EXHIBIT 4.4
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CREDIT AGREEMENT
among
▇.▇. ▇▇▇▇▇▇ HOLDINGS, INC.
as Borrower,
NATIONSBANK, N.A.
as Agent,
and
The Several Lenders From Time to Time Parties Hereto
Dated as of November 3, 1998
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TABLE OF CONTENTS
Page
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ARTICLE I Definitions..........................................................1
Section 1.1 Definitions.................................................1
Section 1.2 Other Definitional Provisions..............................14
Section 1.3 Accounting Terms and Determination.........................14
Section 1.4 Time of Day................................................15
ARTICLE II Revolving Credit Facility..........................................15
Section 2.1 Commitments................................................15
Section 2.2 Notes......................................................15
Section 2.3 Repayment of Revolving Loans...............................15
Section 2.4 Use of Proceeds............................................15
Section 2.5 Reduction or Termination of Commitments....................15
Section 2.6 Increase in Commitment.....................................16
Section 2.7 Letters of Credit..........................................18
Section 2.8 Swingline Loans............................................20
ARTICLE III Interest and Fees.................................................22
Section 3.1 Interest Rate..............................................22
Section 3.2 Determinations of Applicable Margin and Revolving
Commitment Fee............................................22
Section 3.3 Payment Dates..............................................23
Section 3.4 Default Interest...........................................23
Section 3.5 Conversions and Continuations of Loans.....................23
Section 3.6 Computations...............................................24
Section 3.7 Revolving Commitment Fee...................................24
Section 3.8 Syndication Fee............................................24
ARTICLE IV Administrative Matters.............................................24
Section 4.1 Borrowing Procedure........................................24
Section 4.2 Minimum Amounts............................................25
Section 4.3 Certain Notices............................................25
Section 4.4 Prepayments................................................26
Section 4.5 Method of Payment..........................................26
Section 4.6 Pro Rata Treatment.........................................26
Section 4.7 Sharing of Payments........................................27
Section 4.8 Non-Receipt of Funds by the Agent..........................27
Section 4.9 Participation Obligations Absolute; Failure to Fund
Participation.............................................27
ARTICLE V Change in Circumstances.............................................28
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Section 5.1 Increased Cost and Reduced Return..........................28
Section 5.2 Limitation on Types of Loans...............................30
Section 5.3 Illegality.................................................30
Section 5.4 Treatment of Affected Loans................................30
Section 5.5 Compensation...............................................31
Section 5.6 Taxes......................................................31
Section 5.7 Replacement of a Lender....................................33
ARTICLE VI Conditions Precedent...............................................33
Section 6.1 Initial Loan and Letter of Credit..........................33
Section 6.2 All Loans and Letters of Credit............................35
ARTICLE VII Representations and Warranties....................................36
Section 7.1 Corporate Existence........................................36
Section 7.2 Financial Statements.......................................36
Section 7.3 Corporate Actions: No Breach...............................36
Section 7.4 Operation of Business......................................37
Section 7.5 Litigation and Judgments...................................37
Section 7.6 Rights in Properties; Liens; Nonproductive Assets..........37
Section 7.7 Enforceability.............................................37
Section 7.8 Approvals..................................................37
Section 7.9 Debt.......................................................37
Section 7.10 Taxes......................................................37
Section 7.11 Margin Securities..........................................38
Section 7.12 ERISA......................................................38
Section 7.13 Disclosure.................................................38
Section 7.14 Subsidiaries...............................................39
Section 7.15 Agreements.................................................39
Section 7.16 Compliance with Laws.......................................39
Section 7.17 Investment Company Act.....................................39
Section 7.18 Public Utility Holding Company Act.........................39
Section 7.19 Environmental Matters......................................39
Section 7.20 Year 2000 Compliance.......................................40
ARTICLE VIII Positive Covenants...............................................41
Section 8.1 Reporting Requirements.....................................41
Section 8.2 Maintenance of Existence; Conduct of Business..............43
Section 8.3 Maintenance of Properties..................................43
Section 8.4 Taxes and Claims...........................................43
Section 8.5 Insurance..................................................43
Section 8.6 Inspection Rights..........................................43
Section 8.7 Keeping Books and Records..................................44
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Section 8.8 Compliance with Law........................................44
Section 8.9 Compliance with Agreements.................................44
Section 8.10 Further Assurances; Significant Subsidiary Guaranty
and Contribution and Indemnification Agreement............44
Section 8.11 ERISA......................................................44
Section 8.12 Year 2000 Compliance.......................................44
Section 8.13 Fiduciary Accounts.........................................45
ARTICLE IX Negative Covenants.................................................45
Section 9.1 Debt.......................................................45
Section 9.2 Limitation on Liens and Restrictions on Subsidiaries.......46
Section 9.3 Mergers, Etc...............................................47
Section 9.4 Restricted Junior Payments.................................48
Section 9.5 Investments................................................48
Section 9.6 Limitation on Issuance of Capital Stock....................50
Section 9.7 Transactions With Affiliates...............................50
Section 9.8 Disposition of Assets......................................50
Section 9.9 Sale and Leaseback.........................................50
Section 9.10 Lines of Business..........................................51
Section 9.11 Fiscal Quarter and Fiscal Year.............................51
ARTICLE X Financial Covenants.................................................51
Section 10.1 Net Worth..................................................51
Section 10.2 Fixed Charge Coverage Ratio................................51
Section 10.3 Leverage Ratio.............................................51
Section 10.4 Tangible Net Worth.........................................51
ARTICLE XI Default............................................................51
Section 11.1 Events of Default..........................................51
Section 11.2 Remedies...................................................54
Section 11.3 Cash Collateral............................................54
Section 11.4 Performance by the Agent...................................55
Section 11.5 Right of Set-off; Adjustments..............................55
ARTICLE XII The Agent.........................................................56
Section 12.1 Appointment, Powers, and Immunities........................56
Section 12.2 Reliance by Agent..........................................56
Section 12.3 Defaults...................................................57
Section 12.4 Rights as Lender...........................................57
Section 12.5 Indemnification............................................57
Section 12.6 Non-Reliance on Agent and Other Lenders....................57
Section 12.7 Resignation of Agent.......................................58
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Section 12.8 Several Commitments........................................58
Section 12.9 Agent Fee..................................................58
ARTICLE XIII Miscellaneous....................................................58
Section 13.1 Expenses; Indemnification..................................58
Section 13.2 Limitation of Liability....................................60
Section 13.3 No Duty....................................................60
Section 13.4 No Fiduciary Relationship..................................60
Section 13.5 Equitable Relief...........................................60
Section 13.6 No Waiver; Cumulative Remedies.............................60
Section 13.7 Assignments and Participations.............................60
Section 13.8 Survival...................................................62
Section 13.9 ENTIRE AGREEMENT...........................................62
Section 13.10 Amendments and Waivers.....................................62
Section 13.11 Maximum Interest Rate......................................63
Section 13.12 Notices....................................................63
Section 13.13 Governing Law..............................................64
Section 13.14 Counterparts...............................................64
Section 13.15 Severability...............................................64
Section 13.16 Headings...................................................64
Section 13.17 Non-Application of Chapter 346 of Texas Finance Code.......64
Section 13.18 Construction...............................................64
Section 13.19 Independence of Covenants..................................64
Section 13.20 WAIVER OF JURY TRIAL.......................................64
Section 13.21 Confidentiality............................................64
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INDEX TO EXHIBITS
Exhibit Description of Exhibit
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A Revolving Note
B Swingline Note
C Guaranty
D Assignment and Acceptance
E Compliance Certificate
F Commitment and Acceptance
G Contribution and Indemnification Agreement
H Permitted Investment Policy
I Strategic Investment Policy
J Loan or Letter of Credit Request Form
K Rapid Recovery Facility
INDEX TO SCHEDULES
Schedule Description of Schedule
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7.14 List of Subsidiaries
7.21 Fiduciary Accounts
9.1(b) Existing Debt
9.1(e) Airplane Lease
9.2 Existing Liens
9.5 Existing Strategic Investments
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the Agreement), dated as of November 3, 1998,
is among ▇.▇. ▇▇▇▇▇▇ HOLDINGS, INC., a Delaware corporation (Borrower), each of
the banks or other lending institutions which is or which may from time to time
become a signatory hereto or any successor or assignee thereof (individually, a
Lender and, collectively, the Lenders), and NATIONSBANK, N.A., individually as a
Lender, as the Swingline Lender, and as Agent for itself and the other Lenders
(in its capacity as agent, together with its successors in such capacity, the
Agent).
R E C I T A L S:
The Borrower has requested that the Lenders extend credit to the
Borrower in the form of a revolving credit facility. The Lenders are willing to
extend such credit to the Borrower upon the terms and conditions hereinafter set
forth.
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto agree as follows:
ARTICLE I
Definitions
Section I.1 Definitions. As used in this Agreement, the following
terms have the following meanings:
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.
Adjustment Date has the meaning specified in Section 3.2.
Affected Loans has the meaning specified in Section 5.4.
Affiliate means, as to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds five percent (5%) or more of any class
of voting stock of such Person; or (c) five percent (5%) or more of the voting
stock of which is directly or indirectly beneficially owned or held by the
Person in question. The term Acontrol means the possession, directly or
indirectly, of the power to direct or cause direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise;
provided, however, in no event shall the Agent or any Lender be deemed an
Affiliate of the Borrower or any Subsidiaries.
Agent has the meaning set forth in the introductory paragraph of
this Agreement.
Agreement has the meaning set forth in the introductory paragraph of
this Agreement.
Applicable Lending Office means, for each Lender and for each Type
of Loan, the Lending Office of such Lender (or of an affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or an Affiliate of such Lender) as such Lender may from
time to time specify to the Agent and the Borrower by written notice in
accordance with the terms hereof as the office by which its Loans of such Type
are to be made and maintained.
Applicable Margin has the meaning specified in Section 3.2.
Approved Acquisition has the meaning specified in Section 9.5.
Assignment and Acceptance means an assignment and acceptance entered
into by a Lender and its assignee and accepted by the Agent pursuant to Section
13.7, in substantially the form of Exhibit D hereto.
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 means a portion of a Loan that bears interest at the
rate based upon the Base Rate.
Borrower has the meaning set forth in the introductory paragraph of
this Agreement.
Borrowing Availability means, on any date, the amount by which the
aggregate Commitments exceed the Outstanding Revolving Credit on such date.
Business Day means (a) any day excluding Saturday, Sunday and any
day which either is a legal holiday under the laws of the State of Texas or is a
day on which banking institutions located in any such State are closed, and (b)
with respect to all borrowings, payments, Conversions, Continuations, Interest
Periods, and notices in connection with Eurodollar Loans, any day which is a
Business Day described in clause (a) above and which is also a day on which
dealings in Dollar deposits are carried out in the London interbank market.
Capital Expenditures means, for any period, all expenditures of the
Borrower and its Subsidiaries which are classified as capital expenditures on
the consolidated statement of cash flows of Borrower in accordance with GAAP,
including all such expenditures so classified as recurring capital expenditures
and all such expenditures associated with Capital Lease Obligations.
Capital Lease Obligations means, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal property, which obligations are
required to be classified and accounted for as a capital lease on a balance
sheet of such Person under GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
Closing Date means November 3, 1998.
Code means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
Commitment means, as to each Lender, the obligation of such Lender
to make advances of funds and purchase participation interests in (or with
respect to the Agent as a Lender or the Swingline Lender, hold other interests
in) Letters of Credit and Swingline Loans in an aggregate principal amount at
any one time outstanding up to but not exceeding the amount set forth opposite
the name of such Lender on the signature pages hereto under the heading
Commitment, as the same may be increased, reduced or terminated pursuant to
Section 2.5, 2.6, or 11.2 or, if such Lender was not an original signatory to
this Agreement, in such Lender's Assignment and Acceptance or in any Commitment
and Acceptance that has become effective pursuant to Section 2.6. As of the
Closing Date, the aggregate amount of the Commitments of all Lenders equals One
Hundred Million Dollars ($100,000,000).
Commitment and Acceptance has the meaning specified in Section
2.6(a).
Commitment Percentage means, as to any Lender, the percentage
equivalent of a fraction the numerator of which is the amount of the Commitments
of such Lender and the denominator of which is the aggregate amount of the
Commitments of all of the Lenders.
Compliance Certificate means a certificate in substantially the form
of Exhibit E properly completed and executed by the chief financial officer,
treasurer or assistant treasurer of the Borrower.
Consolidating Schedules means consolidating schedules (not
necessarily in accordance with GAAP) in reasonable form which total to the
consolidated financial statements required by this Agreement. Consolidating
Schedules will include (a) income statements by company for Borrower and each
domestic Subsidiary and an aggregate subtotal for all Subsidiaries constituting
Foreign Companies as of the required period, (b) balance sheets of (i) the
Borrower, (ii) the domestic Subsidiaries aggregated as a group, and (iii) the
Subsidiaries constituting Foreign Companies aggregated as a group, in each case
as of the required period, and (c) statements of retained earnings and cash flow
as of the required period prepared with an aggregate subtotal for (i) Borrower
and all domestic Subsidiaries and (ii) all Subsidiaries constituting Foreign
Companies.
CREDIT AGREEMENT - PAGE 3
Continue, Continuation, Continuing and Continued shall refer to the
continuation pursuant to Section 3.5 hereof of a Eurodollar Loan as a Eurodollar
Loan from one Interest Period to the next Interest Period.
Contribution and Indemnification Agreement means the Contribution
and Indemnification Agreement executed by the Borrower and the Significant
Subsidiaries, in substantially the form of Exhibit G hereto, as the same may be
amended or otherwise modified from time to time.
Convert, Conversion, and Converted shall refer to a conversion
pursuant to Section 3.5 or Article 5 of one Type of Loan into the other Type of
Loan.
Debt means as to any Person at any time (without duplication): (a)
all obligations of such Person for borrowed money whether secured or unsecured;
(b) all obligations of such Person evidenced by bonds, notes, debentures, or
other similar instruments whether secured or unsecured; (c) all Capital Lease
Obligations of such Person under any lease with remaining lease payments in an
amount greater than One Hundred Thousand Dollars ($100,000) over the term of
such lease; (d) all Debt Guaranteed by such Person; (e) all obligations secured
by a Lien existing on property owned by such Person, whether or not the
obligations secured thereby have been assumed by such Person or are non-recourse
to the credit of such Person; (f) all reimbursement obligations of such Person
(whether contingent or otherwise) in respect of letters of credit, bankers
acceptances, surety or other bonds and similar instruments; (g) all liabilities
of such Person in respect of unfunded vested benefits under any Plan; (h) all
lease obligations incurred in connection with the airplane lease described on
Schedule 9.1(e) attached hereto; and (i) all operating lease obligations
(excluding any real property lease obligations) under any lease with remaining
lease payments in an amount greater than One Hundred Thousand Dollars ($100,000)
over the term of such lease.
Default Rate means, in respect of any principal of any Loan, any
Reimbursement Obligation, or any other amount payable by the Borrower under any
Loan Document which is not paid when due (whether at stated maturity, by
acceleration, or otherwise), a rate per annum during the period commencing on
the due date until such amount is paid in full equal to the sum of two percent
(2%) plus the Base Rate plus the Applicable Margin as in effect from time to
time (provided that, if such amount in default is principal of a Eurodollar Loan
and the due date is a day other than the last day of an Interest Period
therefor, the Default Rate for such principal shall be, for the period from and
including the due date and to but excluding the last day of the Interest Period
therefor, two percent (2%) plus the interest rate for such Loan for such
Interest Period as provided in Section 3.1 hereof, and, thereafter, the rate
provided for above in this definition).
Default means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
Dollars and $ mean lawful money of the United States of America.
EBITDA means, for any period and any Person, the total of the
following, each calculated without duplication for such Person on a consolidated
basis for such period: (a) Net Income; plus (b) any provision for (or less any
benefit from) income or franchise taxes included in determining
CREDIT AGREEMENT - PAGE 4
Net Income; plus (c) Net Interest Expense deducted in determining Net Income;
plus (d) amortization and depreciation expense deducted in determining Net
Income; plus (e) minority interests.
Eligible Assignee means (i) a Lender; (ii) an Affiliate of a Lender;
and (iii) any other Person approved by the Agent, such approval not to be
unreasonably withheld or delayed by the Agent, and, unless a Default has
occurred and is continuing at the time any assignment is effected, in accordance
with Section 13.7; the Borrower, such approval not to be unreasonably withheld
or delayed by the Borrower; provided, however, that neither the Borrower nor an
Affiliate of the Borrower shall qualify as an Eligible Assignee.
Environmental Laws means any and all federal, state, and local laws,
regulations, and requirements pertaining to health, safety, or the environment,
as such laws, regulations, and requirements may be amended or supplemented from
time to time.
Environmental Liabilities means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs, and expenses, (including,
without limitation, all fees, disbursements and expenses of counsel, expert and
consulting fees and costs of investigation and feasibility studies), fines,
penalties, sanctions, and interest incurred as a result of any claim or demand,
by any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any Environmental Law,
permit, order or agreement with any Governmental Authority or other Person,
arising from environmental, health or safety conditions or the Release or
threatened Release of a Hazardous Material into the environment.
ERISA Affiliate means any corporation or trade or business which is
a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower, which is under common control
(within the meaning of Section 414(c) of the Code) with the Borrower, or which
is otherwise affiliated with the Borrower (within the meaning of Section 414(m)
or Section 414(o) of the Code).
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
Eurodollar Loans means Loans that bear interest at rates based upon
the Adjusted Eurodollar Rate.
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 (2) 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.
CREDIT AGREEMENT - PAGE 5
(London time) two (2) 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 has the meaning specified in Section 11.1.
Executive Officer means any of the chief executive officer, chief
financial officer, president, executive vice president, secretary, treasurer or
assistant treasurer of a Person.
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.
"Fiduciary Accounts" means bank accounts with the Lenders,
including, without limitation, those listed on Schedule 7.21, in which funds are
primarily held by the Borrower or its Subsidiaries in a fiduciary capacity.
Fiscal Quarter means any three (3) month period ending December 31,
March 31, June 30 or September 30.
Fiscal Year means calendar year.
Fixed Charge Coverage Ratio means at any time, the ratio of (a) the
sum of (i) EBITDA of the Borrower on a consolidated basis for the prior four (4)
Fiscal Quarter period, plus (ii) rental expense of Borrower on a consolidated
basis deducted in determining Net Income for the prior four (4) Fiscal Quarter
period, minus (iii) the amount of EBITDA of the Borrower on a consolidated basis
derived from all Foreign Companies in excess of 15% of the EBITDA of the
Borrower on a consolidated basis for the prior four (4) Fiscal Quarter period to
(b) the sum of interest expense and rental expense of the Borrower on a
consolidated basis for the prior four (4) Fiscal Quarter period.
Foreign Company means (i) any Subsidiary that is not organized under
the laws of a state located in the United States of America or (ii) any
Affiliate of the Borrower that is not organized under the laws of a state
located in the United States of America.
Funded Debt means as to any Person at any time (without
duplication) those items described in clauses (a), (b), (c) and (h) of the
definition of Debt.
CREDIT AGREEMENT - PAGE 6
GAAP means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles Board of
the American Institute of Certified Public Accountants or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question. Accounting
principles are applied on a consistent basis when the accounting principles
applied in a current period are comparable in all material respects to those
accounting principles applied in a preceding period.
Governmental Authority means any nation or government, any state or
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory, or administrative functions of or pertaining to
government.
Guarantee by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep-well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in any
other manner the obligee of such Debt or other obligation of the payment thereof
or to protect the obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for collection
or deposit in the ordinary course of business. The term Guarantee used as a verb
has a corresponding meaning.
Guaranty means the guaranty agreement executed by each of the
Significant Subsidiaries in favor of the Agent and the Lenders, in substantially
the form of Exhibit C hereto, as the same may be amended or otherwise modified
from time to time.
Hazardous Material means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law.
Increase Date has the meaning specified in Section 2.6(b).
Increasing Lender has the meaning specified in Section 2.6(a).
Insignificant Subsidiary means each Subsidiary that is not a
Significant Subsidiary.
Interest Period means with respect to any Eurodollar Loans, each
period commencing on the date such Loan is established or Converted from a Base
Rate Loan or, in the case of Continuations, the last day of the next preceding
Interest Period with respect to such Eurodollar Loan, and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as the Borrower may select as provided in Section 3.5 or 4.1,
except that each such Interest Period which commences on the last Business Day
of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Business Day of the appropriate subsequent calendar month. Notwithstanding
the foregoing:
CREDIT AGREEMENT - PAGE 7
(a) each Interest Period which would otherwise end on a day which is not a
Business Day shall end on the next succeeding Business Day (or if such
succeeding Business Day falls in the next succeeding calendar month, on the next
preceding Business Day); (b) any Interest Period which would otherwise extend
beyond the Termination Date shall end on the Termination Date; (c) no more than
six (6) Interest Periods shall be in effect at the same time; and (d) no
Interest Period for any Eurodollar Loan shall have a duration of less than one
(1) month and, if the Interest Period would otherwise be a shorter period, the
related Eurodollar Loan shall not be available hereunder.
Lender has the meaning set forth in the introductory paragraph of
this Agreement.
Letter of Credit Liabilities means, at any time, the aggregate
maximum amount available to be drawn under all outstanding Letters of Credit (in
each case, determined without regard to whether any conditions to drawing could
then be met) and all unreimbursed drawings under Letters of Credit.
Letters of Credit has the meaning specified in Section 2.7(a).
Leverage Ratio means as of any Fiscal Quarter end, the ratio of (a)
total Funded Debt of the Borrower on a consolidated basis to (b) EBITDA of the
Borrower on a consolidated basis for the prior four (4) Fiscal Quarter period
minus the amount of EBITDA of the Borrower on a consolidated basis derived from
all Foreign Companies in excess of 15% of the EBITDA of the Borrower on a
consolidated basis for the prior four (4) Fiscal Quarter period.
Lien means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment, preference,
priority, or other encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or title retention agreement), whether
arising by contract, operation of law, or otherwise.
Loan Documents means this Agreement, the Notes, the Guaranty, the
Contribution and Indemnification Agreement and all other promissory notes,
guaranties, letters of credit, and other instruments, agreements and other
documentation executed and delivered pursuant to or in connection with this
Agreement, as such instruments, agreements and other documentation may be
amended or otherwise modified.
Loan or Letter of Credit Request Form means a certificate, in
substantially the form of Exhibit J, properly completed and signed by an
Executive Officer of the Borrower or any designee thereof, requesting a Loan or
Letter of Credit, as applicable.
Loan Parties means the Borrower and the Significant Subsidiaries.
Loans means Revolving Loans or Swingline Loans.
Material Adverse Effect means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, prospects, or
properties of the Borrower and the Subsidiaries taken as a whole, or (b) the
validity of enforceability of this Agreement or any of the other Loan Documents
or the rights or remedies of the Agent or the Lenders hereunder or thereunder.
In
CREDIT AGREEMENT - PAGE 8
determining whether any individual event could reasonably be expected to result
in a Material Adverse Effect, notwithstanding that such event does not itself
have such effect, a Material Adverse Effect shall be deemed to have occurred if
the cumulative effect of such event and all other then existing events could
reasonably be expected to result in a Material Adverse Effect.
Maximum Rate means, at any time and with respect to any Lender, the
maximum rate of nonusurious interest under applicable law that such Lender may
charge the Borrower. The Maximum Rate shall be calculated in a manner that takes
into account any and all fees, payments, and other charges contracted for,
charged or received in connection with the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to the Borrower at the time of such change in
the Maximum Rate. For purposes of determining the Maximum Rate under Texas law,
the applicable weekly ceiling shall be the indicated rate ceiling described in,
and computed in accordance with, Article 5069-1D.001 et seq. Vernon's Texas
Civil Statutes, as amended or codified.
Multiemployer Plan means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Borrower or
any ERISA Affiliate and which is covered by Title IV of ERISA.
NationsBank means NationsBank, N.A.
Net Income means, for any period and any Person, such Person's
consolidated net income (or loss) determined in conformity with GAAP, but
excluding: (a) the income of any other Person (other than its subsidiaries) in
which such Person or any of its subsidiaries has an ownership interest, unless
received by such Person or its subsidiary in a cash distribution; (b) any
after-tax gains or losses attributable to asset disposition; and (c) to the
extent not included in clauses (a) and (b) above, any after-tax extraordinary,
non-cash or nonrecurring gains or extraordinary or non-cash losses or non-cash
charges due to changes in accounting principles required by GAAP.
Net Interest Expense means, for any period and any Person, the total
of the following for such Person calculated on a consolidated basis for such
period in accordance with GAAP: (a) interest expense minus (b) interest income
(excluding all fiduciary interest income).
New Lender means (i) an Affiliate of a Lender; and (ii) any other
Person approved by the Borrower and the Agent (such approval not to be
unreasonably withheld) that, immediately prior to its issuance of a Commitment
pursuant to Section 2.6 was not a Lender hereunder.
Net Worth means, as of any applicable date of determination, the net
worth of the Borrower and the Subsidiaries as determined on a consolidated basis
in accordance with GAAP.
Notes means the Revolving Notes and the Swingline Note.
Obligation means all obligations, indebtedness, and liabilities of
the Borrower to the Agent, the Swingline Lender, and the Lenders, or any of
them, arising pursuant to any of the Loan
CREDIT AGREEMENT - PAGE 9
Documents, whether now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several,
or joint and several, including, without limitation, the obligation of the
Borrower to repay the Loans, the Reimbursement Obligations, interest on the
Loans and Reimbursement Obligations, and all fees, costs, and expenses
(including reasonable attorneys' fees) provided for in the Loan Documents.
Outstanding Revolving Credit means, at any time of determination,
the sum of (a) the aggregate amount of Revolving Loans then outstanding; plus
(b) the aggregate amount of Letter of Credit Liabilities (or when calculated
with respect to a Lender, including the Agent as a Lender, such Lender's
participation or other interest in such Letter of Credit Liabilities); plus (c)
the aggregate amount of Swingline Loans (or when calculated with respect to a
Lender, including the Swingline Lender, such Lender's participation or other
interest in such Swingline Loans) then outstanding.
Payment Date has the meaning specified in subsection 2.7(c).
Payor has the meaning specified in Section 4.8.
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
Permitted Acquisition means an acquisition (i) greater than fifty
percent (50%) of the outstanding capital stock or other comparable ownership
interest in a Person and such Persons earnings would be required to be
consolidated with the Borrowers earnings in accordance with GAAP, (ii) equal to
fifty percent (50%) of the outstanding capital stock or other comparable
ownership interest in a Person if after such acquisition, the Borrower is deemed
to have control of such Person and such Persons earnings would be required to be
consolidated with the Borrowers earnings in accordance with GAAP, or (iii) of or
all or substantially all of such Persons assets; provided however, (a) such
Person has maintained a positive EBITDA for two of the most recent prior three
Fiscal Years of such Person, (b) such Person has maintained a positive EBITDA
for the prior four (4) Fiscal Quarters of such Person then ended prior to such
acquisition, (c) such Person being acquired is not engaged in any line of
business other than the businesses or complementary or reasonably related
businesses in which the Borrower or any Subsidiary is engaged on the date
hereof, (d) the sum of (i) the cash consideration for such acquisition, plus
(ii) the cash consideration for any other Permitted Acquisitions in each case
described in clauses (i) and (ii) actually paid during the prior four (4) Fiscal
Quarters is in an amount not greater than twenty percent (20%) of the
consolidated gross revenues of the Borrower and its Subsidiaries for the prior
four (4) Fiscal Quarters of the Borrower then ended prior to such acquisition
(which calculation of the consolidated gross revenues for purposes herein shall
include the gross revenues of each Permitted Acquisition made after the Closing
Date and before the date of determination (such date being the date of payment
of the cash consideration described in clause (i) above) for the prior four (4)
Fiscal Quarters even if such Permitted Acquisition has not been a Subsidiary
during the previous four (4) Fiscal Quarters), and (e) at least five (5)
Business Days prior to such acquisition Borrower has executed and delivered to
Agent a Compliance Certificate demonstrating compliance with this Agreement
immediately before and proforma immediately after such acquisition.
CREDIT AGREEMENT - PAGE 10
Permitted Investment means any advance, loan, extension of credit,
or capital contribution to or investment in any Person, or purchase or ownership
of any stock, bonds, notes, debentures, or other securities of any Person that
complies with the criteria set forth in the Borrowers current investment policy,
a copy of which is attached hereto as Exhibit H.
Person means any individual, corporation, business trust,
association, company, partnership, joint venture, Governmental Authority, or
other entity.
Plan means any employee benefit plan (within the meaning of Section
3(3) of ERISA) established or maintained by the Borrower or any ERISA Affiliate,
which plan is subject to the provisions of ERISA.
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.
Principal Office means the principal office of the Agent, personally
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
Prohibited Transaction means any transaction set forth in Section
406 or 407 of ERISA or Section 4975(c)(1) of the Code for which there does not
exist a statutory or administrative exemption.
Quarterly Payment Date means the last day of March, June, September,
and December of each year, the first of which shall be the first such day after
the date of this Agreement.
Rapid Recovery Facility means that program established by the
Borrower pursuant to which the Borrower makes short-term advances to certain of
its clients which are insurance companies which are parties as ceding companies
to reinsurance contracts with reinsurers; such advances based on obligations
owed to such clients pursuant to such reinsurance contracts, as such program is
more specifically described in Exhibit K.
Regulation D means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from time to
time.
Regulatory Change means, with respect to any Lender, any change
after the date of this Agreement in United States federal, state, or foreign
laws or regulations (including Regulation D) or the adoption or making after
such date of any interpretations, directives, or requests applying to a class of
Lenders including such Lender of or under any United States federal or state, or
any foreign, laws or regulations (whether or not having the force of law) by any
court or governmental or monetary authority charged with the interpretation or
administration thereof.
Reimbursement Obligation means the obligation of the Borrower to
reimburse the Agent for any demand for payment or drawing under a Letter of
Credit.
CREDIT AGREEMENT - PAGE 11
Release means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching, or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water,
ground water, or property in violation of Environmental Laws.
Remedial Action means all actions required to (a) cleanup, remove,
treat, or otherwise address Hazardous Materials in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Hazardous Materials so that they do not migrate or endanger
or threaten to endanger public health or welfare or the indoor or outdoor
environment, or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.
Reportable Event means any of the events set forth in Section 4043
of ERISA.
Required Lenders means Lenders having (a) in excess of fifty percent
(50%) of the Commitments, or (b) if all Commitments have terminated, in excess
of fifty percent (50%) of the sum of (i) the outstanding principal amount of the
Loans (less any participations by the Swingline Lender hereunder to the other
Lenders in the outstanding Swingline Loans), (ii) the participations in
outstanding Letter of Credit Liabilities and (iii) the participations by the
Swingline Lender to the other Lenders in outstanding Swingline Loans.
Required Payment has the meaning specified in Section 4.8.
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 by reason of any Regulatory
Change against any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or 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.
Revolving Commitment Fee has the meaning specified in Section 3.7.
Revolving Loans means, as to any Lender, the advances made by such
Lender pursuant to Section 2.1.
Revolving Notes means the promissory notes provided for by Sections
2.2, 2.6 and 13.7 and all amendments and other modifications thereof.
Significant Subsidiary means any Subsidiary that is not a Foreign
Company, and meets at least one of the two following criteria:
CREDIT AGREEMENT - PAGE 12
(a) such Subsidiary either (i) has gross revenues
(determined in accordance with GAAP) during the most recently ended
Fiscal Year of such Subsidiary equal to or greater than One Million
Five Hundred Thousand Dollars ($1,500,000), or (ii) has total assets
(determined in accordance with GAAP) equal to or greater than One
Million Five Hundred Thousand Dollars ($1,500,000); and
(b) beginning one hundred eighty (180) days after the
Closing Date, such Subsidiary is a directly owned Subsidiary of the
Borrower.
Stock Option Plans means collectively, (a) that certain ▇.▇. ▇▇▇▇▇▇
Holdings, Inc. 1997 Stock Incentive Plan, (b) that certain 1993 Stock Incentive
Plan of ▇.▇. ▇▇▇▇▇▇ Holdings, Inc., as amended by the First Amendment to the
1993 Stock Incentive Plan of ▇.▇. ▇▇▇▇▇▇ Holdings, Inc. and the Second Amendment
to the 1993 Stock Incentive Plan of ▇.▇. ▇▇▇▇▇▇ Holdings, Inc., (c) ▇.▇. ▇▇▇▇▇▇
Holdings, Inc. Directors Stock Option Plan, (d) ▇.▇. ▇▇▇▇▇▇ Holdings, Inc.
Executive Restricted Stock Incentive Plan, (e) ▇.▇. ▇▇▇▇▇▇ Holdings, Inc.
Non-Employee Directors Stock Plan, (f) K2 Technologies, Inc. 1994 Stock Plan
adopted November 15, 1994, (g) K2 Technologies, Inc. 1996 Stock Option Plan
adopted September 19, 1996, and (h) K2 Technologies, Inc. 1998 Key Person Stock
Option Plan adopted July 25, 1998, copies of which the Borrower has delivered to
the Agent.
Strategic Investment means any advance, loan, extension of credit,
or capital contribution to or investment in any Person, or purchase or ownership
of any stock, bonds, notes, debentures, or other securities of any Person that
(a) in the aggregate constitutes less than or equal to fifty percent (50%) of
all outstanding capital stock or other comparable ownership interest in such
Person if after such transaction, the Borrower is deemed not to have control of
such Person, and (b) complies with the Borrowers criteria set forth in the
Borrowers strategic investment policy, a copy of which is attached hereto as
Exhibit I.
Subsidiary means any corporation (or other entity) of which at least
a majority of the outstanding shares of stock (or other ownership interests)
having by the terms thereof ordinary voting power to elect a majority of the
board of directors (or similar governing body) of such corporation (or other
entity) (irrespective of whether or not at the time stock (or other ownership
interests) of any other class or classes of such corporation (or other entity)
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by the
Borrower or one or more of the Subsidiaries or by the Borrower and one or more
of the Subsidiaries.
Swingline Commitment means the obligation of the Swingline Lender to
make advances pursuant to Section 2.8(a) in an aggregate principal amount at any
one time outstanding up to but not exceeding Ten Million Dollars ($10,000,000),
as such amount may be reduced pursuant to subsection 2.8(e) or Section 11.2.
Swingline Lender means NationsBank.
CREDIT AGREEMENT - PAGE 13
Swingline Loans means the advances made by the Swingline Lender
pursuant to subsection 2.8(a).
Swingline Maturity has the meaning specified in subsection 2.8(c).
Swingline Note means the promissory note provided for by subsection
2.8(b) and all amendments and other modifications thereto.
Tangible Net Worth means, as of any applicable date of
determination, the Net Worth of the Borrower and the Subsidiaries less any
intangible assets, including without limitation, patents, patent rights,
trademarks, trade names, franchises, copyrights, goodwill, and other similar
intangible assets, as determined on a consolidated basis in accordance with
GAAP.
Termination Date means November 3, 2001, or such earlier date on
which the Commitments terminate as provided in this Agreement.
Type shall mean any type of Loan (i.e., a Base Rate Loan or
Eurodollar Loan).
UCC means the Uniform Commercial Code as in effect in the State of
Texas.
UK Senior Facility means the loan facilities made to Swire Fraser
Insurance (Holdings) Ltd pursuant to (a) that certain Letter Agreement dated
November 15, 1995, by and between Midland Bank plc and Swire Fraser Insurance
(Holdings) Ltd, (b) that certain Letter Agreement dated August 22, 1997, by and
between Midland Bank plc and ▇▇▇▇▇ ▇▇▇▇▇▇ Insurance (Holdings) Ltd, (c) that
certain Letter Agreement dated February 12, 1998, by and between Midland Bank
plc and ▇▇▇▇▇ ▇▇▇▇▇▇ Insurance (Holdings) Ltd, and (d) that certain Letter
Agreement dated June 26, 1998, by and between Midland Bank plc and ▇▇▇▇▇ ▇▇▇▇▇▇
Insurance (Holdings) Ltd, as each has been and may be amended, restated or
modified from time to time.
Year 2000 Compliant has the meaning specified in Section 7.20.
Year 2000 Problem has the meaning specified in Section 7.20.
Section I.2 Other Definitional Provisions. All definitions contained
in this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words hereof, herein, and hereunder and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Unless otherwise specified, all
Article and Section references pertain to this Agreement. Terms used herein that
are defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC.
Section I.3 Accounting Terms and Determination. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to the Agent and the Lenders
hereunder shall be prepared, in accordance with GAAP, on a basis consistent with
those used in the preparation of the financial statements referred to in Section
7.2 hereof. All calculations
CREDIT AGREEMENT - PAGE 14
made for the purposes of determining compliance with the provisions of this
Agreement shall be made by application of GAAP, on a basis consistent with those
used in the preparation of the financial statements referred to in Section 7.2
hereof. In the event any changes in accounting principles required by GAAP or
recommended by Borrower's certified public accountants and implemented by
Borrower occur and such changes result in a change in the method of the
calculation of financial covenants, standards or terms under this Agreement,
then the Borrower, the Agent and the Lenders agree to enter into negotiations in
order to amend such provisions of this Agreement so as to equitably reflect such
changes with the desired result that the criteria for evaluating such covenants,
standards or terms shall be the same after such changes as if such changes had
not been made. Until such time as such an amendment shall have been executed and
delivered by the Agent, the Borrower and the Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such changes had not occurred.
Section I.4 Time of Day. Unless otherwise indicated, all references
in this Agreement to times of day shall be references to Dallas, Texas time.
ARTICLE II
Revolving Credit Facility
Section II.1 Commitments. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make one or more Revolving Loans
to the Borrower from time to time from and including the Closing Date to but
excluding the Termination Date in an aggregate principal amount at any time
outstanding up to but not exceeding the amount of such Lender's Commitment as
then in effect; provided, however, (a) the Outstanding Revolving Credit
applicable to a Lender (including the Agent as a Lender) shall not at any time
exceed such Lender's Commitment and (b) the Outstanding Revolving Credit shall
not at any time exceed the aggregate Commitments. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the Borrower
may borrow, prepay, and reborrow hereunder the amount of the Commitments and may
obtain Base Rate Loans and Eurodollar Loans thereunder and, until the
Termination Date, the Borrower may Continue Eurodollar Loans established under
the Revolving Loans or Convert Loans established under the Revolving Loans of
one Type into Loans of the other Type. Loans of each Type under the Revolving
Loan made by each Lender shall be established and maintained at such Lender's
Applicable Lending Office for Revolving Loans of such Type.
Section II.2 Notes. The Revolving Loans made by a Lender shall be
evidenced by a single promissory note of the Borrower in substantially the form
of Exhibit A hereto, payable to the order of such Lender in a principal amount
equal to its Commitment as originally in effect and as it may be increased or
decreased pursuant to the provisions of this Agreement and otherwise duly
completed.
Section II.3 Repayment of Revolving Loans. The Borrower shall pay to
the Agent for the account of the Lenders the outstanding principal amount of all
of the Revolving Loans on the Termination Date.
CREDIT AGREEMENT - PAGE 15
Section II.4 Use of Proceeds. The proceeds of Revolving Loans shall
be used by the Borrower for general corporate purposes including support of
working capital, Permitted Acquisitions, Permitted Investments, Strategic
Investments, Letters of Credit, payment in full of the obligations of the
Borrower under the Amended and Restated Credit Agreement more specifically
described in Section 6.1(i) and other lawful corporate purposes.
Section II.5 Reduction or Termination of Commitments. The Borrower
shall have the right to terminate or reduce in part the unused portion of the
Commitments at any time and from time to time, provided that: (a) the Borrower
shall give notice of each such termination or reduction as provided in Section
4.3; (b) each partial reduction shall be in an aggregate amount at least equal
to Five Million Dollars ($5,000,000); and (c) the Commitments may not be reduced
to an amount less than the sum of the Swingline Commitment plus the Letter of
Credit Liabilities then outstanding. The Commitments may not be reinstated after
they have been terminated or reduced.
Section II.6 Increase in Commitment.
(a) So long as (a) no Default has occurred and is
continuing, and (b) the Borrower has not terminated or reduced in
part any unused portion of the Commitments at any time pursuant to
Section 2.5, the Borrower may, at any time and from time to time, by
notice to the Agent, request an increase in the aggregate amount of
the Commitments within the limitations hereafter described, which
notice shall set forth the amount of such increase. In accordance
with Section 2.6(d), the aggregate amount of the Commitments may be
so increased either by having one or more New Lenders that have been
approved by the Borrower become Lenders and/or by having any one or
more of the then existing Lenders (at their respective election in
their sole discretion) increase the amount of their Commitment
(Increasing Lenders), provided that (i) the Commitment of any New
Lender shall not be less than $10,000,000 and the sum of the
Commitments of the New Lenders and the increases in the Commitments
of the Increasing Lenders shall be in an aggregate amount of not
less than $10,000,000 (and, if in excess thereof, in integral
multiples of $5,000,000); (ii) the aggregate amount of all the
increases in the Commitments pursuant to this Section 2.6 shall not
exceed Fifty Million Dollars ($50,000,000); (ii) the Borrower, each
New Lender and/or each Increasing Lender shall have executed and
delivered to the Agent a commitment and acceptance (the Commitment
and Acceptance) substantially in the form of Exhibit F hereto, and
the Agent shall have accepted and executed the same, (iv) the
Borrower shall have executed and delivered to the Agent a Revolving
Note or Revolving Notes payable to the order of each New Lender
and/or each Increasing Lender, each such Revolving Note to be in the
amount of such New Lender's Commitment or such Increasing Lenders
Commitment (as applicable); (v) the Borrower shall have delivered to
the Agent opinions of counsel (substantially similar to the forms of
opinions provided for in Section 6.1(j), modified to apply to the
increase in the Commitments and each new Revolving Note and
Commitment and Acceptance executed and delivered in connection
therewith); (vi) the Significant Subsidiaries shall have consented
in writing to the new Commitments or increases in Commitments (as
applicable) and shall have agreed that their Guarantees continue in
full force and effect, and (vii) the Borrower, each New Lender
and/or each Increasing Lender shall otherwise have executed and
delivered such other instruments and documents as the
CREDIT AGREEMENT - PAGE 16
Agent shall have reasonably requested in connection with such new
Commitment or increase in the Commitment (as applicable). The form
and substance of the documents required under clauses (iii) through
(vii) above shall be reasonably acceptable to the Agent. The Agent
shall provide written notice to all of the Lenders hereunder of the
admission of any New Lender or the increase in the Commitment of any
Increasing Lender hereunder and shall furnish to each of the Lenders
copies of the documents required under clause (iii), (v), (vi) and
(vii) above.
(b) Upon the effective date of any increase in the
aggregate amount of Commitments pursuant to the provisions hereof
(Increase Date), which Increase Date shall be mutually agreed upon
by the Borrower, each New Lender, each Increasing Lender and the
Agent, each New Lender and/or Increasing Lender shall make a payment
to the Agent in an amount sufficient, upon the application of such
payments by all New Lenders and Increasing Lenders to the reduction
of the outstanding Revolving Loans held by the Lenders (including
the Increasing Lenders) to cause the principal amount outstanding
under the Revolving Loans made by each Lender to be equal to each
Lenders Commitment Percentage of the aggregate amount of Commitments
as so increased. The Borrower hereby irrevocably authorizes each New
Lender and/or each Increasing Lender to fund to the Agent the
payment required to be made pursuant to the immediately preceding
sentence for application to the reduction of the outstanding
Revolving Loans held by the other Lenders, and each such payment
shall constitute a Revolving Loan hereunder. If, as a result of the
repayment of the Revolving Loans provided for in this Section
2.6(b), any payment of a Eurodollar Loan occurs on a day which is
not the last day of the applicable Interest Period, the Borrower
will pay to the Agent for the benefit of any of the Lenders
(including any Increasing Lender to the extent of Eurodollar Loans
held by such Increasing Bank prior to such Increase Date) holding a
Eurodollar Loan any loss or cost incurred by such Lender resulting
therefrom in accordance with Section 5.5. Upon the Increase Date,
all Revolving Loans outstanding hereunder (including any Revolving
Loans made by the New Lenders and/or Increasing Lenders on the
Increase Date) shall be Base Rate Loans, subject to the Borrower's
right to convert the same to Eurodollar Loans on or after such date
in accordance with the provisions of Section 3.5.
(c) Upon the Increase Date and the making of the
Revolving Loans by the New Lenders and/or Increasing Lenders in
accordance with the provisions of Section 2.6(b), each New Lender
and/or each Increasing Lender shall also be deemed to have
irrevocably and unconditionally purchased and received without
recourse or warranty, from the Lenders immediately prior to the
Increase Date, an undivided interest and participation in any Letter
of Credit and Swingline Loan, as applicable, then outstanding,
ratably, such that each Lender (including each New Lender) holds a
participation interest in each such Letter of Credit and Swingline
Loan, as applicable, in proportion to such Lenders Commitment
Percentage.
(d) Upon the notice by the Borrower to the Agent
pursuant to Section 2.6(a) hereof, each of the then existing Lenders
shall have the right (at its election) to increase its Commitment by
an amount equal to such Lenders Commitment Percentage of the
proposed increase in the aggregate Commitments. If less than all of
the proposed increase in aggregate
CREDIT AGREEMENT - PAGE 17
Commitments is elected by the existing Lenders, then any of the then
existing Lenders shall have the right to increase its Commitment in
an amount greater than such Lenders Commitment Percentage of the
proposed increase in the aggregate Commitments with the Agents
approval. If the entire amount of the proposed increase in aggregate
Commitments is still not obtained, Agent shall use its best efforts
with Borrowers full cooperation to add New Lenders, acceptable to
the Borrower and to the Agent, with new Commitments which when added
to the increase in Commitments of the Increasing Lenders, shall
equal the requested increase in the aggregate amount of the
Commitments. In the event the sum of each New Lenders Commitment and
the increase in each Increasing Lenders Commitment is less than the
requested increase in the aggregate amount of Commitments, the
Borrower may elect to accept the increase in the aggregate amount of
the Commitments to be equal to such lesser amount. Notwithstanding
anything to the contrary, Agent shall not be liable for any failure
to obtain Increasing Lenders or New Lenders hereunder or any failure
to increase the aggregate amount of Commitments by the amount so
requested by the Borrower pursuant to Section 2.6(a).
(e) Nothing contained herein shall constitute, or
otherwise be deemed to be a commitment or agreement on the part of
any Lender to increase its Commitment hereunder at any time. No
Lender (except only for itself) shall have the right to decline
Borrower=s request pursuant to Section 2.6(a) for an increase in the
aggregate amount of Commitments.
Section II.7 Letters of Credit.
(a) Commitment to Issue. The Borrower may utilize the
Commitments by requesting that the Agent issue, and the Agent,
subject to the terms and conditions of this Agreement, shall issue
standby letters of credit for the Borrower's account (such letters
of credit being hereinafter referred to collectively as the Letters
of Credit); provided, however, (i) the aggregate amount of
outstanding Letter of Credit Liabilities shall not at any time
exceed Fifteen Million Dollars ($15,000,000); (ii) the Outstanding
Revolving Credit shall not at any time exceed the aggregate
Commitments; and (iii) the Outstanding Revolving Credit applicable
to a Lender shall not at any time exceed such Lender's Commitment.
Upon the date of issue of a Letter of Credit, the Agent shall be
deemed, without further action by any party hereto, to have sold to
each other Lender, and each other Lender shall be deemed, without
further action by any party hereto, to have purchased from the Agent
a participation to the extent of such Lender's Commitment Percentage
in such Letter of Credit and the related Letter of Credit
Liabilities.
(b) Letter of Credit Request Procedure. The Borrower
shall give the Agent at least five (5) Business Days irrevocable
prior notice (effective upon receipt) by means of a Loan or Letter
of Credit Request Form specifying the date of each Letter of Credit
to be issued and the nature of the transactions to be supported
thereby. Upon receipt of such notice the Agent shall promptly notify
each other Lender of the contents thereof and of such Lender's
Commitment Percentage of the amount of the proposed Letter of
Credit. The Agent shall provide a Lender a copy of each Letter of
Credit issued hereunder upon such Lender's request. Each Letter of
Credit shall have an expiration date that does not extend beyond the
CREDIT AGREEMENT - PAGE 18
Termination Date, shall be payable in Dollars, must support a
transaction entered into in the ordinary course of the Borrower's
business, must be satisfactory in form and substance to the Agent,
and shall be issued pursuant to such documentation as the Agent may
require, including, without limitation, the Agent's standard form
letter of credit request and reimbursement agreement; provided that,
in the event of any conflict between the terms of such agreement and
the other Loan Documents, the terms of the other Loan Documents
shall control.
(c) Letter of Credit Fees. The Borrower will pay to the
Agent for the account of each Lender an irrevocable letter of credit
fee on such Lender's Commitment Percentage of the amount available
for drawings under each Letter of Credit, such letter of credit fee
(i) to be paid in arrears on each Quarterly Payment Date after
issuance until the date of expiration or termination thereof (each
such date herein a Payment Date) and (ii) to be calculated for the
period from and including one Payment Date to and excluding the next
at a rate equal to the Applicable Margin applicable to Eurodollar
Loans in effect on the date of payment (as determined in accordance
with Section 3.2). After receiving any payment of any letter of
credit fees under this clause (c), the Agent will promptly pay to
each Lender the letter of credit fees then due such Lender. With
respect to each Letter of Credit, the Borrower will also pay to the
Agent, for its account only, the fees and expenses described in
Section 13.1(a), to the extent applicable, and, on the date of the
issuance of the Letter of Credit, the fronting fee equal to 0.125%
per annum of the aggregate face amount of such Letter of Credit
shall be payable by the Borrower to the Agent for its own account.
(d) Funding of Drawings. Upon receipt from the
beneficiary of any Letter of Credit of any demand for payment or
other drawing under such Letter of Credit, the Agent shall promptly
notify the Borrower and each Lender as to the amount to be paid as a
result of such demand or drawing and the respective payment date.
Not later than 11:00 a.m. on the applicable payment date, each
Lender will make available to the Agent, at the Principal Office, in
immediately available funds, in payment of its participation in
Letters of Credit, an amount equal to such Lender's Commitment
Percentage of the amount to be paid as a result of such demand or
drawing even if the conditions to a Loan under Article 6 have not
been satisfied.
(e) Reimbursements. The Borrower shall be irrevocably
and unconditionally obligated to immediately reimburse the Agent for
any amounts paid by the Agent upon any demand for payment or drawing
under any Letter of Credit, without presentment, demand, protest, or
other formalities of any kind. All payments on the Reimbursement
Obligations shall be made to the Agent at the Principal Office for
the account of the Agent in Dollars and in immediately available
funds, without setoff, deduction or counterclaim not later than 3:00
pm. on the date of the corresponding payment under the Letter of
Credit by the Agent. Subject to the other terms and conditions of
this Agreement, such reimbursement may be made by Borrower
requesting a Revolving Loan or a Swingline Loan in accordance with
Section 4.1, the proceeds of which shall be credited against the
Borrower's Reimbursement Obligations. The Agent will pay to each
Lender such Lender's Commitment Percentage of all amounts received
from the Borrower for application in payment, in whole or in part,
to
CREDIT AGREEMENT - PAGE 19
the Reimbursement Obligation in respect of any Letter of Credit, but
only to the extent such Lender has made payment to the Agent in
respect of such Letter of Credit pursuant to clause (d) of this
Section 2.7.
(f) Reimbursement Obligations Absolute. The
Reimbursement Obligations of the Borrower under this Agreement shall
be absolute, unconditional, and irrevocable, and shall be performed
strictly in accordance with the terms of the Loan Documents under
all circumstances whatsoever and the Borrower hereby waives any
defense to the payment of the Reimbursement Obligations based on any
circumstance whatsoever, including without limitation, in either
case, the following circumstances: (i) any lack of validity or
enforceability of any Letter of Credit or any other Loan Document;
(ii) any amendment or waiver of or any consent to departure from any
Loan Document; (iii) the existence of any claim, setoff,
counterclaim, defense or other rights which the Borrower, any
Significant Subsidiary, or any other Person may have at any time
against any beneficiary of any Letter of Credit, the Agent, any
Lender, or any other Person, whether in connection with any Loan
Document or any unrelated transaction; (iv) any statement, draft, or
other documentation presented under any 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
whatsoever; (v) payment by the Agent under any Letter of Credit
against presentation of a draft or other document that appears on
its face to be in order, without responsibility for further inquiry,
regardless of any notice or information to the contrary; or (vi) any
other circumstance similar to any of the foregoing.
(g) Issuer Responsibility. The Borrower assumes all
risks of the acts or omissions of any beneficiary of any Letter of
Credit with respect to its use of such Letter of Credit. Neither the
Agent, any Lender nor any of their respective officers or directors
shall have any responsibility or liability to the Borrower or any
other Person for: (a) the failure of any draft to bear any reference
or adequate reference to any Letter of Credit, or the failure of any
Person to surrender or to take up any Letter of Credit as required
by the terms of any Letter of Credit, or the failure of any Person
to note the amount of any instrument on any Letter of Credit, each
of which requirements, if contained in any Letter of Credit itself,
it is agreed may be waived by the Agent; (b) errors, omissions,
interruptions, or delays in transmission or delivery of any
messages; (c) the validity, sufficiency, or genuineness of any draft
or other document, or any endorsement(s) thereon, even if any such
draft, document or endorsement should in fact prove to be in any and
all respects invalid, insufficient, fraudulent, or forged or any
statement therein is untrue or inaccurate in any respect; (d) the
payment by the Agent to the beneficiary of any Letter of Credit
against presentation of any draft or other document that appears on
its face to be in order, without responsibility for further inquiry,
regardless of any notice or information to the contrary. The Agent
may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any
notice or information to the contrary. The Agent shall not be
responsible or liable in any way for its actions or inactions in
connection with Letters of Credit except only for its own gross
negligence or willful misconduct.
Section II.8 Swingline Loans.
CREDIT AGREEMENT - PAGE 20
(a) Swingline Commitment. Subject to the terms and
conditions of this Agreement, the Swingline Lender agrees to make
one or more Swingline Loans to the Borrower from time to time from
and including the Closing Date to but excluding the Termination Date
in an aggregate principal amount at any time outstanding up to but
not exceeding the Swingline Commitment; provided, however, (i) the
Outstanding Revolving Credit shall never exceed the aggregate
Commitments and (ii) the Outstanding Revolving Credit applicable to
a Lender (including the Swingline Lender as a Lender) shall never
exceed such Lender's Commitment. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement,
the Borrower may borrow, prepay, and reborrow hereunder the amount
of the Swingline Commitment and may establish Base Rate Loans
thereunder. On the date a Swingline Loan is made by the Swingline
Lender, the Swingline Lender shall be deemed without further action
by any party hereto, to have sold to each Lender, and each Lender
shall be deemed, without further action by any party hereto, to have
purchased from the Swingline Lender a participation to the extent of
such Lender's Commitment Percentage in the Swingline Loan so made,
such participation to be funded in accordance with clause (c) of
this Section 2.8.
(b) Swingline Note. The Swingline Loans made by the
Swingline Lender shall be evidenced by a single promissory note of
the Borrower in substantially the form of Exhibit B hereto, payable
to the order of the Swingline Lender in a principal amount equal to
the Swingline Commitment as originally in effect and otherwise duly
completed.
(c) Repayment of Swingline Loans; Funding of
Participation. The Borrower shall pay to the Swingline Lender for
its own account the outstanding principal amount of each Swingline
Loan on the earlier of (i) the Termination Date or (ii) the date
which is seven (7) days after the Swingline Loan is made (the
earlier of such date with respect to a Swingline Loan herein the
"Swingline Maturity"). Subject to the other terms and conditions of
this Agreement, Borrower may repay a Swingline Loan on its Swingline
Maturity or at any time prior thereto by requesting a Revolving Loan
in accordance with Section 4.1 with the proceeds thereof payable to
the Swingline Lender for its own account. Swingline Lender, at any
time in its sole and absolute discretion and whether or not a
Swingline Maturity shall have occurred, may require that each Lender
fund its participation in the then outstanding principal amount of
all Swingline Loans by giving each Lender notice thereof.
Additionally, if the Borrower shall not have repaid a Swingline Loan
by 1:00 p.m. on the corresponding Swingline Maturity, the Swingline
Lender will notify each Lender of the aggregate principal amount of
the Swingline Loan which has not been repaid. Upon the giving of any
notice by the Swingline Lender under either of the preceding two
sentences, each Lender shall make available to the Swingline Lender,
at the Principal Office, in immediately available funds, an amount
equal to its Commitment Percentage of the aggregate principal amount
of Swingline Loan or Swingline Loans subject to such notice by not
later than 3:00 p.m. on the date such notice is received if such
notice is received by 1:00 p.m. or by 11:00 a.m. on the next
Business Day, if such notice is received after 1:00 p.m., whether or
not the conditions to a Loan under Article 6 are satisfied.
CREDIT AGREEMENT - PAGE 21
(d) Use of Proceeds. The proceeds of Swingline Loans
shall be used by the Borrower for the same purposes as Revolving
Loans as described in Section 2.4; provided however, the Swingline
Commitment may not be used for the issuance of Letters of Credit but
may be used at the Borrowers option to fund Reimbursement
Obligations incurred in connection with Letters of Credit.
(e) Reduction or Termination of Swingline Commitment.
The Borrower shall have the right to terminate or reduce in part the
unused portion of the Swingline Commitment at any time and from time
to time, provided that: (i) the Borrower shall give notice of each
such termination or reduction as provided in Section 4.3; and (ii)
each partial reduction shall be in an aggregate amount at least
equal to Five Million Dollars ($5,000,000). The Swingline Commitment
may not be reinstated after it has been terminated or reduced.
ARTICLE III
Interest and Fees
Section III.1 Interest Rate. The Borrower shall pay to the Agent for
the account of each Lender interest on the unpaid principal amount of each Loan
made by such Lender for the period commencing on the date of such Loan to but
excluding the date such Loan is due, at a fluctuating rate per annum equal to
(a) with respect to the Revolving Loans, (i) during the period that such Loans
or portions thereof are Base Rate Loans, the Base Rate plus the Applicable
Margin and (ii) during the period that such Loans or portions thereof are
Eurodollar Loans, the Adjusted Eurodollar Rate plus the Applicable Margin; and
(b) with respect to the Swingline Loans, the Base Rate plus the Applicable
Margin.
Section III.2 Determinations of Applicable Margin and Revolving
Commitment Fee.
(a) The phrase Applicable Margin shall mean, for any
day, (i) the margin of interest over the Adjusted Eurodollar Rate or
Base Rate, as the case may be, that is applicable when any interest
rate is determined under this Agreement, or (ii) the per annum
percentage rate that is applicable when any Revolving Commitment Fee
is determined under this Agreement. The Applicable Margin is subject
to adjustment (upwards or downwards, as appropriate) based upon the
Leverage Ratio. Effective as of each Adjustment Date, the Applicable
Margin for each Type of Loan or Revolving Commitment Fee, as
applicable, shall be adjusted to reflect the Applicable Margin
prescribed below for the Leverage Ratio as demonstrated by the
Compliance Certificate delivered for that Fiscal Quarter:
------------- ------------------------------------------------ ------------------- -------------- ----------------
REVOLVING
EURODOLLAR RATE BASE RATE COMMITMENT FEE
APPLICABLE APPLICABLE APPLICABLE
LEVEL LEVERAGE RATIO MARGIN MARGIN MARGIN
------------- ------------------------------------------------ ------------------- -------------- ----------------
I Less than 0.75 to 1.00 0.50% 0% 0.20%
------------- ------------------------------------------------ ------------------- -------------- ----------------
CREDIT AGREEMENT - PAGE 22
------------- ------------------------------------------------ ------------------- -------------- ----------------
Greater than or equal to 0.75 to 1.00, but less
II than 1.50 to 1.00 0.625% 0% 0.20%
------------- ------------------------------------------------ ------------------- -------------- ----------------
Greater than or equal to 1.50 to 1.00, but less
III than 2.00 to 1.00 0.750% 0% 0.25%
------------- ------------------------------------------------ ------------------- -------------- ----------------
Greater than or equal to 2.00 to 1.00, but less
IV than 2.50 to 1.00 1.00% 0% 0.30%
------------- ------------------------------------------------ ------------------- -------------- ----------------
V Greater than or equal to 2.50 to 1.00 1.25% 0.25% 0.375%
------------- ------------------------------------------------ ------------------- -------------- ----------------
(b) Notwithstanding anything to the contrary contained
herein, Applicable Margin shall mean the percentage prescribed in
Level II above during the period commencing on the Closing Date
until receipt by the Agent and the Lenders of (i) the Borrowers
audited consolidated financial statement and Consolidating Schedules
for the Fiscal Year ending December 31, 1998, and (ii) a Compliance
Certificate that demonstrates a change in the Leverage Ratio that
would cause another Applicable Margin to be applicable pursuant to
Section 3.2(a).
(c) Upon delivery of the Compliance Certificate pursuant
to subsection 8.1(c) in connection with the financial statements of
Borrower and the Subsidiaries required to be delivered pursuant to
Section 8.1(b) at the end of each Fiscal Quarter commencing with
such Compliance Certificate delivered at the end of the Fiscal
Quarter ending on December 31, 1998, the Applicable Margin shall
automatically be adjusted in accordance with the Leverage Ratio set
forth therein and the table set forth in Section 3.2(a), such
automatic adjustment to take effect as of the first Business Day
after the receipt by the Agent of the related Compliance Certificate
pursuant to Section 8.1(c) (each such Business Day when such margins
or fees change pursuant to this sentence or the next following
sentence, herein an Adjustment Date). If Borrower fails to deliver
such Compliance Certificate which so sets forth the Leverage Ratio
within the period of time required by subsection 8.1(c), the
Applicable Margin shall automatically be adjusted to the highest
Applicable Margin provided in the table set forth in Section 3.2(a),
such automatic adjustments to take effect as of the first Business
Day after the last day on which the Borrower was required to deliver
the applicable Compliance Certificate in accordance with Section
8.1(c) and to remain in effect until subsequently adjusted in
accordance herewith upon the delivery of a Compliance Certificate.
Section III.3 Payment Dates. Accrued interest on the Loans shall be
due and payable as follows: (i) in the case of all Loans (including Base Rate
Loans and Eurodollar Loans), on each Quarterly Payment Date; (ii) in addition to
accrued interest paid in accordance with the foregoing
CREDIT AGREEMENT - PAGE 23
clause (i) and with respect to Eurodollar Loans, on the last day of the Interest
Period with respect thereto; and (iii) on the Termination Date.
Section III.4 Default Interest. Notwithstanding the foregoing, upon
the occurrence and during the continuance of an Event of Default, the
outstanding principal amount of all Loans and (to the fullest extent permitted
by law) any other amount payable by the Borrower under any Loan Document shall
bear interest at the applicable Default Rate at the Required Lenders' option
beginning upon the occurrence of such Event of Default or such later date as
selected by the Required Lenders. Interest payable at the Default Rate shall be
payable from time to time on demand.
Section III.5 Conversions and Continuations of Loans. Subject to
Section 4.2, the Borrower shall have the right from time to time to Convert all
or part of any Base Rate Loan (other than a Swingline Loan) into a Eurodollar
Loan under the same Revolving Loan or to Continue Eurodollar Loans in existence
as Eurodollar Loans under the same Revolving Loan, provided that: (a) the
Borrower shall give the Agent notice of each such Conversion or Continuation as
provided in Section 4.3; (b) a Eurodollar Loan may only be Converted on the last
day of the Interest Period therefore; (c) except for Conversions into Base Rate
Loans, no Conversions or Continuations shall be made while a Default has
occurred and is continuing; and (d) the Swingline Loan may not be a Eurodollar
Loan.
Section III.6 Computations. Interest and fees payable by the
Borrower hereunder and under the other Loan Documents shall be computed as
follows: (i) with respect to Eurodollar Loans and the Default Rate when
calculated with respect to a Eurodollar Loan, on the basis of a year of 360 days
and the actual number of days elapsed (including the first day but excluding the
last day) occurring in the period for which payable unless in the case of
interest such calculation would result in a usurious rate, in which case
interest shall be calculated on the basis of a year of 365 or 366 days, as the
case may be and (ii) with respect to Base Rate Loans, the Default Rate when
calculated based on the Base Rate and all fees payable hereunder, on the basis
of a year of 365 or 366 days, as the case may be and the actual number of days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable.
Section III.7 Revolving Commitment Fee. The Borrower agrees to pay
to the Agent for the account of each Lender a nonrefundable commitment fee
(Revolving Commitment Fee) on the daily average unused amount of such Lender's
Commitment for the period from and including the Closing Date to and including
the Termination Date, at the Applicable Margin rate (as prescribed in Sections
3.2(a) and (b) hereof based on a 360 day year and the actual number of days
elapsed. For the purpose of calculating the Revolving Commitment Fee hereunder,
the Commitments shall be deemed utilized by all outstanding Revolving Loans and
all Letter of Credit Liabilities but shall not, for purposes of this Section 3.7
only, be deemed utilized by any Swingline Loans. Accrued Revolving Commitment
Fee under this Section 3.7 shall be payable in arrears on each Quarterly Payment
Date and on the Termination Date.
Section III.8 Syndication Fee. Upon the exercise of the Borrowers
option pursuant to Section 2.6, the Borrower agrees to pay to the Agent on each
Increase Date solely for the account
CREDIT AGREEMENT - PAGE 24
of the Agent a nonrefundable syndication fee in an amount equal to 0.1% of the
actual increase in the aggregate amount of Commitments.
ARTICLE IV
Administrative Matters
Section IV.1 Borrowing Procedure. The Borrower shall give the Agent
by means of a Loan or Letter of Credit Request Form, and the Agent will give the
Lenders, notice of each borrowing under any Commitment in accordance with
Section 4.3. Not later than 3:00 p.m. on the date specified for each borrowing
under the applicable Commitment (other than the Swingline Commitment) each
Lender will make available the amount of the Loan to be made by it on such date
to the Agent, at the Principal Office, in immediately available funds, for the
account of the Borrower. The amount so received by the Agent shall, subject to
the terms and conditions of this Agreement, be made available to the Borrower by
(a) depositing the same, in immediately available funds, in an account of the
Borrower (designated by the Borrower) maintained with the Agent at the Principal
Office or (b) wire transferring such funds to a Person or Persons designated by
the Borrower in writing. Swingline Lender at its option may accept telephone
requests for Swingline Loans received not later than 1:00 p.m. on the date of
such requested borrowing. Any telephone request for a Swingline Loan by the
Borrower shall be promptly confirmed by delivery of written Loan or Letter of
Request Form for such Swingline Loan via facsimile to the Swingline Lender not
later than 4:30 p.m. on the same date of such telephone request. Not later than
3:00 p.m. on the date specified for each borrowing under the Swingline
Commitment, the Swingline Lender will make available the amount of the Swingline
Loan to be made by it on such date to the Borrower by (i) depositing the same,
in immediately available funds, in an account of the Borrower (designated by the
Borrower) maintained with the Swingline Lender at the Principal Office or (ii)
wire transferring such funds to a Person or Persons designated by the Borrower
in writing.
Section IV.2 Minimum Amounts. Except for prepayments pursuant to
Article 5, each borrowing under (a) a Revolving Loan constituting a Base Rate
Loan and each prepayment of Revolving Loans constituting Base Rate Loans shall
be in an amount at least equal to Three Hundred Thousand Dollars ($300,000) or
any larger amount in increments of One Hundred Thousand Dollars ($100,000); and
(b) a Swingline Loan and each prepayment of Swingline Loans shall be in an
amount at least equal to One Hundred Thousand Dollars ($100,000) or any larger
amount in increments of One Hundred Thousand Dollars ($100,000). Except for
Conversions pursuant to Article 5, each Eurodollar Loan shall be in a minimum
principal amount of Five Million Dollars ($5,000,000) or any larger amount in
increments of One Million Dollars ($1,000,000).
Section IV.3 Certain Notices. Notices by the Borrower to the Agent
of terminations or reductions of Commitments, of borrowings and prepayments of
Loans and of Conversion and Continuations of Loans shall be irrevocable and
shall be effective only if received by the Agent not later than 1:00 p.m. (a) on
the Business Day which is at least three (3) Business Days prior to the date of
termination or reduction of Commitments, (b) on the Business Day of the
borrowing, prepayment or repayment of Base Rate Loans, or Conversions into Base
Rate Loans, or (c) on the Business Day which is at least three (3) Business Days
prior to the date of borrowing, prepayment
CREDIT AGREEMENT - PAGE 25
or repayment of Eurodollar Loans, Conversions into or Continuations as
Eurodollar Loans. Any notices of the type described in this Section 4.3 which
are received by the Agent after 1:00 p.m. on a Business Day shall be deemed to
be received and shall be effective on the next Business Day. Each such notice of
termination or reduction shall specify the applicable Commitments to be affected
and the amount of the Commitments to be terminated or reduced. Each such notice
of borrowing, Conversion, Continuation, or prepayment shall (a) specify the
Loans to be borrowed or prepaid or the Loans to be Converted or Continued; (b)
the amount (subject to Section 4.2 hereof) to be borrowed, Converted, Continued
or prepaid; (c) in the case of a Conversion, the Type of Loan to result from
such Conversion; (d) in the case of a borrowing (other than a borrowing under
the Swingline Loan), the Type of Loan or Loans to be applicable to such
borrowing and the amounts thereof; (e) in the event a Eurodollar Loan is
selected, the duration of the Interest Period therefor; and (f) the date of
borrowing, Conversion, Continuation, or prepayment (which shall be a Business
Day). The Agent shall notify the Lenders of the contents of each such notice on
the date of its receipt of the same or, if received after 1:00 p.m. on a
Business Day, on the next Business Day. In the event the Borrower fails to
select the Type of Loan, or the duration of any Interest Period for any
Eurodollar Loan, within the time period and otherwise as provided in this
Section 4.3, such Loan (if outstanding as Eurodollar Loan) will be automatically
Converted into a Base Rate Loan on the last day of preceding Interest Period for
such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not
then outstanding) will be made as, a Base Rate Loan. The Borrower may not borrow
any Eurodollar Loans, Convert any Base Rate Loans into Eurodollar Loans, or
Continue any Eurodollar Loan as a Eurodollar Loan if the interest rate for such
Eurodollar Loans would exceed the Maximum Rate.
Section IV.4 Prepayments. Subject to Section 4.2 and the provisions
of this Section 4.4, Borrower may, at any time and from time to time without
premium or penalty upon prior notice to the Agent as specified in Section 4.3,
prepay or repay any Loan in full or in part. Eurodollar Loans may be prepaid or
repaid only on the last day of the Interest Period applicable thereto unless the
Borrower pays to the Agent for the account of the applicable Lenders any amounts
due under Section 5.5 as a result of such prepayment or repayment.
Section IV.5 Method of Payment. Except as otherwise expressly
provided herein, all payments of principal, interest, and other amounts to be
made by the Borrower or any Significant Subsidiary under the Loan Documents
shall be made to the Agent at the Principal Office for the account of each
Lender's Applicable Lending Office in Dollars and in immediately available
funds, without setoff, deduction, or counterclaim, not later than 1:00 p.m. on
the date on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day). The Borrower and each Significant Subsidiary making any payment
shall, at the time of making each such payment, specify to the Agent the sums
payable under the Loan Documents to which such payment is to be applied (and in
the event that the Borrower or such Significant Subsidiary fails to so specify,
or if a Default has occurred and is continuing, the Agent may apply such payment
and any proceeds of any collateral to the Obligations in such order and manner
as it may elect in its sole discretion, subject to Section 4.6 hereof). Each
payment received by the Agent under any Loan Document for the account of a
Lender shall be paid to such Lender by 3:00 p.m. on the date the payment is
deemed made to the Agent in immediately available funds, for the account of such
Lender's Applicable Lending Office. Whenever
CREDIT AGREEMENT - PAGE 26
any payment under any Loan Document shall be stated to be due on a day that is
not a Business Day, such payment may be made on the next succeeding Business
Day, and such extension of time shall in such case be included in the
computation of the payment of interest and Revolving Commitment Fee, as the case
may be.
Section IV.6 Pro Rata Treatment. Except to the extent otherwise
provided herein: (a) each Loan (other than the Swingline Loan) shall be made by
the Lenders, each payment of the Revolving Commitment Fee under Section 3.7 and
letter of credit fees under subsection 2.7(c) shall be made for the account of
the Lenders, and each termination or reduction of the Commitments shall be
applied to the Commitments of the Lenders, pro rata according to their
respective Commitment Percentages; (b) the making, Conversion, and Continuation
of Loans of a particular Type (other than Conversions provided for by Section
5.4) shall be made pro rata among the Lenders holding Loans of such Type
according to their respective Commitment Percentages; (c) each payment and
prepayment of principal of or interest on Loans or Reimbursement Obligations by
the Borrower shall be made to the Agent for the account of the Agent or the
Lenders holding such Loans or Reimbursement Obligations (or participation
interests therein) pro rata in accordance with the respective unpaid principal
amounts of such Loans or participation interests held by the Agent or such
Lenders (provided that only the Agent shall be entitled to principal and
interest on the Swingline Loan unless the other Lenders have funded their
participations therein in accordance with subsection 2.8(c); (d) proceeds of any
collateral shall be shared by the Agent and the Lenders pro rata in accordance
with the respective unpaid principal amounts of and interest on the Obligations
then due the Agent and the Lenders; and (e) the Lenders (other than the Agent)
shall purchase from the Agent and the Swingline Lender, respectively,
participations in the Letters of Credit and Swingline Loans to the extent of
their respective Commitment Percentages. If at any time payment, in whole or in
part, of any amount distributed by the Agent hereunder is rescinded or must
otherwise be restored or returned by Agent as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar law, then
each Person receiving any portion of such amount agrees, upon demand, to return
the portion of such amount it has received to the Agent.
Section IV.7 Sharing of Payments. If a Lender shall obtain payment
of any principal of or interest on any of the Obligations due to such Lender
hereunder directly (and not through the Agent) through the exercise of any right
of setoff, bank's lien, counterclaim or similar right, or otherwise, it shall
promptly purchase from the other Lenders participations in the Obligations held
by the other Lenders in such amounts, and make such other adjustments from time
to time as shall be equitable to the end that all the Lenders shall share the
benefit of such payment pro rata in accordance with the unpaid principal of and
interest on the Obligations then due to each of them. To such end, all of the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if all or any portion of such excess payment
is thereafter rescinded or must otherwise be restored. The Borrower agrees, to
the fullest extent it may effectively do so under applicable law, that any
Lender so purchasing a participation in the Obligations held by the other
Lenders may exercise all rights of setoff, Lender's lien, counterclaim, or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Obligations in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness or obligation
of the Borrower.
CREDIT AGREEMENT - PAGE 27
Section IV.8 Non-Receipt of Funds by the Agent. Unless the Agent
shall have been notified by a Lender or the Borrower (the Payor) prior to the
date on which such Lender is to make payment to the Agent hereunder or the
Borrower is to make a payment to the Agent for the account of one or more of the
Lenders, as the case may be (such payment being herein called the Required
Payment), which notice shall be effective upon receipt, that the Payor does not
intend to make the Required Payment to the Agent, the Agent may assume that the
Required Payment has been made and may, in reliance upon such assumption (but
shall not be required to), make the amount thereof available to the intended
recipient on such date and, if the Payor has not in fact made the Required
Payment to the Agent, (a) the recipient of such payment shall, on demand, pay to
the Agent the amount made available to it together with interest thereon in
respect of the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (i) if recovered from a Lender, at the Federal Funds Rate for such
period and (ii) if recovered from the Borrower, the rate of interest applicable
to the respective Loan, as determined pursuant to Section 3.1 and (b) Agent
shall be entitled to offset against any and all sums to be paid to such
recipient, the amount calculated in accordance with the foregoing clause (a).
Section IV.9 Participation Obligations Absolute; Failure to Fund
Participation. The obligations of a Lender to fund its participation in the
Swingline Loans and Letters of Credit in accordance with the terms hereof shall
be absolute, unconditional and irrevocable and shall be performed strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever, including without limitation, the following circumstances: (a) any
lack of validity of any Loan Document; (b) the occurrence of any Default; (c)
the existence of any claim, setoff, counterclaim, defenses or other rights which
such Lender, the Borrower, any Significant Subsidiary, or any other Person may
have; (d) the occurrence of any event that has or could reasonably be expected
to have a Material Adverse Effect; (e) the failure of any condition to a Loan
under Article 6 to be satisfied; or (f) any other circumstance whatsoever,
whether or not similar to any of the foregoing. If a Lender fails to fund its
participation in a Swingline Loan or a Letter of Credit as required hereby, such
Lender shall remain obligated to pay to the Swingline Lender or the Agent,
respectively, the amount it failed to fund on demand together with interest
thereon in respect of the period commencing on the date such amount should have
been funded until the date the amount was actually funded to the Swingline
Lender or the Agent, respectively, at a rate per amount equal to the Federal
Funds Rate for such period and the Swingline Lender or the Agent, respectively,
shall be entitled to offset against any and all sums to be paid to such Lender
hereunder the amount due the Swingline Lender or the Agent, respectively, under
this sentence.
ARTICLE V
Change in Circumstances
Section V.1 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
CREDIT AGREEMENT - PAGE 28
interpretation or administration thereof by any governmental
authority, central Lender, or comparable agency charged with the
interpretation or administration thereof, or compliance by any
Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such
governmental authority, central Lender, or comparable agency:
(i shall subject such Lender (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 Loans, issue or participate in
Letters of Credit, or change the basis of taxation of
any amounts payable to such Lender (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 Lender by the
jurisdiction in which such Lender 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 Lender (or its Applicable Lending
Office), including the Commitment of such Lender
hereunder; or
(iii shall impose on such Lender (or its
Applicable Lending Office) or on 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 Lender (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 Lender (or its Applicable
Lending Office) under this Agreement or its Note with respect to any
Lender Loans, then the Borrower shall pay to such Lender on demand
such amount or amounts as will compensate such Lender for such
increased cost or reduction. If any Lender requests compensation by
the Borrower under this Section 5.1(a), the Borrower may, by notice
to such Lender (with a copy to the Agent), suspend the obligation of
such Lender 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 5.4 shall be applicable); provided that
such suspension shall not affect the right of such Lender to receive
the compensation so requested.
(b If, after the date hereof, any Lender 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 Lender, 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 governmental authority, central Lender, or
comparable agency, has or would
CREDIT AGREEMENT - PAGE 29
have the effect of reducing the rate of return on the capital of
such Lender or any corporation controlling such Lender as a
consequence of such Lender's obligations hereunder to a level below
that which such Lender 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 Lender
such additional amount or amounts as will compensate such Lender for
such reduction.
(c Each Lender 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 Lender 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 Lender, be otherwise disadvantageous to it. Any
Lender claiming compensation under this Section 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 Lender may use any reasonable averaging and attribution
methods. If any Lender fails to give such notice of any such event
within ninety (90) days after it obtains knowledge of such an event,
such Lender shall, with respect to compensation payable pursuant to
this Section, only be entitled to payment under this Section for
diminished return as a result of such reduction for the period from
and after the date ninety (90) days prior to the date that such
Lender does give such notice.
Section V.2 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 Lenders determine (which determination
shall be conclusive) and notify the Agent that the Adjusted
Eurodollar Rate will not adequately and fairly reflect the cost to
the Lenders 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 Lenders 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.
Section V.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain,
CREDIT AGREEMENT - PAGE 30
or fund Eurodollar Loans hereunder, then such Lender shall promptly notify the
Borrower thereof and such Lender'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 Lender may again make, maintain, and fund
Eurodollar Loans (in which case the provisions of Section 5.4 shall be
applicable).
Section V.4 Treatment of Affected Loans. If the obligation of any
Lender 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 5.1 or 5.3 hereof (Loans of such Type being herein called Affected Loans
and such Type being herein called the Affected Type), such Lender'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 5.3 hereof, on such earlier date as such Lender
may specify to the Borrower with a copy to the Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 5.1 or 5.3 hereof that gave rise to such Conversion no longer exist:
(a to the extent that such Lender's Affected Loans have
been so Converted, all payments and prepayments of principal that
would otherwise be applied to such Lender'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 Lender as Loans of the Affected Type shall be made or
Continued instead as Base Rate Loans, and all Loans of such Lender
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 Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1 or 5.3 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender'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 Lenders holding Loans of the
Affected Type and by such Lender are held pro rata (as to principal amounts,
Types, and Interest Periods) in accordance with their respective Commitments.
Section V.5 Compensation. Upon the request of any Lender, the
Borrower shall pay to such Lender such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for any loss, cost,
or expense (excluding 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 11.2(a) on a date
other than the last day of the Interest Period for such Loan; or
CREDIT AGREEMENT - PAGE 31
(b any failure by the Borrower for any reason
(including, without limitation, the failure of any condition
precedent specified in Article 6 to be satisfied) to borrow,
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.
Section V.6 Taxes.
(a Any and all payments by the Borrower to or for the
account of any Lender or the Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for
any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and all liabilities with
respect thereto, excluding, in the case of each Lender and the
Agent, taxes imposed on its income, and franchise taxes imposed on
it, by the jurisdiction under the laws of which such Lender (or its
Applicable Lending Office) or the Agent (as the case may be) is
organized or any political subdivision thereof (all such
non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as
Taxes). If the Borrower shall be required by law to deduct any Taxes
from or in respect of any sum payable under this Agreement or any
other Loan Document to any Lender or the Agent, (i) the sum payable
hereunder shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional
sums payable under this Section 5.6) such Lender or the Agent
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 furnish to the
Agent, at its address below its signature hereof, the original or a
certified copy of a receipt evidencing payment thereof.
(b In addition, the Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any
payment made under this Agreement or any other Loan Document or from
the execution or delivery of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as
Other Taxes).
(c The Borrower agrees to indemnify each Lender and the
Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed or asserted by
any jurisdiction on amounts payable under this Section 5.6) paid by
such Lender or the Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom or
with respect thereto.
(d Each Lender 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
Lender listed on the signature pages hereof and on or prior to the
date on which it becomes a Lender in the case of each other Lender,
and from time to time thereafter if reasonably requested in writing
by the Borrower or the Agent (but only so long as such Lender
remains lawfully able to do so), shall provide the Borrower and the
Agent with
CREDIT AGREEMENT - PAGE 32
(i) Internal Revenue Service Form 1001 or 4224, as appropriate, or
any successor form prescribed by the Internal Revenue Service,
certifying that such Lender 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 Lender 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 Lender has
failed to provide the Borrower and the Agent with the appropriate
form pursuant to Section 5.6(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), or to
the extent such form does not establish a complete exemption from
withholding, such Lender shall not be entitled to indemnification
under Section 5.6(a) or 5.6(b) with respect to Taxes imposed by the
United States; provided, however, that should a Lender, 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
Lender shall reasonably request to assist such Lender to recover
such Taxes.
(f If the Borrower is required to pay additional amounts
to or for the account of any Lender pursuant to this Section 5.6,
then such Lender will agree to use reasonable efforts to 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 Lender, is not otherwise
disadvantageous to such Lender.
(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 agreements and obligations
of the Borrower contained in this Section 5.6 shall survive the
termination of the Commitments and the payment in full of the Notes.
Section V.7 Replacement of a Lender. If (i) the obligation of a
Lender (other than the Agent as a Lender) to make or Continue Eurodollar Loans
has been suspended pursuant to Section 5.1, 5.2 or 5.3 or (ii) a Lender (other
than the Agent as a Lender) has demanded compensation under Section 5.1 or
Section 5.6, the Borrower shall have the right to require such Lender to assign
to an Eligible Assignee selected by the Borrower and reasonably satisfactory to
the Agent (which may be one or more of the Lenders) the Notes and participation
interests in the Letter of Credit Liabilities and Swingline Loans held by such
Lender pursuant to the terms of an appropriately completed Assignment and
Acceptance in accordance with subsection 13.7; provided
CREDIT AGREEMENT - PAGE 33
that, neither the Agent nor any Lender shall have any obligation to Borrower to
find any such Eligible Assignee and in order for Borrower to replace a Lender,
the Borrower must require such replacement within three (3) months of the date
such obligations of the Lender were suspended or the date the Lender demanded
such compensation. Each Lender (other than the Agent as a Lender) agrees to its
replacement at the option of the Borrower pursuant to this Section 5.7; provided
that, the Eligible Assignee selected by Borrower shall purchase such Lender's
interest in the Obligations of the Borrower to such Lender for cash in an
aggregate amount equal to the aggregate unpaid principal thereof, all unpaid
interest accrued thereon, all unpaid commitment and letter of credit fees
accrued for the account of such Lender, any breakage costs incurred by the
selling Lender because of the prepayment of any Eurodollar Loans, all other fees
(if any) applicable thereto and all other amounts (including any amounts due
under Section 5.1 or 5.6) then owing to such Lender hereunder or under any other
Loan Document.
ARTICLE VI
Conditions Precedent
Section VI.1 Initial Loan and Letter of Credit. The obligation of
each Lender to make its initial Loan and the obligation of the Agent to issue
the initial Letter of Credit and make the initial Swingline Loan are subject to
the condition precedent that the Agent shall have received on or before the day
of any such Loan or Letter of Credit all of the following, each dated (unless
otherwise indicated) the date hereof, in form and substance satisfactory to the
Agent:
(a Resolutions. Resolutions of the Board of Directors of
the Borrower and each Significant Subsidiary certified by its
Secretary or an Assistant Secretary which authorize its execution,
delivery, and performance of the Loan Documents to which it is or is
to be a party.
(b Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of the Borrower
and each Significant Subsidiary certifying the name of each of its
officers (i) who is authorized to sign the Loan Documents to which
it is or is to be a party (including the certificates contemplated
herein) together with specimen signatures of each such officer and
(ii) who will, until replaced by other officers duly authorized for
that purpose, act as its representative for the purposes of signing
documentation and giving notices and other communications in
connection with this Agreement and the transactions contemplated
hereby.
(c Certificate of Incorporation. The certificate of
incorporation of the Borrower and each Significant Subsidiary
certified by the Secretary of State of the state of its
incorporation and dated a current date.
(d Bylaws. The bylaws of the Borrower and each
Significant Subsidiary certified by its Secretary or an Assistant
Secretary.
CREDIT AGREEMENT - PAGE 34
(e Governmental Certificates. Certificates of the
appropriate government officials of the state of incorporation of
the Borrower and each Significant Subsidiary as to its existence and
good standing and certificates of the appropriate government
officials of each state in which the Borrower and each Significant
Subsidiary is required to qualify to do business and where failure
to so qualify could reasonably be expected to have a Material
Adverse Effect, as to the Borrower's and each such Significant
Subsidiary's qualification to do business and good standing in such
state, all dated a current date.
(f Notes. The Notes executed by the Borrower.
(g Guaranty. A Guaranty duly executed by each
Significant Subsidiary.
(h Contribution and Indemnification Agreement. A
Contribution and Indemnification Agreement duly executed by each
Significant Subsidiary.
(i Termination Agreement. A termination agreement in
form and substance reasonably satisfactory to the Agent or other
documents confirming that the prior credit facilities provided
pursuant to that certain Amended and Restated Credit Agreement dated
as of April 29, 1996, by and among the Borrower, the several lenders
from time to time party thereto and Norwest Bank Minnesota, National
Association, as agent, shall be terminated and paid in full
effective as of the Closing Date.
(j Opinion of Counsel. Favorable opinions of legal
counsel to the Borrower and the Significant Subsidiaries as to such
matters as the Agent or the Required Lenders may reasonably request.
(k Lender Fees. The arrangement, upfront, underwriting
and administrative fees Borrower has agreed to pay to NationsBank
and the other Lenders (as to the upfront fees only) under and as
described in the terms of that certain fee letter dated August 14,
1998 among Borrower, NationsBank and NationsBanc ▇▇▇▇▇▇▇▇▇▇
Securities LLC.
(l Attorneys' Fees and Expenses. Evidence that the costs
and expenses (including reasonable attorneys' fees) referred to in
Section 3.1, to the extent incurred, shall have been paid in full by
the Borrower.
(m Financial Statements. Audited consolidated financial
statements of the Borrower and the Subsidiaries as at and for the
Fiscal Years ended December 31, 1995, December 31, 1996 and December
31, 1997 containing balance sheets and statements of income and cash
flow, all in reasonable detail and audited and certified by
independent certified public accountants of recognized national
standing acceptable to the Agent, to the effect that such reports
have been prepared in accordance with GAAP.
Section VI.2 All Loans and Letters of Credit. The obligation of each
Lender to make any Loan (including the initial Loan) and the obligation of the
Agent to issue any Letter of Credit
CREDIT AGREEMENT - PAGE 35
(including the initial Letter of Credit) or make any Swingline Loan are subject
to the following additional conditions precedent:
(a Loan or Letter of Credit Request Form. The Agent or
Swingline Lender shall have received a Loan or Letter of Credit
Request Form, dated the date of such Loan or Letter of Credit, as
applicable, executed by an Executive Officer of the Borrower, or any
designee thereof;
(b No Default. No Default shall have occurred and be
continuing, or would result from such Loan or Letter of Credit;
(c Representations and Warranties. All of the
representations and warranties contained in Article 7 hereof and in
the other Loan Documents shall be true and correct in all material
respects on and as of the date of such Loan or Letter of Credit with
the same force and effect as if such representations and warranties
had been made on and as of such date except to the extent that such
representations and warranties relate specifically to another date;
and
(d Additional Documentation. The Agent shall have
received such additional approvals, opinions, or documents as the
Agent may reasonably request.
Each notice of borrowing by the Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by the Borrower that the conditions precedent set forth in subsections 6.2(b)
and (c) have been satisfied (both as of the date of such notice and, unless the
Borrower otherwise notifies the Agent prior to the date of such borrowing or
Letter of Credit, as of the date of such borrowing or Letter of Credit).
ARTICLE VII
Representations and Warranties
To induce the Agent and the Lenders to enter into this Agreement,
the Borrower represents and warrants to the Agent and the Lenders that:
Section VII.1 Corporate Existence. The Borrower and each Subsidiary
(a) is a corporation or other entity (as reflected on Schedule 7.14) duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or organization; (b) has all requisite power
and authority to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify could reasonably be expected to have a
Material Adverse Effect. Borrower and each Significant Subsidiary has the
corporate power and authority to execute, deliver, and perform their respective
obligations under the Loan Documents to which it is or may become a party.
CREDIT AGREEMENT - PAGE 36
Section VII.2 Financial Statements. The Borrower has delivered to
the Agent and the Lenders audited consolidated financial statements of the
Borrower and the Subsidiaries as at and for the Fiscal Year ended December 31,
1997 and unaudited consolidated financial statements of the Borrower and the
Subsidiaries for the Fiscal Quarter ended June 30, 1998. Such financial
statements, have been prepared in accordance with GAAP, and present fairly, on a
consolidated basis, the financial condition of the Borrower and the Subsidiaries
as of the respective dates indicated therein and the results of operations for
the respective periods indicated therein. Neither the Borrower nor any of the
Subsidiaries has any material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments, or unrealized or anticipated losses
from any unfavorable commitments except as referred to or reflected in such
financial statements. There has been no material adverse change in the business,
condition (financial or otherwise), operations, prospects, or properties of the
Borrower and the Subsidiaries taken as a whole since December 31, 1997.
Section VII.3 Corporate Actions: No Breach. The execution, delivery,
and performance by the Borrower and each Significant Subsidiary of the Loan
Documents to which each is or may become a party and compliance with the terms
and provisions hereof and thereof have been duly authorized by all requisite
action on the part of the Borrower and each Significant Subsidiary and do not
and will not (a) violate or conflict with, or result in a breach of, or require
any consent under (i) the articles or certificate of incorporation or bylaws or
other applicable organizational documents of the Borrower or any of such
Subsidiary, (ii) any applicable law, rule, or regulation or any order, writ,
injunction, or decree of any Governmental Authority or arbitrator other than
such violations, conflicts and breaches which could not be reasonably expected
to have a Material Adverse Effect, or (iii) any agreement or instrument to which
the Borrower or any of the Subsidiaries is a party or by which any of them or
any of their property is bound or subject (the Other Agreements) other than such
violations, conflicts and breaches which could not be reasonably expected to
have a Material Adverse Effect, or (b) constitute a default under any Other
Agreement, or result in the creation or imposition of any Lien (except as
permitted herein) upon any of the revenues or assets of the Borrower or any
Subsidiary other than such defaults which could not be reasonably expected to
have a Material Adverse Effect.
Section VII.4 Operation of Business. The Borrower and each of the
Subsidiaries possess all licenses, permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct their
respective businesses substantially as now conducted and as presently proposed
to be conducted except those that the failure to so possess could not reasonably
be expected to have a Material Adverse Effect, and the Borrower and each of its
Subsidiaries are not in violation of any valid rights of others with respect to
any of the foregoing except violations that could not reasonably be expected to
have a Material Adverse Effect.
Section VII.5 Litigation and Judgments. There is no action, suit,
investigation, or proceeding before or by any Governmental Authority or
arbitrator pending, or to the knowledge of the Borrower, threatened against or
affecting the Borrower or any Subsidiary, that could be reasonably expected to
have a Material Adverse Effect. As of the Closing Date, there are no outstanding
judgments against the Borrower or any Subsidiary that could reasonably be
expected to have a Material Adverse Effect.
CREDIT AGREEMENT - PAGE 37
Section VII.6 Rights in Properties; Liens; Nonproductive Assets. The
Borrower and each Subsidiary have good title to or valid leasehold interests in
their respective properties and assets, real and personal, including the
properties, assets, and leasehold interests reflected in the financial
statements described in Section 7.2 except where the failure to maintain good
title to or valid leasehold interest could reasonably be expected to have a
Material Adverse Effect (except as sold or otherwise disposed of since the date
of such financial statements in the ordinary course of business or as otherwise
permitted by this Agreement), and none of the properties, assets, or leasehold
interests of the Borrower or any Subsidiary is subject to any Lien, except as
permitted by Section 9.2.
Section VII.7 Enforceability. The Loan Documents to which the
Borrower or any Significant Subsidiary is party, when delivered, shall
constitute the legal, valid, and binding obligations of the Borrower or the
Significant Subsidiary, as applicable, enforceable against Borrower or the
applicable Significant Subsidiary in accordance with their respective terms,
except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors' rights and general
principles of equity.
Section VII.8 Approvals. No authorization, approval, or consent of,
and no filing or registration with, any Governmental Authority or third party is
or will be necessary for the execution, delivery, or performance by the Borrower
or any Significant Subsidiary of the Loan Documents to which each is or may
become a party or for the validity or enforceability thereof except for such
authorizations, approvals, consents, filings and registrations the failure to
obtain or make could not be reasonably expected to have a Material Adverse
Effect.
Section VII.9 Debt. The Borrower and the Subsidiaries have no Debt,
except as permitted by Section 9.1.
Section VII.10 Taxes. The Borrower and each Subsidiary have filed
all tax returns (federal, state, and local) required to be filed, including all
income, franchise, employment, property, and sales and use tax returns, and have
paid all of their respective liabilities for taxes, assessments, governmental
charges, and other levies that are due and payable other than those being
contested in good faith by appropriate proceedings diligently pursued for which
adequate reserves have been established except where failure to file or pay
could reasonably be expected to have a Material Adverse Effect. The Borrower
knows of no pending investigation of the Borrower or any Subsidiary by any
taxing authority or of any pending but unassessed tax liability of the Borrower
or any Subsidiary.
Section VII.11 Margin Securities. Neither the Borrower nor any
Subsidiary is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulations T, U, or X of the Board of Governors of
the Federal Reserve System), and no part of the proceeds of any Loan will be
used to purchase or carry any margin stock or to extend credit to others for the
purpose of purchasing or carrying margin stock.
CREDIT AGREEMENT - PAGE 38
Section VII.12 ERISA. The Borrower, each Subsidiary, ERISA
Affiliate, and each Plan are in compliance with all applicable provisions of
ERISA and the Code except for such events of noncompliance that will not have a
Material Adverse Effect. Neither a Reportable Event nor a Prohibited Transaction
has occurred with respect to any Plan. No notice of intent to terminate a Plan
has been filed, nor has any Plan been terminated. No circumstances exist which
constitute grounds entitling the PBGC to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings. Neither the Borrower nor any ERISA Affiliate has completely or
partially withdrawn from a Multiemployer Plan. The Borrower and each ERISA
Affiliate have met their minimum funding requirements under ERISA and the Code
with respect to all of their Plans except for those instances of noncompliance
with such requirements that will not have a Material Adverse Effect and no
accumulated funding deficiency (for which an excise tax is due or would be due
in the absence of a waiver) as defined in Section 412 of the Code or Section
302(a)(2) of ERISA, whichever may apply, has been incurred with respect to any
Plan, whether or not waived. The present value of all vested benefits under each
Plan do not exceed the fair market value of all Plan assets allocable to such
benefits, determined on a termination basis as of the most recent valuation date
of the Plan and in accordance with ERISA, by an amount that could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any ERISA
Affiliate has incurred any liability to the PBGC under ERISA in an amount that
could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any ERISA Affiliate is subject to any lien imposed under Section
412(n) of the Code or Section 302(f) or 4068 of ERISA, whichever may apply, with
respect to any Plan. Neither the Borrower nor any ERISA Affiliate is required to
provide security to a Plan under Section 401(a)(29) of the Code.
Section VII.13 Disclosure. All factual information (taken as a
whole) furnished by or on behalf of the Borrower in writing to the Agent or any
Lender (including, without limitation, all information contained in the Loan
Documents) for purposes of or in connection with this Agreement, the other Loan
Documents or any transaction contemplated herein or therein is, and all other
such factual information (taken as a whole) hereafter furnished by or on behalf
of the Borrower to the Agent or any Lender, will be true and accurate in all
material respects on the date as of which such information is dated or certified
and not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information was provided.
Section VII.14 Subsidiaries. As of the Closing Date and as of any
date Schedule 7.14 is amended pursuant to Section 8.10, the Borrower has no
Subsidiaries other than those listed on Schedule 7.14 hereto. Schedule 7.14 sets
forth the type of each Subsidiary listed thereon, the jurisdiction of
incorporation or organization of each such Subsidiary, the percentage of the
Borrower's ownership of the outstanding voting stock (or other ownership
interests) of each Subsidiary, and with respect to each Significant Subsidiary
that is a corporation, the authorized, issued and outstanding capital stock of
each such Significant Subsidiary. All of the outstanding capital stock of each
Significant Subsidiary listed on Schedule 7.14 has been validly issued, is fully
paid, and is nonassessable. There are no outstanding subscriptions, options,
warrants, calls, or rights (including preemptive rights) to acquire, and no
outstanding securities or instruments convertible into, capital stock of any
Significant Subsidiary except as listed on Schedule 7.14.
CREDIT AGREEMENT - PAGE 39
Section VII.15 Agreements. Neither the Borrower nor any Subsidiary
is in default in any respect in the performance, observance, or fulfillment of
any of the obligations, covenants, or conditions contained in any agreement or
instrument to which it is a party other than defaults which could not be
reasonably be expected to have a Material Adverse Effect.
Section VII.16 Compliance with Laws. Neither the Borrower nor any
Subsidiary is in violation of any law, rule, regulation, order, or decree of any
Governmental Authority or arbitrator other than defaults which could not be
reasonably expected to have a Material Adverse Effect.
Section VII.17 Investment Company Act. Neither the Borrower nor any
Subsidiary is an investment company within the meaning of the Investment Company
Act of 1940, as amended.
Section VII.18 Public Utility Holding Company Act. Neither the
Borrower nor any Subsidiary is a holding company or a subsidiary company of a
holding company or an Affiliate of a holding company or a public utility within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section VII.19 Environmental Matters. Except for those matters which
will not have a Material Adverse Effect:
(a The Borrower, each Subsidiary, and all of their
respective properties, assets, and operations are in full compliance
with all Environmental Laws. The Borrower is not aware of, nor has
the Borrower received notice of, any past or present conditions,
events, activities, practices, or incidents which may interfere with
or prevent the compliance or continued compliance of the Borrower
and the Subsidiaries with all Environmental Laws;
(b The Borrower and each Subsidiary have obtained all
permits, licenses, and authorizations that are required under
applicable Environmental Laws, and all such permits are in good
standing and the Borrower and its Subsidiaries are in compliance
with all of the terms and conditions of such permits;
(c No Hazardous Materials exist on, about, or within or
have been used, generated, stored, transported, disposed of on, or
Released from any of the properties or assets of the Borrower or any
Subsidiary except in compliance with Environmental Laws. The use
which the Borrower and the Subsidiaries make and intend to make of
their respective properties and assets will not result in the use,
generation, storage, transportation, accumulation, disposal, or
Release of any Hazardous Material on, in, or from any of their
properties or assets except in compliance with Environmental Laws;
(d Neither the Borrower nor any of the Subsidiaries nor
any of their respective currently or previously owned or leased
properties or operations is subject to any outstanding or, to the
best of its knowledge, threatened order from or agreement with any
Governmental Authority or other Person or subject to any judicial or
administrative proceeding with respect to (i) failure to comply with
Environmental Laws, (ii) Remedial Action, or (iii) any Environmental
Liabilities arising from a Release or threatened Release;
CREDIT AGREEMENT - PAGE 40
(e There are no conditions or circumstances associated
with the currently or previously owned or leased properties or
operations of the Borrower or any of the Subsidiaries that could
reasonably be expected to give rise to any Environmental
Liabilities;
(f Neither the Borrower nor any of the Subsidiaries is a
treatment, storage, or disposal facility requiring a permit under
the Resource Conservation and Recovery Act, 42 U.S.C. ' 6901 et
seq., regulations thereunder or any comparable provision of state
law. The Borrower and the Subsidiaries are compliance with all
applicable financial responsibility requirements of all
Environmental Laws;
(g Neither the Borrower nor any of the Subsidiaries has
filed or failed to file any notice required under applicable
Environmental Law reporting a Release; and
(h No Lien arising under any Environmental Law has
attached to any property or revenues of the Borrower or the
Subsidiaries.
Section VII.20 Year 2000 Compliance. The Borrower has (i) initiated
a review and assessment of all areas within its and each of its Subsidiaries'
business and operations (including those affected by suppliers, vendors and
customers) that could reasonably be expected to be adversely affected by the
"Year 2000 Problem" (that is the risk that computer applications used by the
Borrower or any of its Subsidiaries (or suppliers and customers) may be unable
to recognize and perform properly date-sensitive functions involving certain
dates prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii) to
date, substantially implemented that plan in accordance with that timetable.
Based on the foregoing, the Borrower believes that all computer applications
(including those of its suppliers, vendors and customers) that are material to
its or any of its Subsidiaries' business and operations are reasonably expected
on a timely basis to be able to perform properly date-sensitive functions for
all dates before and after January 1, 2000 (that is, be Year 2000 compliant),
except to the extent that a failure to do so could not reasonably be expected to
have Material Adverse Effect.
ARTICLE VIII
Positive Covenants
The Borrower covenants and agrees that, as long as the Obligations
or any part thereof are outstanding or any Lender has any Commitment hereunder,
the Borrower will perform and observe the following positive covenants:
Section VIII.1 Reporting Requirements. The Borrower will furnish to
the Agent and each Lender:
(a Annual Financial Statements. As soon as available,
and in any event within ninety (90) days after the end of each
Fiscal Year of the Borrower, beginning with the Fiscal
CREDIT AGREEMENT - PAGE 41
Year ending December 31, 1998, (i) a copy of the annual audited
consolidated financial statement of the Borrower and the
Subsidiaries for such Fiscal Year containing balance sheets and
statements of income, retained earnings, and cash flow as at the end
of such Fiscal Year and for the Fiscal Year then ended, in each case
setting forth in comparative form the figures for the preceding
Fiscal Year, all in reasonable detail and audited and certified by
independent certified public accountants of recognized national
standing acceptable to the Agent, to the effect that such report has
been prepared in accordance with GAAP and (ii) a copy of the
Consolidating Schedules for such Fiscal Year, in each case setting
forth in comparative form the figures for the preceding Fiscal Year,
all in reasonable detail certified by the chief financial officer,
treasurer or assistant treasurer of the Borrower;
(b Quarterly Financial Statements. As soon as available,
and in any event within fifty (50) days after the end of each of the
first three (3) Fiscal Quarters in each such Fiscal Year, (i) a copy
of an unaudited consolidated financial statement of the Borrower and
the Subsidiaries as of the end of such period and for the portion of
the Fiscal Year then ended containing balance sheets and statements
of income, retained earnings, and cash flow, in each case setting
forth in comparative form the figures for the corresponding period
of the preceding Fiscal Year, all in reasonable detail certified by
the chief financial officer, treasurer or assistant treasurer of the
Borrower to have been prepared in accordance with GAAP and to fairly
present (subject to year-end audit adjustments) the financial
condition and results of operations of the Borrower and the
Subsidiaries at the date and for the periods indicated therein and
(ii) a copy of the Consolidating Schedules as of the end of such
period and for the portion of the Fiscal Year then ended, in each
case setting forth in comparative form the figures for the
corresponding period of the preceding Fiscal Year, all in reasonable
detail certified by the chief financial officer, treasurer or
assistant treasurer of the Borrower to fairly present the financial
condition and results of operations of the Borrower and the
Subsidiaries at the date and for the periods indicated therein;
(c Compliance Certificate. Within fifty (50) days after
the end of each Fiscal Quarter of each Fiscal Year, or with respect
to the last Fiscal Quarter of each Fiscal Year, within ninety (90)
days of the end of such Fiscal Quarter, a Compliance Certificate
accompanying the applicable financial statements required to be
delivered pursuant to Section 8.1(a) or 8.1(b), as applicable;
(d Management Letters. Promptly upon receipt thereof, a
copy of any management letter or written report submitted to the
Borrower or any Subsidiary by independent certified public
accountants with respect to the business, condition (financial or
otherwise), operations, prospects, or properties of the Borrower or
any Subsidiary;
(e Notice of Litigation. Promptly after the commencement
thereof, notice of all actions, suits, investigations (with respect
to investigations only, of which the Borrower has actual knowledge)
and proceedings before any Governmental Authority or arbitrator
affecting the Borrower or any Subsidiary which could reasonably be
expected to have a Material Adverse Effect;
CREDIT AGREEMENT - PAGE 42
(f Notice of Default. As soon as possible and in any
event within five (5) Business Days after an Executive Officer of
the Borrower has knowledge of the occurrence of each Default, a
written notice setting forth the details of such Default and the
action that the Borrower has taken and proposes to take with respect
thereto;
(g ERISA Reports. Promptly after the filing or receipt
thereof, copies of all material reports, including annual reports,
and notices which the Borrower or any ERISA Affiliate files with or
receives from the PBGC, the Internal Revenue Service or the U.S.
Department of Labor with respect to any Plan; and as soon as
possible and in any event within five (5) Business Days after the
Borrower or any ERISA Affiliate knows or has reason to know that any
Reportable Event or Prohibited Transaction has occurred with respect
to any Plan or that the PBGC or the Borrower or any ERISA Affiliate
has instituted or will institute proceedings under Title IV of ERISA
to terminate any Plan, a certificate of the chief financial officer
of the Borrower setting forth the details as to such Reportable
Event or Prohibited Transaction or Plan termination and the action,
if any, that the Borrower proposes to take with respect thereto;
(h Notice of Material Adverse Effect. As soon as
possible and in any event within five (5) Business Days after an
Executive Officer of the Borrower has knowledge of the occurrence
thereof, written notice of any matter that could reasonably be
expected to have a Material Adverse Effect;
(i Proxy Statements, Etc. As soon as available, one copy
of each financial statement, report, notice or proxy statement sent
by the Borrower or any Subsidiary to its stockholders generally and
one copy of each regular, periodic or special report, registration
statement, or prospectus, or any other document filed by the
Borrower or any Subsidiary with any securities exchange or the
Securities and Exchange Commission or any successor agency;
(j General Information. Promptly, such other information
concerning the Borrower or any Subsidiary as the Agent or any Lender
may from time to time reasonably request; and
(k Balance Sheets. (i) Within ninety (90) days after the
Closing Date, balance sheets as of September 30, 1998 for each
domestic Subsidiary;
ii)At any time upon the request of the
Required Lenders, within thirty (30) calendar days of
such request, balance sheets for each domestic
Subsidiary of the Borrower for the last reported period;
and
(iii) Upon the occurrence and during the
continuance of an Event of Default and at the request of
the Required Lenders, within five (5) Business Days of
such request, balance sheets for each domestic
Subsidiary of the Borrower for the last reported period.
CREDIT AGREEMENT - PAGE 43
Section VIII.2 Maintenance of Existence; Conduct of Business. Except
as permitted by Section 9.3, the Borrower will, and will cause each Significant
Subsidiary to, preserve and maintain its corporate or other organizational
existence and all of its leases, privileges, licenses, permits, franchises,
qualifications, and rights that are necessary or desirable in the ordinary
conduct of its business. The Borrower will, and will cause each Subsidiary to,
conduct its business in an orderly and efficient manner in accordance with good
business practices.
Section VIII.3 Maintenance of Properties. The Borrower will, and
will cause each Subsidiary to, maintain, keep, and preserve all of its material
properties necessary in the conduct of its business in good working order and
condition (exclusive of ordinary wear and tear), the failure of which could
reasonably be expected to have a Material Adverse Effect.
Section VIII.4 Taxes and Claims. The Borrower will, and will cause
each Subsidiary to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, penalties, interest, levies, assessments, and
governmental charges imposed on it or its income or profits or any of its
property, and (b) all lawful claims for labor, material, and supplies, which, if
unpaid, might become a Lien upon any of its property; provided, however, that
neither the Borrower nor any Subsidiary shall be required to pay or discharge
any tax, levy, assessment, or governmental charge or Liens which is being
contested in good faith by appropriate proceedings diligently pursued, and for
which adequate reserves have been established.
Section VIII.5 Insurance. The Borrower will, and will cause each
Subsidiary to, maintain insurance with financially sound and reputable insurance
companies in such amounts and covering such risks as are usually carried by
corporations engaged in similar businesses and owning similar properties in the
same general areas in which the Borrower and the Subsidiaries operate, provided
that in any event the Borrower will maintain and cause each Subsidiary to
maintain workmen's compensation insurance, property insurance and comprehensive
general liability insurance reasonably satisfactory to the Agent.
Section VIII.6 Inspection Rights. At any reasonable time and from
time to time prior to a Default upon three (3) Business Day's prior notice and
at any reasonable time after the occurrence and during the continuance of a
Default, the Borrower will, and will cause each Subsidiary to, permit
representatives of the Agent and each Lender to examine, copy, and make extracts
from its books and records, to visit and inspect its properties, and to discuss
its business, operations, and financial condition with its officers and
independent certified public accountants.
Section VIII.7 Keeping Books and Records. The Borrower will, and
will cause each Subsidiary to, maintain proper books of record and account in
which full, true, and correct entries in conformity with GAAP shall be made of
all dealings and transactions in relation to its business and activities.
Section VIII.8 Compliance with Law. The Borrower will, and will
cause each Subsidiary to, comply with all applicable laws (including, without
limitation, all Environmental Laws), rules, regulations, orders, and decrees of
any Governmental Authority or arbitrator other than such noncompliance which
will not have a Material Adverse Effect.
CREDIT AGREEMENT - PAGE 44
Section VIII.9 Compliance with Agreements. The Borrower will, and
will cause each Subsidiary to, comply with all agreements, contracts, and
instruments binding on it or affecting its properties or business other than
such noncompliance which will not have a Material Adverse Effect.
Section VIII.10 Further Assurances; Significant Subsidiary Guaranty
and Contribution and Indemnification Agreement. The Borrower will, and will
cause each Significant Subsidiary to, execute and deliver such further
documentation and take such further action as may be reasonably requested by the
Agent to carry out the provisions and purposes of the Loan Documents. Without
limiting the foregoing, upon the creation or acquisition of any Significant
Subsidiary or if any Insignificant Subsidiarys gross revenues or total assets
increase so that it becomes a Significant Subsidiary, the Borrower shall (a)
provide written notice of such event to the Agent within five (5) Business Days
following the date an Executive Officer of the Borrower has knowledge thereof
and (b) cause each such Significant Subsidiary to execute and deliver a
Guaranty, a Contribution and Indemnification Agreement, and such other
documentation as the Agent may request to cause such Significant Subsidiary to
evidence or otherwise implement the guaranty of the Obligations contemplated by
a Guaranty or a Contribution and Indemnification Agreement within thirty (30)
calendar days following the date an Executive Officer of the Borrower has
knowledge thereof. No Subsidiary that is a Foreign Company shall be required to
execute a Guaranty or a Contribution and Indemnification Agreement. If any
Significant Subsidiary is created or acquired after the Closing Date, the
Borrower shall execute and deliver to the Agent (a) an amendment to Schedule
7.14 to this Agreement (which only needs the signature of the Agent to be
effective if the only change is the addition of the new Significant Subsidiary)
and (b) any other documents which would have otherwise been required to be
delivered to the Agent and the Lenders if such Significant Subsidiary had been a
Significant Subsidiary as of the Closing Date. If any Insignificant Subsidiary
is created or acquired after the Closing Date, the Borrower shall execute and
deliver to the Agent an amendment to Schedule 7.14 to this Agreement (which only
needs the signature of the Agent to be effective if the only change is the
addition of the new Subsidiary) on the date of actual delivery of a Compliance
Certificate under Section 8.1(c) demonstrating the existence thereof.
Section VIII.11 ERISA. The Borrower will, and will cause each
Subsidiary to, comply with all minimum funding requirements and all other
requirements of ERISA, if applicable, so as not to give rise to any liability
which will have a Material Adverse Effect.
Section VIII.12 Year 2000 Compliance. The Borrower will promptly
notify the Lender in the event the Borrower discovers or determines that any
computer application (including those of its suppliers, vendors and customers)
that is material to its or any of its Subsidiaries' business and operations will
not be Year 2000 compliant, except to the extent that such failure could not
reasonably be expected to have a Material Adverse Effect.
Section VIII.13 Fiduciary Accounts. Within five (5) Business Days of
opening or closing a Fiduciary Account, the Borrower shall execute and deliver
to the Agent an amendment to Schedule 7.21 to this Agreement (which only needs
the signature of the Agent to be effective if the only change is the addition or
deletion of a Fiduciary Account). Upon the occurrence and during the continuance
of an Event of Default and at the request of the Required Lenders, the Borrower
will
CREDIT AGREEMENT - PAGE 45
transfer, or will cause the transfer of, the funds owned by the Borrower and/or
its Subsidiaries in the Fiduciary Accounts at such intervals as determined by
the Agent into a general corporate account of the Borrower maintained at Agent.
ARTICLE IX
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations
or any part thereof are outstanding or any Lender has any Commitment hereunder,
the Borrower will perform and observe the following negative covenants:
Section IX.1 Debt. The Borrower will not, and will not permit any
Subsidiary to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Debt (including, without limitation, the UK Senior
Facility) described on Schedule 9.1 (b) hereto and any extensions,
renewals or refinances thereof so long as (i) the principal amount
of such Debt and the formula for determining the interest rate
charged thereon after such renewal, extension or refinancing shall
not exceed the principal amount of such Debt which was outstanding
and the formula for determining the interest rate which was in
effect immediately prior to such renewal, extension or refinancing;
provided however, (1) the aggregate principal amount of the Debt
incurred in connection with the UK Senior Facility may increase to
an amount not to exceed Eighteen Million Dollars ($18,000,000) (such
amount as determined based on the exchange rate on the date of such
increase) and (2) the formula for determining the interest rate of
the UK Senior Facility may increase and (ii) such Debt shall not be
secured by any assets other than assets securing such Debt, if any,
prior to such renewal, extension or refinancing;
(c) Intercompany Debt among Borrower and the
Subsidiaries; provided that (i) the obligations of each obligor of
such Debt shall be subordinated in right of payment to the
Obligations from and after such time as any portion of the
Obligations shall become due and payable (whether at stated
maturity, by acceleration or otherwise) and shall have such other
terms and provisions as Agent may reasonably require; provided
however, so long as no Default has occurred and is continuing, such
subordinated obligations may be repaid; (ii) the aggregate amount of
such Debt outstanding at any time which is owed by the Insignificant
Subsidiaries to Borrower shall not exceed Ten Million Dollars
($10,000,000); and (iii) the aggregate amount of such Debt
outstanding at any time which is owed by Subsidiaries organized in a
jurisdiction outside the United States of America shall not exceed
the sum of Five Million Dollars ($5,000,000);
(d) Debt (including Capital Lease Obligations but
excluding Debt described in Section 9.1(e)) not to exceed Two
Million Five Hundred Thousand Dollars ($2,500,000) in
CREDIT AGREEMENT - PAGE 46
the aggregate at any time outstanding secured by purchase money
Liens permitted by Section 9.2;
(e) Debt incurred in connection with the airplane lease
described on Schedule 9.1(e) hereto;
(f) Guaranties incurred in the ordinary course of
business with respect to surety and appeal bonds, performance and
return-of-money bonds and other similar obligations of the Borrower
or any Subsidiary not exceeding at any time outstanding One Million
Dollars ($1,000,000) in aggregate liability;
(g) Debt which constitutes Strategic Investments which
is permitted by Section 9.5;
(h) Guaranties of Debt otherwise permitted by clauses
(a) through (g) of this Section 9.1; and
(i) Debt in addition to that specifically described in
clauses (a) through (h) of this Section 9.1 which in the aggregate
does not exceed One Million Dollars ($1,000,000) at any time
outstanding.
Section IX.2 Limitation on Liens and Restrictions on Subsidiaries.
The Borrower will not, and will not permit any Subsidiary to, incur, create,
assume, or permit to exist any Lien upon any of its property, assets, or
revenues, whether now owned or hereafter acquired, except the following:
(a) Liens disclosed on Schedule 9.2 hereto;
(b) Encumbrances consisting of minor easements, zoning
restrictions, or other restrictions on the use of real property that
do not (individually or in the aggregate) materially affect the
value of the assets encumbered thereby or materially impair the
ability of the Borrower or the Subsidiaries to use such assets in
their respective businesses, and none of which is violated in any
material respect by existing or proposed structures or land use;
(c) Liens (other than Liens relating to Environmental
Liabilities or ERISA) for taxes, assessments, or other governmental
charges that are not delinquent or which are being contested in good
faith and for which adequate reserves have been established;
(d) Liens of mechanics, materialmen, warehousemen,
carriers, landlords or other similar statutory Liens securing
obligations that are not yet due and are incurred in the ordinary
course of business;
(e) Liens resulting from good faith deposits to secure
payments of workmen's compensation or other social security programs
or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids or contracts (other than for payment
of Debt);
CREDIT AGREEMENT - PAGE 47
(f) Liens for purchase money obligations; provided that:
(i) the Debt secured by any such Lien is permitted under Section
9.1; and (ii) any such Lien encumbers only the asset so purchased;
(g) Any attachment or judgment Lien not constituting an
Event of Default;
(h) Liens arising from filing UCC financing statements
regarding leases not prohibited by this Agreement;
(i) Liens in favor of the Borrower or any Subsidiary to
support intercompany Debt permitted by this Agreement;
(j) Liens on property of a Person existing at the time
such Person becomes a Subsidiary; provided, that such Liens were in
existence prior to such acquisition and do not extend to any assets
other than those of such Person;
(k) Liens on property existing at the time of
acquisition thereof by the Borrower or any Subsidiary of the
Borrower; provided that such Liens were in existence prior to such
acquisition; and
(l) Liens securing Debt in an amount less than One
Hundred Thousand Dollars ($100,000) outstanding; provided however,
the aggregate amount of such Debt shall not exceed Five Hundred
Thousand Dollars ($500,000) at any time outstanding.
Except as provided on Schedule 9.2, neither Borrower nor any Subsidiary shall
enter into or assume any agreement (other than the Loan Documents) prohibiting
the creation or assumption of any Lien upon its properties or assets, whether
now owned or hereafter acquired; provided that, in connection with the creation
of purchase money Liens, the Borrower or the Subsidiary may agree that it will
not permit any other Liens to encumber the asset subject to such purchase money
Lien. Except as provided herein or on Schedule 9.2, Borrower will not and will
not permit any Subsidiaries directly or indirectly to create or otherwise cause
or suffer to exist or become effective any consensual encumbrance or restriction
of any kind on the ability of any Subsidiary to: (1) pay dividends or make any
other distribution on any of such Subsidiary's capital stock owned by Borrower
or any Subsidiary of Borrower; (2) subject to subordination provisions pay any
Debt owed to Borrower or any other Subsidiary; (3) make loans or advances to
Borrower or any other Subsidiary; or (4) transfer any of its property or assets
to Borrower or any other Subsidiary.
Section IX.3 Mergers, Etc. The Borrower will not, and will not
permit any Subsidiary to, become a party to a merger or consolidation, or
purchase or otherwise acquire all or a substantial part of the business or
assets of any Person or of a division or branch of any Person or any shares or
other equity interest issued by any Person (whether or not certificated), or
wind-up, dissolve, or liquidate itself; provided that, (i) a Subsidiary may
wind-up, dissolve or liquidate if no Default exists or would result therefrom
and its assets are transferred to Borrower or a Significant Subsidiary; (ii) any
Subsidiary may merge with and into Borrower if Borrower is the surviving entity
and no Default exists or would result therefrom; (iii) any Subsidiary may merge
with and into any other Subsidiary
CREDIT AGREEMENT - PAGE 48
that is organized under the laws of the United States of America if the
Subsidiary organized under the laws of the United States of America is the
surviving entity, no Default exists or would result therefrom and, to the extent
applicable, Section 8.10 is complied with; (iv) any Subsidiary organized under
the laws of a jurisdiction outside the United States of America may merge with
any other Subsidiary organized under the laws of a jurisdiction outside of the
United States of America, if no Default exists or would result therefrom; and
(v) the Borrower may make any Permitted Acquisitions, Permitted Investments,
Approved Acquisitions and Strategic Investments.
Section IX.4 Restricted Junior Payments. Borrower will not directly
or indirectly declare, order, pay, make or set apart any sum for (a) any
dividend or other distribution, direct or indirect, on account of any shares of
any class of stock or other equity interest of Borrower now or hereafter
outstanding; provided however, the Borrower may make regularly scheduled
quarterly dividends based on historical dividend methodology of the Borrower so
long as (i) no Default shall have occurred and be continuing immediately before
and immediately after such payment, (ii) compliance of the Borrower with the
historical dividend methodology as to such dividends and (iii) in the case of
any increase in the dividend amount to be paid per share over the most recent
dividend previously paid, Borrower shall have obtained Agents prior written
approval to such increase, such approval not to be unreasonably withheld; (b)
any redemption, conversion, exchange, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect, of any
shares of any class of stock or other equity interest of Borrower now or
hereafter outstanding; or (c) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock or other equity interest of Borrower now or
hereafter outstanding; provided however, Borrower may purchase or acquire any
shares of any class of stock of the Borrower or make any payment to retire or
obtain the surrender of any outstanding warrants or options to acquire shares of
any class of stock of the Borrower in an aggregate amount not to exceed
Twenty-Five Million Dollars ($25,000,000) at any time.
Section IX.5 Investments. The Borrower will not, and will not permit
any Subsidiary to, make or permit to remain outstanding any advance, loan,
extension of credit, or capital contribution to or investment in any Person, or
purchase or own any stock, bonds, notes, debentures, or other securities of any
Person except:
(a) Borrower and its Subsidiaries may own stock of the
Subsidiaries existing on the Closing Date and notes payable by
Subsidiaries in accordance with the restrictions set forth in
Section 9.1;
(b) loans and advances to employees for business
expenses incurred in the ordinary course of business not to exceed
One Million Dollars ($1,000,000) in the aggregate at any time
outstanding;
(c) Strategic Investments, including those specified on
Schedule 9.5 hereto, in the aggregate at any time outstanding not to
exceed Sixty Million Dollars ($60,000,000); provided however, (i)
Borrower shall have obtained the Agents prior written consent (which
consent shall not be unreasonably withheld) to the purchase of any
Strategic Investment in an amount greater than One Million Dollars
($1,000,000) made after the date hereof and
CREDIT AGREEMENT - PAGE 49
(ii) in the event Borrower or any Subsidiary sells a Strategic
Investment, the total amount of Strategic Investments outstanding at
such time shall be reduced by an amount equal to the lesser of (1)
the original purchase price of such Strategic Investment sold and
(2) the sale price of such Strategic Investment sold;
(d) Permitted Investments;
(e) Permitted Acquisitions for which the total
consideration contracted for at closing during any four (4)
consecutive Fiscal Quarters of the Borrower does not exceed in the
aggregate One Hundred Million Dollars ($100,000,000) (for purposes
hereof, if the total consideration of any Permitted Acquisition
includes a component incapable of valuation at closing (i.e.,
profits interest) (Future Amount) then (i) the component of
consideration which can be valued at the closing of such Permitted
Acquisition shall be deemed to be contracted for at closing of such
Permitted Acquisition and (ii) upon payment of the Future Amount,
such payment shall be deemed to be contracted for in the Fiscal
Quarter such payment is made for the purpose of calculating the
amount of consideration paid for such Permitted Acquisition);
(f) acquisitions of all the equity or other comparable
interests issued by a Person or the acquisition of all or
substantially all of such Persons assets (together with all the
equity or other comparable interests issued by a Person herein an
Approved Acquisition) other than a Permitted Acquisition in an
aggregate amount for all such Approved Acquisitions of Ten Million
Dollars ($10,000,000) at any time; provided however, in the event
Borrower or any Subsidiary sells such Approved Acquisition, the
total amount of Approved Acquisitions outstanding at such time shall
be reduced by an amount equal to the lesser of (i) the original
purchase price of such Approved Acquisition sold and (ii) the sale
price of such Approved Acquisition sold;
(g) advances pursuant to the Rapid Recovery Facility to
clients of the Borrower not to exceed Twenty Million Dollars
($20,000,000) in the aggregate outstanding at any time; provided
however, (i) such advances are not outstanding more than fifteen
(15) Business Days, (ii) the reinsurer associated with each such
advance shall have capital and surplus of at least One Hundred
Million Dollars ($100,000,000) as most recently reported to the
applicable Governmental Authority and the aggregate amount of all
such advances with respect to such reinsurer is not in excess of the
greater of (A) Two Million Dollars ($2,000,000) and (B) two percent
(2%) of such reinsurers capital and surplus as most recently
reported to the applicable Governmental Authority, and (iii) such
clients are rated at least B+ by the Bests Insurance Reports and the
aggregate amount of all such advances to a single client are not
greater than fifteen percent (15%) of such clients capital and
surplus as most recently reported to the applicable Governmental
Authority; and
(h) all advances pursuant to the Rapid Recovery Facility
(other than advances described in Section 9.5(g)) or outside the
Rapid Recovery Facility but for the same purpose to clients of the
Borrower not to exceed Five Million Dollars ($5,000,000) in the
aggregate outstanding at any time.
CREDIT AGREEMENT - PAGE 50
Upon the date of actual delivery of a Compliance Certificate under
Section 8.1(c) or under the definition of Permitted Acquisition in Section 1.1
demonstrating the existence thereof, any investments made as permitted hereunder
shall be recharacterized from time to time, as applicable, as either Strategic
Investments, Permitted Acquisitions or Approved Acquisitions, as applicable, in
accordance with the criteria set forth in the definitions of such terms set
forth in Section 1.1 and herein. Any such recharacterization shall immediately
result in the coverage of such investment from one subsection of this Section
9.5 to the new subsection, as applicable, provided however, an additional
condition of an acquisition constituting an Approved Acquisition in or of a
Person moving out of Section 9.5 (f) to any other subsection is the requirement
that the EBITDA of such Person for the prior four (4) Fiscal Quarter period be
positive.
Section IX.6 Limitation on Issuance of Capital Stock. The Borrower
will not permit any Subsidiary to, at any time issue, sell, assign, or otherwise
dispose of (a) any of its capital stock or other equity interests, (b) any
securities exchangeable for or convertible into or carrying any rights to
acquire any of its capital stock or other equity interests, or (c) any option,
warrant, or other right to acquire any of its capital stock or other equity
interests; provided however, (i) Borrower or any Subsidiary may issue stock
options or capital stock upon exercise of stock options issued pursuant to the
Stock Option Plans and (ii) the Borrower or any Subsidiary may transfer any
capital stock or other equity interests in a Subsidiary to either the Borrower
or any other Subsidiary so long as at the time of such transfer, Borrower shall
redetermine whether the Subsidiaries involved in such transfer are Significant
Subsidiaries immediately after giving effect thereto.
Section IX.7 Transactions With Affiliates. The Borrower will not,
and will not permit any Subsidiary to, enter into any transaction, including,
without limitation, the purchase, sale, or exchange of property or the rendering
of any service, with any Affiliate of the Borrower or such Subsidiary, except in
the ordinary course of and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business and upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary.
Section IX.8 Disposition of Assets. The Borrower will not, and will
not permit any Subsidiary to, sell, lease, assign, transfer, or otherwise
dispose (collectively, a Disposition) of any of its assets with net sale
proceeds of any Disposition greater than One Million Dollars ($1,000,000),
except Dispositions of unnecessary, obsolete or worn out equipment or
Dispositions of assets of a Subsidiary to the Borrower or another Subsidiary so
long as at the time of such Disposition, Borrower shall redetermine whether the
Subsidiaries involved in such Disposition are Significant Subsidiaries
immediately after giving effect thereto.
Section IX.9 Sale and Leaseback. The Borrower will not, and will not
permit any Subsidiary to, enter into any arrangement with any Person pursuant to
which it leases from such Person real or personal property that has been or is
to be sold or transferred, directly or indirectly, by it to such Person.
CREDIT AGREEMENT - PAGE 51
Section IX.10 Lines of Business. The Borrower will not, and will not
permit any Subsidiary to, engage in any line or lines of business activity other
than the businesses in which they are engaged on the date hereof or lines of
business complementary or reasonably related to their existing lines of
business.
Section IX.11 Fiscal Quarter and Fiscal Year. The Borrower will not
change the manner in which either the last day of its Fiscal Year or the last
days of the first three (3) Fiscal Quarters of its Fiscal Years is calculated.
ARTICLE X
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations
or any part thereof are outstanding or any Lender has any Commitment hereunder,
the Borrower will perform and observe the following financial covenants:
Section X.1 Net Worth. Beginning at the Closing Date for the Fiscal
Quarter ended September 30, 1998, the Borrower will at all times maintain a Net
Worth in an amount not less than Ninety Million Dollars ($90,000,000), and for
each Fiscal Quarter thereafter, not less than the sum of (i) the minimum Net
Worth required for the prior Fiscal Quarter then ended, plus (ii) 75% of the
Borrowers Net Income for the prior Fiscal Quarter then ended, plus (iii) 75% of
the net proceeds of any equity issuances by the Borrower for the prior Fiscal
Quarter then ended. If Net Income for a Fiscal Quarter is negative, no
adjustment to the requisite level of Net Worth shall be made.
Section X.2 Fixed Charge Coverage Ratio. The Borrower will at all
times maintain a Fixed Charge Coverage Ratio of not less than 2.0 to 1.0.
Section X.3 Leverage Ratio. The Borrower will at all times maintain
a Leverage Ratio of not more than 2.5 to 1.0.
Section X.4 Tangible Net Worth. The Borrower will at all times
maintain a Tangible Net Worth in an amount not less than fifty percent (50%) of
the Borrowers minimum Net Worth required for the same period pursuant to Section
10.1
ARTICLE XI
Default
Section XI.1 Events of Default. Each of the following shall be
deemed an Event of Default:
(a) The Borrower shall fail to pay (i) within one (1)
Business Day of the date due any principal payable under any Loan
Document or any part thereof; (ii) within one (1) Business Day of
the date due any interest or fees payable under the Loan Documents
or any
CREDIT AGREEMENT - PAGE 52
part thereof; and (iii) within three (3) Business Days of the date
due of any other Obligation or any part thereof.
(b) Any representation, warranty or certification made
or deemed made by the Borrower or any Significant Subsidiary (or any
of their respective officers) in any Loan Document or in any
certificate, report, notice, or financial statement furnished at any
time in connection with any Loan Document shall be false,
misleading, or erroneous in any material respect when made or deemed
to have been made.
(c) The Borrower shall fail to perform, observe, or
comply with any covenant, agreement, or term contained in Section
8.1 and Articles 9 and 10 of this Agreement. Any Significant
Subsidiary shall fail to perform, observe or comply with any
covenant, agreement or term contained in paragraph 8 of the Guaranty
to which it is a party.
(d) The Borrower or any Significant Subsidiary shall
fail to perform, observe, or comply with any other covenant,
agreement, or term contained in any Loan Document (other than
covenants to pay the Obligations and the covenants described in
subsection 11.1 (c)) and such failure shall continue for a period of
fifteen (15) Business Days after the earlier of (i) the date the
Agent or any Lender provides the Borrower with notice thereof or
(ii) the date the Borrower should have notice thereof or (iii) the
date the Borrower should have notified the Agent thereof in
accordance with Subsection 8.1(f), notice thereof.
(e) The Borrower or any Significant Subsidiary shall (i)
apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, examiner, liquidator
or the like of itself or of all or a substantial part of its
property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect, the Bankruptcy
Code), (iv) institute any proceeding or file a petition seeking to
take advantage of any other law relating to Bankruptcy, insolvency,
reorganization, liquidation, dissolution, winding-up, or composition
or readjustment of debts, (v) fail to controvert in a timely and
appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code, (vi)
admit in writing its inability to, or be generally unable to pay its
debts as such debts become due, or (vii) take any corporate action
for the purpose of effecting any of the foregoing.
(f) A proceeding or case shall be commenced, without the
application, approval or consent of the Borrower or any Significant
Subsidiary, in any court of competent jurisdiction, seeking (i) its
reorganization, liquidation, dissolution, arrangement or winding-up,
or the composition or readjustment of its debts, (ii) the
appointment of a receiver, custodian, trustee, examiner, liquidator
or the like of the Borrower or such Subsidiary or of all or any
substantial part of its property, or (iii) similar relief in respect
of the Borrower or such Subsidiary under any law relating to
bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering
any of the foregoing shall be entered and continue unstayed and in
effect, for a period of sixty
CREDIT AGREEMENT - PAGE 53
(60) or more days; or an order for relief against the Borrower or
any Subsidiary shall be entered in an involuntary case under the
Bankruptcy Code.
(g) The Borrower or any Subsidiary shall fail to
discharge within a period of thirty (30) days after the commencement
thereof any attachment, sequestration, forfeiture, or similar
proceeding or proceedings involving an aggregate amount in excess of
One Million Dollars ($1,000,000) against any of its assets or
properties.
(h) A final judgment or judgments for the payment of
money in excess of One Million Dollars ($1,000,000) in the aggregate
shall be rendered by a court or courts against the Borrower or any
Subsidiary and the same shall not be discharged (or provision shall
not be made for such discharge) (or not be covered by a solvent and
reputable insurance company reasonably acceptable to the Agent), or
a stay of execution thereof shall not be procured, within thirty
(30) days from the date of entry thereof and the Borrower or the
relevant Subsidiary shall not, within said period of thirty (30)
days, or such longer period during which execution of the same shall
have been stayed, appeal therefrom and cause the execution thereof
to be stayed during such appeal.
(i) The Borrower or any Subsidiary shall fail to pay
when due any principal of or interest on any Debt if the aggregate
principal amount of the affected Debt equals or exceeds One Million
Dollars ($1,000,000) (other than the Obligations), or the maturity
of any such Debt shall have been accelerated, or any such Debt shall
have been required to be prepaid prior to the stated maturity
thereof or any event shall have occurred with respect to any Debt in
the aggregate principal amount equal to or in excess of One Million
Dollars ($1,000,000) that permits (or, with the giving of notice or
lapse of time or both, would permit) any holder or holders of such
Debt or any Person acting on behalf of such holder or holders to
accelerate the maturity thereof or require any such prepayment.
(j) This Agreement, any Guaranty or any Note shall cease
to be in full force and effect (other than, with respect to a
Guaranty, as a result of a permitted dissolution pursuant to Section
9.3) or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by the
Borrower, any Subsidiary, or the Borrower or any Subsidiary shall
deny that it has any further liability or obligation under any of
the Loan Documents.
(k) Any of the following events shall occur or exist
with respect to the Borrower or any ERISA Affiliate: (i) any
Prohibited Transaction involving any Plan; (ii) any Reportable Event
with respect to any Plan; (iii) the filing under Section 4041 of
ERISA of a notice of intent to terminate any Plan or the termination
of any Plan; (iv) any event or circumstance that might constitute
grounds entitling the PBGC to institute proceedings under Section
4042 of ERISA for the termination of, or for the appointment of a
trustee to administer, any Plan, or the institution by the PBGC of
any such proceedings; or (v) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer
Plan; and in each case above, such event or condition, together with
all other events or
CREDIT AGREEMENT - PAGE 54
conditions, if any, have subjected or could in the reasonable
opinion of Required Lenders subject the Borrower to any tax,
penalty, or other liability to a Plan, a Multiemployer Plan, the
PBGC, or otherwise (or any combination thereof) which in the
aggregate exceed or could reasonably be expected to exceed One
Million Dollars ($1,000,000).
(l) Any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act acquires beneficial ownership
(within the meaning of Section 13(d) under the Exchange Act) in
excess of thirty-three percent (33%) of the total voting power of
all classes of capital stock then outstanding of Borrower entitled
(without regard to the occurrence of any contingency) to vote in
elections of directors of Borrower.
Section XI.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may (and if directed by Required Lenders, shall) do any
one or more of the following:
(a) Acceleration. By notice to the Borrower, declare all
outstanding principal of and accrued and unpaid interest on the
Notes and all other amounts payable by the Borrower under the Loan
Documents immediately due and payable, and the same shall thereupon
become immediately due and payable, without further notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by the Borrower.
(b) Termination of Commitments. Terminate the
Commitments, including, without limitation, the obligation of the
Agent to issue Letters of Credit, without notice to the Borrower.
(c) Judgment. Reduce any claim to judgment.
(d) Foreclosure. Foreclose or otherwise enforce any Lien
granted to the Agent for the benefit of itself and the Lenders to
secure payment and performance of the Obligations in accordance with
the terms of the Loan Documents.
(e) Rights. Exercise any and all rights and remedies
afforded by the laws of the State of Texas or any other
jurisdiction, by any of the Loan Documents, by equity, or otherwise.
Provided, however, that upon the occurrence of an Event of Default under Section
11.1(e) or (f), the Commitments of all of the Lenders shall automatically
terminate (including, without limitation, the obligation of the Agent to issue
Letters of Credit), and the outstanding principal of and accrued and unpaid
interest on the Notes and all other amounts payable by the Borrower under the
Loan Documents shall thereupon become immediately due and payable without
notice, demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest, or other formalities of any kind, all of which
are hereby expressly waived by the Borrower.
Section XI.3 Cash Collateral. If an Event of Default shall have
occurred and be continuing the Borrower shall, if requested by the Agent or
Required Lenders, pledge to the Agent as security
CREDIT AGREEMENT - PAGE 55
for the Obligations an amount in immediately available funds equal to the then
outstanding Letter of Credit Liabilities, such funds to be held in a cash
collateral account at the Agent without any right of withdrawal by the Borrower.
Section XI.4 Performance by the Agent. If the Borrower or any
Significant Subsidiary shall fail to perform any covenant or agreement in
accordance with the terms of the Loan Documents, the Agent may, at the direction
of Required Lenders, perform or attempt to perform such covenant or agreement on
behalf of the Borrower. In such event, the Borrower shall, at the request of the
Agent, promptly pay any amount expended by the Agent or the Lenders in
connection with such performance or attempted performance to the Agent at the
Principal Office, together with interest thereon at the applicable Default Rate
from and including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither the Agent nor any Lender shall have any liability or
responsibility for the performance of any obligation of the Borrower or any
Significant Subsidiary under any Loan Document.
Section XI.5 Right of Set-off; Adjustments.
Upon the occurrence and during the continuance of any
Event of Default, each Lender (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 Lender (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 Lender,
irrespective of whether such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured.
Notwithstanding anything to the contrary contained in this Section 11.5, each
Lender agrees that if it shall set off or apply any deposits in a Fiduciary
Account maintained by such Lender it will do so only to the extent such deposits
are for the Borrower's or any Subsidiary's own account, and such Lender shall
not freeze such Fiduciary Account during the exercise of such Lender's rights
hereunder. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender; provided, however, that the failure
to give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section are in addition to
other rights and remedies (including, without limitation, other rights of
set-off) that such Lender may have.
If any Lender (a benefitted Lender) 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 set-off, or otherwise), in a greater proportion than any such
payment to or collateral received by any other Lender, if any, in respect of
such other Lender's Loans owing to it, or interest thereon, such benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loans owing to it, or shall provide
such other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to share the
excess payment or benefits of such collateral or proceeds ratably with each of
the Lenders; provided, however, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefitted Lender, such
purchase shall
CREDIT AGREEMENT - PAGE 56
be rescinded, and the purchase price and benefits returned, to the extent of
such recovery, but without interest. The Borrower agrees that any Lender so
purchasing a participation from a Lender pursuant to this Section 11.5 may, to
the fullest extent permitted by law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Person were the direct creditor of the Borrower in the amount of such
participation.
ARTICLE XII
The Agent
Section XII.1 Appointment, Powers, and Immunities. Each Lender
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 Lender; (b) shall not be responsible to the Lenders for any recital,
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, 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 Loan Party or the satisfaction of any condition
or to inspect the property (including the books and records) of any Loan Party
or any of its Subsidiaries or Affiliates; (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.
Section XII.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 any Loan Party), 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 13.7 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 Required Lenders, and such instructions shall be binding
CREDIT AGREEMENT - PAGE 57
on all of the Lenders; 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 Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.
Section XII.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 Lender 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
Lenders. 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 Required Lenders, 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 best interest of the Lenders.
Section XII.4 Rights as Lender. With respect to its Commitment and
the Loans made by it, NationsBank (and any successor acting as Agent) in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term Lender or Lenders shall, unless the context 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 Lender) 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 any Loan Party 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 any Loan
Party 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
Lenders.
Section XII.5 Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed under Section 13.1 hereof, but without
limiting 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 Lender) 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 Lender 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 Lender agrees to reimburse the Agent promptly upon demand for
its ratable share of any costs or expenses payable by the Borrower under Section
13.1, 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.
CREDIT AGREEMENT - PAGE 58
Section XII.6 Non-Reliance on Agent and Other Lenders. Each Lender
agrees that it has, independently and without reliance on the Agent or any other
Lender, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of the Loan Parties and their
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, 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 Lenders by the Agent
hereunder, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the affairs, financial
condition, or business of any Loan Party or any of its Subsidiaries or
Affiliates that may come into the possession of the Agent or any of its
Affiliates.
Section XII.7 Resignation of Agent. The Agent may resign at any time
by giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders shall have the right to appoint a successor
Agent, and if no Default has occurred and is continuing, such successor Agent
shall be reasonably satisfactory to the Borrower. If no successor Agent shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Agent's giving of notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a commercial Lender organized under the laws of
the United States of America having combined capital and surplus of at least
$100,000,000. 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 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.
Section XII.8 Several Commitments. The Commitments and other
obligations of the Lenders under any Loan Document are several. The default by
any Lender in making a Loan in accordance with its Commitment shall not relieve
the other Lenders of their obligations under any Loan Document. In the event of
any default by any Lender in making any Loan, each nondefaulting Lender shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. No Lender shall
be responsible for any act or omission of any other Lender.
Section XII.9 Agent Fee. The Borrower agrees to pay to the Agent on
the Closing Date and each anniversary of the Closing Date the administrative fee
described in that certain fee letter dated August 14, 1998, among the Borrower,
NationsBank and NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC.
ARTICLE XIII
Miscellaneous
Section XIII.1 Expenses; Indemnification.
CREDIT AGREEMENT - PAGE 59
(a) The Borrower agrees to pay on demand all costs and
expenses of the Agent in connection with the syndication,
preparation, execution, delivery, administration, modification, and
amendment 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 Lenders, 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 LENDER AND EACH OF THEIR AFFILIATES AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AGENTS, AND
ADVISORS (EACH, AN INDEMNIFIED PARTY) FROM 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 PREPARATION OF DEFENSE
IN CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF
THE LOANS (INCLUDING ANY OF THE FOREGOING ARISING FROM THE SOLE OR
CONTRIBUTORY 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 13.1 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 NOT THE TRANSACTIONS CONTEMPLATED
HEREBY ARE CONSUMMATED. THE BORROWER AGREES NOT TO ASSERT ANY CLAIM
AGAINST THE AGENT, ANY LENDER, ANY OF THEIR AFFILIATES, OR ANY OF
THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS,
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.
CREDIT AGREEMENT - PAGE 60
(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 13.1 shall survive the
payment in full of the Loans and all other amounts payable under
this Agreement.
Section XIII.2 Limitation of Liability. None of the Agent, any
Lender, or any Affiliate, officer, director, employee, attorney, or agent
thereof shall have any liability with respect to, and the Borrower and, by the
execution of the Loan Documents, to which it is a party each Significant
Subsidiary, hereby waives, releases, and agrees not to ▇▇▇ any of them upon, any
claim for any special, indirect, incidental, consequential or punitive damages
suffered or incurred by the Borrower or any Significant Subsidiary in connection
with, arising out of, or in any way related to any of the Loan Documents, or any
of the transactions contemplated by any of the Loan Documents.
Section XIII.3 No Duty. All attorneys, accountants, appraisers, and
other professional Persons and consultants retained by the Agent or any Lender
shall have the right to act exclusively in the interest of the Agent and the
Lenders and shall have no duty of disclosure, duty of loyalty, duty of care, or
other duty or obligation of any type or nature whatsoever to the Borrower or any
of the Borrower's shareholders or any other Person.
Section XIII.4 No Fiduciary Relationship. The relationship between
the Borrower and the Significant Subsidiaries on the one hand and the Agent and
each Lender on the other is solely that of debtor and creditor, and neither the
Agent nor any Lender has any fiduciary or other special relationship with the
Borrower or any Significant Subsidiaries, and no term or condition of any of the
Loan Documents shall be construed so as to deem the relationship between the
Borrower and the Significant Subsidiaries on the one hand and the Agent and each
Lender on the other and any Lender to be other than that of debtor and creditor.
Section XIII.5 Equitable Relief. The Borrower recognizes that in the
event the Borrower or any Significant Subsidiary fails to pay, perform, observe,
or discharge any or all of the obligations under the Loan Documents, any remedy
at law may prove to be inadequate relief to the Agent and the Lenders. The
Borrower therefore agrees that the Agent and the Lenders, if the Agent or the
Required Lenders so request, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
Section XIII.6 No Waiver; Cumulative Remedies. No failure on the
part of the Agent or any Lender to exercise and no delay in exercising, and no
course of dealing with respect to, any right, power, or privilege under any Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power, or privilege under any Loan Document preclude any
other or further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in the Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section XIII.7 Assignments and Participations.
CREDIT AGREEMENT - PAGE 61
(a) Each Lender 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 Lender or an assignment of all of a Lender's
rights and obligations under this Agreement, any such
partial assignment shall be in an amount at least equal
to $5,000,000 or an integral multiple of $2,500,000 in
excess thereof;
(iii) each such assignment by a Lender 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, 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 Lender hereunder and
the assigning Lender 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 5.6.
(b) The Agent shall maintain at its address below its
signature hereof 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 Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender 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 Lenders may treat each Person whose
name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable prior notice.
(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 D 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.
CREDIT AGREEMENT - PAGE 62
(d) Each Lender may sell participations to one or more
Persons in all or a portion of its rights, obligations or rights and
obligations under this Agreement (including all or a portion of its
Commitment or its Loans); provided, however, that (i) such Lenders
obligations under this Agreement shall remain unchanged, (ii) such
Lender 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 Article 5 and the right of set-off contained in Section
11.5, and (iv) the Borrower shall continue to deal solely and
directly with such Lender in connection with such Lenders rights and
obligations under this Agreement, and such Lender 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, extending its Commitment
or releasing any Significant Subsidiary from the Guaranty).
(e) Notwithstanding any other provision set forth in
this Agreement, any Lender may at any time assign and pledge all or
any portion of its Loans and its Note to any Federal Reserve Lender
as collateral security pursuant to Regulation A and any Operating
Circular issued by such Federal Reserve Lender. No such assignment
shall release the assigning Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning
the Borrower or any of its Subsidiaries in the possession of such
Lender from time to time to assignees and participants (including
prospective assignees and participants), subject, however, to the
provisions of Section 13.21 hereof.
Section XIII.8 Survival. All representations and warranties made in
any Loan Document or in any document, statement, or certificate furnished in
connection with any Loan Document shall survive the execution and delivery of
the Loan Documents and no investigation by the Agent or any Lender or any
closing shall affect the representations and warranties or the right of the
Agent or any Lender to rely upon them. Without prejudice to the survival of any
other obligation of the Borrower hereunder, the obligations of the Borrower
under Article 5 and Sections 13. 1 and 13.2 shall survive repayment of the Notes
and termination of the Commitments and the Letters of Credit.
Section XIII.9 ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE
OTHER LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG
THE PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES
THERETO.
CREDIT AGREEMENT - PAGE 63
Section XIII.10 Amendments and Waivers. Any provision of this
Agreement or any other Loan Document may be amended or waived if, but only if,
such amendment or waiver is in writing and is signed by the Borrower and the
Required Lenders (and, if Article 12 or the rights or duties of the Agent are
affected thereby, by the Agent); provided that no such amendment or waiver
shall, unless signed by all the Lenders, (i) increase the Commitment of any
Lender hereunder (except as agreed to by such Lender pursuant to the provisions
of Section 2.6), (ii) reduce the principal of or rate of interest on any Loan or
any fees or other amounts payable hereunder, (iii) postpone any date fixed for
the payment of any scheduled installment of principal of or interest on any Loan
or any fees or other amounts payable hereunder or for termination of any
Commitment, (iv) release any Significant Subsidiary from its obligations under
its Guaranty.
Section XIII.11 Maximum Interest Rate.
(a) No interest rate specified in any Loan Document
shall at any time exceed the Maximum Rate. If at any time the
interest rate (the Contract Rate) for any Obligation shall exceed
the Maximum Rate, thereby causing the interest accruing on such
Obligation to be limited to the Maximum Rate, then any subsequent
reduction in the Contract Rate for such Obligation shall not reduce
the rate of interest on such Obligation below the Maximum Rate until
the aggregate amount of interest accrued on such Obligation equals
the aggregate amount of interest which would have accrued on such
Obligation if the Contract Rate for such Obligation had at all times
been in effect.
(b) No provision of any Loan Document shall require the
payment or the collection of interest in excess of the maximum
amount permitted by applicable law. If any excess of interest in
such respect is hereby provided for, or shall be adjudicated to be
so provided, in any Loan Document or otherwise in connection with
this loan transaction, the provisions of this Section shall govern
and prevail and neither the Borrower nor the sureties, guarantors,
successors, or assigns of the Borrower shall be obligated to pay the
excess amount of such interest or any other excess sum paid for the
use, forbearance, or detention of sums loaned pursuant hereto. In
the event any Lender ever receives, collects, or applies as interest
any such sum, such amount which would be in excess of the maximum
amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the Obligations; and, if the principal
of the Obligations has been paid in full, any remaining excess shall
forthwith be paid to the Borrower. In determining whether or not the
interest paid or payable exceeds the Maximum Rate, the Borrower and
each Lender shall, to the extent permitted by applicable law, (a)
characterize any non-principal payment as an expense, fee, or
premium rather than as interest, (b) exclude voluntary prepayments
and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest
throughout the entire contemplated term of the Obligations so that
interest for the entire term does not exceed the Maximum Rate.
Section XIII.12 Notices. All notices and other communications
provided for in any Loan Document to which the Borrower or any Significant
Subsidiary is a party shall be given or made in writing and telecopied, mailed
by certified mail return receipt requested, or delivered to the
CREDIT AGREEMENT - PAGE 64
intended recipient at the Address for Notices specified below its name on the
signature pages hereof and, if to a Significant Subsidiary, at the address for
notices for Borrower; or, as to any party at such other address as shall be
designated by such party in a notice to each other party given in accordance
with this Section. Except as otherwise provided in any Loan Document, all such
communications shall be deemed to have been duly given when transmitted by
telecopy, subject to telephone confirmation of receipt, or when personally
delivered or, in the case of a mailed notice, three (3) Business Days after
being duly deposited in the mails, in each case given or addressed as aforesaid;
provided, however, notices to the Agent pursuant to Section 2.7 or 4.3 shall not
be effective until received by the Agent.
Section XIII.13 Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas and the
applicable laws of the United States of America.
Section XIII.14 Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same agreement.
Section XIII.15 Severability. Any provision of any Loan Document
held by a court of competent jurisdiction to be invalid or unenforceable shall
not impair or invalidate the remainder of any Loan Document and the effect
thereof shall be confined to the provision held to be invalid or illegal.
Section XIII.16 Headings. The headings, captions, and arrangements
used in this Agreement are for convenience only and shall not affect the
interpretation of this Agreement.
Section XIII.17 Non-Application of Chapter 346 of Texas Finance
Code. The provisions of Chapter 346 of the Texas Finance Code (formerly Chapter
15 of the Texas Credit Code (Vernon's Texas Civil Statutes, Article 5069-15))
are specifically declared by the parties hereto not to be applicable to any Loan
Documents or to the transactions contemplated thereby.
Section XIII.18 Construction. The Borrower, each Significant
Subsidiary (by its execution of the Loan Documents to which it is a party), the
Agent and each Lender acknowledges that each of them has had the benefit of
legal counsel of its own choice and has been afforded an opportunity to review
the Loan Documents with its legal counsel and that the Loan Documents shall be
construed as if jointly drafted by the parties thereto.
Section XIII.19 Independence of Covenants. All covenants under the
Loan Documents shall be given independent effect so that if a particular action
or condition is not permitted by any of such covenants, the fact that it would
be permitted by an exception to, or be otherwise within the limitations of,
another covenant shall not avoid the occurrence of a Default if such action is
taken or such condition exists.
Section XIII.20 WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY
CREDIT AGREEMENT - PAGE 65
IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE)
ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT OR ANY LENDER IN THE
NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
Section XIII.21 Confidentiality. The Agent and each Lender (each, a
"Lending Party") agrees to keep confidential any information furnished or made
available to it by the Borrower pursuant to this Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or subject to
provisions substantially similar to those contained in this Section, any
affiliate of any Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party or affiliate of any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the credit facility
provided herein so long as such Person is subject to provisions substantially
similar to those contained in this Section, (c) as required by any law, rule, or
regulation, (d) upon the order of any court or administrative agency, (e) upon
the request or demand of any regulatory agency or authority, (f) that is or
becomes available to the public or that is or becomes available to any Lending
Party other than as a result of a disclosure by any Lending Party prohibited by
this Agreement, (g) in connection with any litigation to which such Lending
Party or any of its affiliates may be a party, (h) to the extent necessary in
connection with the exercise of any remedy under this Agreement or any other
Loan Document, and (i) subject to provisions substantially similar to those
contained in this Section, to any actual or proposed participant or assignee.
[Remainder of page intentionally left blank]
CREDIT AGREEMENT - PAGE 66
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
BORROWER:
▇.▇. ▇▇▇▇▇▇ HOLDINGS, INC.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
Address for Notices:
▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.:(▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇
CREDIT AGREEMENT
AGENT AND LENDER:
Commitment: NATIONSBANK, N.A.,
$40,000,000 individually as a Lender and as the Agent
Swingline Commitment: By:
$10,000,000 -------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Lending Office for Base Rate
Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
CREDIT AGREEMENT
OTHER LENDERS:
NORWEST BANK MINNESOTA, N.A.
Commitment: By:
$25,000,000 -------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address for Notices:
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.:(▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇▇
Lending Office for Base Rate
Loans and Eurodollar Loans:
Sixth and Marquette
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
CREDIT AGREEMENT
THE FIRST NATIONAL BANK OF CHICAGO
Commitment: By:
$15,000,000 -------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Address for Notices:
▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇. ▇. ▇▇▇▇▇▇▇▇▇
Lending Office for Base Rate
Loans and Eurodollar Loans:
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Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
CREDIT AGREEMENT
FLEET NATIONAL BANK
Commitment: By:
$20,000,000 -------------------------------------
Name:
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Title:
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Address for Notices:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Mail Stop CTMO 0250
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Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Lending Office for Base Rate
Loans and Eurodollar Loans:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, Mail Stop CTMO 0250
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Icy Mounds
CREDIT AGREEMENT