1
EXHIBIT 4.1
$125,000,000
REVOLVING CREDIT AGREEMENT
DATED AS OF JUNE 2, 1997
BY AND AMONG
THE MEN'S WEARHOUSE, INC.
(THE "BORROWER"),
NATIONSBANK OF TEXAS, N.A.,
INDIVIDUALLY AND AS AGENT
AND
THE OTHER FINANCIAL INSTITUTIONS LISTED
ON THE SIGNATURE PAGES HEREOF
(COLLECTIVELY, THE "BANKS")
2
TABLE OF CONTENTS
Page
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1. CERTAIN DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 1 -
1.1. Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 1 -
1.2. Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 1 -
2. THE LOANS AND LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 19 -
2.1. Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 19 -
2.2. Borrowing Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 20 -
2.3. Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 21 -
2.4. Letter of Credit Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 22 -
2.5. Letters of Credit Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 23 -
2.6. Agreement to Repay Letter of Credit Drawings . . . . . . . . . . . . . . . . . . . . . . . . - 25 -
2.7. Conflict between Applications and Agreement . . . . . . . . . . . . . . . . . . . . . . . . . - 27 -
2.8. Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 27 -
2.9. Unavailability of Alternate Currency . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 28 -
3. INTEREST RATE PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 28 -
3.1. Interest Rate Determination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 28 -
3.2. Increased Cost and Reduced Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 29 -
3.3. Limitation on Types of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 31 -
3.4. Illegality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 31 -
3.5. Treatment of Affected Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 32 -
3.6. Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 32 -
3.7. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 33 -
4. PREPAYMENTS AND OTHER PAYMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 33 -
4.1. Required Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 33 -
4.2. Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 33 -
4.3. Notice of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 33 -
4.4. Place of Payment or Prepayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 33 -
4.5. No Prepayment Premium or Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 34 -
4.6. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 34 -
4.7. Reduction or Termination of the Commitments . . . . . . . . . . . . . . . . . . . . . . . . . - 36 -
4.8. Payments on Business Day . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 36 -
5. COMMITMENT FEE AND OTHER FEES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 36 -
5.1. Commitment Fee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 36 -
5.2. Arrangement Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 36 -
5.3 Upfront Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
5.4 Administrative Agency Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
5.5. Letter of Credit Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
5.6. Fees Not Interest; Nonpayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
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6. APPLICATION OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 37 -
7. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
7.1. Organization and Qualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
7.2. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
7.3. Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
7.4. Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
7.5. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
7.6. Payment of Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 38 -
7.7. Conflicting or Adverse Agreements or Restrictions . . . . . . . . . . . . . . . . . . . . . . - 39 -
7.8. Authorization, Validity, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 39 -
7.9. Investment Company Act Not Applicable . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 39 -
7.10. Public Utility Holding Company Act Not Applicable . . . . . . . . . . . . . . . . . . . . . . - 39 -
7.11. Margin Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 39 -
7.12. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 40 -
7.13. Full Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 40 -
7.14. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 40 -
7.15. Permits and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 41 -
7.16. Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 41 -
7.17. Capital Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
7.18. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
7.19. Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
7.20. No Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
7.21. Subordinated Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 42 -
8. CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
8.1. Conditions to Effectiveness of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . - 43 -
8.2. Conditions to each Loan and Letter of Credit . . . . . . . . . . . . . . . . . . . . . . . . - 45 -
9. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 45 -
9.1. Reporting and Notice Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 45 -
9.2. Corporate Existence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 49 -
9.3. Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 49 -
9.4. Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 49 -
9.5. Right of Inspection. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 49 -
9.6. Maintenance of Property. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 50 -
9.7. Guarantees of Restricted Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 50 -
9.8. Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 50 -
9.9. Patents, Trademarks and Licenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 51 -
9.10. Taxes; Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 51 -
10. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 51 -
10.1. Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 51 -
10.2. Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 52 -
10.3. Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 53 -
10.4. Mergers; Consolidations; Sale or Other Dispositions of All
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or Substantially All Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 54 -
10.5. Investments, Loans and Advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 55 -
10.6. Sale or Other Disposition of Less than Substantially All
Assets; Sale and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 56 -
10.7. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 57 -
10.8. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 57 -
10.9. Nature of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 58 -
10.10. Issuance and Disposition of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 58 -
10.11. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 58 -
10.12. Discount or Sale of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 59 -
10.13. Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 59 -
10.14. Certain Financial Tests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 60 -
10.15. Regulations G, T, U and X. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 61 -
10.16. Status. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 62 -
10.17. Compliance with Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 62 -
10.18. Subordinated Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 62 -
10.19. Investments in Unrestricted Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . - 62 -
10.20. No Commingling of Assets, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 62 -
10.21. Restrictive Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 63 -
11. EVENTS OF DEFAULT; REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 63 -
11.1. Failure to Pay Principal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 64 -
11.2. Failure to Pay Other Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 64 -
11.3. Default under Other Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 64 -
11.4. Misrepresentation or Breach of Warranty . . . . . . . . . . . . . . . . . . . . . . . . . . . - 64 -
11.5. Violation of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 64 -
11.6. Bankruptcy and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 64 -
11.7. Dissolution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 65 -
11.8. Judgment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 65 -
11.9. Nullity of Loan Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 65 -
11.10. Change of Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 65 -
11.11. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 65 -
11.12. Guarantors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 66 -
11.13. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 66 -
11.14. Collateral Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 66 -
11.15. Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 66 -
12. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 67 -
12.1. Appointment, Powers. and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 67 -
12.2. Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 67 -
12.3. Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 68 -
12.4. Rights as Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 68 -
12.5. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 68 -
12.6. Non-Reliance on Agent and Other Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 68 -
12.7. Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 69 -
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13. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 69 -
13.1. Representation by the Banks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 69 -
13.2. Waivers, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 69 -
13.3. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 70 -
13.4. GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 70 -
13.5. Survival of Representations, Warranties and Covenants . . . . . . . . . . . . . . . . . . . . - 70 -
13.6. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 71 -
13.7. Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 71 -
13.8. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 71 -
13.9. Right of Set-off, Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 71 -
13.10. Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 72 -
13.11. Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 74 -
13.12. Expenses; Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 74 -
13.13. Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 75 -
13.14. Loan Agreement Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 76 -
13.15. Obligations Several. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 76 -
13.16. SUBMISSION TO JURISDICTION; WAIVERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 76 -
13.17. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 77 -
13.18. Amendments, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 77 -
13.19. Relationship of the Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 78 -
13.20. FINAL AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . - 79 -
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6
REVOLVING CREDIT AGREEMENT
The Men's Wearhouse, Inc., a corporation organized under the
laws of the State of Texas (the "Borrower"), the financial institutions listed
on the signature pages hereof (collectively, the "Banks" and individually, a
"Bank"), and NationsBank of Texas, N.A. (together with any successor thereof,
"NationsBank") in its capacity as agent (the "Agent") for the Banks hereunder,
hereby agree as follows:
PRELIMINARY STATEMENT
WHEREAS, the Borrower has received loans and other extensions
of credit pursuant to that certain Second Amended and Restated Credit Agreement
dated as of March 14, 1995 (as amended, the "Existing Credit Agreement") by and
among the Borrower, NationsBank as agent and the other banks and financial
institutions signatory thereto;
WHEREAS, the Borrower has requested the Agent and the Banks to
make loans to the Borrower in an aggregate amount not to exceed $125,000,000 at
any time outstanding and, pursuant to a $20,000,000 sub-limit, issue letters of
credit in account of the Borrower in an aggregate amount not to exceed
$20,000,000 at any time outstanding;
WHEREAS, a portion of such loans shall be used to repay in
full the Existing Credit Agreement whereupon this Agreement shall be in
replacement thereof; and
WHEREAS, pursuant to the terms and conditions hereof the Agent
and the Banks have agreed to such request upon the terms and conditions
hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. CERTAIN DEFINITIONS.
1.1. ACCOUNTING PRINCIPLES. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP
consistent with those applied in the preparation of the audited financial
statements referred to in Section 9.1 hereof. All financial information
delivered to the Agent pursuant to Section 9.1 hereof shall be prepared in
accordance with GAAP applied on a basis consistent with those reflected by the
initial financial statements delivered to the Agent pursuant to Section 7.2,
except (i) where such principles are inconsistent with the requirements of this
Agreement and (ii) for those changes made pursuant to Section 9.8 hereof.
1.2. CERTAIN DEFINED TERMS. As used in this Agreement,
the following terms shall have the following meanings:
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"Acquisitions" has the meaning specified in Section 10.13
hereof.
"Acquisition Target" means any Person acquired pursuant to
Section 10.13.
"Actual Inventory Balance" means, at any time, an amount equal
to the actual balance of Inventory divided by the number of the Borrower's and
Restricted Subsidiaries' open store locations at the date of calculation. For
purposes of this definition, (a) each store location open at the date of
calculation shall be considered one (1) open store location, (b) each clearance
center open at the date of calculation shall be considered three (3) open store
locations, (c) total warehouses at the date of calculation shall be considered
fourteen (14) open store locations, (d) each store scheduled to open within
sixty (60) days of the date of calculation shall be considered one (1) open
store location and (e) each clearance center scheduled to open within sixty
(60) days of the date of calculation shall be considered three (3) open store
locations. In the event the Borrower or any Restricted Subsidiary acquires or
opens stores or schedules to open stores within 60 days, the square footage of
which significantly deviates from 5,000 square feet, for purposes of this
definition each such store shall be considered the equivalent of the number of
open store locations determined by dividing the square footage of such stores
by 5,000.
"Adjusted Debt" means, at any time and without duplication, an
amount equal to the sum of (a) Total Funded Debt plus (b) an amount equal to
the product of (i) Base Rent Expense for the immediately preceding quarter
times (ii) thirty-two (32).
"Adjusted Eurodollar Rate" means, for any Eurodollar Loan for
any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) determined by the Agent to be equal to
the quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar
Loan for such Interest Period by (b) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"Affiliate" shall mean any Person controlling, controlled by
or under common control with any other Person. For purposes of this
definition, "control" (including "controlled by" and "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 such Person, whether
through the ownership of voting securities or otherwise. If any Person shall
own, directly or indirectly, beneficially and of record twenty percent (20%) or
more of the equity (whether outstanding capital stock, partnership interests or
otherwise) of another Person, such Person shall be deemed to be an Affiliate.
"Agent" shall have the meaning set forth in the preamble
hereto.
"Agreement" shall mean this Revolving Credit Agreement, as the
same may be amended, modified or supplemented from time to time.
- 2 -
8
"Alternate Currency" shall mean British pounds sterling,
German deutsche marks, Italian lira, French francs, Canadian dollars and
Japanese yen.
"Applicable Lending Office" shall mean, with respect to each
Bank, such Bank's (a) Domestic Lending Office in the case of a Base Rate Loan
and (b) LIBOR Lending Office in the case of a Eurodollar Loan.
"Applicable Margin" means, (a) for the period from the Closing
Date until the first redetermination hereunder, (i) as to Eurodollar Loans and
Letter of Credit Fees, .875% per annum, and (ii) as to Commitment Fees, 0.125%
per annum, and (b) for each period thereafter (each such period commencing 61
days after the end of each fiscal quarter of the Borrower and ending 60 days
after the end of the next fiscal quarter of the Borrower), the applicable rate
per annum set forth in the table below opposite the ratio of Adjusted Debt to
EBITDA plus Base Rent Expense for the four immediately preceding fiscal
quarterly periods. Each determination of the Applicable Margin shall be
determined by the Agent for each such period after its receipt of the
applicable certificate delivered pursuant to Section 9.1(l) and prior to the
commencement of such period. Each change in the Applicable Margin shall be
immediately effective commencing on the 61st day after each fiscal quarter end
as to all Eurodollar Loans then outstanding, the Letter of Credit Outstandings
and the then Unused Commitment, and remain effective until the next
determination.
Applicable Margin for Applicable Margin for Applicable Margin
ADJUSTED DEBT TO EBITDA PLUS Eurodollar Loans Letter of Credit Fees for Commitment Fees
BASE RENT EXPENSE on the Unused
Commitment
=====================================================================================================================
Less than 4.0:1.0 0.875% 0.875% 0.125%
Equal to or greater than 4.0:1.0 1.0% 1.0% 0.15%
but less than 4.25:1.0
Equal to or greater than 4.25:1.0 1.125% 1.125% 0.175%
but less than 4.5:1.0
Equal to or greater than 4.5:1.0 1.25% 1.25% 0.225%
but less than 4.75:1.0
Equal to or greater than 4.75:1.0 1.375% 1.375% 0.275%
"Application" shall mean an application, in such form as the
Issuing Bank may specify from time to time, requesting the Issuing Bank to open
a Letter of Credit.
"Assignment and Acceptance" shall have the meaning set forth
in Section 13.10(a).
"Bank" shall have the meaning specified in the preamble hereto
and shall include the Agent, in its individual capacity.
- 3 -
9
"Base Rate" means, for any day, the rate per annum equal to
the higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (.5%) and (b) the Prime Rate for such day. Any change in the Base Rate
due to a change in the Prime Rate or the Federal Funds Rate shall be effective
on the effective date of such change in the Prime Rate or Federal Funds Rate.
"Base Rate Loan" shall mean any Loan which bears interest at
the Base Rate.
"Base Rent Expense" means, for any period, payments (whether
computed monthly or annually) due under Leases of real property (including
those resulting from sale-leaseback transactions), exclusive of payments for
percentage rent, common-area maintenance, insurance, taxes and any other
amounts recorded in the Borrower's or the Guarantors' books and records in
accordance with their customary practices as rent other than "base rent
expense"; provided, with respect to any acquisition of an Acquisition Target
which results in the requirement to provide proforma financial information
pursuant to Article 11 of Regulation S-X (Reg Section 210.11.01, .02 and .03),
Base Rent Expense of the Acquisition Target for each full fiscal quarter
included in the applicable computation period prior to such Acquisition
(including the fiscal quarter during which it was acquired) shall be included,
provided further that Base Rent Expense of the Acquisition Target shall be
adjusted for those applicable items of base rent expense that will increase or
decrease subsequent to the date of Acquisition, such adjustments limited to
those like adjustments included in the proforma financial statements provided
in the Form 8-K filed with the Securities and Exchange Commission pursuant to
Article 11 of Regulation S-X.
"Borrower" shall have the meaning set forth in the preamble
hereto.
"Borrowing Date" shall mean a date upon which the Borrower has
requested a Loan is to be made in a Notice of Borrowing delivered pursuant to
Section 2.
"Business Day" shall mean a day when the Agent is open for
business, provided that, if the applicable Business Day relates to any
Eurodollar Loan, it shall mean a day when the Agent is open for business and on
which commercial banks are open for international business (including dealings
in Dollar deposits) in London.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within ninety (90) days after the date of
acquisition thereof; (b) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within ninety (90) days after the
date of acquisition thereof and, at the time of acquisition, having the highest
rating obtainable from either Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service, Inc. (or, if at any time neither Standard & Poor's
Corporation nor ▇▇▇▇▇'▇ Investors Service, Inc. shall be rating such
obligations, then from such other nationally recognized rating services
acceptable to the Agent); (c) commercial paper
- 4 -
10
maturing no more than ninety (90) days after the date of creation thereof and,
at the time of acquisition, having a rating of at least A-1 or P-1 from either
Standard & Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc. (or, if at any
time neither Standard & Poor's Corporation nor ▇▇▇▇▇'▇ Investors Service, Inc.
shall be rating such obligations, then the highest rating from such other
nationally recognized rating services acceptable to the Agent); (d) domestic
and eurodollar certificates of deposit or bankers' acceptances maturing within
ninety (90) days after the date of acquisition thereof issued by any Bank or
any commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia having combined capital and
surplus of not less than $250,000,000 (e) repurchase agreements of the Agent or
any commercial bank organized under the laws of the United States of America or
any state thereof or the District of Columbia having combined capital and
surplus of not less than $250,000,000; (f) overnight investments with the Agent
or any commercial bank organized under the laws of the United States of America
or any state thereof or the District of Columbia having combined capital and
surplus of not less than $250,000,000; (g) other readily marketable instruments
issued or sold by the Agent or any commercial bank organized under the laws of
the United States of America or any state thereof or the District of Columbia
having combined capital and surplus of not less than $250,000,000; and (h)
funds invested in brokerage accounts with nationally recognized brokerage
houses or money market accounts, in each case for less than thirty (30) days.
"Change of Control" means (i) any transaction (including a
merger or consolidation) the result of which is that any "Person" or "group"
(within the meaning of Sections 13(d) and 14(d)(2) of the Exchange Act) becomes
the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) of
more than 50 percent (50%) of the total voting power of all classes of the
voting stock of the Borrower or the surviving Person and/or warrants or options
to acquire such voting stock, calculated on a fully diluted basis (a "Control
Person"), other than any such transaction in which the current executive
officers of the Borrower who are also currently directors and their Affiliates
or The ▇▇▇▇▇▇ Family Foundation become, individually or collectively, a Control
Person, provided that, for so long as any of the Subordinated Debt is
outstanding, immediately following such transaction at least thirty percent
(30%) of the outstanding voting stock of the Borrower is held by Persons who
are not Affiliates of such Control Person and such stock is registered pursuant
to Sections 12(b) or 12(g) of the Exchange Act or is required to file reports
pursuant to Section 15(d) of the Exchange Act; or (ii) the sale, lease or
transfer of all or substantially all of the Borrower's assets (which includes
the assets of its Subsidiaries) to any "Person" or "group" (within the meaning
of Sections 13(d) and 14(d)(2) of the Exchange Act), except to the Borrower or
one or more of its Subsidiaries.
"Closing Date" shall mean June 2, 1997.
"Code" shall mean the Internal Revenue Code of 1986, as
amended, as now or hereafter in effect, together with all regulations, rulings
and interpretations thereof or thereunder issued by the Internal Revenue
Service.
- 5 -
11
"Commitment" shall mean, with respect to each Bank, such
Bank's Commitment, as defined in Section 2.1(a), and "Commitments" shall mean,
collectively, the Commitments of all of the Banks.
"Consolidated Current Assets" means all items classified as
current assets on the consolidated financial statements of the Borrower and the
Guarantors delivered to the Banks pursuant to Section 9.1, all as determined in
accordance with GAAP consistently applied.
"Consolidated Current Liabilities" means all items classified
as current liabilities on the consolidated financial statements of Borrower and
the Guarantors delivered to the Banks pursuant to Section 9.1 other than any
current portion of the outstanding Loans and Letters of Credit, all as
determined in accordance with GAAP consistently applied.
"Consolidated Net Income" means with respect to any period,
net income of the Borrower and the Guarantors on a consolidated basis (after
adjustment for income taxes), determined in accordance with GAAP.
"Consolidated Net Worth" means, as of any date, the total
shareholders' equity which appears on the consolidated balance sheet of the
Borrower and the Guarantors as of such date, determined in accordance with
GAAP; excluding, however, (a) from total shareholders' equity mandatorily
redeemable preferred stock of the Borrower or a Restricted Subsidiary to the
extent included in total shareholders' equity and (b) Restricted Investments by
the Borrower and the Guarantors in any Unrestricted Subsidiaries and any
Non-Guaranteeing Restricted Subsidiaries.
"Contingent Liability" means (i) any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or is
contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the Debt,
obligation or any other liability of any other Person (other than by
endorsements of instruments in the ordinary course of collection), (ii)
obligations under surety, appeal or custom bonds, or (iii) guarantees of the
payment of dividends or other distributions upon the shares of or interest in
any other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitations set forth therein) be deemed to be
the outstanding principal amount (or maximum principal amount, if larger) of
the Debt, obligation or other liability guaranteed thereby or, if applicable,
such lesser principal amount as is expressly stated to be the maximum principal
amount of such Person's obligation thereunder.
"Contractual Rent Expense" means, for any period as to the
Borrower and the Guarantors, all payments (whether computed monthly or
annually) due under Leases of real property (including those resulting from
sale-leaseback transactions), including, without limitation, Base Rent Expense
and payments for percentage rent, common-area maintenance, insurance, and taxes
and any other amounts recorded in the Borrower's or the Guarantors' books and
records in accordance with their customary practices as rent expense, whether
paid or
- 6 -
12
accrued in the applicable period of calculation, but excluding adjustments with
respect to such payments required to be made in conformity with GAAP for the
purposes of accounting for graduated lease payments, calculated for the four
(4) immediately preceding fiscal quarterly periods; provided, with respect to
any acquisition of an Acquisition Target which results in the requirement to
provide proforma financial information pursuant to Article 11 of Regulation S-X
(Reg Section 210.11.01, .02 and .03), Contractual Rent Expense of the
Acquisition Target for each full fiscal quarter included in the applicable
computation period prior to such Acquisition (including the fiscal quarter
during which it was acquired) shall be included, provided further that
Contractual Rent Expense of the Acquisition Target shall be adjusted for those
applicable items of contractual expense that will increase or decrease
subsequent to the date of Acquisition, such adjustments limited to those like
adjustments included in the proforma financial statements provided in the Form
8-K filed with the Securities and Exchange Commission pursuant to Article 11 of
Regulation S-X.
"Conversion/Continuation Date" shall have the meaning set
forth in Section 3.1(a)(ii).
"Debt" means (without duplication), for any Person:
(a) indebtedness of such Person for borrowed money
(including obligations, contingent or otherwise, of such Person
relative to the face amount of all letters of credit, whether drawn or
undrawn, and banker's acceptances issued for the account of such
Person);
(b) obligations of such Person evidenced by bonds,
debentures, notes or similar instruments (but excluding sight drafts
that evidence trade account payables arising in the ordinary course of
business);
(c) obligations of such Person to pay the deferred
purchase price of property or services (but excluding trade accounts
payable arising in the ordinary course of business);
(d) indebtedness of the kind described in clause (a), (b)
or (c) of this definition secured by a Lien on Property owned or being
purchased by such Person (including indebtedness arising under
conditional sales or other title retention agreements), whether or not
such indebtedness shall have been assumed by such Person or is limited
in recourse;
(e) obligations of such Person as lessee under Leases
that shall have been or should be, in accordance with generally
accepted accounting principles, recorded as Capital Leases;
(f) obligations under surety, appeal or custom bonds;
- 7 -
13
(g) Contingent Liabilities of such Person; and
(h) obligations of such Person under or in connection
with a sale-leaseback or similar arrangements.
"Debtor Laws" shall mean all applicable liquidation,
conservatorship, bankruptcy, moratorium, arrangement, receivership, insolvency,
reorganization, or similar laws, or general equitable principles from time to
time in effect affecting the rights of creditors generally.
"Default" shall mean any of the events specified in Section
11, whether or not there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act.
"Dollar Equivalent Value" means for purposes of the provisions
of this Agreement, (i) the equivalent in Dollars of any Alternate Currency and
(ii) the equivalent in any Alternate Currency of Dollars shall be determined by
using the quoted spot rate at which the Agent or any Affiliate of the Agent
offers to exchange Dollars for such Alternate Currency on the date on which
such equivalent is to be determined pursuant to the provisions of this
Agreement. The equivalent in Dollars of each Letter of Credit made in an
Alternate Currency shall be recalculated hereunder on each date that it shall
be necessary to determine the portion of each Bank's Unused Commitment or any
or all Letter of Credit Outstandings on such date.
"Dollars" and "$" shall mean lawful currency of the United
States of America.
"Domestic Lending Office" shall mean, with respect to any
Bank, the office of such Bank specified as its "Domestic Lending Office"
opposite its name on Schedule I attached hereto and made a part hereof or such
other office of such Bank as such Bank may from time to time specify to the
Borrower and the Agent.
"Drawing" shall have the meaning set forth in Section 2.6(b)
hereof.
"EBITDA" means, for any period, as to the Borrower and the
Guarantors, an amount equal to earnings before income taxes and adjustment for
extraordinary items, plus (a) depreciation and amortization, plus (b) interest
expense, plus (or minus) (c) other non-cash charges or income affecting net
earnings (except for those related to extraordinary items), for the four (4)
immediately preceding fiscal quarterly periods; provided, with respect to any
acquisition of an Acquisition Target which results in the requirement to
provide proforma financial information pursuant to Article 11 of Regulation S-X
(Reg Section 210.11.01, .02 and .03), EBITDA of the Acquisition Target for
each full fiscal quarter included in the applicable computation period prior to
such Acquisition (including the fiscal quarter during which it was acquired)
shall be included, provided further that EBITDA of the Acquisition Target shall
be adjusted for those items of income and expense that will increase or
decrease subsequent to the date of Acquisition, such adjustments limited to
those adjustments included in the proforma
- 8 -
14
financial statements provided in the Form 8-K filed with the Securities and
Exchange Commission pursuant to Article 11 of Regulation S-X.
"Eligible Assignee" means (i) a Bank; (ii) an affiliate of a
Bank; and (iii) any other Person approved by the Agent and, unless an Event of
Default has occurred and is continuing at the time any assignment is effected
in accordance with Section 13.10, the Borrower, such approval not to be
unreasonably withheld or delayed by the Borrower and such approval to be deemed
given by the Borrower if no objection is received by the assigning Bank and the
Agent from the Borrower within ten (10) Business Days after notice of such
proposed assignment has been provided by the assigning Bank to the Borrower;
provided, however, that neither the Borrower nor an Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"Environmental Lien" means a Lien in favor of a Governmental
Authority or other Person (a) for any liability under any Environmental
Protection Statute or (b) for damages arising from or costs incurred by such
Governmental Authority or other Person in response to a release or threatened
release of Hazardous Materials into the environment.
"Environmental Protection Statute" means (a) the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 (as amended by
the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.A. Section
9601 et seq.), as amended from time to time, and any and all rules and
regulations issued or promulgated thereunder ("CERCLA"); (b) the Resource
Conservation and Recovery Act (as amended by the Hazardous and Solid Waste
Amendment of 1984, 42 U.S.C.A. Section 6901 et seq.), as amended from time to
time, and any and all rules and regulations promulgated thereunder ("RCRA");
(c) the Clean Air Act, 42 U.S.C.A. Section 7401 et seq., as amended from time
to time, and any and all rules and regulations promulgated thereunder; (d) the
Clean Water Act of 1977, 33 U.S.C.A. Section 1251 et seq., as amended from
time to time, and any and all rules and regulations promulgated thereunder; (e)
the Toxic Substances Control Act, 15 U.S.C.A. Section 2601 et seq., as amended
from time to time, and any and all rules and regulations promulgated
thereunder; or (f) any other federal or state law, statute, rule or regulation
enacted in connection with or relating to the protection or regulation of the
environment (including, without limitation, those laws, statutes, rules and
regulations regulating the disposal, removal, production, storing, refining,
handling, transferring, processing or transporting of Hazardous Materials) and
any rules and regulations issued or promulgated in connection with any of the
foregoing by any Governmental Authority, and "Environmental Protection
Statutes" means, collectively, each of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder.
"ERISA Affiliate" means any subsidiary or trade or business
(whether or not incorporated) which is a member of a group of which the
Borrower is a member and which is under common control within the meaning of
Section 414 of the Code and the rules and regulations thereunder.
- 9 -
15
"ERISA Event" means any of the following events: (a) a
"Reportable Event" described in Section 4043 of ERISA and the regulations
issued thereunder (other than a "Reportable Event" not subject to the
provisions for the thirty (30)-day notice to the PBGC under such regulations),
(b) the withdrawal of the Borrower from a Plan during a plan year in which it
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
incurrence of liability by the Borrower under Section 4064 of ERISA, (c) the
distribution of a notice of intent to terminate a Plan pursuant to Section
4041(a)(2) of ERISA or the treatment of a Plan amendment as a termination under
Section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan
by the PBGC, or (e) any other event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan.
"Eurodollar Lending Office" shall mean, with respect to each
Bank, the office specified as such Bank's "Eurodollar Lending Office" opposite
its name on Schedule 1 attached hereto and made a part hereof (or, if no such
office is specified, its Domestic Lending Office) or such other office of such
Bank as such Bank may from time to time specify to the Borrower and the Agent.
"Eurodollar Loans" means Loans that bear interest at rates
based upon the Adjusted Eurodollar Rate plus the Applicable Margin.
"Eurodollar Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Eurodollar Rate" shall mean,
for any Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for deposits in
Dollars at approximately 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period for a term comparable to such Interest
Period: provided, however if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such rates
(rounded upwards, if necessary, to the nearest 1/100 of 1%).
"Event of Default" shall mean any of the events specified in
Section 11, provided that there has been satisfied any requirement in
connection with such event for the giving of notice, or the lapse of time, or
the happening of any further condition, event or act.
"Existing Credit Agreement" shall have the meaning set forth
in the preamble hereto.
"Existing Letters of Credit" shall mean the Letters of Credit
identified on Schedule 2.3 hereto.
- 10 -
16
"Expiration Date" shall mean the last day of a Interest
Period.
"Fair Market Value" shall mean (i) with respect to any asset
(other than cash) the price at which a willing buyer would buy and a willing
seller would sell, such asset in an arms' length transaction, and (ii) with
respect to cash, the amount of such cash.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day; provided that (a) if such, day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate charged to
the Agent (in its individual capacity) on such day on such transactions as
determined by the Agent.
"Fiscal Year" means the Borrower's fifty-two (52) or
fifty-three (53) week fiscal year, which ends on the Saturday nearest January
31 in each calendar year; by way of example, references to "Fiscal 1996" shall
mean the fiscal year ended February 1, 1997.
"Fixed Charge Ratio" means, for any period as to the Borrower
and the Guarantors, the ratio of (i) EBITDA plus Contractual Rent Expense minus
capital expenditures (excluding Acquisitions) minus repurchases of treasury
stock to (ii) Fixed Charges. For purposes of this definition, capital
expenditures and repurchases of treasury stock shall each be calculated for the
four immediately preceding fiscal quarterly periods.
"Fixed Charges" means, for any period as to the Borrower and
the Guarantors, and without duplication, an amount equal to the sum of (a) cash
interest expense plus (b) Contractual Rent Expense plus (c) scheduled payments
on Capital Leases plus (d) scheduled principal payments in respect of any Debt
permitted under this Agreement (excluding payments on trade accounts payable
incurred in the ordinary course of business and Lease payments relating to
sale- leaseback transactions covered by clause (b) or (c) of this definition
and excluding scheduled principal payments on the Obligations) plus cash
dividends by the Borrower or any Guarantor (other than any wholly-owned
Guarantor); calculated for the four (4) immediately preceding fiscal quarterly
periods.
"Future Plan" has the meaning specified in Section 9.1(h)
hereof.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant
- 11 -
17
segments of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Approval" means any authorization, consent,
approval, license or exemption of, registration or filing with, or report or
notice to, any Governmental Authority.
"Governmental Authority" means any national, state, county,
municipal or other government, domestic or foreign, any agency, board, bureau,
commission, court, department or other instrumentality of any such government,
or any arbitrator.
"Governmental Requirement" means any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, writ, edict,
franchise, permit, certificate, license, award, authorization or other
direction, guideline, or requirement of any Governmental Authority, including,
without limitation, any requirement under common law.
"Guaranty" has the meaning set forth in Section 9.7.
"Guarantor" means each Restricted Subsidiary which shall
execute and deliver a Guaranty pursuant to Section 9.7.
"Hazardous Materials" means (a) any "hazardous waste" as
defined by RCRA; (b) any "hazardous substance" as defined by CERCLA; (c)
asbestos; (d) polychlorinated biphenyls; (e) any substance the presence of
which on any of the Borrower's or any Subsidiary's Properties is prohibited by
any Governmental Authority; (f) petroleum, including crude oil and any fraction
thereof, natural gas liquids, liquefied natural gas and synthetic gas useable
for fuel (or mixtures of natural gas and such synthetic gas); (g) drilling
fluids, produced waters and other wastes associated with the exploration,
development or production of crude oil, natural gas or geothermal energy; and
(h) any other substance which, pursuant to any Governmental Requirement,
requires special handling in its collection, storage, treatment or disposal.
"Highest Lawful Rate" shall mean, with respect to each Bank,
the maximum non-usurious interest rate, if any, that at any time or from time
to time may be contracted for, taken, reserved, charged, or received with
respect to the Notes or on other amounts, if any, due to such Bank pursuant to
this Agreement or any other Loan Document, under laws applicable to such 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 non-usurious interest rate than applicable laws now allow. To the
extent required by applicable law in determining the Highest Lawful Rate with
respect to any Bank as of any date, there shall be taken into account the
aggregate amount of all payments and charges theretofore charged, reserved or
received by such Bank hereunder or under the other Loan Documents which
constitute or are deemed to constitute interest under applicable law.
"Interest Payment Date" shall mean (a) as to any Base Rate
Loan, the last day of each fiscal quarter, beginning with August 2, 1997 (or if
any such date is not a Business Day,
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18
then the next preceding Business Day); (b) as to any Eurodollar Loan in which
the Interest Period with respect thereto is not greater than three (3) months,
the date on which such Interest Period ends; (c) as to any Eurodollar Loan in
which the Interest Period with respect thereto is greater than three (3)
months, the date on which the third month of such Interest Period ends, and the
date on which each such Interest Period ends; and (d) as to all Loans, at
maturity.
"Interest Period" shall mean the period of time for which the
Eurodollar Rate shall be in effect as to any Eurodollar Loan which shall be a
1, 2, 3 or 6 month period of time, commencing with the Borrowing Date or the
Expiration Date of the immediately preceding Interest Period, as the case may
be, applicable to and ending on the effective date of any rate change or rate
continuation made as provided in Section 3.1(a) as the Borrower may specify in
the Notice of Borrowing or the Notice of Rate Change/Continuation, subject,
however, to the early termination provisions of the second sentence of Section
3.2(d) relating to any Eurodollar Loan; provided, however, that: (i) any
Interest Period which would otherwise end on a day which is not a Business Day
shall be extended to the next succeeding Business Day unless such Business Day
falls in another calendar month, in which case such Interest Period shall end
on the next preceding Business Day, (ii) the duration of any Interest Period
which commences before any principal repayment installment date and otherwise
ends after such date shall end on such date, and (iii) no Interest Period shall
extend beyond the Maturity Date.
"Inventory" means the "inventory" (as that term is defined by
and within the meaning of GAAP) of the Borrower and any Restricted Subsidiary
including, without limitation, merchandise in transit and piece goods in the
possession of manufacturers.
"Investment" of any Person means any investment so classified
under GAAP, and, whether or not so classified, includes (a) any direct or
indirect loan or advance made by it to any other Person, whether by means of
stock purchase, loan, advance or otherwise, (b) any capital contribution to any
other Person, and (c) any ownership or similar interest in any other Person.
"Issuing Bank" shall mean NationsBank or any Affiliate
thereof, in its capacity as an issuer of Letters of Credit hereunder.
"Law" means any federal, state or local law, statute,
ordinance, code, rule, regulation, license, permit, authorization, decision,
order, injunction or decree, domestic or foreign.
"Lease" means, as to any Person, any operating lease other
than a Capital Lease of any Property (whether real, personal or mixed) by that
Person as a lessee, together with all renewals, extensions and options thereon.
"Letter of Credit" shall have the meaning specified in Section
2.3(a).
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19
"Letter of Credit Outstandings" shall mean, at any time, the
sum of, without duplication, (a) the aggregate Stated Amount of all outstanding
Letters of Credit and (b) the amount of all Unpaid Drawings in respect of all
Letters of Credit.
"Letter of Credit Request" shall have the meaning specified
in Section 2.4(a).
"Lien" shall mean any claim, mortgage, deed of trust, pledge,
security interest, encumbrance, lien, or charge of any kind (including, without
limitation, any agreement to give any of the foregoing, any conditional sale or
other title retention agreement or any lease in the nature thereof).
"Loan" or "Loans" shall mean a Loan or Loans, respectively, as
the case may be, from the Banks to the Borrower made under this Agreement.
"Loan Documents" shall mean this Agreement, the Notes, the
Letters of Credit, the Applications, the Guarantees and all instruments,
certificates and agreements now or hereafter executed or delivered to the
Agent, the Issuing Bank, or any Bank pursuant to any of the foregoing and the
transactions connected therewith, and all amendments, modifications, renewals,
extensions, increases and rearrangements of, and substitutions for, any of the
foregoing.
"Majority Banks" shall mean at any time Banks holding at least
66 2/3% of the aggregate unpaid principal amounts outstanding under the Notes
held by the Banks, or, if no such amounts are outstanding, Banks having at
least 66 2/3% of the Commitments.
"Margin Stock" shall have the meaning assigned to such term in
either Regulation U or Regulation G.
"Material Adverse Effect" means any material adverse effect on
(a) the financial condition, business, properties or operations of the Borrower
and its Restricted Subsidiaries, taken as a whole or (b) the ability of the
Borrower or any Restricted Subsidiary to perform its respective obligations
under this Agreement, any Note or any other Loan Document to which it is a
party on a timely basis.
"Maturity Date" shall mean April 30, 2002.
"Multiemployer Plan" means a "multiemployer plan" as defined
in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is
making or accruing or has made or accrued an obligation to make contributions.
"Multiple Employer Plan" means a single employer plan, as
defined in Section 4001(a)(15) of ERISA, which (i) is maintained for employees
of the Borrower or an ERISA Affiliate and at least one entity other than the
Borrower or an ERISA Affiliate or (ii) was so
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20
maintained and in respect of which the Borrower or an ERISA Affiliate could
have liability under Section 4064 or 4069 of ERISA in the event such plan has
been or were to be terminated.
"NationsBank" shall have the meaning set forth in the preamble
hereto.
"Non-Guaranteeing Restricted Subsidiary" shall have the
meaning set forth in Section 9.7.
"Note" or "Notes" shall have the meaning set forth in Section
2.1(b) hereof.
"Notice of Borrowing" shall have the meaning set forth in
Section 2.2(a) hereof.
"Notice of Rate Change/Continuation" shall have the meaning
set forth in Section 3.1(a)(ii).
"Obligations" means all of the obligations of the Borrower and
each Subsidiary now or hereafter existing under the Loan Documents, whether for
principal, Unpaid Drawings, interest, fees, expenses, indemnification or
otherwise.
"Officer's Certificate" shall mean a certificate signed in the
name of the Borrower by a Responsible Officer.
"Other Taxes" shall have the meaning set forth in Section
4.6(b).
"PBGC" means the Pension Benefit Guaranty Corporation.
"PBGC Plan" means any Plan subject to Title IV of ERISA or
Section 412 of the Code.
"Permitted Debt" shall have the meaning set forth in Section
10.2 hereof.
"Permitted Liens" means:
(a) Liens for current taxes, assessments or other
governmental charges which are not delinquent or remain payable
without any penalty, or the validity or amount of which is contested
in good faith by appropriate proceedings; provided however, that any
right to seizure, levy, attachment, sequestration, foreclosure or
garnishment with respect to Property of the Borrower or any Subsidiary
by reason of such Lien has not matured, or has been and continues to
be effectively enjoined or stayed;
(b) nonconsensual Liens imposed by operation of law,
including, without limitation, landlord Liens for rent not yet due and
payable, and Liens for materialmen, mechanics, warehousemen, carriers,
employees, workmen, repairmen, current wages or accounts payable not
yet delinquent and arising in the ordinary course of business;
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21
provided, however, that any right to seizure, levy, attachment,
sequestration, foreclosure or garnishment with respect to Property of
the Borrower or any Subsidiary by reason of such Lien has not matured,
or has been, and continues to be, effectively enjoined or stayed;
(c) easements, rights-of-way, restrictions and other
similar Liens or imperfections to title which do not materially
interfere with the occupation, use and enjoyment by the Borrower or
any Subsidiary of the Property encumbered thereby or materially impair
the value of such Property subject thereto;
(d) Liens (other than any Lien imposed by ERISA) incurred
or deposits made in the ordinary course of business (i) in connection
with workers' compensation, unemployment insurance and other types of
social security, or (ii) to secure (or to obtain letters of credit
that secure) the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, performance or payment bonds,
purchase, construction or sales contracts and other similar
obligations, in each case not incurred or made in connection with the
borrowing of money, the obtaining of advances or credit or the payment
of the deferred purchase price of property;
(e) Liens arising out of or in connection with any
litigation or other legal proceeding which is being contested in good
faith by appropriate proceedings; provided however, that any right to
seizure, levy, attachment, sequestration, foreclosure or garnishment
with respect to Property of the Borrower or any Subsidiary by reason
of such Lien has not matured or has been, and continues to be,
effectively enjoined or stayed; and
(f) UCC protective filings with respect to personal
property leased to the Borrower or any Subsidiary.
"Person" shall mean an individual, partnership, joint venture,
corporation, joint stock company, bank, trust, unincorporated organization
and/or a government or any department or agency thereof.
"Plan" means any employee benefit plan within the meaning of
Section 3(3) of ERISA, other than a Multiemployer Plan, maintained by the
Borrower or any ERISA Affiliate.
"Prime Rate" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not be the
lowest rate of interest charged by NationsBank to its customers.
"Property" or Properties" shall mean any interest or right in
any kind of property or assets, whether real, personal, or mixed, owned or
leased, tangible or intangible, and whether now held or hereafter acquired.
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22
"Pro Rata Percentage" shall mean with respect to any Bank, a
fraction (expressed as a percentage), the numerator of which shall be the
amount of such Bank's Commitment and the denominator of which shall be the
aggregate amount of all the Commitments of the Banks, as adjusted from time to
time in accordance with Section 4.7.
"Register" shall have the meaning set forth in Section
13.10(b).
"Reserve Requirement" means, at any time, the maximum rate at
which reserves (including, without limitation, any marginal, special,
supplemental, or emergency reserves) are required to be maintained under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System (or any successor) by member banks of the Federal Reserve System
against "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Responsible Officer" means the Chairman of the Board,
President, Vice President-Finance or the Treasurer of the Borrower.
"Restricted Investments" shall have the meaning set forth in
Section 10.5.
"Restricted Payments" shall have the meaning set forth in
Section 10.3.
"Restricted Subsidiary" shall mean the Subsidiaries designated
as Restricted Subsidiaries on Schedule 7.17 attached hereto, together with any
Subsidiary hereafter created or acquired and, at the time of creation or
acquisition, not designated by the Board of Directors of the Borrower as an
Unrestricted Subsidiary. Any Subsidiary designated as an Unrestricted
Subsidiary for purposes of this Agreement may thereafter be designated as a
Restricted Subsidiary upon 30 days' prior written notice to the Agent if, at
the time of such designation and after giving effect thereto and after giving
effect to the concurrent retirement of any Debt, (i) no Event of Default or
Default shall have occurred and be continuing, (ii) such Subsidiary is
organized under the laws of Canada, the United Kingdom or the United States or
any state thereof, and (iii) 100% of each class of voting stock or other equity
interests outstanding of such Subsidiary is owned by the Borrower or a
wholly-owned Restricted Subsidiary.
"Securities Act" shall have the meaning set forth in Section
13.1.
"Similar Businesses" shall have the meaning set forth in
Section 7.18.
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"Stated Amount" shall mean, as to each Letter of Credit, at
any time, the maximum amount then available to be drawn thereunder (without
regard to whether any conditions to drawing could then be met).
"Subordinated Debt" shall mean the indebtedness of the
Borrower to the Subordinated Noteholders under the Subordinated Indenture and
the "Securities" issued pursuant thereto (as such term is defined therein).
"Subordinated Indenture" shall mean that certain Indenture
dated as of March 1, 1996, between the Borrower and Texas Commerce Bank
National Association, as Trustee, relating to 5 1/4% Convertible Subordinated
Notes due 2003, as the same may be amended, modified or restated from time to
time.
"Subordinated Noteholder" means any "Holder",
"Securityholder", "Holder of a Security", "indenture security holder" or
"Security Holder," as such terms are defined in the Subordinated Indenture.
"Subsidiary" means any corporation of which the Borrower,
either directly or indirectly through its wholly-owned Subsidiaries, owns at
the time more than fifty percent (50%) of the outstanding capital stock having
ordinary voting power to elect a majority of the Board of Directors of such
corporation (whether or not at the time stock of any other class or classes of
such corporation shall have, or might have, voting power by reason of the
happening of any contingency); each partnership of which the Borrower or any
Subsidiary is a general partner and each limited liability company in which the
Borrower or any Subsidiary is a member or manager and owns, directly or
indirectly, an aggregate interest of more than fifty percent (50%); and shall
include any such corporation, partnership or limited liability company which
shall become a Subsidiary after the date hereof.
"Taxes" shall have the meaning set forth in Section 4.6(a).
"Total Funded Debt" means, at any time as to the Borrower and
the Guarantors and without duplication, an amount equal to the sum of (a) the
aggregate principal amount of all Loans outstanding on such date plus (b) the
aggregate principal amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 2.6 hereof plus (c) the aggregate
principal amount of all other outstanding indebtedness of the Borrower and the
Guarantors of the type described in clauses (a)-(e) of the definition of "Debt"
(excluding (i) trade accounts payable incurred in the ordinary course of
business and (ii) any undrawn amounts under outstanding letters of credit).
"Type" shall mean, with respect to any Loan, any Base Rate
Loan or any Eurodollar Loan.
"Unpaid Drawing" shall have the meaning specified in Section
2.6(a).
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"Unrestricted Subsidiary" shall mean each corporate Subsidiary
designated as an Unrestricted Subsidiary on Schedule 7.17 attached hereto,
together with any corporate Subsidiary which is hereafter designated by the
Board of Directors of the Borrower as an Unrestricted Subsidiary. Any
corporate Subsidiary may be designated an Unrestricted Subsidiary upon 30 days'
prior written notice to the Agent if, at the time of such designation and after
giving effect thereto and after giving effect to the concurrent retirement of
any Debt, (i) no Event of Default or Default shall have occurred and be
continuing, and (ii) such Subsidiary does not own, directly or indirectly, any
Debt or capital stock of, or other equity interest in, the Borrower or a
Restricted Subsidiary.
"Unused Commitment" shall mean, as to each Bank, an amount
equal to such Bank's Commitment minus such Bank's Pro Rata Percentage of
outstanding Loans and Letter of Credit Outstandings at such time.
2. THE LOANS AND LETTERS OF CREDIT.
2.1. LOANS.
(a) Upon the terms and conditions and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make Loans to the Borrower on any one (1) or more Business Days prior to the
Maturity Date, up to an aggregate principal amount of Loans not exceeding at
any one time outstanding the amount set opposite such Bank's name on the
signature pages hereof as such Bank's Commitment (such amount, as it may be
reduced from time to time pursuant to Section 4.7 and Section 13.10 being such
Bank's "Commitment"); provided, however, that after giving effect to any Loan,
in no event shall the outstanding amount of all Loans made hereunder to the
Borrower plus the Letter of Credit Outstandings at such time (in the case of
Letter of Credit Outstandings denominated in Alternate Currencies, calculated,
as of the date of such Loan, by reference to the Dollar Equivalent Value of
such Letter of Credit Outstandings) exceed the Commitments of all the Banks.
Within such limits and during such period and subject to the terms and
conditions of this Agreement, the Borrower may borrow, repay and reborrow
hereunder.
(b) The Borrower shall execute and deliver to the Agent
for each Bank to evidence the Loans made by each Bank, a promissory note (each,
as the same may be amended, modified or extended from time to time, a "Note"),
which shall be (i) dated the Closing Date; (ii) in the principal amount of such
Bank's Commitment; and (iii) in substantially the form attached hereto as
Exhibit A, with the blanks appropriately filled. The outstanding principal
balance of each Note shall be payable on the Maturity Date. Each Note shall
bear interest on the unpaid principal amount thereof from time to time
outstanding at the rate per annum determined as specified in Section 3, payable
on each Interest Payment Date and at maturity, commencing with the first
Interest Payment Date following the date of such Note.
(c) In the case of a proposed borrowing comprised of
Eurodollar Loans, the Agent shall promptly notify each Bank of the applicable
interest rate under Section 3.1. Each
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Bank shall, before 11:00 a.m. (Houston time) on the Borrowing Date, make
available for the account of its Applicable Lending Office to the Agent at the
Agent's Domestic Lending Office, in same day funds, its Pro Rata Percentage of
such borrowing. After the Agent's receipt of such funds and upon fulfillment
of the applicable conditions set forth in Section 8, on the Borrowing Date the
Agent shall make the borrowing available to the Borrower at its Domestic
Lending Office in immediately available funds. Each Bank may, at its option,
post on a schedule attached to its Note (x) the date and principal amount of
each Loan made under such Note; (y) the rate of interest each such Loan will
bear; and (z) each payment of principal thereon; provided, however, that any
failure of such Bank to so ▇▇▇▇ such Note shall not affect the Borrower's
obligations thereunder; and provided further that such Bank's records as to
such matters shall be controlling, absent manifest error, whether or not such
Bank has so marked such Note. Any deposit to the Borrower's demand deposit
account by the Agent pursuant to a request (whether written or oral) believed
by the Agent to be an authorized request by the Borrower for a Loan hereunder
shall be deemed to be a Loan hereunder for all purposes with the same effect as
if the Borrower had in fact requested the Agent to make such Loan.
2.2. BORROWING PROCEDURE.
(a) Each borrowing by the Borrower hereunder shall be (i)
in the case of any Eurodollar Loan, in an aggregate amount of not less than
$3,000,000 or an integral multiple of $500,000 in excess thereof; or (ii) in
the case of any Base Rate Loan, in an aggregate amount of not less than
$500,000 or an integral multiple of $250,000 in excess thereof. Each Loan
shall be made upon prior written notice from the Borrower to the Agent in the
form of Exhibit B hereto (the "Notice of Borrowing") delivered to the Agent not
later than 12:00 noon (Houston time) (i) on the third Business Day prior to the
Borrowing Date, if such borrowing consists of Eurodollar Loans; and (ii) on the
Borrowing Date, if such borrowing consists of Base Rate Loans. Each Notice of
Borrowing shall be irrevocable and shall specify (i) the amount of the proposed
borrowing and of each Loan comprising a part thereof; (ii) the Borrowing Date;
(iii) the Type of Loan requested; (iv) with respect to any Eurodollar Loan, the
Interest Period with respect to each such Loan and the Expiration Date of each
such Interest Period (provided, that there shall not be more than ten (10)
Interest Periods in effect at any one time under this Agreement); and (v) the
demand deposit account of the Borrower at the Agent's Domestic Lending Office
with which the proceeds of the borrowing are to be deposited. Promptly upon
its receipt of a Notice of Borrowing, the Agent shall deliver by telefacsimile
a copy thereof to each Bank. The Borrower may give the Agent telephonic notice
by the required time of any proposed borrowing under this Section 2.2(a);
provided, that such telephonic notice shall be promptly confirmed in writing by
delivery to the Agent of a Notice of Borrowing. Neither the Agent nor any Bank
shall incur any liability to the Borrower in acting upon any telephonic notice
referred to above which the Agent believes in good faith to have been given by
the Borrower or for otherwise acting in good faith under this Section 2.2(a).
(b) Unless the Agent shall have received notice from a
Bank prior to the date of any borrowing that such Bank will not make available
to the Agent such Bank's Pro Rata Percentage of such borrowing, the Agent may
assume that such Bank has made such portion
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available to the Agent on the date of such borrowing in accordance with Section
2.1(c), and the Agent may, in reliance upon such assumption, make available to
the Borrower on such date a corresponding amount. If and to the extent that
such Bank shall not have so made its Pro Rata Percentage available to the
Agent, such Bank and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, (i) in the case of the Borrower,
at the interest rate applicable at the time to Loans comprising such borrowing,
and (ii) in the case of such Bank, at the Federal Funds Rate. If such Bank
shall repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Loan as part of such borrowing for purposes of this
Agreement.
(c) The failure of any Bank to make the Loan to be made
by it as part of any borrowing shall not relieve any other Bank of its
obligation, if any, hereunder to make its Loan on the date of such borrowing,
but no Bank shall be responsible for the failure of any other Bank to make the
Loan to be made by such other Bank on the date of any borrowing.
2.3. LETTERS OF CREDIT.
(a) Subject to and upon the terms and conditions herein
set forth, including, without limitation, the applicable terms and conditions
set forth in Section 8 hereof, the Issuing Bank agrees that it will, at any
time and from time to time on or after the Closing Date following its receipt
of a Letter of Credit Request, issue for the account of the Borrower, in the
name of the Borrower or any Restricted Subsidiary, one or more irrevocable
standby or commercial letters of credit (all such letters of credit
collectively, the "Letters of Credit"); provided, that the Issuing Bank shall
not issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain the Issuing Bank from issuing such Letter of Credit or any
requirement of Law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance
of letters of credit generally; or
(ii) the Stated Amount of such Letter of Credit (in the
case of Letters of Credit denominated in Alternate Currencies,
calculated, as of the date of such issuance, by reference to the
Dollar Equivalent Value of such Stated Amount) shall be greater than
an amount which when added to the Letter of Credit Outstandings at
such time (in the case of Letters of Credit denominated in Alternate
Currencies, calculated, as of the date of such issuance, by reference
to the Dollar Equivalent Value of such Letter of Credit Outstandings)
and the aggregate principal amount of all Loans then outstanding
(after giving effect to the principal amount of all Loans repaid and
all Unpaid Drawings reimbursed prior to or concurrently with the
issuance of such Letter of Credit) would
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exceed the Commitments of all the Banks (after giving effect to any
reductions to the Commitments of all the Banks on such date); or
(iii) the Stated Amount of such Letter of Credit (in the
case of Letters of Credit denominated in Alternate Currencies,
calculated, as of the date of such issuance, by reference to the
Dollar Equivalent Value of such Stated Amount) shall be greater than
an amount which when added to the Letter of Credit Outstandings at
such time (in the case of Letter of Credit Outstandings denominated in
Alternate Currencies, calculated, as of the date of such issuance, by
reference to the Dollar Equivalent Value of such Letter of Credit
Outstandings) (after giving effect to the principal amount of all
Unpaid Drawings reimbursed prior to or concurrently with the issuance
of such Letter of Credit) would exceed $20,000,000; or
(iv) the expiry date, or, in the case of any Letter of
Credit containing an expiry date that is extendible at the option of
the Issuing Bank, the initial expiry date of such Letter of Credit, is
a date that is later than the earlier of (y) twelve (12) months from
the issuance date or (z) the Maturity Date.
(b) The Issuing Bank shall neither renew nor permit the
renewal of any Letter of Credit if any of the conditions precedent to such
renewal set forth in Section 8 are not satisfied. The Existing Letters of
Credit shall be deemed to have been issued hereunder. No Letter of Credit may
be issued, or remain outstanding, for the benefit of an Unrestricted
Subsidiary.
2.4. LETTER OF CREDIT REQUESTS.
(a) Whenever the Borrower desires that a Letter of Credit
be issued for its account or that an existing expiry date shall be extended, it
shall deliver to the Agent its prior written request therefor not later than
11:30 a.m. (Houston time) (i) in the case of a Letter of Credit to be issued,
on at least the second (2nd) Business Day prior to the requested issuance date
and (ii) in the case of the extension of the existing expiry date of any Letter
of Credit, on at least the second (2nd) Business Day prior to the date on which
the Issuing Bank must notify the beneficiary thereof that the Issuing Bank does
not intend to extend such existing expiry date. Each such request shall be in
the form of Exhibit C attached hereto (each a "Letter of Credit Request") and,
in the case of the issuance of any Letter of Credit, shall be accompanied by an
Application therefor, completed to the satisfaction of the Issuing Bank, and
such other certificates, documents and other papers and information as the
Issuing Bank or any Bank (through the Agent) may reasonably request. Subject
to Section 2.9, each Letter of Credit shall, at the Borrower's option, be
denominated in Dollars or an Alternative Currency, shall expire no later than
the date specified in Section 2.3, shall not be in an amount greater than is
permitted under Section 2.3(a) and shall be in such form as may be approved
from time to time by the Issuing Bank and the Borrower. Promptly upon its
receipt of a Letter of Credit Request, and, if applicable, the related
Application, the Agent shall so notify the other Banks. It is agreed that an
Application may be delivered by electronic transfer.
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(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, this Agreement. Unless the Issuing Bank has received notice from the Agent
or any Bank before it issues the respective Letter of Credit or extends the
existing expiry date of a Letter of Credit that one or more of the applicable
conditions specified in Section 8 are not then satisfied, or that the issuance
of such Letter of Credit would violate this Agreement, then the Issuing Bank
may issue the requested Letter of Credit for the account of the Borrower in
accordance with this Agreement and the Issuing Bank's usual and customary
practices; provided, however, that the Issuing Bank shall not be required to
issue any Letter of Credit earlier than two (2) Business Days after its receipt
of the Letter of Credit Request and the related Application therefor and all
other certificates, documents and other papers and information relating
thereto. Upon its issuance of any Letter of Credit or the extension of the
existing expiry date of any Letter of Credit, as the case may be, the Issuing
Bank shall promptly notify the Borrower of such issuance or extension, which
notice shall be accompanied by a copy of the Letter of Credit actually issued
or a copy of any amendment extending the existing expiry date of any Letter of
Credit, as the case may be. Promptly upon its receipt of such documents, the
Agent shall notify each Bank of the issuance of such Letter of Credit or the
extension of such expiry date, as the case may be, and upon the request of any
Bank shall deliver copies of such documents to such Bank.
2.5. LETTERS OF CREDIT PARTICIPATIONS.
(a) Immediately upon the issuance by the Issuing Bank of
each Letter of Credit, the Issuing Bank shall be deemed to have sold and
transferred to each Bank, and each Bank shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Bank's Pro Rata Percentage, in each such Letter of Credit (including
extensions of the expiry date thereof), each substitute letter of credit, each
drawing made thereunder and the obligations of the Borrower under this
Agreement and the other Loan Documents with respect thereto, and any security
therefor or guaranty pertaining thereto.
(b) In determining whether to pay under any Letter of
Credit, the Issuing Bank shall have no obligation relative to the Agent or the
Banks other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by the Issuing Bank under or in connection
with any Letter of Credit if taken or omitted in the absence of gross
negligence or willful misconduct shall not create for the Issuing Bank any
resulting liability to the Agent or any Bank. It is the intent of the parties
hereto that the Issuing Bank shall have no liability to the Agent or the Banks
for its ordinary sole or contributing negligence.
(c) In the event that the Issuing Bank makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to the Issuing Bank pursuant to Section 2.6(a), the Agent shall
promptly notify each Bank of such failure, and each
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Bank shall promptly and unconditionally pay to the Agent for the account of the
Issuing Bank the amount of such Bank's Pro Rata Percentage of such unreimbursed
payment in Dollars (in the case of Letters of Credit denominated in Alternate
Currencies, calculated, as of the date of such payment, by reference to the
Dollar Equivalent Value of such Letter of Credit) and in same day funds. If
the Agent so notifies, prior to 11:30 a.m. (Houston time) on any Business Day,
any Bank required to fund a payment under a Letter of Credit, such Bank shall
make available to the Agent for the account of the Issuing Bank such Bank's Pro
Rata Percentage of the amount of such payment on such Business Day in same day
funds. If and to the extent such Bank shall not have so made its Pro Rata
Percentage of the amount of such payment available to the Agent for the account
of the Issuing Bank, such Bank agrees to pay to the Agent for the account of
the Issuing Bank, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to the
Agent for the account of the Issuing Bank at the Federal Funds Rate. The
failure of any Bank to make available to the Agent for the account of any
Issuing Bank its Pro Rata Percentage of any payment under any Letter of Credit
shall not relieve any other Bank of its obligation hereunder to make available
to the Agent for the account of the Issuing Bank its Pro Rata Percentage of any
payment under any Letter of Credit on the date required, as specified above,
but no Bank shall be responsible for the failure of any other Bank to make
available to the Agent for the account of such Issuing Bank such other Bank's
Pro Rata Percentage of any such payment.
(d) Whenever the Issuing Bank receives a payment of a
reimbursement obligation as to which the Agent has received for the account of
the Issuing Bank any payments from the Banks pursuant to clause (c) above, the
Issuing Bank shall pay to the Agent, and the Agent shall promptly pay to each
Bank which has paid its Pro Rata Percentage thereof, in Dollars and in same day
funds, an amount equal to such Bank's Pro Rata Percentage thereof.
(e) The obligations of the Banks to make payments to the
Agent for the account of the Issuing Bank with respect to Letters of Credit
shall be absolute and not subject to any qualification or exception whatsoever
and shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any other Person may have at any time
against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such transferee may
be acting), the Agent, the Issuing Bank, any Bank, or any other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrower or any other Party and the beneficiary named in any such
Letter of Credit);
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30
(iii) any draft, certificate or any other document
presented under the 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, any Bank (other
than the gross negligence or willful misconduct of the Issuing Bank).
(f) THE BANKS AGREE TO INDEMNIFY THE ISSUING BANK (TO THE
EXTENT NOT REIMBURSED BY THE BORROWER), RATABLY ACCORDING TO THE RESPECTIVE PRO
RATA PERCENTAGES, FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS,
LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON,
INCURRED BY, OR ASSERTED AGAINST THE ISSUING BANK IN ANY WAY RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY LETTER OF CREDIT OR ANY ACTION TAKEN OR
OMITTED BY THE ISSUING BANK UNDER THIS AGREEMENT OR ANY LETTER OF CREDIT;
PROVIDED, THAT NO BANK SHALL BE LIABLE FOR ANY PORTION OF SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES OR DISBURSEMENTS RESULTING FROM THE ISSUING BANK'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT.
2.6. AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS.
(a) Upon the receipt by the Issuing Bank of any Drawing
from a beneficiary under a Letter of Credit, the Issuing Bank promptly will
provide the Borrower with telecopy notice thereof. The Borrower hereby agrees
to reimburse the Issuing Bank by making payment to the Agent in immediately
available funds in Dollars or the Alternate Currency, as the case may be, in
which such Letter of Credit was denominated, at the Agent's Domestic Lending
Office, for any payment made by the Issuing Bank under any Letter of Credit
issued by it (each such amount so paid until reimbursed, an "Unpaid Drawing")
immediately after, and in any event on the date of, such payment, with interest
on the amount so paid by the Issuing Bank, to the extent not reimbursed prior
to 2:00 p.m. (Houston time) on the date of such payment, from and including the
date paid but excluding the date reimbursement is made as provided above, at a
rate per annum equal to the lesser of (x) 2% above the Base Rate or (y) the
Highest Lawful Rate, such interest to be payable on demand. Prior to the
Maturity Date, unless otherwise paid by the Borrower, such Unpaid Drawing may
(and, if the Majority Banks so desire, shall automatically), subject to
satisfaction of the conditions precedent set forth in Sections 2.3 and 8, be
paid with the proceeds of Loans which shall bear interest at an annual rate
equal to the Base Rate, which rate the Borrower may in its discretion continue
or convert pursuant to Section 3.1(a)(ii).
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(b) The Borrower's obligations under this Section 2.6 to
reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances (except as provided below with respect to the gross negligence or
willful misconduct of the Issuing Bank) and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or have had
against any Bank (including the Issuing Bank in its capacity as the issuer of a
Letter of Credit or any Bank as a participant therein), including any defense
based upon the failure of any drawing under a Letter of Credit (each a
"Drawing") to conform to the terms of the Letter of Credit (other than a
defense based upon the gross negligence or willful misconduct of the Issuing
Bank in determining whether such Drawing conforms to the terms of the Letter of
Credit) or any non- application or misapplication by the beneficiary of the
proceeds of such Drawing, including any of the following circumstances:
(i) any lack of validity or enforceability of this
Agreement or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any other Person may have at any time
against a beneficiary named in a Letter of Credit, any transferee of
any Letter of Credit (or any Person for whom any such transferee may
be acting), the Agent, the Issuing Bank, any Bank, or any other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Borrower or any other Party and the beneficiary named in any such
Letter of Credit);
(iii) any draft, certificate or any other document
presented under the 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;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents;
(v) the occurrence of any Default or Event of Default; or
(vi) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Borrower
(other than the gross negligence or willful misconduct of the Issuing
Bank).
(c) The Borrower also agrees with the Issuing Bank, the
Agent and the Banks that, in the absence of gross negligence or willful
misconduct of the Issuing Bank, the Issuing Bank shall not be responsible for,
and the Borrower's reimbursement obligations under Section 2.6(a) shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged or any dispute between or among the Borrower or
any other
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32
Party and the beneficiary of any Letter of Credit or any other party to which
such Letter of Credit may be transferred or any claims whatsoever of the
Borrower or any other Party against any beneficiary of such Letter of Credit or
any such transferee.
(d) The Issuing Bank shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Bank's gross
negligence or willful misconduct. The Borrower agrees that any action taken or
omitted by the Issuing Bank under or in connection with any Letter of Credit or
the related drafts or documents, if done in the absence of gross negligence or
willful misconduct and in accordance with the standards of care specified in
the Uniform Customs and Practice for Documentary Credits (1994 Revision),
International Chamber of Commerce, Publication No. 500 (and any subsequent
revisions thereof approved by a Congress of the International Chamber of
Commerce and adhered to by such Issuing Bank) and, to the extent not
inconsistent therewith, the Uniform Commercial Code of the State of Texas,
shall not result in any liability of the Issuing Bank to the Borrower or any
other Party. It is the intent of the parties hereto that the Issuing Bank
shall not have any liability under this Section 2.6 for the ordinary negligence
of the Issuing Bank.
2.7. CONFLICT BETWEEN APPLICATIONS AND AGREEMENT. To the
extent that any provision of any Application related to any Letter of Credit is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control.
2.8. INCREASED COSTS.
(a) Notwithstanding any other provision herein, but
subject to Section 13.11, if any Law, rule, regulation or guideline adopted
pursuant to or arising out of the July 1988 report of the Basle Committee on
Banking Regulations and Supervisory Practices entitled "International
Convergence of Capital Measurement and Capital Standards" or the introduction
or effectiveness of any applicable law or regulation or any change in
applicable Law or regulation or in the interpretation or administration
thereof, or compliance by any Bank (or any lending office of such Bank) with
any applicable guideline or request from any central bank or governmental
authority (whether or not having the force of Law) either (i) shall impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued, or participated in, by any Bank,
or (ii) shall impose on any Bank any other conditions affecting this Agreement
or any Letter of Credit; and the result of any of the foregoing is to increase
the cost to any Bank issuing, maintaining or participating in any Letter of
Credit, or reduce the amount of any sum received or receivable by any Bank
hereunder with respect to Letters of Credit, by an amount deemed by such Bank
to be material, then, from time to time, the Borrower shall pay to the Agent
for the account of such Bank such additional amount or amounts as will
compensate such Bank for such increased cost or reduction by such Bank.
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33
(b) Each Bank will notify the Borrower through the Agent
of any event which will entitle such Bank to compensation pursuant to paragraph
(a) above. A certificate of a Bank setting forth in reasonable detail such
amount or amounts as shall be necessary to compensate such Bank as specified in
paragraph (a) above may be delivered to the Borrower (through the Agent) and
shall be conclusive absent manifest error. The Borrower shall pay to the Agent
for the account of such Bank the amount shown as due on any such certificate
within fifteen (15) days after its receipt of the same.
2.9. UNAVAILABILITY OF ALTERNATE CURRENCY. In the event
that there shall occur on or prior to the date of the issuance of any Letter of
Credit denominated in an Alternate Currency any material adverse change in
national or international financial, political or economic conditions or
currency exchange rates or exchange controls which would in the opinion of the
Agent make it impracticable for such Letter of Credit to be denominated in the
Alternate Currency specified by the Borrower, then the Agent shall forthwith
give notice thereof to the Borrower and the Banks, and such Letter of Credit
shall not be issued on the requested issuance date.
3. INTEREST RATE PROVISIONS.
3.1. INTEREST RATE DETERMINATION.
(a) Except as specified in Sections 3.2, 3.3, 3.4 and
3.5, the Loans shall bear interest on the unpaid principal amount thereof from
time to time outstanding, until maturity, at a rate per annum (calculated based
on a year of 360 days in the case of the Eurodollar Rate, and a year of 365 or
366 days, as the case may be, in the case of the Base Rate, in each case for
the actual days elapsed) as follows:
(i) The principal balance of the Loans from time to time
outstanding shall bear interest at an annual rate equal to the lesser
of (A) with respect to any Eurodollar Loan, the Adjusted Eurodollar
Rate plus the Applicable Margin, and with respect to any Base Rate
Loan, the Base Rate, as the case may be, with respect thereto or (B)
the Highest Lawful Rate, from the first day to, but not including, (y)
with respect to any Base Rate Loan, the Maturity Date and (z) with
respect to any Eurodollar Loan, the Expiration Date of the Interest
Period then in effect with respect thereto.
(ii) So long as no Default or Event of Default has
occurred and is continuing, the Borrower may (y) change the interest
rates to apply to any Loan or (z) elect to continue all or any part of
the outstanding principal balance of any Eurodollar Loan as a Loan of
such Type by giving the Agent an irrevocable written notice in the
form of Exhibit D hereto (the "Notice of Rate Change/Continuation")
specifying (A) the date on which such Loan was made; (B) the interest
rate then applicable to such Loan; (C) with respect to any Eurodollar
Loan, the Interest Period then applicable to each such Loan; (D) the
principal amount of such Loan to remain outstanding; (E) the Type of
Loan and, with respect to any Eurodollar Loan, the Interest Period to
become applicable to such
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34
Loan on the effective date of the rate change or continuation; (F) the
requested effective date of the rate change or continuation (the
"Conversion/Continuation Date"); and (G) with respect to any
Eurodollar Loan, the duration and Expiration Date of each such
Interest Period. In the case of the conversion of all or any part of
any Base Rate Loan into a Eurodollar Loan or the continuation of any
Eurodollar Loan as a Loan of such Type, such notice must be received
by the Agent at least three (3) full Business Days prior to the
Conversion/ Continuation Date, and otherwise at least one (1) full
Business Day prior thereto. Each rate so specified shall become
effective on the Conversion/Continuation Date and remain in effect
until the expiration of the applicable Interest Period specified in
such Notice of Rate Change/Continuation.
(iii) If the Borrower shall fail to choose, as provided in
clause (ii) above, the rate of interest to become effective with
respect to any Eurodollar Loan upon the Expiration Date of the
Interest Period with respect thereto, such Loan shall bear interest at
the Base Rate on and after such Expiration Date until the Borrower
shall have so chosen a different rate.
(iv) Nothing contained herein shall authorize the Borrower
(A) to convert any Loan into or continue any Loan as a Eurodollar Loan
unless the Expiration Date of the Interest Period for such Loan occurs
on or before the Maturity Date or (B) to continue or change the
interest rates applicable to any Eurodollar Loan prior to the
Expiration Date of the Interest Period with respect thereto.
(v) Notwithstanding anything set forth herein to the
contrary (other than Section 13.11), if a Default has occurred and is
continuing, and upon written notice to the Borrower from the Agent,
each outstanding Loan shall bear interest at a rate per annum which
shall be equal to the lesser of (x) 2% above the interest rate
otherwise applicable thereto or (y) the Highest Lawful Rate, which
interest shall be due and payable on demand.
(b) The Base Rate for each Base Rate Loan shall be
determined by the Agent on the first day and on each day such Base Rate Loan
shall be outstanding, or if such day is not a Business Day, on the next
succeeding Business Day. The Eurodollar Rate for the Interest Period for each
Eurodollar Loan shall be determined by the Agent two (2) Business Days before
the first day of such Interest Period.
(c) Each determination of an applicable interest rate by
the Agent shall be conclusive and binding upon the Borrower and the Banks in
the absence of manifest error.
3.2. INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any
applicable law, rule, or regulation, or any change in any applicable law, rule,
or regulation, or any change in the interpretation or administration thereof by
any governmental authority, central bank, or
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35
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such governmental
authority, central bank, or comparable agency:
(i) shall subject such Bank (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, its Note, or its obligation to make Eurodollar
Loans, or change the basis of taxation of any amounts payable to such
Bank (or its Applicable Lending Office) under this Agreement or its
Note in respect of any Eurodollar Loans (other than taxes imposed on
the overall net income of such Bank by the jurisdiction in which such
Bank has its principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Eurodollar Rate) relating to any extensions of credit or other assets
of, or any deposits with or other liabilities or commitments of, such
Bank (or its Applicable Lending Office), including the Commitment of
such Bank hereunder; or
(iii) shall impose on such Bank (or its Applicable Lending
Office) or on the United States market for certificates of deposit or
the London interbank market any other condition affecting this
Agreement or its Note or any of such extensions of credit or
liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Bank (or its Applicable Lending Office) under this Agreement or its Note
with respect to any Eurodollar Loans, then the Borrower shall pay to such Bank
on demand such amount or amounts as will compensate such Bank for such
increased cost or reduction, provided, that the Borrower will not be
responsible for paying any amounts pursuant to this Section 3.2 accruing for a
period greater than 180 days. If any Bank requests compensation by the
Borrower under this Section 3.2(a), the Borrower may, by notice to such Bank
(with a copy to the Agent), suspend the obligation of such Bank to make or
continue Loans of the Type with respect to which such compensation is
requested, or to convert Loans of any other Type into Loans of such Type, until
the event or condition giving rise to such request ceases to be in effect (in
which case the provisions of Section 3.5 shall be applicable); provided that
such suspension shall not affect the right of such Bank to receive the
compensation so requested.
(b) If, after the date hereof, any Bank shall have
determined that the adoption of any applicable law, rule, or regulation
regarding capital adequacy or any change therein or in the interpretation or
administration thereof by any governmental authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
any request or directive regarding capital adequacy (whether or not having the
force of law) of any such
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36
governmental authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Bank or any
corporation controlling such Bank as a consequence of such Bank's obligations
hereunder to a level below that which such Bank or such corporation could have
achieved but for such adoption, change, request, or directive (taking into
consideration its policies with respect to capital adequacy), then from time to
time upon demand the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank for such reduction, provided, that the
Borrower will not be responsible for paying any amounts pursuant to this
Section 3.2 accruing for a period greater than 180 days.
(c) Each Bank shall promptly notify the Borrower and the
Agent of any event of which it has knowledge, occurring after the date hereof,
which will entitle such Bank to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Bank, be otherwise disadvantageous to it. Any Bank claiming
compensation under this Section shall do so in good faith on a
nondiscriminatory basis, and shall furnish to the Borrower and the Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Bank may use any reasonable averaging and
attribution methods.
3.3. LIMITATION ON TYPES OF LOANS. If on or prior to the
first day of any Interest Period for any Eurodollar Loan:
(a) the Agent determines (which determination shall be
conclusive) that by reason of circumstances affecting the relevant
market, adequate and reasonable means do not exist for ascertaining
the Eurodollar Rate for such Interest Period; or
(b) the Required Banks determine (which determination
shall be conclusive) and notify the Agent that the Adjusted Eurodollar
Rate plus the Applicable Margin will not adequately and fairly reflect
the cost to the Banks of funding Eurodollar Loans for such Interest
Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Banks shall be under no obligation to make
additional Loans of such Type, continue Loans of such Type, or to convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
3.4. ILLEGALITY. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for any Bank or its
Applicable Lending Office to make, maintain, or fund Eurodollar Loans
hereunder, then such Bank shall promptly notify the Borrower thereof and such
Bank's obligation to make or continue Eurodollar Loans and to convert other
Types of Loans into Eurodollar Loans shall be suspended until such time as such
Bank may again
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37
make, maintain, and fund Eurodollar Loans (in which case the provisions of
Section 3.5 shall be applicable).
3.5. TREATMENT OF AFFECTED LOANS. If the obligation of
any Bank to make a Eurodollar Loan or to continue, or to convert Loans of any
other Type into, Loans of a particular Type shall be suspended pursuant to
Section 3.2 or 3.4 hereof (Loans of such Type being herein called "Affected
Loans" and such Type being herein called the "Affected Type"), such Bank's
Affected Loans shall be automatically converted into Base Rate Loans on the
last day(s) of the then current Interest Period(s) for Affected Loans (or, in
the case of a conversion required by Section 3.4 hereof, on such earlier date
as such Bank may specify to the Borrower with a copy to the Agent) and, unless
and until such Bank gives notice as provided below that the circumstances
specified in Section 3.2 or 3.4 hereof that gave rise to such conversion no
longer exist:
(a) to the extent that such Bank's Affected Loans have
been so converted, all payments and prepayments of principal that
would otherwise be applied to such Bank's Affected Loans shall be
applied instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued
by such Bank as Loans of the Affected Type shall be made or continued
instead as Base Rate Loans, and all Loans of such Bank that would
otherwise be converted into Loans of the Affected Type shall be
converted instead into (or shall remain as) Base Rate Loans.
If such Bank gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 3.2 or 3.4 hereof that gave rise to the
conversion of such Bank's Affected Loans pursuant to this Section 3.5 no longer
exist (which such Bank agrees to do promptly upon such circumstances ceasing to
exist) at a time when Loans of the Affected Type made by other Banks are
outstanding, such Bank's Base Rate Loans shall be automatically converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Loans of the Affected Type, to the extent necessary so that, after giving
effect thereto, all Loans held by the Banks holding Loans of the Affected Type
and by such Bank are held pro rata (as to principal amounts, Types, and
Interest Periods) in accordance with their respective Commitments.
3.6. COMPENSATION. Upon the request of any Bank, the
Borrower shall pay to such Bank such amount or amounts as shall be sufficient
(in the reasonable opinion of such Bank) to compensate it for any loss, cost,
or expense (including loss of anticipated profits) incurred by it as a result
of-
(a) any payment, prepayment, or conversion of a
Eurodollar Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 11) on a date other than
the last day of the Interest Period for such Eurodollar Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified
in Article 8 to be satisfied) to borrow,
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38
convert, continue, or prepay a Eurodollar Loan on the date for such
borrowing, conversion, continuation, or prepayment specified in the
relevant notice of borrowing, prepayment, continuation, or conversion
under this Agreement.
3.7. SURVIVAL. The agreements contained in Article 3
shall survive the termination of this Agreement and the payment in full of the
Notes and all other amounts payable hereunder for a period of 180 days
thereafter.
4. PREPAYMENTS AND OTHER PAYMENTS.
4.1. REQUIRED PREPAYMENTS. The Borrower agrees that if at
any time it or the Agent determines that the aggregate principal amount of
Loans outstanding plus the Letter of Credit Outstandings (in the case of Letter
of Credit Outstandings denominated in Alternate Currencies, calculated by
reference to the Dollar Equivalent Value of such Letter of Credit Outstandings)
exceeds the Commitments, the Borrower will make a prepayment of principal in an
amount at least equal to such excess, together with interest accrued thereon to
the date of such prepayment and all amounts due, if any, under Section 3.6.
Failure to make such payment when due shall constitute an Event of Default
under Section 11.2.
4.2. OPTIONAL PREPAYMENTS. The Borrower shall have the
right at any time and from time to time to prepay the Notes, in whole or in
part; provided, that each partial prepayment (i) of any Eurodollar Loans shall
be in an aggregate principal amount of at least $1,000,000 or an integral
multiple of $500,000 in excess thereof, and (ii) of any Base Rate Loans shall
be in an aggregate principal amount of at least $500,000 or an integral
multiple of $50,000 in excess thereof, in each case, together with interest
accrued thereon to the date of such prepayment and all amounts due, if any,
under Section 3.6.
4.3. NOTICE OF PAYMENTS. The Borrower shall give the
Agent at least three (3) Business Days' prior written notice of each prepayment
proposed to be made by it pursuant to Section 4.2, specifying the principal
amount of the Loans to be prepaid, the prepayment date and the account of the
Borrower to be charged if such prepayment is to be so effected. Notice of such
prepayment having been given, the principal amount of the Loans specified in
such notice, together with interest thereon to the date of prepayment, shall
become due and payable on such prepayment date. If the Borrower pays or
prepays any Eurodollar Loan prior to the end of the Interest Period applicable
thereto, such payment shall be subject to Section 3.6.
4.4. PLACE OF PAYMENT OR PREPAYMENT. All payments and
prepayments made in accordance with the provisions of this Agreement or of the
Notes in respect of commitment fees or of principal or interest on the Notes
shall be made to the Agent for the account of the relevant Bank at its Domestic
Lending Office no later than 12:00 Noon (Houston time) in immediately available
funds. Unless the Agent shall have received notice from the Borrower prior to
the date on which any payment is due to the Banks hereunder that the Borrower
will not make any payment due hereunder 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
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39
assumption, cause to be distributed to each Bank on such due date an amount
equal to the amount then due to such Bank. If and to the extent such 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, for each day from the date such amount is distributed to
such Bank until the date such Bank repays such amount to the Agent, at the
Federal Funds Rate. If and to the extent that the Agent receives any payment
or prepayment from the Borrower and fails to distribute such payment or
prepayment to the Banks ratably on the basis of their respective Pro Rata
Percentage on the day the Agent receives such payment or prepayment, and such
distribution shall not be so made by the Agent in full on the required day, the
Agent shall pay to each Bank such Bank's Pro Rata Percentage thereof together
with interest thereon at the Federal Funds Rate for each day from the date such
amount is paid to the Agent by the Borrower until the date the Agent pays such
amount to such Bank. Notwithstanding the Agent's failure to so distribute any
such payment, as between the Borrower and the Banks, such payment shall be
deemed received and collected.
4.5. NO PREPAYMENT PREMIUM OR PENALTY. Each prepayment
pursuant to Section 4.1 or 4.2 shall be without premium or penalty.
4.6. TAXES.
(a) Subject to Section 13.11, any and all payments by the
Borrower hereunder or under any other Loan Document to or for the account of
any Bank or the Agent shall be made free and clear of and without deduction for
any and all present or future taxes, deductions, charges or withholdings, and
all liabilities with respect thereto, including, without limitation, such
taxes, deductions, charges, withholdings or liabilities whatsoever, excluding,
in the case of each Bank and Agent, taxes imposed on its net income (including
penalties and interest payable in respect thereof), and franchise taxes imposed
on it, by the jurisdiction under the laws of which such Bank or Agent (as the
case may be) is organized or any political subdivision thereof and, in the case
of each Bank, taxes imposed on its net income (including penalties and interest
payable in respect thereof), and franchise taxes imposed on it, by the
jurisdiction of such Bank's Applicable Lending Office or any political
subdivision thereof (all such non-excluded taxes, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes"). In the
case of a Bank that is a domestic corporation, within the meaning of Section
7701 of the Code, the taxes that are imposed by the United States of America
and that are identified in the preceding sentence are the taxes that are
imposed by Section 11, Section 55 and Section 59A of the Code, or by any
comparable provision of future law. Subject to Section 13.11 hereof, if the
Borrower shall be required by Law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note to any Bank or Agent (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 4.6) such Bank or Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (ii) the Borrower shall make such deductions, (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable Law and (iv) the Borrower shall confirm
that all applicable Taxes, if any, imposed on it by virtue of the transactions
under this Agreement have been properly and legally paid by it to the
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appropriate taxing authorities by sending official tax receipts or notarized
copies of such receipts to such Bank within thirty (30) days after payment of
any applicable tax.
(b) In addition, subject to Section 13.11 hereof, the
Borrower agrees to pay any present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies which arise from any
payment made hereunder or under the Notes or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or any other Loan
Document (hereinafter referred to as "Other Taxes").
(c) SUBJECT TO SECTION 13.11 HEREOF, THE BORROWER WILL
INDEMNIFY EACH BANK AND AGENT FOR THE FULL AMOUNT OF TAXES OR OTHER TAXES
(INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER TAXES IMPOSED BY ANY
JURISDICTION ON AMOUNTS PAYABLE UNDER THIS SECTION 4.6) PAID BY SUCH BANK OR
AGENT (ON THEIR BEHALF OR ON BEHALF OF ANY BANK) (AS THE CASE MAY BE) AND ANY
LIABILITY (INCLUDING PENALTIES, INTEREST AND EXPENSES) ARISING THEREFROM OR
WITH RESPECT THERETO, WHETHER OR NOT SUCH TAXES OR OTHER TAXES WERE CORRECTLY
OR LEGALLY ASSERTED. THIS INDEMNIFICATION SHALL BE MADE WITHIN THIRTY (30)
DAYS FROM THE DATE SUCH BANK OR AGENT (AS THE CASE MAY BE) MAKES WRITTEN DEMAND
THEREFOR.
(d) Each Bank organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution and
delivery of this Agreement in the case of each Bank listed on the signature
pages hereof and on or prior to the date on which it becomes a Bank in the case
of each other Bank, and from time to time thereafter if requested in writing by
the Borrower or the Agent (but only so long as such Bank remains lawfully able
to do so), shall provide the Borrower and the Agent with (1) Internal Revenue
Service Form 1001 or 4224, as appropriate, or any successor form prescribed by
the Internal Revenue Service, certifying that such Bank is entitled to benefits
under an income tax treaty to which the United States is a party which reduces
the rate of withholding tax on payments of interest or certifying that the
income receivable pursuant to this Agreement is effectively connected with the
conduct of a trade or business in the United States, (ii) Internal Revenue
Service Form W-8 or W-9, as appropriate, or any successor form prescribed by
the Internal Revenue Service, and (iii) any other form or certificate required
by any taxing authority (including any certificate required by Sections 871(h)
and 881(c) of the Internal Revenue Code), certifying that such Bank is entitled
to an exemption from or a reduced rate of tax on payments pursuant to this
Agreement or any of the other Loan Documents.
(e) For any period with respect to which a Bank has
failed to provide the Borrower and the Agent with the appropriate form pursuant
to Section 4.6(d) (unless such failure is due to a change in treaty, law, or
regulation occurring subsequent to the date on which a form originally was
required to be provided), such Bank shall not be entitled to indemnification
under Section 4.6 with respect to Taxes imposed by the United States; provided,
however, that should a Bank, which is otherwise exempt from or subject to a
reduced rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps as
such Bank shall reasonably request to assist such Bank to recover such Taxes.
(f) If the Borrower is required to pay additional amounts
to or for the account of any Bank pursuant to this Section 4.6, then such Bank
will agree to use reasonable efforts to
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change the jurisdiction of its Applicable Lending Office so as to eliminate or
reduce any such additional payment which may thereafter accrue if such change,
in the judgment of such Bank, is not otherwise disadvantageous to such Bank.
(g) Within thirty (30) days after the date of any payment
of Taxes, the Borrower shall furnish to the Agent the original or a certified
copy of a receipt evidencing such payment.
(h) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreement and obligations of the
Borrower contained in this Section 4.6 shall survive the payment in full of
principal and interest hereunder and under the Notes.
4.7. REDUCTION OR TERMINATION OF THE COMMITMENTS. The
Borrower may at any time or from time to time reduce or terminate the
Commitment of each Bank by giving not less than three (3) full Business Days'
prior written notice to such effect to the Agent; provided, that any partial
reduction shall be in an amount of not less than $5,000,000 or an integral
multiple of $5,000,000 in excess thereof. Promptly after the Agent's receipt
of such notice of reduction, the Agent shall notify each Bank of the proposed
reduction and such reduction shall be effective on the date specified in
Borrower's notice with respect to such reduction and shall reduce the
Commitment of each Bank proportionately in accordance with its Pro Rata
Percentage. After each such reduction, the commitment fee shall be calculated
upon the aggregate Commitments as so reduced. The Commitment of each Bank
shall automatically terminate on the Maturity Date or in the event of
acceleration of the maturity date of the Notes. Each reduction of the
Commitments hereunder shall be irrevocable.
4.8. PAYMENTS ON BUSINESS DAY. Whenever any payment or
prepayment hereunder or under any Note 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; provided, however, if such extension would
cause payment of interest on or principal of Eurodollar Loans to be made in the
next following calendar month, such payment shall be made on the next preceding
Business Day.
5. COMMITMENT FEE AND OTHER FEES.
5.1. COMMITMENT FEE. The Borrower agrees to pay to the
Agent for the account of each Bank a commitment fee computed on a daily basis
of a year of 360 days from the Closing Date to, but not including, the Maturity
Date, at the Applicable Margin per annum on the daily average amount of such
Bank's Unused Commitment, such commitment fee to be payable in arrears 61 days
after the end of each fiscal quarterly period, beginning with the quarterly
period ended August 2, 1997 and (b) the earlier of the Maturity Date or the
termination of the Commitments.
5.2. ARRANGEMENT FEE. The Borrower agrees to pay to
NationsBank Capital Markets, Inc. for its own account the fees set forth in
that certain fee letter of even date herewith between NationsBank Capital
Markets, Inc. and the Borrower.
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5.3 UPFRONT FEES. The Borrower agrees to pay to each
Bank (other than NationsBank) for its own account the fees set forth in those
certain fee letters of even date herewith between each such Bank and the
Borrower.
5.4 ADMINISTRATIVE AGENCY FEE. The Borrower agrees to
pay to the Agent for its own account the fees set forth in that certain fee
letter of even date herewith between the Borrower and the Agent.
5.5. LETTER OF CREDIT FEES. (a) The Borrower agrees to
pay the Agent for distribution to the Banks (based upon their respective Pro
Rata Percentage) a fee in respect of each Letter of Credit issued for the
account of such Borrower (the "Letter of Credit Fee"), equal to the greater of
(i) amount to be computed at a rate per annum equal to the Applicable Margin on
the Stated Amount of such Letter of Credit and (ii) $250.00.
(b) The Borrower agrees to pay to the Issuing Bank for
its own account a fronting fee for each Letter of Credit issued hereunder,
equal to an amount to be computed at a rate per annum equal to .10% on the
Stated Amount of such Letter of Credit.
(c) Fees due to the Agent and the Issuing Bank pursuant
to this Section 5.4 shall be computed on the basis of a year of 360 days and
shall be due and payable in arrears 61 days after the end of each fiscal
quarterly period, the first such payment to be made on the first such payment
date for which such Letter of Credit is outstanding hereunder for which no such
fees shall heretofore have been paid, and on the date such Letter of Credit
expires.
5.6. FEES NOT INTEREST; NONPAYMENT. The fees described in
this Agreement represent compensation for services rendered and to be rendered
separate and apart from the lending of money or the provision of credit and do
not constitute compensation for the use, detention, or forbearance of money,
and, subject to Section 13.11, the obligation of the Borrower to pay each fee
described herein shall be in addition to, and not in lieu of, the obligation of
the Borrower to pay interest, other fees described in this Agreement, and
expenses otherwise described in this Agreement. Fees shall be payable when due
in Dollars and in immediately available funds. Subject to Section 13.11
hereof, all fees, including, without limitation, the commitment fee referred to
in Section 5.1, shall be non-refundable, and shall, to the fullest extent
permitted by Law, bear interest, if not paid when due, at a rate per annum
equal to the lesser of (a) 2% above the Base Rate or (b) the Highest Lawful
Rate.
6. APPLICATION OF PROCEEDS. The Borrower agrees that the
proceeds of the Loans shall be used for (i) repayment in full of the Existing
Credit Agreement, (ii) Acquisitions permitted under Section 10.13, and (iii)
general corporate purposes and working capital needs.
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7. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants that:
7.1. ORGANIZATION AND QUALIFICATION. The Borrower and
each Restricted Subsidiary (a) is duly organized, validly existing, and in good
standing under the laws of its jurisdiction of organization; (b) has the power
and authority to own its properties and to carry on its business as now
conducted; and (c) is duly qualified to do business and is in good standing in
every jurisdiction where such qualification is necessary and where failure to
be so qualified would have a Material Adverse Effect.
7.2. FINANCIAL STATEMENTS. The Borrower has furnished the
Banks with its certified consolidated audited financial statements for the
Fiscal Year 1996, including balance sheets, income and cash flow statements.
The statements described above have been prepared in conformity with GAAP. The
statements described above fully and fairly reflect the consolidated financial
condition of the Borrower and its Subsidiaries and the results of their
operations as at the dates and for the periods indicated. As of the Closing
Date, there has been no event since February 1, 1997 which could reasonably be
expected to have a Material Adverse Effect. As of the Closing Date, there
exists no material contingent liabilities or obligations of the Borrower or any
of its Subsidiaries which are not fully disclosed in such financial statements
or disclosed by the Borrower to the Agent in writing.
7.3. LITIGATION. There is no action or proceeding pending
(or, to the best knowledge of the Borrower, threatened) against the Borrower or
any Subsidiary thereof before any court, administrative agency or arbitrator
which could reasonably be expected to have a Material Adverse Effect.
7.4. DEFAULT. Neither the Borrower nor any Subsidiary
thereof is in default under or in violation of (i) the provisions of any
instrument evidencing any Debt or of any agreement relating thereto; or (ii)
any judgment, order, writ, injunction or decree of any court or any order,
regulation or demand of any Governmental Authority, which default or violation
could reasonably be expected to have a Material Adverse Effect. There is in
effect no waiver or waivers with respect to any loan agreement, indenture,
mortgage, security agreement, lease or other agreement or obligation to which
the Borrower or any Restricted Subsidiary thereof is a party which is limited
as to duration or is subject to the fulfillment of any condition which if not
in effect could reasonably be expected to have a Material Adverse Effect.
7.5. TITLE TO PROPERTIES. The Borrower and each
Restricted Subsidiary have good and indefeasible title to its respective
material real Properties, and good and marketable title to its respective
material personal Property, in each case, purported to be owned by it, free of
any Liens except those permitted in Section 10.1. All Leases necessary for the
conduct of the business of the Borrower and each Restricted Subsidiary are
valid and subsisting and are in full force and effect.
7.6. PAYMENT OF TAXES. The Borrower and each Subsidiary
thereof has filed or caused to be filed all federal, state and foreign income
tax returns which are required to be filed, and has paid or caused to be paid
all taxes as shown on such returns or on any assessment
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44
received by it to the extent that such taxes have become due, except for such
taxes and assessments as are being contested in good faith in appropriate
proceedings and reserved for in accordance with GAAP in the manner required by
Section 9.10.
7.7. CONFLICTING OR ADVERSE AGREEMENTS OR RESTRICTIONS.
Neither Borrower nor any Subsidiary thereof is a party to any contract or
agreement or subject to any restriction which could reasonably be expected to
have a Material Adverse Effect. Neither the execution and delivery of the Loan
Documents nor the consummation of the transactions contemplated thereby nor
fulfillment of and compliance with the respective terms, conditions and
provisions thereof will conflict with or result in a breach of any of the
terms, conditions or provisions of, or constitute a default under, or result in
any violation of, or result in the creation or imposition of any Lien on any of
the Property of the Borrower or any Subsidiary thereof pursuant to, (a) the
charter or bylaws of the Borrower or any Subsidiary thereof; (b) any Law or any
regulation of any Governmental Authority; (c) any order, writ, injunction or
decree of any court; or (d) the terms, conditions or provisions of any contract
or agreement to which the Borrower or any Subsidiary thereof is a party or by
which it is bound or to which it is subject.
7.8. AUTHORIZATION, VALIDITY, ETC. The Borrower and each
Subsidiary thereof has the power and authority to make, execute, deliver and
carry out the Loan Documents to which it is a party and the transactions
contemplated therein and to perform its obligations thereunder and all such
action has been duly authorized by all necessary proceedings on its part. The
Loan Documents to which it is a party have been duly and validly executed and
delivered by the Borrower and each Subsidiary thereof and constitute valid and
legally binding agreements of the Borrower and each Subsidiary thereof
enforceable in accordance with their respective terms, except as limited by
Debtor Laws.
7.9. INVESTMENT COMPANY ACT NOT APPLICABLE. Neither
Borrower nor any Subsidiary 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.
7.10. PUBLIC UTILITY HOLDING COMPANY ACT NOT APPLICABLE.
Neither Borrower nor any Subsidiary thereof is a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company", or an affiliate of a "subsidiary company" of a "holding company", or
a "public utility", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
7.11. MARGIN STOCK. Neither the Borrower nor any
Subsidiary thereof is engaged in the business of extending credit for the
purpose of purchasing or carrying Margin Stock, and no proceeds of any Loan
will be used (a) to purchase or carry any Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock; (b) to
reduce or retire any Debt which was originally incurred to purchase or carry
any such Margin Stock; (c) for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of Regulation G, T, U or X;
or (d) to acquire any security of any Person who is subject to Sections 13 and
14 of the Securities Exchange Act. After applying the proceeds of each Loan,
not more than twenty-five percent (25%) of the value (as determined by any
reasonable method) of the Borrower's assets is represented by Margin Stock.
Neither the
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Borrower nor any Subsidiary thereof, nor any Person acting on behalf of the
Borrower or any Subsidiary, has taken or will take any action which might cause
any Loan Document to violate Regulation G, T, U or X or any other regulation of
the Board of Governors of the Federal Reserve System.
7.12. ERISA. Neither the Borrower nor any ERISA Affiliate
has ever established, maintained, contributed to or been obligated to
contribute to, and neither the Borrower and each ERISA Affiliate nor any ERISA
Affiliate has any liability or obligation with respect to any PBGC Plan,
Multiemployer Plan or Multiple Employer Plan. Neither the Borrower nor any
ERISA Affiliate has any present intention to establish a PBGC Plan, a
Multiemployer Plan or a Multiple Employer Plan. Neither the Borrower nor any
ERISA Affiliate has ever established, maintained, contributed to or been
obligated to contribute to any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) which provides benefits to retired employees (other than
as required by Section 601 of ERISA). The Borrower and each ERISA Affiliate is
in compliance in all material respects with all applicable provisions of ERISA
and the Code with respect to each Plan, including the fiduciary provisions
thereof, and each Plan is, and has been, maintained in compliance in all
material respects with ERISA and, where applicable, the Code. Full payment
when due has (and, on the Closing Date will have) been made of all amounts
which the Borrower and each ERISA Affiliate is required under the terms of each
Plan or applicable law to have paid as contributions to such Plan as of the
date hereof.
7.13. FULL DISCLOSURE. All information heretofore or
contemporaneously furnished by or on behalf of the Borrower or any Subsidiary
thereof in writing to the Agent or any Bank for purposes of or in connection
with this Agreement or any transaction contemplated hereby is, and all other
such information hereafter furnished by or on behalf of the Borrower or any
Subsidiary thereof in writing to the Agent or any Bank will be, (a) true and
accurate in all material respects on the date as of which such information is
dated or certified and (b) taken as a whole with all such written information
provided to the Agent or any Bank, not incomplete by omitting to state any
material fact necessary to make such information not misleading in light of the
circumstances under which such information was provided. There is no fact
known to the Borrower or any Subsidiary which is reasonably likely to have a
Material Adverse Effect, which has not been disclosed herein or in such other
written documents, information or certificates furnished to the Agent and the
Banks for use in connection with the transactions contemplated hereby.
7.14. ENVIRONMENTAL MATTERS. (a) Neither the Borrower
nor any Subsidiary thereof (i) has received any summons, citation, directive,
letter, notice or other form of communication, or otherwise learned of any
claim, demand, action, event, condition, report or investigation indicating or
concerning any potential or actual liability which would individually, or in
the aggregate, have a Material Adverse Effect arising in connection with (A)
any noncompliance with, or violation of, the requirements of any Environmental
Protection Statute; (B) the release, or threatened release, of any Hazardous
Materials into the environment; or (C) the existence of any Environmental Lien
on any Property of the Borrower or any Subsidiary; or (ii) has any actual or,
to its knowledge, threatened liability to any Person under any
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46
Environmental Protection Statute which would, individually or in the aggregate,
have a Material Adverse Effect.
(b) The Borrower and each Subsidiary thereof has obtained
all consents, licenses or permits which are required under all Environmental
Protection Statutes (including, without limitation, laws relating to emissions,
discharges, releases or threatened releases of Hazardous Materials into the
environment (including, without limitation, air, surface water, ground water or
land) or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials),
except to the extent that failure to have or obtain any such consent, license
or permit does not have a Material Adverse Effect. The Borrower and each
Subsidiary thereof is in compliance with all terms and conditions of the
consents, licenses or permits required to be obtained by it, and is also in
compliance with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables contained in
those laws or contained in any regulation, code, plan, order, injunction,
notice or demand letter issued, entered, promulgated or approved thereunder,
except to the extent that failure to comply does not have a Material Adverse
Effect.
7.15. PERMITS AND LICENSES. All material permits, licenses
and other Governmental Approvals necessary for the Borrower and its Restricted
Subsidiaries to carry on their respective businesses have been obtained and are
in full force and effect and neither the Borrower nor any Subsidiary is in
material breach of the foregoing. The Borrower and each Restricted Subsidiary
thereof own, or possess adequate licenses or other valid rights to use, United
States trademarks, trade names, service marks, copyrights, patents and
applications therefore which are material to the conduct of the business,
operations or financial condition of the Borrower or such Restricted
Subsidiary.
7.16. SOLVENCY. As of the Closing Date, upon giving effect
to the issuance of the Notes and the execution of the Loan Documents by the
Borrower and each Subsidiary which is a party thereto, the following are true
and correct:
(a) The fair saleable value of the assets of the Borrower
and each Subsidiary exceeds the amount that will be required to be
paid on, or in respect of, the existing debts and other liabilities
(including, without limitation, pending or overtly threatened
litigation in amounts in excess of effective insurance coverage and
all other contingent liabilities) of the Borrower and each Subsidiary
as they mature;
(b) The assets of the Borrower and each Subsidiary do not
constitute unreasonably small capital for it to carry out its business
as now conducted and as proposed to be conducted including its capital
needs, taking into account the particular capital requirements of the
business conducted by it, and projected capital requirements and
capital availability thereof; and
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(c) Neither the Borrower, nor any Subsidiary, intends to
incur debts beyond its ability to pay such debts as they mature
(taking into account the timing and amounts of cash to be received by
the Borrower and such Subsidiary, as the case may be, and of amounts
to be payable on or in respect of debt of the Borrower and such
Subsidiary, as the case may be).
7.17. CAPITAL STRUCTURE. As of the Closing Date, the
Borrower owns the percentage of all classes of stock of each Subsidiary and the
stock ownership of each such Subsidiary and the stock ownership of Borrower as
of the date hereof is as set forth on Schedule 7.17 attached hereto. Except
for the Subsidiaries described on Schedule 7.17 or as otherwise notified to the
Agent in writing pursuant to Section 9.1(k), the Borrower has no other
Subsidiaries. As of the Closing Date, Borrower has no partnership or joint
venture interests in any other Person except as set forth in Schedule 7.17.
All of the issued and outstanding shares of capital stock of the Borrower and
each Subsidiary are fully paid and nonassessable.
7.18. INSURANCE. The Borrower and each Subsidiary maintain
insurance of such types as is usually carried by corporations of established
reputation engaged in the same or similar business and which are similarly
situated ("Similar Businesses") with financially sound and reputable insurance
companies and associations (or as to workers' compensation or similar
insurance, in an insurance fund or by self-insurance authorized by the
jurisdiction in which its operations are carried on), and in such amounts as
such insurance is usually carried by Similar Businesses.
7.19. COMPLIANCE WITH LAWS. The business and operations of
the Borrower and each Restricted Subsidiary as conducted at all times have been
and are in compliance in all material respects with all applicable Laws.
7.20. NO CONSENT. No authorization or approval or other
action by, and no notice to or filing with, any Person or any Governmental
Authority is required for the due execution, delivery and performance by the
Borrower or any Subsidiary thereof of this Agreement or any other Loan Document
to which it is a party, the borrowings hereunder or issuance of Letters of
Credit, in each case as contemplated herein, or the effectuation of the
transactions contemplated under any Loan Document to which it is a party.
7.21. SUBORDINATED DEBT. The Obligations constitute
"Senior Indebtedness" and "Designated Senior Indebtedness" as such terms are
defined in the Subordinated Indenture.
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8. CONDITIONS.
8.1. CONDITIONS TO EFFECTIVENESS OF AGREEMENT. The
effectiveness of Agreement is subject to the following conditions:
(a) Approvals. The Borrower shall have obtained all
orders, approvals or consents of all Persons required for the
execution, delivery and performance by the Borrower and each
Subsidiary of each Loan Document to which it is a party.
(b) Compliance with Law. The business and operations of
the Borrower and each Subsidiary as conducted at all times relevant to
the transactions contemplated by this Agreement to and including the
close of business on the Closing Date shall have been and shall be in
compliance (other than any failure to be in compliance that does not
result in a Material Adverse Effect) with all applicable Laws. No Law
shall prohibit the transactions contemplated by the Loan Documents.
No order, judgment or decree of any Governmental Authority, and no
action, suit, investigation or proceeding pending or threatened in any
court or before any arbitrator or Governmental Authority that purports
to affect the Borrower or any Subsidiary, shall exist that could
reasonably be expected to have a Material Adverse Effect.
(c) Officer's Certificate. On the Closing Date, the
Agent shall have received a certificate dated the Closing Date of a
Responsible Officer of the Borrower (with a copy thereof for each
Bank) certifying that (i) except as disclosed by the Borrower to the
Agent in writing, there has not occurred a material adverse change in
the business, assets, operations, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries or in the facts and
information regarding such Persons as represented in the Borrower's
most recent quarterly financial statements dated February 1, 1997,
(ii) the Borrower and its Subsidiaries are in compliance with all
existing financial obligations, and (iii) no Default or Event of
Default shall have occurred and be continuing.
(d) Insurance. On the Closing Date, the Agent shall have
received all such information as the Agent shall reasonably request
concerning the insurance maintained by the Borrower and each
Subsidiary.
(e) Payment of Fees and Expenses. Payment of (i) all
fees due and owing and described in Section 5 hereof and (ii) the
reasonable expenses of, or incurred by, the Agent and counsel, to the
extent billed as of the Closing Date, to and including the Closing
Date in connection with the negotiation and closing of the
transactions contemplated herein.
(f) Fee Letters. The Borrower shall have executed and
delivered the fee letters described in Sections 5.2 and 5.3.
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(g) Required Documents and Certificates. On the Closing
Date, the Banks shall have received the following, in each case in
form, scope and substance satisfactory to the Banks:
(i) this Agreement;
(ii) the Notes;
(iii) the Guaranty of each Restricted Subsidiary
existing as of the Closing Date;
(iv) an Officer's Certificate from the Borrower
and each Subsidiary dated as of the Closing Date certifying,
inter alia, (A) Articles of Incorporation or Bylaws (or
equivalent corporate documents), as amended and in effect of
such Person; (B) resolutions duly adopted by the Board of
Directors of such Person authorizing the transactions
contemplated by the Loan Documents to which it is a party and
(C) the incumbency and specimen signatures of the officers of
such Person executing documents on its behalf;
(v) a certificate from the appropriate public
official of each jurisdiction in which the Borrower and each
Subsidiary is organized as to the continued existence and good
standing of such Person;
(vi) a certificate from the appropriate public
official of each jurisdiction in which the Borrower and each
Subsidiary is authorized and qualified to do business as to
the due qualification and good standing of such Person, where
failure to be so qualified or certified is reasonably likely
to have a Material Adverse Effect;
(vii) a legal opinion in form, substance and scope
satisfactory to the Agent from counsel for, and issued upon
the express instructions of, the Borrower;
(viii) certified copies of Requests for Information
of Copies (Form UCC-11), or equivalent reports, for the States
of Texas and California listing all effective financing
statements which name the Borrower and each Subsidiary (under
its present name, any trade names and any previous names) as
debtor and which are filed, together with copies of all such
financing statements;
(ix) repayment in full of the Existing Credit
Agreement and the termination thereof;
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(x) any other documents reasonably requested by
the Agent prior to the Closing Date.
In addition, as of the Closing Date, all legal matters
incident to the transactions herein contemplated shall be satisfactory to
counsel for the Agent and the Banks.
8.2. CONDITIONS TO EACH LOAN AND LETTER OF CREDIT. The
obligation of the Banks to make, continue and convert each Loan and of the
Issuing Bank to issue, renew and extend any Letter of Credit is subject to the
following conditions:
(a) Representations True and No Defaults. (i) The
representations and warranties of the Borrower and each Subsidiary
contained in the Loan Documents (other than those representations and
warranties limited by their terms to a specific date) shall be true
and correct on and as of the particular Borrowing Date or the
applicable Conversion/ Continuation Date or on the date of issuance,
renewal or extension of any Letter of Credit, as the case may be, as
though made on and as of such date; (ii) except as disclosed by the
Borrower to the Agent in writing, no event has occurred since the date
of the most recent financial statements delivered pursuant to Section
9.1(a) (or in the case of a borrowing prior to the delivery of such
statements, February 1, 1997), that has caused a Material Adverse
Effect; and (iii) no Event of Default or Default shall have occurred
and be continuing.
(b) Borrowing Documents. On each Borrowing Date, the
Agent shall have received a Notice of Borrowing in respect of the
Loans delivered in accordance with Section 2.2.
(c) Conversion/Continuation Documents. On each
Conversion/Continuation Date, the Agent shall have received a Notice
of Rate Change/Continuation.
(d) Letter of Credit Documents. On the date of the
issuance, renewal or extension of any Letter of Credit, the Agent
shall have received a Letter of Credit Request, delivered in
accordance with Section 2.5.
9. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees
that, so long as any Note shall remain unpaid, any Letter of Credit shall
remain outstanding, or any Bank shall have any Commitment hereunder, the
Borrower will:
9.1. REPORTING AND NOTICE REQUIREMENTS. Furnish to the
Agent (with a copy for each Bank) for delivery to the Banks:
(a) Quarterly Financial Statements. As soon as available
and in any event within sixty (60) days after the end of each fiscal
quarter of the Borrower (excluding the fourth quarter), consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of
such quarter and consolidated statements of earnings, shareholders'
equity and
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51
cash flow of the Borrower and its Subsidiaries for the period
commencing at the end of the previous Fiscal Year of the Borrower and
ending with the end of such fiscal quarter, setting forth in each case
in comparative form corresponding consolidated figures for the
corresponding period in the immediately preceding Fiscal Year of the
Borrower, all in reasonable detail and certified by a Responsible
Officer as presenting fairly the consolidated financial position of
the Borrower and its Subsidiaries as of the date indicated and the
results of their operations for the period indicated in conformity
with GAAP, consistently applied, subject to changes resulting from
year-end adjustments.
(b) Annual Financial Statements. As soon as available
and in any event within one hundred and five (105) days after the end
of each Fiscal Year of the Borrower, audited consolidated statements
of earnings, shareholders' equity and cash flow of the Borrower and
its Subsidiaries for such Fiscal Year, and audited consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of
such Fiscal Year, setting forth in each case in comparative form
corresponding consolidated figures for the immediately preceding year,
all in reasonable detail and satisfactory in form, substance, and
scope to the Agent, together with the unqualified opinion of
independent certified public accountants of recognized national
standing selected by the Borrower, stating that such financial
statements fairly present the consolidated financial position of the
Borrower and its Subsidiaries as of the date indicated and the
consolidated results of their operations and cash flow for the period
indicated in conformity with GAAP, consistently applied (except for
such inconsistencies which may be disclosed in such report), and that
the audit by such accountants in connection with such consolidated
financial statements has been made in accordance with generally
accepted auditing standards.
(c) Consolidated Statements. In the event that the
Borrower or any of its Restricted Subsidiaries have made an Investment
in an Unrestricted Subsidiary and such Investment continues to be
outstanding, consolidated financial statements (balance sheets,
statements of earnings, shareholders' equity and cash flow) of the
Borrower and Restricted Subsidiaries. The consolidated financial
statements referred to in this Section 9.1(c) will be provided within
the time frame specified in Section 9.1(a) or 9.1(b), as appropriate,
but will not be subject to audit and will not include customary
footnotes.
(d) Compliance Certificate. Together with the delivery
of any information required by Subsection (a) and Subsection (b) of
this Section 9.1, a certificate in the form of Exhibit E hereto signed
by a Responsible Officer, (i) stating that there exists no Event of
Default or Default, or if any Event of Default or Default exists,
specifying the nature thereof, the period of existence thereof, and
what action the Borrower proposes to take with respect thereto; and
(ii) setting forth such schedules, computations and other information
as may be required to demonstrate that the Borrower is in compliance
with its covenants in Sections 10.13 and 10.14 hereof.
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52
(e) Notice of Default. Promptly after any Responsible
Officer or the Corporate Controller of the Borrower knows or has
reason to know that (i) any Default or Event of Default has occurred,
or (ii) any default or event of default has occurred under the
Subordinated Indenture, or if any Subordinated Noteholders or any
agent or representative thereof have given notice or taken any other
action with respect to a claimed default or event of default
thereunder, a written statement of a Responsible Officer of the
Borrower setting forth the details of such event and the action which
the Borrower has taken or proposes to take with respect thereto.
(f) Notice of Litigation. Promptly after any Responsible
Officer or the Corporate Controller of the Borrower or of any
Subsidiary obtaining knowledge of the commencement thereof, notice of
any litigation, legal, administrative or arbitral proceeding,
investigation or other action of any nature which involves the
reasonable possibility of any judgment or liability which could have a
Material Adverse Effect and which notice does not require a waiver of
the attorney-client privilege in respect of such litigation,
proceeding or investigation, and upon request by the Agent or any
Bank, details regarding such litigation which are satisfactory to the
Agent or such Bank.
(g) Securities Filings. Promptly after the sending or
filing thereof and in any event within fifteen (15) days thereof,
copies of all reports which the Borrower sends to any of its
securityholders, and copies of all reports (including each regular and
periodic report (excluding registration statements on Form S- 8)) and
each registration statement or prospectus, which the Borrower or any
Subsidiary files with the Securities and Exchange Commission or any
national securities exchange.
(h) ERISA Notices, Information and Compliance. The
Borrower will, and will cause each of its ERISA Affiliates to deliver
to the Agent, as soon as possible and in any event within ten (10)
days after the Borrower or any of its ERISA Affiliates knows of the
occurrence of any of the following, a certificate of the chief
financial officer of the Borrower (or, if applicable, of the ERISA
Affiliate) setting forth the details as to such occurrence and the
action, if any, which the Borrower or ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be
given or filed with or by the Borrower, an ERISA Affiliate, the PBGC
or plan administrator with respect thereto:
(i) the establishment or adoption of any PBGC
Plan, Multiemployer Plan or Multiple Employer Plan by the
Borrower or any ERISA Affiliate on or after the Effective Date
(a "Future Plan");
(ii) the occurrence of an ERISA Event with respect
to any Future Plan;
(iii) the existence of an accumulated funding
deficiency (within the meaning of Section 302 of ERISA) with
respect to any Future Plan as determined as of the end of each
Fiscal Year of the Future Plan;
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53
(iv) the making of an application to the Secretary
of the Treasury for a waiver or modification of the minimum
funding standard (including any required installment payments)
or extension of any amortization period under Section 412 of
the Code with respect to any Future Plan;
(v) the institution of a proceeding pursuant to
Section 515 of ERISA to collect delinquent contributions from
the Borrower or an ERISA Affiliate with respect to a Future
Plan;
(vi) the occurrence of any "prohibited
transaction" as described in Section 406 of ERISA or in
Section 4975 of the Code, in connection with any Plan or any
trust created thereunder; or
(vii) the failure to pay when due all amounts that
the Borrower or any ERISA Affiliate is required under the
terms of each Plan or applicable law to have paid as a
contribution to such Plan.
Upon written request of the Agent, the Borrower will and will
cause its ERISA Affiliates to obtain and deliver to the Agent, as soon
as possible and in any event within ten (10) days from receipt of the
request, a complete copy of the most recent annual report (Form 5500)
of each Plan required to be filed with the Internal Revenue Service
and copies of any other reports or notices which the Borrower or an
ERISA Affiliate files with the Internal Revenue Service, PBGC or the
United States Department of Labor or which the Borrower or an ERISA
Affiliate receives from such Governmental Authority.
(i) Financial Forecast. On or before the ninetieth
(90th) day following the last day of each Fiscal Year of the Borrower,
the projected consolidated balance sheets, statements of earnings and
cash flow of the Borrower and its Subsidiaries for such current year.
(j) Notice of New Subsidiaries. Within ten (10) days
after the formation or acquisition of any Subsidiary of the Borrower,
a certificate of a Responsible Officer notifying the Agent of such
event.
(k) Notice of Material Adverse Effect. Promptly after
any Responsible Officer or the Corporate Controller of the Borrower
knows or has reason to know of the occurrence of any action or event
which may cause a Material Adverse Effect, a written statement of the
Responsible Officer of the Borrower setting forth the details of such
action or event and the action which the Borrower has taken or
proposes to take with respect thereto.
(l) Eurodollar Rate Margin Certificate. Within
fifty-five (55) days after the end of each fiscal quarter of the
Borrower (commencing with the fiscal quarter ending May 3, 1997), a
certificate in the form of Exhibit F hereto signed by a Responsible
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54
Officer, (i) setting forth the ratio of Adjusted Debt to EBITDA plus
Base Rent Expense for the four immediately preceding fiscal quarterly
periods and the resultant Applicable Margin determined as of the end
of the relevant fiscal quarter for the four fiscal quarters ending on
such date and (ii) setting forth such computations and other financial
information as may be required to determine such ratio of Adjusted
Debt to EBITDA plus Base Rent Expense.
(m) Other Information. Such other information respecting
the condition or operations, financial or otherwise, of the Borrower
or any of its Subsidiaries as any Bank through the Agent may from time
to time reasonably request.
9.2. CORPORATE EXISTENCE. Except as otherwise permitted
by Section 10.4, remain, and cause each Restricted Subsidiary to remain, (i) a
corporation duly organized, validly existing, and in good standing under the
laws of its jurisdiction of organization, with the power to own its properties
and to carry on its business; and (ii) duly qualified to do business and in
good standing in every jurisdiction where such qualification is necessary and
where failure to be so qualified would have a Material Adverse Effect.
9.3. BOOKS AND RECORDS. Maintain, and cause each
Subsidiary to maintain, complete and accurate books of record and account in
accordance with sound accounting practices in which true, full and correct
entries will be made of all its dealings and business affairs.
9.4. INSURANCE. Maintain insurance of such types as
Similar Businesses with financially sound and reputable insurance companies and
associations (or as to workers' compensation or similar insurance, in an
insurance fund or by self-insurance authorized by the jurisdiction in which its
operations are carried on), including without limitation public liability
insurance, casualty insurance against loss or damage to its Properties, assets
and businesses now owned or hereafter acquired, and business interruption
insurance, and in such amounts as such insurance is usually carried by Similar
Businesses.
9.5. RIGHT OF INSPECTION. From time to time during
regular business hours upon reasonable notice to the Borrower and at no cost to
the Borrower (unless a Default or Event of Default shall have occurred and be
continuing at such time) permit, and cause each Subsidiary to permit, any
officer, or employee of, or agent designated by, the Agent or any Bank to visit
and inspect any of the Properties of the Borrower or any Subsidiary, examine
the Borrower's or such Subsidiary's corporate books or financial records, take
copies and extracts therefrom and discuss the affairs, finances and accounts of
the Borrower or any Subsidiary with the Borrower's or such Subsidiary's
officers or certified public accountants (subject to the agreement of such
accountants), all as often as the Agent or any Bank may reasonably desire. At
the request of the Agent, the Borrower will use its best efforts to assure that
its certified public accountants agree to meet with the Banks to discuss such
matters related to the affairs, finances and accounts of the Borrower or any
Subsidiary as they may request; provided that a
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55
representative of the Borrower shall be present during any such discussions
with such certified public accountants.
9.6. MAINTENANCE OF PROPERTY. At all times maintain,
preserve, protect and keep, and cause each Restricted Subsidiary to at all
times maintain, preserve, protect and keep, or cause to be maintained,
preserved, protected and kept, its Property in good repair, working order and
condition (ordinary wear and tear excepted) and, from time to time, will make,
or cause to be made, all repairs, renewals, replacements, extensions,
additions, betterments and improvements to its Property as are appropriate, so
that each of (a) (i) the Borrower and (ii) the Borrower and its Restricted
Subsidiaries, taken as a whole, maintain their current line of business, and
(b) the business carried on in connection therewith may be conducted properly
and efficiently at all times.
9.7. GUARANTEES OF RESTRICTED SUBSIDIARIES. Immediately
upon the designation, formation or acquisition of any Restricted Subsidiary,
cause such Restricted Subsidiary to provide to the Agent for the benefit of the
Banks a guaranty of the obligations of the Borrower under this Agreement which
shall be in the form attached hereto as Exhibit G (each, a "Guaranty"),
together with written evidence satisfactory to Agent and its counsel that such
Restricted Subsidiary has taken all corporate and other action and obtained all
consents necessary to duly approve and authorize its execution, delivery and
performance of the Guaranty, any other documents which it is required to
execute, and an opinion of counsel to such Restricted Subsidiary in form, scope
and substance acceptable to the Agent; provided, however, if such Restricted
Subsidiary is a partnership of which the Borrower or any Subsidiary is a
general partner, such Restricted Subsidiary shall not be required to execute
and deliver a Guaranty (any such Restricted Subsidiary herein referred to as a
"Non-Guaranteeing Restricted Subsidiary"). The Borrower shall notify the Agent
in writing of any such Restricted Subsidiary which it so designates. The
Borrower shall not be permitted to designate any Restricted Subsidiary which
has executed a Guaranty as a Non-Guaranteeing Restricted Subsidiary. As of the
Closing Date, the only Non-Guaranteeing Restricted Subsidiary is BGA-VPL Joint
Venture. It is agreed and understood that the agreement of the Borrower under
this Section 9.7 to cause any such Restricted Subsidiary to provide to the
Agent for the benefit of the Banks a Guaranty is a condition precedent to the
making of the Advances pursuant to this Agreement and that the entry into this
Agreement by the Banks constitutes good and adequate consideration for the
provision of such Guaranty.
9.8. ACCOUNTING PRINCIPLES. If any changes in accounting
principles from those used in the preparation of the financial statements
referenced in Section 9.1 are adopted by the Borrower and such changes result
in a change in the method of calculation or the interpretation of any of the
financial covenants, standards or terms found in Section 9.1, Section 10.13,
Section 10.14 or any other provision of this Agreement, deliver to the Agent a
reconciliation prepared by a Responsible Officer showing the effect of such
changes hereunder; provided that the Borrower and the Banks agree to amend any
such affected terms and provisions so as to reflect such changes with the
result that the criteria for evaluating Borrower's or such
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56
Subsidiaries' financial condition shall be the same after such changes as if
such changes had not been made.
9.9. PATENTS, TRADEMARKS AND LICENSES. Maintain, and
cause each Restricted Subsidiary to maintain, all assets, licenses, patents,
copyrights, trademarks, service marks, trade names, permits and other
Governmental Approvals necessary to conduct its business except where the
failure to so maintain is not reasonably likely to have a Material Adverse
Effect.
9.10. TAXES; OBLIGATIONS. Pay and discharge, and cause
each Subsidiary to pay and discharge, before they become delinquent, all taxes,
assessments, and governmental charges or levies imposed upon the Borrower, any
Subsidiary or upon the income or any Property of the Borrower or any Subsidiary
as well as all material claims and obligations of any kind (including, without
limitation, claims for labor, materials, supplies, and rent) which, if unpaid,
might become a Lien upon any Property of the Borrower or any Restricted
Subsidiary; provided, however, that neither the Borrower nor any Subsidiary
shall be required to pay any such tax, assessment, charge, levy or claim if the
amount, applicability or validity thereof shall currently be contested in good
faith by appropriate proceedings diligently conducted by or on behalf of the
Borrower or any such Subsidiary and, if required under GAAP, the Borrower or
any such Subsidiary shall have established adequate reserves therefor.
10. NEGATIVE COVENANTS. So long as any Note shall remain unpaid,
any Letter of Credit shall remain outstanding, or any Bank shall have any
Commitment hereunder:
10.1. LIENS. The Borrower shall not, and shall not permit
any Restricted Subsidiary to, create, assume or permit to exist any Lien
(including the charge upon assets purchased under a conditional sales
agreement, purchase money mortgage, security agreement or other title retention
agreement) upon any of its Properties, whether now owned or hereafter acquired,
or assign or otherwise convey any right to receive income, other than:
(a) Permitted Liens;
(b) Liens existing on the Closing Date and described on
Schedule 10.1 attached hereto and made a part hereof and Liens
extending the duration of any such existing Lien; provided that the
principal amount secured by such Lien is not increased and the
extended Lien does not cover any Property of the Borrower or any
Restricted Subsidiary which is not covered by the existing Lien
extended thereby; and
(c) Liens securing the Debt permitted by Section 10.2(b)
hereof and placed on Property of the Borrower or any Restricted
Subsidiary contemporaneously with the purchase thereof to secure a
portion of the purchase price therefor; provided that (i) such Lien
shall not extend to any other Property of the Borrower or any
Restricted Subsidiary and (ii) such Lien is not in favor of an
Affiliate.
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57
10.2. DEBT. The Borrower will not create or suffer to
exist, and will not permit any Restricted Subsidiary to create, incur, assume
or suffer to exist, any Debt except as set forth below, all of which shall be
"Permitted Debt":
(a) Debt of the Borrower and the Guarantors to the Banks,
the Agent and the Issuing Bank evidenced by any Loan Document;
(b) in addition to Debt otherwise permitted to be
incurred by the Borrower or any Restricted Subsidiary, as the case may
be, by this Section 10.2, secured or unsecured Debt of the Borrower or
any Restricted Subsidiary to Persons other than the Borrower or any
Subsidiary; provided that at no time shall the aggregate amount of all
such Debt of the Borrower and the Restricted Subsidiaries permitted by
this Section 10.2(b) exceed 7 1/2% of Consolidated Net Worth, of which
secured Debt may constitute no more than 3% of Consolidated Net Worth;
(c) Debt of the Borrower or any Restricted Subsidiary
existing on the date hereof and described on Schedule 10.2 attached
hereto and made a part hereof; provided that such Debt is not
increased or assigned; and furtherprovided that such Debt is not
renewed, extended or permitted to remain outstanding after the stated
maturity thereof at any time when a default under the documents
creating such Debt exists or during the existence of a Default or
Event of Default;
(d) unsecured Debt of the Borrower to any wholly-owned
Guarantor, and unsecured Debt of any Guarantor to the Borrower or any
other wholly-owned Guarantor; provided that in each case the term and
provisions of such Debt shall be subject to Section 10.8; further
provided that any such unsecured Debt of the Borrower to any
wholly-owned Guarantor shall be subordinated in form and substance
satisfactory to the Banks to the Obligations; and provided further
that any such unsecured Debt of any Guarantor to the Borrower is
incurred when no Default or Event of Default exists or would result
therefrom;
(e) Debt of the Borrower or any Restricted Subsidiary
representing Capital Leases; provided that at no time shall the
aggregate amount of such Debt of the Borrower and its Restricted
Subsidiaries permitted by this Section 10.2(e) exceed 5% of
Consolidated Net Worth;
(f) Debt of the Borrower relating to sale-leaseback
transactions permitted under Section 10.6(c);
(g) unsecured Debt of the Borrower incurred in the
ordinary course of business for the purchase of inventory, including
deferred purchases of inventory;
(h) trade accounts payable incurred in the ordinary
course of business; and
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58
(i) other unsecured Debt of the Borrower or any Guarantor
to Persons other than the Borrower or any Subsidiary in an aggregate
amount not to exceed $75,000,000 and having maturities no shorter than
30 days after the Maturity Date and terms no more restrictive than
those set forth in the Loan Documents, and which is subordinated to
the payment of the Obligations in a manner approved in writing by the
Majority Banks, and provided further that such Debt is incurred when
no Default or Event of Default exists or would result therefrom.
For purposes of this Section 10.2, any Debt (1) which is
extended, renewed or refunded shall be deemed to have been incurred when
extended, renewed or refunded, (2) of a Person when it becomes, or is merged
into, or is consolidated with a Restricted Subsidiary or the Borrower shall be
deemed to have been incurred at that time, (3) which is permitted by Section
10.2(d) and which is owing to a wholly-owned Restricted Subsidiary when it
ceases to be a wholly-owned Restricted Subsidiary shall be deemed to have been
incurred at that time, (4) of a Restricted Subsidiary which is owing to the
Borrower or any other Restricted Subsidiary shall be deemed to have been
incurred at the time the Borrower or such other Restricted Subsidiary disposes
of such Debt to any Person other than the Borrower or a wholly-owned Restricted
Subsidiary, and (5) which is Debt of the Borrower or a Restricted Subsidiary
consisting of a reimbursement obligation in respect of a letter of credit or
similar instrument shall be deemed to be incurred when such letter of credit or
similar instrument is issued.
10.3. RESTRICTED PAYMENTS. The Borrower will not directly
or indirectly, and will not permit any Restricted Subsidiary to directly or
indirectly, declare or make any dividend payment or other distribution of
Properties, cash, rights, obligations or securities on account of any shares of
any class of capital stock of or any partnership or other interest in the
Borrower or any Subsidiary, or purchase, redeem, retire or otherwise acquire
for value (or permit any Subsidiary to do so) any shares of any class of
capital stock of the Borrower or any Subsidiary or any warrants, rights or
options to acquire any such shares, partnership interests or other interests,
now or hereafter issued, outstanding or created (all the foregoing being herein
collectively referred to as "Restricted Payments"); provided that:
(a) the Borrower and each Subsidiary may declare and make
any dividend payment or other distribution payable in common stock of
the Borrower or any Subsidiary to the extent that such dividends in
stock are payable only with respect to stock of the same type or
class,
(b) the Borrower may pay or declare any dividend in
respect of preferred stock of the Borrower,
(c) any Subsidiary may declare and make a dividend or
other distribution to the Borrower,
(d) from and after the Closing Date the Borrower may (i)
repurchase shares of its common stock and (ii) purchase, redeem or
otherwise acquire shares of stock in
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59
connection with the payment for the exercise of options granted to an
employee or director pursuant to an employee or director stock option
plan or withhold shares otherwise issuable upon the exercise of an
option in connection with the payment of any federal or state taxes
resulting from the exercise of any such option; provided that all such
payments pursuant to this Section 10.3(d) may not exceed $20,000,000
in the aggregate, and
(e) from and after the Closing Date, the Borrower may
make payments not to exceed an aggregate amount of $100,000 to its
shareholders required in connection with any stock split or stock
dividend with respect to its common stock in order to avoid the
issuance of fractional shares of its common stock;
further provided however that prior to and after giving effect
to any such proposed dividend, distribution, purchase, redemption, retirement
or acquisition for value, no Default or Event of Default has occurred or would
exist.
10.4. MERGERS; CONSOLIDATIONS; SALE OR OTHER DISPOSITIONS
OF ALL OR SUBSTANTIALLY ALL ASSETS. The Borrower will not, and will not permit
any Restricted Subsidiary to, merge or consolidate with or into any other
Person, or convey, transfer, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
assets (i.e., assets which could not otherwise be disposed of pursuant to
Section 10.6) (whether now owned or hereafter acquired) to any other Person;
provided that:
(a) any Restricted Subsidiary may merge or consolidate
with or into, or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets to, any wholly-owned Guarantor;
(b) any Restricted Subsidiary may merge or consolidate
with or into any Person; provided that the surviving entity shall be a
wholly-owned Guarantor, further provided that prior to and after
giving effect thereto, no Default or Event of Default has occurred or
would exist;
(c) any Restricted Subsidiary may merge into or transfer
all or substantially all of its assets to the Borrower; and
(d) the Borrower may merge or consolidate with or into
any Person; provided that in the case of any such merger or
consolidation to which the Borrower is a party, the Borrower shall be
the surviving entity and, furtherprovided that prior to and after
giving effect thereto, no Default or Event of Default has occurred or
would exist.
10.5. INVESTMENTS, LOANS AND ADVANCES. The Borrower will
not, and will not permit any Restricted Subsidiary to, make or permit to remain
outstanding any Investment, endorse, or otherwise be or become contingently
liable, directly or indirectly, in connection with the obligations, stock or
dividends of, or own, purchase or acquire any stock, obligations or
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securities of, or any other interest in, or make or permit to remain
outstanding any capital contribution to, any Person (other than in the Borrower
or a Guarantor), or otherwise make, incur, create, assume or suffer to exist
any Investment (other than in the Borrower or a Guarantor) of the Borrower or
any Restricted Subsidiary to purchase or acquire any assets (excluding, in any
event, the contingent liability of a general partner for the obligations of its
partnership arising under law due to the nature of its general partnership
interest) (collectively, "Restricted Investments"), except that:
(a) the Borrower and its Restricted Subsidiaries may make
or permit to remain outstanding Restricted Investments to the extent
within the prohibitions of, and permitted by, Sections 10.4 and 10.6;
(b) the Borrower or any Restricted Subsidiary may acquire
and own stock, obligations or securities received in settlement of
debts (created in the ordinary course of business) owing to the
Borrower or any Restricted Subsidiary;
(c) the Borrower or any Restricted Subsidiary may own,
purchase or acquire Cash Equivalents;
(d) the Borrower or any Restricted Subsidiary may permit
to remain outstanding guarantees resulting from endorsement of
negotiable instruments for collection in the ordinary course of
business;
(e) the Borrower and its Restricted Subsidiaries may make
or permit to remain outstanding loans to employees (not including
payments covered by subsection (f) of this Section 10.5) made in the
ordinary course of business in an aggregate amount not to exceed at
any time $4,000,000;
(f) the Borrower and its Restricted Subsidiaries may make
or permit to remain outstanding payment by the Borrower of premiums on
life insurance policies naming ▇▇▇▇▇▇ ▇▇▇▇▇▇ as insured as provided
for in that certain Split-Dollar Agreement, dated November 25, 1994,
among the Borrower, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇, as Co-Trustee, a
copy of which has been delivered to the Agent, and payment by the
Borrower of premiums on similar life insurance policies naming ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as insureds;
(g) the Borrower and the Guarantors may make or permit to
remain outstanding intercompany loans and advances which are permitted
under Section 10.2(d) hereof;
(h) the Borrower and its Restricted Subsidiaries may make
or permit to remain outstanding Investments in Unrestricted
Subsidiaries; provided that all such Investments of the Borrower and
its Restricted Subsidiaries shall be subject to Section 10.19;
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(i) the Borrower and its Restricted Subsidiaries may make
or permit to remain additional outstanding Restricted Investments
(other than Restricted Investments permitted under Subsections (a)
through (h) hereof) (including, without limitation, Restricted
Investments in Non-Guaranteeing Restricted Subsidiaries), provided
that all such Restricted Investments of the Borrower and its
Restricted Subsidiaries shall not exceed in an aggregate amount at any
time 7 1/2% of Consolidated Net Worth; provided that, prior to and
immediately after making such Restricted Investments, no Default or
Event of Default has occurred and is continuing or would exist;
further provided (i) if such Restricted Investment also constitutes an
Acquisition as that term is defined under Section 10.13, such
Restricted Investment will be governed by Section 10.13 hereof in lieu
of this Section 10.5, and (ii) if such Restricted Investment is in a
Unrestricted Subsidiary, such Restricted Investment is governed by
Section 10.5(h) hereof in lieu of this Section 10.5(i).
10.6. SALE OR OTHER DISPOSITION OF LESS THAN SUBSTANTIALLY
ALL ASSETS; SALE AND LEASEBACKS. The Borrower will not, and will not permit
any Restricted Subsidiary to, sell, assign, lease, exchange, transfer or
otherwise dispose of (whether in one transaction or in a series of
transactions) part, but less than all or substantially all, of its respective
Property to any other Person (whether now owned or hereafter acquired);
provided however that:
(a) the Borrower or any Restricted Subsidiary may in the
ordinary course of business dispose of Property to Persons other than
the Borrower or any Subsidiary consisting of (i) Inventory, (ii) goods
or equipment that are, in the reasonable opinion of the Borrower or
such Restricted Subsidiary, obsolete or unproductive, and (iii) other
assets if, after giving effect to such sale, exchange, transfer or
other disposition (1) the aggregate Fair Market Value of (i) all
assets of the Borrower and its Restricted Subsidiaries sold,
exchanged, transferred or otherwise disposed of (on a consolidated
basis) (but excluding assets sold, exchanged, transferred or otherwise
disposed of pursuant to any other subsection of this Section 10.6)
during the period of 12 consecutive months previously preceding such
sale, exchange, transfer or other disposition and (ii) the assets of
all Restricted Subsidiaries, the stock of which have been sold or
otherwise disposed of pursuant to this Section 10.6(a) during such 12
month period shall not exceed 5% of Consolidated Net Worth as of the
end of the fiscal quarter immediately preceding or coinciding with
such sale, exchange, transfer or other disposition, and (2) the assets
described in the foregoing subclauses (i) and (ii) shall not have
contributed more than 5% of EBITDA for the four most recently
completed fiscal quarters taken as a single accounting period;
(b) the Borrower may sell, transfer or otherwise dispose
of its common stock being held by it as treasury stock;
(c) the Borrower may enter into sale-leaseback
transactions with any Person other than an Unrestricted Subsidiary or
a Non-Guaranteeing Restricted Subsidiary during the period from the
Closing Date to the Maturity Date relating to sales of real property
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62
and related fixtures and improvements in an aggregate amount
(calculated on the basis of Fair Market Value) not exceeding (i) the
sum of (A) $13,000,000 for the Fiscal Year 1997 plus (B) $3,000,000
for each Fiscal Year thereafter, minus (ii) the aggregate amount sold
under sale-leaseback transactions previously entered into under this
Section 10.6(c);
(d) to the extent such sale, assignment, lease, exchange,
transfer or disposition is also a disposition of Properties subject to
Section 10.3, the Borrower and its Restricted Subsidiaries may make
such sale, assignment, lease, exchange, transfer or disposition to the
extent permitted by Section 10.3;
(e) the Borrower and its Restricted Subsidiaries may
sell, assign, lease, transfer or otherwise dispose of (whether in one
transaction or in a series of transactions) part, but less than all or
substantially all, of its respective Property to the Borrower or any
other Restricted Subsidiary to the extent within the prohibitions of,
and permitted by, Section 10.4 (to the same extent in respect of all
or substantially all of its assets) and Section 10.5; and
(f) the Borrower and its Restricted Subsidiaries may sell
or exchange Property to any Unrestricted Subsidiary and any
Non-Guaranteeing Restricted Subsidiary; provided that (i) all such
sales and exchanges shall be for Fair Market Value and subject to
Section 10.8 and (ii) no Default or Event of Default shall exist or
occur as a result thereof.
10.7. USE OF PROCEEDS. The Borrower will not use, nor
permit the use of, all or any portion of any Loan for any purpose except as
described in Section 6 hereof.
10.8. TRANSACTIONS WITH AFFILIATES. Except as permitted in
Section 10.5(f), the Borrower will not, and will permit any Restricted
Subsidiary to, directly or indirectly, engage in any transaction with any
Affiliate or any shareholder, officer or director of the Borrower or of any
Affiliate, including, without limitation, the purchase, sale or exchange of
assets or the rendering of any service, except in the ordinary course of
business and pursuant to the reasonable requirements of the business of the
Borrower or such Restricted Subsidiary, as the case may be, and upon fair and
reasonable terms that are not less favorable to the Borrower or such Restricted
Subsidiary, as the case may be, than those which might be obtained in an
arm's-length transaction at the time from wholly independent and unrelated
sources.
10.9. NATURE OF BUSINESS. The Borrower will not, and will
not permit any Restricted Subsidiary to, make any material change in the nature
of the business conducted by the Borrower and its Restricted Subsidiaries,
taken as a whole.
10.10. ISSUANCE AND DISPOSITION OF SHARES. The Borrower
will not, and will not permit any Restricted Subsidiary to, issue, sell or
otherwise dispose of options which by their terms require the Borrower or any
Restricted Subsidiary to purchase or acquire any
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63
shares or equity securities, and will not permit any Restricted Subsidiary to,
issue, sell or otherwise dispose of any shares of its capital stock or other
equity securities, or rights, warrants or options to purchase or acquire any
shares or equity securities, other than with respect to (a) preferred stock of
the Borrower which is not by its terms required to be redeemed by the Borrower
prior to the Maturity Date, and (b) stock options granted under employee or
director stock option plans which provide that the exercise price may be paid
with shares of the Borrower's common stock or that the optionee may satisfy any
withholding tax requirements upon exercise of the option by having the Borrower
withhold shares otherwise issuable upon such exercise.
10.11. ERISA. The Borrower shall not and shall not permit
any ERISA Affiliate to:
(a) do any of the following, which in the aggregate would
reasonably be expected to have a Material Adverse Effect:
(i) engage in any transaction which it knows or
has reason to know could result in a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by
Section 4975 of the Code;
(ii) fail to make any payments when due to any
Multiemployer Plan that the Borrower or an ERISA Affiliate may
be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(iii) incur withdrawal liability under ERISA with
respect to a Multiemployer Plan;
(iv) voluntarily terminate or, in the case of a
"substantial employer" as defined in Section 4001(a)(2) of
ERISA, withdraw from any Plan if such termination or
withdrawal could result in the imposition of a Lien on the
Borrower or an ERISA Affiliate under Section 4068 of ERISA;
(v) fail to make any required contribution when
due to any Plan subject to Section 412(n) of the Code that
with the passage of time would likely result in a Lien upon
the properties or assets of the Borrower or an ERISA
Affiliate;
(vi) adopt any amendment to a Plan, the effect of
which is to increase the "current liability" under the Plan as
defined in Section 302(d)(7) of ERISA;
(vii) act or fail to act, if, as a result thereof,
an event similar to any of those referred to in clauses (i) to
(vi) would likely occur under the applicable laws of a foreign
country; or
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64
(b) permit any Plan subject to Title IV of ERISA to have
an accumulated funding deficiency (as defined in Section 302 of ERISA)
as of the end of any Fiscal Year of the Plan; or
(c) permit the adoption, implementation or amendment of
any unfunded deferred compensation agreement or other arrangement of a
similar nature irrespective of whether subject to the funding
requirements of ERISA which could reasonably be expected to have a
Material Adverse Effect.
10.12. DISCOUNT OR SALE OF RECEIVABLES. The Borrower will
not discount or sell, nor permit any Restricted Subsidiary to discount or sell,
any of its notes receivable, receivables under leases or other accounts
receivable, other than in the ordinary course of collections of delinquent
notes and receivables, provided that, not withstanding the foregoing, the
Borrower and any Restricted Subsidiary may, in the normal course of its
business, acquire such assets and sell such assets at Fair Market Value.
10.13. ACQUISITIONS. The Borrower will not, and will not
permit any Restricted Subsidiary to, acquire by purchase or merger (a) the
power to direct or cause the direction of the management and policies of any
other Person (other than the Borrower or any Subsidiary), directly or
indirectly, whether through the ownership of voting securities or by contract
or otherwise or (b) more than 20% of the capital stock or other equity interest
of any such other Person or all or substantially all of the assets or
Properties of any such other Person (the events described in clauses (a) and
(b) of this Section 10.13 herein referred to as "Acquisitions"), except that
the Borrower or any Subsidiary may make such Acquisitions if:
(i) the aggregate cash consideration paid for such
Acquisitions does not exceed an amount equal to:
(A) $40,000,000 plus
(B) the net cash proceeds from any equity
issuance of the Borrower made within the preceding period
commencing upon the later of the Closing Date or the date
twenty-four (24) months prior to, any such Acquisition (except
(x) any proceeds from the sale of such equity to a Subsidiary,
(y) any proceeds from the issuance of common stock of the
Borrower or a Restricted Subsidiary in connection with any
employee stock ownership plan or any management stock
incentive plan, and (z) any proceeds from the issuance of
shares in connection with the conversion of a convertible debt
security issued prior to the Closing Date) minus the sum of
all (y) the amount of all Debt incurred by the Borrower or
such Restricted Subsidiary to the seller in such Acquisition
to pay a portion of the purchase price therefor and (z)
Restricted Payments during such computation period; (provided
that, notwithstanding the limitations of Section 10.13(i), the
Borrower or any Restricted Subsidiary may participate in an
exchange of stock
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65
for stock or stock for assets with such Person, which exchange
shall be excluded from the provisions hereof), minus
(C) any assumed Debt;
(ii) prior to and immediately after making such
Acquisition, no Default or Event of Default has occurred and is
continuing or would exist; and
(iii) in the case of the purchase of the capital stock or
other equity interest of any such other Person, such Person shall be
designated a Restricted Subsidiary.
10.14. CERTAIN FINANCIAL TESTS. (a) Consolidated Net Worth.
The Borrower will not permit Consolidated Net Worth at any time to be less than
an amount equal to the sum of (i) $120,000,000 plus (ii) seventy-five percent
(75%) of cumulative positive Consolidated Net Income, from February 1, 1997
through the determination date and without deduction for losses in Consolidated
Net Income, plus (iii) fifty percent (50%) of net cash proceeds received by the
Borrower or a Guarantor in consideration for the issuance of shares of any
capital stock of the Borrower or any Guarantor on or after February 1, 1997.
(b) Leverage Ratio. The Borrower shall not permit the
ratio of (i) Adjusted Debt to (ii) EBITDA plus Base Rent Expense for the four
immediately preceding fiscal quarterly periods to exceed (i) during the period
ending on February 1, 1999, 5.50 to 1.00 and, (ii) thereafter, 5.25 to 1.00,
determined in each case on the last day of each fiscal quarterly period for the
four fiscal quarters ending on such date.
(c) Fixed Charge Ratio. The Borrower shall not permit
its Fixed Charge Ratio to be less than 1.20 to 1.00 determined on the last day
of each fiscal quarterly period for the four fiscal quarters ending on such
date.
(d) Maximum Inventory Balance. The Borrower shall not
permit the Actual Inventory Balance for the periods ending on the dates set out
below to be more than the respective amounts set out below:
Maximum Amount
--------------
For Fiscal Quarters Ended (in thousands)
------------------------- --------------
05/03/97 $590
08/02/97 $600
11/01/97 $650
01/31/98 $540
05/02/98 $615
08/01/98 $625
10/31/98 $680
01/30/99 $570
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66
05/01/99 $650
07/31/99 $660
10/30/99 $710
01/29/00 $600
04/29/00 $680
07/29/00 $690
10/29/00 $750
01/27/01 $630
04/28/01 $710
07/28/01 $720
10/27/01 $790
01/26/02 $660
04/27/02 $750
(e) Current Ratio. The Borrower will not permit the
ratio of Consolidated Current Assets to Consolidated Current Liabilities to be
less than 1.50 to 1.00 determined on the last day of each fiscal quarterly
period.
(f) Consolidated Net Worth Attributable to Foreign
Assets. The Borrower will not permit the percentage of Consolidated Net Worth
of the Borrower and its Restricted Subsidiaries attributable to operating
assets (exclusive of Inventory in process of, or held for, manufacture) located
outside the United States, Canada and the United Kingdom at any time to be
greater than ten percent (10%).
10.15. REGULATIONS G, T, U AND X. The Borrower will not
take or permit, and will not permit any Subsidiary to take or permit, any
action which would involve the Agent or the Banks in a violation of Regulation
G, Regulation T, Regulation U, Regulation X or any other regulation of the
Board of Governors of the Federal Reserve System or a violation of the
Securities Exchange Act of 1934, in each case as now or hereafter in effect.
10.16. STATUS. The Borrower will not, and will not permit
any Subsidiary to:
(i) Be or become an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended; or
(ii) Be or become 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", or a
"public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
10.17. COMPLIANCE WITH LAWS. The Borrower will not fail to
comply, nor permit any Restricted Subsidiary to fail to comply, in all material
respect with all Laws.
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10.18. SUBORDINATED DEBT. The Borrower will not consent to
or request any modification, supplement or waiver of any provision of the
Subordinated Indenture without the prior written consent of the Banks.
10.19. INVESTMENTS IN UNRESTRICTED SUBSIDIARIES. The sum of
the Fair Market Value of all Restricted Investments permitted by Section
10.5(i) (calculated at the time of such Investment) shall not exceed
$40,000,000 in the aggregate at any time, nor shall the same be incurred if
prior to or immediately thereafter a Default or Event of Default has occurred
or would exist. For purposes of this Section 10.20, any such Restricted
Investment to or for the benefit of a Person other than an Unrestricted
Subsidiary shall be deemed to be incurred at the time any such Person becomes
an Unrestricted Subsidiary.
10.20. NO COMMINGLING OF ASSETS, ETC. (a) Except (i) as
among the Borrower and the Guarantors and (ii) as set forth in Section
10.20(b), the Borrower and each Subsidiary shall not commingle its assets with
those of any other Person and its funds and other assets shall be separately
identified and segregated from those of any other Person. Except (i) as among
the Borrower and the Guarantors and (ii) as set forth in Section 10.20(b), the
Borrower and each Subsidiary shall pay from the assets of the Borrower and its
Subsidiaries all liabilities, obligations and indebtedness of any kind incurred
by such Person and, except as otherwise expressly permitted in this Agreement,
shall not pay from its assets any liabilities, obligations or indebtedness of
any other Person. Except as among the Borrower and the Guarantors, the
Borrower and each Subsidiary shall maintain its corporate, financial and
accounting books and records separate from those of any other Person. Except
as among the Borrower and the Guarantors, the Borrower and each Subsidiary
shall indicate in such statements and records the separateness of such Person's
assets and liabilities from those of any other Person. Except (i) as among the
Borrower and the Guarantors and (ii) in the case of registered "d.b.a." names,
the Borrower and each Subsidiary shall not, at any time, hold itself out to the
public (including, without limitation, any creditors of any of its Affiliates)
under the name of any other Person.
(b) The restrictions set forth in the first two sentences
of Section 10.20(a) shall not prohibit the Borrower or any Subsidiary from
commingling funds and paying the liabilities of any other Person in connection
with the ordinary course of its operations, in an aggregate amount not to
exceed $1,000,000.
10.21. RESTRICTIVE AGREEMENTS. Anything herein or any other
Loan Document to the contrary notwithstanding, the Borrower will not, and will
not permit any Subsidiary to, enter into, create or otherwise allow to exist
any agreement or restriction that (i) prohibits or restricts the creation or
assumption of any Lien upon any Property of the Borrower or any Guarantor in
favor of any Person, including without limitation the Banks, (ii) prohibits or
restricts any Guarantor from executing any guarantee which may be required
under Section 9.7 hereof, (iii) requires any obligation of the Borrower or any
Subsidiary to be secured by any Property of the Borrower or any Restricted
Subsidiary if any obligation of the Borrower or such Subsidiary to the Banks is
secured in favor of another Person, including without limitation the Banks, or
(iv) prohibits or restricts the ability of (A) any Guarantor (1) to
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pay dividends or make other distributions or contributions or advances to the
Borrower or any other Restricted Subsidiary, (2) to repay loans and other
indebtedness owing by it to the Borrower or any other Restricted Subsidiary,
(3) to redeem equity interests held by it by Borrower or any other Restricted
Subsidiary, or (4) to transfer any of its assets to the Borrower or any other
Restricted Subsidiary, or (B) the Borrower or any other Restricted Subsidiary
to make any payments required or permitted under the Loan Documents or
otherwise prohibit or restrict compliance by the Borrower and the Subsidiaries
thereunder.
11. EVENTS OF DEFAULT; REMEDIES. If any of the following events
shall occur, then the Agent shall at the request, or may with the consent, of
the Majority Banks, (i) by notice to the Borrower, declare the Commitment of
each Bank and the several obligations of each Bank to make Loans hereunder to
be terminated, whereupon the same shall forthwith terminate, (ii) declare the
Notes and all interest accrued and unpaid thereon, the Unpaid Drawings and all
other amounts payable under the Notes and this Agreement, to be forthwith due
and payable, whereupon the Notes, all such interest and all such other amounts,
shall become and be forthwith due and payable without presentment, demand,
protest, or further notice of any kind (including, without limitation, notice
of default, notice of intent to accelerate and notice of acceleration), all of
which are hereby expressly waived by the Borrower, (iii) terminate any Letter
of Credit providing for such termination by sending a notice of termination as
provided therein and (iv) direct the Borrower to take any action required by
Section 11.15; provided, however, that with respect to any Event of Default
described in Section 11.6 or 11.7 hereof, (A) the Commitment of each Bank and
the several obligations of each Bank to make Loans hereunder shall
automatically be terminated and (B) the entire unpaid principal amount of the
Notes, all interest accrued and unpaid thereon, the Unpaid Drawings and all
such other amounts payable under the Notes and this Agreement, shall
automatically become immediately due and payable, without presentment, demand,
protest, or any notice of any kind (including, without limitation, notice of
default, notice of intent to accelerate and notice of acceleration), all of
which are hereby expressly waived by the Borrower.
11.1. FAILURE TO PAY PRINCIPAL. The Borrower shall fail to
pay any principal of any Note when the same becomes due and payable; or
11.2. FAILURE TO PAY OTHER AMOUNTS. The Borrower shall
fail to pay interest on any Note or fees or other amounts due under any Note or
this Agreement or any other Loan Document, when the same becomes due and
payable and such failure shall remain unremedied for one (1) Business Day; or
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11.3. DEFAULT UNDER OTHER DEBT. The Borrower or any
Restricted Subsidiary shall fail to pay any principal of or premium or interest
on any Debt which is outstanding in a principal amount of at least $5,000,000
in the aggregate when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other event
constituting a default (however defined) shall occur or condition shall exist
under any agreement or instrument relating to any such Debt and shall continue
after the applicable grace period, if any, specified in such agreement or
instrument; or
11.4. MISREPRESENTATION OR BREACH OF WARRANTY. Any
representation or warranty made by the Borrower or any Subsidiary herein or in
any other Loan Document or in any certificate, document or instrument otherwise
furnished to the Agent or the Banks in connection with this Agreement shall be
incorrect, false or misleading in any material respect when made or when deemed
made; or
11.5. VIOLATION OF COVENANTS.
(i) The Borrower violates any covenant, agreement or
condition contained in Section 9.1(e), 9.2, 9.7 or in Article 10; or
(ii) The Borrower violates any other covenant, agreement
or condition contained herein or in any other Loan Document to which
it is a party and such default shall continue unremedied for thirty
(30) days after the occurrence of such event; or
11.6. BANKRUPTCY AND OTHER MATTERS.
(i) The Borrower or any Restricted Subsidiary shall
commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any Debtor Law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or
shall consent to any such relief or to the appointment of or taking
possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment
for the benefit of creditors, or shall fail generally to pay its debts
as they become due, or shall admit in writing its inability to pay its
debts generally, or shall take any corporate action to authorize any
of the foregoing; or
(ii) An involuntary case or other proceeding shall be
commenced against the Borrower or any Restricted Subsidiary seeking
liquidation, reorganization or other relief with respect to it or its
debts under any Debtor Law or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of sixty
(60) days; or an order for relief under
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70
U.S. Federal Bankruptcy Law (or a similar order under other Debtor
Law) shall be entered against the Borrower or any Restricted
Subsidiary; or
11.7. DISSOLUTION. Any order is entered in any proceeding
against the Borrower or any Restricted Subsidiary decreeing the dissolution,
liquidation, winding-up or split-up of the Borrower or any Restricted
Subsidiary; or
11.8. JUDGMENT. Any judgment or order for the payment of
money which, individually or in the aggregate, shall be in excess of 5% of Net
Worth at any time, shall be rendered against the Borrower or any of its
Restricted Subsidiaries and either (i) enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii) there shall be
any period of thirty (30) consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect; or
11.9. NULLITY OF LOAN DOCUMENTS. Any Loan Document shall,
at any time after its execution and delivery and for any reason, cease to be in
full force and effect or be declared to be null and void, or the validity or
enforceability thereof shall be contested by the Borrower or any Affiliate
thereof, or the Borrower or any Subsidiary thereof shall deny that it has any
or any further liability or obligations under any Loan Document to which it is
a party; or
11.10. CHANGE OF CONTROL. A Change of Control shall occur; or
11.11. ERISA. With respect to (a) any Future Plan (as such
term is defined in Section 9.1(g) hereof), other than a Multiemployer Plan
within the meaning of Section 4001(a)(3) of ERISA, (i) such Future Plan shall
fail to satisfy the minimum funding standard or a waiver of such standard or
extension of any amortization period is sought under Section 412 of the Code;
(ii) such Future Plan is or is proposed to be terminated and as a result
thereof liability in excess of $1,000,000 can be asserted under Title IV of
ERISA against the Borrower or ERISA Affiliate; (iii) such Future Plan shall
have an unfunded current liability in excess of $1,000,000; or (iv) there has
been a withdrawal from any such Future Plan and as a result liability in excess
of $1,000,000 can be asserted under Section 4062(e) or 4063 of ERISA against
the Borrower or any ERISA Affiliate; or (b) any Future Plan that is a
Multiemployer Plan under Section 4001(a)(3) of ERISA, such Future Plan is
insolvent or in reorganization or the Borrower or an ERISA Affiliate has
withdrawn, or proposes to withdraw, either totally or partially, from such
Future Plan and, in any case, the Borrower or its ERISA Affiliate might
reasonably be anticipated to incur a liability which would have a Material
Adverse Effect; or (c) any Plan other than a Future Plan, the Borrower or its
ERISA Affiliate could reasonably be anticipated to incur a liability which
would have a Material Adverse Effect; or
11.12. GUARANTORS. Any Guarantor violates any covenant,
agreement or condition contained in any Guaranty or any default or event of
default otherwise occurs thereunder;
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11.13. OTHER REMEDIES. In addition to and cumulative of any
rights or remedies expressly provided for in this Section 11, if any one or
more Events of Default shall have occurred, the Agent shall at the request, and
may with the consent, of the Majority Banks proceed to protect and enforce the
rights of the Banks hereunder by any appropriate proceedings as the Agent may
elect. The Agent shall at the request, and may with the consent, of the
Majority Banks also proceed either by the specific performance of any covenant
or agreement contained in this Agreement or the other Loan Documents or by
enforcing the payment of the Notes or by enforcing any other legal or equitable
right provided under this Agreement or the other Loan Documents or otherwise
existing under any Law in favor of the holder of the Notes. The Agent shall
not, however, be under any obligation to ▇▇▇▇▇▇▇▇ any assets in favor of the
Borrower or any other Person or against or in payment of any or all obligations
under any Loan Document.
11.14. COLLATERAL ACCOUNT. The Borrower hereby agrees that
in the event of (i) the payment in full of the Loans and the termination of the
Commitments, or (ii) the occurrence of an Event of Default it shall, if
requested by the Agent or the Majority Banks (through the Agent), pay to the
Agent an amount in immediately available funds equal to 100% of the then
aggregate amount of Letter of Credit Outstandings, which funds shall be held by
the Agent in a collateral account to be maintained by the Agent. The Borrower
hereby agrees to execute and deliver to the Agent and the Banks such security
agreements, pledges or other documents as the Agent or any of the Banks may,
from time to time, reasonably require to perfect the pledge, lien and security
interest in and to any such funds provided for in this Section 11.14. Upon the
payment or expiry of all Letter of Credit Outstandings, all such Collateral
shall be released to the Borrower in due form at Borrower's cost.
11.15. REMEDIES CUMULATIVE. No remedy, right or power
conferred upon the Banks is intended to be exclusive of any other remedy, right
or power given hereunder or now or hereafter existing at Law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
12. THE AGENT.
12.1. APPOINTMENT, POWERS. AND IMMUNITIES. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent under
this Agreement and the other Loan Documents with such powers and discretion as
are specifically delegated to the Agent by the terms of this Agreement and the
other Loan Documents, together with such other powers as are reasonably
incidental thereto. The Agent (which term as used in this sentence and in
Section 12.5 and the first sentence of Section 12.6 hereof shall include its
affiliates and its own and its affiliates' officers, directors, employees, and
agents): (a) shall not have any duties or responsibilities except those
expressly set forth in this Agreement and shall not be a trustee or fiduciary
for any Bank; (b) shall not be responsible to the Banks for any statement,
representation, or warranty (whether written or oral) made in or in connection
with any Loan Document or any certificate or other document referred to or
provided for in, or received by any of them under, any Loan Document, or for
the value, validity, effectiveness, genuineness,
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enforceability, or sufficiency of any Loan Document, or any other document
referred to or provided for therein or for any failure by any Loan Party or any
other Person to perform any of its obligations thereunder; (c) shall not be
responsible for or have any duty to ascertain, inquire into, or verify the
performance or observance of any covenants or agreements by any Person or the
satisfaction of any condition or to inspect the property (including the books
and records) of any Person; (d) shall not be required to initiate or conduct
any litigation or collection proceedings under any Loan Document; and (e) shall
not be responsible for any action taken or omitted to be taken by it under or
in connection with any Loan Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
12.2. RELIANCE BY AGENT. The Agent shall be entitled to
rely upon any certification, notice, instrument, writing, or other
communication (including, without limitation, any thereof by telephone or
telecopy) believed by it to be genuine and correct and to have been signed,
sent or made by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel for the Borrower),
independent accountants, and other experts selected by the Agent. The Agent
may deem and treat the payee of any Note as the holder thereof for all purposes
hereof unless and until the Agent receives and accepts an Assignment and
Acceptance executed in accordance with Section 13.11 hereof. As to any matters
not expressly provided for by this Agreement, the Agent shall not be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Banks, and such instructions
shall be binding on all of the Banks; provided, however, that the Agent shall
not be required to take any action that exposes the Agent to personal liability
or that is contrary to any Loan Document or applicable law or unless it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking any such
action.
12.3. DEFAULTS. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
the Agent has received written notice from a Bank or the Borrower specifying
such Default or Event of Default and stating that such notice is a "Notice of
Default". In the event that the Agent receives such a notice of the occurrence
of a Default or Event of Default, the Agent shall give prompt notice thereof to
the Banks. The Agent shall (subject to Section 12.2 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be
directed by the Majority Banks, provided that, unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the est interest of
the Banks.
12.4. RIGHTS AS BANK. With respect to its Commitment and
the Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were to acting as the
Agent, and the term "Bank" or "Banks" shall, unless the context
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otherwise indicates, include the Agent in its individual capacity. NationsBank
(and any successor acting as Agent) and its affiliates may without having to
account therefor to any Bank) accept deposits from, lend money to, make
investments in, provide services to, and generally engage in any kind of
lending, trust, or other business with the Borrower or any of its Subsidiaries
or Affiliates as if it were not acting as Agent, and NationsBank and any
successor acting as Agent) and its affiliates may accept fees and other
consideration from the Borrower or any of its Subsidiaries or Affiliates for
services in connection with this Agreement or otherwise without having to
account for the same to the Banks.
12.5. INDEMNIFICATION. THE BANKS AGREE TO INDEMNIFY THE
AGENT (TO THE EXTENT NOT REIMBURSED UNDER SECTION 13.12 HEREOF, BUT WITHOUT THE
OBLIGATIONS OF THE BORROWER UNDER SUCH SECTION) RATABLY IN ACCORDANCE WITH
THEIR RESPECTIVE COMMITMENTS, FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING
ATTORNEYS' FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY
BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT (INCLUDING BY ANY
BANK) IN ANY WAY RELATING TO OR ARISING OUT OF ANY LOAN DOCUMENT OR THE
TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED BY THE AGENT
UNDER ANY LOAN DOCUMENT (INCLUDING ANY OF THE FOREGOING ARISING FROM THE
NEGLIGENCE OF THE AGENT); PROVIDED THAT NO BANK SHALL BE LIABLE FOR ANY OF THE
FOREGOING TO THE EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE PERSON TO BE INDEMNIFIED. WITHOUT LIMITATION OF THE
FOREGOING, EACH BANK AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS
RATABLE SHARE OF ANY COSTS OR EXPENSES PAYABLE BY THE BORROWER UNDER SECTION
13.12, TO THE EXTENT THAT THE AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS
AND EXPENSES BY THE BORROWER. THE AGREEMENTS CONTAINED IN THIS SECTION SHALL
SURVIVE PAYMENT IN FULL OF THE LOANS AND ALL OTHER AMOUNTS PAYABLE UNDER THIS
AGREEMENT.
12.6. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank
agrees that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Borrower and its Subsidiaries
and decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Bank, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own analysis and decisions in taking or not taking action under the Loan
Documents. Except for notices, reports, and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning the affairs, financial condition, or
business of the Borrower or any of its Subsidiaries or affiliates that may come
into the possession of the Agent or any of its affiliates.
12.7. SUCCESSOR AGENT. The Agent may resign at any time by
giving notice thereof to the Banks and the Borrower, and may be removed at any
time with or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Majority Banks and no
successor Agent shall have accepted such appointment within thirty
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(30) days after the retiring Agent's giving of notice of resignation or the
Majority Banks' removal of the retiring Agent, then the retiring Agent may, on
behalf of the Banks, appoint a successor Agent which shall be a commercial bank
organized under the laws of the United States of America having combined
capital and surplus of at least $500,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor, such successor shall thereupon
succeed to and become vested with all the rights, powers, discretion,
privileges, and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring
Agent's resignation or removal hereunder as Agent, the provisions of this
Article 12 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as Agent.
13. MISCELLANEOUS.
13.1. REPRESENTATION BY THE BANKS. Each Bank represents
that it is the present intention of such Bank, as of the date of its
acquisition of the Notes, to acquire the Notes for its account or for the
account of its Affiliates, and not with a view to the distribution or sale
thereof, and, subject to any applicable Laws, the disposition of such Bank's
property shall at all times be within its control. The Notes have not been
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and may not be transferred, sold or otherwise disposed of except (a) in a
registered offering under the Securities Act; (b) pursuant to an exemption from
the registration provisions of the Securities Act; or (c) if the Securities Act
shall not apply to the Notes or the transactions contemplated by the Loan
Documents. Nothing in this Section 13.1 shall affect the characterization of
the Loans and the transactions contemplated hereunder as commercial lending
transactions.
13.2. WAIVERS, ETC. No failure or delay on the part of any
Bank or the Agent in exercising any power or right hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any such right or
power, or any abandonment or discontinuance of steps to enforce such a right or
power, preclude any other or further exercise thereof or the exercise of any
other right or power. No course of dealing between the Borrower and any Bank
or the Agent shall operate as a waiver of any right of any Bank or the Agent.
No modification or waiver of any provision of this Agreement, the Notes or any
other Loan Document nor consent to any departure by the Borrower therefrom
shall in any event be effective unless the same shall be in writing, and then
such waiver or consent shall be effective only in the specific instance and for
the purpose for which given. No notice to or demand on the Borrower in any
case shall entitle the Borrower to any other or further notice or demand in
similar or other circumstances.
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13.3. NOTICES. All notices and other communications
provided for herein shall be in writing (including telex, facsimile, or cable
communication) and shall be mailed, couriered, telecopied, telexed, cabled or
delivered addressed as follows:
If to the Borrower, to it at:
▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇. ▇▇▇▇▇ ▇▇▇▇▇
and if to any Bank or the Agent, at its Domestic Lending Office specified
opposite its name on Schedule I attached hereto, or as to the Borrower, or the
Agent, to such other address as shall be designated by such party in a written
notice to the other party and, as to each other party, at such other address as
shall be designated by such party in a written notice to the Borrower and the
Agent. All such notices and communications shall, when mailed, delivered by
courier, telecopied, telexed, transmitted, or cabled, become effective when
three (3) Business Days have elapsed after being deposited in the mail (with
first class postage prepaid and addressed as aforesaid), or when confirmed by
telex answerback, transmitted to the correct telecopier, or delivered to the
courier or the cable company, except that notices and communications from the
Borrower to the Agent shall not be effective until actually received by the
Agent.
13.4. GOVERNING LAW. EACH LOAN DOCUMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE
UNITED STATES OF AMERICA.
13.5. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS. All representations, warranties and covenants contained herein or
made in writing by the Loan Parties in connection herewith shall survive the
execution and delivery of this Agreement and the Notes, and will bind and inure
to the benefit of the respective successors and assigns of the parties hereto,
whether so expressed or not, provided that the undertaking of the Banks to make
Loans and issue Letters of Credit to the Borrower shall not inure to the
benefit of any successor or assign of the Borrower. No investigation at any
time made by or on behalf of the Banks shall diminish the Banks' right to rely
thereon.
13.6. COUNTERPARTS. This Agreement may be executed in
several counterparts, and by the parties hereto on separate counterparts, and
each counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
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13.7. SEPARABILITY. Should any clause, sentence, paragraph
or section of this Agreement be judicially declared to be invalid,
unenforceable or void, such decision shall not have the effect of invalidating
or voiding the remainder of this Agreement, and the parties hereto agree that
the part or parts of this Agreement so held to be invalid, unenforceable or
void will be deemed to have been stricken herefrom and the remainder will have
the same force and effectiveness as if such part or parts had never been
included herein. Each covenant contained in this Agreement shall be construed
(absent an express contrary provision herein) as being independent of each
other covenant contained herein, and compliance with any one covenant shall not
(absent such an express contrary provision) be deemed to excuse compliance with
one or more other covenants.
13.8. DESCRIPTIVE HEADINGS. The section headings in this
Agreement have been inserted for convenience only and shall be given no
substantive meaning or significance whatsoever in construing the terms and
provisions of this Agreement.
13.9. RIGHT OF SET-OFF, ADJUSTMENTS. (a) Upon the
occurrence and during the continuance of any Event of Default, each Bank (and
each of its Affiliates) is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Bank (or any of its
Affiliates) to or for the credit or the account of the Borrower against any and
all of the obligations of the Borrower now or hereafter existing under this
Agreement and the Note held by such Bank, irrespective of whether such Bank
shall have made any demand under this Agreement or such Note and although such
obligations may be unmatured. Each Bank agrees promptly to notify the Borrower
after any such set-off and application made by such Bank; provided, however,
that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of each Bank under this Section 13.9 are
in addition to other rights and remedies (including, without limitation, other
rights of set-off) that such Bank may have.
(b) If any Bank (a "benefitted Bank") shall at any time receive
any payment of all or part of the Loans owing to it, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by setoff, or otherwise), in a greater proportion than any such
payment to or collateral received by any other Bank, if any, in respect of such
other Bank's Loans owing to it, or interest thereon, such benefitted Bank shall
purchase for cash from the other Banks a participating Interest in such portion
of each such other Bank's Loans owing to it, or shall provide such other Banks
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefitted Bank to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Banks; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefitted Bank, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest. The Borrower agrees that any Bank so
purchasing a participation from a Bank pursuant to this Section may, to the
fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect
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to such participation as fully as if such Person were the direct creditor of
the Borrower in the amount of such participation.
13.10. ASSIGNMENTS AND PARTICIPATIONS. (a) Each Bank may
assign to one or more Eligible Assignees all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of its Loans, its Note, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another Bank
or an assignment of all of a Bank's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least
equal to $10,000,000 or an integral multiple of $1,000,000 in excess
thereof;
(iii) each such assignment by a Bank shall be of a
constant, and not varying, percentage of all of its rights and
obligations under this Agreement and the Note; and
(iv) the parties to such assignment shall execute and
deliver to the Agent for its acceptance an Assignment and Acceptance
in the form of Exhibit H hereto (the "Assignment and Acceptance"),
together with any Note subject to such assignment and a processing fee
of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Bank hereunder and
the assigning Bank shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the
Agent and the Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not incorporated under the laws of the United States of America or
a state thereof, it shall deliver to the Borrower and the Agent certification
as to exemption from deduction or withholding of Taxes in accordance with
Section 4.6.
(b) The Agent shall maintain at its address referred to
in Section 13.3 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Banks and the Commitment of, and principal amount of the Loans owing to,
each Bank from time to time (the "Register"). The entries in the register
shall be conclusive and binding for all purposes, absent manifest error, and
the Borrower, the Agent 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 on reasonable prior
notice.
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(c) Upon its receipt of an Assignment and Acceptance
executed by the parties thereto, together with any Note subject to such
assignment and payment of the processing fee, the Agent shall, if such
Assignment and Acceptance has been completed and is in substantially the form
of Exhibit H hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt notice
thereof to the parties thereto.
(d) Each Bank may sell participations to one or more
Persons in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and its Loans); provided,
however, that (i) such Bank's obligations under this Agreement shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in Section
3.2 and the right of set-off contained in Section 13.9, provided that no
participant shall be entitled to recover under Section 3.2 an amount in excess
of the proportionate share which such participant holds of the original
aggregate principal amount hereunder to which the selling Bank would otherwise
have been entitled and (iv) the Borrower shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement, and such Bank shall retain the sole right to enforce the
obligations of the Borrower relating to its Loans and its Note and to approve
any amendment, modification, or waiver of any provision of this Agreement
(other than amendments, modifications, or waivers decreasing the amount of
principal of or the rate at which interest is payable on such Loans or Note,
extending any scheduled principal payment date or date fixed for the payment of
interest on such Loans or Note, or extending its Commitment). The Bank selling
any such participation shall give notice thereof to the Borrower, identifying
the participant and the amount of such participation and the Agent shall also
give such notice to the Borrower in the event the Agent has knowledge thereof.
(e) Notwithstanding any other provision set forth in this
agreement, any Bank may at any time assign and pledge all or any portion of its
Loans and its Note to any Federal Reserve Bank as collateral security pursuant
to Regulation A and any Operating Circular issued by such Federal Reserve Bank.
No such assignment shall release the assigning Bank from its obligations
hereunder.
(f) Any Bank may furnish any information concerning the
Borrower or any of its Subsidiaries in the possession of such Bank from time to
time to assignees and participants (including prospective assignees and
participants).
13.11. INTEREST. All agreements between the Borrower, the
Agent or any Bank, whether now existing or hereafter arising and whether
written or oral, are hereby expressly limited so that in no contingency or
event whatsoever, whether by reason of demand being made on any Note or
otherwise, shall the amount contracted for, charged, reserved or received by
the Agent or any Bank for the use, forbearance, or detention of the money to be
loaned under this Agreement or otherwise or for the payment or performance of
any covenant or obligation contained herein or in any other Loan Document
exceed the Highest Lawful Rate.
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If, as a result of any circumstances whatsoever, fulfillment by any Loan Party
of any provision hereof or of any of such documents, at the time performance of
such provision shall be due, shall involve transcending the limit of validity
prescribed by applicable usury law or result in the Agent or Bank having or
being deemed to have contracted for, charged, reserved or received interest (or
amounts deemed to be interest) in excess of the maximum lawful rate or amount
of interest allowed by applicable law to be so contracted for, charged,
reserved or received by such Agent or Bank, then, ipso facto, the obligation to
be fulfilled by the Borrower shall be reduced to the limit of such validity,
and if, from any such circumstance, the Agent or any Bank shall ever receive
interest or anything which might be deemed interest under applicable law which
would exceed the Highest Lawful Rate, such amount which would be excessive
interest shall be refunded to the Borrower, or, to the extent (i) permitted by
applicable law and (ii) such excessive interest does not exceed the unpaid
principal balance of the Notes and the amounts owing on other obligations of
the Borrower to the Agent or any Bank under any Loan Document, applied to the
reduction of the principal amount owing on account of the Notes or the amounts
owing on other obligations of the Borrower to the Agent or any Bank under any
Loan Document and not to the payment of interest. All sums paid or agreed to
be paid to the Agent or any Bank for the use, forbearance, or detention of the
indebtedness of the Borrower to the Agent or any Bank shall, to the extent
permitted by applicable law, be amortized, prorated, allocated, and spread
throughout the full term of such indebtedness until payment in full of the
principal thereof (including the period of any renewal or extension thereof) so
that the interest on account of such indebtedness shall not exceed the Highest
Lawful Rate. The terms and provisions of this Section 13.11 shall control and
supersede every other provision hereof and of all other agreements between the
Borrower and the Banks.
13.12. EXPENSES; INDEMNIFICATION. (a) The Borrower agrees
to pay on demand all costs and expenses of the Agent in connection with the
syndication, preparation, execution, delivery, modification, and amendment of
(and, if a Default or Event of Default exists, in connection with the
administration of) this Agreement, the other Loan Documents, and the other
documents to be delivered hereunder, including, without limitation, the
reasonable fees and expenses of counsel for the Agent (including the cost of
internal counsel) with respect thereto and with respect to advising the Agent
as to its rights and responsibilities under the Loan Documents. The Borrower
further agrees to pay on demand all costs and expenses of the Agent and the
Banks, if any (including, without limitation, reasonable attorneys' fees and
expenses and the cost of internal counsel), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Loan
Documents and the other documents to be delivered hereunder.
(B) THE BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS
THE AGENT AND EACH BANK AND EACH OF THEIR AFFILIATES AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND ADVISORS (EACH, AN "INDEMNIFIED
PARTY") IN AND AGAINST ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS,
AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) THAT
MAY BE INCURRED BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED PARTY, IN
EACH CASE ARISING OUT OF OR IN CONNECTION WITH OR BY REASON OF (INCLUDING,
WITHOUT LIMITATION, IN CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR
PROCEEDING OR REPARATION OF
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DEFENSE IN CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY OF HE TRANSACTIONS
CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE LOANS
(INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED
PARTY), EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR
EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER
PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 13.12 APPLIES, SUCH INDEMNITY
SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING
IS BROUGHT BY THE BORROWER, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN
INDEMNIFIED PARTY OR ANY OTHER PERSON OR ANY INDEMNIFIED PARTY IS OTHERWISE A
PARTY THERETO AND WHETHER OR TO THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED. THE BORROWER AGREES NOT TO ASSERT ANY CLAIM AGAINST THE AGENT,
ANY BANK, ANY OF THEIR AFFILIATES, OR ANY OF THEIR RESPECTIVE DIRECTORS,
OFFICERS, EMPLOYEES, ATTORNEYS, AGENT'S, AND ADVISERS, ON ANY THEORY OF
LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING
OUT OF OR OTHERWISE RELATING TO THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE LOANS.
(c) Without prejudice to the survival of any other
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 13.12 shall survive the payment in full of
the Loans and all other amounts payable under this Agreement.
13.13. PAYMENTS SET ASIDE. To the extent any payments on
the Obligations or proceeds of any collateral or the proceeds of such
enforcement or setoff or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other Person under any Debtor Law or
equitable cause, then, to the extent of such recovery, the Obligation or part
thereof originally intended to be satisfied, and all rights and remedies
therefor, shall be revived and shall continue in full force and effect, and the
Agent's and the Banks' rights, powers and remedies under this Agreement and
each other Loan Document shall continue in full force and effect, as if such
payment had not been made or such enforcement or setoff had not occurred. In
such event, each Loan Document shall be automatically reinstated and the
Borrower shall take such action as may be reasonably requested by the Agent and
the Banks to effect such reinstatement.
13.14. LOAN AGREEMENT CONTROLS. If there are any conflicts
or inconsistencies among this Agreement and any of the other Loan Documents,
the provisions of this Agreement shall prevail and control.
13.15. OBLIGATIONS SEVERAL. The obligations of each Bank
under each Loan Document to which it is a party are several, and no Bank shall
be responsible for any obligation or Commitment of any other Bank under any
Loan Document to which it is a party. Nothing contained in any Loan Document
to which it is a party, and no action taken by any
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Bank pursuant thereto, shall be deemed to constitute the Banks to be a
partnership, an association, a joint venture, or any other kind of entity.
13.16. SUBMISSION TO JURISDICTION; WAIVERS. EACH OF THE
BORROWER, THE AGENT AND THE BANKS IRREVOCABLY AND UNCONDITIONALLY:
(a) SUBMITS, FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR
FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE
NONEXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF TEXAS, THE
COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND
APPELLATE COURTS FROM ANY THEREOF;
(b) WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING IN ANY SUCH COURT OR THAT
SUCH PROCEEDING WAS BROUGHT IN AN INCONVENIENT COURT AND AGREES NOT TO PLEAD OR
CLAIM THE SAME;
(c) AGREES THAT SERVICE OF PROCESS IN ANY SUCH LEGAL
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING OF A COPY THEREOF (BY
REGISTERED OR CERTIFIED MAIL OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL POSTAGE
PREPAID) TO THE ADDRESS SET FORTH IN SECTION 13.3 HEREOF OR AT SUCH OTHER
ADDRESS OF WHICH THE OTHER PARTIES HERETO SHALL HAVE BEEN NOTIFIED IN WRITING
PURSUANT TO SECTION 13.3; AND
(d) NOTWITHSTANDING THE FOREGOING, NOTHING HEREIN SHALL
IN ANY WAY AFFECT THE RIGHT OF THE AGENT OR ANY BANK OR THE BORROWER TO BRING
ANY ACTION ARISING OUT OF OR RELATING TO THE NOTES OR THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT IN ANY COMPETENT COURT ELSEWHERE HAVING JURISDICTION OVER
THE BORROWER, THE AGENT OR ANY BANK, AS THE CASE MAY BE, OR ITS PROPERTY.
13.17. WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, THE BORROWER HERETO (A) WAIVES ANY RIGHT TO A
TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER
THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS
AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE
A COURT AND NOT BEFORE A JURY; (B) IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT
NOT PROHIBITED BY LAW AND TO THE
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EXTENT NOT EXPRESSLY PROVIDED FOR HEREUNDER, ANY RIGHT IT MAY HAVE TO CLAIM OR
RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES; AND (C) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT
OF COUNSEL FOR ANY PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR
IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS.
13.18. AMENDMENTS, ETC. No amendment or waiver of any
provision of this Agreement, any Note or any other Loan Document, nor consent
to any departure by the Borrower or any Subsidiary herefrom or therefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Borrower or such Subsidiary, as the case may be, as to amendments, and by the
Majority Banks in all cases, and then, in any case, such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver or consent shall,
unless in writing and signed by 100% of the Banks, do any of the following: (a)
change the definition of "Majority Banks", "Commitment", or "Pro Rata
Percentage", (b) forgive or reduce or increase the amount of the Commitment of
any Bank or subject any Bank to any additional obligations, (c) forgive or
reduce the principal of, or rate or amount of interest applicable to, any Loan,
other than as provided in this Agreement or forgive or reduce the amount of the
commitment fee, (d) postpone any date fixed for any payment or prepayment of
principal of, or interest on, the Notes, (e) change Section 13.15 or this
Section 13.18, (f) change the aggregate unpaid principal amount of the Notes,
or the number of Banks, which shall be required for the Banks or any of them to
take any action hereunder, (g) waive any of the conditions specified in Section
8.1 or Section 8.2, or (h) except as otherwise provided herein, release all or
substantially all of any collateral or release any Guarantor; and provided
further that no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Banks required above to take such
action, affect the rights or duties of the Agent under this Agreement, any Note
or any other Loan Document.
13.19. RELATIONSHIP OF THE PARTIES. This Agreement provides
for the making of loans by the Banks, in their capacity as Banks, to the
Borrower, in its capacity as a borrower, and for the payment of interest and
repayment of principal by the Borrower to the Banks. The relationship between
the Banks and the Borrower is limited to that of creditors/secured parties, on
the one hand, and debtor, on the other hand. The provisions herein for
compliance with financial, environmental, and other covenants, delivery of
financial, environmental and other reports, and financial, environmental and
other inspections, investigations, audits, examinations or tests are intended
solely for the benefit of the Banks to protect their interests as Banks in
assuming payments of interest and repayment of principal and nothing contained
in this Agreement or the Notes shall be construed as permitting or obligating
the Banks to act as financial or business advisors or consultants to the
Borrower, as permitting or obligating the Banks to control the Borrower or to
conduct or operate the Borrower's operations, as creating any fiduciary
obligation on the part of the Banks to the Borrower, or as
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creating any joint venture, agency, or other relationship between the parties
other than as explicitly and specifically stated in this Agreement. The
Borrower acknowledges that it has had the opportunity to obtain the advice of
experienced counsel of its own choosing in connection with the negotiation and
execution of this Agreement and to obtain the advice of such counsel with
respect to all matters contained herein, including, without limitation, the
provision in Section 13.17 for waiver of trial by jury. The Borrower further
acknowledges that it is experienced with respect to financial and credit
matters and has made its own independent decision to apply to the Banks for the
financial accommodations provided hereby and to execute and deliver this
Agreement.
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13.20. FINAL AGREEMENT. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN 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 BETWEEN THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto, by their respective
officers thereunto duly authorized, have executed this Agreement effective as
of June 2, 1997.
THE MEN'S WEARHOUSE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President - Finance
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇
Title: Sr. Vice President
NATIONSBANK OF TEXAS, N.A.
as a Bank and as Agent
Commitment Pro Rata Percentage By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
---------- ------------------- --------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
$35,000,000 28.00% Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
Commitment Pro Rata Percentage By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------- ------------------- --------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
$30,000,000 24.00% Title: Vice President
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▇▇▇▇▇ FARGO BANK, N.A.
Commitment Pro Rata Percentage By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
---------- ------------------- -----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
$30,000,000 24.00% Title: Vice President and Vice President
BANK OF MONTREAL
Commitment Pro Rata Percentage By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------- ------------------- --------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
$20,000,000 16.00% Title: Managing Director
BANKBOSTON, N.A.
Commitment Pro Rata Percentage By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
---------- ------------------- --------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
$10,000,000 8.00% Title: Vice President
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EXHIBIT A
REVOLVING NOTE
$ June 2, 1997
----------
FOR VALUE RECEIVED, the undersigned, THE MEN'S WEARHOUSE,
INC., a corporation organized under the laws of Texas (the "Borrower"), HEREBY
PROMISES TO PAY to the order of __________________________ (the "Bank"), on or
before the Maturity Date, the lesser of (i) principal sum of ______________ and
No/100 Dollars ($__________) or (ii) the amount outstanding hereunder as of
such date, in accordance with the terms and provisions of that certain
Revolving Credit Agreement dated as of June 2, 1997 by and among the Borrower,
NationsBank of Texas, N.A., as Agent, the Bank, and the other parties thereto
(as same may be amended, modified, increased, supplemented and/or restated from
time to time, the "Credit Agreement"; capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Credit Agreement).
The outstanding principal balance of this Note shall be due
and payable on the Maturity Date and as otherwise provided in the Credit
Agreement. The Borrower promises to pay interest on the unpaid principal
balance of this Note from the date of any Loan evidenced by this Note until the
principal balance thereof is paid in full. Interest shall accrue on the
outstanding principal balance of this Note from and including the date of any
Loan evidenced by this Note to but not including the Maturity Date at the rate
or rates, and shall be due and payable on the dates, set forth in the Credit
Agreement.
Payments of principal and interest, and all amounts due with
respect to costs and expenses, shall be made in lawful money of the United
States of America in immediately available funds, without deduction, set-off or
counterclaim to the Agent not later than 12:00 noon (Houston time) on the dates
on which such payments shall become due pursuant to the terms and provisions
set forth in the Credit Agreement.
In addition to all principal and accrued interest on this
Note, the Borrower agrees to pay (a) all costs and expenses incurred by all
owners and holders of this Note in collecting this Note through any probate,
reorganization, bankruptcy or any other proceeding and (b) reasonable
attorneys' fees when and if this Note is placed in the hands of an attorney for
collection after default.
Except as otherwise specifically provided for in the Credit
Agreement, the Borrower and any and all endorsers, guarantors and sureties
severally waive grace, demand, presentment for payment, notice of dishonor or
default, protest, notice of protest, notice of intent to accelerate, notice of
acceleration and diligence in collecting and bringing of suit against any party
hereto, and agree to all renewals, extensions or partial payments hereon and to
any release
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or substitution of security hereof, in whole or in part, with or without
notice, before or after maturity.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAW.
IN WITNESS WHEREOF, the Borrower has caused this Note to be
executed and delivered by its officer thereunto duly authorized effective as of
the date first above written.
THE MEN'S WEARHOUSE, INC.
By:
-----------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
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