, indemnify, and hold harmless
the Agent, the Issuing Bank, each Bank, and each of their respective Related
Parties (for the purposes of this Section 8.2, collectively, the "Indemnified
Parties"), from and against all demands, claims, actions, suits, damages,
judgments, fines, penalties, liabilities, settlements, and out-of-pocket costs
and expenses, including reasonable costs of attorneys and related costs of
experts such as accountants (collectively, the "Indemnified Liabilities"),
actually incurred by any Indemnified Party which are related to any litigation
or proceeding relating to this Agreement, the Credit Documents, or the
transactions contemplated thereunder, INCLUDING ANY INDEMNIFIED LIABILITIES
CAUSED BY ANY INDEMNIFIED PARTY'S OWN NEGLIGENCE, but not Indemnified
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Liabilities which are a result of any Indemnified Party's gross negligence or
willful misconduct. The provisions of this paragraph shall survive the repayment
and termination of the credit provided for under this Agreement and any
purported termination of this Agreement which does not expressly refer to this
paragraph.
(b) Within a reasonable period of time after any Indemnified Party
receives actual notice of the assertion of any claim or the commencement of any
action, or any threatened claim or action, which is covered by this Section 8.2,
such Indemnified Party shall, if indemnification with respect thereof is
intended to be sought from the Borrower under this Section 8.2, notify the
Borrower of such claim or action; provided that the failure to so notify the
Borrower shall not relieve the Borrower from any liability which the Borrower
may have to such Indemnified Party hereunder. If any such claim or action shall
be brought or threatened against an Indemnified Party by a third party, the
Borrower shall be entitled to participate in the defense thereof so long as no
Event of Default exists. No consent order or settlement shall be entered into by
an Indemnified Party with respect to any such third party claim or action prior
to notification of and consultation with the Borrower, so long as no Event of
Default exists; provided that the failure to so notify or consult with the
Borrower shall not relieve the Borrower from any liability which the Borrower
may have to such Indemnified Party hereunder.
8.3 MODIFICATIONS, WAIVERS, AND CONSENTS. No modification or waiver of any
provision of this Agreement or the Notes, nor any consent required under this
Agreement or the Notes, shall be effective unless the same shall be in writing
and signed by the Agent and Majority Banks and the Borrower, and then such
modification, waiver, or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no modification, waiver, or consent shall, unless in writing and signed by the
Agent, all the Banks, and the Borrower do any of the following: (a) waive any of
the conditions specified in Section 3.1 or 3.2, (b) increase the Commitments of
the Banks, (c) forgive or reduce the amount or rate of any principal, interest,
fees, or other amounts payable under the Credit Documents, or postpone or extend
the time for payment thereof, (d) release any Guaranty or any material amount of
collateral securing the Credit Obligations, or (e) change the percentage of
Banks required to take any action under this Agreement, the Notes, or the other
Credit Documents, including any amendment of the definition of "Majority Banks"
or of this Section 8.3; PROVIDED however that upon any Permitted Sale of
Property constituting collateral securing the Credit Obligations, the liens
securing such collateral shall be released by the Agent in accordance with
Section 4.05 of the Security Agreements, without requirement for the consent of
the Banks. No modification, waiver, or consent shall, unless in writing and
signed by the Agent or the Issuing Bank affect the rights or obligations of the
Agent or the Issuing Bank, as the case may be, under the Credit Documents. The
Agent shall not modify or waive or grant any consent under any other Credit
Document if such action would be prohibited under this Section 8.3 with respect
to the Credit Agreement or the Notes.
8.4 SURVIVAL OF AGREEMENTS. All representations, warranties, and covenants
of the Borrower in this Agreement and the Credit Documents shall survive the
execution of this Agreement and the Credit Documents and any other document or
agreement.
8.5 ASSIGNMENT AND PARTICIPATION. This Agreement and the Credit Documents
shall bind and inure to the benefit of the Borrower and their respective
successors and assigns and the Agent and the Banks and their respective
successors and assigns. The Borrower may not assign its rights
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or delegate its duties under this Agreement or any Credit Document.
(a) ASSIGNMENTS. Any Bank may assign to one or more banks or other
entities all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Commitments, the
Advances owing to it, the Notes held by it, and the participation interest in
the Letters of Credit owned by it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of all of such
Bank's rights and obligations under this Agreement, (ii) assignments of
Commitments shall be made in minimum amounts of $5,000,000 and be made in
integral multiples of $1,000,000 and the assigning Bank, if it retains any
Commitments, shall maintain at least $5,000,000 in Commitments, (iii) each such
assignment shall be to an Eligible Assignee, (iv) the parties to each such
assignment shall execute and deliver to the Agent, for its acceptance and
recording in the Register, an Assignment and Acceptance, together with the Notes
subject to such assignment, and (v) each Eligible Assignee (other than the
Eligible Assignee of the Agent) shall pay to the Agent a $3,500 administrative
fee. Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least three Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto for all purposes and, to the extent
that rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
and (B) such Bank thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of such Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(b) TERM OF ASSIGNMENTS. By executing and delivering an Assignment and
Acceptance, the Bank thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Bank makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
the execution, legality, validity, enforceability, genuineness, sufficiency of
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the Initial Financial Statements 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 shall, independently and without reliance upon the Agent, such
Bank or any other Bank and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and (vi)
such assignee agrees that it shall perform in accordance with their terms all of
the obligations which by the terms of this Agreement are required to be
performed by it as a Bank.
(c) THE REGISTER. The Agent shall maintain at its address referred to in
Section 8.6 a
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copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Banks and the
Commitments of each Bank from time to time (the "Register"). The entries in the
Register shall be conclusive and binding for all purposes, absent manifest
error, and the Borrower, the Agent, the Issuing Bank, and the Banks may treat
each Person whose name is recorded in the Register as a Bank hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(d) PROCEDURES. Upon its receipt of an Assignment and Acceptance executed
by a Bank and an Eligible Assignee, together with the Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed in the appropriate form, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register, and (iii) give
prompt notice thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower shall execute and deliver to the Agent in
exchange for the surrendered Notes a new Note to the order of such Eligible
Assignee in an amount equal to the Commitment assumed by it pursuant to such
Assignment and Acceptance and, if such Bank has retained any Commitment
hereunder, a new Note to the order of such Bank in an amount equal to the
Commitment retained by it hereunder. Such new Notes shall be dated the effective
date of such Assignment and Acceptance and shall be in the appropriate form.
(e) PARTICIPATION. Each Bank may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitments, the Advances owing to it, its participation interest in the Letters
of Credit, and the Notes held by it); provided, however, that (i) such Bank's
obligations under this Agreement (including, without limitation, its Commitments
to the Borrower hereunder) shall remain unchanged, (ii) such Bank shall remain
solely responsible to the other parties hereto for the performance of such
obligations, (iii) such Bank shall remain the holder of any such Notes for all
purposes of this Agreement, (iv) the Borrower, the Agent, and the Issuing Bank
and the other Banks shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement, and (v)
such Bank shall not require the participant's consent to any matter under this
Agreement, except for change in the principal amount of the Notes, reductions in
fees or interest, extending the applicable maturity date, or releasing any
collateral or guarantor. The Borrower hereby agrees that participants shall have
the same rights under Sections 2.6, 2.7, 2.8, 2.9, 2.11 and 8.2 as a Bank to the
extent of their respective participation.
8.6 NOTICE. All notices and other communications under this Agreement and
the Notes shall be in writing and mailed by certified mail (return receipt
requested), telecopied, telexed, hand delivered, or delivered by a nationally
recognized overnight courier, to the address for the appropriate party specified
in SCHEDULE I or at such other address as shall be designated by such party in a
written notice to the other parties. Mailed notices shall be effective when
received. Telecopied or telexed notices shall be effective when transmission is
completed or confirmed by telex answerback. Delivered notices shall be effective
when delivered by messenger or courier. Notwithstanding the foregoing, notices
and communications to the Agent pursuant to Article 2 or 7 shall not be
effective until received by the Agent.
8.7 CHOICE OF LAW. This Agreement and the Notes have been prepared, are
being
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executed and delivered, and are intended to be performed in the State of Texas,
and the substantive laws of the State of Texas and the applicable federal laws
of the United States shall govern the validity, construction, enforcement, and
interpretation of this Agreement and the Notes; provided however, Chapter 346
the Texas Finance Code does not apply to this Agreement or the Notes. Each
Letter of Credit shall be governed by the Uniform Customs and Practice for
Documentary Credits, International Chamber of Commerce Publication No. 500 (1993
version).
8.8 FORUM SELECTION. THE BORROWER IRREVOCABLY CONSENTS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF TEXAS AND OF ANY FEDERAL COURT LOCATED IN SUCH
STATE IN CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THE CREDIT DOCUMENTS OR ANY TRANSACTIONS RELATED THERETO. THE BORROWER AGREES
AND SHALL NOT CONTEST THAT PROPER FORUM AND VENUE FOR ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THE CREDIT DOCUMENTS OR ANY TRANSACTIONS RELATING
THERETO ARE IN THE COURTS OF THE STATE OF TEXAS IN ▇▇▇▇▇▇ COUNTY, TEXAS, AND THE
FEDERAL COURTS LOCATED IN ▇▇▇▇▇▇ COUNTY, TEXAS. THE BORROWER IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE FOREGOING BASED UPON
CLAIMS THAT THE FOREGOING COURTS ARE AN INCONVENIENT FORUM.
8.9 SERVICE OF PROCESS. IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THE CREDIT DOCUMENTS OR ANY TRANSACTIONS RELATING THERETO, THE
BORROWER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT, OR OTHER PROCESS OR
NOTICE AND AGREES THAT SERVICE BY FIRST CLASS MAIL, RETURN RECEIPT REQUESTED, TO
THE BORROWER AT ITS ADDRESS FOR NOTICES HEREUNDER, OR ANY OTHER FORM OF SERVICE
PROVIDED FOR IN THE TEXAS CIVIL PRACTICE LAW AND RULES THEN IN EFFECT SHALL
CONSTITUTE GOOD AND SUFFICIENT SERVICE UPON THE BORROWER.
8.10 WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE CREDIT
DOCUMENTS OR ANY TRANSACTIONS RELATING THERETO.
8.11 COUNTERPARTS. This Agreement may be executed in multiple counterparts
which together shall constitute one and the same instrument.
8.12 CONFIDENTIALITY. Each Bank acknowledges that it shall receive
information regarding the Borrower's business operations and financial condition
which is not available to the public. Each Bank agrees to maintain the
confidentiality of such nonpublic information according to such Bank's standard
practices for such nonpublic client information, but such policies including the
sharing of such information with auditors, accountants, and legal advisors, and
as required by law. Each Bank may share such information with potential
participants and assigns of its interests under the Credit Documents if such
transferees agree in writing to maintain the confidentiality of such information
in the same manner.
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8.13 NO FURTHER AGREEMENTS. THIS WRITTEN AGREEMENT AND THE CREDIT
DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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EXECUTED as of the date first above written.
BORROWER:
TETRA TECHNOLOGIES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
Treasurer
AGENT:
BANK OF AMERICA, N.A., as Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
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BANKS:
BANK OF AMERICA, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇
Senior Vice President
Revolving Credit Commitment: $12,500,000
Term Loan Commitment: $12,500,000
CHASE BANK OF TEXAS, N.A.
By:
Name:
Title:
Revolving Credit Commitment: $6,250,000
Term Loan Commitment: $6,250,000
GUARANTY FEDERAL BANK, F.S.B.
By:
Name:
Title:
Revolving Credit Commitment: $6,250,000
Term Loan Commitment: $6,250,000
-▇▇-
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇
By:
Name:
Title:
Revolving Credit Commitment: $10,416,666.67
Term Loan Commitment: $10,416,666.67
THE BANK OF NOVA SCOTIA
By:
Name:
Title:
Revolving Credit Commitment: $8,333,333.33
Term Loan Commitment: $8,333,333.33
COMERICA BANK
By:
Name:
Title:
Revolving Credit Commitment: $6,250,000
Term Loan Commitment: $6,250,000
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