EXECUTION COPY
CREDIT AGREEMENT
Dated as of February 16, 1998
among
HOMEUSA, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
FIRST CHICAGO CAPITAL CORPORATION
as Agent
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I: DEFINITIONS
1.1 Certain Defined Terms .............................................. 1
1.2 References ......................................................... 23
ARTICLE II: THE LOAN FACILITIES
2.1 Loans .............................................................. 23
2.2 Rate Options for all Advances ...................................... 25
2.3 Optional Payments; Mandatory Prepayments ........................... 25
2.4 Reduction of Commitments ........................................... 26
2.5 Method of Borrowing ................................................ 26
2.6 Method of Selecting Types and Interest Periods for Advances ........ 26
2.7 Minimum Amount of Each Advance ..................................... 27
2.8 Method of Selecting Types and Interest Periods for Conversion
and Continuation of Advances ..................................... 27
2.9 Default Rate ....................................................... 27
2.10 Method of Payment .................................................. 28
2.11 Revolving Notes, Telephonic Notices ................................ 28
2.12 Promise to Pay; Interest and Commitment Fees; Interest
Payment Dates; Interest and Fee Basis; Taxes; Loan
and Control Accounts .............................................. 28
2.13 Notification of Advances, Interest Rates, Prepayments and
Aggregate Commitment Reductions ................................... 34
2.14 Lending Installations .............................................. 34
2.15 Non-Receipt of Funds by the Agent .................................. 34
2.16 Termination Date ................................................... 35
2.17 Replacement of Certain Lenders ..................................... 35
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 Obligation to Issue ................................................ 36
3.2 Types and Amounts .................................................. 36
3.3 Conditions ......................................................... 36
3.4 Procedure for Issuance of Letters of Credit ........................ 37
3.5 Letter of Credit Participation ..................................... 37
3.6 Reimbursement Obligation ........................................... 38
3.7 Letter of Credit Fees .............................................. 38
3.8 Issuing Bank Reporting Requirements ................................ 39
3.9 Indemnification; Exoneration ....................................... 39
3.10 Cash Collateral .................................................... 40
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 Yield Protection ................................................... 41
4.2 Changes in Capital Adequacy Regulations ............................ 42
4.3 Availability of Types of Advances .................................. 42
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4.4 Funding Indemnification ............................................ 42
4.5 Lender Statements; Survival of Indemnity ........................... 43
ARTICLE V: CONDITIONS PRECEDENT
5.1 Initial Advances and Letters of Credit ............................. 43
5.2 Each Advance and Letter of Credit .................................. 45
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
6.1 Organization; Corporate Powers ..................................... 46
6.2 Authority .......................................................... 46
6.3 No Conflict; Governmental Consents ................................. 47
6.4 Financial Statements ............................................... 47
6.5 No Material Adverse Change ......................................... 48
6.6 Taxes .............................................................. 48
6.7 Litigation; Loss Contingencies and Violations ...................... 49
6.8 Subsidiaries ....................................................... 49
6.9 ERISA .............................................................. 50
6.10 Accuracy of Information ............................................ 50
6.11 Securities Activities .............................................. 51
6.12 Material Agreements ................................................ 51
6.13 Compliance with Laws ............................................... 51
6.14 Assets and Properties .............................................. 51
6.15 Statutory Indebtedness Restrictions ................................ 51
6.16 Insurance .......................................................... 52
6.17 Labor Matters ...................................................... 52
6.18 Initial Acquisitions; Related Transactions ......................... 52
6.19 Environmental Matters .............................................. 52
6.20 The Public Offering ................................................ 53
6.21 Benefits ........................................................... 54
ARTICLE VII: COVENANTS
7.1 Reporting ........................................................... 54
7.2 Affirmative Covenants ............................................... 58
7.3 Negative Covenants .................................................. 61
7.4 Financial Covenants ................................................. 70
ARTICLE VIII: DEFAULTS
8.1 Defaults ............................................................ 71
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES
9.1 Termination of Commitments; Acceleration ............................ 74
9.2 Defaulting Lender ................................................... 74
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9.3 Amendments .......................................................... 76
9.4 Preservation of Rights .............................................. 77
ARTICLE X: GENERAL PROVISIONS
10.1 Survival of Representations ........................................ 77
10.2 Governmental Regulation ............................................ 77
10.3 Performance of Obligations ......................................... 77
10.4 Headings ........................................................... 78
10.5 Entire Agreement ................................................... 78
10.6 Several Obligations; Benefits of this Agreement .................... 78
10.7 Expenses; Indemnification .......................................... 78
10.8 Numbers of Documents ............................................... 80
10.9 Accounting ......................................................... 80
10.10 Severability of Provisions ........................................ 80
10.11 Nonliability of Lenders ........................................... 80
10.12 GOVERNING LAW ..................................................... 81
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL ........... 81
10.14 No Strict Construction ............................................ 82
10.15 Subordination of Intercompany Indebtedness ........................ 83
10.16 Usury Not Intended ................................................ 84
10.17 Business Loans .................................................... 85
ARTICLE XI: THE AGENT
11.1 Appointment; Nature of Relationship ................................ 85
11.2 Powers ............................................................. 85
11.3 General Immunity ................................................... 85
11.4 No Responsibility for Loans, Creditworthiness,
Collateral, Recitals, Etc ........................................ 86
11.5 Action on Instructions of Lenders .................................. 86
11.6 Employment of Agents and Counsel ................................... 86
11.7 Reliance on Documents; Counsel ..................................... 86
11.8 The Agent's Reimbursement and Indemnification ...................... 86
11.9 Rights as a Lender ................................................. 87
11.10 Lender Credit Decision ............................................ 87
11.11 Successor Agent ................................................... 87
11.12 Collateral Documents .............................................. 88
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 Setoff ............................................................. 89
12.2 Ratable Payments ................................................... 89
12.3 Application of Payments ............................................ 89
12.4 Relations Among Lenders ............................................ 90
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
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13.1 Successors and Assigns ............................................. 91
13.2 Participations ..................................................... 91
13.3 Assignments ........................................................ 92
13.4 Confidentiality .................................................... 94
13.5 Dissemination of Information ....................................... 94
ARTICLE XIV: NOTICES
14.1 Giving Notice ...................................................... 94
14.2 ▇▇▇▇▇ of Address ................................................... 94
ARTICLE XV: COUNTERPARTS
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EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A -- Form of Assignment Agreement
(Definitions, Sections 2.17 and 13.3)
EXHIBIT B -- Commitments
(Definitions)
EXHIBIT C-1 -- Form of Revolving Note
(Definitions)
EXHIBIT C-2 -- Form of Swing Line Note
(Definitions)
EXHIBIT D -- Form of Borrowing Notice (Section 2.6)
EXHIBIT E -- Form of Request for Letter of Credit (Section 3.3)
EXHIBIT F -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT G -- List of Closing Documents
(Section 5.1)
EXHIBIT H -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT I -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT J -- Form of Guaranty Supplement
(Section 7.3(G)(ii))
EXHIBIT K -- Form of Pledge Supplement
(Section 7.3(G)(ii))
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SCHEDULES
Schedule 1.1.1 -- Founding Companies (Definitions)
Schedule 1.1.2 -- Initial Shareholders
Schedule 1.1.3 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.4 -- Permitted Existing Investments (Definitions)
Schedule 1.1.5 -- Permitted Existing Liens (Definitions)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.19 -- Environmental Matters (Section 6.19)
Schedule 7.3 -- Subordination Terms (Section 7.3(A)(iii)
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CREDIT AGREEMENT
This Credit Agreement dated as of February 16, 1998 is entered into
among HomeUSA, Inc., a Delaware corporation, the institutions from time to time
parties hereto as Lenders, whether by execution of this Agreement or an
Assignment Agreement pursuant to SECTION 13.3, and First Chicago Capital
Corporation, in its capacity as contractual representative for itself and the
other Lenders. The parties hereto agree as follows:
ARTICLE I: DEFINITIONS
. In addition to the terms defined above, the following terms used in
this Agreement shall have the following meanings, applicable both to the
singular and the plural forms of the terms defined.
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or division thereof,
whether through purchase of assets, merger or otherwise or (ii) directly or
indirectly acquires (in one transaction or as the most recent transaction in a
series of transactions) at least a majority (in number of votes) of the
securities of a corporation which have ordinary voting power for the election of
directors (other than securities having such power only by reason of the
happening of a contingency) or a majority (by percentage of voting power) of the
outstanding equity interests of another Person.
"ACQUISITION DOCUMENTS" means all material documents, instruments and
agreements entered into in connection with the Initial Acquisitions.
"ADJUSTED EBITDA" means EBITDA PLUS the PRO FORMA adjustments which are
consistent with the Commission's regulations and practices as of the Closing
Date (whether or not applicable) to account for adjustments to historical EBITDA
for the Founding Companies as described in the Prospectus and other acquired
entities (other than the Founding Companies) which are the result of a Permitted
Acquisition.
"ADJUSTED LEVERAGE RATIO" means the ratio of (i) Total Debt of the
Borrower and its consolidated Subsidiaries to (ii) the sum of (A) EBITDA of the
Borrower and its Subsidiaries PLUS (B) the PRO FORMA adjustments which are
consistent with the Commission's regulations and practices as of the Closing
Date (whether or not applicable) to account for adjustments to historical EBITDA
for the Founding Companies PLUS (C) any PRO FORMA adjustments reasonably
acceptable to the Agent to account for adjustments to historical EBITDA with
respect to salary expenses of top management and officers historically
experienced by any acquired entity (other than the Founding Companies) which are
the result of a Permitted Acquisition.
"ADJUSTED REVENUES" means revenues calculated for any period by
including the actual amount for the applicable period ending on such day for the
Borrower and its Subsidiaries, including the actual revenues of the targets from
any Permitted Acquisitions from the first day of the applicable period through
the date of the closing of each Permitted Acquisition, utilizing (a) where
available or required pursuant to the terms of this Agreement, historical
audited and/or reviewed unaudited financial statements obtained from the seller,
broken down by fiscal quarter in the Borrower's reasonable judgment or (b)
unaudited financial statements (where no audited or reviewed financial
statements are required pursuant to the terms of this Agreement) reviewed
internally by the Borrower, broken down by fiscal quarter in the Borrower's
reasonable judgment.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount
of the several Revolving Loans made by the Lenders to the Borrower of the same
Type and, in the case of Eurodollar Rate Advances, for the same Interest Period.
"AFFECTED LENDER" is defined in SECTION 2.17 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
Capital Stock, by contract or otherwise.
"AGENT" means FCCC in its capacity as contractual representative for
itself and the Lenders pursuant to ARTICLE XI hereof and any successor Agent
appointed pursuant to ARTICLE XI hereof.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all the
Lenders, as amended from time to time pursuant to the terms hereof. The initial
Aggregate Commitment is Twenty-five Million and 00/100 Dollars ($25,000,000.00).
"AGREEMENT" means this Credit Agreement, as it may be amended, restated
or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles in effect from time to time, applied in a manner consistent with that
used in preparing the financial statements referred to in SECTION 6.4(A) hereof,
PROVIDED, HOWEVER, that with respect to the calculation of financial ratios and
other financial tests required by this Agreement, "Agreement Accounting
Principles" means generally accepted accounting principles as in effect as of
the date of this Agreement, applied in a manner consistent with that used in
preparing the financial statements referred to in Section 6.4(A) hereof;
PROVIDED, further, however, all pro forma financial statements reflecting
Acquisitions shall be prepared in accordance with the requirements established
by the Commission for acquisition accounting for reporting acquisitions by
public companies (whether or not such Acquisitions are required to be publicly
reported or not).
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"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under SECTION 2.12(C)(i) hereof determined in accordance with the
provisions of SECTION 2.12(D)(ii) hereof.
"APPLICABLE EURODOLLAR MARGIN" means, as at any date of determination
prior to the Conversion Date, the rate per annum then applicable to Eurodollar
Rate Loans determined in accordance with the provisions of SECTION 2.12(D)(II)
hereof and, at any date thereafter, 5.25%.
"APPLICABLE FLOATING RATE MARGIN" means, as at any date of determination
prior to the Conversion Date, the rate per annum then applicable to Floating
Rate Loans determined in accordance with the provisions of SECTION 2.12(D)(ii)
hereof and, at any date thereafter, 4.0%.
"APPLICABLE L/C FEE PERCENTAGE" means, with respect to any Letter of
Credit and as at any date of determination, a rate per annum equal to the
Applicable Eurodollar Margin in effect on such date.
"ARRANGER" means First Chicago Capital Markets, Inc., in its capacity as
the arranger for the loan transaction evidenced by this Agreement.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person).
"ASSIGNMENT AGREEMENT" shall mean an assignment and acceptance agreement
entered into in connection with an assignment pursuant to SECTION 13.3 hereof in
substantially the form of EXHIBIT A.
"AUTHORIZED OFFICER" means any of the Chief Executive Officer, Chief
Financial Officer, Vice President-Administration or Treasurer of the Borrower,
acting singly.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) in respect of which the Borrower or
any other member of the Controlled Group is, or within the immediately preceding
six (6) years was, an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" means HomeUSA, Inc., a Delaware corporation, together with
its successors and assigns, including a debtor-in-possession on behalf of the
Borrower.
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"BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.
"BORROWING NOTICE" is defined in SECTION 2.6 hereof.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Chicago, Illinois
and on which dealings in Dollars are carried on in the London interbank market
and (ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in Chicago, Illinois.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities, including
Capitalized Leases and Permitted Purchase Money Indebtedness) (other than in
connection with Permitted Acquisitions) by the Borrower and its Subsidiaries
during that period that, in conformity with Agreement Accounting Principles, are
required to be included in or reflected by the property, plant, equipment or
similar fixed asset accounts reflected in the consolidated balance sheet of the
Borrower and its Subsidiaries.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CAPITALIZED LEASE" of a Person means any lease of property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ten (10)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are limited to investment
grade securities (i.e., securities rated at least Baa by ▇▇▇▇▇'▇ Investors
Service, Inc. or at least BBB by Standard & Poor's Ratings Group); (iv)
commercial paper of United States and foreign banks and bank holding companies
and their subsidiaries and United States and foreign finance,
4
commercial industrial or utility companies which, at the time of acquisition,
are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better)
by ▇▇▇▇▇'▇ Investors Services, Inc.; (v) corporate bonds, mortgage-backed
securities and municipal bonds in each case of a domestic issuer rated at the
date of acquisition not less than Aaa by ▇▇▇▇▇'▇ Investor Services, Inc. or AAA
by Standard & Poor's Ratings Group with maturities of no more than two (2) years
from the date of acquisition; (vi) repurchase agreements secured by debt
securities of the type described in part (i) above, the market value of which,
including accrued interest, is not less than 100% of the amount of the
repurchase agreement, with maturities of no more than two years from the date of
acquisition, issued by or acquired from or through any Lender or any bank or
trust company organized under the laws of the United States or any state thereof
and having capital and surplus aggregating at least $100,000,000.00; and (vii)
money market funds with respect to which not less than 90% of such funds are
invested in the type of investments specified in clauses (i) through (v) above;
PROVIDED, unless the context otherwise requires, that the maturities of such
Cash Equivalents shall not exceed 365 days.
"CHANGE" is defined in SECTION 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(i) any "person" or "group" (as such terms are used in SECTIONS
13(D) and 14(D) of the Exchange Act), other than the Initial
Shareholders, is or becomes the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be
deemed to have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of 30% or
more of the combined voting power of the Borrower's Capital Stock
ordinarily having the right to vote at an election of directors;
(ii) during any period of 24 consecutive calendar months,
individuals:
(a) who were directors of the Borrower on the first day of such
period, or
(b) whose election or nomination for election to the board of
directors of the Borrower was recommended or approved by at
least a majority of the directors then still in office who
were directors of the Borrower on the first day of such
period, or whose election or nomination for election was so
approved,
shall cease to constitute a majority of the board of directors of the
Borrower;
(iii) the Borrower consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of
its property to any Person, or any corporation consolidates with or
merges into the Borrower, in either event pursuant to a transaction in
which the outstanding Capital Stock of the Borrower is reclassified or
changed into or exchanged for cash, securities or other property; and
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(iv) other than as a result of a transaction permitted under the
terms of this Agreement, the Borrower shall cease (a) to own, of record
and beneficially, with sole voting and dispositive power, (1) 100% of
the outstanding shares of Capital Stock of each of the Founding
Companies, or (2) 80% of the outstanding shares of Capital Stock of each
of the other Guarantors or (b) to have the power, directly or
indirectly, to elect a majority of the members of the board of directors
of each of the Guarantors.
"CLOSING DATE" means the date on which the initial Loans are advanced
hereunder.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, or any successor statute.
"COLLATERAL" means any property owned by the Borrower or any of its
Subsidiaries and pledged to the Agent pursuant to the Pledge Agreements to
secure the Secured Obligations.
"COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"COMMITMENT" means, for each Lender, the obligation of such Lender to
make Revolving Loans and to purchase participations in Letters of Credit not
exceeding the amount set forth on EXHIBIT B to this Agreement opposite its name
thereon under the heading "Commitment" or on Schedule 1 of the Assignment
Agreement by which it became a Lender, as such amount may be modified from time
to time pursuant to the terms of this Agreement or to give effect to any
applicable Assignment Agreement.
"CONSOLIDATED TANGIBLE ASSETS" means the total assets of the Borrower
and its Subsidiaries on a consolidated basis, but excluding therefrom all items
that are treated as intangibles under Agreement Accounting Principles.
"CONSOLIDATED NET WORTH" means, at a particular date, all amounts which
would be included under shareholders' equity for the Borrower and its
consolidated Subsidiaries determined in accordance with Agreement Accounting
Principles.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBs"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including
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Contractual Obligations (contingent or otherwise) arising through any agreement
to purchase, repurchase, or otherwise acquire such Indebtedness, obligation or
liability or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition, or to make payment other than for value
received.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision
of any equity or debt securities issued by that Person or any indenture,
mortgage, deed of trust, security agreement, pledge agreement, guaranty,
contract, undertaking, agreement or instrument, in each case in writing, to
which that Person is a party or by which it or any of its properties is bound,
or to which it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation
which is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower; (ii) a partnership or
other trade or business (whether or not incorporated) which is under common
control (within the meaning of Section 414(c) of the Code) with the Borrower;
and (iii) a member of the same affiliated service group (within the meaning of
Section 414(m) of the Code) as the Borrower, any corporation described in CLAUSE
(i) above or any partnership or trade or business described in CLAUSE (ii)
above.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person
(i) 90% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person and (ii)
of which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.
"CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.8(D) hereof.
"CONVERSION DATE" means August 16, 1998.
"CORPORATE BASE RATE" means the corporate base rate of interest
announced by First Chicago from time to time, changing when and as said
corporate base rate changes.
"CURE LOAN" is defined in SECTION 9.2(iii) hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if
foreclosure, distraint, sale or other similar proceedings shall not have
been commenced) which are being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and with
respect to which adequate reserves or other appropriate provisions are
being maintained in accordance with Agreement Accounting Principles;
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(ii) statutory Liens of landlords and Liens of suppliers,
mechanics, carriers, materialmen, warehousemen or workmen and other
similar Liens imposed by law created in the ordinary course of business
for amounts not yet due or which are being contested in good faith by
appropriate proceedings properly instituted and diligently conducted and
with respect to which adequate reserves or other appropriate provisions
are being maintained in accordance with Agreement Accounting Principles;
(iii) Liens incurred or deposits made, in each case, in the
ordinary course of business in connection with worker's compensation,
unemployment insurance or other types of social security benefits or to
secure the performance of bids, tenders, sales, contracts (other than
for the repayment of borrowed money), surety, appeal and performance
bonds; PROVIDED that (A) all such Liens do not in the aggregate
materially detract from the value of the Borrower's or such Subsidiary's
assets or property taken as a whole or materially impair the use thereof
in the operation of the businesses taken as a whole, and (B) with
respect to Liens securing bonds to stay judgments or in connection with
appeals do not secure at any time an aggregate amount which if paid at
such time would result in the occurrence or existence of a Default;
(iv) Liens arising with respect to zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility
easements, building restrictions and other similar charges or
encumbrances on the use of real property which do not in any case
materially detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of the Borrower or
any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments,
writs or warrants of attachment, or similar process against the Borrower
or any of its Subsidiaries which do not constitute a Default under
SECTION 8.1(h) hereof; and
(vi) any interest or title of the lessor in the property subject
to any operating lease entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business.
"DEFAULT" means an event described in ARTICLE VIII hereof.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the Termination Date.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States.
8
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:
(i) Net Income,
PLUS (ii) Interest Expense,
PLUS (iii) charges against income for foreign, federal, state
and local taxes, to the extent deducted in computing Net
Income,
PLUS (iv) depreciation expense, to the extent deducted in computing
Net Income,
PLUS (v) amortization expense, including, without limitation,
amortization of goodwill, other intangible assets and
Transaction Costs, to the extent deducted in computing Net
Income,
PLUS (vi) other non-cash charges classified as long-term
deferrals in accordance with Agreement Accounting
Principles, to the extent deducted in computing Net
Income,
MINUS (vii) Net Extraordinary Gains, and
PLUS (viii) for the fiscal quarters ending prior to the fiscal
quarter ending December 31, 1998, all non-cash
compensation expenses of the Borrower associated with the
issuance of common stock of the Borrower in connection
with the Public Offering to management of the Borrower or
the Founding Companies and consultants to the Borrower.
As used herein "NET EXTRAORDINARY GAINS" shall mean the sum of, but only if
positive, extraordinary gains (and any nonrecurring unusual gains arising in or
outside of the ordinary course of business not included in extraordinary gains
determined in accordance with Agreement Accounting Principles which have been
included in the determination of Net Income) MINUS extraordinary losses (and any
nonrecurring unusual losses arising in or outside of the ordinary course of
business not included in extraordinary losses determined in accordance with
Agreement Accounting Principles). EBITDA shall be calculated for any period by
including the actual amount for the applicable period ending on such day,
including the EBITDA attributable to Permitted Acquisitions occurring during
such period on a PRO FORMA basis for the period from the first day of the
applicable period through the date of the closing of each Permitted Acquisition,
utilizing (a) where available or required pursuant to the terms of this
Agreement, historical audited and/or reviewed unaudited financial statements
obtained from the seller, broken down by fiscal quarter in the Borrower's
reasonable judgment or (b) unaudited financial statements (where no audited or
reviewed financial statements are required pursuant to the terms of this
Agreement) reviewed internally by the Borrower, broken down in the Borrower's
reasonable judgment.
9
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. SS 9601 ET SEQ., the Occupational Safety and Health Act of 1970,
29 U.S.C. SS 651 ET SEQ., and the Resource Conservation and Recovery Act of
1976, 42 U.S.C. SS 6901 ET SEQ., in each case including any amendments thereto,
any successor statutes, and any regulations or guidance promulgated thereunder,
and any state or local equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement
of law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"EQUITY INTERESTS" means Capital Stock and all warrants, options or
other rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Loan for
the relevant Interest Period, the rate determined by the Agent to be the
arithmetic average of the respective rates at which deposits in Dollars are
offered by First Chicago to first-class banks in the London interbank market at
approximately 11 a.m. (London time) two Business Days prior to the first day of
such Interest Period, in the approximate amounts of the portions of the relevant
Eurodollar Rate Loan of First Chicago, and having a maturity approximately equal
to such Interest Period, as adjusted for Reserves.
"EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period PLUS the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/16 of 1% if the rate is not such a
multiple.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.
10
"EURODOLLAR RATE LOAN" means a Revolving Loan, or portion thereof, which
bears interest at the Eurodollar Rate.
"FAIR VALUE" means (a) with respect to the Capital Stock of the
Borrower, the closing price for such Capital Stock on the trading date
immediately preceding the date of the applicable acquisition agreement;
PROVIDED, such amount may be discounted to the extent such discount is permitted
by Agreement Accounting Principles and (b) with respect to other assets, the
value of the relevant asset as of the date of acquisition or sale determined in
an arm's-length transaction conducted in good faith between an informed and
willing buyer and an informed and willing seller under no compulsion to buy.
"FCCC" means First Chicago Capital Corporation, in its individual
capacity, and its successors.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum 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 for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"FIRST CHICAGO" means The First National Bank of Chicago, in its
individual capacity, and its successors.
"FIXED CHARGE COVERAGE RATIO" is defined in SECTION 7.4(A) hereof.
"FLOATING RATE" means, for any day for any Revolving Loan, a rate per
annum equal to the Alternate Base Rate for such day PLUS the then Applicable
Floating Rate Margin, changing and as the Alternate Base Rate or Applicable
Floating Rate Margin changes.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"FOUNDING COMPANIES" means each of the Persons listed on SCHEDULE 1.1.1
hereto.
"GOVERNMENTAL ACTS" is defined in SECTION 3.9(a) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
11
"GROSS NEGLIGENCE" means recklessness, the absence of the slightest care
or the complete disregard of consequences. Gross Negligence does not mean the
absence of ordinary care or diligence, or an inadvertent act or inadvertent
failure to act. If the term "gross negligence" is used with respect to the Agent
or any Lender or any indemnitee in any of the other Loan Documents, it shall
have the meaning set forth herein.
"GUARANTORS" means all of the Borrower's Material Subsidiaries (which
shall include the Founding Companies) as of the Closing Date and any other New
Subsidiaries which have satisfied the provisions of SECTION 7.3(F)(ii) hereof,
and their respective successors and assigns.
"GUARANTY" means that certain Subsidiary Guaranty dated as of the date
hereof executed by the Guarantors in favor of the Agent, for the ratable benefit
of the Lenders, as it may be amended, modified, supplemented and/or restated
(including to add new Guarantors), and as in effect from time to time.
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"INDEBTEDNESS" of any Person means, without duplication, such Person's
(a) obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
reimbursement obligations with respect to letters of credit (other than
commercial letters of credit) issued for the account of such Person, (g) Hedging
Obligations, (h) Off Balance Sheet Liabilities and (i) Contingent Obligations in
respect of obligations of another Person of the type described in the foregoing
clauses (a) through (h). The amount of Indebtedness of any Person at any date
shall be without duplication (i) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (ii) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
"INDEMNIFIED MATTERS" is defined in SECTION 10.7(B) hereof.
12
"INDEMNITEES" is defined in SECTION 10.7(B) hereof.
"INFORMATION MEMORANDUM" is defined in SECTION 6.4(A).
"INITIAL ACQUISITIONS" means the acquisition by the Borrower in separate
merger transactions (the "MERGERS"), in exchange for cash and shares of its
common stock, of the Founding Companies.
"INITIAL SHAREHOLDERS" means each of the Persons listed on SCHEDULE
1.1.2 hereto.
"INTEREST EXPENSE" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases, commitment and letter
of credit fees), but excluding interest expense not payable in cash (including
amortization of discount), all as determined in conformity with Agreement
Accounting Principles. Interest Expense shall be calculated for any period by
including the actual amount for the applicable period ending on such day for the
Borrower and its Subsidiaries, including the actual Interest Expense of the
Founding Companies and the targets from any Permitted Acquisitions for the
period from the first day of the applicable period through the date of the
closing of each Permitted Acquisition, utilizing (a) where available or required
pursuant to the terms of this Agreement, historical audited and/or reviewed
unaudited financial statements obtained from the seller, broken down by fiscal
quarter in the Borrower's reasonable judgment or (b) unaudited financial
statements (where no audited or reviewed financial statements are required
pursuant to the terms of this Agreement) reviewed internally by the Borrower,
broken down in the Borrower's reasonable judgment.
"INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a
period of one (1), two (2), three (3) or six (6) months commencing on a Business
Day selected by the Borrower pursuant to this Agreement. Such Interest Period
shall end on (but exclude) the day which corresponds numerically to such date
one, two, three or six months thereafter; PROVIDED, HOWEVER, that if there is no
such numerically corresponding day in such next, second, third or sixth
succeeding month, such Interest Period shall end on the last Business Day of
such next, second, third or sixth succeeding month. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next succeeding Business Day, PROVIDED, HOWEVER, that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day.
"INVESTMENT" means, with respect to any Person, (i) any purchase or
other acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
13
"IRS" means the Internal Revenue Service and any Person succeeding to
the functions thereof.
"ISSUING BANKS" means FCCC and one of its Affiliates and any other
Lender which, at the Borrower's request, agrees, in each such Lender's sole
discretion, to become an Issuing Bank for the purpose of issuing Letters of
Credit, and their respective successors and assigns, in each case in such
Lender's separate capacity as an issuer of Letters of Credit pursuant to SECTION
3.1. The designation of any Lender as an Issuing Bank after the date hereof
shall be subject to the prior written consent of the Agent.
"L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter
of Credit.
"L/C INTEREST" shall have the meaning ascribed to such term in SECTION
3.5 hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum
of (i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of all
Letters of Credit requested by the Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages
of this Agreement or any other institution which becomes a party to this
Agreement pursuant to an Assignment Agreement, and their respective successors
and assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LETTER OF CREDIT" means the letters of credit issued by the Issuing
Banks pursuant to SECTION 3.1 hereof.
"LEVERAGE RATIO" is defined in SECTION 7.4(B) hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or security agreement or preferential
arrangements of any kind or nature whatsoever (including, without limitation,
the interest of a vendor or lessor under any conditional sale, Capitalized Lease
or other title retention agreement).
"LOAN(S)" means, with respect to a Lender, a Revolving Loan and
collectively, the Revolving Loans, and in the case of the Swing Line Bank, any
Swing Line Loan made pursuant to SECTION 2.1(B) hereof, and collectively all
such Revolving Loans and Swing Line Loans, whether made or continued as or
converted to Floating Rate Loans or Eurodollar Rate Loans.
"LOAN ACCOUNT" is defined in SECTION 2.12(F) hereof.
14
"LOAN DOCUMENTS" means this Agreement, the Revolving Notes, the
Guaranty, the Pledge Agreements and all other documents, instruments and
agreements executed in connection therewith or contemplated thereby, as the same
may be amended, restated or otherwise modified and in effect from time to time.
"MARGIN STOCK" shall have the meaning ascribed to such term in
Regulation U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower, or the Borrower and its Subsidiaries, taken as a
whole, (b) the ability of the Borrower or any of its Subsidiaries to perform
their respective obligations under the Loan Documents in any material respect or
(c) the ability of the Lenders or the Agent to enforce in any material respect
their rights with respect to the Collateral.
"MATERIAL SUBSIDIARY" means (a) any "Significant Subsidiary" as defined
in Regulation S-X issued pursuant to the Securities Act of 1933 and the
Securities Exchange Act of 1934 and (b) any other Subsidiary of the Borrower
which at any time comprises ten percent (10%) or more of the Borrower's
Consolidated Tangible Assets.
"MAXIMUM RATE" means the maximum nonusurious interest rate under
applicable law. To the extent Texas law may apply to this Agreement, the maximum
lawful rate under this Agreement shall be the weekly indicated rate ceiling
under Article 5069-1.04 of the Texas Revised Civil Statutes, unless any other
lawful rate ceiling exceeds the rate ceiling so determined, and then the higher
rate ceiling shall apply.
"MERGER(S)" is defined in the definition of Initial Acquisitions above.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"NET INCOME" means, for any period, the net earnings (or loss) after
taxes of the Borrower and its Subsidiaries on a consolidated basis for such
period taken as a single accounting period determined in conformity with
Agreement Accounting Principles.
"NEW SUBSIDIARY" is defined in SECTION 7.3(F)(ii).
"NON PRO RATA LOAN" is defined in SECTION 9.2 hereof.
"NOTES" means the Revolving Notes and the Swing Line Note.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3(B) hereof.
"OBLIGATIONS" means all Loans, advances, debts, liabilities,
obligations, covenants and duties owing by the Borrower to the Agent, any
Lender, the Swing Line Bank, the Arranger, any
15
Affiliate of the Agent or any Lender, or any Indemnitee, of any kind or nature,
present or future, arising under this Agreement, the Notes or any other Loan
Document, whether or not evidenced by any note, guaranty or other instrument,
whether or not for the payment of money, whether arising by reason of an
extension of credit, loan, guaranty, indemnification, or in any other manner,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, attorneys' fees and disbursements, paralegals' fees (in each
case whether or not allowed), and any other sum chargeable to the Borrower under
this Agreement or any other Loan Document.
"OFF BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
(b) any liability under any sale and leaseback transactions which do not create
a liability on the consolidated balance sheet of such Person, (c) any liability
under any financing lease or so-called "synthetic" lease transaction, or (d) any
obligations arising with respect to any other transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such Person and its
Subsidiaries.
"OTHER TAXES" is defined in SECTION 2.12(E)(ii) hereof.
"PARTICIPANTS" is defined in SECTION 13.2(A) hereof.
"PAYMENT DATE" means the last Business Day of each March, June,
September and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in SECTION 7.3(F)(iii) hereof.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.3 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.4 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.5 to this Agreement.
"PERMITTED FLOOR PLAN FINANCING" is defined in SECTION 7.3(A)(xiv).
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in SECTION 7.3(A)(ix)
hereof.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate
16
principal amount (plus associated fees and expenses) of the Indebtedness being
replaced, renewed, refinanced or extended, (ii) does not rank at the time of
such replacement, renewal, refinancing or extension senior to the Indebtedness
being replaced, renewed, refinanced or extended, and (iii) does not contain
terms (including, without limitation, terms relating to security, amortization,
interest rate, premiums, fees, covenants, event of default and remedies)
materially less favorable to the Borrower or to the Lenders than those
applicable to the Indebtedness being replaced, renewed, refinanced or extended.
"PERMITTED SUBORDINATED INDEBTEDNESS" is defined in SECTION 7.3(A)(iii)
hereof.
"PERSON" means any individual, corporation, firm, enterprise,
partnership, trust, incorporated or unincorporated association, joint venture,
joint stock company, limited liability company or other entity of any kind, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA
in respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" means the (i) Pledge Agreement dated as of the date
hereof executed by the Borrower in favor of the Agent, (ii) Pledge Agreement
dated as of the date hereof executed by ▇▇▇▇▇▇'▇ Mobile Homes, Inc., in favor of
the Agent, (iii) Pledge Agreement dated as of the date hereof executed by First
American Homes, Inc., in favor of the Agent, (iv) Pledge Agreement dated as of
the date hereof executed by HUSA GP, Inc., in favor of the Agent, and (v) Pledge
Agreement dated as of the date hereof executed by HUSA LP, Inc., in favor of the
Agent, in each case, for the ratable benefit of the Lenders as each may be
amended, modified, supplemented and/or restated (including to add new "Pledged
Collateral" as defined in each such Pledge Agreement), and as in effect from
time to time.
"PLEDGED SUBSIDIARY" means a direct or indirect Subsidiary of the
Borrower, all of the Capital Stock of which is pledged to the Agent pursuant to
a Pledge Agreement.
"PRO RATA SHARE" means, with respect to any Lender, the percentage
obtained by dividing (A) such Lender's Commitment at such time (as adjusted from
time to time in accordance with the provisions of this Agreement) by (B) the sum
of the Aggregate Commitments at such time; PROVIDED, HOWEVER, if the Commitments
are terminated pursuant to the terms of this Agreement, then "Pro Rata Share"
means the percentage obtained by dividing (x) the sum of such Lender's L/C
Obligations and Revolving Loans, and in the case of the Swing Line Bank, Swing
Line Loans by (y) the aggregate amount of all Revolving Loans, Swing Line Loans
and L/C Obligations.
"PROSPECTUS" means the Prospectus filed by the Borrower with the
Commission and dated November 21, 1997, with respect to the initial public
offerings of its common stock, $.01 par value.
17
"PUBLIC OFFERING" means the offering by the Borrower of 5,000,000 shares
of its common stock, $.01 par value, pursuant to the Prospectus.
"PUBLIC OFFERING DOCUMENTS" means the Prospectus, the Underwriting
Agreement, and all other material instruments and agreements executed or
obtained by the Borrower or any of its Subsidiaries pursuant to or in connection
with the Public Offering.
"PURCHASERS" is defined in SECTION 13.3(A) hereof.
"RATE OPTION" means the Eurodollar Rate or the Floating Rate.
"REGISTER" is defined in SECTION 13.3(C) hereof.
"REGULATION B" means Regulation B of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
prohibition of certain discriminatory practices with respect to credit
transactions (as defined therein).
"REGULATION G" means Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by nonbank, nonbroker lenders for the purpose of purchasing
or carrying margin stock (as defined therein).
"REGULATION T" means Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying Margin
Stock applicable to member banks of the Federal Reserve System.
"REGULATION X" means Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REGULATION Z" means Regulation Z of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors which implement
provisions of the Truth in Lending Act.
"REIMBURSEMENT OBLIGATION" is defined in SECTION 3.6 hereof.
18
"RELATED TRANSACTIONS" means the Initial Acquisitions, the Mergers and
the Public Offering.
"RELEASE" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor environment, including the movement of Contaminants
through or in the air, soil, surface water or groundwater.
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person. Rentals shall be
calculated for any period by including the actual amount for the applicable
period ending on such day for the Borrower and its Subsidiaries, including the
actual Rentals of the targets from any Permitted Acquisitions for the period
from the first day of the applicable period through the date of the closing of
each Permitted Acquisition, utilizing (a) where available or required pursuant
to the terms of this Agreement, historical audited and/or reviewed unaudited
financial statements obtained from the seller, broken down by fiscal quarter in
the Borrower's reasonable judgment or (b) unaudited financial statements (where
no audited or reviewed financial statements are required pursuant to the terms
of this Agreement) reviewed internally by the Borrower, broken down in the
Borrower's reasonable judgment.
"REPLACEMENT LENDER" is defined in SECTION 2.17 hereof.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, PROVIDED, HOWEVER, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the
aggregate, are equal to or greater than FIFTY-ONE percent (51%); PROVIDED,
HOWEVER, that, if any of the Lenders shall have failed to fund its Pro Rata
Share of any Revolving Loan requested by the Borrower, or any Swing Line Loan as
requested by the Agent which such Lenders are obligated to fund under the terms
of this Agreement and any such failure has not been cured, then for so long as
such failure continues, "REQUIRED LENDERS" means Lenders (excluding all Lenders
whose failure to fund their respective Pro Rata Shares of such Revolving Loans
or Swing Line Loans has not been so cured) whose Pro Rata Shares represent at
least FIFTY-ONE percent (51%) of the aggregate Pro Rata Shares of such Lenders;
PROVIDED FURTHER, HOWEVER, that, if the Commitments have been terminated
pursuant to the terms of this Agreement, "REQUIRED LENDERS" means Lenders
(without regard to such Lenders' performance of their respective obligations
hereunder) whose aggregate ratable shares (stated as a percentage) of the
aggregate outstanding principal balance of all Loans and L/C Obligations are
equal to or greater than FIFTY-ONE percent (51%).
19
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws
or other organizational or governing documents of such Person, and any law, rule
or regulation, or determination of an arbitrator or a court or other
Governmental Authority, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is subject
including, without limitation, the Securities Act of 1933, the Securities
Exchange Act of ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇, ▇, ▇, ▇, ▇ and Z, ERISA, the Fair Labor
Standards Act, the Worker Adjustment and Retraining Notification Act, Americans
with Disabilities Act of 1990, the National Mobile Home Construction and Safety
Standards Act of 1974, the Federal Consumer Credit Protection Act, the Federal
Equal Credit Opportunity Act, the Federal Fair Credit Reporting Act, any
applicable state mortgage or consumer finance brokerage licencing acts, any
applicable state insurance brokerage licencing acts and any certificate of
occupancy, zoning ordinance, building, environmental or land use requirement or
permit or environmental, labor, employment, occupational safety or health law,
rule or regulation, including Environmental, Health or Safety Requirements of
Law.
"RESERVES" shall mean the maximum reserve requirement, as prescribed by
the Board of Governors of the Federal Reserve System (or any successor) with
respect to "Eurocurrency liabilities" or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Eurodollar Rate Loans is determined or category of extensions of credit or other
assets which includes loans by a non-United States office of any Lender to
United States residents.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution,
direct or indirect, on account of any Equity Interests of the Borrower now or
hereafter outstanding, except a dividend payable solely in the Borrower's
Capital Stock (other than Disqualified Stock) or in options, warrants or other
rights to purchase such Capital Stock, (ii) any redemption, retirement, purchase
or other acquisition for value, direct or indirect, of any Equity Interests of
the Borrower or any of its Subsidiaries now or hereafter outstanding, other than
in exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Borrower) of other Equity Interests of the
Borrower (other than Disqualified Stock), (iii) any redemption, purchase,
retirement, defeasance, prepayment or other acquisition for value, direct or
indirect, of any Permitted Subordinated Indebtedness, and (iv) any payment of a
claim for the rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of, any Permitted Subordinated Indebtedness or
any Equity Interests of the Borrower or any of the Borrower's Subsidiaries, or
of a claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the
amount by which the Aggregate Commitment at such time exceeds the Revolving
Credit Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Loans (including the Swing Line
Loans) at such time, plus (ii) the L/C Obligations at such time.
20
"REVOLVING LOAN(S)" means, with respect to a Lender, such Lender's
portion of any Advance made pursuant to Section 2.1(a) hereof.
"REVOLVING NOTE" means a promissory note, in substantially the form of
EXHIBIT C-1 hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Commitment, including any amendment, restatement,
modification, renewal or replacement of such Revolving Note.
"RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2 hereof.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii)
all Hedging Obligations owing to any Lender or any affiliate of any Lender under
agreements with respect thereto entered into with any Lender or any affiliate of
any Lender.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"SWING LINE BANK" means FCCC or any other Lender as a successor Swing
Line Bank.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum principal amount of $5,000,000 at any one
time outstanding.
"SWING LINE LOAN" means a Loan made available to the Borrower by the
Swing Line Bank pursuant to SECTION 2.1(b) hereof.
"SWING LINE NOTE" means a promissory note, in substantially the form of
EXHIBIT C-2 hereto, duly executed by the Borrower and payable to the order of
the Swing Line Bank in the amount of its Swing Line Commitment, including any
amendment, restatement, modification, renewal or replacement of such Swing Line
Note.
"SYNDICATION PERIOD" is defined in SECTION 2.2 hereof.
"TAXES" is defined in SECTION 2.12(E)(i) hereof.
"TERMINATION DATE" means the earlier of (a) February 16, 2001 and (b)
the date of termination of the Aggregate Commitment pursuant to SECTION 2.4
hereof or the Commitments pursuant to SECTION 9.1 hereof.
21
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"TOTAL DEBT" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of Indebtedness of the Borrower and its
Subsidiaries, other than Hedging Obligations.
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the
Transaction Documents, in connection with the Public Offering, and the
consummation of the Initial Acquisitions and the Related Transactions.
"TRANSACTION DOCUMENTS" means the Loan Documents, the Public Offering
Documents, the Acquisition Documents and the other material documents executed
in connection with the Related Transactions.
"TRANSFEREE" is defined in SECTION 13.5 hereof.
"TYPE" means, with respect to any Revolving Loan, its nature as a
Floating Rate Loan or a Eurodollar Rate Loan.
"UNDERWRITING AGREEMENT" means that certain Underwriting Agreement from
the Borrower confirmed and accepted by Alex. ▇▇▇▇▇ & Sons Incorporated for
itself and certain other underwriters in connection with the Public Offering.
"UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans,
the amount (if any) by which the present value of all vested nonforfeitable
benefits under all Single Employer Plans exceeds the fair market value of all
such Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plans, and (ii) in the case of Multiemployer
Plans, the withdrawal liability that would be incurred by the Controlled Group
if all members of the Controlled Group completely withdrew from all
Multiemployer Plans.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or
the giving of notice, or both, would constitute a Default.
22
Any accounting terms used in this Agreement which are not specifically
defined herein shall have the meanings customarily given them in accordance with
generally accepted accounting principles in existence as of the date hereof.
. The existence throughout the Agreement of references to the Borrower's
Subsidiaries is for a matter of convenience only. Any references to Subsidiaries
of the Borrower set forth herein shall (i) with respect to representations and
warranties which deal with historical matters be deemed to include each of the
Founding Companies and their respective subsidiaries, together with the
businesses acquired pursuant to the Initial Acquisitions; and (ii) shall not in
any way be construed as consent by the Agent or any Lender to the establishment,
maintenance or acquisition of any Subsidiary, except as may otherwise be
permitted hereunder.
ARTICLE II: THE LOAN FACILITIES
2.1 LOANS. (a) REVOLVING LOANS. Upon the satisfaction of the conditions
precedent set forth in SECTIONS 5.1 and 5.2, from and including the date of this
Agreement and prior to the Conversion Date, each Lender severally and not
jointly agrees, on the terms and conditions set forth in this Agreement, to make
Revolving Loans to the Borrower from time to time, in Dollars, in an amount not
to exceed such Lender's Pro Rata Share of Revolving Credit Availability at such
time; PROVIDED, HOWEVER, at no time shall the Revolving Credit Obligations
exceed the Aggregate Commitment at such time. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow Revolving Loans at any
time prior to the Conversion Date. The Revolving Loans made on the Closing Date
shall initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Rate Loans in the manner
provided in SECTION 2.8 and subject to the other conditions and limitations
therein set forth and set forth in this ARTICLE II. On the Conversion Date, the
Borrower's option to borrow and reborrow Revolving Loans shall terminate, the
Aggregate Commitment shall be reduced to zero, the outstanding principal balance
of the Revolving Loans shall be repaid in nine (9) equal consecutive quarterly
installments of principal, payable on the last Business Day of each calendar
quarter, commencing on September 30, 1998 and continuing thereafter until
December 31, 2000, and a final installment of the then outstanding principal
balance of the Revolving Loans on the Termination Date. The Revolving Loans
shall be permanently reduced by the amount of each installment on the date
payment thereof is made hereunder. Notwithstanding the foregoing, the then
outstanding principal balance of all Revolving Loans, if any, shall be due and
payable on the Termination Date.
(b) SWING LINE LOANS.
(i) AMOUNT OF SWING LINE LOANS. Upon the satisfaction of the
conditions precedent set forth in SECTION 5.1 and 5.2, from and
including the date of this Agreement and prior to the Termination Date,
the Swing Line Bank agrees, on the terms and conditions set forth in
this Agreement, to make swing line loans to the Borrower from time to
time, in Dollars, in an amount not to exceed the Swing Line Commitment
(each,
23
individually, a "SWING LINE LOAN" and collectively, the "SWING LINE
LOANS"); PROVIDED, HOWEVER, at no time shall the Revolving Credit
Obligations exceed the Aggregate Commitment; and PROVIDED, FURTHER, that
at no time shall the sum of (a) the outstanding amount of the Swing Line
Loans, PLUS (b) the outstanding amount of Revolving Loans made by the
Swing Line Bank pursuant to SECTION 2.1(A) (after giving effect to any
concurrent repayment of Loans), exceed the Swing Line Bank's Commitment
at such time. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow Swing Line Loans at any time prior to the
Termination Date.
(ii) BORROWING NOTICE. The Borrower shall deliver to the Agent
and the Swing Line Bank a Borrowing Notice, signed by it, not later than
10:00 a.m. (Chicago time) on the Borrowing Date of each Swing Line Loan,
specifying (i) the applicable Borrowing Date (which shall be a Business
Day), and (ii) the aggregate amount of the requested Swing Line Loan.
The Swing Line Loans shall at all times be Floating Rate Loans, which
shall be an amount not less than $250,000 and increments of $100,000 in
excess thereof.
(iii) MAKING OF SWING LINE LOANS. Promptly after receipt of the
Borrowing Notice under SECTION 2.1(B)(II) in respect of Swing Line
Loans, the Agent shall notify each Lender by telex or telecopy, or other
similar form of transmission, of the requested Swing Line Loan. Not
later than 2:00 p.m. (Chicago time) on the applicable Borrowing Date,
the Swing Line Bank shall make available its Swing Line Loan, in funds
immediately available in Chicago to the Agent at its address specified
pursuant to ARTICLE XIV. The Agent will promptly make the funds so
received from the Swing Line Bank available to the Borrower at the
Agent's aforesaid address.
(iv) REPAYMENT OF SWING LINE LOANS. The Swing Line Loans shall be
evidenced by the Swing Line Note, and each Swing Line Loan shall be paid
in full by the Borrower on or before the fifth Business Day after the
Borrowing Date for such Swing Line Loan. The Borrower may at any time
prepay, without penalty or premium, all outstanding Swing Line Loans or,
in a minimum amount and increments of $100,000, any portion of the
outstanding Swing Line Loans, upon notice to the Agent and the Swing
Line Bank. In addition, the Agent (i) may at any time in its sole
discretion with respect to any outstanding Swing Line Loan, or (ii)
shall on the fifth Business Day after the Borrowing Date of any Swing
Line Loan, require each Lender (including the Swing Line Bank) to make a
Revolving Loan in the amount of such Lender's Pro Rata Share of such
Swing Line Loan, for the purpose of repaying such Swing Line Loan. Not
later than 2:00 p.m. (Chicago time) on the date of any notice received
pursuant to this SECTION 2.1(B)(IV), each Lender shall make available
its required Revolving Loan or Revolving Loans, in funds immediately
available in Chicago to the Agent at its address specified pursuant to
ARTICLE XIV. Revolving Loans made pursuant to this SECTION 2.1(B)(IV)
shall initially be Floating Rate Loans and thereafter may be continued
as Floating Rate Loans or converted into Eurodollar Rate Loans in the
manner provided in SECTION 2.8 and subject to the other conditions and
limitations therein set forth and set forth in this ARTICLE II. Unless a
Lender shall have notified the Swing Line Bank, prior to its making any
Swing Line Loan, that any applicable condition precedent set forth in
SECTIONS 5.1 and 5.2 had not then been
24
satisfied, such Lender's obligation to make Revolving Loans pursuant to
this SECTION 2.1(B)(IV) to repay Swing Line Loans shall be
unconditional, continuing, irrevocable and absolute and shall not be
affected by any circumstances, including, without limitation, (A) any
set-off, counterclaim, recoupment, defense or other right which such
Lender may have against the Agent, the Swing Line Bank or any other
Person, (B) the occurrence of continuance of a Default or Unmatured
Default, (C) any adverse change in the condition (financial or
otherwise) of the Borrower, or (D) any other circumstances, happening or
event whatsoever. In the event that any Lender fails to make payment to
the Agent of any amount due under this SECTION 2.1(B)(IV), the Agent
shall be entitled to receive, retain and apply against such obligation
the principal and interest otherwise payable to such Lender hereunder
until the Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied. In addition to the foregoing,
if for any reason any Lender fails to make payment to the Agent of any
amount due under this SECTION 2.1(B)(IV), such Lender shall be deemed,
at the option of the Agent, to have unconditionally and irrevocably
purchased from the Swing Line Bank, without recourse or warranty, an
undivided interest and participation in the applicable Swing Line Loan
in the amount of such Revolving Loan, and such interest and
participation may be recovered from such Lender together with interest
thereon at the Federal Funds Effective Rate for each day during the
period commencing on the date of demand and ending on the date such
amount is received. On the Termination Date, the Borrower shall repay in
full the outstanding principal balance of the Swing Line Loans.
2.2 RATE OPTIONS FOR ALL ADVANCES. The Revolving Loans may be Floating
Rate Advances or Eurodollar Rate Advances, or a combination thereof, selected by
the Borrower in accordance with SECTION 2.8. The Borrower may select, in
accordance with SECTION 2.8, Rate Options and Interest Periods applicable to
portions of the Revolving Loans; PROVIDED that there shall be no more than seven
(7) Interest Periods in effect with respect to all of the Revolving Loans at any
time; and PROVIDED, FURTHER, HOWEVER, notwithstanding anything herein to the
contrary, the Borrower may not select the Eurodollar Rate for any Revolving
Loans without the Agent's consent during the period from the Closing Date
through the earlier to occur of (i) the date that is 60 days after the Closing
Date and (ii) the date on which the Arranger notifies the Borrower that the
primary syndication of the Loans and Commitments has been completed (the
"SYNDICATION PERIOD"). The Swing Line Loans shall at all times be Floating Rate
Loans.
2.3 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS.
(A) OPTIONAL PAYMENTS. The Borrower may from time to time repay or
prepay, without penalty or premium all or any part of outstanding Floating Rate
Advances in a minimum amount for each such repayment or prepayment of $1,000,000
and in increments of $100,000 in excess thereof; PROVIDED, that the Borrower may
not so prepay Floating Rate Advances unless it shall have provided at least one
Business Day's written notice to the Agent of such prepayment. Each Eurodollar
Rate Advance may be voluntarily repaid or prepaid in full, or in part, prior to
the last day of the applicable Interest Period, subject to the indemnification
provisions contained in SECTION 4.4, PROVIDED, that the Borrower may not so
prepay Eurodollar Rate Advances unless it
25
shall have provided at least two (2) Business Days' written notice to the Agent
of such prepayment.
(B) MANDATORY PREPAYMENTS. If at any time and for any reason the
Revolving Credit Obligations are greater than the Aggregate Commitment, the
Borrower shall immediately make a mandatory prepayment of the Obligations in an
amount equal to such excess. In addition, if Revolving Credit Availability is at
any time less than the amount of contingent L/C Obligations outstanding at any
time, the Borrower shall deposit cash collateral with the Agent in an amount
equal to the amount by which such L/C Obligations exceed such Revolving Credit
Availability. All of the mandatory prepayments made under this SECTION 2.3(B)
shall be applied first to Floating Rate Loans and to any Eurodollar Rate Loans
maturing on such date and then to subsequently maturing Eurodollar Rate Loans in
order of maturity.
2.4 REDUCTION OF COMMITMENTS. The Borrower may permanently reduce the
Aggregate Commitment in whole, or in part ratably among the Lenders, in an
aggregate minimum amount of $5,000,000 and integral multiples of $5,000,000 in
excess of that amount (unless the Aggregate Commitment is reduced in whole),
upon at least three (3) Business Days' written notice to the Agent, which notice
shall specify the amount of any such reduction; PROVIDED, HOWEVER, that the
amount of the Aggregate Commitment may not be reduced below the aggregate
principal amount of the outstanding Revolving Credit Obligations. All accrued
commitment fees shall be payable on the effective date of any partial or
complete termination of the obligations of the Lenders to make Revolving Loans
hereunder.
2.5 METHOD OF BORROWING. Not later than 2:00 p.m. (Chicago time) on each
Borrowing Date, each Lender shall make available its Revolving Loan, in funds
immediately available in Chicago to the Agent at its address specified pursuant
to ARTICLE XIV. The Agent will promptly make the funds so received from the
Lenders available to the Borrower at the Agent's aforesaid address.
2.6 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent irrevocable notice in substantially the form
of EXHIBIT D hereto (a "BORROWING NOTICE") not later than 10:00 a.m. (Chicago
time) (a) on the Borrowing Date of each Floating Rate Advance and (b) three
Business Days before the Borrowing Date for each Eurodollar Rate Advance,
specifying: (i) the Borrowing Date (which shall be a Business Day) of such
Advance; (ii) the aggregate amount of such Advance; (iii) the Type of Advance
selected; and (iv) in the case of each Eurodollar Rate Advance, the Interest
Period applicable thereto. Each Floating Rate Advance and all Obligations (other
than Eurodollar Loans) shall bear interest from and including the date of the
making of such Advance or the incurrence of such Obligation to (but not
including) the date of repayment thereof at the Floating Rate, changing when and
as such Floating Rate changes. Changes in the rate of interest on that portion
of any Advance maintained as a Floating Rate Loan will take effect
simultaneously with each change in the Alternate Base Rate. Each Eurodollar Rate
Advance shall bear interest from and including the first day of the Interest
Period applicable thereto to (but not
26
including) the last day of such Interest Period at the interest rate determined
as applicable to such Eurodollar Rate Advance.
2.7 MINIMUM AMOUNT OF EACH ADVANCE. Each Advance (other than an Advance
to repay Swing Line Loans pursuant to Section 2.1(b)(iv) or a Reimbursement
Obligation pursuant to SECTION 3.6) shall be in the minimum amount of $1,000,000
(and in multiples of $100,000 if in excess thereof), PROVIDED, HOWEVER, that any
Floating Rate Advance may be in the amount of the unused Aggregate Commitment.
2.8 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
CONTINUATION OF ADVANCES.
(A) RIGHT TO CONVERT. The Borrower may elect from time to time, subject
to the provisions of SECTION 2.2 and this SECTION 2.8, and, for any conversion
of a Eurodollar Rate Advance other than at the end of an Interest Period,
subject to payment of amounts payable under SECTION 4.4, to convert all or any
part of a Revolving Loan of any Type into any other Type or Types of Loans.
(B) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent notice in accordance with SECTION 2.8(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.
(C) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT.
Notwithstanding anything to the contrary contained in SECTION 2.8(A) or SECTION
2.8(B), no Revolving Loan may be converted into or continued as a Eurodollar
Rate Loan (except with the consent of the Required Lenders) when any Default or
Unmatured Default has occurred and is continuing.
(D) CONVERSION/CONTINUATION NOTICE. The Borrower shall give the Agent
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 10:00 a.m. (Chicago time) three (3) Business Days prior
to the date of the requested conversion or continuation, specifying: (1) the
requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Revolving Loan to be converted or
continued; and (3) the amount of Eurodollar Rate Loan(s) into which such
Revolving Loan is to be converted or continued and the duration of the Interest
Period applicable thereto.
2.9 DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest rate(s) applicable to the Obligations shall be equal to the
Floating Rate PLUS two percent (2.0%) per annum and fees payable under SECTION
3.7 with respect to Letters of Credit shall be increased by two percent (2.0%)
per annum.
27
2.10 METHOD OF PAYMENT. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to ARTICLE XIV, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 2:00 p.m. (Chicago time)
on the date when due and shall be made ratably among the Lenders (unless such
amount is not to be shared ratably in accordance with the terms hereof). Each
payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds which the Agent
received at its address specified pursuant to ARTICLE XIV or at any Lending
Installation specified in a notice received by the Agent from such Lender. The
Borrower authorizes the Agent to charge the account of the Borrower maintained
with First Chicago for each payment of principal, interest, fees and other
amounts as it becomes due hereunder.
2.11 REVOLVING NOTES, TELEPHONIC NOTICES. Each Lender is authorized to
record the principal amount of each of its Revolving Loans and each repayment
with respect to its Revolving Loans on the schedule attached to its respective
Revolving Note; PROVIDED, HOWEVER, that the failure to so record shall not
affect the Borrower's obligations under any such Revolving Note. The Borrower
authorizes the Lenders and the Agent to extend Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be acting on
behalf of the Borrower. The Borrower agrees to deliver promptly to the Agent a
written confirmation, signed by an Authorized Officer, if such confirmation is
requested by the Agent or any Lender, of each telephonic notice. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, (i) the telephonic notice shall govern absent manifest error
and (ii) the Agent or the Lender, as applicable, shall promptly notify the
Authorized Officer who provided such confirmation of such difference.
2.12 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST PAYMENT
DATES; INTEREST AND FEE BASIS; TAXES; LOAN AND CONTROL ACCOUNTS.
(A) PROMISE TO PAY. The Borrower unconditionally promises to pay when
due the principal amount of each Loan and all other Obligations incurred by it,
and to pay all unpaid interest accrued thereon, in accordance with the terms of
this Agreement and the Notes.
(B) INTEREST PAYMENT DATES. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the Closing Date and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity; PROVIDED, HOWEVER, interest accrued on each Eurodollar Rate Loan
having an Interest Period longer than three months shall also be payable on the
last day of each three-month interval during such Interest Period. Interest
accrued on the principal balance of all other Obligations shall be payable in
arrears (i) on the last day of each calendar month, commencing on the first such
day following the incurrence of such Obligation, (ii) upon repayment thereof in
full or in part, and (iii) if not theretofore paid in full, at the time such
other Obligation becomes due and payable (whether by acceleration or otherwise).
28
(C) COMMITMENT FEES; CONVERSION FEE. (i) The Borrower shall pay to the
Agent, for the account of the Lenders in accordance with their Pro Rata Shares,
from and after the Closing Date until the date on which the Aggregate Commitment
shall be terminated in whole, a commitment fee accruing at the rate of the then
Applicable Commitment Fee Percentage, on the amount by which (A) the Aggregate
Commitment in effect from time to time exceeds (B) the Revolving Credit
Obligations in effect from time to time. All such commitment fees payable under
this CLAUSE (C) shall be payable quarterly in arrears on each Payment Date
occurring after the Closing Date (with the first such payment being calculated
for the period from the Closing Date and ending on such Payment Date), and, in
addition, on the date on which the Aggregate Commitment shall be terminated in
whole.
(ii) The Borrower agrees to pay to the Agent for the sole account of the
Agent and the Arranger (unless otherwise agreed between the Agent or the
Arranger and any Lender) the fees set forth in the letter agreement between the
Agent and the Borrower dated October 30, 1997, payable at the times and in the
amounts set forth therein.
(D) INTEREST AND FEE BASIS; APPLICABLE EURODOLLAR MARGIN, APPLICABLE
FLOATING RATE MARGIN AND APPLICABLE COMMITMENT FEE PERCENTAGE.
(i) Interest and fees shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest shall be payable for the day an Obligation is
incurred but not for the day of any payment on the amount paid if payment is
received prior to 2:00 p.m. (Chicago time) at the place of payment. If any
payment of principal of or interest on a Loan or any payment of any other
Obligations shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
(ii) At any time prior to the Conversion Date, the Applicable Eurodollar
Margin, Applicable Floating Rate Margin and Applicable Commitment Fee Percentage
shall be determined from time to time by reference to the table set forth below,
on the basis of the then applicable Adjusted Leverage Ratio as described in this
SECTION 2.12(D)(II); PROVIDED, HOWEVER, for the period from the Closing Date
until the Applicable Eurodollar Margins, Applicable Floating Rate Margin and
Applicable Commitment Fee Percentage are first adjusted pursuant to this CLAUSE
(D), it shall be assumed that the Adjusted Leverage Ratio is 2.75 to 1.00.
(iii) The Borrower agrees to pay the Agent, for the account of the
Lenders in accordance with their Pro Rata Shares, on the Conversion Date, a
conversion fee in the amount equal to two percent (2%) of the Aggregate
Commitment, as measured on the Closing Date.
29
Level I Level II Level III Level IV Level V
-------------------------- -------------------- --------------- --------------- ----------------
Adjusted Less than or equal to 3.00 Greater than 3.00 Greater than 3.25 Greater than 3.50 Greater than
Leverage Ratio to 1.00 to 1.00 to 1.00 to 1.00 3.75 to 1.00
and and and
Less than or equal Less than or equal Less than or equal
3.25 to 1.00 to 3.50 to 1.00 to 3.75 to 1.00
------------------------------------------------------------------------------------------------------------------------------------
Applicable
Commitment 0.50% 0.50% 0.50% 0.50% 0.50%
Fee Percentage
------------------------------------------------------------------------------------------------------------------------------------
Applicable
Eurodollar 2.00% 2.25% 2.50% 2.75% 3.00%
Rate Margin and
Applicable L/C
Fee Percentage
------------------------------------------------------------------------------------------------------------------------------------
Applicable
Floating Rate
Margin 0.75% 1.00% 1.25% 1.50% 1.75%
------------------------------------------------------------------------------------------------------------------------------------
For purposes of this SECTION 2.12(D)(II), the Adjusted Leverage Ratio shall be
determined as of the last day of each fiscal quarter based upon (a) for Total
Debt, Total Debt as of the last day of each such fiscal quarter; and (b) for
EBITDA, EBITDA for the twelve-month period ending on such day calculated as set
forth in the definition thereof. Upon receipt of the financial statements
delivered pursuant to SECTIONS 7.1(A)(I) (subject to adjustment upon receipt of
the financial statements delivered pursuant to SECTION 7.1(A)(II)), the
Applicable Eurodollar Margin, Applicable Floating Rate Margin and Applicable
Commitment Fee Percentage shall be adjusted, such adjustment being effective
five (5) Business Days following the Agent's receipt of such financial
statements and the compliance certificate required to be delivered in connection
therewith pursuant to SECTION 7.1(A)(III); PROVIDED, that if the Borrower shall
not have timely delivered its financial statements in accordance with SECTION
7.1(A)(I) or (II), as applicable, then commencing on the date upon which such
financial statements should have been delivered and continuing until such
financial statements are actually delivered, it shall be assumed for purposes of
determining the Applicable Eurodollar Margin, Applicable Floating Rate Margin
and Applicable Commitment Fee Percentage that the Adjusted Leverage Ratio was
greater than 2.75 to 1.0.
(E) TAXES.
(i) Any and all payments by the Borrower hereunder shall be made
free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings or
any liabilities with respect thereto including
30
those arising after the date hereof as a result of the adoption of or
any change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the
interpretation or application thereof by a Governmental Authority but
excluding, in the case of each Lender and the Agent, such taxes
(including income taxes, franchise taxes and branch profit taxes) as are
imposed on or measured by such Lender's or Agent's, as the case may be,
income by the United States of America or any Governmental Authority of
the jurisdiction under the laws of which such Lender or Agent (other
than due to a Lender's failure to comply with SECTION 2.12(E)(VI)), as
the case may be, is organized (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities which the
Agent or a Lender determines to be applicable to this Agreement, the
other Loan Documents, the Commitments, the Loans or the Letters of
Credit being hereinafter referred to as "TAXES"). If the Borrower shall
be required by law to deduct any Taxes from or in respect of any sum
payable hereunder or under the other Loan Documents to any Lender or the
Agent, (i) the sum payable shall be increased as may be necessary so
that after making all required deductions (including deductions
applicable to additional sums payable under this SECTION 2.12(E)) such
Lender or the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, and (iii) the Borrower shall pay
the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law. If a withholding tax of the
United States of America or any other Governmental Authority shall be or
become applicable (y) after the date of this Agreement, to such payments
by the Borrower made to the Lending Installation or any other office
that a Lender may claim as its Lending Installation, or (z) after such
Lender's selection and designation of any other Lending Installation, to
such payments made to such other Lending Installation, such Lender shall
use reasonable efforts to make, fund and maintain its Loans through
another Lending Installation of such Lender in another jurisdiction so
as to reduce the Borrower's liability hereunder, if the making, funding
or maintenance of such Loans through such other Lending Installation of
such Lender does not, in the reasonable judgment of such Lender,
otherwise adversely affect such Loans, or obligations under the
Commitments or such Lender.
(ii) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies which arise from any payment made hereunder,
from the issuance of Letters of Credit hereunder, or from the execution,
delivery or registration of, or otherwise with respect to, this
Agreement, the other Loan Documents, the Commitments, the Loans or the
Letters of Credit (hereinafter referred to as "OTHER TAXES").
(iii) The Borrower indemnifies each Lender and the Agent for the
full amount of Taxes and Other Taxes (including, without limitation, any
Taxes or Other Taxes imposed by any Governmental Authority on amounts
payable under this SECTION 2.12(E)) 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
31
thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within thirty (30)
days after the date such Lender or the Agent (as the case may be) makes
written demand therefor. A certificate as to any additional amount
payable to any Lender or the Agent under this SECTION 2.12(E) submitted
to the Borrower and the Agent (if a Lender is so submitting) by such
Lender or the Agent shall show in reasonable detail the amount payable
and the calculations used to determine such amount and shall, absent
manifest error, be final, conclusive and binding upon all parties
hereto. With respect to such deduction or withholding for or on account
of any Taxes and to confirm that all such Taxes have been paid to the
appropriate Governmental Authorities, the Borrower shall promptly (and
in any event not later than thirty (30) days after receipt) furnish to
each Lender and the Agent such certificates, receipts and other
documents as may be required (in the judgment of such Lender or the
Agent) to establish any tax credit to which such Lender or the Agent may
be entitled.
(iv) Within thirty (30) days after the date of any payment of
Taxes or Other Taxes by the Borrower, the Borrower shall furnish to the
Agent the original or a certified copy of a receipt evidencing payment
thereof.
(v) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this SECTION 2.12(E) shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of
Credit and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrower under this
SECTION 2.12(E), each Lender that is not created or organized under the
laws of the United States of America or a political subdivision thereof
shall deliver to the Borrower and the Agent on or before the Closing
Date, or, if later, the date on which such Lender becomes a Lender
pursuant to SECTION 13.3, a true and accurate certificate executed in
duplicate by a duly authorized officer of such Lender, in a form
satisfactory to the Borrower and the Agent, to the effect that such
Lender is capable under the provisions of an applicable tax treaty
concluded by the United States of America (in which case the certificate
shall be accompanied by two executed copies of Form 1001 of the IRS) or
under Section 1442 of the Code (in which case the certificate shall be
accompanied by two copies of Form 4224 of the IRS) of receiving payments
of interest hereunder without deduction or withholding of United States
federal income tax. Each such Lender further agrees to deliver to the
Borrower and the Agent from time to time a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender
substantially in a form satisfactory to the Borrower and the Agent,
before or promptly upon the occurrence of any event requiring a change
in the most recent certificate previously delivered by it to the
Borrower and the Agent pursuant to this SECTION 2.12(E)(VI). Further,
each Lender which delivers a certificate accompanied by Form 1001 of the
IRS covenants and agrees to deliver to the Borrower and the Agent within
fifteen (15) days prior to March 1, 1998, and every third (3rd)
anniversary of
32
such date thereafter on which this Agreement is still in effect, another
such certificate and two accurate and complete original signed copies of
Form 1001 (or any successor form or forms required under the Code or the
applicable regulations promulgated thereunder), and each Lender that
delivers a certificate accompanied by Form 4224 of the IRS covenants and
agrees to deliver to the Borrower and the Agent within fifteen (15) days
prior to the beginning of each subsequent taxable year of such Lender
during which this Agreement is still in effect, another such certificate
and two accurate and complete original signed copies of IRS Form 4224
(or any successor form or forms required under the Code or the
applicable regulations promulgated thereunder). Each such certificate
shall certify as to one of the following:
(a) that such Lender is capable of receiving payments of
interest hereunder without deduction or withholding of United
States of America federal income tax;
(b) that such Lender is not capable of receiving payments
of interest hereunder without deduction or withholding of United
States of America federal income tax as specified therein but is
capable of recovering the full amount of any such deduction or
withholding from a source other than the Borrower and will not
seek any such recovery from the Borrower; or
(c) that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date
such Lender became a party hereto, such Lender is not capable of
receiving payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein and that it is not capable of recovering the
full amount of the same from a source other than the Borrower.
Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or
the Agent to establish any exemption from or reduction of any Taxes or
Other Taxes required to be deducted or withheld and which may be
obtained without undue expense to such Lender.
(F) LOAN ACCOUNT. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the
Obligations of the Borrower to such Lender owing to such Lender from time to
time, including the amount of principal and interest payable and paid to such
Lender from time to time hereunder and under the Notes.
(G) CONTROL ACCOUNT. The Register maintained by the Agent pursuant to
SECTION 13.3(C) shall include a control account, and a subsidiary account for
each Lender, in which
33
accounts (taken together) shall be recorded (i) the date and amount of each
Advance made hereunder, the type of Revolving Loan comprising such Advance and
any Interest Period applicable thereto, (ii) the effective date and amount of
each Assignment Agreement delivered to and accepted by it and the parties
thereto pursuant to SECTION 13.3, (iii) the amount of any principal or interest
due and payable or to become due and payable from the Borrower to each Lender
hereunder or under the Revolving Notes, (iv) the amount of any sum received by
the Agent from the Borrower hereunder and each Lender's share thereof and (v)
all other appropriate debits and credits as provided in this Agreement,
including, without limitation, all fees, charges, expenses and interest.
(H) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower objects to information contained in the Register and each
Loan Account within thirty (30) days of the Borrower's receipt of such
information.
2.13 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Continuation/Conversion Notice, and prepayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each Eurodollar Rate Loan promptly upon determination of such
interest rate and will give each Lender prompt notice of each change in the
Alternate Base Rate.
2.14 LENDING INSTALLATIONS. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Revolving Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by written
or facsimile notice to the Agent and the Borrower, designate a Lending
Installation through which Loans will be made by it and for whose account Loan
payments are to be made.
2.15 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during 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) in the case of payment by a Lender, the
Federal Funds
34
Effective Rate for such day or (ii) in the case of payment by the Borrower, the
interest rate applicable to the relevant Loan.
2.16 TERMINATION DATE. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, all
financing arrangements among the Borrower and the Lenders in connection with
this Agreement shall have been terminated (other than under agreements with
respect to Hedging Obligations) and all of the Letters of Credit shall have
expired, been canceled or terminated, all of the rights and remedies under this
Agreement and the other Loan Documents shall survive and the Agent shall be
entitled to retain its security interest in and to all existing and future
Collateral.
2.17 REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, or to fund a Revolving Loan in order to repay Swing
Line Loans pursuant to SECTION 2.1(B)(IV), which such Lender is obligated to
fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrower under SECTIONS 2.12(E), 4.1 or 4.2
to recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to SECTION 4.3 claiming that such Lender is unable to extend
Eurodollar Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (iv) has invoked SECTION 10.2, then, in any such case, the
Borrower or the Agent may make written demand on such Affected Lender (with a
copy to the Agent in the case of a demand by the Borrower and a copy to the
Borrower in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use its best efforts to assign pursuant
to one or more duly Assignment Agreements five (5) Business Days after the date
of such demand, to one or more financial institutions that comply with the
provisions of SECTION 13.3(A) which the Borrower or the Agent, as the case may
be, shall have engaged for such purpose ("REPLACEMENT LENDER"), all of such
Affected Lender's rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, its Commitment, all Loans owing to it,
all of its participation interests in existing Letters of Credit, and its
obligation to participate in additional Letters of Credit hereunder) in
accordance with SECTION 13.3. The Agent agrees, upon the occurrence of such
events with respect to an Affected Lender and upon the written request of the
Borrower, to use its reasonable efforts to obtain the Commitments from one or
more financial institutions to act as a Replacement Lender. The Agent is
authorized to execute one or more of such assignment agreements as
attorney-in-fact for any Affected Lender failing to execute and deliver the same
within five (5) Business Days after the date of such demand. Further, with
respect to such assignment the Affected Lender shall have concurrently received,
in cash, all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
SECTIONS 2.12(E), 4.1, and 4.2 with respect to such Affected Lender and
compensation payable under SECTION 2.12(C) in the event of any
35
replacement of any Affected Lender under CLAUSE (II) or CLAUSE (III) of this
SECTION 2.17; PROVIDED that upon such Affected Lender's replacement, such
Affected Lender shall cease to be a party hereto but shall continue to be
entitled to the benefits of SECTIONS 2.12(E), 4.1, 4.2, 4.4, and 10.7, as well
as to any fees accrued for its account hereunder and not yet paid, and shall
continue to be obligated under SECTION 11.8. Upon the replacement of any
Affected Lender pursuant to this SECTION 2.17, the provisions of SECTION 9.2
shall continue to apply with respect to Advances which are then outstanding with
respect to which the Affected Lender failed to fund its Pro Rata Share and which
failure has not been cured.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 OBLIGATION TO ISSUE. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue for the
account of the Borrower through such Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit in accordance with
this ARTICLE III, from time to time during the period, commencing on the date
hereof and ending on the Business Day prior to the Conversion Date.
3.2 TYPES AND AMOUNTS. No Issuing Bank shall have any obligation to and
no Issuing Bank shall:
(i) issue any Letter of Credit if on the date of issuance, before
or after giving effect to the Letter of Credit requested hereunder, (a)
the Revolving Credit Obligations at such time would exceed the Aggregate
Commitment at such time, or (b) the aggregate outstanding amount of the
L/C Obligations would exceed $7,500,000; or
(ii) issue any Letter of Credit which has an expiration date
later than five (5) Business Days immediately preceding the Conversion
Date.
3.3 CONDITIONS. In addition to being subject to the satisfaction of the
conditions contained in SECTIONS 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the applicable Issuing
Bank at such times and in such manner as such Issuing Bank may
reasonably prescribe, a request for issuance of such Letter of Credit in
substantially the form of EXHIBIT E hereto, duly executed applications
for such Letter of Credit, and such other documents, instructions and
agreements as may be reasonably required pursuant to the terms thereof,
and the proposed Letter of Credit shall be reasonably satisfactory to
such Issuing Bank as to form and content; and
36
(ii) as of the date of issuance no order, judgment or decree of
any court, arbitrator or Governmental Authority shall purport by its
terms to enjoin or restrain the applicable Issuing Bank from issuing
such Letter of Credit and no law, rule or regulation applicable to such
Issuing Bank and no request or directive (whether or not having the
force of law) from a Governmental Authority with jurisdiction over such
Issuing Bank shall prohibit or request that such Issuing Bank refrain
from the issuance of Letters of Credit generally or the issuance of that
Letter of Credit.
If any provision in a letter of credit application delivered in connection with
the foregoing is inconsistent with or more restrictive than a provision
contained in this Agreement, the provisions contained in this Agreement shall
control.
3.4 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. (a) Subject to the
terms and conditions of this ARTICLE III and provided that the applicable
conditions set forth in SECTIONS 5.1 and 5.2 hereof have been satisfied, the
applicable Issuing Bank shall, on the requested date, issue a Letter of Credit
on behalf of the Borrower in accordance with such Issuing Bank's usual and
customary business practices and, in this connection, such Issuing Bank may
assume that the applicable conditions set forth in SECTION 5.2 hereof have been
satisfied unless it shall have received notice to the contrary from the Agent or
a Lender or has knowledge that the applicable conditions have not been met.
(b) The applicable Issuing Bank shall give the Agent written or telex
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Letter of Credit, PROVIDED, HOWEVER, that the failure to provide
such notice shall not result in any liability on the part of such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless
the requirements of this SECTION 3.4 are met as though a new Letter of Credit
was being requested and issued.
3.5 LETTER OF CREDIT PARTICIPATION. Unless a Lender shall have notified
the Issuing Bank prior to its issuance of a Letter of Credit that any applicable
condition precedent set forth in SECTIONS 5.1 and 5.2 had not been satisfied,
then immediately upon the issuance of each Letter of Credit hereunder, each
Lender shall be deemed to have automatically, irrevocably and unconditionally
purchased and received from the applicable Issuing Bank an undivided interest
and participation in and to such Letter of Credit, the obligations of the
Borrower in respect thereof, and the liability of such Issuing Bank thereunder
(collectively, an "L/C INTEREST") in an amount equal to the amount available for
drawing under such Letter of Credit multiplied by such Lender's Pro Rata Share.
Each Issuing Bank will notify each Lender promptly upon presentation to it of an
L/C Draft or upon any other draw under a Letter of Credit. On or before the
Business Day on which an Issuing Bank makes payment of each such L/C Draft or,
in the case of any other draw on a Letter of Credit, on demand by the Agent,
each Lender shall make payment to the Agent, for the account of the applicable
Issuing Bank,
37
in immediately available funds in an amount equal to such Lender's Pro Rata
Share of the amount of such payment or draw. The obligation of each Lender to
reimburse the Issuing Banks under this SECTION 3.5 shall be unconditional,
continuing, irrevocable and absolute. In the event that any Lender fails to make
payment to the Agent of any amount due under this SECTION 3.5, the Agent shall
be entitled to receive, retain and apply against such obligation the principal
and interest otherwise payable to such Lender hereunder until the Agent receives
such payment from such Lender or such obligation is otherwise fully satisfied;
PROVIDED, HOWEVER, that nothing contained in this sentence shall relieve such
Lender of its obligation to reimburse the applicable Issuing Bank for such
amount in accordance with this SECTION 3.5.
3.6 REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance which may be drawn under or pursuant to
a Letter of Credit or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Agent for an advance made under a Letter of Credit or
L/C Draft being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with
respect to such Letter of Credit or L/C Draft). If the Borrower at any time
fails to repay a Reimbursement Obligation pursuant to this SECTION 3.6, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of Revolving Loans. Such Revolving Loans shall constitute a
Floating Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on the day such Reimbursement Obligation arises and,
for any reason, the Lenders are unable to make or have no obligation to make
Revolving Loans, then such Reimbursement Obligation shall bear interest from and
after such day, until paid in full, at the interest rate applicable to a
Floating Rate Advance.
3.7 LETTER OF CREDIT FEES. The Borrower agrees to pay (i) quarterly, in
arrears, on each Payment Date to the Agent for the ratable benefit of the
Lenders, except as set forth in SECTION 9.2, a letter of credit fee at a rate
per annum equal to the Applicable L/C Fee Percentage on the average daily
outstanding face amount available for drawing under all Letters of Credit, (ii)
quarterly in arrears to the Agent for the sole account of the Issuing Banks, a
fronting fee at such percentage rate per annum as shall be agreed between the
Borrower and each such Issuing Bank on the aggregate average daily outstanding
amount available for drawing under each such Issuing Bank's Letters of Credit,
payable quarterly in arrears, and (iii) to the Agent for the benefit of each
Issuing Bank, all customary fees and other issuance, amendment, document
examination, negotiation and presentment expenses and related charges in
connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by the Issuing Banks with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit, payable at the time of
invoice of such amounts.
38
3.8 ISSUING BANK REPORTING REQUIREMENTS. In addition to the notices
required by SECTION 3.4(C), each Issuing Bank shall, no later than the tenth
Business Day following the last day of each month, provide to the Agent, upon
the Agent's request, schedules, in form and substance reasonably satisfactory to
the Agent, showing the date of issue, account party, amount, expiration date and
the reference number of each Letter of Credit issued by it outstanding at any
time during such month and the aggregate amount payable by the Borrower during
such month. In addition, upon the request of the Agent, each Issuing Bank shall
furnish to the Agent copies of any Letter of Credit and any application for or
reimbursement agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Agent. Upon the request of any Lender, the Agent will provide to such Lender
information concerning such Letters of Credit.
3.9 INDEMNIFICATION; EXONERATION. (a) In addition to amounts payable as
elsewhere provided in this ARTICLE III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Agent, each Issuing Bank and each Lender
from and against any and all liabilities and costs which the Agent, such Issuing
Bank or such Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the case of
the applicable Issuing Bank, as a result of its Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the applicable Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future DE JURE or DE FACTO Governmental
Authority (all such acts or omissions herein called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Agent and the Issuing Banks,
the Borrower assumes all risks of the acts and omissions of, or misuse of such
Letter of Credit by, the beneficiary of any Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit applications and Letter of Credit reimbursement agreements executed by
the Borrower at the time of request for any Letter of Credit, neither the Agent,
any Issuing Bank nor any Lender shall be responsible (in the absence of Gross
Negligence or willful misconduct in connection therewith, as determined by the
final judgment of a court of competent jurisdiction): (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
the Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit; (iv) for errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable, telegraph, telex, or
other similar form of teletransmission or otherwise; (v) for errors in
interpretation of technical trade terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any Letter of Credit or of the proceeds thereof; (vii) for the
misapplication by the beneficiary of a Letter of Credit of the proceeds of any
drawing under such Letter of
39
Credit; and (viii) for any consequences arising from causes beyond the control
of the Agent, the Issuing Banks and the Lenders, including, without limitation,
any Governmental Acts. None of the above shall affect, impair, or prevent the
vesting of any Issuing Bank's rights or powers under this SECTION 3.9.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank, the Agent or any Lender under any
resulting liability to the Borrower or relieve the Borrower of any of its
obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 3.9 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement.
3.10 CASH COLLATERAL. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of Default, the Borrower shall, upon the Agent's demand, deliver to
the Agent for the benefit of the Lenders and the Issuing Banks, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding L/C Obligations.
In addition, if the Revolving Credit Availability is at any time less than the
amount of contingent L/C Obligations outstanding at any time, the Borrower shall
deposit cash collateral with the Agent in an amount equal to the amount by which
such L/C Obligations exceed such Revolving Credit Availability. Any such
collateral shall be held by the Agent in a separate account appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by the Agent for the benefit of the Lenders and
the Issuing Banks as collateral security for the Borrower's obligations in
respect of this Agreement and each of the Letters of Credit and L/C Drafts. Such
amounts shall be applied to reimburse the Issuing Banks for drawings or payments
under or pursuant to Letters of Credit or L/C Drafts, or if no such
reimbursement is required, to payment of such of the other Obligations as the
Agent shall determine. If no Default shall be continuing, amounts remaining in
any cash collateral account established pursuant to this SECTION 3.10 which are
not to be applied to reimburse an Issuing Bank for amounts actually paid or to
be paid by such Issuing Bank in respect of a Letter of Credit or L/C Draft,
shall be returned to the Borrower (after deduction of the Agent's expenses
incurred in connection with such cash collateral account).
ARTICLE IV: CHANGE IN CIRCUMSTANCES
40
4.1 YIELD PROTECTION. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the date of this Agreement and having
general applicability to all banks within the jurisdiction in which such Lender
operates (excluding, for the avoidance of doubt, the effect of and phasing in of
capital requirements or other regulations or guidelines passed prior to the date
of this Agreement), or any interpretation or application thereof by any
Governmental Authority charged with the interpretation or application thereof,
or the compliance of any Lender therewith,
(i) to the extent not otherwise covered pursuant to the
provisions of SECTION 2.12(E), subjects any Lender or any applicable
Lending Installation to any tax, duty, charge or withholding on or from
payments due from the Borrower (excluding, in the case of each Lender
and the Agent, such taxes (including income taxes, franchise taxes and
branch profit taxes) as are imposed on or measured by such Lender's or
Agent's, as the case may be, income by the United States of America or
any Governmental Authority of the jurisdiction under the laws of which
such Lender or Agent, as the case may be, is organized), or changes the
basis of taxation of payments to any Lender in respect of its Loans, its
L/C Interests, the Letters of Credit or other amounts due it hereunder,
or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Rate Loans) with respect to its
Loans, L/C Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining the Loans, the L/C Interests or the
Letters of Credit or reduces any amount received by any Lender or any
applicable Lending Installation in connection with Loans or Letters of
Credit, or requires any Lender or any applicable Lending Installation to
make any payment calculated by reference to the amount of Loans or L/C
Interests held or interest received by it or by reference to the Letters
of Credit, by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within 15 days after
receipt by the Borrower of written demand by such Lender pursuant to SECTION
4.5, the Borrower shall pay such Lender that portion of such increased expense
incurred or reduction in an amount received which such Lender determines is
attributable to making, funding and maintaining its Loans, L/C Interests,
Letters of Credit and its Commitment.
41
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans hereunder, then, within 15 days after receipt by the Borrower of
written demand by such Lender pursuant to SECTION 4.5, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its L/C Interests, the Letters of
Credit or its obligation to make Loans hereunder (after taking into account such
Lender's policies as to capital adequacy). "CHANGE" means (i) any change after
the date of this Agreement in the "Risk-Based Capital Guidelines" (as defined
below) excluding, for the avoidance of doubt, the effect of any phasing in of
such Risk-Based Capital Guidelines or any other capital requirements passed
prior to the date hereof, or (ii) any adoption of or change in any other law,
governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement and having general applicability to all banks and
financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
4.3 AVAILABILITY OF TYPES OF ADVANCES. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Agent shall suspend the availability of the affected Type of
Advance and, in the case of any occurrence set forth in clause (i) require any
Advances of the affected Type to be converted to Floating Rate Loans until the
circumstances giving rise to such suspension no longer exist.
4.4 FUNDING INDEMNIFICATION. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, or a Eurodollar Rate Advance is converted on a day
other than the last day of the applicable Interest Period, the Borrower
indemnifies each Lender for any loss or cost incurred by it resulting therefrom
42
(including loss of profit other than loss of profit represented by the
Applicable Eurodollar Margin which would have been payable for such Interest
Period), including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Eurodollar Rate Advance. In
connection with any assignment by any Lender of any portion of the Loans made
pursuant to SECTION 13.3 and made during the Syndication Period, and if,
notwithstanding the provisions of SECTION 2.2, the Borrower has requested and
the Agent has consented to the use of the Eurodollar Rate, the Borrower shall be
deemed to have repaid all outstanding Eurodollar Rate Advances as of the
effective date of such assignment and reborrowed such amount as a Floating Rate
Advance and/or Eurodollar Rate Advance (chosen in accordance with the provisions
of SECTION 2.2) and the indemnification provisions under this SECTION 4.4 shall
apply.
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. If reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under SECTIONS 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under SECTION 4.3, so long as such designation is not disadvantageous to such
Lender. Each Lender requiring compensation pursuant to SECTION 2.12(E) or to
this ARTICLE IV shall use its reasonable efforts to notify the Borrower and the
Agent in writing of any Change, law, policy, rule, guideline or directive giving
rise to such demand for compensation not later than ninety (90) days following
the date upon which the responsible account officer of such Lender knows or
should have known of such Change, law, policy, rule, guideline or directive;
PROVIDED, HOWEVER, that the failure to so notify the Borrower shall not affect
the Borrower's obligations under this SECTION 4.5. Any demand for compensation
pursuant to this ARTICLE IV shall be in writing and shall state the amount due,
if any, under SECTION 4.1, 4.2 or 4.4 and shall set forth in reasonable detail
the calculations upon which such Lender determined such amount. Such written
demand shall be rebuttably presumed correct for all purposes. Determination of
amounts payable under such Sections in connection with a Eurodollar Rate Loan
shall be calculated as though each Lender funded its Eurodollar Rate Loan
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to
such Revolving Loan, whether in fact that is the case or not. The obligations of
the Borrower under SECTIONS 4.1, 4.2 and 4.4 shall survive payment of the
Obligations and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 INITIAL ADVANCES AND LETTERS OF CREDIT. The Lenders shall not be
required to make the initial Revolving Loans or issue any Letters of Credit or
purchase any participations therein unless (i) the Lenders shall be satisfied in
all material respects that the Borrower has received net proceeds (net of
underwriting discount and Transaction Costs) from the Public Offering of not
less than $30,000,000; (ii) no law, regulation, order, judgment or decree of any
Governmental Authority shall, and the Agent shall not have received any notice
that litigation is pending or threatened which is likely to, (A) enjoin,
prohibit or restrain the making of the
43
initial Revolving Loans on the Closing Date or (B) impose or result in the
imposition of a Material Adverse Effect; (iii) the Related Transactions have all
been consummated; (iv) there shall have occurred no material adverse change in
the primary and secondary loan syndication markets or capital markets generally;
and (v) the Borrower has furnished to the Agent each of the following, with
sufficient copies for the Lenders, all in form and substance satisfactory to the
Agent and the Lenders:
(a) Certificates of good standing for the Borrower and each of
the Guarantors from its jurisdiction of incorporation or formation, in
the case of a limited liability company and each other jurisdiction
where the nature of its business requires it to be qualified as a
foreign corporation;
(b) Copies, certified by the Secretary or Assistant Secretary of
the Borrower and each Guarantor, or in the case of any Guarantor which
is a limited liability company, certified by the managing member or sole
member, of its articles or certificate of incorporation or formation, if
applicable, (which copies shall be certified as of a recent date by the
appropriate governmental officer in its respective jurisdiction of
incorporation or formation), its by-laws or similar governing
documentation, in the case of a limited liability company, and of its
Board of Directors' resolutions or similar authorization documentation,
in the case of a limited liability company, (and resolutions of other
bodies, if any are deemed necessary by counsel for any Lender)
authorizing the execution of the Loan Documents;
(c) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower and each Guarantor or, where
applicable, executed by the managing member or sole member, which shall
identify by name and title and bear the signature of the officers of the
Borrower and Guarantors authorized to sign the Loan Documents and, in
the case of the Borrower, to request Revolving Loans and Letters of
Credit hereunder, upon which certificate the Lenders shall be entitled
to rely until informed of any change in writing by the Borrower;
(d) A certificate, in form and substance satisfactory to the
Agent, signed by the chief financial officer of the Borrower, (i)
certifying that on the Closing Date no Default or Unmatured Default has
occurred and is continuing, (ii) setting forth the calculation of the
Adjusted Leverage Ratio as of September 30, 1997, (iii) certifying
receipt of not less than $30,000,000 of net proceeds from the Public
Offering and (iv) certifying that no change in the business, condition
(financial or otherwise), operations, performance, properties or
prospects of the Borrower and its Subsidiaries, taken as a whole, shall
have occurred since November 21, 1997 which has had or could reasonably
be expected to have a Material Adverse Effect;
(e) A written opinion of the Borrower's and Guarantors' counsel,
addressed to the Agent and the Lenders, addressing the issues identified
in EXHIBIT F hereto containing assumptions and qualifications acceptable
to the Agent and the Lenders;
44
(f) Revolving Notes payable to the order of each of the
applicable Lenders;
(g) A Swing Line Note payable to the order of FCCC;
(h) Written money transfer instructions reasonably requested by
the Agent, addressed to the Agent and signed by an Authorized Officer;
(i) The Guaranty executed by each of the Guarantors;
(j) The Pledge Agreements executed by the pledgor thereof
together with the appropriate stock certificates and stock powers
executed in blank or pledge instructions, where appropriate, and
including Uniform Commercial Code Financing Statements naming such
pledgor as "Debtor" and the Agent as "Secured Party" to be filed with
the appropriate Secretary of State; and
(k) Such other documents as the Agent or any Lender or its
counsel may have reasonably requested, including, without limitation all
of the documents reflected on the List of Closing Documents attached as
EXHIBIT G to this Agreement.
5.2 EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall not be required
to make any Advance, issue any Letter of Credit or purchase any participation
therein, unless on the applicable Borrowing Date, or in the case of a Letter of
Credit, the date on which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in ARTICLE VI
are true and correct as of such Borrowing Date (unless such
representation and warranty expressly relates to an earlier date or is
no longer true solely as a result of transactions permitted by this
Agreement).
Each Borrowing Notice with respect to each such Advance and the letter
of credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
SECTIONS 5.2(I) and (II) have been satisfied. If any Lender has a reasonable
basis for believing a Default or Unmatured Default may have occurred and is
continuing or that the Borrower is not able to make one or more of the
representations and warranties set forth in ARTICLE VI, such Lender may require
a duly completed officer's certificate in substantially the form of EXHIBIT H
hereto and/or a duly completed compliance certificate in substantially the form
of EXHIBIT I hereto as a condition to making an Advance or the issuance of any
Letter of Credit.
45
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows to each Lender and the
Agent as of the Closing Date, giving effect to the Initial Acquisitions, the
consummation of the Mergers, the consummation of the Public Offering and the
consummation of the other transactions contemplated by the Transaction Documents
on the Closing Date, and thereafter on each date as required by SECTION 5.2:
6.1 ORGANIZATION; CORPORATE POWERS. The Borrower and each of its
Subsidiaries (i) is a corporation or a limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization or formation, (ii) is duly qualified to do business and is in good
standing under the laws of each jurisdiction in which failure to be so qualified
and in good standing could not reasonably be expected to have a Material Adverse
Effect and (iii) has all requisite corporate power and authority to own, operate
and encumber its property and to conduct its business as presently conducted and
as proposed to be conducted.
6.2 AUTHORITY.
(A) The Borrower and each of its Subsidiaries has the requisite power
and authority (i) to execute, deliver and perform each of the Transaction
Documents in connection with the Initial Acquisitions, the Mergers, the Public
Offering and the Related Transactions which have been executed by it as required
by this Agreement on or prior to Closing Date and (ii) to file the Transaction
Documents in connection with the Initial Acquisitions, the Mergers, the Public
Offering and the Related Transactions or which have been filed by it as required
by this Agreement on or prior to the Closing Date with any Governmental
Authority.
(B) The execution, delivery, performance and filing, as the case may be,
of each of the Transaction Documents by the Borrower or any of its Subsidiaries
in connection with the Initial Acquisitions, the Mergers, the Public Offering
and the Related Transactions which have been executed or filed as required by
this Agreement on or prior to the Closing Date and to which the Borrower or any
of its Subsidiaries is party, and the consummation of the transactions
contemplated thereby, have been duly approved by the respective boards of
directors and, if necessary, the shareholders of the Borrower and its
Subsidiaries, and such approvals have not been rescinded. No other corporate
action or proceedings on the part of the Borrower or its Subsidiaries are
necessary to consummate the Related Transactions.
(C) Each of the Transaction Documents to which the Borrower or any of
its Subsidiaries is a party has been duly executed, delivered or filed, as the
case may be, by it and constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, is in full force and effect
and no material term or condition thereof has been amended, modified or waived
from the terms and conditions described in the Prospectus without the prior
written consent of the Required Lenders, and the Borrower and its Subsidiaries
have,
46
and, to the best of the Borrower's and its Subsidiaries' knowledge, all other
parties thereto have, performed and complied with all the material terms,
provisions, agreements and conditions set forth therein and required to be
performed or complied with by such parties on or before the Closing Date, and no
unmatured default, default or breach of any material covenant by any such party
exists thereunder.
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of the Loan Documents and other Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not (i)
conflict with the certificate or articles of incorporation or by-laws of the
Borrower or any such Subsidiary, (ii) with respect to the Transaction Documents
other than the Loan Documents, to the Borrower's knowledge after diligent
inquiry of all relevant Persons constitute a tortious interference with any
Contractual Obligation of any Person or conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law (including, without limitation, any Environmental Property
Transfer Act) or Contractual Obligation of the Borrower or any such Subsidiary,
or require termination of any Contractual Obligation, except such interference,
breach, default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iii) with respect to
the Loan Documents, constitute a tortious interference with any Contractual
Obligation of any Person or conflict with, result in a breach of or constitute
(with or without notice or lapse of time or both) a default under any
Requirement of Law (including, without limitation, any Environmental Property
Transfer Act) or Contractual Obligation of the Borrower or any such Subsidiary,
or require termination of any Contractual Obligation, except such interference,
breach, default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iv) result in or
require the creation or imposition of any Lien whatsoever upon any of the
property or assets of the Borrower or any such Subsidiary, other than Liens
permitted by the Loan Documents, or (v) require any approval of the Borrower's
or any such Subsidiary's shareholders except such as have been obtained. The
execution, delivery and performance of each of the Transaction Documents to
which the Borrower or any of its Subsidiaries is a party do not and will not
require any registration with, consent or approval of, or notice to, or other
action to, with or by any Governmental Authority, including under any
Environmental Property Transfer Act, except filings, consents or notices which
have been made, obtained or given, or which, if not made, obtained or given,
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect.
6.4 FINANCIAL STATEMENTS.
(A) The PRO FORMA financial statements of the Borrower and its
Subsidiaries, contained in the Prospectus present on a PRO FORMA basis the
financial condition of the Borrower and such Subsidiaries as of the dates
contained therein, and reflect on a PRO FORMA basis those liabilities reflected
in the notes thereto and resulting from consummation of the Initial
Acquisitions, the Mergers, the Public Offering and the Related Transactions and
the other transactions contemplated by this Agreement, and the payment or
accrual of all Transaction Costs payable
47
on the Closing Date with respect to any of the foregoing. The projections and
assumptions contained in Section 9 of the confidential information memorandum
entitled "HOMEUSA $50,000,000 Senior Revolving Credit Facility" dated December
1997 and furnished on behalf of the Borrower to financial institutions invited
to participate in the credit facility evidenced by this Agreement (the
"INFORMATION MEMORANDUM") were prepared in good faith and represent management's
opinion as of such date based on the information available to the Borrower at
the time so furnished.
(B) The historical financial statements of the Borrower and each of the
Founding Companies included in the Prospectus, were prepared in accordance with
generally accepted accounting principles consistently applied throughout the
periods covered thereby (except as otherwise expressly noted therein), (ii) to
the Borrower's knowledge, after diligent inquiry, fairly present the financial
condition of each of the Borrower and the Founding Companies as of the dates
thereof and the results of operations for the periods covered thereby; and (iii)
show all material indebtedness and other liabilities, direct or contingent, of
each of the Borrower and the Founding Companies as of the dates thereof.
6.5 NO MATERIAL ADVERSE CHANGE. (a) Since September 30, 1997 up to the
Closing Date, there has occurred no event or circumstance which has had or could
reasonably be expected to have a Material Adverse Effect.
(b) Since the Closing Date, there has occurred no event or circumstance
which has had or could reasonably be expected to have a Material Adverse Effect.
6.6 TAXES.
(A) TAX EXAMINATIONS. All material deficiencies which have been asserted
against the Borrower or any of the Borrower's Subsidiaries as a result of any
federal, state, local or foreign tax examination for each taxable year in
respect of which an examination has been conducted have been fully paid or
finally settled or are being contested in good faith, and as of the Closing Date
no issue has been raised by any taxing authority in any such examination which,
by application of similar principles, reasonably can be expected to result in
assertion by such taxing authority of a material deficiency for any other year
not so examined which has not been reserved for in the Borrower's consolidated
financial statements to the extent, if any, required by Agreement Accounting
Principles. Neither the Borrower nor any of the Borrower's Subsidiaries
anticipates any material tax liability with respect to the years which have not
been closed pursuant to applicable law.
(B) PAYMENT OF TAXES. All tax returns and reports of the Borrower and
its Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles or for which the failure to file could not
48
reasonably be expected to have a Material Adverse Effect. The Borrower has no
knowledge of any proposed tax assessment against the Borrower or any of its
Subsidiaries that will have or could reasonably be expected to have a Material
Adverse Effect.
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. There is no action,
suit, proceeding, arbitration or, to the Borrower's knowledge after diligent
inquiry, investigation before or by any Governmental Authority or private
arbitrator pending or, to the Borrower's knowledge after diligent inquiry,
threatened against the Borrower or any of its Subsidiaries or any property of
any of them (i) challenging the validity or the enforceability of any material
provision of the Transaction Documents or (ii) which will have or could
reasonably be expected to have a Material Adverse Effect. There is no material
loss contingency within the meaning of Agreement Accounting Principles which has
not been reflected in the consolidated financial statements of the Borrower and
its Subsidiaries prepared and delivered pursuant to SECTION 7.1(A) for the
fiscal period during which such material loss contingency was incurred. Neither
the Borrower nor any of its Subsidiaries is (A) in violation of any applicable
Requirements of Law which violation will have or could reasonably be expected to
have a Material Adverse Effect, or (B) subject to or in default with respect to
any final judgment, writ, injunction, restraining order or order of any nature,
decree, rule or regulation of any court or Governmental Authority which will
have or could reasonably be expected to have a Material Adverse Effect.
6.8 SUBSIDIARIES. SCHEDULE 6.8 to this Agreement (i) contains a
description as of the Closing Date (or as of the date of any supplement thereto)
of the corporate structure of, the Borrower and its Subsidiaries and any other
Person in which the Borrower or any of its Subsidiaries holds an Equity
Interest; and (ii) accurately sets forth as of the Closing Date (or as of the
date of any supplement thereto) (A) the correct legal name, the jurisdiction of
incorporation and the jurisdictions in which each of the Borrower and the
Subsidiaries of the Borrower is qualified to transact business as a foreign
corporation, (B) for each Subsidiary of the Borrower which is not a wholly-owned
Subsidiary, the authorized, issued and outstanding shares of each class of
Capital Stock of such Subsidiaries and the owners of such shares (both as of the
Closing Date and on a fully-diluted basis), and (C) a summary of the direct and
indirect partnership, joint venture, or other Equity Interests, if any, of the
Borrower and each Subsidiary of the Borrower in any Person that is not a
corporation. After the formation or acquisition of any New Subsidiary permitted
under SECTION 7.3(F)(II), if requested by the Agent, the Borrower shall provide
a supplement to SCHEDULE 6.8 to this Agreement. Except as set forth on SCHEDULE
6.8, none of the issued and outstanding Capital Stock of the Borrower or any of
its Subsidiaries is subject to any redemption or repurchase agreement. The
outstanding Capital Stock of the Borrower and each of the Borrower's
Subsidiaries is duly authorized, validly issued, fully paid and nonassessable
and, prior to the Public Offering, is not Margin Stock. The Borrower has no
Subsidiaries other than (i) the Subsidiaries set forth on SCHEDULE 6.8 and (ii)
any Subsidiaries acquired or formed in connection with a Permitted Acquisition,
in connection with which the Borrower shall have provided all of the documents,
instruments and agreements as required by this Agreement.
49
6.9 ERISA. No Benefit Plan has incurred any material accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither the Borrower nor any member of the Controlled
Group has incurred any material liability to the PBGC which remains outstanding
other than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report filed
with the IRS with respect to each Benefit Plan and, if so requested, furnished
to the Lenders, is complete and accurate in all material respects. Since the
date of each such Schedule B, there has been no material adverse change in the
funding status or financial condition of the Benefit Plan relating to such
Schedule B. Neither the Borrower nor any member of the Controlled Group has (i)
failed to make a required contribution or payment to a Multiemployer Plan or
(ii) made a complete or partial withdrawal under Sections 4203 or 4205 of ERISA
from a Multiemployer Plan, in either event which could result in any material
liability. Neither the Borrower nor any member of the Controlled Group has
failed to make a required installment or any other required payment under
Section 412 of the Code, in either case involving any material amount, on or
before the due date for such installment or other payment. Neither the Borrower
nor any member of the Controlled Group is required to provide security to a
Benefit Plan under Section 401(a)(29) of the Code due to a Plan amendment that
results in an increase in current liability for the plan year. Neither the
Borrower nor any of its Subsidiaries maintains or contributes to any employee
welfare benefit plan within the meaning of Section 3(1) of ERISA which provides
benefits to employees after termination of employment other than as required by
Section 601 of ERISA. Each Plan which is intended to be qualified under Section
401(a) of the Code as currently in effect is so qualified, and each trust
related to any such Plan is exempt from federal income tax under Section 501(a)
of the Code as currently in effect. The Borrower and all Subsidiaries are in
compliance in all material respects with the responsibilities, obligations and
duties imposed on them by ERISA and the Code with respect to all Plans. Neither
the Borrower nor any of its Subsidiaries nor any fiduciary of any Plan has
engaged in a nonexempt prohibited transaction described in Sections 406 of ERISA
or 4975 of the Code which could reasonably be expected to subject the Borrower
or any Guarantor to material liability. Neither the Borrower nor any member of
the Controlled Group has taken or failed to take any action which would
constitute or result in a Termination Event, which action or inaction could
reasonably be expected to subject the Borrower to material liability. Neither
the Borrower nor any Subsidiary is subject to any liability under Sections 4063,
4064, 4069, 4204 or 4212(c) of ERISA and no other member of the Controlled Group
is subject to any liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of
ERISA which could reasonably be expected to subject the Borrower or any
Guarantor to material liability. Neither the Borrower nor any of its
Subsidiaries has, by reason of the transactions contemplated hereby, any
obligation to make any payment to any employee pursuant to any Plan or existing
contract or arrangement. For purposes of this SECTION 6.9 "material" means any
noncompliance or basis for liability which could reasonably be likely to subject
the Borrower or any of its Subsidiaries to liability individually or in the
aggregate for all such matters in excess of $2,500,000.
6.10 ACCURACY OF INFORMATION. The information, exhibits and reports
furnished by or on behalf of the Borrower and any of its Subsidiaries to the
Agent or to any Lender in
50
connection with the negotiation of, or compliance with, the Loan Documents,
including, without limitation, the Information Memorandum (other than the
projections contained in Section 9 thereof), the representations and warranties
of the Borrower and its Subsidiaries contained in the Transaction Documents, and
all certificates and documents delivered to the Agent and the Lenders pursuant
to the terms thereof, taken as a whole, do not contain as of the date furnished
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements contained herein or therein, taken as
a whole, in light of the circumstances under which they were made, not
misleading.
6.11 SECURITIES ACTIVITIES. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 MATERIAL AGREEMENTS. Neither the Borrower nor any of its
Subsidiaries is a party to any Contractual Obligation or subject to any charter
or other corporate restriction which individually or in the aggregate will have
or could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any of its Subsidiaries has received notice or has knowledge that
(i) it is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, or (ii) any condition exists which, with the giving of notice
or the lapse of time or both, would constitute a default with respect to any
such Contractual Obligation, in each case, except where such default or
defaults, if any, individually or in the aggregate will not have or could not
reasonably be expected to have a Material Adverse Effect.
6.13 COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.14 ASSETS AND PROPERTIES. The Borrower and each of its Subsidiaries
has good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any laws
or regulations of any Governmental Authority affecting such assets), except
where the failure to have any such title will not have or could not reasonably
be expected to have a Material Adverse Effect, and all such assets and property
are free and clear of all Liens, except Liens permitted under SECTION 7.3(C).
Substantially all of the assets and properties owned by, leased to or used by
the Borrower and/or each such Subsidiary of the Borrower are in adequate
operating condition and repair, ordinary wear and tear excepted. Neither this
Agreement nor any other Transaction Document, nor any transaction contemplated
under any such agreement, will affect any right, title or interest of the
Borrower or such Subsidiary in and to any of its assets in a manner that will
have or could reasonably be expected to have a Material Adverse Effect.
6.15 STATUTORY INDEBTEDNESS RESTRICTIONS. Neither the Borrower nor any
of its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935,
51
the Federal Power Act, the Interstate Commerce Act, or the Investment Company
Act of 1940, or any other federal, state or local statute, ordinance or
regulation which limits its ability to incur indebtedness or its ability to
consummate the transactions contemplated hereby or in connection with Initial
Acquisitions, the Mergers, the Public Offering and the Related Transactions.
6.16 INSURANCE. The Borrower's and its Subsidiaries' insurance policies
and programs reflect coverage that is reasonably consistent with prudent
industry practice.
6.17 LABOR MATTERS.
As of the Closing Date, to the Borrower's and its Subsidiaries'
knowledge, there are no material labor disputes to which the Borrower or any of
its Subsidiaries may become a party, including, without limitation, any strikes,
lockouts or other disputes relating to such Persons' plants and other
facilities.
6.18 INITIAL ACQUISITIONS; RELATED TRANSACTIONS. As of the Closing Date
and immediately prior to the making of the initial Loans:
(i) the Acquisition Documents are in full force and effect, no
material breach, default or waiver of any material term or provision
thereof by the Borrower or any of its Subsidiaries or, to the best of
the Borrower's knowledge, the other parties thereto, has occurred
(except for such breaches, defaults and waivers, if any, consented to in
writing by the Agent and the Required Lenders) and no action has been
taken by any competent authority which restrains, prevents or imposes
any material adverse condition upon, or seeks to restrain, prevent or
impose any material adverse condition upon, any of the Initial
Acquisitions, the Mergers or the Related Transactions; and
(ii) all material conditions precedent to, all consents from
applicable Governmental Authorities, and all other material consents
necessary to permit, the Initial Acquisitions pursuant to the
Acquisition Documents have been satisfied, the Initial Acquisitions have
been consummated on the terms described in the Prospectus, the Mergers
have been consummated and the Related Transactions have been
consummated.
6.19 ENVIRONMENTAL MATTERS. (a) Except as disclosed on SCHEDULE 6.19 to
this Agreement:
(i) the operations of the Borrower and its Subsidiaries comply in
all material respects with Environmental, Health or Safety Requirements
of Law;
(ii) the Borrower and its Subsidiaries have all material permits,
licenses or other authorizations required under Environmental, Health or
Safety Requirements of Law and are in material compliance with such
permits;
52
(iii) neither the Borrower, any of its Subsidiaries nor any of
their respective present property or operations, or, to the best of, the
Borrower's or any of its Subsidiaries' knowledge, any of their
respective past property or operations, are subject to or the subject
of, any investigation known to the Borrower or any of its Subsidiaries,
any judicial or administrative proceeding, order, judgment, decree,
settlement or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any material
remedial action; or (C) any material claims or liabilities arising from
the Release or threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to the best of the Borrower's or any
of its Subsidiaries' knowledge has there ever been on or in the property
of the Borrower or any of its Subsidiaries any landfill, waste pile,
underground storage tanks, aboveground storage tanks, surface
impoundment or hazardous waste storage facility of any kind, any
polychlorinated biphenyls (PCBs) used in hydraulic oils, electric
transformers or other equipment, or any asbestos containing material
that in the case of any of the foregoing could be reasonably expected to
result in any material claims against or liabilities of the Borrower or
any of its Subsidiaries; and
(v) neither the Borrower nor any of its Subsidiaries has any
material Contingent Obligation in connection with any Release or
threatened Release of a Contaminant into the environment.
(b) For purposes of this SECTION 6.19 "material" means any noncompliance
or basis for liability which could reasonably be expected individually or in the
aggregate to have a Material Adverse Effect.
6.20 THE PUBLIC OFFERING. As of the Closing Date:
(a) The Prospectus is effective under the Securities Act of 1933; the
Public Offering Documents comply in all material respects with the provisions of
the Securities Act of 1933, any other federal securities law, applicable state
securities or "Blue Sky" law, applicable foreign securities law or applicable
general corporation law, and, in each case, the rules and regulations
thereunder.
(b) All conditions precedent to, and all consents necessary to permit,
the Public Offering have been satisfied or delivered, and no action has been
taken by any competent authority which restrains, prevents or imposes material
adverse conditions upon, or seeks to restrain, prevent or impose material
adverse conditions upon, the Public Offering or the funding of any Revolving
Loans and the issuance of any Letters of Credit hereunder.
(c) The Borrower has issued 5,000,000 shares of its common stock, $0.01
par value per share, in connection with the Public Offering, the Public Offering
has been consummated, and the Borrower has received the proceeds thereof (net of
underwriting
53
discount and other Transaction Costs) of not less than $30,000,000 and applied
such proceeds in the manner and for the purposes set forth in the Prospectus.
6.21. BENEFITS. Each of the Borrower and its Subsidiaries will benefit
from the financing arrangement established by this Agreement. The Agent and the
Lenders have stated and the Borrower acknowledges that, but for the agreement by
each of the Guarantors to execute and deliver the Guaranty, the Agent and the
Lenders would not have made available the credit facilities established hereby
on the terms set forth herein.
ARTICLE VII : COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders shall
otherwise give prior written consent:
7.1 REPORTING. The Borrower shall:
(A) FINANCIAL REPORTING. Furnish to the Lenders:
(i) QUARTERLY REPORTS. As soon as practicable, and in any event
within forty-five (45) days after the end of each of the first three
quarters in each fiscal year, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such period and the
related consolidated statements of income and cash flows of the Borrower
and its Subsidiaries for such fiscal quarter and for the period from the
beginning of the then current fiscal year to the end of such fiscal
quarter, certified by the chief financial officer of the Borrower on
behalf of the Borrower as fairly presenting the consolidated financial
position of the Borrower and its Subsidiaries as at the dates indicated
and the results of their operations and cash flows for the periods
indicated in accordance with Agreement Accounting Principles, subject to
normal year end adjustments. In addition, as soon as practicable, and in
any event within sixty (60) days after the end of the fourth fiscal
quarter in each fiscal year, such financial statements and information
as shall be reasonably acceptable to the Agent as sufficient for the
calculation of the Adjusted Leverage Ratio as of the end of such fiscal
quarter, certified by the chief financial officer of the Borrower.
(ii) ANNUAL REPORTS. As soon as practicable, and in any event
within ninety (90) days after the end of each fiscal year, (a) the
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year and the related consolidated statements of
income, stockholders' equity and cash flows of the Borrower and its
Subsidiaries for such fiscal year, and in comparative form the
corresponding figures for the previous fiscal year in form and substance
sufficient to calculate the financial covenants set forth in SECTION
7.4, (b) a schedule from the Borrower setting forth for each item in
CLAUSE (A) hereof, the corresponding figures from the consolidated
54
financial budget for the current fiscal year delivered pursuant to
SECTION 7.1(A)(IV), and (c) an audit report on the items listed in
CLAUSE (A) hereof of independent certified public accountants of
recognized national standing, which audit report shall be unqualified
and shall state that such financial statements fairly present the
consolidated financial position of the Borrower and its Subsidiaries as
at the dates indicated and the results of their operations and cash
flows for the periods indicated in conformity with Agreement Accounting
Principles and that the examination by such accountants in connection
with such consolidated financial statements has been made in accordance
with generally accepted auditing standards. The deliveries made pursuant
to this CLAUSE (II) shall be accompanied by any management letter
prepared by the above-referenced accountants.
(iii) OFFICER'S CERTIFICATE. Together with each delivery of any
financial statement (a) pursuant to CLAUSES (I)and (II) of this SECTION
7.1(A), an Officer's Certificate of the Borrower, substantially in the
form of EXHIBIT H attached hereto and made a part hereof, stating that
no Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof and (b) pursuant
to CLAUSES (I) and (II) of this SECTION 7.1(A), a compliance
certificate, substantially in the form of EXHIBIT I attached hereto and
made a part hereof, signed by the Borrower's chief financial officer or
treasurer, setting forth calculations for the period then ended, which
demonstrate compliance, when applicable, with the provisions of SECTION
7.4, and which calculate the Leverage Ratio for purposes of determining
the then Applicable Eurodollar Margin, Applicable Floating Rate Margin
and Applicable Commitment Fee Percentage.
(iv) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. Not less
frequently than once during each 12-month period following the Closing
Date, a copy of the plan and forecast (including a projected balance
sheet, income statement and statement of cash flow) of the Borrower and
its Subsidiaries for the upcoming 12-month period prepared in such
detail as shall be reasonably satisfactory to the Agent.
(B) NOTICE OF DEFAULT. Promptly upon any of the chief executive officer,
chief operating officer, chief financial officer, treasurer or controller of the
Borrower obtaining knowledge (i) of any condition or event which constitutes a
Default or Unmatured Default, or becoming aware that any Lender or Agent has
given any written notice with respect to a claimed Default or Unmatured Default
under this Agreement, or (ii) that any Person has given any written notice to
the Borrower or any Subsidiary of the Borrower or taken any other action with
respect to a claimed default or event or condition of the type referred to in
SECTION 8.1(e), deliver to the Agent and the Lenders a notice specifying (a) the
nature and period of existence of any such claimed default, Default, Unmatured
Default, condition or event, (b) the notice given or action taken by such Person
in connection therewith, and (c) what action the Borrower has taken, is taking
and proposes to take with respect thereto.
55
(C) LAWSUITS. (i) Promptly upon the Borrower obtaining knowledge of the
institution of, or written threat of, any action, suit, proceeding, governmental
investigation or arbitration against or affecting the Borrower or any of its
Subsidiaries or any property of the Borrower or any of its Subsidiaries not
previously disclosed pursuant to SECTION 6.7, which action, suit, proceeding,
governmental investigation or arbitration exposes, or in the case of multiple
actions, suits, proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which could reasonably be
expected to have a Material Adverse Effect, give written notice thereof to the
Agent and the Lenders and provide such other information as may be reasonably
available to enable each Lender and the Agent and its counsel to evaluate such
matters; and (ii) in addition to the requirements set forth in CLAUSE (I) of
this SECTION 7.1(C), upon request of the Agent or the Required Lenders, promptly
give written notice of the status of any action, suit, proceeding, governmental
investigation or arbitration covered by a report delivered pursuant to CLAUSE
(I) above or disclosed in any filing with the Commission and provide such other
information as may be reasonably available to it that would not violate any
attorney-client privilege by disclosure to the Lenders to enable each Lender and
the Agent and its counsel to evaluate such matters.
(D) ERISA NOTICES. Deliver or cause to be delivered to the Agent and the
Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower obtains
knowledge that a Termination Event has occurred, a written statement of
the chief financial officer of the Borrower describing such Termination
Event and the action, if any, which the Borrower has taken, is taking or
proposes to take with respect thereto, and when known, any action taken
or threatened by the IRS, DOL or PBGC with respect thereto and (b)
within ten (10) Business Days after any member of the Controlled Group
obtains knowledge that a Termination Event has occurred which could
reasonably be expected to subject the Borrower or any member of the
Controlled Group to liability individually or in the aggregate in excess
of $2,500,000, a written statement of the chief financial officer of the
Borrower describing such Termination Event and the action, if any, which
the member of the Controlled Group has taken, is taking or proposes to
take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the Borrower or any of
its Subsidiaries obtains knowledge that a prohibited transaction
(defined in Sections 406 of ERISA and Section 4975 of the Code) has
occurred which could result in material liability, a statement of the
chief financial officer of the Borrower describing such transaction and
the action which the Borrower or such Subsidiary has taken, is taking or
proposes to take with respect thereto;
56
(iii) within ten (10) Business Days after the Borrower or any of
its Subsidiaries receives notice of any unfavorable determination letter
from the IRS regarding the qualification of a Plan under Section 401(a)
of the Code, copies of each such letter;
(iv) within ten (10) Business Days after the filing thereof with
the IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by the Borrower or a member
of the Controlled Group with respect to such request;
(v) within ten (10) Business Days after receipt by the Borrower
or any member of the Controlled Group of the PBGC's intention to
terminate a Benefit Plan or to have a trustee appointed to administer a
Benefit Plan, copies of each such notice;
(vi) within ten (10) Business Days after receipt by the Borrower
or any member of the Controlled Group of a notice from a Multiemployer
Plan regarding the imposition of withdrawal liability, copies of each
such notice;
(vii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment or
any other required payment under Section 412 of the Code on or before
the due date for such installment or payment, a notification of such
failure; and
(viii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group knows or has reason to know that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer
Plan, or (c) the PBGC has instituted or will institute proceedings under
Section 4042 of ERISA to terminate a Multiemployer Plan.
For purposes of this SECTION 7.1(D), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the Administrator of any Plan of which the Borrower or any member of the
Controlled Group or such Subsidiary is the plan sponsor.
(E) LABOR MATTERS. Notify the Agent and the Lenders in writing, promptly
upon the Borrower's learning thereof, of (i) any material labor dispute to which
the Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities and (ii) any material liability incurred under the
Worker Adjustment and Retraining Notification Act with respect to the closing of
any plant or other facility of the Borrower or any of its Subsidiaries.
(F) OTHER INDEBTEDNESS. Deliver to the Agent (i) a copy of each notice
or communication regarding potential or actual defaults (including any
accompanying officer's certificate) delivered by or on behalf of the Borrower or
any of its Subsidiaries to the holders of funded Indebtedness pursuant to the
terms of the agreements governing such Indebtedness,
57
such delivery to be made at the same time and by the same means as such notice
or other communication is delivered to such holders, and (ii) a copy of each
notice or other communication regarding potential or actual defaults received by
the Borrower or any of its Subsidiaries from the holders of funded Indebtedness
pursuant to the terms of such Indebtedness, such delivery to be made promptly
after such notice or other communication is received by the Borrower or any such
Subsidiary.
(G) OTHER REPORTS. Deliver or cause to be delivered to the Agent and the
Lenders copies of all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to its securities holders or filed with
the Commission by the Borrower, all press releases made available generally by
the Borrower or any of the Borrower's Subsidiaries to the public concerning
material developments in the business of the Borrower or any such Subsidiary and
all notifications received from the Commission by the Borrower or its
Subsidiaries pursuant to the Securities Exchange Act of 1934 and the rules
promulgated thereunder (other than customary comment letters received in
connection with registration statements or other communications between the
Commission and the Borrower).
(H) ENVIRONMENTAL NOTICES. As soon as possible and in any event within
ten (10) days after receipt by the Borrower or any of its Subsidiaries, a copy
of (i) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release by the
Borrower, any of its Subsidiaries, or any other Person of any Contaminant into
the environment, and (ii) any notice alleging any violation of any
Environmental, Health or Safety Requirements of Law by the Borrower or any of
its Subsidiaries if, in either case, such notice or claim relates to an event
which could reasonably be expected to have a Material Adverse Effect.
(I) OTHER INFORMATION. Promptly upon receiving a request therefor from
the Agent or any Lender, prepare and deliver to the Agent and the Lenders such
other information with respect to the Borrower, any of its Subsidiaries or the
Collateral as from time to time may be reasonably requested by the Agent or any
Lender.
7.2 AFFIRMATIVE COVENANTS.
(A) CORPORATE EXISTENCE, ETC. Except for mergers permitted pursuant to
Section 7.3(H), the Borrower shall, and shall cause each of its Subsidiaries to,
at all times maintain its corporate existence (as, in the case of a limited
liability company, its existence as such) and preserve and keep, or cause to be
preserved and kept, in full force and effect its rights and franchises material
to its businesses.
(B) CORPORATE POWERS; CONDUCT OF BUSINESS. The Borrower shall, and shall
cause each of its Subsidiaries to, qualify and remain qualified to do business
in each jurisdiction in which the nature of its business requires it to be so
qualified and where the failure to be so qualified will have or could reasonably
be expected to have a Material Adverse Effect. The Borrower
58
will, and will cause each Subsidiary to, carry on and conduct its business in
substantially the same manner and in substantially the same fields of enterprise
as it is presently conducted.
(C) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all Permits necessary for
its operations and maintain such Permits in good standing unless failure to
comply or obtain could not reasonably be expected to have a Material Adverse
Effect.
(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or assets
or in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by SECTION 7.3(C)) upon any of the Borrower's or such
Subsidiary's property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED, HOWEVER, that no such taxes,
assessments and governmental charges referred to in CLAUSE (I) above or claims
referred to in CLAUSE (II) above (and interest, penalties or fines relating
thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with Agreement
Accounting Principles shall have been made therefor. The Borrower will not, nor
will it permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any other Person other than the consolidated
return of the Borrower.
(E) INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, insurance policies and programs reflecting coverage that is
reasonably consistent with prudent industry practice.
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall permit and cause each of the Borrower's Subsidiaries to permit, any
authorized representative(s) designated by either the Agent or any Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine, audit, check and make copies of their respective
financial and accounting records, books, journals, orders, receipts and any
correspondence and other data relating to their respective businesses or the
transactions contemplated hereby or by the Initial Acquisitions (including,
without limitation, in connection with environmental compliance, hazard or
liability), and to discuss their affairs, finances and accounts with their
officers and independent certified public accountants, all upon reasonable
notice and at such reasonable times during normal business hours, as often as
may be reasonably requested; PROVIDED, that while no Default or Unmatured
Default exists, all of the foregoing shall be at the expense of the Agent or the
Lenders, as applicable. The Borrower shall keep and maintain, and cause each of
the Borrower's Subsidiaries to keep and maintain, in all material respects,
proper books of record and account in which entries in
59
conformity with Agreement Accounting Principles shall be made of all dealings
and transactions in relation to their respective businesses and activities. If a
Default has occurred and is continuing, the Borrower, upon the Agent's request,
shall turn over any such records to the Agent or its representatives.
(G) ERISA COMPLIANCE. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans, except where
the failure to comply will not or could not reasonably be expected to subject
the Borrower and its Subsidiaries to liability individually or in the aggregate
in excess of $2,500,000.
(H) MAINTENANCE OF PROPERTY. The Borrower shall cause all property used
or useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this SECTION 7.2(H) shall prevent the
Borrower from discontinuing the operation or maintenance of any of such property
if such discontinuance is, in the judgment of the Borrower, desirable in the
conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Agent or the Lenders.
(I) ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance could not reasonably be expected to have a Material Adverse
Effect.
(J) USE OF PROCEEDS. The Borrower shall use the proceeds of the
Revolving Loans to (i) repay certain existing Indebtedness of the Founding
Companies, (ii) provide funds for the additional working capital needs and other
general corporate purposes of the Borrower and its Subsidiaries and (iii) fund
Permitted Acquisitions. The Borrower will not, nor will it permit any Subsidiary
to, use any of the proceeds of the Revolving Loans to purchase or carry any
"Margin Stock" or to make any Acquisition, other than any Permitted Acquisition
pursuant to SECTION 7.3(F).
(K) ADDITION OF GUARANTORS. The Borrower shall cause (i) each Subsidiary
that is, at any time, a Material Subsidiary, and (ii) each other Subsidiary
necessary for the Borrower to comply with the requirements set forth in SECTIONS
7.3(F)(II) and 7.3(S), to deliver to the Agent an executed Guaranty Supplement
to become a Guarantor under the Guaranty in the form of EXHIBIT J attached
hereto, and the Borrower shall deliver, or cause to be delivered, an executed
Pledge Supplement in order to pledge the Capital Stock of such Subsidiary
pursuant to a Pledge Agreement in the form of EXHIBIT K attached hereto and, in
each such case for the
60
Borrower and such Subsidiary, appropriate corporate resolutions, opinions and
other documentation in form and substance reasonably satisfactory to the Agent.
7.3 NEGATIVE COVENANTS.
(A) INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness;
(iii) unsecured subordinated indebtedness incurred by the
Borrower (including in connection with any Permitted Acquisition) that
(a) does not have a stated maturity before the Termination Date in
effect as of the date such indebtedness is incurred, (b) has terms that
are no more restrictive than the terms of this Agreement and the other
Loan Documents, and (c) is subordinated to the Obligations on terms at
least as favorable to the Lenders as the terms set forth on SCHEDULE 7.3
attached hereto, with such changes thereto as may be agreed to by the
Agent (such Indebtedness being referred to herein as "PERMITTED
SUBORDINATED INDEBTEDNESS");
(iv) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
(v) Indebtedness constituting Contingent Obligations in respect
of Indebtedness otherwise permitted hereunder;
(vi) Indebtedness arising from intercompany loans from the
Borrower to any Controlled Subsidiary or from any Subsidiary to the
Borrower or any Controlled Subsidiary; PROVIDED that in each case such
Indebtedness is subordinated upon terms satisfactory to the Agent to the
obligations of the Borrower and its Subsidiaries with respect to the
Obligations;
(vii) guaranties by the Borrower of Indebtedness permitted to be
incurred by any Subsidiary;
(viii) Indebtedness in respect of Hedging Obligations permitted
under SECTION 7.3(Q);
(ix) secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
after the Closing Date (including, as a result of the assumption of any
such Indebtedness in connection with a Permitted Acquisition) to finance
the acquisition of fixed assets, if (1) at the time of
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such incurrence, no Default or Unmatured Default has occurred and is
continuing or would result from such incurrence, (2) such Indebtedness
has a scheduled maturity and is not due on demand, (3) such Indebtedness
does not exceed the lower of the fair market value or the cost of the
applicable fixed assets on the date acquired, (4) such Indebtedness does
not exceed $5,000,000 in the aggregate outstanding at any time, and (5)
any Lien securing such Indebtedness is permitted under SECTION 7.3(C)
(such Indebtedness being referred to herein as "PERMITTED PURCHASE MONEY
INDEBTEDNESS");
(x) Indebtedness with respect to surety, appeal and performance
bonds obtained by the Borrower or any of its Subsidiaries in the
ordinary course of business;
(xi) Indebtedness arising under the Guaranty;
(xii) Indebtedness of a Subsidiary consisting of tax-advantaged
industrial revenue bond, industrial development bond or other similar
financings assumed in connection with (but not incurred in connection
with or in anticipation of) a Permitted Acquisition;
(xiii) other Indebtedness (other than working capital financing
including, without limitation, Permitted Floor Plan Financing) existing
at a New Subsidiary at the time of the Permitted Acquisition thereof
(but not incurred in connection or in anticipation of such Permitted
Acquisition) the outstanding principal balance of which does not exceed
ten percent (10%) of the book value of the assets acquired as a result
of such Permitted Acquisition; and
(xiv) Indebtedness relating to the purchase of manufactured homes
for inventory through "floor plan" credit facilities in an amount as of
the end of any fiscal quarter not to exceed twenty-five percent (25%) of
Adjusted Revenues for the four quarter period then ended ("PERMITTED
FLOOR PLAN FINANCING"); and
(xv) other Indebtedness in addition to that referred to elsewhere
in this SECTION 7.3(A) incurred by the Borrower in an amount not to
exceed $5,000,000 in the aggregate at any time outstanding.
(B) SALES OF ASSETS. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any property
(including the stock of any Subsidiary), whether now owned or hereafter
acquired, or any income or profits therefrom, or enter into any agreement to do
so, except:
(i) sales of inventory in the ordinary course of business;
(ii) the disposition in the ordinary course of business of
equipment that is obsolete, excess or no longer useful in the Borrower's
or its Subsidiaries' business; and
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(iii) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (including sales of stock of a Subsidiary)
if such transaction (a) is for consideration consisting of at least 80%
of cash, (b) is for not less than Fair Value, and (c) when combined with
all such other transactions (each such transaction being valued at book
value) (i) during the immediately preceding twelve-month period,
represents the disposition of not greater than TEN percent (10)% of the
Borrower's Consolidated Tangible Assets at the end of the fiscal year
immediately preceding that in which such transaction is proposed to be
entered into, and (ii) during the period from the Closing Date to the
date of such proposed transaction, represents the disposition of not
greater than TWENTY percent (20)% of the Borrower's Consolidated
Tangible Assets at the end of the fiscal year immediately preceding that
in which such transaction is proposed to be entered into.
(C) LIENS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:
(i) Permitted Existing Liens;
(ii) Customary Permitted Liens;
(iii) purchase money Liens (including the interest of a lessor
under a Capitalized Lease and Liens to which any property is subject at
the time of the Borrower's acquisition thereof) securing Permitted
Purchase Money Indebtedness; PROVIDED that such Liens shall not apply to
any property of the Borrower or its Subsidiaries other than that
purchased or subject to such Capitalized Lease;
(iv) Liens securing Permitted Floor Plan Financing provided the
subject of any such Lien is limited to inventory of the applicable
obligor of such Permitted Floor Plan Financing.
(v) Liens securing the Obligations or Secured Obligations;
(vi) Liens (other than on the stock of any Subsidiaries) securing
Indebtedness assumed in connection with a Permitted Acquisition and
permitted pursuant to CLAUSE (XII) or CLAUSE (XIII) of SECTION 7.3(A);
PROVIDED that such Liens shall not apply to any property of the Borrower
or its Subsidiaries other than that purchased or directly financed in
connection with such Indebtedness; and
(vii) Liens securing other obligations not exceeding $2,500,000
in the aggregate at any time outstanding.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit
63
the creation of a Lien on any of its properties or other assets in favor of the
Agent for the benefit of itself and Lenders, as collateral for the Obligations;
PROVIDED that any agreement, note, indenture or other instrument in connection
with Liens permitted pursuant to clauses (i), (iii), (iv) and (vi) may prohibit
the creation of a Lien in favor of the Agent for the benefit of itself and the
Lenders on the items of property obtained with the proceeds of the related
Indebtedness secured by such Liens.
(D) INVESTMENTS. Except to the extent permitted pursuant to PARAGRAPH
(G) below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than
the amount thereof on the Closing Date;
(iii) Investments in trade receivables or received in connection
with the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(iv) Investments consisting of deposit accounts maintained by the
Borrower or its Subsidiaries in the ordinary course of business in
connection with its cash management system;
(v) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by SECTION 7.3(B);
(vi) Investments consisting of intercompany loans from any
Subsidiary to the Borrower or any other Subsidiary permitted by SECTION
7.3(A)(VI);
(vii) Investments in any Controlled Subsidiary of the Borrower;
(viii) Investments constituting Permitted Acquisitions; and
(ix) Investments in direct obligations of any commercial lender
which is providing Permitted Floor Plan Financing to the Borrower and
which is acceptable to the Lender; PROVIDED that: (1) the aggregate
amount of such Investments, at any time, with respect to any such
commercial lender, will not exceed the aggregate amount of Permitted
Floor Plan Financing outstanding with such commercial lender at such
time, (2) Borrower has the legal right to offset such investments
against any outstanding Permitted Floor Plan Financing with such
commercial lender and ; (3) such investments have a maturity not to
exceed ninety days. and
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(x) Investments in addition to those referred to elsewhere in
this SECTION 7.3(D) in an amount not to exceed $1,000,000 in the
aggregate at any time outstanding;
PROVIDED, HOWEVER, that the Investments described in CLAUSES (V), (VIII) and
(IX) above shall not be permitted if either a Default or an Unmatured Default
shall have occurred and be continuing on the date thereof or would result
therefrom.
(E) RESTRICTED PAYMENTS. Neither the Borrower nor any of its
Subsidiaries shall declare or make any Restricted Payment, except:
(i) the defeasance, redemption or repurchase or prepayment of any
Permitted Subordinated Indebtedness with the net cash proceeds of
Permitted Refinancing Indebtedness;
(ii) the defeasance, redemption or repurchase or prepayment of
any Permitted Subordinated Indebtedness in an amount not to exceed at
any time 10% of the Aggregate Commitment at such time;
(iii) in connection with the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests held by
departing officers, directors and employees or in connection with the
Borrower's "1997 Long-Term Incentive Plan" and "1997 Non-Employee
Directors' Stock Plan"; PROVIDED, that the aggregate purchase price of
all such repurchased, redeemed, acquired or retired Equity Interests or
other Restricted Payments shall not exceed $1,000,000 in the aggregate
since the Closing Date; and
(iii) where the consideration therefor consists solely of Equity
Interests (but excluding Disqualified Stock) of the Borrower or its
Subsidiaries, provided no Change of Control would occur as a result
thereof;
PROVIDED, HOWEVER, that the Restricted Payments described in CLAUSES (I), (II)
and (III) above shall not be permitted if either a Default or an Unmatured
Default shall have occurred and be continuing at the date of declaration or
payment thereof or would result therefrom.
(F) CONDUCT OF BUSINESS; SUBSIDIARIES; ACQUISITIONS. (i) Neither the
Borrower nor any of its Subsidiaries shall engage in any business other than the
businesses engaged in by the Borrower on the date hereof and any business or
activities which are substantially similar, related or incidental thereto.
(ii) The Borrower may create, acquire and/or capitalize any
Subsidiary (a "NEW SUBSIDIARY") after the date hereof pursuant to any
transaction that is permitted by or not otherwise prohibited by this Agreement;
PROVIDED that upon the formation or acquisition of each New Subsidiary, the
Borrower shall cause each New Subsidiary that is a Material Subsidiary to
promptly deliver to the Agent an executed counterpart of a Guaranty Supplement
65
to become a Guarantor under the Guaranty in the form of EXHIBIT J attached
hereto and the Borrower shall deliver an executed Pledge Supplement in order to
pledge the Capital Stock of such Subsidiary pursuant to a Pledge Agreement in
the form of EXHIBIT K attached hereto and in each such case the Borrower, the
applicable pledgor thereof if not the Borrower, and such Subsidiary shall
deliver appropriate corporate resolutions, opinions and other documentation in
form and substance satisfactory to the Agent, and all New Subsidiaries that are
Material Subsidiaries shall be Controlled Subsidiaries.
(iii) The Borrower shall not make any Acquisitions, other than
the Initial Acquisitions and other Acquisitions meeting the following
requirements (each such Acquisition constituting a "PERMITTED ACQUISITION"):
(a) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of
any Indebtedness in connection therewith;
(b) in the case of an Acquisition of Equity Interests of an
entity, such Acquisition shall be of at least eighty percent (80%) of
the Equity Interests of such entity;
(c) the businesses being acquired shall be substantially similar,
related or incidental to the businesses or activities engaged in by the
Borrower and its Subsidiaries on the Closing Date;
(d) the Indebtedness incurred by the Borrower to the seller as
part of the consideration therefor (other than Indebtedness assumed in
connection therewith and permitted pursuant to CLAUSES (IX), (XII) or
(XIII) of SECTION 7.3(A)) shall be Permitted Subordinated Indebtedness
under SECTION 7.3(A);
(e) prior to each such Acquisition, the Borrower shall deliver to
the Agent and the Lenders a certificate from one of the Authorized
Officers, (1) calculating the purchase price and Adjusted EBITDA for
purposes of CLAUSE (H) below; and (2) certifying that after giving
effect to such Acquisition and the incurrence of any Indebtedness
hereunder and permitted by SECTION 7.3(A) in connection therewith, on a
PRO FORMA basis, as if the Acquisition and such incurrence of
Indebtedness had occurred on the first day of the twelve-month period
ending on the last day of the Borrower's most recently completed fiscal
quarter, the Borrower would have been in compliance with all of the
covenants contained in this Agreement as of the end of such period,
including, without limitation, the financial covenants set forth in
SECTION 7.4;
(f) the purchase is consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis;
66
(g) after giving effect to such Acquisition, the representations
and warranties set forth in ARTICLE VI hereof shall be true and correct
in all material respects on and as of the date of such Acquisition with
the same effect as though made on and as of such date; and
(h) the written consent of the Required Lenders shall have been
obtained in connection with any Acquisition if (1) the aggregate of the
cash portion of the purchase price is greater than $10,000,000 or (2)
the aggregate purchase price (including, without limitation, cash,
stock, indebtedness, other than Permitted Floor Plan Financing, assumed
liabilities, and transaction related contractual payments, including
amounts payable under non-compete, consulting or similar
agreements)(valuing all non-cash consideration at Fair Value) is equal
to or greater than both (i) $5,000,000 and (ii) seven (7) times the
Adjusted EBITDA of the target entity for the last 12-month period
preceding such Acquisition for which financial statements are available.
With respect to any Acquisition where the target entity's assets are equal to or
greater than ten percent (10.0%) of the Borrower's and its Subsidiaries'
Consolidated Tangible Assets, the Borrower shall (a) have obtained (and shall
have based the calculations set forth above on) historical audited financial
statements for the target and/or unaudited financial statements for the target
for a period of not less than two years, obtained from the seller or provided by
any independent consultant or agent retained for the purposes of such
Acquisition and acceptable to the Agent in its reasonable discretion, broken
down by fiscal quarter in the Borrower's reasonable judgment, copies of which
shall be provided to the Agent and the Lenders and (b) at the request of the
Required Lenders (such request not to be made more frequently than once in any
fiscal quarter) provide such financial information as shall be reasonably
acceptable to the Agent and the Required Lenders demonstrating the Borrower's
PRO FORMA compliance with the covenants after taking into account such
Acquisition and the incurrence of any Indebtedness in connection therewith.
(G) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Neither the Borrower
nor any of its Subsidiaries shall directly or indirectly enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any holder or
holders of any of the Equity Interests of the Borrower, or with any Affiliate of
the Borrower which is not its Subsidiary, on terms that are less favorable to
the Borrower or any of its Subsidiaries, as applicable, than those that might be
obtained in an arm's length transaction at the time from Persons who are not
such a holder or Affiliate, except for Restricted Payments permitted by SECTION
7.3(E).
(H) RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Borrower nor any of
its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution), or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any such
Subsidiary's business or property, whether now or hereafter acquired, except (i)
transactions permitted under SECTIONS 7.3(B) or 7.3(F); (ii) the merger of a
Subsidiary of the
67
Borrower into a Person acquired in connection with a Permitted Acquisition;
(iii) the merger of a wholly-owned Subsidiary of the Borrower with and into the
Borrower; and (iv) the merger of a Subsidiary of the Borrower with another
Subsidiary of the Borrower; PROVIDED, HOWEVER, (i) with respect to any such
permitted mergers involving any Guarantor or Pledged Subsidiary, the surviving
corporation in the merger shall also be or become a Guarantor and a Pledged
Subsidiary; and (ii) after the consummation of any such transaction, the
Borrower shall be in compliance with the provisions of SECTION 7.2(K) and
7.3(S).
(I) SALES AND LEASEBACKS. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed) (i) which
it or one of its Subsidiaries sold or transferred or is to sell or transfer to
any other Person, or (ii) which it or one of its Subsidiaries intends to use for
substantially the same purposes as any other property which has been or is to be
sold or transferred by it or one of its Subsidiaries to any other Person in
connection with such lease, unless in either case the sale involved is not
prohibited under SECTION 7.3(B) and the lease involved is not prohibited under
SECTION 7.3(A).
(J) MARGIN REGULATIONS. Neither the Borrower nor any of its
Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
(K) ERISA. The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Code), with respect to
any Benefit Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail, to pay
timely required contributions or annual installments due with respect to
any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to
terminate, any Benefit Plan which would result in any liability of the
Borrower or any Controlled Group member under Title IV of ERISA;
(v) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any Controlled Group member may be required
to make under any agreement relating to such Multiemployer Plan, or any
law pertaining thereto;
68
(vi) fail, or permit any Controlled Group member to fail, to pay
any required installment or any other payment required under Section 412
of the Code on or before the due date for such installment or other
payment; or
(vii) amend, or permit any Controlled Group member to amend, a
Plan resulting in an increase in current liability for the plan year
such that the Borrower or any Controlled Group member is required to
provide security to such Plan under Section 401(a)(29) of the Code;
except where such transactions, events, circumstances, or failures will not have
or is not reasonably likely to subject the Borrower and its Subsidiaries to
liability individually or in the aggregate in excess of $5,000,000.
(L) ISSUANCE OF EQUITY INTERESTS. The Borrower shall not issue any
Equity Interests if as a result of such issuance a Change of Control shall
occur. None of the Borrower's Subsidiaries shall issue any Equity Interests
other than to the Borrower.
(M) CORPORATE DOCUMENTS. Neither the Borrower nor any of its
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective constituent documents as in effect on the
date hereof in any manner adverse to the interests of the Lenders, without the
prior written consent of the Required Lenders.
(N) OTHER INDEBTEDNESS. Except as permitted in SECTION 7.3(R), the
Borrower shall not amend, supplement or otherwise modify the terms of any
Indebtedness (other than the Obligations) permitted under SECTION 7.3(A) other
than with respect to Permitted Purchase Money Indebtedness and Permitted Floor
Plan Financing in any way that would be materially less advantageous to the
Borrower or materially adverse to the Lenders, including, without limitation,
with respect to amount, maturity, amortization, interest rate, premiums, fees,
covenants, events of default, remedies, dividends and subordination provisions.
(O) FISCAL YEAR. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on December 31 of each calendar
year.
(P) SUBSIDIARY COVENANTS. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Indebtedness or other Obligation owed to the
Borrower or any other Subsidiary, make loans or advances or other Investments in
the Borrower or any other Subsidiary, or sell, transfer or otherwise convey any
of its property to the Borrower or any other Subsidiary.
(Q) HEDGING OBLIGATIONS. The Borrower shall not and shall not permit any
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap,
69
collar, cap or similar agreements evidencing Hedging Obligations, other than
interest rate, foreign currency or commodity exchange, swap, collar, cap or
similar agreements entered into by the Borrower or a Subsidiary pursuant to
which the Borrower or such Subsidiary has hedged its actual interest rate,
foreign currency or commodity exposure.
(R) SUBORDINATED INDEBTEDNESS. The Borrower shall not and shall not
permit any Subsidiary to, amend, supplement or modify the terms of any Permitted
Subordinated Indebtedness, or make any payment required as a result of an
amendment or change thereto other than amendments, supplements or modifications
which (i) decrease the rate of interest payable on the Permitted Subordinated
Indebtedness, (ii) provide for the payment in kind in lieu of cash of any
portion of the interest on the Permitted Subordinated Indebtedness, (iii)
provide for the extension of the maturity date with respect to any principal or
interest payment to be made under the instruments evidencing Permitted
Subordinated Indebtedness, (iv) provide more flexibility to the Borrower or its
Subsidiaries in connection with any financial covenants, (v) waive any defaults
existing in connection with the Permitted Subordinated Indebtedness, and (vi) do
not adversely affect in any respect the interests of the Agent or the Lenders.
(S) NON-GUARANTOR SUBSIDIARIES. The Borrower shall not permit, at any
time, the Adjusted Revenues of the Subsidiaries which are not Guarantors or
Pledged Subsidiaries (calculated as of the end of each fiscal quarter for the
four-quarter period then ended) to be equal to or greater in the aggregate than
ten percent (10%) of the Adjusted Revenues of the Borrower and its Subsidiaries
(calculated as of the end of each fiscal quarter for the four-quarter period
then ended).
7.4 FINANCIAL COVENANTS. The Borrower shall comply with the following:
(A) FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain a ratio
("FIXED CHARGE COVERAGE RATIO") of (i) the sum of (a) ADJUSTED EBITDA, PLUS (b)
Rentals, MINUS (c) Capital Expenditures, in each case for Borrower and its
consolidated Subsidiaries to (ii) Interest Expense PLUS Rentals of the Borrower
and its consolidated Subsidiaries of at least 2.25 to 1.00 for each fiscal
quarter ending from and after the Closing Date. In each case the Fixed Charge
Coverage Ratio shall be determined as of the last day of each fiscal quarter for
the four-quarter period ending on such day. The Fixed Charge Coverage Ratio
shall be calculated for any period by including any applicable PRO FORMA
adjustments to Rentals and Interest Expense for the Founding Companies and other
acquired entities (other than the Founding Companies) which are the result of a
Permitted Acquisition to account for differences, if any, during such period
between (i) the Rentals and/or Interest Expense of such Founding Company or
other acquired entity, as applicable, prior to becoming a Subsidiary of the
Borrower and (ii) the Rentals or Interest Expense of such Founding Company or
other acquired entity, as applicable, subsequent to its becoming a Subsidiary of
the Borrower.
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(B) TOTAL DEBT TO EBITDA RATIO. The Borrower shall not at any time
permit the ratio (the "LEVERAGE RATIO") of (i) Total Debt of the Borrower and
its consolidated Subsidiaries to (ii) Adjusted EBITDA of the Borrower and its
consolidated Subsidiaries to be greater than 4.00 to 1.00. The Leverage Ratio
shall be calculated, in each case, determined as of the last day of each fiscal
quarter based upon (a) for Total Debt, Total Debt as of the last day of each
such fiscal quarter; and (b) for Adjusted EBITDA, Adjusted EBITDA for the
twelve-month period ending on such day calculated as set forth in the definition
thereof.
(C) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (a) $70,000,000,
PLUS (b) fifty percent (50%) of Net Income (if positive) calculated separately
for each fiscal quarter ending after December 31, 1997, PLUS (c) seventy-five
percent (75%) of the net cash proceeds resulting from the issuance by the
Borrower or any of its Subsidiaries of any Capital Stock.
ARTICLE VIII: DEFAULTS
8.1 DEFAULTS. Each of the following occurrences shall constitute a
Default under this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall (i) fail to
pay when due any of the Obligations consisting of principal with respect to the
Revolving Loans or (ii) shall fail to pay within three (3) Business Days of the
date when due any of the other Obligations under this Agreement or the other
Loan Documents.
(b) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation binding
on the Borrower under:
(i) SECTION 7.1(D) through and including 7.1(I), or 7.2(B) and
such failure shall continue unremedied for fifteen (15) days;
(ii) SECTIONS 7.1(A), 7.1(C), 7.2(C), 7.2(D), 7.2(E), 7.2(G),
7.2(H) and 7.2(I) and such failure shall continue unremedied for five
(5) Business Days; or
(iii) SECTIONS 7.1(B), 7.2(A), 7.2(F), 7.2(J), 7.2(K), 7.2(L),
7.3 or 7.4.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or warranty
made or deemed made by the Borrower to the Agent or any Lender herein or by the
Borrower or any of its Subsidiaries in any of the other Loan Documents or in any
statement or certificate at any time given by any such Person pursuant to any of
the Loan Documents shall be false or misleading in any material respect on the
date as of which made (or deemed made).
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(d) OTHER DEFAULTS. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
PARAGRAPHS (A), (B) or (C) of this SECTION 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the occurrence thereof.
(e) DEFAULT AS TO OTHER INDEBTEDNESS. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness the outstanding principal amount of which Indebtedness is in
excess of $5,000,000 or any breach, default or event of default shall occur, or
any other condition shall exist under any instrument, agreement or indenture
pertaining to any such Indebtedness, if the effect thereof is to cause an
acceleration, mandatory redemption, a requirement that the Borrower offer to
purchase such Indebtedness or other required repurchase of such Indebtedness, or
permit the holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such Indebtedness;
or any such Indebtedness shall be otherwise declared to be due and payable (by
acceleration or otherwise) or required to be prepaid, redeemed or otherwise
repurchased by the Borrower or any of its Subsidiaries (other than by a
regularly scheduled required prepayment) prior to the stated maturity thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against the Borrower
or any of the Borrower's Subsidiaries and the petition shall not be
dismissed, stayed, bonded or discharged within sixty (60) days after
commencement of the case; or a court having jurisdiction in the premises
shall enter a decree or order for relief in respect of the Borrower or
any of the Borrower's Subsidiaries in an involuntary case, under any
applicable bankruptcy, insolvency or other similar law now or
hereinafter in effect; or any other similar relief shall be granted
under any applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over the
Borrower or any of the Borrower's Subsidiaries or over all or a
substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be entered; or an interim receiver,
trustee or other custodian of the Borrower or any of the Borrower's
Subsidiaries or of all or a substantial part of the property of the
Borrower or any of the Borrower's Subsidiaries shall be appointed or a
warrant of attachment, execution or similar process against any
substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be issued and any such event shall not be
stayed, dismissed, bonded or discharged within sixty (60) days after
entry, appointment or issuance.
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(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower or
any of the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, (iii) consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property, (iv)
make any assignment for the benefit of creditors or (v) take any corporate
action to authorize any of the foregoing.
(h) JUDGMENTS AND ATTACHMENTS. Any money judgment(s), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $2,500,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
(i) DISSOLUTION. Any order, judgment or decree shall be entered against
the Borrower or any of its Subsidiaries decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of sixty (60) days; or the Borrower or any of its Subsidiaries shall
otherwise dissolve or cease to exist except as specifically permitted by this
Agreement.
(j) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason,
(i) any Loan Document as a whole that materially affects the ability of the
Agent, or any of the Lenders to enforce the Obligations or enforce their rights
against the Collateral ceases to be in full force and effect or the Borrower or
any of the Borrower's Subsidiaries party thereto seeks to repudiate its
obligations thereunder or the Liens intended to be created thereby are, or the
Borrower or any such Subsidiary seeks to render such Liens, invalid or
unperfected, or (ii) any Lien on the Capital Stock of any Material Subsidiary
shall, at any time, for any reason, be invalidated or otherwise cease to be in
full force and effect, or such Lien shall not have the priority contemplated by
this Agreement or the Loan Documents.
(k) TERMINATION EVENT. Any Termination Event occurs which is reasonably
likely to subject the Borrower or any of its Subsidiaries to liability
individually or in the aggregate in excess of $2,500,000.
(l) WAIVER OF MINIMUM FUNDING STANDARD. If the plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which the application for the waiver is based
could reasonably be expected to subject either the Borrower or any Controlled
Group member to liability individually or in the aggregate in excess of
$1,000,000.
(m) CHANGE OF CONTROL. A Change of Control shall occur.
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(n) HEDGING AGREEMENTS. Nonpayment by the Borrower or any Subsidiary of
any obligation under any contract with respect to Hedging Obligations entered
into by the Borrower or such Subsidiary with any Lender (or Affiliate thereof)
or the breach by the Borrower or Subsidiary of any other term, provision or
condition contained in any agreement and such non- payment shall continue for
ten (10) days after the occurrence thereof.
(o) GUARANTOR DEFAULT OR REVOCATION. Any Guaranty shall fail to remain
in full force or effect or any action shall be taken by the Borrower or any
Subsidiary to discontinue or to assert the invalidity or unenforceability of any
Guaranty, or any Guarantor shall fail to comply with any of the terms or
provisions of any Guaranty to which it is a party, or any Guarantor denies that
it has any further liability under any Guaranty to which it is a party, or gives
notice to such effect.
(p) FAILURE OF SUBORDINATION. The subordination provisions of the
documents and instruments evidencing any Permitted Subordinated Indebtedness
shall, at any time, be invalidated or otherwise cease to be in full force and
effect.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES
9.1 TERMINATION OF COMMITMENTS; ACCELERATION. If any Default described
in SECTION 8.1(F) or 8.1(G) occurs with respect to the Borrower, the obligations
of the Lenders to make Loans hereunder and the obligation of the Issuing Banks
to issue Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent or any Lender. If any other Default occurs, the
Required Lenders may terminate or suspend the obligations of the Lenders to make
Loans hereunder and the obligation of the Issuing Banks to issue Letters of
Credit hereunder, or declare the Obligations to be due and payable, or both,
whereupon, after written notice to the Borrower, the Obligations shall become
immediately due and payable, without presentment, demand, protest or other
notice of any kind, all of which the Borrower expressly waives.
9.2 DEFAULTING LENDER. In the event that any Lender fails to fund its
Pro Rata Share of any Advance requested or deemed requested by the Borrower,
which such Lender is obligated to fund under the terms of this Agreement (the
funded portion of such Advance being hereinafter referred to as a "NON PRO RATA
LOAN"), until the earlier of such Lender's cure of such failure and the
termination of the Commitments, the proceeds of all amounts thereafter repaid to
the Agent by the Borrower and otherwise required to be applied to such Lender's
share of all other Obligations pursuant to the terms of this Agreement shall be
advanced to the Borrower by the Agent on behalf of such Lender to cure, in full
or in part, such failure by
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such Lender, but shall nevertheless be deemed to have been paid to such Lender
in satisfaction of such other Obligations. Notwithstanding anything in this
Agreement to the contrary:
(i) the foregoing provisions of this SECTION 9.2 shall apply only
with respect to the proceeds of payments of Obligations and shall not
affect the conversion or continuation of Loans pursuant to SECTION 2.8;
(ii) any such Lender shall be deemed to have cured its failure to
fund its Pro Rata Share of any Advance at such time as an amount equal
to such Lender's original Pro Rata Share of the requested principal
portion of such Advance is fully funded to the Borrower, whether made by
such Lender itself or by operation of the terms of this SECTION 9.2, and
whether or not the Non Pro Rata Loan with respect thereto has been
repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Advance ("CURE LOANS") shall bear interest at the rate applicable to
Floating Rate Loans in effect from time to time, and for all other
purposes of this Agreement shall be treated as if they were Floating
Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Agreement, would be applied to
the outstanding Floating Rate Loans shall be applied FIRST, ratably to
all Floating Rate Loans constituting Non Pro Rata Loans, SECOND, ratably
to Floating Rate Loans other than those constituting Non Pro Rata Loans
or Cure Loans and, THIRD, ratably to Floating Rate Loans constituting
Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Pro Rata Share of any Advance and the
termination of the Commitments, the term "Required Lenders" for purposes
of this Agreement shall mean Lenders (excluding all Lenders whose
failure to fund their respective Pro Rata Shares of such Advance have
not been so cured) whose Pro Rata Shares represent at least FIFTY-ONE
percent (51%) of the aggregate Pro Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund
its Pro Rata Share of any Advance is cured in accordance with SECTION
9.2(II), (A) such Lender shall not be entitled to any commitment fees
with respect to its Commitment and (B) such Lender shall not be entitled
to any letter of credit fees, which commitment fees and letter of credit
fees shall accrue in favor of the Lenders which have funded their
respective Pro Rata Share of such requested Advance, shall be allocated
among such performing Lenders ratably based upon
75
their relative Commitments, and shall be calculated based upon the
average amount by which the aggregate Commitments of such performing
Lenders exceeds the sum of (I) the outstanding principal amount of the
Loans owing to such performing Lenders, PLUS (II) the outstanding
Reimbursement Obligations owing to such performing Lenders, PLUS (III)
the aggregate participation interests of such performing Lenders arising
pursuant to SECTION 3.5 with respect to undrawn and outstanding Letters
of Credit.
9.3 AMENDMENTS. Subject to the provisions of this ARTICLE IX, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; PROVIDED, HOWEVER, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
(i) Postpone or extend the Termination Date or any other date
fixed for any payment of principal of, or interest on, the Loans, the
Reimbursement Obligations or any fees or other amounts payable to such
Lender (except with respect to (a) any modifications of the provisions
relating to prepayments of Loans and other Obligations and (b) a waiver
of the application of the default rate of interest pursuant to SECTION
2.9 hereof);
(ii) Reduce the principal amount of any Loans or L/C Obligations,
or reduce the rate or extend the time of payment of interest or fees
thereon;
(iii) Reduce the percentage specified in the definition of
Required Lenders or any other percentage of Lenders specified to be the
applicable percentage in this Agreement to act on specified matters;
(iv) Increase the amount of the Commitment of any Lender
hereunder;
(v) Permit the Borrower to assign its rights under this
Agreement;
(vi) Amend this SECTION 9.3;
(vii) Other than in connection with a transaction permitted under
the terms of this Agreement, release any guarantor of the Obligations;
(viii) Other than in connection with a transaction permitted
under the terms of this Agreement, release all or substantially all of
the Collateral; or
(ix) Amend the terms of SECTION 12.2.
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No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent, (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank and (c)
Letters of Credit shall be effective without the written consent of the Issuing
Banks. The Agent may waive payment of the fee required under SECTION 13.3(B)
without obtaining the consent of any of the Lenders.
9.4 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to SECTION 9.3, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE X: GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
10.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the Agent may,
but shall have no obligation to (i) at any time, pay or discharge taxes, Liens,
security interests or other encumbrances levied or placed on or threatened
against any Collateral and (ii) after the occurrence and during the continuance
of a Default make any other payment or perform any act required of the Borrower
under any Loan Document or take any other action which the Agent in its
discretion deems necessary or desirable to protect or preserve the Collateral or
enhance the likelihood of repayment of the Obligations. The Agent shall use its
reasonable efforts to give the Borrower and the Lenders notice of any action
taken under this SECTION 10.3 prior to the taking of such action or promptly
thereafter provided the failure to give such notice shall not affect the
Borrower's or Lenders' obligations in respect thereof. The Borrower agrees to
pay the Agent, upon demand, the principal amount of all funds advanced by the
Agent under this SECTION 10.3, together with interest thereon at the rate from
time to time applicable to Floating Rate Loans from the date of such advance
until the outstanding principal balance thereof is paid in full. If the Borrower
fails to make payment in respect of any such
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advance under this SECTION 10.3 within one (1) Business Day after the date the
Borrower receives written demand therefor from the Agent, the Agent shall
promptly notify each Lender and each Lender agrees that it shall thereupon make
available to the Agent, in Dollars in immediately available funds, the amount
equal to such Lender's Pro Rata Share of such advance. If such funds are not
made available to the Agent by such Lender within one (1) Business Day after the
Agent's demand therefor, the Agent will be entitled to recover any such amount
from such Lender together with interest thereon at the Federal Funds Effective
Rate for each day during the period commencing on the date of such demand and
ending on the date such amount is received. The failure of any Lender to make
available to the Agent its Pro Rata Share of any such unreimbursed advance under
this SECTION 10.3 shall neither relieve any other Lender of its obligation
hereunder to make available to the Agent such other Lender's Pro Rata Share of
such advance on the date such payment is to be made nor increase the obligation
of any other Lender to make such payment to the Agent. All outstanding principal
of, and interest on, advances made under this SECTION 10.3 shall constitute
Obligations for purposes hereof.
10.4 HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
10.5 ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.7 EXPENSES; INDEMNIFICATION.
(A) EXPENSES. The Borrower shall reimburse the Agent for any reasonable
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' and paralegals' fees and time charges of attorneys and paralegals for
the Agent, which attorneys and paralegals may be employees of the Agent) paid or
incurred by the Agent in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Agent and the Lenders for any reasonable costs, internal charges and
out-of-pocket expenses (including attorneys' and paralegals' fees and time
charges of attorneys and paralegals for the Agent and the Lenders, which
attorneys and paralegals may be employees of the Agent or the
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Lenders) paid or incurred by the Agent or any Lender in connection with the
collection of the Obligations and enforcement of the Loan Documents. In addition
to expenses set forth above, the Borrower agrees to reimburse the Agent,
promptly after the Agent's request therefor, for each audit or other business
analysis performed by or for the benefit of the Lenders in connection with this
Agreement or the other Loan Documents at a time when a Default exists in an
amount equal to the Agent's then reasonable and customary charges for each
person employed to perform such audit or analysis, plus all reasonable costs and
expenses (including without limitation, travel expenses) incurred by the Agent
in the performance of such audit or analysis. Agent shall provide the Borrower
with a detailed statement of all reimbursements requested under this SECTION
10.7(A).
(B) INDEMNITY. The Borrower further agrees to defend, protect,
indemnify, and hold harmless the Agent and each and all of the Lenders and each
of their respective Affiliates, and each of such Agent's, Lender's, or
Affiliate's respective officers, directors, employees, attorneys and agents
(including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
ARTICLE V) (collectively, the "INDEMNITEES") from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses of any kind or nature whatsoever (including, without
limitation, the fees and disbursements of counsel for such Indemnitees in
connection with any investigative, administrative or judicial proceeding,
whether or not such Indemnitees shall be designated a party thereto), imposed
on, incurred by, or asserted against such Indemnitees in any manner relating to
or arising out of:
(i) this Agreement, the other Loan Documents or any of the
Transaction Documents, or any act, event or transaction related or
attendant thereto or to the Initial Acquisitions, any Permitted
Acquisition, the Mergers, the Public Offering or the Related
Transactions, the making of the Loans, and the issuance of and
participation in Letters of Credit hereunder, the management of such
Loans or Letters of Credit, the use or intended use of the proceeds of
the Loans or Letters of Credit hereunder, or any of the other
transactions contemplated by the Transaction Documents; or
(ii) any liabilities, obligations, responsibilities, losses,
damages, personal injury, death, punitive damages, economic damages,
consequential damages, treble damages, intentional, willful or wanton
injury, damage or threat to the environment, natural resources or public
health or welfare, costs and expenses (including, without limitation,
attorney, expert and consulting fees and costs of investigation,
feasibility or remedial action studies), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future relating to violation of any
Environmental, Health or Safety Requirements of Law arising from or in
connection with the past, present or future operations of the Borrower,
its Subsidiaries or any of their respective predecessors in interest,
or, the past, present or future environmental, health or safety
condition of any respective property of the Borrower or its
Subsidiaries, the presence of asbestos-containing materials at any
respective property
79
of the Borrower or its Subsidiaries or the Release or threatened Release
of any Contaminant into the environment (collectively, the "INDEMNIFIED
MATTERS");
PROVIDED, HOWEVER, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused by or resulting from (y) a
dispute among the Lenders or a dispute between any Lender and the Agent, or (z)
the willful misconduct or Gross Negligence of such Indemnitee or breach of
contract by such Indemnitee with respect to the Loan Documents, in each case, as
determined by the final non-appealed judgment of a court of competent
jurisdiction. If the undertaking to indemnify, pay and hold harmless set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall contribute the maximum portion which it
is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
(C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS. The Borrower further
agrees to assert no claim against any of the Indemnitees on any theory of
liability for consequential, special, indirect, exemplary or punitive damages.
No settlement shall be entered into by the Borrower or any if its Subsidiaries
with respect to any claim, litigation, arbitration or other proceeding relating
to or arising out of the transactions evidenced by this Agreement, the other
Loan Documents or in connection with the Initial Acquisitions, any Permitted
Acquisition, the Mergers, the Public Offering or Related Transactions (whether
or not the Agent or any Lender or any Indemnitee is a party thereto) unless such
settlement releases all Indemnitees from any and all liability with respect
thereto.
(D) SURVIVAL OF AGREEMENTS. The obligations and agreements of the
Borrower under this SECTION 10.7 shall survive the termination of this
Agreement.
10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
10.9 ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
10.11 NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any
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Lender undertakes any responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's business
or operations.
10.12 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, ANY
LENDER, OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS.
10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B), EACH
OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG
THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED
EXCLUSIVELY BY STATE OR FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, BUT THE
PARTIES HERETO ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF CHICAGO, ILLINOIS. EACH OF THE PARTIES
HERETO WAIVES IN ALL DISPUTES BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(B) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, ANY LENDER
OR ANY INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWER OR ITS
PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON TO (1) OBTAIN PERSONAL
JURISDICTION OVER THE BORROWER OR (2) ENFORCE A JUDGMENT OR OTHER COURT ORDER
ENTERED IN FAVOR OF SUCH PERSON. THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY
PERMISSIVE COUNTERCLAIMS IN ANY PROCEEDING BROUGHT BY SUCH PERSON TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER IN FAVOR OF SUCH PERSON. THE BORROWER WAIVES ANY
OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH SUCH PERSON HAS
COMMENCED A PROCEEDING DESCRIBED IN THIS SUBSECTION (B).
(C) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE
OF ANY PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF
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PROCESS OF ANY WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY
THE MAILING THEREOF BY THE AGENT OR THE LENDERS BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE BORROWER ADDRESSED AS PROVIDED HEREIN. NOTHING HEREIN
SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF THE AGENT OR THE LENDERS TO
SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER PERMITTED BY
APPLICABLE LAW THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT
LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER
INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
IN ANY JURISDICTION SET FORTH ABOVE.
(D) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(E) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS
OR PROCEEDING TO REALIZE ON THE COLLATERAL OR ENFORCE ANY JUDGMENT OR OTHER
COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY SPECIFIC
PERFORMANCE, TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION,
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
(F) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 10.13, WITH ITS COUNSEL.
10.14 NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties
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hereto and no presumption or burden of proof shall arise favoring or disfavoring
any party by virtue of the authorship of any provisions of this Agreement.
10.15 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees
that any and all claims of the Borrower against any Guarantor, any endorser or
any other guarantor of all or any part of the Obligations, or against any of its
properties, including, without limitation, pursuant to any intercompany
Indebtedness permitted under SECTION 7.3(A)(VI), shall be subordinate and
subject in right of payment to the prior payment, in full and in cash, of all
Obligations. Notwithstanding any right of the Borrower to ask, demand, ▇▇▇ for,
take or receive any payment from any Guarantor, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Guarantor shall be and are subordinated to the
rights, if any, of the Lenders and the Agent in those assets. The Borrower shall
have no right to possession of any such asset or to foreclose upon any such
asset, whether by judicial action or otherwise, unless and until all of the
Obligations shall have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Agent and the Lenders have been terminated. If, during the
continuance of a Default, all or any part of the assets of any Guarantor, or the
proceeds thereof, are subject to any distribution, division or application to
the creditors of any Guarantor, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, then, and in any such event, any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any Guarantor
to the Borrower, including, without limitation, pursuant to any intercompany
Indebtedness permitted under SECTION 7.3(A)(VI) ("INTERCOMPANY INDEBTEDNESS")
shall be paid or delivered directly to the Agent for application on any of the
Obligations, due or to become due, until such Obligations shall have first been
paid in full in cash and satisfied; PROVIDED, HOWEVER, ordinary course payments
or distributions made by any Guarantor to the Borrower shall be required to be
paid or delivered to the Agent only upon the Agent's request. The Borrower
irrevocably authorizes and empowers the Agent to demand, ▇▇▇ for, collect and
receive every such payment or distribution and give acquittance therefor and to
make and present for and on behalf of the Borrower such proofs of claim and take
such other action, in the Agent's own name or in the name of the Borrower or
otherwise, as the Agent may deem necessary or advisable for the enforcement of
this SECTION 10.15. The Agent may vote such proofs of claim in any such
proceeding, receive and collect any and all dividends or other payments or
disbursements made thereon in whatever form the same may be paid or issued and
apply the same on account of any of the Obligations. Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Borrower upon or with respect to the Intercompany Indebtedness during the
continuance of a Default and prior to the satisfaction of all of the Obligations
and the termination of all financing arrangements under this Agreement and the
other Loan Documents between the Borrower and the Agent and the Lenders, the
Borrower shall receive and hold the same in trust, as trustee, for the benefit
of the Agent and the Lenders and shall forthwith deliver the same to the Agent,
for the benefit of the Agent and the Lenders, in precisely the form received
(except for the endorsement or
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assignment of the Borrower where necessary), for application to any of the
Obligations, due or not due, and, until so delivered, the same shall be held in
trust by the Borrower as the property of the Agent and the Lenders; PROVIDED,
HOWEVER, ordinary course payments or distributions made by any Guarantor to the
Borrower shall be required to be paid or delivered to the Agent only upon the
Agent's request. If the Borrower fails to make any such endorsement or
assignment to the Agent, the Agent or any of its officers or employees are
irrevocably authorized to make the same. The Borrower agrees that until the
Obligations have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Agent and the Lenders have been terminated, the Borrower will
not assign or transfer to any Person (other than the Agent) any claim the
Borrower has or may have against any Guarantor.
10.16. USURY NOT INTENDED. It is the intent of the Borrower and each
Lender in the execution and performance of this Agreement and the other Loan
Documents to contract in strict compliance with applicable usury laws, including
conflicts of law concepts, governing the Advances of each Lender including such
applicable laws of the State of Texas and the United States of America from
time-to-time in effect. In furtherance thereof, the Lenders and the Borrower
stipulate and agree that none of the terms and provisions contained in this
Agreement or the other Loan Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof "interest" shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this
Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or paid
on the Advances, include amounts which by applicable law are deemed interest
which would exceed the Maximum Rate, then such excess shall be deemed to be a
mistake and each Lender receiving same shall credit the same on the principal of
its Notes (or if such Notes shall have been paid in full, refund said excess to
the Borrower). In the event that the maturity of the Notes are accelerated by
reason of any election of the holder thereof resulting from any Default under
this Agreement or otherwise, or in the event of any required or permitted
prepayment, then such consideration that constitutes interest may never include
more than the Maximum Rate and excess interest, if any, provided for in this
Agreement or otherwise shall be canceled automatically as of the date of such
acceleration or prepayment and, if theretofore paid, shall be credited on the
applicable Notes (or, if the applicable Notes shall have been paid in full,
refunded to the Borrower of such interest). In determining whether or not the
interest paid or payable under any specific contingencies exceeds the Maximum
Rate, the Borrower and the Lenders shall to the maximum extent permitted under
applicable law amortize, prorate, allocate and spread in equal parts during the
period of the full stated term of the Notes all amounts considered to be
interest under applicable law at any time contracted for, charged, received or
reserved in connection with the Obligations. The provisions of this Section
shall control over all other provisions of this Agreement or the other Loan
Documents which may be in apparent conflict herewith.
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10.17. BUSINESS LOANS. The Borrower warrants and represents that the
Loans evidenced by the Notes are and shall be for business, commercial,
investment or other similar purposes and not primarily for personal, family,
household or agricultural use, as such terms are used in Chapter One ("Chapter
One") of the Texas Credit Code. At all such times, if any, as Chapter One shall
establish a Maximum Rate, the Maximum Rate shall be the "indicated rate ceiling"
(as such term is defined in Chapter One) from time to time in effect.
ARTICLE XI: THE AGENT
11.1 APPOINTMENT; NATURE OF RELATIONSHIP. The First National Bank of
Chicago is appointed by the Lenders as the Agent hereunder and under each other
Loan Document, and each of the Lenders irrevocably authorizes the Agent (for so
long as the Agent remains in such capacity under this Agreement) to act as the
contractual representative of such Lender with only the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such contractual representative upon the express conditions contained in
this ARTICLE XI. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement and that the Agent is
merely acting as the representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agent (i) does not
assume any fiduciary duties to any of the Lenders, (ii) is a "representative" of
the Lenders within the meaning of Section 9-105 of the Uniform Commercial Code
and (iii) is acting as an independent contractor, the rights and duties of which
are limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Lenders agrees to assert no claim against the Agent on
any agency theory or any other theory of liability for breach of fiduciary duty,
all of which claims each Lender waives.
11.2 POWERS. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or under any of the other
Loan Documents except any action specifically provided by the Loan Documents
required to be taken by the Agent.
11.3 GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from (i) the Gross Negligence or
willful misconduct of such Person or (ii) breach of contract by such Person with
respect to the Loan Documents.
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11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL,
RECITALS, ETC. Neither the Agent nor any of its directors, officers, agents or
employees shall be responsible for or have any duty to ascertain, inquire into,
or verify (i) any statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder; (ii) the performance or observance
of any of the covenants or agreements of any obligor under any Loan Document;
(iii) the satisfaction of any condition specified in ARTICLE V, except receipt
of items required to be delivered solely to the Agent; (iv) the existence or
possible existence of any Default or (v) the validity, effectiveness or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith. The Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or in any of the
other Loan Documents for the perfection or priority of any of the Liens on any
of the Collateral, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or for
the financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.
11.5 ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or any other percentage of Lenders specified to be the
applicable percentage in this Agreement or any other Loan Document to act on
specified matters), and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
11.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any Revolving Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
11.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i)
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for any amounts not reimbursed by the Borrower for which the Agent is entitled
to reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of the Loan Documents or
any other document delivered in connection therewith or the transactions
contemplated thereby, or the enforcement of any of the terms thereof or of any
such other documents, provided that no Lender shall be liable for any of the
foregoing to the extent any of the foregoing is found in a final non-appealable
judgment by a court of competent jurisdiction to have arisen solely from the
Gross Negligence or willful misconduct of the Agent.
11.9 RIGHTS AS A LENDER. With respect to its Commitment, Loans made by
it and the Notes issued to it, the Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as through it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which such Person is not prohibited
hereby from engaging with any other Person.
11.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges 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 credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
11.11 SUCCESSOR AGENT. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, and the Agent may be
removed at any time with or without cause by written notice received by the
Agent from the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint, on behalf of the Borrower and
the Lenders, a successor Agent. If no successor Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty days after the retiring Agent's giving notice of resignation, then
the retiring Agent may appoint, on behalf of the Borrower and the Lenders, a
successor Agent. Notwithstanding anything herein to the contrary, so long as no
Default has occurred and is continuing, each such successor Agent shall be
subject to approval by the Borrower, which approval shall not be unreasonably
withheld. Such successor Agent shall be a commercial bank having capital and
retained earnings of at least $50,000,000. Upon the acceptance of any
appointment as the
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Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents. After any
retiring Agent's resignation hereunder as Agent, the provisions of this ARTICLE
XI 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 the Agent hereunder and under
the other Loan Documents.
11.12 COLLATERAL DOCUMENTS. (a) Each Lender authorizes the Agent to
enter into the Pledge Agreements and each of the other Collateral documents
contemplated thereby (collectively, the "Collateral Documents") to which it is a
party and to take all action contemplated by such documents. Each Lender agrees
that no holder of Secured Obligations (other than the Agent) shall have the
right individually to seek to realize upon the security granted by any
Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Agent for the benefit of the holders of
Secured Obligations upon the terms of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by any Person
as collateral security for the Obligations, the Agent is hereby authorized to
execute and deliver on behalf of the Holders of Secured Obligations any Loan
Documents necessary or appropriate to grant and perfect a Lien on such
Collateral in favor of the Agent on behalf of the Holders of Secured
Obligations.
(c) The Lenders hereby authorize the Agent, at its option and in its
discretion, to (y) release any Lien granted to or held by the Agent upon any
Collateral and/or (z) release any Guarantor from its obligations under the
Guaranty (i) upon termination of the Commitments and payment and satisfaction of
all of the Obligations at any time arising under or in respect of this Agreement
or the Loan Documents or the transactions contemplated hereby or thereby; (ii)
in connection with any transaction permitted by, but only in accordance with,
the terms of the applicable Loan Document; or (iii) in connection with any
transaction approved, authorized or ratified in writing by the Required Lenders,
unless such release is required to be approved by all of the Lenders hereunder.
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this SECTION 11.12(C).
(d) Upon any sale or transfer of assets constituting Collateral which is
permitted pursuant to the terms of any Loan Document, or consented to in writing
by the Required Lenders or all of the Lenders, as applicable, or consummation of
any transaction involving the sale of all or substantially all of the assets of
a Guarantor and upon at least five Business Days' prior written request by the
Borrower, the Agent shall (and is hereby irrevocably authorized by the Lenders
to) execute such documents as may be necessary to evidence the release of the
Liens granted to the Agent for the benefit of the Holders of Secured Obligations
herein or pursuant hereto upon the Collateral that was sold or transferred or
evidence the release of the applicable Guarantor from its obligations under the
Guaranty; PROVIDED, HOWEVER, that (i) the
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Agent shall not be required to execute any such document on terms which, in the
Agent's opinion, would expose the Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Secured Obligations, any other Guarantor's obligations under the
Guaranty or any Liens upon (or obligations of the Borrower or any Subsidiary in
respect of) all interests retained by the Borrower or any Subsidiary, including
(without limitation) the proceeds of the sale, all of which shall continue to
constitute part of the Collateral.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 SETOFF. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
SECTIONS 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 APPLICATION OF PAYMENTS. Subject to the provisions of SECTION 9.2,
(i) prior to the occurrence of a Default, the Agent shall apply all payments and
prepayments in respect of the Obligations in such order as shall be specified by
the Borrower, and (ii) after the occurrence of a Default, the Agent shall,
unless otherwise specified at the direction of the Required Lenders which
direction shall be consistent with the last sentence of this SECTION 12.3, apply
all payments and prepayments in respect of any Obligations and all proceeds of
Collateral in the following order:
(A) first, to pay interest on and then principal of any portion
of the Loans which the Agent may have advanced on behalf of any Lender
for which the Agent has not then been reimbursed by such Lender or the
Borrower;
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(B) second, to pay interest on and then principal of any advance
made under SECTION 10.3 for which the Agent has not then been paid by
the Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Revolving Loans and
L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on the Swing Line Loans;
(H) eighth, to the ratable payment or prepayment of principal
outstanding on Revolving Loans and Reimbursement Obligations in such
order as the Agent may determine in its sole discretion;
(I) ninth, to provide required cash collateral, if required
pursuant to SECTION 3.10 and
(J) tenth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Revolving Loans shall be applied FIRST, to repay outstanding Floating Rate
Loans, and THEN to repay outstanding Eurodollar Rate Loans with those Eurodollar
Rate Loans which have earlier expiring Interest Periods being repaid prior to
those which have later expiring Interest Periods. The order of priority set
forth in clause (ii) of this SECTION 12.3 and the related provisions of this
Agreement are set forth solely to determine the rights and priorities of the
Agent, the Swing Line Bank and the Issuing Banks as among themselves. The order
of priority set forth in CLAUSES (D) through (J) of this SECTION 12.3 may at any
time and from time to time be changed by the Required Lenders without necessity
of notice to or consent of or approval by the Borrower, or any other Person;
PROVIDED, that the order of priority of payments in respect of Swing Line Loans
may be changed only with the prior written consent of the Swing Line Bank. The
order of priority set forth in CLAUSES (A) through (C) of this SECTION 12.3 may
be changed only with the prior written consent of the Agent.
12.4 RELATIONS AMONG LENDERS.
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(a) Except with respect to the exercise of set-off rights of any Lender
in accordance with SECTION 12.1, the proceeds of which are applied in accordance
with this Agreement, and except as set forth in the following sentence, each
Lender agrees that it will not take any action, nor institute any actions or
proceedings, against the Borrower or any other obligor hereunder or with respect
to any Collateral or any Loan Document, without the prior written consent of the
Required Lenders or, as may be provided in this Agreement or the other Loan
Documents, at the direction of the Agent.
(b) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agent) authorized to act for, any other Lender. Notwithstanding the
foregoing, and subject to SECTION 12.2, any Lender shall have the right to
enforce on an unsecured basis the payment of the principal of and interest on
any Loan made by it after the date such principal or interest has become due and
payable pursuant to the terms of this Agreement.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with SECTION 13.3 hereof. Notwithstanding clause (ii) of this SECTION 13.1, any
Lender may at any time, without the consent of the Borrower or the Agent, assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; PROVIDED, HOWEVER, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with SECTION 13.3 hereof in the case of an assignment thereof or,
in the case of any other transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Revolving Notes issued in exchange therefor.
13.2 PARTICIPATIONS.
(A) PERMITTED PARTICIPANTS; EFFECT. Subject to the terms set forth in
this SECTION 13.2, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any Loan owing to such
Lender, any Note held by such Lender, any Commitment of such Lender, any L/C
Interest of such Lender or any other interest of such Lender under the Loan
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Documents on a pro rata or non-pro rata basis; PROVIDED that without the prior
written consent of the Agent, the amount of such participation shall not be for
less than $5,000,000. Notice of such participation to the Agent shall be
required prior to any participation becoming effective with respect to a
Participant which is not a Lender. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the holder of any such Note for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement shall
be determined as if such Lender had not sold such participating interests, and
the Borrower and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under the Loan
Documents except that, for purposes of ARTICLE IV hereof, the Participants shall
be entitled to the same rights as if they were Lenders.
(B) VOTING RIGHTS. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to any Loan or Commitment in which such Participant has an
interest which requires the consent of all of the affected Lenders pursuant to
the terms of SECTION 9.3.
(C) BENEFIT OF SETOFF. The Borrower agrees that each Participant shall
be deemed to have the right of setoff provided in SECTION 12.1 hereof in respect
to its participating interest in amounts owing under the Loan Documents to the
same extent as if the amount of its participating interest were owing directly
to it as a Lender under the Loan Documents, PROVIDED that each Lender shall
retain the right of setoff provided in SECTION 12.1 hereof with respect to the
amount of participating interests sold to each Participant except to the extent
such Participant exercises its right of setoff. The Lenders agree to share with
each Participant, and each Participant, by exercising the right of setoff
provided in SECTION 12.1 hereof, agrees to share with each Lender, any amount
received pursuant to the exercise of its right of setoff, such amounts to be
shared in accordance with SECTION 12.2 as if each Participant were a Lender.
13.3 ASSIGNMENTS.
(A) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("PURCHASERS") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Commitment,
all Loans owing to it, all of its participation interests in existing Letters of
Credit, and its obligation to participate in additional Letters of Credit
hereunder) in accordance with the provisions of this SECTION 13.3. Each
assignment shall be of a constant, and not a varying, ratable percentage of all
of the assigning Lender's rights and obligations under this Agreement. Such
assignment shall be effected through an Assignment Agreement substantially in
the form of EXHIBIT A hereto and shall not be permitted hereunder unless such
assignment is either for all of such Lender's rights and obligations under
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the Loan Documents or, without the prior written consent of the Agent, involves
Loans and Commitments in an aggregate amount of at least $5,000,000. The consent
of the Agent and, prior to the occurrence of a Default or Unmatured Default, the
Borrower (which consent, in each such case, shall not be unreasonably withheld),
shall be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof. Notwithstanding the
foregoing, any Lender may at any time, without the consent of the Borrower or
the Agent, assign all or any portion of its rights under this Agreement and its
Notes to a Federal Reserve Bank; PROVIDED, HOWEVER, that no such assignment
shall release the transferor Lender from its obligations hereunder.
(B) EFFECT; EFFECTIVE DATE. Upon (i) delivery to the Agent of a notice
of assignment, substantially in the form attached as APPENDIX I to EXHIBIT A
hereto (a "NOTICE OF ASSIGNMENT"), together with any consent required by SECTION
13.3(A) hereof, and (ii) payment of a $3,500 fee to the Agent for processing
such assignment, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall contain a
representation by the Purchaser to the effect that none of the consideration
used to make the purchase of the Commitment, Loans and L/C Obligations under the
applicable assignment agreement are "plan assets" as defined under ERISA and
that the rights and interests of the Purchaser in and under the Loan Documents
will not be "plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser, if not already a Lender, shall for all purposes be a
Lender party to this Agreement and any other Loan Documents executed by the
Lenders and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Lenders or the Agent shall be
required to release the transferor Lender with respect to the percentage of the
Aggregate Commitment, Loans and Letter of Credit participations assigned to such
Purchaser. Upon the consummation of any assignment to a Purchaser pursuant to
this SECTION 13.3(B), the transferor Lender, the Agent and the Borrower shall
make appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Purchaser, in each case in principal amounts reflecting their
Commitments, as adjusted pursuant to such assignment.
(C) THE REGISTER. The Agent shall maintain at its address referred to in
SECTION 14.1 a copy of each Assignment Agreement delivered to and accepted by it
pursuant to this SECTION 13.3 and a register (the "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 and whether
such Lender is an original Lender or the assignee of another Lender pursuant to
an assignment under this SECTION 13.3. The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Borrower
and each of its Subsidiaries, 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.
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13.4 CONFIDENTIALITY. Subject to SECTION 13.5, the Agent and the Lenders
shall hold all nonpublic information obtained pursuant to the requirements of
this Agreement and identified as such by the Borrower in accordance with such
Person's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a prospective Transferee in
connection with the contemplated participation or assignment or as required or
requested by any Governmental Authority or representative thereof or pursuant to
legal process and shall require any such Transferee to agree (and require any of
its Transferees to agree) to comply with this SECTION 13.4. In no event shall
the Agent or any Lender be obligated or required to return any materials
furnished by the Borrower; PROVIDED, HOWEVER, each prospective Transferee shall
be required to agree that if it does not become a participant or assignee it
shall return all materials furnished to it by or on behalf of the Borrower in
connection with this Agreement.
13.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries and the Collateral; PROVIDED that
prior to any such disclosure, such prospective Transferee shall agree to
preserve in accordance with SECTION 13.4 the confidentiality of any confidential
information described therein.
ARTICLE XIV: NOTICES
14.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.11 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
14.2 CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has
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been executed by the Borrower, the Agent and the Lenders and each party has
notified the Agent by telex or telephone, that it has taken such action.
[Remainder of This Page Intentionally Blank]
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IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have
executed this Agreement as of the date first above written.
HOMEUSA, INC., as the Borrower
By:___________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇
Title: Senior Vice President
Address:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇,
Chief Financial Officer
Telephone No.:(▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (713) 965- 0109
FIRST CHICAGO CAPITAL
CORPORATION, as Agent and as a
Lender
By:___________________________
Name:
Title:
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
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