1
EXHIBIT 99.(b)(1)
================================================================================
CREDIT AGREEMENT
among
INTERVOICE, INC.,
as Parent,
INTERVOICE ACQUISITION SUBSIDIARY III, INC.,
as Borrower,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Administrative Agent,
BANK ONE, TEXAS, N.A.,
as Documentation Agent,
THE BANK OF NOVA SCOTIA,
IBM CREDIT CORPORATION,
and
BANKBOSTON, N.A.,
as Co-Agents,
and
the Lenders party hereto
June 1, ▇▇▇▇
▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ SECURITIES LLC
Sole Lead Arranger and Sole Book Manager
================================================================================
2
TABLE OF CONTENTS
ARTICLE 1 - Definitions...........................................................................................1
Section 1.1 Definitions..........................................................................1
Section 1.2 Other Interpretive Provisions.......................................................21
Section 1.3 Accounting Terms and Determinations.................................................22
Section 1.4 Time of Day.........................................................................23
ARTICLE 2 - Revolving Credit Facility............................................................................23
Section 2.1 Revolving Commitments...............................................................23
Section 2.2 Revolving Notes.....................................................................23
Section 2.3 Repayment of Revolving Loans........................................................23
Section 2.4 Use of Proceeds.....................................................................23
Section 2.5 Termination or Reduction of Revolving Commitments...................................24
Section 2.6 Letters of Credit...................................................................24
ARTICLE 3 - Term Loan Facility...................................................................................28
Section 3.1 Term Loans..........................................................................28
Section 3.2 Term Notes..........................................................................28
Section 3.3 Repayment of Term Loans.............................................................28
Section 3.4 Use of Proceeds.....................................................................28
ARTICLE 4 - Interest and Fees....................................................................................29
Section 4.1 Interest Rate.......................................................................30
Section 4.2 Determinations of Margins and Commitment Fee Rate...................................30
Section 4.3 Payment Dates.......................................................................30
Section 4.4 Default Interest....................................................................31
Section 4.5 Conversions and Continuations of Accounts...........................................31
Section 4.6 Commitment Fee......................................................................31
Section 4.7 Computations........................................................................31
Section 4.8 Agent Fee...........................................................................31
ARTICLE 5 - Administrative Matters...............................................................................32
Section 5.1 Borrowing Procedure.................................................................32
Section 5.2 Minimum Amounts.....................................................................32
Section 5.3 Certain Notices.....................................................................32
Section 5.4 Prepayments.........................................................................34
Section 5.5 Method of Payment...................................................................35
Section 5.6 Pro Rata Treatment..................................................................36
Section 5.7 Sharing of Payments.................................................................36
Section 5.8 Non-Receipt of Funds by Agent.......................................................37
Section 5.9 Participation Obligations Absolute; Failure to Fund Participation. ................37
ARTICLE 6 - Change in Circumstances..............................................................................38
Section 6.1 Increased Cost and Reduced Return...................................................38
Section 6.2 Limitation on Libor Accounts........................................................39
3
Section 6.3 Illegality. .......................................................................40
Section 6.4 Treatment of Affected Accounts......................................................40
Section 6.5 Compensation. .....................................................................40
Section 6.6 Taxes...............................................................................41
Section 6.7 Withholding Tax Exemption. ........................................................42
Section 6.8 Replacement of Lenders..............................................................43
ARTICLE 7 - Security.............................................................................................44
Section 7.1 Collateral..........................................................................44
Section 7.2 Guaranties..........................................................................45
Section 7.3 New Subsidiaries, New Issuances of Capital Stock....................................45
Section 7.4 New Mortgaged Properties............................................................46
Section 7.5 Release of Collateral...............................................................46
Section 7.6 Collateral and Guaranties of Foreign Subsidiaries and Immaterial
Subsidiaries...................................................................................47
ARTICLE 8 - Conditions Precedent.................................................................................48
Section 8.1 Initial Loans and Letter of Credit..................................................48
Section 8.2 Loans on Brite Merger Date..........................................................52
Section 8.3 All Loans and Letters of Credit.....................................................53
ARTICLE 9 - Representations and Warranties.......................................................................54
Section 9.1 Existence, Power, and Authority.....................................................54
Section 9.2 Financial Condition.................................................................54
Section 9.3 Corporate and Similar Action; No Breach.............................................55
Section 9.4 Operation of Business...............................................................55
Section 9.5 Litigation and Judgments............................................................55
Section 9.6 Rights in Properties; Liens.........................................................55
Section 9.7 Enforceability......................................................................56
Section 9.8 Approvals...........................................................................56
Section 9.9 Debt................................................................................56
Section 9.10 Taxes...............................................................................56
Section 9.11 Margin Securities...................................................................56
Section 9.12 ERISA...............................................................................57
Section 9.13 Disclosure..........................................................................57
Section 9.14 Subsidiaries; Capitalization........................................................57
Section 9.15 Agreements..........................................................................58
Section 9.16 Compliance with Laws................................................................58
Section 9.17 Investment Company Act..............................................................58
Section 9.18 Public Utility Holding Company Act..................................................58
Section 9.19 Environmental Matters...............................................................58
Section 9.20 Transaction Documents...............................................................59
Section 9.21 Broker's Fees.......................................................................59
Section 9.22 Employee Matters....................................................................60
Section 9.23 Solvency............................................................................60
Section 9.24 Year 2000 Compliance................................................................60
4
ARTICLE 10 - Affirmative Covenants...............................................................................61
Section 10.1 Reporting Requirements..............................................................61
Section 10.2 Maintenance of Existence; Conduct of Business.......................................63
Section 10.3 Maintenance of Properties...........................................................63
Section 10.4 Taxes and Claims....................................................................63
Section 10.5 Insurance...........................................................................64
Section 10.6 Inspection Rights...................................................................65
Section 10.7 Keeping Books and Records...........................................................65
Section 10.8 Compliance with Laws................................................................65
Section 10.9 Compliance with Agreements..........................................................65
Section 10.10 Further Assurances..................................................................66
Section 10.11 ERISA...............................................................................66
Section 10.12 Year 2000 Compliance................................................................66
Section 10.13 Acquisition Agreement...............................................................66
Section 10.14 Hedge Agreement.....................................................................67
ARTICLE 11 - Negative Covenants..................................................................................67
Section 11.1 Debt................................................................................67
Section 11.2 Limitation on Liens and Restrictions on Subsidiaries................................68
Section 11.3 Mergers, Etc........................................................................70
Section 11.4 Restricted Payments.................................................................70
Section 11.5 Investments.........................................................................71
Section 11.6 Limitation on Issuance of Capital Stock.............................................71
Section 11.7 Transactions With Affiliates........................................................71
Section 11.8 Asset Dispositions..................................................................72
Section 11.9 Lines of Business...................................................................72
Section 11.10 Limitations on Restrictions Affecting Parent and Subsidiaries.......................72
Section 11.11 ERISA...............................................................................72
ARTICLE 12 - Financial Covenants.................................................................................73
Section 12.1 Leverage Ratio......................................................................73
Section 12.2 Fixed Charge Coverage Ratio.........................................................73
Section 12.3 Minimum Adjusted Net Worth..........................................................74
Section 12.4 Capital Expenditures................................................................74
ARTICLE 13 - Default.............................................................................................74
Section 13.1 Events of Default...................................................................74
Section 13.2 Remedies............................................................................77
Section 13.3 Cash Collateral.....................................................................78
Section 13.4 Performance by Agent................................................................78
Section 13.5 Set-off.............................................................................78
Section 13.6 Continuance of Default..............................................................78
ARTICLE 14 - Guaranty of Parent..................................................................................78
Section 14.1 Guaranty............................................................................78
5
Section 14.2 Contribution........................................................................79
Section 14.3 Guaranty of Performance.............................................................80
Section 14.4 Rights Cumulative...................................................................80
Section 14.5 Payment Upon Event of Default; Subrogation..........................................80
Section 14.6 No Effect of Stay in Bankruptcy.....................................................80
Section 14.7 Nonimpairment of Guaranty...........................................................80
Section 14.8 Additional representations and Warranties...........................................81
Section 14.9 Subordination.......................................................................82
Section 14.10 Tolling of Limitations..............................................................83
Section 14.11 Waivers.............................................................................83
ARTICLE 15 - Agent...............................................................................................84
Section 15.1 Appointment and Authorization; "Agent"..............................................84
Section 15.2 Delegation of Duties................................................................84
Section 15.3 Liability of Agent..................................................................84
Section 15.4 Reliance By Agent...................................................................85
Section 15.5 Notice of Default...................................................................85
Section 15.6 Credit Decision.....................................................................86
Section 15.7 Indemnification.....................................................................86
Section 15.8 Agent in Individual Capacity........................................................87
Section 15.9 Successor Agent.....................................................................87
Section 15.10 Withholding Tax.....................................................................88
ARTICLE 16 - Miscellaneous.......................................................................................89
Section 16.1 Expenses............................................................................89
Section 16.2 Indemnification.....................................................................90
Section 16.3 Limitation of Liability.............................................................91
Section 16.4 No Duty.............................................................................91
Section 16.5 No Fiduciary Relationship...........................................................91
Section 16.6 Equitable Relief....................................................................91
Section 16.7 No Waiver; Cumulative Remedies......................................................91
Section 16.8 Successors and Assigns..............................................................91
Section 16.9 Survival............................................................................94
Section 16.10 Entire Agreement....................................................................94
Section 16.11 Amendments and Waivers..............................................................94
Section 16.12 Maximum Interest Rate...............................................................95
Section 16.13 Notices.............................................................................96
Section 16.14 Governing Law; Venue; Service of Process............................................96
Section 16.15 Counterparts........................................................................97
Section 16.16 Severability........................................................................97
Section 16.17 Non-Application of Chapter 15 of Texas Credit Code..................................97
Section 16.18 Independence of Covenants...........................................................97
Section 16.19 Waiver of Jury Trial................................................................97
Section 16.20 Confidentiality.....................................................................97
6
INDEX TO EXHIBITS
Exhibit Description of Exhibit
------- ----------------------
A Revolving Note
B Term Note
C Assignment and Acceptance
D Compliance Certificate
E Subsidiary Guaranty
F Joinder Agreement
G Notice of Borrowings, Conversions,
Continuations, or Prepayments
INDEX TO SCHEDULES
Schedule Description of Schedule
-------- -----------------------
1.1 Commitments
9.4 Operation of Business
9.5 Litigation and Judgments
9.6(A) Real Property
9.6(B) Intellectual Property
9.6(C) Locations
9.9 Debt
9.10 Taxes
9.12 ERISA
9.14 Subsidiaries; Capitalization
9.15 Agreements
9.19 Environmental Matters
9.22 Employee Matters
11.2 Liens
16.13 Address for Notices
7
CREDIT AGREEMENT
THIS CREDIT AGREEMENT ("Agreement"), dated effective as of June 1, 1999, is
among INTERVOICE, INC., a corporation duly organized and validly existing under
the laws of the State of Texas, ("Parent"), INTERVOICE ACQUISITION SUBSIDIARY
III, INC., a corporation duly organized and validly existing under the laws of
the State of Nevada ("Borrower"), each of the banks or other lending
institutions which is (or which may from time to time become) a party hereto or
any successor or assignee thereof pursuant to Section 16.8(b) (individually, a
"Lender" and, collectively, the "Lenders"), and BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, a national banking association, as the Issuing Bank (as
defined below) and as administrative agent for the Lenders (in its capacity as
administrative agent, together with its successors in such capacity, "Agent").
RECITALS:
A. Parent and Borrower have requested that the Lenders extend
$150,000,000 of senior secured credit facilities to Borrower in the form of a
revolving credit facility and a term credit facility for the purpose of
financing the Brite Acquisition and the Brite Merger and to provide working
capital for Parent's and Borrower's operations.
B. The Lenders are willing to extend such credit to Borrower upon the
terms and conditions set forth in this Agreement and the other Loan Documents.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. Wherever used in this Agreement, the following
terms have the following meanings:
"Accounts" means either a Base Rate Account or a Libor Account.
"Adjusted Libor Rate" means, for any Libor Account for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1.00%) determined by Agent to be equal to the quotient obtained by
dividing (a) the Libor Rate for such Libor Account for such Interest Period by
(b) one (1) minus the Reserve Requirement for such Libor Account for such
Interest Period.
"Adjusted Net Worth" means Parent's consolidated (a) shareholder's
equity (including, without limitation, Capital Stock, additional paid-in
capital, and retained earnings, after deducting treasury stock), plus (b)
non-cash non-recurring charges, minus (c) non-recurring gains, plus (d)
non-recurring charges not included in clause (b) preceding arising in
connection with the Related
CREDIT AGREEMENT - Page 1
8
Transactions to the extent taken during the Fiscal Quarter ending August 31,
1999, plus (e) up to $10,000,000 in the aggregate of non-recurring charges not
included in clause (b) or clause (d) preceding occurring during the term of this
Agreement.
"Affected Accounts" has the meaning specified in Section 6.4.
"Affected Libor Accounts" has the meaning specified in Section 6.5.
"Affiliate" means, with respect to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that directly
or indirectly beneficially owns or holds twenty percent (20%) or more of any
class of Capital Stock of such Person; or (c) twenty percent (20%) or more of
the Capital Stock of which is directly or indirectly beneficially owned or held
by the Person in question. As used in this definition, the term "control" means
the possession, directly or indirectly, of the power to direct or cause
direction of the management and policies of a Person, whether through the
ownership of Capital Stock, by contract, or otherwise; provided, however, in no
event shall Agent, Arranger, the Issuing Bank, or any Lender be deemed an
Affiliate of Parent, Borrower, or any Subsidiary of Parent or Borrower.
"Agent" has the meaning specified in the introductory paragraph of this
Agreement.
"Agent-Related Persons" means Agent, each of Agent's Affiliates (including,
without limitation, Arranger), and each of their respective officers, directors,
employees, and agents.
"Agent's Letter" means the certain letter agreement dated as of the Closing
Date among Parent, Borrower, and Agent, as the same may be amended or otherwise
modified from time to time.
"Agreement" has the meaning specified in the introductory paragraph of this
Agreement, as the same may be amended restated, or otherwise modified.
"Applicable Lending Office" means, for each Lender and for each Type of
Account, the "Lending Office" of such Lender (or of an Affiliate of such Lender)
designated for such Type of Account on the signature pages hereof (or, with
respect to a Lender that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 16.8, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to Agent and
Borrower by written notice in accordance with the terms hereof as the office by
which its Accounts of such Type are to be made and maintained.
"Applicable Rate" has the meaning specified in Section 4.1.
"Arranger" means Banc of America Securities LLC and any successor thereto.
"Asset Disposition" means, with respect to any Person, the disposition,
whether a sale (including, without limitation, any sale/lease-back arrangement),
lease, assignment, transfer, or other
CREDIT AGREEMENT - Page 2
9
voluntary disposition of any asset of such Person (including, without
limitation, the sale or other disposition of any Capital Stock of any Subsidiary
of such Person but excludes any such transaction among any of Parent and its
Subsidiaries) other than (i) sales of Inventory in the ordinary course of
business, (ii) sales of equipment that is obsolete or no longer useful in the
business of such Person, and (iii) the sale and licensing of software products
and other Intellectual Property in the ordinary course of business.
"Assignment and Acceptance" means an assignment and acceptance, in
substantially the form of Exhibit C, entered into by a Lender and an Eligible
Assignee pursuant to Section 16.8(b) and accepted by Borrower (if required) and
Agent.
"Bank of America" means Bank of America National Trust and Savings
Association, and its successors and assigns.
"Bankruptcy Code" has the meaning specified in Section 13.1(e).
"Base Rate" means, for any day, the rate per annum equal to the higher of
(a) the Federal Funds Rate plus one-half of one percent (0.50%), or (b) the
Prime Rate. Any change in the Base Rate due to a change in the Prime Rate or the
Federal Funds Rate shall be effective on the effective date of such change in
the Prime Rate or Federal Funds Rate.
"Base Rate Account" means a portion of a Loan that bears interest at a rate
based upon the Base Rate.
"Base Rate Margin" has the meaning specified in Section 4.2.
"Borrower" has the meaning specified in the introductory paragraph of this
Agreement.
"Borrower Security Agreement" means a pledge and security agreement, in
form and substance satisfactory to Agent, between Borrower and Agent, for the
benefit of Agent and the Lenders, evidencing or creating a Lien in the
Collateral owned by Borrower as security for the Obligations or any portion
thereof, as such agreement may be amended, restated, or otherwise modified from
time to time.
"Brite" means Brite Voice Systems, Inc., a Kansas corporation.
"Brite Acquisition" means the purchase of Shares pursuant to and in
accordance with the Brite Tender Offer.
"Brite Acquisition Documents" means the Brite Merger Agreement, all
documentation executed pursuant to the terms thereof, and all documentation
executed and delivered to consummate the Brite Acquisition and the Brite Merger,
as such documents may be amended or otherwise modified from time to time;
excluding, however, the Loan Documents.
CREDIT AGREEMENT - Page 3
10
"Brite Merger" means the merger of Borrower with and into Brite pursuant to
and in accordance with the terms of the Brite Merger Agreement.
"Brite Merger Agreement" means the certain Acquisition Agreement and Plan
of Merger dated as of April 27, 1999, among Parent, Borrower, and Brite, as such
agreement may be amended or otherwise modified from time to time.
"Brite Merger Date" has the meaning specified in Section 10.10.
"Brite Tender Offer" means that certain tender offer made by Borrower to
acquire up to 9,185,155 of the Shares, but not less than the Minimum Shares, for
$13.40 per share.
"Brite Tender Offer Documents" means the documents executed or delivered in
connection with the Brite Tender Offer, as any of such documents may be amended
or otherwise modified from time to time, including, without limitation, (a) the
combined Schedule 14D-1 Tender Offer Statement Pursuant to Section 14(d)(1) of
the Securities Exchange Act of 1934 and Schedule 13D Under the Securities
Exchange Act of 1934, (b) all documentation executed pursuant to the terms
thereof, and (c) all documentation executed and delivered to consummate the
Brite Tender Offer.
"Business Day" means (a) any day excluding Saturday, Sunday, and any day
which either is a legal holiday under the laws of the State of Texas or the
State of California or is a day on which banking institutions located in Texas
or California are closed, and (b), with respect to all borrowings, payments,
Conversions, Continuations, Interest Periods, and notices in connection with
Libor Accounts under any Loan, any day which is a Business Day described in
clause (a) above and which is also a day on which dealings in Dollar deposits
are carried out in the London interbank market.
"Capital Expenditures" means, for any period, all expenditures of Parent
and its Subsidiaries which are classified as capital expenditures in accordance
with GAAP other than such expenditures which constitute Permitted Acquisitions,
including, without limitation, the aggregate amount of all such expenditures
incurred during such period which constitute Capital Lease Obligations.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations are
classified and accounted for as a capital lease on a balance sheet of such
Person in accordance with GAAP. For purposes of this Agreement, the amount of
such Capital Lease Obligations shall be the capitalized amount thereof,
determined in accordance with GAAP.
"Capital Stock" means corporate stock and any and all shares, partnership
interests, limited liability company interests, membership interests, equity
interests, participations, rights, securities, or other equivalent evidences
(however designated) of ownership, or any options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person (however designated) issued by any
entity (whether a corporation, partnership, limited liability company, or other
type of entity).
CREDIT AGREEMENT - Page 4
11
"Cash Purchase Consideration" means, as of any date of determination and
with respect to any acquisition by Parent or a Subsidiary of Parent, the
purchase price to be paid for the Capital Stock issued by the Target or the
assets of the Target, including all cash consideration paid (whether classified
as purchase price, noncompete payments, consulting payments, or otherwise and
without regard to whether such amount is paid at closing or paid over time but
excluding (i) customary working capital or other purchase price adjustments,
(ii) the amount of any finance charges attributable to deferred payments, and
(iii) any reasonable amounts payable as salary and benefits under any employment
agreement entered into with any seller or any officer or employee of the Target
for the purpose of retaining such Person as an active officer or employee of the
purchaser) and the Dollar value of all other assets, other than Capital Stock of
Parent, to be transferred by the purchaser in connection with such acquisition
to the seller or sellers, all valued in accordance with the applicable agreement
entered into between the Target and/or the seller and the purchaser, and
including (without duplication) the amount of any Debt incurred, assumed, or
acquired by Parent or a Subsidiary of Parent in connection with such
acquisition.
"Closing Date" means the date of the initial advance of the Loans under
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Collateral" means all Property of any nature whatsoever upon which a Lien
is created or purported to be created by any Loan Document as security for the
Obligations or any portion thereof.
"Commitment Fee Rate" has the meaning specified in Section 4.2.
"Commitment Percentage" means, with respect to each Lender, the percentage
equivalent (carried to nine (9) decimal places) of a fraction, the numerator of
which is the aggregate amount of the Commitments of such Lender (or if any such
Commitment has terminated or expired, the outstanding principal amount of the
Loans (and, if applicable Letter of Credit Liabilities) of such Lender with
respect thereto), and the denominator of which is the aggregate amount of the
Commitments of all of the Lenders (or if any such Commitments have terminated or
expired, the outstanding principal amount of the Loans (and, if applicable
Letter of Credit Liabilities) of all of the Lenders with respect thereto).
"Commitments" means, with respect to each Lender, the commitments hereunder
such Lender holds which may be a Revolving Commitment, a Term Commitment, or any
combination thereof and, with respect to all Lenders, all of such commitments,
in each case, as set forth on Schedule 1.1.
"Compliance Certificate" means a certificate in substantially the form of
Exhibit D, properly completed and executed by the chief executive officer or
chief financial officer of Parent.
"Continue", "Continuation", and "Continued" shall refer to the continuation
pursuant to Section 4.5 of a Libor Account from one Interest Period to the next
Interest Period.
CREDIT AGREEMENT - Page 5
12
"Contract Rate" has the meaning specified in Section 16.12(a).
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 4.5 or Article 6 of one Type of Account into another Type of
Account.
"Debt" means, with respect to any Person at any time (without duplication):
(a) all obligations of such Person for borrowed money; (b) all obligations of
such Person evidenced by bonds, notes, debentures, or other similar instruments;
(c) all obligations of such Person to pay the deferred purchase price of
property or services, except trade accounts payable of such Person arising in
the ordinary course of business that are not past due by more than ninety (90)
days or that are being contested in good faith by appropriate proceedings
diligently pursued and for which adequate reserves have been established in
accordance with GAAP; (d) all Capital Lease Obligations of such Person; (e)
Guarantees by such Person; (f) all indebtedness, liabilities, and obligations of
the types described in the foregoing clauses (a) through (d) secured by a Lien
existing on Property owned by such Person, whether or not the indebtedness,
liabilities, and obligations secured thereby have been assumed by such Person or
are non-recourse to such Person; provided, however, that the amount of such Debt
of any Person described in this clause (f) shall, for purposes of this
Agreement, be deemed to be equal to the lesser of (i) the aggregate unpaid
amount of such Debt or (ii) the fair market value of the Property encumbered, as
determined by Agent in its discretion; (g) all reimbursement obligations of such
Person (whether contingent or otherwise) in respect of letters of credit,
bankers' acceptances, surety or other bonds, and similar instruments (including,
without limitation, those outstanding with respect to Letters of Credit, but
excluding letters of credit or bonds relating to obligations arising in the
ordinary course of business which are not Obligations under this Agreement or
otherwise constitutes Debt); (h) all vested obligations of such Person for the
payment of money under any noncompete, consulting, or similar arrangements
(other than earn-outs) providing for the deferred payment of the purchase price
for any property to the extent that any such obligations are, according to GAAP,
reflected as a capitalized liability on a balance sheet of such Person; (i) all
obligations of such Person to redeem or retire shares of Capital Stock of such
Person; (j) all indebtedness, liabilities, and obligations of such Person under
any Hedge Agreement; and (k) the principal balance outstanding under any
synthetic lease, tax retention operating lease, off balance sheet loan, or
similar off balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP. The
Debt of any Person shall include the Debt of any partnership or joint venture in
which such Person is a general partner or a joint venturer, but only to the
extent to which there is recourse to such Person for payment of such Debt.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event of
Default.
"Default Rate" means, in respect of any principal of any Loan, any
Reimbursement Obligation, or any other amount payable by Borrower under any Loan
Document, a rate per annum equal to the sum of two percent (2.00%), plus the
Applicable Rate for Base Rate Accounts as in effect from time to time (provided,
that for amounts outstanding as Libor Accounts, the "Default Rate" for such
principal shall be two percent (2.00%), plus the interest rate for such Libor
Account
CREDIT AGREEMENT - Page 6
13
for the remainder of the applicable Interest Period as provided in Section 4.1,
and, thereafter, the rate provided for above in this definition).
"Dollars" and "$" mean lawful money of the U.S.
"Domestic Subsidiary" means each direct or indirect Subsidiary of Parent
formed under the laws of the U.S. or any state thereof.
"EBITDA" means, for any period, the total of the following calculated for
Parent, without duplication, on a consolidated basis for such period: (a) Net
Income; plus (b) any provision for (or less any benefit from) income or
franchise taxes to the extent included in the determination of Net Income; plus
(c) Interest Expense to the extent included in the determination of Net Income;
plus (d) amortization and depreciation expense to the extent included in the
determination of Net Income; plus (e) other non-cash, non-recurring charges to
the extent included in the determination of Net Income; minus (f) other
non-recurring gains to the extent included in the determination of Net Income;
plus (g) non-recurring charges not included in clause (e) preceding arising in
connection with the Related Transactions to the extent taken during the Fiscal
Quarter ending August 31, 1999; plus (h) up to $10,000,000 in the aggregate of
non-recurring charges not included in clause (e) or clause (g) preceding
occurring during the term of this Agreement.
"Eligible Assignee" has the meaning specified in Section 16.8(b)(i).
"Environmental Laws" means any and all federal, state, and local laws,
regulations, and requirements regulating the environment, as such laws,
regulations, and requirements may be amended or supplemented from time to time.
"Environmental Liabilities" means, as to any Person, all indebtedness,
liabilities, obligations, responsibilities, Remedial Actions, losses, damages,
punitive damages, consequential damages, treble damages, costs, and expenses,
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, or criminal or civil statute, including, without
limitation, any Environmental Law, Permit, order, or agreement with any
Governmental Authority or other Person, arising from environmental conditions,
or the Release or threatened Release of a Hazardous Material into the
environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as Parent or any Subsidiary of Parent or is under
common control (within the meaning of Section 414(c) of the Code) with Parent or
any Subsidiary of Parent.
"Event of Default" has the meaning specified in Section 13.1.
CREDIT AGREEMENT - Page 7
14
"Excess Cash Flow" means, during the term of this Agreement, the sum of the
following calculated cumulatively for Parent without duplication on a
consolidated basis: (a) EBITDA; minus (b) the cash amount of Interest Expense
paid; minus (c) the cash amount of all income and franchise taxes paid; minus
(d) the cash amount of Capital Expenditures; minus (e) all scheduled payments,
mandatory prepayments made pursuant to Section 5.4(a)(v), or optional
prepayments of principal made on Funded Debt; minus (f) the portion of cash,
non-recurring charges which were added back as part of the calculation of
EBITDA; minus (g) the aggregate amount of cash consideration paid in connection
with Permitted Acquisitions; minus (h) the lesser of $10,000,000 or the positive
remainder of the outstanding principal balance of the Revolving Loans on the
Merger Date minus the outstanding principal balance of the Revolving Loans on
the date of calculation.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1.00%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate charged to Agent
(in its individual capacity) on such day on such transactions as determined by
Agent.
"Fiscal Quarters" means the three (3) month periods falling in each Fiscal
Year ending on the last day of February, May, August, and November.
"Fiscal Year" means a twelve (12) month period ending February 28 (or
February 29, if applicable).
"Fixed Charge Coverage Ratio" means, for any period and determined on a
consolidated basis for Parent and its Subsidiaries, the ratio of (a) EBITDA for
such period minus the sum of (i) Capital Expenditures, to the extent paid during
such period, plus (ii) income and franchise taxes actually paid during such
period to (b) the sum of (i) Interest Expense for such period (to the extent
paid during such period), plus (ii) scheduled payments of principal of Funded
Debt for such period.
"Foreign Subsidiary" means each direct or indirect Subsidiary of Parent
that is not a Domestic Subsidiary.
"Funded Debt" means Debt described in clauses (a), (b), (c), (d), (e), (f),
(g), and (k) of the definition of Debt.
"GAAP" means generally accepted accounting principles, applied on a
"consistent basis" (as such phrase is interpreted in accordance with Section
1.3), as set forth in Opinions of the Accounting Principles Board of the
American Institute of Certified Public Accountants and/or in statements of the
Financial Accounting Standards Board and/or their respective successors and
which are applicable in the circumstances as of the date in question.
CREDIT AGREEMENT - Page 8
15
"Governmental Authority" means any nation or government, any federal,
state, county, municipal, parish, provincial, township, or other political
subdivision thereof, and any department, commission, board, court, agency, or
other instrumentality or entity exercising executive, legislative, judicial,
regulatory, or administrative functions of or pertaining to government.
"Guarantee" means any indebtedness, liability, or obligation, contingent or
otherwise, of any Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person or indemnifying such other Person for any Debt or
other obligation and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of such Person (a) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise) or (b)
entered into for the purpose of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part), provided that the term
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business or contingent obligations of a Person in respect of
an obligation of a distributor, reseller, or marketing partner of such Person
arising in connection with the sale and distribution of the goods and services
of such Person in the ordinary course of business. The amount of any Guarantee
shall be deemed to be equal to the lesser of (y) an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Guarantee is made or (z) the maximum amount for which such guaranteeing Person
may be liable pursuant to the terms of the instrument embodying such Guarantee,
unless such primary obligation and the maximum amount for which such
guaranteeing Person may be liable are not stated or determinable, in which case
the amount of such Guarantee shall be such guaranteeing Person's maximum
reasonably anticipated liability in respect thereof as mutually determined by
Parent and Agent in good faith. The term "Guarantee" used as a verb has a
corresponding meaning.
"Guaranty" means a Subsidiary Guaranty or any other guaranty agreement
executed and delivered by a Person in favor of Agent, for the benefit of Agent
and the Lenders, and any and all amendments, restatements, or other
modifications thereof, and "Guaranties" means all of such agreements,
collectively.
"Guarantor" means any Person who is or becomes a party to any Guaranty of
the Obligations or any part thereof.
"Hazardous Material" means any substance, product, waste, pollutant,
chemical, contaminant, insecticide, pesticide, constituent, or material which is
or becomes listed, regulated, or addressed under any Environmental Law as a
result of its hazardous or toxic nature.
"Hedge Agreement" means any agreement, device, or arrangement designed to
protect a Person from the fluctuations of interest rates, exchange rates, or
forward rates applicable to its 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, swap, or collar protection agreements, and forward rate currency or
interest rate options, as the same
CREDIT AGREEMENT - Page 9
16
may be amended or modified and in effect from time to time, and any
cancellation, buy-back, reversal, termination, or assignment of any of the
foregoing.
"Immaterial Subsidiary" means a Domestic Subsidiary with (a) no single
asset with a value in excess of $250,000, (b) an aggregate asset value of less
than $1,000,000, or (c) annual revenues of less than $3,000,000.
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including, without limitation, unregistered names and
marks), trademark and service ▇▇▇▇ registrations and applications, copyrights
and copyright registrations and applications, inventions, invention disclosures,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings, or royalty rights.
"Interest Expense" means, for any period and for any Person, the sum of (a)
interest expense of such Person calculated without duplication on a consolidated
basis for such period in accordance with GAAP, plus (b) interest expenses paid
under interest rate Hedge Agreements during such period, minus (c) interest
payments received under interest rate Hedge Agreements during such period.
"Interest Period" means with respect to any Libor Account, each period
commencing on the date such Account is established or Continued, or Converted
from a Base Rate Account to a Libor Account, or the last day of the next
preceding Interest Period with respect to such Libor Account, and ending on the
numerically corresponding day in the first, second, third, sixth, or, if all
Lenders agree, twelfth calendar month thereafter, as Borrower may select as
provided in Section 4.5 or Section 5.1, except that each such Interest Period
which commences on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the appropriate subsequent
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month. Notwithstanding the foregoing: (a) each Interest Period which
would otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or if such succeeding Business Day falls in the next
succeeding calendar month, on the next preceding Business Day); (b) any Interest
Period which would otherwise extend beyond the Maturity Date shall end on the
Maturity Date; (c) no more than six (6) Interest Periods shall be in effect at
the same time; (d) no Interest Period for any Libor Account shall have a
duration of less than one (1) month and, if the Interest Period would otherwise
be a shorter period, the related Libor Account shall not be available hereunder;
and (e) no Interest Period in respect of any portion of the Term Loan may extend
beyond a Quarterly Payment Date unless, after giving effect thereto, the
aggregate principal amount of Libor Accounts outstanding under the Term Loan
having Interest Periods that end after such Quarterly Payment Date shall be
equal to or less than the aggregate principal amount of the Term Loan to be
outstanding hereunder after such Quarterly Payment Date.
"Inventory" means all inventory now owned or hereafter acquired by any Loan
Party wherever located and whether or not in transit, which is or may at any
time be held for sale or lease,
CREDIT AGREEMENT - Page 10
17
or furnished under any contract (exclusive of leases of real Property) for
service or held or used as raw materials, work-in-process, or supplies or
materials used or consumed in the business of such Loan Party.
"Investments" has the meaning specified in Section 11.5.
"Issuing Bank" means Bank of America or such other Lender which is a
commercial bank as Borrower and Bank of America may mutually designate from time
to time which agrees to be the issuer of a Letter of Credit.
"Joinder Agreement" means an agreement to be executed by Brite pursuant to
the terms of Section 10.10(b), in substantially the form of Exhibit F.
"Lender" has the meaning specified in the introductory paragraph of this
Agreement.
"Letter of Credit" has the meaning specified in Section 2.6(a).
"Letter of Credit Agreement" means, with respect to each Letter of Credit
to be issued by the Issuing Bank, the letter of credit application and
reimbursement agreement which such Issuing Bank requires to be executed by
Borrower in connection with the issuance of such Letter of Credit.
"Letter of Credit Liabilities" means, at any time, the sum of (a) the
aggregate undrawn face amount of all outstanding Letters of Credit, plus (b) all
unreimbursed drawings under Letters of Credit.
"Leverage Ratio" means, as of any period end and determined on a
consolidated basis for Parent and its Subsidiaries, the ratio of (a) Funded Debt
to (b) EBITDA.
"Libor Account" means any portion of a Loan that bears interest at a rate
based upon the Adjusted Libor Rate.
"Libor Rate" means, for any Libor Account for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of
1.00%) appearing on Telerate (also known as Dow ▇▇▇▇▇ Markets) Page 3750 (or any
successor page) as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two (2) Business Days prior to the first
day of such Interest Period for a term comparable to such Interest Period. If
Agent is unable to obtain any quotation as provided above, the term "Libor Rate"
shall mean, for any Libor Account for any Interest Period therefor, the rate of
interest per annum determined by Agent to be the rate at which Dollar deposits
in the approximate amount of the applicable borrowing, Conversion, or
Continuation of such Libor Account and having a maturity comparable to such
Interest Period would be offered by Bank of America to major banks in the London
interbank market at their request at approximately 11:00 a.m. (London time) two
(2) Business Days prior to the commencement of such Interest Period.
"Libor Rate Margin" has the meaning specified in Section 4.2.
CREDIT AGREEMENT - Page 11
18
"Lien" means any lien, mortgage, security interest, tax lien, pledge,
charge, hypothecation, assignment, preference, priority, or other encumbrance of
any kind or nature whatsoever (including, without limitation, any conditional
sale or title retention agreement), whether arising by contract, operation of
law, or otherwise.
"Loan Documents" means this Agreement, the Notes, the Security Documents,
the Letters of Credit, the Letter of Credit Agreements, the Joinder Agreement,
any Hedge Agreement between any Loan Party and any Lender, and all other
agreements, documents, and instruments now or hereafter executed and/or
delivered pursuant to or in connection with any of the foregoing, and any and
all amendments, modifications, supplements, renewals, extensions, or
restatements thereof (excluding any commitment letter, term sheet, or other
agreement entered into prior to the Closing Date).
"Loan Party" means (a) Parent, (b) Borrower, (c) the Guarantors, and (d)
any other Person who is or becomes a party to any agreement, document, or
instrument that Guarantees or secures payment or performance of the Obligations
or any part thereof.
"Loans" means Revolving Loans and Term Loans.
"Margin Adjustment Date" has the meaning specified in Section 4.2.
"Material Adverse Effect" means, with respect to Parent and its
Subsidiaries (determined collectively) any material adverse effect, or the
occurrence of any event or the existence of any condition that could reasonably
be expected to have a material adverse effect, on (a) the business or financial
condition, prospects, or operations of such Person or Persons, (b) the ability
of such Person or Persons to pay and perform the obligations for which such
Person or Persons are responsible when due, or (c) the validity or
enforceability of (i) any of the Loan Documents, (ii) any Lien created or
purported to be created by any of the Loan Documents or the required priority of
any such Lien, or (iii) the rights and remedies of Agent or the Lenders under
any of the Loan Documents.
"Maturity Date" means the Revolving Maturity Date or the Term Maturity
Date.
"Maximum Rate" means, at any time and with respect to any Lender, the
maximum rate of nonusurious interest under applicable law that such Lender may
charge Borrower. The Maximum Rate shall be calculated in a manner that takes
into account any and all fees, payments, and other charges contracted for,
charged, or received in connection with the Loan Documents that constitute
interest under applicable law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum Rate
shall take effect without notice to Borrower at the time of such change in the
Maximum Rate. For purposes of determining the Maximum Rate under Texas law to
the extent applicable, if at all, the applicable rate ceiling shall be the
indicated rate ceiling described in, and computed in accordance with, the Texas
Credit Code.
"Minimum Shares" means a number of Shares pursuant to the Certificate of
Incorporation, Bylaws, and other constituent documents of Brite and according to
applicable law which are
CREDIT AGREEMENT - Page 12
19
sufficient to exceed the number required for Brite's shareholders to approve the
Brite Merger, but in any event shall not be less than fifty-one percent (51.0%)
of the Shares.
"Mortgaged Property" means, any Property consisting of real Property or
interests therein which becomes or is required to become subject to a Mortgage
pursuant to Section 7.4, and "Mortgaged Properties" means all of such real
Property or interests, collectively.
"Mortgage" means any deed of trust, leasehold deed of trust, mortgage,
leasehold mortgage, collateral assignment of leases, or other real estate
security document executed and delivered pursuant to this Agreement by any Loan
Party in favor of Agent for the benefit of Agent and the Lenders with respect to
any Mortgaged Property, and any and all amendments, modifications, supplements,
renewals, or restatements thereof, and "Mortgages" means all of such Mortgages,
collectively.
"Multiemployer Plan" means a multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been made by any Loan Party or any
ERISA Affiliate at any time within the six (6) year period preceding the date
hereof or hereafter and which is covered by Title IV of ERISA.
"Net Income" means, for any period and any Person, such Person's
consolidated net income (or loss) determined in accordance with GAAP, but
excluding the income of any other Person (other than Subsidiaries) in which such
Person or any Subsidiary of such Person has an ownership interest, unless
received by such Person or a Subsidiary of such Person in a cash distribution.
"Net Proceeds" means (i) in connection with any disposition of Property of
any Loan Party, the cash proceeds received by such Loan Party from such
disposition (including, without limitation, payments under notes or other debt
Securities received in connection with any such disposition, but only as and
when received) net of (a) the costs of such disposition (including reasonable,
out-of-pocket professional fees and expenses, investment banking fees, financial
advisory fees, taxes, notarial fees, survey costs, title insurance premiums,
required escrow deposits, and purchase price adjustments and other customary
fees and expenses, in each case attributable to and actually paid in connection
with such disposition), and (b) amounts applied to repayment of Debt (other than
the Obligations) secured by a Lien on the Property disposed of and (ii) in
connection with issuance of any Securities, the cash proceeds received from such
issuance, net of all costs of such issuance (including, without limitation,
reasonable, out-of-pocket professional fees and expenses, notarial fees,
underwriting discounts and commissions, placement, underwriting, or arrangement
fees, and other customary fees and expenses) actually paid.
"Notes" means the Revolving Notes referred to in Section 2.2 and the Term
Notes referred to in Section 3.2.
"Obligations" means any and all (a) obligations, indebtedness, and
liabilities of Parent and Borrower to Agent, Arranger, and the Lenders, or any
of them, arising pursuant to this Agreement or any other Loan Document, whether
now existing or hereafter arising, whether direct, indirect, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including,
without
CREDIT AGREEMENT - Page 13
20
limitation, the obligation of Borrower to repay the Loans, the Reimbursement
Obligations, interest on the Loans and Reimbursement Obligations, and all fees,
costs, and expenses (including, without limitation, attorneys' fees) provided
for in the Loan Documents, and (b) indebtedness, liabilities, and obligations of
any Loan Party under any Hedge Agreement that such Loan Party may enter into
with Agent, Arranger, any Lender, or any of their Affiliates if and to the
extent that such Hedge Agreement is permitted in accordance with Section
11.1(i).
"Offering Memorandum" means the certain Confidential Offering Memorandum
dated May 1999, prepared and distributed by NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities
LLC (now known as Banc of America Securities LLC) with respect to the
syndication of the Commitments and the Loans evidenced by this Agreement.
"Other Taxes" has the meaning specified in Section 6.6(b).
"Outstanding Revolving Credit" means, at any time of determination, the sum
of (a) the aggregate amount of Revolving Loans then outstanding; plus (b) the
aggregate amount of Letter of Credit Liabilities (or when calculated with
respect to any Lender, such Lender's pro rata share of the Revolving Loans then
outstanding and participation or other interest in such Letter of Credit
Liabilities).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Parent" has the meaning specified in the introductory paragraph of this
Agreement.
"Parent Security Agreement" means a pledge and security agreement, in form
and substance satisfactory to Agent, between Parent and Agent, for the benefit
of Agent and the Lenders, evidencing or creating a Lien in the Collateral owned
by Parent as security for the Obligations or any portion thereof, as such
agreement may be amended, restated, or otherwise modified from time to time.
"Permit" means any permit, certificate, approval, order, license, or other
authorization.
"Permitted Acquisition" means any acquisition of the Capital Stock of a
Person or any acquisition of Property which constitutes a significant or
material portion of an existing business of a Person, in each case, in a
transaction that satisfies each of the following requirements:
(a) No Default. Both before and after giving effect to such
acquisition and the Loans (if any) requested to be made in connection
therewith, no Default exists or will exist or would result therefrom;
(b) Delivery and Approval Requirements. Parent shall provide Agent
with a copy of the information provided to the board of directors of Parent
and/or its Subsidiary making the acquisition to obtain the board of
directors approval of such acquisition, and, for each acquisition for which
the Cash Purchase Consideration and the Stock Purchase
CREDIT AGREEMENT - Page 14
21
Consideration, respectively, paid in connection with such acquisition
individually and all acquisitions during the period beginning on the
Closing Date through and including August 29, 2003 (whether Cash Purchase
Consideration, Stock Purchase Consideration, or a combination thereof
(which in such case shall be determined on a pro rata basis)) corresponding
to the Leverage Ratio of Parent exceeds the amounts set forth in the table
below, the prior written consent of the Required Lenders shall have been
obtained.
======================================================================================
Cash Purchase Stock Purchase
Consideration Consideration
--------------------------- ---------------------------
Leverage Ratio Individual Aggregate Individual Aggregate
======================================================================================
Greater than 1.00 to 1.00 $ 5,000,000 $ 10,000,000 $ 25,000,000 $ 50,000,000
--------------------------------------------------------------------------------------
Less than or equal to 1.00 $ 10,000,000 n/a $ 50,000,000 n/a
to 1.00
======================================================================================
(c) Diligence. Parent has completed due diligence to its satisfaction
on the Target and the Property to be acquired;
(d) Structure. If the proposed acquisition is an acquisition of the
Capital Stock of a Target, the acquisition will be structured so that the
Target will become a Wholly-Owned Domestic Subsidiary; and, if the proposed
acquisition is an acquisition of assets, the acquisition will be structured
so that Parent or a Wholly-Owned Domestic Subsidiary shall acquire such
assets; and
(e) Material Adverse Effect. Neither Parent nor any of its
Subsidiaries shall, as a result of or in connection with any such
acquisition, assume or incur any contingent liabilities (whether relating
to environmental, tax, litigation or other matters) that could reasonably
be expected, as of the date of such acquisition, to result in the existence
or occurrence of a Material Adverse Effect.
"Permitted Liens" means the Liens permitted by Section 11.2.
"Person" means any individual, corporation, limited liability company,
business trust, association, company, partnership, joint venture, Governmental
Authority, or other entity.
"Plan" means any employee benefit plan established or maintained by any
Loan Party or any ERISA Affiliate and which is subject to Title IV of ERISA.
"Prime Rate" means the per annum rate of interest established from time to
time by Bank of America as its prime rate or reference rate, which rate may not
be the lowest rate of interest charged by Bank of America to its customers.
CREDIT AGREEMENT - Page 15
22
"Principal Office" means the office of Agent, located at Bank of America,
1850 ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, Agency Administrative Services 5596, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Prohibited Transaction" means any transaction described in Section 406 or
407 of ERISA or Section 4975(c)(1) of the Code for which no statutory or
administrative exemption applies.
"Projections" means Parent's forecasted consolidated (a) balance sheets,
(b) profit and loss statements, (c) cash flow statements, and (d) capitalization
statements; all materially consistent with Parent's historical financial
statements, together with appropriate supporting details and a statement of
underlying assumptions.
"Property" means, for any Person, property or assets of all kinds, real,
personal, or mixed, tangible or intangible (including, without limitation, all
rights relating thereto), whether owned or acquired on or after the Closing
Date.
"Quarterly Payment Date" means the last Business Day of February, May,
August, and November of each year, the first of which shall be August 31, 1999.
"Receivables" means, with respect to any Person, each and every "account,"
as such term is defined in article or chapter 9 of the UCC (or any successor
statute), and includes, without limitation, the unpaid portion of the
obligation, as stated on the respective invoice, or, if there is no invoice,
other writing, of a customer of such Person in respect of Inventory sold and
shipped or services rendered by such Person.
"Register" has the meaning specified in Section 16.8(d).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended, modified, or supplemented from time
to time or any successor regulation therefor.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System as the same may be amended, modified, or supplemented from time
to time or any successor regulation therefor.
"Regulatory Change" means, with respect to any Lender, any change after the
date of this Agreement (other than with respect to taxes excluded by the first
sentence of Section 6.6(a)) in U.S. federal, state, or foreign laws or
regulations (including, without limitation, Regulation D) or the adoption or
making after such date of any interpretations, directives, or requests (other
than with respect to taxes excluded by the first sentence of Section 6.6(a))
applying to a class of lenders including such Lender of or under any U.S.
federal or state, or any foreign, laws or regulations (whether or not having the
force of law) by any Governmental Authority or monetary authority charged with
the interpretation or administration thereof.
CREDIT AGREEMENT - Page 16
23
"Reimbursement Obligations" means all indebtedness, liabilities, and
obligations of any Loan Party to reimburse Agent or the Issuing Bank in
accordance with Section 2.6(e) for any demand for payment or drawing under a
Letter of Credit.
"Related Transactions" means the Brite Tender Offer, the Brite Acquisition,
the Brite Merger, the execution and delivery of the Transaction Documents, the
funding of the Loans on the Closing Date, and the payment of all fees, costs,
and expenses associated with the foregoing.
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, disposal, disbursement, leaching, or migration of
Hazardous Materials into the indoor or outdoor environment or into or from
Property owned or leased by such Person, including, without limitation, the
migration of Hazardous Materials through or in the air, soil, surface water,
ground water, or property, in violation of Environmental Laws.
"Remedial Action" means all actions required under applicable Environmental
Laws to (a) cleanup, remove, treat, or otherwise address Hazardous Materials in
the indoor or outdoor environment, (b) prevent the Release or threat of Release
or minimize the further Release of Hazardous Materials, or (c) perform
pre-remedial studies and investigations and post-remedial monitoring and care;
provided that "Remedial Action" shall not include such actions taken in the
normal course of business and in material compliance with Environmental Laws.
"Required Lenders" means any combination of Lenders having more than fifty
percent (50%) of the sum of (a) the Revolving Commitments or, if the Revolving
Commitments have terminated or have otherwise been fulfilled, the outstanding
principal amount of the Revolving Loans and participations in the Letters of
Credit and (b) (i) the unfunded Term Commitments (if any) plus the outstanding
principal amount of the Term Loans or (ii) if the Term Commitments have
terminated or have otherwise been fulfilled, the outstanding principal amount of
the Term Loans.
"Reportable Event" means any of the events set forth in Section 4043 of
ERISA for which the 30-day notice requirement has not been waived by the PBGC.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Libor Accounts, "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (a) any category of liabilities which includes deposits by reference
to which the Adjusted Libor Rate is to be determined, or (b) any category of
extensions of credit or other assets which include Libor Accounts. The Adjusted
Libor Rate shall be adjusted automatically on and as of the effective date of
any change in the Reserve Requirement.
"Revolving Commitment" means, as to each Lender, the obligation of such
Lender to make advances of funds and purchase participation interests in (or
with respect to the Issuing Bank as a Lender, hold other interests in) Letters
of Credit in an aggregate principal amount at any one time
CREDIT AGREEMENT - Page 17
24
outstanding up to but not exceeding the amount set forth opposite the name of
such Lender on Schedule 1.1 (or if applicable, the most recent Assignment and
Acceptance executed by such Lender) under the heading "Revolving Commitment", as
the same may be reduced or terminated pursuant to Section 2.5, Section 5.4, or
Section 13.2. The aggregate amount of the Revolving Commitments as of the
Closing Date equals Twenty-five Million Dollars ($25,000,000).
"Revolving Loans" means, as to any Lender, the advances made by such Lender
pursuant to Section 2.1, and, as to all Lenders making such Loans, all such
Loans made or held by such Lenders pursuant to Section 2.1.
"Revolving Maturity Date" means the earlier to occur of (a) August 29, 2003
or (b) the Term Maturity Date. "Revolving Notes" means the promissory notes
provided for by Section
2.2 and all amendments, restatements, or other modifications thereof.
"Securities" means any stock, shares, options, warrants, voting trust
certificates, or other instruments evidencing an ownership interest or a right
to acquire an ownership interest in a Person or any bonds, debentures, notes, or
other evidences of indebtedness for borrowed money, secured or unsecured.
"Security Agreements" means the Parent Security Agreement, the Borrower
Security Agreement, the Subsidiary Security Agreement, and any other security
agreement, pledge agreement, securities pledge agreement, or other form of
security agreement evidencing or creating a Lien on personal Property as
security for the Obligations or any portion thereof in form and substance
satisfactory to Agent and the Required Lenders executed by any Person, dated the
Closing Date or a subsequent date, as applicable, in favor of Agent, for the
benefit of Agent and the Lenders, and any such agreement, document, or
instrument executed pursuant to Article 7, and any and all amendments,
restatements, or other modifications thereof.
"Security Documents" means the Guaranties, the Security Agreements, and the
Mortgages, as such agreements may be amended, restated, or otherwise modified
from time to time, and any and all other agreements, deeds of trust, mortgages,
chattel mortgages, security agreements, pledges, guaranties, assignments of
proceeds, assignments of income, assignments of contract rights, assignments of
partnership interests, assignments of royalty interests, or other collateral
assignments, completion or surety bonds, standby agreements, subordination
agreements, undertakings, and other agreements, documents, instruments, and
financing statements now or hereafter executed and/or delivered by any Loan
Party in connection with or as security or assurance for the payment or
performance of the Obligations or any part thereof.
"Shares" means the issued and outstanding shares of Brite common stock.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities,
CREDIT AGREEMENT - Page 18
25
of such Person, (b) the present fair saleable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured, (c) such Person
is able to realize upon its assets and pay its debts and other liabilities,
contingent obligations, and other commitments as they mature in the normal
course of business, (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability to pay as
such debts and liabilities mature, and (e) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Stock Purchase Consideration" means as of any date of determination and
with respect to any acquisition by Parent or a Subsidiary of Parent, the
purchase price to be paid for the Capital Stock issued by the Target or the
assets of the Target, including all consideration paid which is not included in
the definition of Cash Purchase Price.
"Subsidiary" means, (a) when used to determine the relationship of a Person
to another Person, a Person of which an aggregate of more than fifty percent
(50%) or more of the Capital Stock is owned of record or beneficially by such
other Person, or by one or more Subsidiaries of such other Person, or by such
other Person and one or more Subsidiaries of such other Person, (i) if the
holders of such Capital Stock (A) are ordinarily, in the absence of
contingencies, entitled to vote for the election of a majority of the directors
(or other individuals performing similar functions) of such Person, even though
the right so to vote has been suspended by the happening of such a contingency,
or (B) are entitled, as such holders, to vote for the election of a majority of
the directors (or individuals performing similar functions) of such Person,
whether or not the right so to vote exists by reason of the happening of a
contingency, or (ii) in the case of Capital Stock which is not issued by a
corporation, if such ownership interests constitute a majority voting interest,
and (b) when used with respect to a Plan, ERISA, or a provision of the Code
pertaining to employee benefit plans, means, with respect to a Person, any
corporation, trade, or business (whether or not incorporated) which is under
common control with such Person and is treated as a single employer with such
Person under Section 414(b) or Section 414(c) of the Code and the regulations
thereunder.
"Subsidiary Guaranty" means a guaranty agreement executed and delivered by
a Domestic Subsidiary of Parent in favor of Agent, for the benefit of Agent and
the Lenders, in substantially the form of Exhibit E, as such Guaranty may be
amended, restated, or otherwise modified from time to time.
"Subsidiary Security Agreement" means a pledge and security agreement, in
form and substance satisfactory to Agent, between a Domestic Subsidiary (other
than Borrower) and Agent, for the benefit of Agent and the Lenders evidencing or
creating a Lien in the Collateral owned by such Domestic Subsidiary as security
for the Obligations or any portion thereof, as such agreement may be amended,
restated, or otherwise modified from time to time.
CREDIT AGREEMENT - Page 19
26
"Target" means the Person who is to be acquired or whose assets are to be
acquired by Parent or a Wholly-Owned Domestic Subsidiary in connection with a
Permitted Acquisition.
"Taxes" has the meaning specified in Section 6.6.
"Term Commitment" means, with respect to any Lender, the obligation of such
Lender to make advances of funds on the Closing Date and on the Brite Merger
Date (or with respect to any Person becoming a Lender after the Closing Date and
the Brite Merger Date, on such date) in the principal amount set forth opposite
the name of such Lender on Schedule 1.1 (or if applicable, the most recent
Assignment and Acceptance executed by such Lender) under the heading "Term
Commitment." The aggregate amount of all of the Term Commitments as of the
Closing Date equals One Hundred Twenty-five Million Dollars ($125,000,000).
"Term Loans" means, as to any Lender, the Term Loans made or held by such
Lender pursuant to Section 3.1 and, as to all Lenders making such Loans, all
such Loans made or held by such Lenders pursuant to Section 3.1.
"Term Maturity Date" means August 29, 2003; provided, however, unless
waived or extended by the Required Lenders, the "Term Maturity Date" shall be
October 4, 1999 if the Brite Merger has not been consummated by such date.
"Term Notes" means the promissory notes provided for by Section 3.2 and all
amendments, restatements, or other modifications thereof.
"Termination Event" means (a) a Reportable Event, or (b) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (c) the institution of proceedings
to terminate a Plan by the PBGC under Section 4042 of ERISA, or the appointment
of a trustee to administer any Plan.
"Total Commitment" means, as to any Lender, such Lender's (a) Revolving
Commitment, plus (b) such Lender's outstanding Term Loans, plus (c) such
Lender's unfunded Term Commitment, if any.
"Transaction Documents" means the Brite Tender Offer Documents, the Brite
Acquisition Documents, and the Loan Documents.
"Type" means either type of Account (i.e., a Base Rate Account or Libor
Account).
"UCC" means the Uniform Commercial Code as in effect in the State of Texas
and/or any other jurisdiction, the laws of which may be applicable to or in
connection with the creation, perfection, or priority of any Lien on any
Property created pursuant to any Security Document.
CREDIT AGREEMENT - Page 20
27
"Unfunded Vested Accrued Benefits" means with respect to any Plan at any
time, the amount (if any) by which (a) the present value of all vested
nonforfeitable benefits under such Plan exceeds, (b) the fair market value of
all Plan assets allocable to such benefits; all determined as of the then most
recent valuation date for such Plan.
"U.S." means the United States of America.
"Voting Stock" means Capital Stock of a Person having by the terms thereof
ordinary voting power to elect a majority of the board of directors (or similar
governing body) of such Person (irrespective of whether or not at the time
Capital Stock of any other class or classes of such Person shall have or might
have voting power by reason of the happening of any contingency).
"Wholly-Owned Domestic Subsidiary" means any Subsidiary that (i) is owned
100% by Parent and/or a Subsidiary of Parent, and (ii) is organized under the
laws of a state within the U.S.
"Year 2000 Compliant" has the meaning specified in Section 9.24.
"Year 2000 Problem" has the meaning specified in Section 9.24.
Section 1.2 Other Interpretive Provisions.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words refer
to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Article, Annex, Schedule and Exhibit
references are to this Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all instruments,
documents, agreements, certificates, indentures, notices and other
writings, however evidenced.
(ii) The term "including" is not limiting and means "including
without limitation."
(iii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding",
and the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments
shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document,
CREDIT AGREEMENT - Page 21
28
and (ii) references to any statute or regulation are to be construed as
including all statutory and regulatory provisions consolidating, amending,
replacing, supplementing, or interpreting the statute or regulation.
(e) The captions, headings, and arrangements of this Agreement are
for convenience of reference only and shall not affect the interpretation
of this Agreement.
(f) This Agreement and other Loan Documents may use several different
limitations, tests, or measurements to regulate the same or similar
matters. All such limitations, tests, and measurements are cumulative and
shall each be performed in accordance with their terms. Unless otherwise
expressly provided, any reference to any action of Agent or the Lenders by
way of consent, approval, or waiver shall be deemed modified by the phrase
"in its/their sole discretion."
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to Agent, each Lender,
and the Loan Parties, and are the products of all such parties.
Accordingly, this Agreement and the other Loan Documents shall not be
construed against Agent or the Lenders merely because of the Agent's or the
Lenders' involvement in preparation of this Agreement and the other Loan
Documents.
(h) Terms used herein that are defined in the UCC, unless otherwise
defined herein, shall have the meanings specified in the UCC.
Section 1.3 Accounting Terms and Determinations. Except as otherwise
expressly provided herein, all accounting terms used herein shall be
interpreted, and all financial statements and certificates and reports as to
financial matters required to be delivered to Agent and the Lenders hereunder
shall be prepared, in accordance with GAAP, on a "consistent basis" with those
used in the preparation of the financial statements referred to in Section 9.2.
All calculations made for the purposes of determining compliance with the
provisions of this Agreement shall be made by application of GAAP, on a
"consistent basis" with those used in the preparation of the financial
statements referred to in Section 9.2. Accounting principles are applied on a
"consistent basis" when the accounting principles applied in a current period
are comparable in all material respects to those accounting principles applied
in a preceding period. Changes in the application of accounting principles which
do not have a material impact on calculating the financial covenants herein
shall be deemed comparable in all material respects to accounting principles
applied in a preceding period. To enable the ready and consistent determination
of compliance by Parent with its obligations under this Agreement, Parent will
not, nor will it permit any other Loan Party to, change the manner in which
either the last day of its Fiscal Year or the last day of each of the first
three Fiscal Quarters of its Fiscal Year is calculated without the prior written
consent of the Required Lenders. In the event any changes in accounting
principles required by GAAP, recommended by any Loan Party's certified public
accountants or requested by Parent (or that Parent otherwise requests and Agent
and the
CREDIT AGREEMENT - Page 22
29
Required Lenders agree to accept, such agreement not unreasonably to be denied)
and implemented by any Loan Party occur and such changes result in a change in
the method of the calculation of financial covenants under this Agreement, then
Parent, Borrower, Agent, and the Required Lenders agree to enter into
negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such changes with the desired result that the criteria for
evaluating such covenants shall be the same after such changes as if such
changes had not been made. Until such time as such an amendment shall have been
executed and delivered by Parent, Borrower, Agent, and the Required Lenders, all
financial covenants, standards, and terms in this Agreement shall continue to be
calculated or construed as if such changes had not occurred.
Section 1.4 Time of Day. Unless otherwise indicated, all references in
this Agreement to times of day shall be references to Dallas, Texas time.
ARTICLE 2
Revolving Credit Facility
Section 2.1 Revolving Commitments. Subject to the terms and conditions of
this Agreement, each Lender severally agrees to make advances to Borrower from
time to time from and including the Closing Date to but excluding the Revolving
Maturity Date in an aggregate principal amount at any time outstanding up to but
not exceeding the amount of such Lender's Revolving Commitment as then in
effect; provided, however, (a) the Outstanding Revolving Credit applicable to a
Lender shall not at any time exceed such Lender's Revolving Commitment, and (b)
the Outstanding Revolving Credit of all of the Lenders shall not at any time
exceed the aggregate Revolving Commitments. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, Borrower may
borrow, prepay, and reborrow hereunder the amount of the Revolving Commitments
and may establish Base Rate Accounts and Libor Accounts thereunder and, until
the Revolving Maturity Date, Borrower may Continue Libor Accounts established
under the Revolving Loans or Convert Accounts established under the Revolving
Loans of one Type into Accounts of the other Type. Accounts of each Type under
the Revolving Loans made by each Lender shall be established and maintained at
such Lender's Applicable Lending Office for Revolving Loans of such Type.
Section 2.2 Revolving Notes. The Revolving Loans made by a Lender shall
be evidenced by a single promissory note of Borrower, in substantially the form
of Exhibit A, payable to the order of such Lender, in the maximum principal
amount equal to such Lender's Revolving Commitment as originally in effect (or,
if greater, its Revolving Commitment as thereafter increased) and otherwise duly
completed.
Section 2.3 Repayment of Revolving Loans. Borrower shall pay to Agent,
for the account of the Lenders, the prepayments of the Revolving Loans required
pursuant to Section 5.4(a) and the outstanding principal amount of all of the
Revolving Loans on the Revolving Maturity Date.
Section 2.4 Use of Proceeds. Subject to the terms of this Agreement, the
proceeds of the Revolving Loans shall be used by Borrower (a) to make an advance
to Parent to repay its existing indebtedness due to NationsBank, N.A. under that
certain Amended and Restated Loan Agreement dated November 18, 1998, between
Parent and NationsBank, N.A., (b) to pay up to $10,000,000 of (i) the cash
portion of the consideration due in connection with the Brite Tender Offer and
the Brite
CREDIT AGREEMENT - Page 23
30
Merger and (ii) part of the fees and expenses incurred in connection with the
Brite Acquisition and the Brite Merger, and (c) otherwise for general corporate
purposes, including, without limitation, to finance working capital requirements
of Parent and its Subsidiaries, arising in the ordinary course of business, and
for payment of the Reimbursement Obligations; provided that notwithstanding any
other provision of this Agreement or any other Loan Document to the contrary,
the aggregate amount of all Loans made to Borrower on the Closing Date shall not
exceed the loan value (as determined by Agent and each Lender in its sole
discretion) of the Collateral securing the Loans on the Closing Date, including
the loan value of the Shares purchased and pledged to Agent on the Closing Date
(valued at fifty percent (50.0%) of market value), and all Loans made at any
time (including, without limitation, on the Closing Date) shall be made in
compliance with Regulation U.
Section 2.5 Termination or Reduction of Revolving Commitments. Borrower
shall have the right to terminate fully or to reduce in part the unused portion
of the Revolving Commitments at any time and from time to time, provided that:
(a) Borrower shall not have the right to terminate or reduce in part any
unfunded portion of the Revolving Commitments that could or may be required to
be advanced by the Lenders to repay Reimbursement Obligations then outstanding;
(b) Borrower shall give Agent at least three (3) Business Days notice of each
such termination or reduction as provided in Section 5.3; and (c) each partial
reduction shall be in an aggregate amount at least equal to $5,000,000 or any
multiple $1,000,000 in excess thereof. The Revolving Commitments may not be
reinstated after they have been terminated or reduced.
Section 2.6 Letters of Credit.
(a) Commitment to Issue. Borrower may utilize the Revolving
Commitments by requesting that the Issuing Bank issue, and the Issuing
Bank, subject to the terms and conditions of this Agreement, shall issue,
standby or commercial documentary letters of credit for Borrower's account
(such letters of credit being referred to herein as the "Letters of
Credit", which may be for the account of any Loan Party); provided,
however, (i) the aggregate amount of outstanding Letter of Credit
Liabilities shall not at any time exceed $5,000,000, (ii) the Outstanding
Revolving Credit shall not at any time exceed the maximum amount prescribed
by Section 2.1, and (iii) the Outstanding Revolving Credit applicable to
any Lender shall not at any time exceed the maximum amount for such Lender
prescribed by Section 2.1. Upon the date of issue of a Letter of Credit,
the Issuing Bank shall be deemed, without further action by any party
hereto, to have sold to each Lender who holds a Revolving Commitment, and
each such Lender shall be deemed, without further action by any party
hereto, to have purchased from the Issuing Bank, a participation to the
extent of such Lender's Commitment Percentage (calculated with respect to
the Revolving Commitments) in such Letter of Credit and the related Letter
of Credit Liabilities. Upon termination of the Revolving Commitments, any
Letter of Credit then outstanding which has been fully cash collateralized
to the satisfaction of Agent and the Issuing Bank shall no longer be
considered a "Letter of Credit" covered by the terms of this Agreement and
any participating interest heretofore granted by the Issuing Bank to the
Lenders holding Revolving Commitments in such Letter of Credit shall be
deemed terminated but the letter of credit fees payable hereunder shall
continue to accrue to the Issuing Bank with respect to such Letter of
Credit until the expiry thereof.
CREDIT AGREEMENT - Page 24
31
(b) Letter of Credit Request Procedure. Borrower shall give Agent not
less than three (3) Business Days prior notice (effective upon receipt)
specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice Agent
shall notify the Issuing Bank and each Lender who holds a Revolving
Commitment of the contents thereof and of such Lender's Commitment
Percentage of the amount of the proposed Letter of Credit. Each Letter of
Credit (i) shall have an expiration date that does not extend beyond a date
which is the lesser of (A) one (1) year from the date of issuance (or in
the case of commercial documentary letters of credit ninety (90) days) or
(B) thirty (30) days prior to the Revolving Maturity Date, (ii) shall be
payable in Dollars, (iii) must support a transaction entered into or
obligation arising in the ordinary course of business, (iv) must be
satisfactory in form and substance to Agent and the Issuing Bank, and (v)
shall be issued pursuant to such documentation as Agent and the Issuing
Bank may require, including, without limitation, the Issuing Bank's
standard form Letter of Credit Agreement; provided, that, in the event of
any conflict between the terms of such agreement and the other Loan
Documents, the terms of the other Loan Documents shall control.
(c) Letter of Credit Fees. Borrower will pay to Agent, for the
account of each Lender holding a Revolving Commitment, a fee on such
Lender's Commitment Percentage (calculated with respect to the Revolving
Commitments only) of the daily average amount available for drawings under
the Letters of Credit, such fee (i) to be paid in arrears on the first
Quarterly Payment Date occurring after the date of the issuance of the
first Letter of Credit and on each Quarterly Payment Date thereafter until
the date of expiration or termination of all Letters of Credit and (ii) to
be calculated at a rate per annum equal to the Libor Rate Margin applicable
to the Revolving Loans on the basis of a year of 360 days and the actual
number of days elapsed (including the first day but excluding the last
day). After receiving any payment of any fees under this clause (c), Agent
will promptly pay to each Lender that holds a Revolving Commitment the fees
then due such Lender. Borrower will also pay to the Issuing Bank, for its
account only, a fee on the daily average amount available to be drawn under
all outstanding Letters of Credit, such fee (i) to be paid in arrears on
the first Quarterly Payment Date occurring after the date of the issuance
of the first Letter of Credit and on each Quarterly Payment Date thereafter
until the date of expiration or termination of all Letters of Credit and
(ii) to be calculated at a rate per annum equal to one-eighth of one
percent (0.125%) on the basis of a year of 360 days and the actual number
of days elapsed (including the first day but excluding the last day).
Borrower will also pay to the Issuing Bank, for its account only, all
customary fees for issuance, negotiation, amendment, or processing of the
Letters of Credit.
(d) Funding of Drawings. Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment or other drawing under such
Letter of Credit, the Issuing Bank shall so notify Agent and Agent shall so
notify Borrower and each Lender that holds a Revolving Commitment as to the
amount to be paid as a result of such demand or drawing and the respective
payment date. Not later than 1:00 p.m. (Dallas, Texas time) on the
applicable payment date if Borrower has not reimbursed the Issuing Bank for
the amount paid as a result of such demand or drawing, each Lender will
make available to Agent, at the Principal Office, in immediately available
funds, an amount equal to such Lender's
CREDIT AGREEMENT - Page 25
32
Commitment Percentage (calculated based only on the Revolving Commitments)
of the amount to be paid as a result of such demand or drawing which has
not been reimbursed even if the conditions to a Loan under Article 8 have
not been satisfied and Agent shall promptly pay such amounts to the Issuing
Bank.
(e) Reimbursements. Borrower shall be irrevocably and unconditionally
obligated to immediately reimburse the Issuing Bank (through Agent) for any
amounts paid by the Issuing Bank upon any demand for payment or drawing
under any Letter of Credit, without presentment, demand, protest, or other
formalities of any kind. All payments on the Reimbursement Obligations
shall be made to Agent not later than 1:00 p.m. (Dallas, Texas time) on the
date of the corresponding payment under the Letter of Credit by the Issuing
Bank; provided that Agent has provided notice to Borrower prior to 11:00
a.m. (Dallas, Texas time) on such day that such payment is due. In the
event such notice is received after 11:00 a.m. (Dallas, Texas time) on a
Business Day, such payment shall be due not later than 1:00 p.m. (Dallas,
Texas time) on the next succeeding Business Day. Subject to the other terms
and conditions of this Agreement, such reimbursement may be made by
Borrower requesting a Revolving Loan in accordance with Section 5.1, the
proceeds of which shall be credited against Borrower's Reimbursement
Obligations. Agent will pay to each Lender participating in a Letter of
Credit such Lender's Commitment Percentage (calculated based only on the
Revolving Commitments) of all amounts received from Borrower for
application in payment, in whole or in part, to the Reimbursement
Obligation in respect of any Letter of Credit, but only to the extent such
Lender has made payment to Agent in respect of such Letter of Credit
pursuant to clause (d) of this Section 2.6.
(f) Reimbursement Obligations Absolute. The Reimbursement Obligations
of Borrower under this Agreement shall be absolute, unconditional, and
irrevocable, and shall be performed strictly in accordance with the terms
of the Loan Documents under all circumstances whatsoever and Borrower
hereby waives any defense to the payment of the Reimbursement Obligations
based on any circumstance whatsoever, including, without limitation, in
either case, the following circumstances: (i) any lack of validity or
enforceability of any Letter of Credit or any other Loan Document; (ii) the
existence of any claim, set-off, counterclaim, defense, or other rights
which any Loan Party or any other Person may have at any time against any
beneficiary of any Letter of Credit, the Issuing Bank, Agent, any Lender,
or any other Person, whether in connection with any Loan Document or any
unrelated transaction; (iii) any statement, draft, or other documentation
presented under any Letter of Credit proving to be forged, fraudulent,
invalid, or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect whatsoever; (iv) payment by the Issuing
Bank under any Letter of Credit against presentation of a draft or other
document that does not comply with the terms of such Letter of Credit; or
(v) any other circumstance whatsoever, whether or not similar to any of the
foregoing.
(g) Assumption of Risk by Borrower. As among Borrower and the
Lenders, Borrower assumes all risks of the acts and omissions of, or misuse
of any of the Letters of Credit by, the respective beneficiaries of such
Letters of Credit. In furtherance and not in
CREDIT AGREEMENT - Page 26
33
limitation of the foregoing, subject to the provisions of the applications
for the issuance of Letters of Credit, the Lenders, the Issuing Bank, and
Agent shall not be responsible for:
(i) the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any document submitted by any Person in connection
with the application for and issuance of and presentation of drafts
with respect to any of the Letters of Credit, even if it should prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent, or forged;
(ii) the validity or sufficiency of any instrument transferring
or assigning, or purporting to transfer or assign, any 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) the failure of the beneficiary of any Letter of Credit to
comply duly with conditions required in order to draw upon such Letter
of Credit;
(iv) errors, omissions, interruptions, or delays in
transmission or delivery of any messages, by mail, cable, telegraph,
telex, or otherwise, whether or not they be in cipher;
(v) errors in interpretation of technical terms;
(vi) 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) the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
(viii) any consequences arising from causes beyond the control of
any Lender or the Issuing Bank, including, without limitation, any act
of any Governmental Authority.
None of the foregoing shall affect, impair, or prevent the vesting of any of
the Lenders', the Issuing Bank's, or Agent's rights or powers under this
Section 2.6. Borrower shall have a claim against the Issuing Bank, and the
Issuing Bank shall be liable to Borrower, to the extent of any direct (but not
indirect, consequential, or punitive) damages suffered by Borrower which
Borrower proves in a final nonappealable judgment were caused by (A) the
Issuing Bank's willful misconduct or gross negligence in determining whether
documents presented under any Letter of Credit complied with the terms thereof
or (B) the Issuing Bank's willful failure to pay under any Letter of Credit
after presentation to it of documentation strictly complying with the terms and
conditions of such Letter of Credit. The Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
CREDIT AGREEMENT - Page 27
34
ARTICLE 3
Term Loan Facility
Section 3.1 Term Loans. Subject to the terms and conditions of this
Agreement, each Lender who holds a Term Commitment severally agrees to make an
advance of funds, subject to the provisions of Section 3.4, to Borrower on the
Closing Date to fund the Brite Tender Offer and on the Brite Merger Date to fund
any remaining cash requirements of Borrower in connection with the Brite
Acquisition in an aggregate principal amount not to exceed the amount of such
Lender's Term Commitment as then in effect. Each advance of a Term Commitment
will be made pro rata among the holders of the Term Commitments in relation to
their separate Commitments. Borrower may not repay and reborrow advances under
the Term Loans. Borrower may establish Base Rate Accounts or Libor Accounts
under the Term Loans and, until the Term Maturity Date, Borrower may Continue
Libor Accounts established under the Term Loans or Convert Accounts established
under the Term Loans of one Type into Accounts of another Type. Accounts of each
Type established under the Term Loans made by each Lender shall be made and
maintained at such Lender's Applicable Lending Office for Accounts of such Type.
The amount of the Term Commitment shall be reduced on the Closing Date by the
amount of the Term Loans made on the Closing Date, and the remaining Term
Commitment shall terminate on the Brite Merger Date.
Section 3.2 Term Notes. Each Term Loan made by a Lender shall be
evidenced by a single promissory note of Borrower in substantially the form of
Exhibit B, payable to the order of such Lender, in the maximum principal amount
equal to its Term Commitment and otherwise duly completed.
Section 3.3 Repayment of Term Loans. Borrower shall pay to Agent for the
account of the Lenders who hold Term Loans the aggregate principal amount of the
Term Loans as follows:
(a) Fourteen (14) consecutive quarterly principal installments due
and payable on each Quarterly Payment Date commencing on May 31, 2000 and
continuing on each Quarterly Payment Date thereafter, through and including
the Term Maturity Date, in accordance with the following schedule:
==========================================
Quarterly Payment Scheduled
Date Amortization
==========================================
May 31, 2000 $5,000,000
August 31, 2000 $5,000,000
November 30, 2000 $7,500,000
February 28, 2001 $7,500,000
May 31, 2001 $7,500,000
August 31, 2001 $7,500,000
November 30, 2001 $10,000,000
February 28, 2002 $10,000,000
May 31, 2002 $10,000,000
August 30, 2002 $10,000,000
November 29, 2002 $10,000,000
February 28, 2003 $10,000,000
May 30, 2003 $12,500,000
August 29, 2003 $12,500,000
-----------------------------------------
CREDIT AGREEMENT - Page 28
35
(b) Borrower shall make all prepayments of the Term Loans required
pursuant to the provisions of Section 5.4(a).
(c) In any event, all unpaid Obligations in respect of the Term Loans
will be due and payable on the Term Maturity Date.
Section 3.4 Use of Proceeds. Subject to the terms of this Agreement, (a)
the proceeds of the initial Term Loans shall be used by Borrower to pay (i) the
cash portion of the aggregate purchase price of the Shares acquired by Borrower
in connection with the Brite Acquisition, and (ii) costs and expenses incurred
in connection with the Brite Acquisition, and for no other purpose; provided
that notwithstanding any other provision of this Agreement or any other Loan
Document to the contrary, the aggregate amount of all Loans made to Borrower on
the Closing Date shall not exceed the loan value (as determined by Agent in its
sole discretion) of the Collateral securing the Loans on the Closing Date,
including the loan value of the Shares purchased and pledged to Agent on the
Closing Date (fifty percent (50.0%) of "market value", as determined pursuant to
Regulation U), and all Loans made at any time (including, without limitation, on
the Closing Date) shall be made in compliance with Regulation U, and (b) the
proceeds of any subsequent advance of the Term Loan shall be used to pay the
cash consideration in connection with the Brite Merger and to pay costs and
expenses incurred in connection with the Brite Acquisition and the Brite Merger
and for no other purpose.
ARTICLE 4
Interest and Fees
Section 4.1 Interest Rate. Borrower shall pay to Agent, for the account
of each Lender, interest on the unpaid principal amount of each Loan made by
such Lender for the period commencing on the date of such Loan to but excluding
the date such Loan is due, at a fluctuating rate per annum equal to the
Applicable Rate. The term "Applicable Rate" means:
CREDIT AGREEMENT - Page 29
36
(a) during the period that such Loan or portion thereof is
outstanding as a Base Rate Account, the Base Rate, plus the Base Rate
Margin; and
(b) during the period that such Loan or portion thereof is
outstanding as a Libor Account or as Libor Accounts, the Adjusted Libor
Rate, plus the Libor Rate Margin.
Section 4.2 Determinations of Margins and Commitment Fee Rate. From the
Closing Date until the first Margin Adjustment Date, the margins identified in
Section 4.1 and the Commitment Fee Rate shall be as follows: (a) the Base Rate
Margin shall be one and one-quarter percent (1.25%); (b) the Libor Rate Margin
shall be two and one-half percent (2.50%); and (c) the Commitment Fee Rate shall
be one-half percent (0.50%). Upon delivery of the certificate required pursuant
to Section 10.1(d) after the end of each Fiscal Quarter commencing with such
certificate delivered for the Fiscal Quarter ending November 30, 1999, the
Commitment Fee Rate, the Base Rate Margin, and the Libor Rate Margin shall
automatically be adjusted to the fee or rate, as applicable, corresponding to
the Leverage Ratio of Parent set forth in the following table, such automatic
adjustment to take effect as of the date that is three (3) Business Days after
the date on which Agent receives such certificate (the "Margin Adjustment
Date").
================================================================================
BASE RATE LIBOR RATE COMMITMENT
LEVERAGE RATIO MARGIN MARGIN FEE RATE
================================================================================
Greater or equal to than 2.00 to 1.25% 2.50% 0.50%
1.00
Greater than or equal to 1.50 to 1.00% 2.25% 0.50%
1.00 but less than 2.00 to 1.00
Greater than or equal to 0.75 to 0.75% 2.00% 0.50%
1.00 but less than 1.50 to 1.00
Less than 0.75 to 1.00 0.50% 1.75% 0.50%
================================================================================
If Borrower fails to deliver such certificate with respect to any Fiscal Quarter
which sets forth the Leverage Ratio within the period of time required by
Section 10.1(d): (y) the Base Rate Margin shall automatically be adjusted to one
and one-quarter (1.25%) per annum, and (z) the Libor Rate Margin (for Interest
Periods commencing after the applicable Adjustment Date) shall automatically be
adjusted to two and one-half percent (2.50%) per annum. The automatic
adjustments provided for in the preceding sentence shall remain in effect until
subsequently adjusted prospectively in accordance herewith upon delivery of the
required certificate.
Section 4.3 Payment Dates. Accrued interest on the Loans shall be due and
payable as follows: (a) in the case of Loans outstanding as Base Rate Accounts,
on each Quarterly Payment Date and on the Maturity Date of such Loan; and (b) in
the case of Loans outstanding as Libor Accounts and with respect to each such
Account, on (i) the last day of the Interest Period with
CREDIT AGREEMENT - Page 30
37
respect thereto, (ii) in the case of an Interest Period greater than three
months, at three-month intervals after the first day of such Interest Period,
and (iii) on the Maturity Date of such Loan.
Section 4.4 Default Interest. Notwithstanding anything to the contrary
contained in this Agreement, during the existence of an Event of Default,
Borrower will pay to Agent for the account of each Lender interest at the
applicable Default Rate on any principal of any Loan made by such Lender, any
Reimbursement Obligation, and (to the fullest extent permitted by law) any other
amount payable by Borrower under any Loan Document to or for the account of
Agent or such Lender.
Section 4.5 Conversions and Continuations of Accounts. Subject to Section
5.2, Borrower shall have the right from time to time to Convert all or part of
any Base Rate Account in existence under a Loan into a Libor Account under the
same Loan or to continue Libor Accounts in existence under a Loan as Libor
Accounts under the same Loan, provided that: (a) Borrower shall give Agent
notice of each such Conversion or Continuation as provided in Section 5.3; (b)
subject to Section 6.3, a Libor Account may only be Converted on the last day of
the Interest Period therefor; and (c) except for Conversions into Base Rate
Accounts, no Conversions or Continuations shall be made without the consent of
Agent and the Required Lenders at any time during the existence of a Default.
Section 4.6 Commitment Fee. Borrower agrees to pay to Agent for the
account of each Lender a commitment fee (determined according to the provisions
of Section 4.2) on the daily average unused amount of such Lender's Total
Commitment for the period from and including the Closing Date to and including
the Maturity Date, at a per annum rate equal to the Commitment Fee Rate,
provided that for purposes of calculating such fee the amount of outstanding
Letters of Credit shall constitute use of the Total Commitment. Accrued
Commitment Fees under this Section shall be payable in arrears on each Quarterly
Payment Date and on the Maturity Date.
Section 4.7 Computations. Interest and fees payable by Borrower hereunder
and under the other Loan Documents shall be computed on the basis of a year of
360 days and the actual number of days elapsed (including the first day but
excluding the last day) in the period for which interest is payable unless such
calculation would result in a rate that exceeds the Maximum Rate, in which case
interest shall be calculated on the basis of a year of 365 or 366 days, as the
case may be. Notwithstanding anything to the contrary contained in this Section,
interest payable by Borrower hereunder and under the other Loan Documents with
respect to the Base Rate shall be computed on the basis of a year of 365 or 366
days, as the case may be, and the actual number of days elapsed (including the
first day but excluding the last day) in the period for which interest is
payable. Each determination of an interest rate by Agent shall be conclusive and
binding on Borrower and the Lenders in the absence of manifest error. Agent
will, at the request of Borrower or any Lender, deliver to Borrower or such
Lender, as the case may be, a statement showing the quotations used by Agent in
determining any interest rate and the resulting interest rate.
Section 4.8 Agent Fee. Each of Parent and Borrower agrees to pay to Agent
on the Closing Date and on each anniversary thereof the administrative fee
described in the Agent's Letter.
CREDIT AGREEMENT - Page 31
38
ARTICLE 5
Administrative Matters
Section 5.1 Borrowing Procedure. Borrower shall give Agent, and Agent
will give the Lenders, notice of each borrowing under the Commitments in
accordance with Section 5.3. Not later than 1:00 p.m. (Dallas, Texas time) on
the date specified for each borrowing under the applicable Commitment, each
Lender obligated with respect to such Commitment will make available the amount
of the Loan to be made by it on such date to Agent, at the Principal Office, in
immediately available funds, for the account of Borrower. The amounts received
by Agent shall, subject to the terms and conditions of this Agreement, promptly
be made available to Borrower at Borrower's direction by transferring the same,
in immediately available funds by wire transfer, automated clearinghouse debit,
or interbank transfer to (a) a bank account of Borrower designated by Borrower
in writing or (b) a Person or Persons designated by Borrower in writing.
Section 5.2 Minimum Amounts. Each borrowing under the Revolving
Commitment shall be in an amount at least equal to $1,000,000 or an integral
multiple of $100,000 in excess thereof. Except for Conversions and prepayments
pursuant to Section 5.4(a) and Article 6, each Conversion and prepayment of
principal of the Loans shall be in an amount at least equal to $1,000,000 or an
integral multiple of $100,000 in excess thereof. Notwithstanding the foregoing,
each borrowing or Continuation under the Commitments as a Libor Account and each
Conversion of amounts outstanding as a Base Rate Account to a Libor Account
shall be in an amount at least equal to $5,000,000 or an integral multiple of
$1,000,000 in excess thereof.
Section 5.3 Certain Notices.
(a) Notices by Borrower to Agent of terminations or reductions of
Commitments, of borrowings, Conversions, Continuations, and prepayments of
Loans, and of the duration of Interest Periods shall be irrevocable and
shall be effective only if received by Agent not later than 12:00 noon
(Dallas, Texas time) on the Business Day prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation, or prepayment
as specified below:
CREDIT AGREEMENT - Page 32
39
================================================================================
Notice Number of
Business Days
Prior
================================================================================
Borrowing of Loans as Base Rate Accounts 1
Borrowing of Loans as Libor Accounts 3
Conversions or Continuations of Loans and termination or 3
reduction of Commitments
Prepayment of Loans which are Base Rate Accounts 1
Prepayment of Loans which are Libor Accounts 3
================================================================================
Notwithstanding the foregoing, Borrower may give an effective notice of
borrowing of Revolving Loans as a Base Rate Account in accordance with
Section 2.6(e) not later than 10:00 a.m. (Dallas, Texas time) on the
Business Day of the proposed borrowing if the proceeds of such borrowing
will be used to satisfy Reimbursement Obligations. Any notices of the type
described in this Section which are received by Agent after the applicable
time set forth above on a Business Day shall be deemed to be received and
shall be effective on the next Business Day. Each such notice of
termination or reduction shall specify the applicable Commitments to be
affected and the amount of the Commitments to be terminated or reduced.
Each such notice of borrowing, Conversion, Continuation, or prepayment
shall be in the form of Exhibit G, appropriately completed by an authorized
representative of Borrower, and shall specify (a) the Loans to be borrowed
or prepaid or the Accounts to be Converted or Continued; (b) the amount
(subject to Section 5.2) to be borrowed, Converted, Continued, or prepaid;
(c) in the case of a Conversion, the Type of Account to result from such
Conversion; (d) in the case of a borrowing, the Type of Account or Accounts
to be applicable to such borrowing and the amounts thereof; (e) in the
event a Libor Account is selected, the duration of the Interest Period
therefor; and (f) the date of borrowing, Conversion, Continuation, or
prepayment (which shall be a Business Day).
(b) Any notices by Borrower of the type described in this Section may
be made orally or in writing and, if made orally, must be confirmed
immediately in writing (which may be by telecopy, provided that such
telecopy is promptly followed by delivery of an original signed notice) on
the same Business Day on which such oral notice is given; provided that any
such oral notice shall be deemed to be controlling and proper notice in the
event of a discrepancy with or failure to receive a confirming written
notice. Agent shall notify the Lenders of the contents of each such notice
on the date of its receipt of the same or, if received after the applicable
time set forth above on a Business Day, on the next Business Day. In the
event Borrower fails to select the Type of Account applicable to a Loan, or
the duration of any Interest Period for any Libor Account, within the time
period and otherwise as provided in this Section, such Account (if
outstanding as a Libor Account) will be automatically Converted into a Base
Rate Account on the last day of the Interest Period for such Account or (if
outstanding as a Base Rate Account) will remain as, or (if not then
outstanding) will be made as, a Base Rate Account. Borrower may not borrow
any
CREDIT AGREEMENT - Page 33
40
Loans as a Libor Account, Convert any Base Rate Accounts into Libor
Accounts, or Continue any Libor Account as a Libor Account if the
Applicable Rate for such Libor Accounts would exceed the Maximum Rate.
Section 5.4 Prepayments.
(a) Mandatory.
(i) Revolving Loans. If at any time the Outstanding Revolving
Credit exceeds the aggregate Revolving Commitments, Borrower shall,
within one (1) Business Day after the occurrence thereof, prepay the
outstanding Revolving Loans by the amount of such excess.
(ii) Prepayments from Asset Dispositions. Immediately upon
receipt by Parent or any of its Subsidiaries of the Net Proceeds of
any Asset Disposition, Borrower shall make a prepayment in respect of
the Obligations equal to the amount of such Net Proceeds as provided
by Section 5.4(a)(vi) or if the Term Loans have been fully repaid,
such prepayment shall be applied to the Revolving Loans and the
Revolving Commitments shall be permanently reduced by a corresponding
amount; provided, however, that if such Asset Disposition occurs in
the ordinary course of business of such Person and if no Default is in
existence, Borrower shall not be required to make such prepayment to
the extent that the Net Proceeds from any such Asset Disposition are
less than $1,000,000 and the Net Proceeds from all such Asset
Dispositions during the term of this Agreement do not exceed
$5,000,000 in the aggregate; provided, further, however, that if
Parent's Leverage Ratio, as reported pursuant to the most recent
Compliance Certificate delivered to Agent and the Lenders pursuant to
Section 10.1(c), is less than or equal to 1.0 to 1.0, no such
prepayment will be required if and to the extent that the Net Proceeds
of any such Asset Disposition, other than a disposition of any line of
business or operations of any Loan Party, are fully re-invested in
productive assets (including, but not limited to, software licenses)
used in the ordinary course of such Person's business within one
hundred twenty (120) days of the receipt of such Net Proceeds.
(iii) Prepayments from Debt Offerings. In the event that Parent
or any Subsidiary of Parent issues any debt Securities (including,
without limitation, any subordinated debt Securities) (other than Debt
permitted by Section 11.1) no later than the third Business Day
following the date of receipt of the proceeds from such issuance,
Borrower shall make a prepayment in respect of the Obligations equal
to the amount of the Net Proceeds in prepayment of the Loans as
provided in Section 5.4(a)(vi).
(iv) Prepayments from Equity Offerings. At any time Parent's
Leverage Ratio as reported pursuant to the most recent Compliance
Certificate delivered to Agent and the Lenders pursuant to Section
10.1(c) is greater than 1.00 to 1.00, in the event that Parent or any
Subsidiary of Parent issues Capital Stock in any public
CREDIT AGREEMENT - Page 34
41
offering or private placement or receives an additional capital
contribution in respect of existing Capital Stock or other Securities
(including, without limitation, debt Securities), other than such
issuance or placement made exclusively in payment of, or funding for,
a Permitted Acquisition, part of any employee or executive stock
option plan, stock purchase plan, or restricted stock plan (or capital
contribution in respect thereof) or issued in exchange for outstanding
debt or equity securities, no later than the third Business Day
following the date of receipt of the proceeds from such issuance,
Borrower shall make a prepayment in respect of the Obligations equal
to the Net Proceeds of such issuance, in prepayment of the Loans as
provided in Section 5.4(a)(vi).
(v) Prepayments from Excess Cash Flow. Commencing with
Parent's Fiscal Year ending February 28, 2000, and continuing each
Fiscal Year ending thereafter, if Parent's Leverage Ratio calculated
as of such Fiscal Year end for the preceding four Fiscal Quarters is
greater than 1.00 to 1.00, Borrower shall, within one hundred twenty
(120) days of such Fiscal Year end, make a prepayment of the Loans and
other Obligations then outstanding in an amount equal to the lesser of
(A) seventy-five percent (75.0%) of the remainder of Parent's Excess
Cash Flow minus all prepayments made pursuant to this clause (v) prior
to the date of such calculation or (B) an amount necessary to reduce
Parent's Leverage Ratio as calculated above, but after giving effect
to such prepayment, to 1.00 to 1.00, such prepayment to be applied as
provided in Section 5.4(a)(vi).
(vi) Application of Proceeds of Prepayments. All prepayments of
Term Loans pursuant to this Section 5.4(a) shall be accompanied by an
appropriate notice of prepayment in accordance with Section 5.3 and
shall be applied to the Term Loans in the inverse order of maturity of
the remaining installments of principal of the Term Loans until the
Term Loans are paid in full. Upon payment of the Term Loans in full,
no further prepayment will be required pursuant to the terms of this
Section 5.4(a), other than as provided in Section 5.4(a)(i) and
Section 5.4(a)(ii).
(b) Optional. Subject to Section 5.2 and the provisions of this
clause (b), Borrower may, at any time and from time to time without premium
or penalty upon prior notice to Agent as specified in Section 5.3, prepay
or repay any Loan in full or in part. Any optional prepayment of the Term
Loans shall be accompanied with accrued interest on the amount prepaid to
the date of prepayment. Any partial prepayments of the Term Loans shall be
applied to installments due under the Term Loans, pro rata with respect to
each remaining installment of principal. Loans outstanding as a Libor
Account may be prepaid or repaid only on the last day of the Interest
Period applicable thereto unless Borrower pays to Agent, for the account of
the applicable Lenders, any amounts due under Section 6.5 as a result of
such prepayment or repayment.
Section 5.5 Method of Payment. Except as otherwise expressly provided
herein, all payments of principal, interest, and other amounts to be made by
Borrower or any other Loan Party under the Loan Documents shall be made to Agent
at the Principal Office for the account of each
CREDIT AGREEMENT - Page 35
42
Lender's Applicable Lending Office in Dollars and in immediately available
funds, without set-off, deduction, or counterclaim, not later than 1:00 p.m.
(Dallas, Texas time) on the date on which such payment shall become due (each
such payment made after such time on such due date to be deemed to have been
made on the next succeeding Business Day). Borrower shall, at the time of making
each such payment, specify to Agent the sums payable under the Loan Documents to
which such payment is to be applied (and in the event that Borrower fails to so
specify, or if an Event of Default is in existence, Agent may apply such payment
to the Obligations in such order and manner as it may elect in its sole
discretion, subject to Section 5.6 and provided that when applying any such
amounts to any Loans, Loans outstanding as Base Rate Accounts shall be prepaid
in full prior to any application to Loans subject to Libor Accounts). Each
payment received by Agent under any Loan Document for the account of a Lender
shall be paid to such Lender by 3:00 p.m. (Dallas, Texas time) on the date the
payment is deemed made to Agent in immediately available funds, for the account
of such Lender's Applicable Lending Office. Whenever any payment under any Loan
Document shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of the payment of
interest and commitment fee, as the case may be.
Section 5.6 Pro Rata Treatment. Except to the extent otherwise provided
herein: (a) each Loan shall be made by the Lenders holding Commitments for such
Loan, each payment of commitment fees under Section 4.6 and letter of credit
fees under Section 2.6(c) shall be made for the account of the Lenders holding
Revolving Commitments and each termination or reduction of the Commitments shall
be applied to the Commitments of the Lenders holding the applicable Commitments,
pro rata according to their respective Commitment Percentages (calculated with
respect to the Commitments for the Loans in question only); (b) the making,
Conversion, and Continuation of Accounts of a particular Type (other than
Conversions provided for by Section 6.4) shall be made pro rata among the
Lenders holding Accounts of such Type according to their respective Commitment
Percentages (calculated with respect to the Commitments for the Loans in
question only); (c) each payment and prepayment of principal of or interest on
Loans or Reimbursement Obligations by Borrower shall be made to Agent for the
account of the Lenders holding such Loans or Reimbursement Obligations (or
participation interests therein) pro rata in accordance with the respective
unpaid principal amounts of such Loans or participation interests held by such
Lenders; provided that as long as no default in the payment of interest exists,
payments of interest made when Lenders are holding different types of Accounts
applicable to the same Loan as a result of the application of Section 6.4, shall
be made to the Lenders in accordance with the amount of interest owed to each;
and (d) the Lenders holding Revolving Commitments shall purchase from the
Issuing Bank participations in the Letters of Credit to the extent of their
respective Commitment Percentages (calculated only with respect to the Revolving
Commitments). All payments of the Term Loans shall be applied pro rata with
respect to each installment of principal. If at any time payment, in whole or in
part, of any amount distributed by Agent hereunder is rescinded or must
otherwise be restored or returned by Agent as a preference, fraudulent
conveyance, or otherwise under any bankruptcy, insolvency, or similar law, then
each Person receiving any portion of such amount agrees, upon demand, to return
the portion of such amount it has received to Agent.
Section 5.7 Sharing of Payments. If a Lender shall obtain payment of any
principal of or interest on any of the Obligations due to such Lender hereunder
directly (and not through Agent)
CREDIT AGREEMENT - Page 36
43
through the exercise of any right of set-off, banker's lien, counterclaim, or
similar right, or otherwise, it shall promptly purchase from the other Lenders
participations in the Obligations held by the other Lenders in such amounts, and
make such other adjustments from time to time as shall be equitable to the end
that all the Lenders shall share the benefit of such payment pro rata in
accordance with the unpaid principal of and interest on the Obligations then due
to each of them. To such end, all of the Lenders shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if all or any portion of such excess payment is thereafter rescinded or must
otherwise be restored. Borrower agrees, to the fullest extent it may effectively
do so under applicable law, that any Lender so purchasing a participation in the
Obligations held by the other Lenders may exercise all rights of set-off,
banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Obligations in
the amount of such participation. Nothing contained herein shall require any
Lender to exercise any such right or shall affect the right of any Lender to
exercise, and retain the benefits of exercising, any such right with respect to
any other indebtedness, liability, or obligation of Borrower.
Section 5.8 Non-Receipt of Funds by Agent.
(a) Unless Agent shall have been notified by a Lender or Borrower
(the "Payor") prior to the date on which such Lender is to make payment to
Agent hereunder or Borrower is to make a payment to Agent, for the account
of one or more of Agent or the Lenders, as the case may be (such payment
being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to Agent, Agent may assume that the Required Payment has been made
and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient on such date
and, if the Payor has not in fact made the Required Payment to Agent, (i)
the recipient of such payment shall, on demand, pay to Agent the amount
made available to it together with interest thereon in respect of the
period commencing on the date such amount was so made available by Agent
until the date Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such period, and (ii) Agent shall be entitled to
offset against any and all sums to be paid to such recipient, the amount
calculated in accordance with the foregoing clause (a).
(b) The Commitments and other obligations of the Lenders under any
Loan Document are several. The default by any Lender in making a Loan in
accordance with its Commitment shall not relieve the other Lenders of their
obligations under any Loan Document. In the event of any default by any
Lender in making any Loan, each nondefaulting Lender shall be obligated to
make its Loan but shall not be obligated to advance the amount which the
defaulting Lender was required to advance hereunder. No Lender shall be
responsible for any act or omission of any other Lender.
Section 5.9 Participation Obligations Absolute; Failure to Fund
Participation. The obligations of a Lender holding a Revolving Commitment to
fund its participation in the Letters of Credit in accordance with the terms
hereof shall be absolute, unconditional, and irrevocable and shall be performed
strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever, including, without limitation, the following
circumstances: (a) any lack of validity of
CREDIT AGREEMENT - Page 37
44
any Loan Document; (b) the occurrence of any Default; (c) the existence of any
claim, set-off, counterclaim, defense, or other right which such Lender, any
Loan Party, or any other Person may have; (d) the occurrence of any event that
has or could reasonably be expected to have a Material Adverse Effect on any
Loan Party; (e) the failure of any condition to a Loan under Article 8 to be
satisfied; (f) the fact that after giving effect to the funding of the
participation the Outstanding Revolving Credit may exceed the aggregate
Revolving Commitments; or (g) any other circumstance whatsoever, whether or not
similar to any of the foregoing. If a Lender fails to fund its participation in
a Letter of Credit as required hereby, such Lender shall, subject to the
foregoing proviso, remain obligated to pay to Agent the amount it failed to fund
on demand together with interest thereon in respect of the period commencing on
the date such amount should have been funded until the date the amount was
actually funded to Agent at a rate per annum equal to the Federal Funds Rate for
such period and Agent shall be entitled to offset against any and all sums to be
paid to such Lender hereunder the amount due Agent under this sentence.
ARTICLE 6
Change in Circumstances
Section 6.1 Increased Cost and Reduced Return.
(a) Increased Cost. If, after the Closing Date, any Regulatory Change
or compliance by any Lender (or its Applicable Lending Office) with any
request or directive (whether or not having the force of law) of any
Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any Libor
Accounts, its Notes, or its obligation to make Libor Accounts, or
change the basis of taxation of any amounts payable to such Lender (or
its Applicable Lending Office) under this Agreement or its Notes in
respect of any Libor Accounts (other than franchise taxes or taxes
imposed on or measured by the net income of such Lender by the
jurisdiction in which such Lender is organized, has its principal
office or such Applicable Lending Office, or is doing business);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the
Reserve Requirement utilized in the determination of the Adjusted
Libor Rate) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities or commitments of, such
Lender (or its Applicable Lending Office), including the Commitments
of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending
Office) or the London interbank market any other condition affecting
this Agreement or its Notes or any of such extensions of credit or
liabilities or commitments;
CREDIT AGREEMENT - Page 38
45
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, Converting into,
Continuing, or maintaining any Libor Accounts or to reduce any sum received
or receivable by such Lender (or its Applicable Lending Office) under this
Agreement or its Notes with respect to any Libor Accounts, then Borrower
shall pay to such Lender on demand such amount or amounts as will
compensate such Lender for such increased cost or reduction. If any Lender
requests compensation by Borrower under this Section 6.1(a), Borrower may,
by notice to such Lender (with a copy to Agent), suspend the obligation of
such Lender to make or maintain Libor Accounts, or to Convert Base Rate
Accounts into Libor Accounts, until the event or condition giving rise to
such request ceases to be in effect (in which case the provisions of
Section 6.4 shall be applicable); provided that such suspension shall not
affect the right of such Lender to receive the compensation so requested.
(b) Capital Adequacy. If, after the date hereof, any Lender shall
have determined that any Regulatory Change has or would have the effect of
reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy) by an amount deemed by such Lender to be material, then from time
to time upon demand, Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
(c) Claims Under this Section 6.1. Each Lender shall promptly notify
Borrower and Agent of any event of which it has knowledge, occurring after
the date hereof, which will entitle such Lender to compensation pursuant to
this Section 6.1 and will designate a different Applicable Lending Office
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the judgment of such Lender, be otherwise
disadvantageous to it. Any Lender claiming compensation under this Section
6.1 shall furnish to Borrower and Agent a statement setting forth the
additional amount or amounts to be paid to it hereunder which shall be
conclusive in the absence of manifest error. In determining such amount,
such Lender may use any reasonable averaging and attribution methods.
Section 6.2 Limitation on Libor Accounts. If on or prior to the first day
of any Interest Period for any Libor Account:
(a) Agent determines (which determination shall be conclusive) that
by reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Libor Rate for such
Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify Agent that the Adjusted Libor Rate will not
adequately and fairly reflect the cost to the Lenders of funding Libor
Accounts for such Interest Period;
CREDIT AGREEMENT - Page 39
46
then Agent shall give Borrower prompt notice thereof specifying the amounts or
periods, and so long as such condition remains in effect, the Lenders shall be
under no obligation to make additional Libor Accounts, Continue Libor Accounts,
or to Convert Base Rate Accounts into Libor Accounts and Borrower shall, on the
last day(s) of the then current Interest Period(s) for the outstanding Libor
Accounts, either prepay such Libor Accounts or Convert such Libor Accounts into
Base Rate Accounts in accordance with the terms of this Agreement.
Section 6.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Libor Accounts hereunder,
then such Lender shall promptly notify Borrower and Agent thereof and such
Lender's obligation to make or Continue Libor Accounts and to Convert Base Rate
Accounts into Libor Accounts shall be suspended until such time as such Lender
may again make, maintain, and fund Libor Accounts (in which case the provisions
of Section 6.4 shall be applicable).
Section 6.4 Treatment of Affected Accounts. If the obligation of any
Lender to make a particular Libor Account or to Continue, or to Convert Base
Rate Accounts into, Libor Accounts shall be suspended pursuant to Section 6.1 or
Section 6.3 (Accounts of such Type being herein called "Affected Accounts"),
such Lender's Affected Accounts shall be automatically Converted into Base Rate
Accounts on the last day(s) of the then current Interest Period(s) for the
Affected Accounts (or, in the case of a Conversion required by Section 6.3, on
such earlier date as such Lender may specify to Borrower with a copy to Agent)
and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 6.1 or Section 6.3 that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's Affected Accounts have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Accounts shall be applied instead to
its Base Rate Accounts; and
(b) all Accounts that would otherwise be made or Continued by such
Lender as Libor Accounts shall be made or Continued instead as Base Rate
Accounts, and all Accounts of such Lender that would otherwise be Converted
into Libor Accounts shall be Converted instead into (or shall remain as)
Base Rate Accounts.
If such Lender gives notice to Borrower (with a copy to Agent) that the
circumstances specified in Section 6.1 or Section 6.3 that gave rise to the
Conversion of such Lender's Affected Accounts no longer exist (which such Lender
agrees to do promptly upon such circumstances ceasing to exist) at a time when
Libor Accounts made by other Lenders are outstanding, such Lender's Base Rate
Accounts shall be automatically Converted, on the first day(s) of the next
succeeding Interest Period(s) for such outstanding Libor Accounts, to the extent
necessary so that, after giving effect thereto, all Accounts held by the Lenders
holding Libor Accounts and by such Lender are held pro rata (as to principal
amounts, Types, and Interest Periods) in accordance with their respective
Commitment Percentages.
Section 6.5 Compensation. Upon the request of any Lender, Borrower shall
pay to such Lender such amount or amounts as shall be sufficient (in the
reasonable opinion of such Lender) to
CREDIT AGREEMENT - Page 40
47
compensate it for any loss, cost, or expense (including, without limitation,
loss of anticipated profits and any such amounts incurred in connection with
syndication of the Loans) incurred by it as a result of:
(a) any payment, prepayment, or Conversion by Borrower of a Libor
Account for any reason (including, without limitation, the acceleration of
the Loans pursuant to Section 13.2) on a date other than the last day of
the Interest Period for such Libor Account; or
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article 8
to be satisfied) to borrow, Convert, Continue, or prepay a Libor Account on
the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation, or
Conversion under this Agreement.
Notwithstanding the foregoing provisions of this Section 6.5, if at any time the
mandatory prepayment of Term Loans pursuant to Section 5.4(a) would result in
Borrower incurring breakage costs under this Section 6.5 as a result of Libor
Accounts being prepaid other than on the last day of an Interest Period
applicable thereto (the "Affected Libor Accounts"), then Borrower may in its
sole discretion initially deposit a portion (up to 100%) of the amounts that
otherwise would have been paid in respect of the Affected Libor Accounts with
Agent (which deposit, after giving effect to interest to be earned on such
deposit prior to the last day of the relevant Interest Periods, must be equal in
amount to the amount of Affected Libor Accounts not immediately prepaid) to be
held as security for the obligations of Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance satisfactory to
Agent, with such cash collateral to be directly applied upon the first
occurrence (or occurrences) thereafter of the last day of an Interest Period
applicable to the Affected Libor Accounts (or such earlier date or dates as
shall be requested by Borrower), to repay an aggregate principal amount of such
Term Loans equal to the Affected Libor Accounts not initially repaid pursuant to
this sentence.
Section 6.6 Taxes.
(a) Withholding Taxes. Except as otherwise provided in this
Agreement, any and all payments by any Loan Party to or for the account of
any Lender, Agent, Arranger, or the Issuing Bank hereunder or under any
other Loan Document shall be made free and clear of and without deduction
for any and all present or future taxes, duties, levies, imposts,
deductions, charges, or withholdings, and all liabilities with respect
thereto, excluding, in the case of each Lender, Agent, Arranger, or the
Issuing Bank (as applicable), taxes imposed on or measured by its income,
and franchise taxes imposed on it, by the jurisdiction under the laws of
which such Lender (or its Applicable Lending Office), Agent, Arranger, or
the Issuing Bank (as the case may be) is organized, located, or doing
business or any political subdivision thereof (all such non-excluded taxes,
duties, levies, imposts, deductions, charges, withholdings, and liabilities
being hereinafter referred to as "Taxes"). If a Loan Party shall be
required by law to deduct any Taxes from or in respect of any sum payable
under any Loan Document to any Lender, Agent, Arranger, or the Issuing Bank
(as applicable), (i) the
CREDIT AGREEMENT - Page 41
48
sum payable shall be increased as necessary so that after making all
required deductions (including, without limitation, deductions applicable
to additional sums payable under this Section 6.6) such Lender, Agent,
Arranger, or the Issuing Bank (as applicable) receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
applicable Loan Party shall make such deductions, (iii) the applicable Loan
Party shall pay the full amount deducted to the relevant taxing authority
or other authority in accordance with applicable law, and (iv) the
applicable Loan Party shall furnish to Agent the original or a certified
copy of a receipt evidencing payment thereof.
(b) Stamp Taxes, Etc. In addition, Borrower agrees to pay any and all
present or future stamp or documentary taxes and any other excise or
property taxes or charges or similar levies which arise from any payment
made under this Agreement or any other Loan Document or from the execution
or delivery of, or otherwise with respect to, this Agreement or any other
Loan Document ("Other Taxes").
(c) Tax Indemnification. BORROWER AGREES TO INDEMNIFY EACH LENDER,
THE AGENT-RELATED PERSONS, AND THE ISSUING BANK FOR THE FULL AMOUNT OF
TAXES AND OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER
TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS
SECTION 6.6) PAID BY SUCH LENDER, ANY AGENT-RELATED PERSON, OR THE ISSUING
BANK (AS THE CASE MAY BE) AND ANY LIABILITY (INCLUDING, WITHOUT LIMITATION,
PENALTIES, INTEREST, AND EXPENSES) ARISING THEREFROM OR WITH RESPECT
THERETO, OTHER THAN PENALTIES, ADDITIONS TO TAX, INTEREST, AND EXPENSES
ARISING AS A RESULT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT ON THE PART
OF SUCH LENDER OR AGENT-RELATED PERSON.
(d) Mitigation. If Borrower is required to pay additional amounts to
or for the account of any Lender pursuant to this Article 6, then such
Lender agrees to use commercially reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to change the
jurisdiction of its Applicable Lending Office so as to eliminate or reduce
any such additional payment which may thereafter accrue if such change, in
the reasonable judgment of such Lender, is not otherwise disadvantageous to
such Lender. To the extent Borrower pays sums pursuant to this Section 6.6
and the applicable Lender, Agent, Arranger, or the Issuing Bank receives a
refund of any or all of such sums, such refund shall be applied to reduce
any amounts then due and owing under this Agreement or, to the extent that
no amounts are due and owing under this Agreement at the time such refund
is received, the party receiving such refund shall pay over such refunded
sums to Borrower, provided that no Default is in existence at such time.
Section 6.7 Withholding Tax Exemption. Each Lender organized under the
laws of a jurisdiction outside the U.S., on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter if
requested in writing by Borrower or Agent (but only so long as such Lender
remains lawfully able to do so),
CREDIT AGREEMENT - Page 42
49
shall provide Borrower and Agent with (a) if such Lender is a "bank" within the
meaning of Section 881(c)(3)(A) of the Code, (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the U.S. is a party which reduces to zero the rate of
withholding tax on payments of interest or certifying that the income receivable
pursuant to this Agreement is effectively connected with the conduct of a trade
or business in the U.S., (ii) Internal Revenue Service Form W-8 or W-9, as
appropriate, or any successor form prescribed by the Internal Revenue Service,
and (iii) any other form or certificate required by any taxing authority
(including, without limitation, any certificate required by Sections 871(h) and
881(c) of the Code), certifying that such Lender is entitled to a complete
exemption from tax on payments pursuant to any of the Loan Documents or (b) if
such Lender is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code, a Form W-8, or any subsequent versions thereof or successors thereto (and,
if such non-U.S. Lender delivers a Form W-8, a certificate (including, without
limitation, any certificate required by Sections 871(h) and 881(c) of the Code)
representing that such non-U.S. Lender is not a bank for purposes of Section
881(c) of the Code, is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of Borrower and is not a controlled foreign
corporation related to Borrower (within the meaning of Section 864(d)(4) of the
Code)), properly completed and duly executed by such non-U.S. Lender claiming
complete exemption from United States Federal withholding tax on payments of
interest by Borrower under this Agreement and the other Loan Documents. For any
period with respect to which a Lender has failed to provide Borrower and Agent
with the appropriate form pursuant to this Section and thereby to establish
complete exemption from U.S. withholding tax (unless such failure to establish
complete exemption from U.S. withholding tax is due to a change in treaty, law,
or regulation occurring subsequent to the date on which a form originally was
required to be provided), (A) the applicable Loan Party shall deduct all
required Taxes from any amounts payable to such Lender under any Loan Document,
(B) the applicable Loan Party shall pay the full amount allocated to the
relevant taxing authority or other authority in accordance with applicable law,
(C) the applicable Loan Party shall furnish to Agent the original or a certified
copy of a receipt evidencing payment thereof, and (D) such Lender shall not be
entitled to an indemnification or increases in the sum payable under Section 6.6
or Section 15.7 with respect to Taxes imposed by the U.S.; provided, however,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, Borrower shall take such steps as such Lender
shall reasonably request to assist such Lender to recover such Taxes.
Section 6.8 Replacement of Lenders. If at any time a Lender becomes a
Gross Up Lender (as identified below), Borrower shall have the right to replace
such Lender with another Person; provided that (a) such new Person shall be an
Eligible Assignee and such new Person shall execute an Assignment and
Acceptance, (b) neither Agent nor any Lender shall have any obligation to
Borrower to find such other Person, (c) in the event of a replacement of a Gross
Up Lender, in order for Borrower to be entitled to replace such Lender, such
replacement must take place no later than ninety (90) days after the date the
Gross Up Lender shall notify Borrower and Agent of its desire to be paid any
sums pursuant to this Article 6, and (d) if Borrower replaces one Gross Up
Lender, it must replace all Gross Up Lenders or replace all Gross Up Lenders on
a pro rata basis. Each Lender agrees to its replacement at the option of
Borrower pursuant to this Section 6.8 and in accordance with Section 16.8;
provided that the successor Lender shall purchase without recourse such Lender's
CREDIT AGREEMENT - Page 43
50
interest in the Obligations of Borrower to such Lender for cash in an aggregate
amount equal to the aggregate unpaid principal thereof, all unpaid interest
accrued thereon, all unpaid commitment fees accrued for the account of such
Lender hereunder or under any other Loan Document, and Borrower shall pay to the
Gross Up Lender any breakage costs incurred by the selling Lender because of the
prepayment of any Libor Accounts, all other fees (if any) applicable thereto,
and all other amounts (including, without limitation, any amounts under this
Article 6) then owing to such Lender hereunder or under any other Loan Document
and the Loan Parties shall execute a release addressed to such Lender releasing
such Lender from all claims arising in connection with the Loan Documents. Any
Lender who requests a payment pursuant to this Article 6 shall be deemed a
"Gross Up Lender".
ARTICLE 7
Security
Section 7.1 Collateral. To secure the full and complete payment and
performance of the Obligations, Parent and Borrower shall, and shall cause each
of the Guarantors to, grant to Agent, for the benefit of Agent and the Lenders,
a perfected, first priority Lien (subject only to any Lien permitted under
Section 11.2 to the extent, if any, any such Lien would have a higher priority
by operation of law than the Liens in favor of Agent) on all of its right,
title, and interest in and to the following Property, whether now owned or
hereafter acquired, pursuant to the Security Documents:
(a) all Capital Stock of each Domestic Subsidiary (whether present or
future, but (i) excluding the Capital Stock of InterVoice Communications
International, Inc., Phone Star Corp., and VoicePlex Corporation, each of
which are Wholly-Owned Domestic Subsidiaries and which Parent agrees to
dissolve in accordance with applicable law within sixty (60) days of the
Closing Date and (ii) to the extent required by the agreement of limited
partnership of InterVoice Limited Partnership, excluding 25% of the
partnership interest of such limited partnership), including, without
limitation, the Shares owned by Parent or Borrower at any time, owned as of
the Closing Date or thereafter acquired by Parent or any Subsidiary of
Parent;
(b) the lesser of (i) 65% of the shares of each class of Capital
Stock of each Foreign Subsidiary (whether present or future) that is a
direct, wholly-owned Subsidiary of Parent or of a Domestic Subsidiary, or
(ii) all of the shares of each class of Capital Stock of each such Foreign
Subsidiary, in each case owned as of the Closing Date or thereafter
acquired by Parent or such Domestic Subsidiary; and
(c) all other Property of each Loan Party, owned as of the Closing
Date or thereafter acquired, including, without limitation, all accounts
(including, without limitation, Receivables), inventory (including, without
limitation, Inventory), equipment (provided that prior to a request by
Agent during the existence of an Event of Default, no Loan Party shall be
required to deliver any certificate of title on equipment or vehicles with
a market value of less than $50,000), furniture, fixtures, contract rights,
general intangibles, documents, instruments, investment property, chattel
paper, Permits, Intellectual Property (provided that
CREDIT AGREEMENT - Page 44
51
prior to a request by Agent during the existence of an Event of Default, no
Loan Party shall be required to register any Intellectual Property with any
Governmental Authority other than such registrations which are reasonably
necessary to protect the Intellectual Property of any Loan Party),
intercompany Debt, licenses, and real Property, and proceeds of any of the
foregoing; provided that with respect to licenses, contract rights, and
Permits which according to their terms are not assignable such Liens shall
not be required to attach to such Property.
Each of Parent and Borrower covenants that none of the Capital Stock to be
pledged in accordance with this Section 7.1 shall be subject to any transfer
restrictions, shareholders' agreement, or other restriction except for such
restrictions under applicable securities laws and such restrictions, if any, as
may be acceptable to Agent. In connection with and in addition to the foregoing,
Parent and its Subsidiaries shall execute and/or deliver such Security Documents
and further agreements, documents, and instruments (including, without
limitation, stock certificates, stock powers, and financing statements) as Agent
may request in order for it to obtain and maintain the perfected, first priority
Liens to be granted in accordance with this Section 7.1. Notwithstanding the
foregoing, neither Brite nor any Subsidiary of Brite shall be required to
execute any Security Document or deliver any Collateral as required by this
Section until consummation of the Brite Merger.
Section 7.2 Guaranties. Each Domestic Subsidiary (other than Borrower and
the Immaterial Subsidiaries) shall guarantee payment and performance of the
Obligations pursuant to a Guaranty. Notwithstanding the foregoing, neither Brite
nor any Subsidiary of Brite shall be required to execute a Guaranty as required
by this Section until consummation of the Brite Merger.
Section 7.3 New Subsidiaries, New Issuances of Capital Stock.
Contemporaneously with the creation or acquisition of any Subsidiary of Parent,
Parent shall, and shall cause each of its Subsidiaries (as applicable) to:
(a) grant or cause to be granted to Agent, for the benefit of Agent
and the Lenders, a perfected, first priority security interest in all of
the Capital Stock of a Domestic Subsidiary or 65% of the Capital Stock of
any Foreign Subsidiary directly owned by Parent or any Domestic Subsidiary
(to the extent such Capital Stock is not already so pledged to Agent);
(b) cause each such Subsidiary (excluding any Immaterial Subsidiary
and any Foreign Subsidiary, except as provided in Section 7.6) to Guarantee
the payment and performance of the Obligations by executing and delivering
to Agent an appropriate Guaranty; and
(c) cause each such Subsidiary (excluding any Immaterial Subsidiary
and any Foreign Subsidiary, except as provided in Section 7.6) to execute
and deliver to Agent an appropriate Security Agreement and such other
Security Documents as Agent may request to grant Agent, for the benefit of
Agent and the Lenders, a perfected, first priority Lien (except for
Permitted Liens, if any) on all Property of such Subsidiary which is
required to be pledged as Collateral under the terms of this Agreement.
CREDIT AGREEMENT - Page 45
52
Contemporaneously with the issuance of any additional Capital Stock of any
Subsidiary of Parent, Parent shall, and shall cause each other Loan Party and
other appropriate Persons (as applicable) to, grant or cause to be granted to
Agent, for the benefit of Agent and the Lenders, a perfected, first priority
security interest in such Capital Stock of such Subsidiary (to the extent any of
such Capital Stock is already not so pledged to Agent, limited as follows: (x)
in the case of any Foreign Subsidiaries directly owned by Parent or a Domestic
Subsidiary to an aggregate amount of sixty-five percent (65%) of the Capital
Stock of each such Foreign Subsidiary or, if an Event of Default exists, as
provided in Section 7.6, (y) in the case of Foreign Subsidiaries, other than
Foreign Subsidiaries directly owned by Parent or a Domestic Subsidiary, if an
Event of Default exists, as provided in Section 7.6). Each of Parent and
Borrower covenants that none of the Capital Stock to be pledged in accordance
with this Section 7.3 shall be subject to any transfer restriction,
shareholders' agreement, or other restriction except for such restrictions under
applicable securities laws and such restrictions, if any, as may be acceptable
to Agent. Notwithstanding anything to the contrary contained in this Section 7.3
(but subject to Section 7.6), (i) neither Parent nor any Subsidiary of Parent
shall be obligated to pledge more than 65% of each class of the issued and
outstanding Capital Stock of any Foreign Subsidiary that is a direct,
wholly-owned Subsidiary of Parent or a Domestic Subsidiary or to pledge any
Capital Stock of any Subsidiary of any such Foreign Subsidiaries, (ii) no
Foreign Subsidiary shall be obligated to execute a Guaranty guaranteeing payment
or performance of the Obligations, and (iii) no Foreign Subsidiary shall be
obligated to execute a Security Agreement or any other Security Document
securing payment or performance of the Obligations. In connection with and in
addition to the foregoing, Parent and its Domestic Subsidiaries shall execute
and/or deliver such further agreements, documents, and instruments (including,
without limitation, stock certificates, stock powers, and financing statements)
as Agent may request in order for it to obtain and maintain the perfected, first
priority Liens to be granted in accordance with this Section 7.3.
Section 7.4 New Mortgaged Properties. Each of Parent and Borrower shall,
and shall cause each of Parent's other Subsidiaries other than Foreign
Subsidiaries, contemporaneously with the acquisition of any fee real Property
to, execute, acknowledge, and deliver to Agent, for the benefit of Agent and the
Lenders, a Mortgage or an amendment or modification to a then existing Mortgage
covering all fee real Property acquired by such Loan Party subsequent to the
Closing Date, together with evidence satisfactory to Agent and its counsel,
including, without limitation, if requested by Agent, a commitment for a
mortgagee's policy of title insurance or a title opinion in favor of Agent, in
form and substance satisfactory to Agent, that the Mortgage creates a valid,
first priority Lien on the fee estate in favor of Agent, for the benefit of
Agent and the Lenders (except for Permitted Liens, if any), together with
appraisals and surveys if requested by Agent. Following the date of each such
acquisition of Property, if requested by Agent, Parent shall, and shall cause
each of its other Subsidiaries (other than Foreign Subsidiaries) with an
interest in such Properties to, (a) deliver or cause to be delivered to Agent, a
mortgagee's policy of title insurance insuring the Liens of the Mortgage
covering such fee real Property in an amount satisfactory to Agent on standard
form policies (except for Permitted Liens, if any) and (b) provide Agent with a
current environmental assessment of such Property in form and substance
satisfactory to Agent.
Section 7.5 Release of Collateral. Upon any sale, transfer, or other
disposition of Collateral that is expressly permitted under Section 11.8 and
upon five (5) Business Days prior written request by Borrower, Agent shall
execute at Borrower's expense such documents as may be
CREDIT AGREEMENT - Page 46
53
necessary to evidence the release by Agent of its Liens on such Collateral being
sold, transferred, or otherwise disposed of; provided, however, that (a) Agent
shall not be required to release any Lien on any Collateral if a Default is in
existence, (b) Agent shall not be required to execute any such document on terms
which, in Agent's opinion, would expose Agent to liability or create any
obligation not reimbursed by Borrower or entail any consequences other than the
release of such Lien without recourse or warranty, and (c) such release shall
not in any manner discharge, affect, or impair any of the Obligations or any of
Agent's Liens on any Collateral retained by any Loan Party, including, without
limitation, its Liens on the proceeds of any such sale, transfer, or other
disposition.
Section 7.6 Collateral and Guaranties of Foreign Subsidiaries and
Immaterial Subsidiaries. Parent agrees that, notwithstanding anything to the
contrary contained in this Article 7 or elsewhere in this Agreement or in any
other Loan Document, promptly upon (and, in any event, within ten (10) Business
Days after) any written request therefor made by Agent or the Required Lenders
after and during the continuation of an Event of Default pursuant to Sections
13.1(a), (e), (f), and (i), and Section 13.1(c) with respect to failure to
comply with Article 12 Parent will, and will cause each of its Subsidiaries to,
execute and/or deliver, or cause to be executed and/or delivered, each of the
following as may be so requested and all of which shall be in form and substance
satisfactory to Agent:
(a) a Security Agreement which grants to Agent, for the benefit of
Agent and the Lenders, a perfected, first priority Lien (except for
Permitted Liens, if any) on all of such Person's right, title, and interest
in and to the following Property, whether now owned or hereafter acquired:
(i) all Capital Stock of each Foreign Subsidiary (whether
present or future and whether direct or indirect); and
(ii) all other Property of each Foreign Subsidiary or
Immaterial Subsidiary then owned or thereafter acquired, including,
without limitation, all accounts (including, without limitation,
Receivables), inventory (including, without limitation, Inventory),
equipment, furniture, fixtures, contract rights, general intangibles,
instruments, investment property, chattel paper, Permits, Intellectual
Property, intercompany Debt, and real Property, and any proceeds of
the foregoing;
(b) a Guaranty executed by each Foreign Subsidiary or Immaterial
Subsidiary (whether present or future and whether direct or indirect) which
Guarantees payment and performance of the Obligations; and
(c) such further agreements, documents, and instruments (including,
without limitation, stock certificates, stock powers, financing statements,
and other Security Documents) as Agent may request in connection with any
of the foregoing.
Parent covenants that none of the Capital Stock to be pledged in accordance with
this Section 7.6 shall be subject to any transfer restrictions, shareholders'
agreement, or other restriction except for
CREDIT AGREEMENT - Page 47
54
such restrictions under applicable securities laws and such restrictions, if
any, as may be acceptable to Agent.
ARTICLE 8
Conditions Precedent
Section 8.1 Initial Loans and Letter of Credit. The obligation of each
Lender to make its initial Loans are subject to the following conditions
precedent:
(a) Deliveries. Agent shall have received on or before the Closing
Date and on or before the day of any such Loan all of the following, each
dated (unless otherwise indicated) the Closing Date, in form and substance
satisfactory to Agent and the Lenders:
(i) Resolutions; Authority. Resolutions of the board of
directors (or similar governing body) of each Loan Party certified by
its Secretary or an Assistant Secretary which authorize its execution,
delivery, and performance of the Loan Documents to which it is or is
to be a party;
(ii) Incumbency Certificate. A certificate of incumbency
certified by the Secretary or an Assistant Secretary of each Loan
Party certifying the names of its officers (A) who are authorized to
sign the Loan Documents to which it is or is to be a party (including,
without limitation, the certificates contemplated herein) together
with specimen signatures of each such officer and (B) who will, until
replaced by other officers duly authorized for that purpose, act as
its representative for the purposes of signing documentation and
giving notices and other communications in connection with this
Agreement and the transactions contemplated hereby;
(iii) Organizational Documents. The certificate of
incorporation, certificate of formation, certificate of limited
partnership, or other similar document of each Loan Party certified by
the Secretary of State of the state of its incorporation, formation,
or organization and dated a current date;
(iv) Bylaws. The bylaws, operating agreement, partnership
agreement, or similar agreement of each Loan Party certified by its
Secretary or an Assistant Secretary;
(v) Governmental Certificates. Certificates of the appropriate
Governmental Authorities of the state of incorporation of each Loan
Party as to its existence and, to the extent applicable good standing,
and certificates of the appropriate Governmental Authorities of each
state in which each Loan Party conducts business, other than the state
of incorporation of such Loan Party, as to such Loan Party's
qualification to do business and good standing in such state, all
dated a current date;
CREDIT AGREEMENT - Page 48
55
(vi) Credit Agreement. This Agreement, together with all
Schedules, Exhibits, and other attachments (if any), duly executed by
Parent, Borrower, Agent, and the Lenders;
(vii) Notes. The Notes executed by Borrower dated the date
hereof;
(viii) Security Documents. The Guaranties, Security Agreements,
Mortgages, and other Security Documents executed by each of the Loan
Parties, as applicable;
(ix) Form U-1. A Federal Reserve Form U-1 properly completed
and executed by Borrower and each Lender, respectively;
(x) Lien Search Reports.
(A) UCC, tax, and judgment Lien search reports listing all
documentation on file against each Loan Party in each
jurisdiction in which such Loan Party maintains any Collateral;
(B) Federal tax lien search reports with respect to each
Loan Party;
(xi) Termination or Assignment of Liens. Duly executed UCC-3
termination statements, mortgage releases, and such other
documentation as shall be necessary to terminate, release, or assign
to Agent all Liens other than those permitted by Section 11.2;
(xii) Stock Certificates. The stock certificates representing
all of the issued and outstanding Capital Stock referred to in Section
7.1 as of the Closing Date, in each case accompanied by appropriate
instruments of transfer or stock powers executed in blank (as
appropriate), or registration of Agent's Lien, in form and substance
satisfactory to Agent (in the case of book entry securities);
(xiii) Financing Statements. UCC financing statements and all
other requisite filing documents executed by the Loan Parties
necessary to perfect the Liens created pursuant to the Security
Documents;
(xiv) Consents. Copies of all material consents or waivers
necessary for the execution, delivery, and performance by each of the
Loan Parties of the Loan Documents to which it is a party, as Agent
may require, which consents shall be certified by an authorized
representative of the applicable Loan Party as true and correct copies
of such consents as of the Closing Date;
(xv) Insurance Policies. Certificates of insurance summarizing
the insurance policies of each Loan Party as required by this
Agreement and reflecting Agent as loss payee or additional insured, as
applicable, under such policies;
CREDIT AGREEMENT - Page 49
56
(xvi) Opinions of Counsel. Satisfactory opinions of legal
counsel to the Loan Parties from such jurisdictions, and as to such
matters, as Agent may request;
(xvii) Fees. Payment of the fees set forth in the Agent's Letter;
(xviii) Letter of Direction. A letter of direction from Borrower
addressed to Agent with respect to the disbursement of the proceeds of
the initial Loans;
(xix) Schedules. The Schedules to be attached hereto in form and
substance satisfactory to Agent and the Lenders in their sole
discretion;
(xx) Related Transaction Documents. Copies of the Brite
Acquisition Documents, the Brite Tender Offer Documents, and any
approvals, consents, and other documentation required to be delivered
under the terms thereof (to the extent required to be delivered
thereunder as of the time of the Brite Acquisition); and all
certificates and opinions delivered in connection with such documents
shall be addressed to Agent, Arranger, and the Lenders or accompanied
by a written authorization from the Person delivering such certificate
or opinion stating that Agent, Arranger, and the Lenders may rely on
such certificate or opinion as though it were addressed to Agent,
Arranger, and the Lenders, respectively;
(xxi) Confirmation of Purchase Price. The Brite Acquisition
Documents shall provide for an aggregate consideration consisting of
cash and a variable amount of Parent's common stock, with the cash
portion of the purchase price not to exceed $123,000,000.
(b) Attorneys' Fees and Expenses. The costs and expenses (including,
without limitation, attorneys' fees) referred to in Section 16.1 for which
statements have been presented shall have been paid in full (or shall be
paid with the proceeds of the Loans made on the Closing Date);
(c) Compliance with Laws. As of the Closing Date, each Person that is
a party to this Agreement or any of the other Loan Documents shall have
complied with all requirements of any Governmental Authority necessary to
consummate the transactions contemplated by this Agreement and the other
Loan Documents and the Related Transactions shall be exempt from Sections
17-12,101 through 17-12,104 of the Kansas Statutes Annotated and any other
similar control share statute;
(d) No Prohibitions. No requirement of any Governmental Authority
shall prohibit the consummation of the transactions contemplated by this
Agreement or any other Loan Document or any Related Transactions, and no
order, judgment, ruling, injunction, or decree of any Governmental
Authority or arbitrator shall, and no litigation or other proceeding shall
be pending or threatened which would, enjoin, prohibit, restrain, or
otherwise adversely affect in any material manner the consummation of the
Brite Merger or
CREDIT AGREEMENT - Page 50
57
the other transactions contemplated by this Agreement, the other Loan
Documents, or any Related Transactions or otherwise have a Material Adverse
Effect;
(e) No Material Adverse Change. As of the Closing Date, no material
adverse change shall have occurred with respect to the business, assets,
liabilities (actual or contingent), operations, condition (financial or
otherwise), or prospects of Parent and its Subsidiaries (taken as a whole
but excluding Brite and its Subsidiaries) since February 28, 1999, or of
Brite and its Subsidiaries (taken as a whole) since December 31, 1998;
(f) No Material Litigation. Except as set forth in Schedule 9.5, as
of the Closing Date, no action, suit, investigation, or proceeding shall be
pending or threatened before any Governmental Authority that purports to
affect Parent or any of its Subsidiaries (excluding Brite and its
Subsidiaries) or Brite or any of its Subsidiaries or any transaction
contemplated by the Transaction Documents that could reasonably be expected
to result in a Material Adverse Effect or that could reasonably be expected
to have an adverse effect on the ability of any Loan Party to perform its
Obligations under the Transaction Documents;
(g) Compliance With Financial and Other Obligations. As of the
Closing Date, each Loan Party shall be in compliance with all of its
respective existing financial obligations, and no default or event of
default shall be in existence under any Capital Stock or Debt of Parent or
any Subsidiary of Parent, either before or after giving effect to the
Related Transactions, or would result therefrom;
(h) Capital Structure. The corporate capital and ownership structure
(including, without limitation, articles of incorporation and by-laws),
shareholders agreements, and management of Parent and its Subsidiaries
(after giving effect to the Brite Acquisition) shall be satisfactory to the
Agent;
(i) No Material Market Changes. The absence of any material
disruption of or material adverse change in conditions in the financial,
banking, or capital markets which Agent and Arranger, in their sole
discretion, deem material in connection with the syndication of the
Commitments and Loans provided to Borrower pursuant to the terms of this
Agreement;
(j) Closing Date Availability; Other Debt. After giving effect to the
Related Transactions (other than the Brite Merger) and all Outstanding
Revolving Credit incurred on the Closing Date, the Revolving Commitment
shall exceed the Outstanding Revolving Credit by not less than $15,000,000,
plus the positive remainder of (i) the unfunded cash portion (if any) of
the purchase price for the Shares not tendered pursuant to the Brite Tender
Offer minus (ii) any undrawn portion of the Term Commitment, and Parent and
its Subsidiaries shall have no other Debt except for Permitted Debt;
(k) Consummation of Brite Tender Offer. The Brite Tender Offer and
the Brite Acquisition shall have been, or shall be, consummated on or
before the Closing Date pursuant to the Brite Acquisition Documents which
shall have been consummated in
CREDIT AGREEMENT - Page 51
58
accordance with the terms thereof and in accordance with applicable law and
regulatory approvals, and none of the Brite Acquisition Documents shall
have been altered, amended, or otherwise changed or supplemented in any
material respect or any material condition therein waived without the prior
written consent of Agent (which consent may be given without the prior
approval of the Lenders);
(l) Minimum Shares. After giving effect to the Related Transactions
(other than the Brite Merger) and as of the Closing Date, Borrower shall
have acquired, concurrently with the making of the initial Loans hereunder,
not fewer than the Minimum Shares, and there shall not have been any
material change in the number of Shares outstanding as of April 26, 1999;
(m) Payment and Termination of Existing Credit Facilities. The
existing credit facilities of Parent and Brite presently maintained with
NationsBank, N.A. shall, to the satisfaction of Agent, be (i) terminated,
(ii) all loans and obligations thereunder shall be paid or satisfied in
full, and (iii) all Liens in favor of any creditor in connection therewith
shall be assigned to Agent or terminated or released to Agent's
satisfaction;
(n) Hostile Takeover Rights of Brite Shareholders. Any "poison pill"
rights of Brite shall have been redeemed by the board of directors of
Brite, or Agent and the Lenders shall be satisfied that they have been
invalidated or otherwise will not be triggered;
(o) Governmental Approvals. The Federal Trade Commission or U.S.
Justice Department under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Anti-Trust Improvements Act
shall have approved the Merger and the other transactions contemplated by
the Brite Acquisition Documents or the waiting period thereunder shall have
expired without adverse action and all other required consents or
requirements of any Governmental Authority or required under applicable law
shall have been obtained or complied with;
(p) Related Transactions. Agent shall have been provided satisfactory
evidence that all conditions to the consummation of the Related
Transactions have been satisfied or waived in accordance with Section 16.11
and that such transactions will occur on the Closing Date and the Brite
Merger Date, as applicable;
(q) Financial Statements. Agent and the Lenders shall have received a
copy of Parent's February 28, 1999 audited financial statements which are
in compliance with the provisions of Section 10.1(a)(i); and
(r) Additional Documentation. Agent and the Lenders shall have
received such additional approvals, opinions, or other documentation as
Agent or any Lender may reasonably request.
Section 8.2 Loans on Brite Merger Date. The obligation of each Lender to
make Loans on the Brite Merger Date is subject to fulfillment of the conditions
set forth in Section 8.1 and Section 8.3. In addition to the foregoing,
concurrently with the funding of the Loans on the Brite
CREDIT AGREEMENT - Page 52
59
Merger Date, Parent and Borrower shall cause Brite (as successor to Borrower) to
execute the Joinder Agreement and cause Brite and its Domestic Subsidiaries
which are not Immaterial Subsidiaries to execute and deliver the Security
Documents to which each is required to be a party, consummate the Brite Merger,
and thereupon promptly delist the Shares so that the Shares no longer constitute
"margin stock" as defined in Regulation U.
Section 8.3 All Loans and Letters of Credit. The obligation of each
Lender to make any Loan (including, without limitation, the initial Loans) and
the obligation of the Issuing Bank to issue any Letter of Credit are subject to
the following additional conditions precedent:
(a) No Default. No Default shall have occurred and be continuing, or
would result from such Loan or Letter of Credit;
(b) Representations and Warranties. All of the representations and
warranties contained in Article 9 and in the other Loan Documents shall be
true and correct in all material respects on and as of the date of such
Loan or Letter of Credit with the same force and effect as if such
representations and warranties had been made on and as of such date except
to the extent that such representations and warranties relate specifically
to another date;
(c) Compliance with Regulation U. If the Loan or Letter of Credit is
requested at any time after the Closing Date but prior to delisting of the
Shares, Borrower shall deliver a Federal Reserve Form U-1 properly
completed and executed by Borrower and each Lender, respectively;
(d) Related Transaction Documents. If the Loan or Letter of Credit is
requested on or prior to the time of the Brite Merger, copies of the Brite
Acquisition Documents, the Brite Tender Offer Documents, and any approvals,
consents, and other documentation required to be delivered under the terms
thereof as of the date of such requested Loan or Letter of Credit;
(e) Governmental Restrictions. There shall be no governmental
inquiries, injunctions, or restraining orders instituted or pending, or any
statute or rule enacted, promulgated, entered, or enforced which would have
a Material Adverse Effect upon Parent and its Subsidiaries (taken as a
whole); and
(f) No Material Adverse Change. No material adverse change shall have
occurred with respect to the business, assets, liabilities (actual or
contingent), operations, condition (financial or otherwise), or prospects
of Parent and its Subsidiaries (taken as a whole) since February 28, 1999.
Each notice of borrowing by Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by Parent and Borrower that the conditions precedent set forth in Section 8.3(a)
and Section 8.3(b) have been satisfied (both as of the date of
CREDIT AGREEMENT - Page 53
60
such notice and, unless Parent and Borrower otherwise notify Agent prior to the
date of such borrowing or Letter of Credit, as of the date of such borrowing or
Letter of Credit).
ARTICLE 9
Representations and Warranties
To induce Agent and the Lenders to enter into this Agreement, Parent and
Borrower represent and warrant that the following statements are, and, after
giving effect to the transactions contemplated hereby, including, without
limitation, the Brite Acquisition, will be true, correct, and complete:
Section 9.1 Existence, Power, and Authority.
(a) Parent and each of its Subsidiaries is (i) a corporation, or in
the case of InterVoice Limited Partnership is a limited partnership, duly
organized, validly existing, and in good standing (as applicable) under the
laws of the jurisdiction of its incorporation or formation, as applicable;
(ii) has all requisite power and authority to own its assets and carry on
its business as now being or as proposed to be conducted; and (iii) is
qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where failure to so qualify
would have a Material Adverse Effect;
(b) Parent and each other Loan Party has the power and authority to
execute, deliver, and perform its respective obligations under the Loan
Documents to which it is or may become a party.
Section 9.2 Financial Condition.
(a) Financial Statements. Parent has delivered to Agent and each
Lender the audited financial statements of (i) Parent and its Subsidiaries
as of and for the twelve (12) month periods ended February 28, 1997,
February 28, 1998, February 28, 1999, and (ii) Brite and its Subsidiaries
as of and for the twelve (12) month periods ended December 31, 1996,
December 31, 1997, December 31, 1998. Such financial statements have been
prepared in accordance with GAAP, and present fairly, the financial
condition of Parent and its Subsidiaries and Brite and its Subsidiaries,
respectively, as of the respective dates indicated therein and the results
of operations for the respective periods indicated therein. Neither Parent
nor any of its Subsidiaries has any material contingent liabilities,
liabilities for taxes, unusual forward or long-term commitments, or
unrealized or anticipated losses from any unfavorable commitments except as
referred to or reflected in such financial statements.
(b) Projections. The Projections delivered by Parent to Agent and
Arranger and included in the Offering Memorandum and the Projections to be
delivered by Parent pursuant to Section 10.1(a) have been and will be
prepared by Parent in light of the past operation of the business of Parent
and its Subsidiaries. All such Projections represent, as of the date
thereof, a good faith estimate by Parent and its senior management of the
financial conditions
CREDIT AGREEMENT - Page 54
61
and performance of Parent and its Subsidiaries based on assumptions
believed to be reasonable at the time made.
Section 9.3 Corporate and Similar Action; No Breach. The execution,
delivery, and performance by each Loan Party of the Transaction Documents to
which it is or may become a party and compliance with the terms and provisions
thereof have been duly authorized by all requisite action on the part of such
Loan Party, and do not and will not (a) violate or conflict with, or result in a
breach of, or require any consent under (i) the articles of incorporation,
certificate of limited partnership, certificate of formation, bylaws,
partnership agreement, or operating agreement of such Person, (ii) any
applicable law, rule, or regulation or any order, writ, injunction, or decree of
any Governmental Authority or arbitrator, or (iii) any agreement or instrument
to which such Person is a party or by which any of them or any of their property
is bound or subject where such violation could reasonably be expected to have a
Material Adverse Effect, or (b) constitute a default under any such agreement or
instrument, or result in the creation or imposition of any Lien upon any of the
revenues or assets of such Person where such default could reasonably be
expected to have a Material Adverse Effect.
Section 9.4 Operation of Business. Each of Parent and its Subsidiaries
possesses all material licenses, Permits, franchises, patents, copyrights,
trademarks, and tradenames, or rights thereto, necessary to conduct its business
substantially as now conducted and as presently proposed to be conducted except
where a failure to possess the same could not reasonably be expected to have a
Material Adverse Effect, and neither Parent nor any of its Subsidiaries is in
violation of any valid rights of others with respect to any of the foregoing
where such violation could reasonably be expected to have a Material Adverse
Effect. Except as set forth in Schedule 9.4 and except for the transactions
contemplated by the Transaction Documents, since February 28, 1999, Parent and
its Subsidiaries have conducted their respective businesses only in the ordinary
and usual course.
Section 9.5 Litigation and Judgments. Except as set forth in Schedule 9.5
or as otherwise disclosed to Agent and the Lenders pursuant to Section 10.1(e),
there is no action, suit, investigation, or proceeding before or by any
Governmental Authority or arbitrator pending or threatened against or affecting
Parent or any of its Subsidiaries or the Related Transactions which could
reasonably be expected to have a Material Adverse Effect. As of the Closing
Date, except as set forth in Schedule 9.5, there are no outstanding judgments
against Parent or any of its Subsidiaries.
Section 9.6 Rights in Properties; Liens. Parent and each of its
Subsidiaries has good title to or valid leasehold interests in its respective
Properties, real and personal, including, as of the Closing Date, the Properties
and leasehold interests reflected in the financial statements described in
Section 9.2, and none of such Properties or leasehold interests of Parent or any
of its Subsidiaries is subject to any Lien, except as permitted by Section 11.2.
Except as disclosed on Schedule 9.6(A), as of the Closing Date, neither Parent
nor any of its Subsidiaries owns any right, title, or interest in any real
Properties. Except as disclosed on Schedule 9.6(B), as of the Closing Date,
neither Parent nor any of its Subsidiaries owns any right, title, or interest of
a nature in Intellectual Property that is registered with any Governmental
Authority. As of the Closing Date, Schedule 9.6(C) sets forth the locations of
all of the offices and other places of business of Parent and its Subsidiaries
and the locations of all of the Properties of Parent and its Subsidiaries, as
well as the identities of the Persons
CREDIT AGREEMENT - Page 55
62
who conduct business or own Properties at such locations and the identities of
the predecessor entities who previously conducted business or owned Properties
at such locations and whose Capital Stock or assets were acquired by Parent or
any of its Subsidiaries. The Lien of Agent on the Collateral required by Article
7 constitutes a perfected first priority Lien subject only to Permitted Liens.
Section 9.7 Enforceability. The Loan Documents to which Parent or any
Subsidiary of Parent is a party, when delivered, shall constitute the legal,
valid, and binding obligations of Parent or such Subsidiary, as applicable,
enforceable against such Person in accordance with their respective terms,
except as limited by bankruptcy, insolvency, or other laws of general
application relating to the enforcement of creditors' rights and general
principles of equity.
Section 9.8 Approvals. No authorization, approval, or consent of, and no
filing or registration with, any Governmental Authority or other third party is
or will be necessary for the execution, delivery, or performance by any Loan
Party of the Loan Documents to which it is or may become a party or for the
validity or enforceability thereof except for such authorizations, approvals,
consents, filings, and registrations which have been obtained, are required in
connection with the recordation or perfection of Liens granted to Agent pursuant
to the Security Documents.
Section 9.9 Debt. Except as set forth in Schedule 9.9, neither Parent nor
any of its Subsidiaries has any Debt, except as permitted by Section 11.1.
Section 9.10 Taxes. Except as set forth in Schedule 9.10 or, after the
Closing Date, matters which do not violate Section 10.4, Parent and each
Subsidiary of Parent have filed all tax returns (federal, state, and local)
required to be filed, including all income, franchise, employment, property, and
sales tax returns, and have paid all of their respective liabilities for taxes,
assessments, governmental charges, and other levies that are due and payable
other than those being contested in good faith by appropriate proceedings
diligently pursued for which adequate reserves have been established in
accordance with GAAP or where such non-filing or non-payment could not
reasonably be expected to result in liability in excess of $3,000,000 in the
aggregate. Except as set forth in Schedule 9.10 or, after the Closing Date,
matters which do not violate Section 10.4, there is no pending investigation of
Parent or any Subsidiary of Parent by any taxing authority with respect to any
liability for tax or of any pending but unassessed tax liability of Parent or
any Subsidiary of Parent.
Section 9.11 Margin Securities. Neither Parent nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulations T, U, or X of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Loan will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock; provided that, in connection with the
Brite Acquisition and/or the Brite Merger, proceeds of the Loans may be used to
acquire the Shares. The loan value of the Collateral securing the Loans on the
Closing Date, including the loan value of the Shares purchased on the Closing
Date (valued at fifty percent (50.0%) of market value) equals or exceeds the
loan value
CREDIT AGREEMENT - Page 56
63
required by said Regulations T, U, or X and the Loans used to purchase such
Shares comply in all respects with such Regulations T, U, or X.
Section 9.12 ERISA. With respect to each Plan, Parent and each Subsidiary
of Parent is in compliance in all material respects with all applicable
provisions of ERISA. Neither a Reportable Event nor a Prohibited Transaction has
occurred and is continuing with respect to any Plan which constitutes an Event
of Default under this Agreement. As of the Closing Date, no notice of intent to
terminate a Plan has been filed, nor has any Plan been terminated. As of the
Closing Date, no circumstances exist which constitute grounds entitling the PBGC
to institute proceedings to terminate, or appoint a trustee to administer, a
Plan, nor has the PBGC instituted any such proceedings. Neither Parent nor any
of its Subsidiaries nor any ERISA Affiliate has completely or partially
withdrawn from a Multiemployer Plan. Parent, each Subsidiary of Parent, and each
ERISA Affiliate have met their minimum funding requirements under ERISA with
respect to each Plan. Except as set forth in Schedule 9.12, the present value of
all vested benefits under each Plan do not exceed the fair market value of all
Plan assets allocable to such benefits, as determined on the most recent
valuation date of the Plan and in accordance with ERISA. Neither Parent, any of
its Subsidiaries, nor any ERISA Affiliate has any outstanding liability to the
PBGC under ERISA (other than liability for the payment of PBGC premiums in the
ordinary course of business).
Section 9.13 Disclosure. All factual information furnished by or on behalf
of Parent or any Subsidiary of Parent to Agent, Arranger, or any Lender
(including, without limitation, all information contained in the Transaction
Documents) for purposes of or in connection with this Agreement, the other Loan
Documents, or any transaction contemplated herein or therein to the best of
Parent's and Borrower's knowledge is, and all other such factual information
hereafter furnished by or on behalf of Parent or any Subsidiary of Parent to
Agent, Arranger, or any Lender, will be true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any fact necessary to make such information not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
Section 9.14 Subsidiaries; Capitalization. As of the Closing Date and
after giving effect to the Brite Acquisition, Parent has no other Subsidiaries
other than those listed in Schedule 9.14. As of the Closing Date, Schedule 9.14
sets forth the jurisdiction of incorporation or organization of Parent and its
Subsidiaries, the percentage of Parent's or a Subsidiary's (as applicable)
ownership of the outstanding Voting Stock of each Subsidiary of Parent. All of
the outstanding Capital Stock of Parent and its Subsidiaries has been validly
issued, is fully paid, is nonassessable, and has not been issued in violation of
any preemptive or similar rights. Except as disclosed in Schedule 9.14, there
are (a) no outstanding subscriptions, options, warrants, calls, or rights
(including, without limitation, preemptive rights) to acquire, and no
outstanding securities or instruments convertible into, Capital Stock of Parent
or any of its Subsidiaries, and (b) no shareholder agreements, voting trusts, or
similar agreements in effect and binding on any shareholder of Parent or any of
its Subsidiaries or the Capital Stock of Parent or any of its Subsidiaries. All
shares of Capital Stock of Parent and its Subsidiaries were issued in compliance
with all applicable state and federal securities laws.
CREDIT AGREEMENT - Page 57
64
Section 9.15 Agreements. Except as set forth in Schedule 9.15, neither
Parent nor any of its Subsidiaries is a party to any charter or corporate
restriction that could reasonably be expected to have a Material Adverse Effect.
Neither Parent nor any of its Subsidiaries is in default, or has knowledge of
facts or circumstances that with the giving of notice or passage of time or both
could reasonably be expected to result in a default, in any respect in the
performance, observance, or fulfillment of any of the obligations, covenants, or
conditions contained in any agreement or instrument (including, without
limitation, any indenture, loan, or credit agreement, or any lease or other
similar agreement or instrument) to which it is a party where such default could
reasonably be expected to cause a Material Adverse Effect.
Section 9.16 Compliance with Laws. Neither Parent nor any of its
Subsidiaries is in violation of any law, rule, regulation, order, or decree of
any Governmental Authority or arbitrator except for violations which could not
reasonably be expected to have a Material Adverse Effect.
Section 9.17 Investment Company Act. Neither Parent nor any of its
Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 9.18 Public Utility Holding Company Act. Neither Parent nor any of
its Subsidiaries is a "holding company" or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company" or a "public utility" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 9.19 Environmental Matters.
Except as disclosed on Schedule 9.19 or where non-compliance could not
reasonably be expected to have a Material Adverse Effect:
(a) Parent, each Subsidiary of Parent, and all of their respective
properties, assets, and operations are in compliance with all Environmental
Laws. Neither Parent nor any of its Subsidiaries is aware of, nor has
Parent or any subsidiary of Parent received notice of, any past, present,
or future conditions, events, activities, practices, or incidents which may
interfere with or prevent the compliance or continued compliance of Parent
or its Subsidiaries with all Environmental Laws;
(b) Parent and its Subsidiaries have obtained and maintained, and are
in material compliance with, all material Permits, licenses, and
authorizations that are required under applicable Environmental Laws;
(c) Except in compliance in all material respects with applicable
Environmental Laws, during the course of Parent's or any of its
Subsidiaries' ownership of or operations on any real Property, there has
been no generation, treatment, recycling, storage, or disposal of hazardous
waste, as that term is defined in 40 CFR Part 261 or any state equivalent,
use of underground storage tanks or surface impoundments, use of asbestos
containing materials, or use of polychlorinated biphenyls (PCB) used in
hydraulic oils, electrical transformers, or other equipment, and the use
which Parent and its Subsidiaries make and intend to make of
CREDIT AGREEMENT - Page 58
65
their respective properties and assets will not result in the use,
generation, storage, transportation, accumulation, disposal, or Release of
any Hazardous Material on, in, or from any of their properties or assets
(other than lubricants, cleaning solutions, and similar materials used for
maintenance in the ordinary course of business);
(d) Neither Parent, any of its Subsidiaries, nor any of their
respective currently or previously owned or leased Properties or operations
is subject to any outstanding or threatened order from or agreement with
any Governmental Authority or other Person or subject to any judicial or
administrative proceeding with respect to (i) failure to comply with
Environmental Laws, (ii) Remedial Action, or (iii) any Environmental
Liabilities arising from a Release or threatened Release;
(e) There are no conditions or circumstances associated with the
currently or previously owned or leased Properties or operations of Parent
or any Subsidiary of Parent that could be expected to result in any
Environmental Liabilities;
(f) Neither Parent nor any of its Subsidiaries is or operates a
treatment, storage, or disposal facility requiring a permit under the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq., the
regulations thereunder, or any comparable provision of state law; Parent
and each Subsidiary of Parent is in compliance with all applicable
financial responsibility requirements of all applicable Environmental Laws;
(g) Neither Parent nor any of its Subsidiaries has filed or failed to
file any notice required under applicable Environmental Law reporting an
unauthorized Release; and
(h) No Lien arising under any Environmental Law has attached to any
property or revenues of Parent or any Subsidiary of Parent.
Section 9.20 Transaction Documents. As of the Closing Date, Borrower has
delivered to Agent a complete and correct copy of the Tender Offer Documents and
the Brite Acquisition Documents, and each such Transaction Document is in full
force and effect and no material term or condition thereof has been amended or
otherwise waived except for such amendments and waivers approved by Agent (which
Agent may give without the consent of the Lenders), none of the parties thereto
has failed to perform any material obligation thereunder, and each of the
representations and warranties given therein is true and correct on and as of
the Closing Date. After giving effect to the initial advance hereunder, the
Brite Acquisition will have been completed in strict compliance with the Brite
Acquisition Documents.
Section 9.21 Broker's Fees. Except as provided in the Agent's Letter and
the Merger Documents and any fees paid to the Arranger, no broker's or finder's
fee, commission, or similar compensation will be payable by Parent or any
Subsidiary of Parent with respect to the Related Transactions. Except as
provided in the Agent's Letter and the Merger Documents and any fees paid to the
Arranger, no other similar fees or commissions will be payable by Parent or any
Subsidiary of Parent for any other services rendered to Parent or any Subsidiary
of Parent ancillary to the Related Transactions.
CREDIT AGREEMENT - Page 59
66
Section 9.22 Employee Matters. Except as set forth on Schedule 9.22, as of
the Closing Date (a) neither Parent nor any of its Subsidiaries, nor any of
their respective employees, is subject to any collective bargaining agreement,
(b) no petition for certification or union election is pending with respect to
the employees of Parent or any Subsidiary of Parent and no union or collective
bargaining unit has sought such certification or recognition with respect to the
employees of Parent or any Subsidiary of Parent, and (c) there are no strikes,
slowdowns, work stoppages, or controversies pending or, to the best knowledge of
Parent and the Subsidiaries of Parent after due inquiry, threatened between
Parent or any Subsidiary of Parent and its respective employees where such
strikes, slowdowns, work stoppages, or controversies could reasonably be
expected to result in a Material Adverse Effect.
Section 9.23 Solvency. As of and from and after the date of this Agreement
and after giving effect to the Brite Acquisition and consummation of the Related
Transactions other than the Brite Merger (as applicable), each of Parent and its
Subsidiaries individually and on a consolidated basis is Solvent. As of and from
and after the date of, and after giving effect to, the Brite Merger, each of
Parent and its Subsidiaries individually and on a consolidated basis will be
Solvent.
Section 9.24 Year 2000 Compliance.
(a) Parent and its Subsidiaries have (i) undertaken a detailed review
and assessment of all areas within their respective business and operations
that could be adversely affected by the "Year 2000 Problem" (that is, the
risk that computer applications used by Parent or any Subsidiary of Parent
may be unable to recognize and perform properly date- sensitive functions
involving certain dates prior to and any date after December 31, 1999),
(ii) developed a detailed plan and timeline for addressing the Year 2000
Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable in all material respects. Parent and its
Subsidiaries anticipate that all computer applications that are material to
their respective businesses and operations will on a timely basis be able
to perform properly date-sensitive functions for all dates before and after
January 1, 2000 (that is, be "Year 2000 Compliant") except where any such
non-performance could not reasonably be expected to have a Material Adverse
Effect.
(b) Each of Parent and its Subsidiaries has made inquiry of its key
suppliers, vendors, and customers as to whether such Persons will on a
timely basis be Year 2000 Compliant and, on the basis of that inquiry,
believes that all such Persons will be so compliant except where
non-compliance could not reasonably be expected to result in a Material
Adverse Effect. For purposes hereof, "key suppliers, vendors, and
customers" refers to those suppliers, vendors, and customers of Parent or a
Subsidiary of Parent the business failure of which would with reasonable
probability be expected to have a Material Adverse Effect.
CREDIT AGREEMENT - Page 60
67
ARTICLE 10
Affirmative Covenants
Each of Parent and Borrower covenants and agrees that, as long as the
Obligations or any part thereof are outstanding, any Lender has any Commitment
hereunder or any Letter of Credit remains outstanding, it will perform and
observe the following positive covenants:
Section 10.1 Reporting Requirements. Parent will furnish to Agent and each
Lender:
(a) Annual Financial Statements and Projections. As soon as
available, and in any event within ninety (90) days after the end of each
Fiscal Year of Parent, beginning with the Fiscal Year ending February 28,
2000, (i) a copy of the annual audit report of Parent for such Fiscal Year
containing, on a consolidated basis, a balance sheet and statements of
income, retained earnings, and cash flow as at the end of such Fiscal Year
and for the Fiscal Year then ended, in each case setting forth in
comparative form the figures for the preceding Fiscal Year, all in
reasonable detail and audited and certified on an unqualified basis by a
"Big Five" firm of independent certified public accountants or other
independent certified public accountants of recognized standing selected by
Parent and reasonably acceptable to Agent (and not objected to by the
Required Lenders), to the effect that such report has been prepared in
accordance with GAAP; (ii) a copy of the annual unaudited report of Parent
and its Subsidiaries for such Fiscal Year containing, on a consolidating
basis balance sheets and statements of income, retained earnings, and cash
flow as at the end of such Fiscal Year and for the Fiscal Year then ended,
in each case setting forth in comparative form the figures for the
preceding Fiscal Year, and in reasonable detail certified by the chief
executive officer or chief financial officer of Parent to have been
prepared in accordance with GAAP and to fairly present the financial
condition and results of operation of Parent and its Subsidiaries, on a
consolidating basis at the date and for the Fiscal Year then ended; and
(iii) a copy of Projections for Parent's Fiscal Year immediately following
the Fiscal Year which is the subject of the financial statements delivered
pursuant to clause (i) preceding;
(b) Quarterly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each of the first three
Fiscal Quarters beginning with the Fiscal Quarter ending May 31, 1999, a
copy of an unaudited financial report of Parent and its Subsidiaries as of
the end of such period and for the portion of the Fiscal Year then ended
containing, on a consolidated basis, a balance sheet and statements of
income, retained earnings, and cash flow, in each case setting forth in
comparative form the figures for the corresponding period of the preceding
Fiscal Year, all in reasonable detail certified by the chief executive
officer or chief financial officer of Parent to have been prepared in
accordance with GAAP and to fairly present the financial condition and
results of operations of Parent and its Subsidiaries on a consolidated
basis, at the date and for the periods indicated therein, subject to
year-end audit adjustments;
(c) Compliance Certificate. As soon as available, and in any event
accompanying the financial statements delivered in accordance with Section
10.1(a) and Section 10.1(b),
CREDIT AGREEMENT - Page 61
68
a Compliance Certificate, together with schedules setting forth the
calculations supporting the computations therein;
(d) Applicable Rate Certificate. Concurrently with the delivery of
each of the financial statements referred to in Section 10.1(b) and within
forty-five (45) days after the end of each Fiscal Year of Parent, a
certificate of the chief financial officer of Parent showing in reasonable
detail the calculation required for Agent to determine the Applicable Rate;
(e) Notice of Litigation. Promptly after receipt by Parent or any
Subsidiary of Parent of notice of the commencement thereof, notice of all
actions, suits, and proceedings before any Governmental Authority or
arbitrator affecting Parent or any Subsidiary of Parent which, if
determined adversely to Parent or such Subsidiary of Parent, could
reasonably be expected to have a Material Adverse Effect;
(f) Notice of Default. As soon as possible and in any event within
two (2) Business Days after the chief executive officer, president, chief
financial officer, any vice president, secretary, assistant secretary,
treasurer, or any assistant treasurer of any Loan Party has knowledge of
the occurrence of a Default, a written notice setting forth the details of
such Default and the action that Parent and the other Loan Parties have
taken and propose to take with respect thereto;
(g) ERISA. As soon as possible and in any event within thirty (30)
days after Parent or any Subsidiary of Parent knows, or has reason to know,
that
(i) any Termination Event with respect to a Plan has occurred
or will occur,
(ii) the aggregate present value of the Unfunded Vested Accrued
Benefits under all Plans is equal to an amount in excess of
$1,000,000, or
(iii) Parent or any Subsidiary of Parent is in "default" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan required by reason of Parent's or any of its
Subsidiaries' complete or partial withdrawal (as described in Section
4203 or 4205 of ERISA) from such Multiemployer Plan,
Parent will provide Agent and the Lenders with a certificate of its
president or its chief financial officer setting forth the details of such
event and the action which is proposed to be taken with respect thereto,
together with any notice or filing which may be required by the PBGC or any
other Governmental Authority with respect to such event;
(h) Notice of Material Adverse Effect. As soon as possible and in any
event within two (2) Business Days of the discovery of any event or
condition that could reasonably be expected to have a Material Adverse
Effect, written notice thereof;
CREDIT AGREEMENT - Page 62
69
(i) Proxy Statements, Periodic Reporting, Etc. As soon as
available, one copy of each financial statement, report, notice, or proxy
statement sent by Parent or any Subsidiary of Parent to its stockholders
generally and one copy of each regular, periodic, or special report,
registration statement, or prospectus filed by Parent or any Subsidiary of
Parent with any securities exchange or the Securities and Exchange
Commission or any successor agency;
(j) Intercompany Contracts. Promptly upon entering into any such
arrangement or contract (to the extent permitted by Section 11.7), copies
or detailed descriptions of all tax sharing, cost allocation, overhead
attribution, and any similar contracts or arrangements between Parent and
any of its Subsidiaries at any time existing;
(k) Articles and Certificates of Merger; Notice of Delisting.
Promptly upon consummation of the Brite Merger, a true and correct copy of
the Articles of Merger filed with, and a Certificate of Merger issued by,
the Kansas Secretary of State and, upon delisting of the Shares, notice to
Agent and the Lenders thereof; and
(l) General Information. Promptly, such other information concerning
Parent or any Subsidiary of Parent as Agent or any Lender may from time to
time reasonably request.
Section 10.2 Maintenance of Existence; Conduct of Business. Except as
permitted by Section 11.3, Parent will, and will cause each Subsidiary of Parent
to, preserve and maintain (i) its corporate existence and (ii) all of its
leases, privileges, Permits, franchises, qualifications, and rights that are
reasonably necessary in the ordinary conduct of its business. Parent will, and
will cause each Subsidiary of Parent to, conduct its business in an orderly and
efficient manner in accordance with good business practices.
Section 10.3 Maintenance of Properties. Parent will, and will cause each
Subsidiary of Parent to, maintain, keep, and preserve all of its material
Properties necessary in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.
Section 10.4 Taxes and Claims. Parent will, and will cause each Subsidiary
of Parent to, pay or discharge at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; provided, however, that neither Parent nor any Subsidiary
of Parent shall be required to pay or discharge any tax, levy, assessment, or
governmental charge or charge for labor, material, and supplies (i) which is
being contested in good faith by appropriate proceedings diligently pursued, and
for which adequate reserves in accordance with GAAP have been established and
(ii) if the failure to pay the same would not result in a Lien on the Property
of Parent or a Subsidiary of Parent other than Liens permitted pursuant to
Section 11.2(d) and Section 11.2(e).
CREDIT AGREEMENT - Page 63
70
Section 10.5 Insurance.
(a) Parent will, and will cause each Subsidiary of Parent to, keep
insured by financially sound and reputable insurers all Property of a
character usually insured by responsible businesses engaged in the same or
a similar business similarly situated against loss or damage of the kinds
and in the amounts customarily insured against by such corporations or
entities and carry such other insurance as is usually carried by such
businesses, provided that in any event Parent and each Subsidiary of Parent
(as appropriate) will maintain:
(i) Property Insurance. Insurance against loss or damage
covering substantially all of the tangible real and personal Property
and improvements of Parent and each Subsidiary of Parent by reason of
any Peril (as defined below) in such amounts (subject to any
deductibles as shall be reasonably satisfactory to Agent) as shall be
reasonable and customary and sufficient to avoid the insured named
therein from becoming a co-insurer of any loss under such policy, but
in any event in such amounts reasonably acceptable to Agent (and not
objected to by the Required Lenders) and as are reasonably available
as determined by the independent insurance broker of Parent or its
applicable Subsidiary;
(ii) Automobile Liability Insurance for Bodily Injury and
Property Damage. Insurance in respect of all vehicles (whether owned,
hired, or rented by Parent or any Subsidiary of Parent) at any time
located at, or used in connection with, its Properties or operations
against liabilities for bodily injury and Property damage in such
amounts as are then customary for vehicles used in connection with
similar Properties and businesses, but in any event to the extent
required by applicable law;
(iii) Comprehensive General Liability Insurance. Insurance
against claims for bodily injury, death, or Property damage occurring
on, in or about the Property (and adjoining streets, sidewalks, and
waterways) of Parent or any Subsidiary of Parent, in such amounts as
are then customary for Property similar in use in the jurisdictions
where such Properties are located; and
(iv) Worker's Compensation Insurance. Worker's compensation
insurance (including, without limitation, employers' liability
insurance) to the extent required by applicable law, which may be
self-insurance to the extent permitted by applicable law.
Such insurance shall be written by financially responsible companies
selected by the applicable Person and having an A.M. Best Rating of "A-" or
better and being in a financial size category of "VI" or larger, or by
other companies reasonably acceptable to Agent. Each policy referred to in
this Section 10.5 shall reflect Agent as loss payee or an additional
insured, as applicable, provide that it will not be canceled, amended, or
reduced except after not less than thirty (30) days' prior written notice
to Agent and shall also provide that the interests of Agent and the Lenders
shall not be invalidated or reduced by any act, omission, or negligence of
Parent or any Subsidiary of Parent. Parent will advise Agent promptly of
any policy cancellation, reduction, or amendment. For purposes hereof, the
term "Peril" shall
CREDIT AGREEMENT - Page 64
71
mean, collectively, fire, lightning, flood (to the extent required by
applicable law), windstorm, hail, explosion, riot and civil commotion,
vandalism and malicious mischief, damage from aircraft, vehicles and smoke,
and other perils covered by the "all-risk" endorsement then in use in the
jurisdictions where the Properties of Parent and its Subsidiaries are
located.
(b) Parent will, and will cause each Subsidiary of Parent, to cause
each insurance recovery (other than any portion of an insurance recovery
payable to a landlord to repair or replace Property leased by Parent or
such Subsidiary) payable by any insurance company to be deposited promptly
with Agent as security for the Obligations if a Default has then occurred
and is continuing.
(c) If a Default shall have occurred and be continuing, Parent will,
and will cause each Subsidiary of Parent, to cause all proceeds of
insurance paid on account of the loss of or damage to any Property of
Parent or any Subsidiary of Parent and all awards of compensation for any
Property of Parent or any Subsidiary of Parent taken by condemnation or
eminent domain to be paid directly to Agent to be applied against or held
as security for the Obligations, at the election of Agent and the Required
Lenders.
Section 10.6 Inspection Rights. Parent will, and will cause each
Subsidiary of Parent to, permit representatives and agents of Agent and each
Lender, during normal business hours and upon reasonable notice to Parent, to
examine, copy, and make extracts from Parent's or such Subsidiary's books and
records, to visit and inspect Parent's or such Subsidiary's Properties and to
discuss Parent's or such Subsidiary's business, operations, and financial
condition with its officers and independent certified public accountants. Parent
will, and will cause each Subsidiary of Parent to, authorize its accountants in
writing (with a copy to Agent) to comply with this Section. Agent or its
representatives may, at any time and from time to time at Borrower's expense,
conduct field exams for such purposes as Agent or the Required Lenders may
reasonably request.
Section 10.7 Keeping Books and Records. Parent will, and will cause each
Subsidiary of Parent to, maintain proper books of record and account in which
full, true, and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities.
Section 10.8 Compliance with Laws. Parent will, and will cause each
Subsidiary of Parent to, comply in all material respects with all applicable
laws (including, without limitation, all Environmental Laws, ERISA, and the
Code), rules, regulations, orders, and decrees of a material nature of any
Governmental Authority or arbitrator other than any such laws, rules,
regulations, orders, and decrees contested by appropriate actions or proceedings
diligently pursued, if adequate reserves in conformity with GAAP and
satisfactory to Agent are established with respect thereto and except for
violations which could not be expected to have a Material Adverse Effect.
Section 10.9 Compliance with Agreements. Parent will, and will cause each
Subsidiary of Parent to, comply with all agreements, contracts, and instruments
binding on it or affecting its
CREDIT AGREEMENT - Page 65
72
properties or business other than such noncompliance which could not be expected
to have a Material Adverse Effect.
Section 10.10 Further Assurances.
(a) Further Assurance. Parent will, and will cause each Subsidiary of
Parent to, execute and/or deliver pursuant to this clause (a) such further
documentation and take such further action as may be reasonably requested
by Agent and the Required Lenders to carry out the provisions and purposes
of the Loan Documents, including, without limitation, any agreement among
Parent, Borrower, Agent, and the Lenders to defer delivery of any legal
opinions requested pursuant to Section 8.1(r).
(b) Brite Joinder. On the effective date of the Brite Merger (the
"Brite Merger Date") and concurrently with consummation of the Brite
Merger, Parent and Borrower will cause Brite to execute and deliver to
Agent and the Lenders a Joinder Agreement and such other documentation as
Agent and the Required Lenders may require to cause Brite to succeed to all
rights, duties, indebtedness, liabilities, and obligations of Borrower
under this Agreement and the other Loan Documents. Furthermore, Brite will
cause each of its Domestic Subsidiaries which are not Immaterial
Subsidiaries to execute and deliver to Agent a Subsidiary Guaranty, a
Subsidiary Security Agreement, and such other documentation as Agent and
the Required Lenders may require to cause each such Subsidiary to evidence
and otherwise implement the Guarantee for the repayment of the Obligations
contemplated by this Agreement and the Liens of Agent in the Collateral as
security therefor.
(c) Subsidiary Joinder. Within ten (10) days after the end of each
Fiscal Quarter, Parent shall, and shall cause each Domestic Subsidiary,
which is not an Immaterial Subsidiary, created or acquired during the
Fiscal Quarter then ending to, execute and deliver to Agent such
documentation as Agent and the Required Lenders may require to cause Parent
and any such Domestic Subsidiary to evidence, perfect, and otherwise
implement the guaranty and/or security for repayment of the Obligations
contemplated by this Agreement, a Guaranty, and any other applicable
Security Document.
Section 10.11 ERISA. With respect to each Plan, Parent will, and will cause
each Subsidiary of Parent to, comply with all minimum funding requirements and
all other requirements of ERISA, if applicable, so as not to give rise to any
liability which could reasonably be expected to have a Material Adverse Effect.
Section 10.12 Year 2000 Compliance. Parent will, and will cause each
Subsidiary of Parent to, promptly notify Agent in the event Parent or any
Subsidiary of Parent discovers or determines that any computer application
(including those of its suppliers and vendors) that is material to it or any of
its business and operations will not be Year 2000 Compliant on a timely basis,
except to the extent that such failure could not be expected to have a Material
Adverse Effect.
Section 10.13 Acquisition Agreement. Parent will, and will pursuant to the
procedures and remedies available to it cause each party to the Brite
Acquisition Documents to, at its expense
CREDIT AGREEMENT - Page 66
73
(a) perform and observe all of the terms and provisions of the Brite Acquisition
Documents to be performed or observed by it, maintain such agreements in full
force and effect, enforce such agreements in accordance with their respective
terms, and take all action to such end as may be from time to time appropriate
in the exercise of prudent business judgment, (b) furnish to Agent promptly on
receipt thereof, copies of all notices, requests, and other documents received
by it under or pursuant to the Brite Acquisition Documents, and (c) from time to
time (i) furnish to Agent such information and requests regarding such
agreements as Agent may reasonably request and (ii) make to any other party to
any such agreement such demands and requests for information and reports or for
action as Agent and the Required Lenders may reasonably request.
Section 10.14 Hedge Agreement. Parent shall with or on behalf of Borrower,
or shall cause Borrower to, within one hundred twenty (120) days of the Closing
Date, enter into a Hedge Agreement, reasonably satisfactory to Agent, which
shall provide coverage for fluctuations in interest rates for at least
$50,000,000 of the Term Loans for a period of at least three (3) years from the
Closing Date.
ARTICLE 11
Negative Covenants
Each of Parent and Borrower covenants and agrees that, as long as the
Obligations or any part thereof are outstanding or any Lender has any Commitment
hereunder or any Letter of Credit remains outstanding, Parent and Borrower will
perform and observe the following negative covenants:
Section 11.1 Debt. Parent will not, and will not permit any Subsidiary of
Parent to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) Debt described on Schedule 9.9, excluding the Obligations, and
any extensions, renewals, or refinancings of such existing Debt so long as
(i) the principal amount of such Debt after such renewal, extension, or
refinancing shall not exceed the principal amount of such Debt which was
outstanding immediately prior to such renewal, extension, or refinancing
and (ii) such Debt shall not be secured by any assets other than assets
securing such Debt, if any, prior to such renewal, extension, or
refinancing, including, to the extent applicable, proceeds of such assets;
(c) Debt of a Subsidiary owed to Parent or another Subsidiary of
Parent; provided that such Debt must according to its terms be fully
subordinate in all respects to any of such Subsidiary's indebtedness,
liabilities, or obligations to Agent and the Lenders pursuant to any Loan
Document;
(d) Debt of Parent owed to a Domestic Subsidiary;
CREDIT AGREEMENT - Page 67
74
(e) Guaranties and other Debt incurred in the ordinary course of
business with respect to surety and appeal bonds, performance and
return-of-money bonds, letters of credit, banker's acceptances, and other
similar obligations including those of the type otherwise described in
Section 11.2(f);
(f) Debt of Parent or any Subsidiary of Parent constituting purchase
money Debt (including, without limitation, Capital Lease Obligations)
incurred after the Closing Date not to exceed $1,000,000 in the aggregate
at any time outstanding secured by purchase money Liens permitted by
Section 11.2(g);
(g) Debt constituting obligations to reimburse worker's compensation
insurance companies for claims paid by such companies on behalf of Parent
or any Subsidiary of Parent in accordance with the policies issued to
Parent or such Subsidiary of Parent;
(h) Debt secured by the Liens permitted by Section 11.2(d) and
Section 11.2(e);
(i) Debt arising under, created by, and consisting of Hedge
Agreements; provided, (i) such Hedge Agreements shall have been entered
into for the purpose of hedging actual risk and not for speculative
purposes and (ii) that each counterparty to such Hedge Agreement shall be a
Lender or shall be rated in one of the two highest rating categories of
Standard and Poor's Corporation or ▇▇▇▇▇'▇ Investors Service, Inc.;
(j) Debt arising from endorsement of negotiable instruments for
deposit or collection or similar transactions in the ordinary course of
business of Parent or a Subsidiary of Parent;
(k) Debt of a Domestic Subsidiary of Parent acquired after the
Closing Date and Debt of a Person merged or consolidated with or into
Parent or a Domestic Subsidiary after the Closing Date, which Debt in each
case exists at the time of such acquisition, merger, or consolidation and
was not created or incurred in contemplation of such acquisition, merger,
or consolidation, and where such acquisition, merger, or consolidation is
not prohibited under this Agreement, and where the aggregate of all such
Debt does not exceed $5,000,000;
(l) Guaranties of customer contracts, bids, accounts payable, accrued
expenses, and other similar liabilities occurring in the ordinary course of
business; and
(m) In addition to the Debt described in the foregoing clauses (a)
through (l) (but specifically excluding any Debt under Section 11.11), Debt
which when combined with the Debt described in clause (f) and clause (k)
preceding does not exceed $10,000,000 in aggregate principal amount at any
one time outstanding.
Section 11.2 Limitation on Liens and Restrictions on Subsidiaries. Parent
will not, and will not permit any Subsidiary of Parent to, incur, create,
assume, or permit to exist any Lien upon any of its property, assets, or
revenues, whether now owned or hereafter acquired, except the following:
CREDIT AGREEMENT - Page 68
75
(a) Existing Liens described on Schedule 11.2 hereto, and any
extensions, renewals, or refinancings of the Debt secured by such Liens as
permitted under Section 11.1(b); provided that (i) no such Lien is expanded
to cover any additional Property (other than after acquired title in or on
such Property and proceeds of the existing collateral) after the Closing
Date and (ii) no such Lien is spread to secure any additional Debt after
the Closing Date;
(b) Liens in favor of Agent, for the benefit of Agent and the Lenders
as collateral for the Obligations or otherwise, pursuant to the Loan
Documents;
(c) Encumbrances consisting of easements, zoning restrictions, or
other restrictions on the use of real Property that do not (individually or
in the aggregate) materially detract from the value of the real Property
encumbered thereby or materially impair the ability of Parent or such
Subsidiary to use such real Property in its business;
(d) Liens for taxes, assessments, or other governmental charges (but
excluding Environmental Liens or Liens under ERISA) that are not delinquent
or which are being contested in good faith and for which adequate reserves
have been established in accordance with GAAP;
(e) Contractual or statutory Liens of mechanics, materialmen,
warehousemen, carriers, landlords, or other similar statutory Liens
securing obligations that are not overdue or are being contested in good
faith by appropriate proceedings diligently pursued and for which adequate
reserves have been established in accordance with GAAP and are incurred in
the ordinary course of business;
(f) Liens resulting from deposits to secure payments of worker's
compensation, unemployment insurance, or other social security programs or
to secure the performance of tenders, statutory obligations, leases,
insurance contracts, surety and appeal bonds, bids, and other contracts
incurred in the ordinary course of business (other than for payment of
Debt);
(g) Liens for purchase money obligations and Liens securing Capital
Lease Obligations; provided that (i) the Debt secured by any such Lien is
permitted under Section 11.1(f) and (ii) any such Lien encumbers only the
Property so purchased or leased;
(h) Any attachment or judgment Lien not constituting an Event of
Default;
(i) Any interest or title of a licensor, lessor, or sublessor under
any license or lease and any interest or title of a licensee, lessee, or
sublessee under any license, cross-license, or lease in any event entered
into in the ordinary course of business and not otherwise prohibited by the
terms of this Agreement;
(j) Liens against equipment arising from precautionary UCC financing
statement filings, including, without limitation, financing statements
regarding operating leases entered into by such Person in the ordinary
course of business; and
CREDIT AGREEMENT - Page 69
76
(k) Nonconsensual Liens in favor of banking institutions arising as a
matter of law and encumbering the deposits (including the right of set-off)
held by such banking institutions in the ordinary course of business.
Section 11.3 Mergers, Etc. Parent will not, and will not permit any
Subsidiary of Parent to, become a party to a merger or consolidation other than
the Brite Merger, or purchase or otherwise acquire all or a substantial part of
the business or Property of any Person or all or a substantial part of the
business or Property of a division or branch of a Person or a majority interest
in the Capital Stock of any Person, or wind-up, dissolve, or liquidate itself;
provided that notwithstanding the foregoing or any other provision of this
Agreement as long as no Default exists or would result therefrom and provided
Parent gives Agent and the Lenders prior written notice:
(a) A Subsidiary of Parent, other than Borrower, may wind-up,
dissolve, or liquidate if (i) its Property is transferred to Parent or a
Wholly-Owned Domestic Subsidiary and (ii) the Person acquiring such
Property complies with its obligations under Section 10.10 simultaneously
with such acquisition;
(b) Any Subsidiary of Parent, other than Borrower, may merge or
consolidate with Parent or Borrower (provided Parent or Borrower is the
surviving entity) or with any other Wholly-Owned Domestic Subsidiary
(provided the Wholly-Owned Domestic Subsidiary is the surviving entity);
(c) After the Brite Merger, Brite may merge with and into Parent,
provided that Parent, Brite, and the other Loan Parties shall execute and
deliver any agreements, documents, or instruments requested by Agent and
the Lenders in connection with such Merger, including, without limitation,
an amendment and restatement of this Agreement and any other Loan Documents
deemed necessary or desirable by Agent and the Lenders; and
(d) the Loan Parties may make Permitted Acquisitions.
Section 11.4 Restricted Payments. Parent will not, and will not permit any
Subsidiary of Parent to, (x) make any prepayment of any Debt other than (i) the
Obligations (ii) any Debt owed to any Loan Party, or (iii) so long as no Event
of Default is in existence, any Debt permitted pursuant to Section 11.1, or (y)
directly or indirectly declare, order, pay, make, or set apart any sum for (i)
any dividend or other distribution, direct or indirect, on account of any shares
of any class of Capital Stock of such Person now or hereafter outstanding, (ii)
any redemption, conversion, exchange, retirement, sinking fund, or similar
payment, purchase, or other acquisition for value, direct or indirect, of any
shares of any class of Capital Stock of any such Person now or hereafter
outstanding, or (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options, or other rights to acquire shares of any
class of Capital Stock of any such Person now or hereafter outstanding except:
(a) Subsidiaries of Parent may make, declare, and pay dividends and
make other distributions with respect to their Capital Stock to Parent or
Wholly-Owned Domestic Subsidiaries;
CREDIT AGREEMENT - Page 70
77
(b) Parent may declare and pay dividends on any class of its Capital
Stock payable solely in shares of Capital Stock of Parent; and
(c) Parent may acquire or redeem Capital Stock of Parent held by any
former officer, director, or employee of Parent or beneficiaries of any
such Person's estate or trusts created by or for the benefit of any such
Person or their beneficiaries.
Section 11.5 Investments. Parent will not, and will not permit any
Subsidiary of Parent to, make or permit to remain outstanding any advance, loan,
extension of credit, or capital contribution to or investment in any Person, or
purchase or own any stocks, bonds, notes, debentures, or other Securities of any
Person, or be or become a joint venturer with or partner of any Person (all the
foregoing, herein "Investments"), except:
(a) Permitted Acquisitions;
(b) Investments in Subsidiaries of Parent, including existing and new
Subsidiaries (subject to the requirements of Section 11.3); provided that
such Investments which constitute advances, loans, extensions of credit,
bonds, notes, or debentures owed by any Loan Party shall at all times be
subordinate in all respects to the Obligations or any indebtedness,
liability, or obligation of such Person to Agent and the Lenders under any
Loan Document and must otherwise be in compliance with Section 11.1 and
Section 11.3;
(c) Investments which comply with Parent's investment policy as in
effect at such time and as approved by Parent's board of directors and
Investments existing on the Closing Date;
(d) advances to officers, directors, and employees for business
expenses incurred in the ordinary course of business;
(e) Investments received in connection with the bankruptcy or
reorganization of suppliers, customers, and other trade debtors and in
connection with the settlement of delinquent obligations of, and disputes
with, customers and suppliers, and other trade debtors arising in the
ordinary course of business; and
(f) extensions of trade credit in the ordinary course of business.
Section 11.6 Limitation on Issuance of Capital Stock. Parent will not, and
will not permit any Subsidiary of Parent to, at any time issue, sell, assign, or
otherwise dispose of, except to Parent or a Subsidiary of Parent, (a) any
Capital Stock of a Subsidiary of Parent, (b) any securities exchangeable for or
convertible into or carrying any rights to acquire any Capital Stock of a
Subsidiary of Parent, or (c) any option, warrant, or other right to acquire any
Capital Stock of a Subsidiary of Parent.
Section 11.7 Transactions With Affiliates. Parent will not, and will not
permit any Subsidiary of Parent to, enter into any transaction, including,
without limitation, the purchase, sale,
CREDIT AGREEMENT - Page 71
78
or exchange of property or the rendering of any service, with any Affiliate of
Parent or such Subsidiary of Parent, except in the ordinary course of and
pursuant to the reasonable requirements of Parent's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to Parent or such
Subsidiary than would be obtained in a comparable arms-length transaction with a
Person not an Affiliate of Parent or such Subsidiary. Nothing contained in the
foregoing sentence shall restrict or limit any transfer, transaction, or
rendering of service: (a) among the Foreign Subsidiaries; (b) from any
Subsidiary of Parent to or for the benefit of Parent or Borrower; (c) by or from
Parent or any Subsidiary of Parent of Intellectual Property to InterVoice
Limited Partnership; (d) from any Foreign Subsidiary to Parent or any Subsidiary
of Parent; (e) from a Domestic Subsidiary, other than Borrower, to another
Domestic Subsidiary; or (f) other transfers, transactions, or rendering of
services in the ordinary course of business operations and pursuant to
reasonable requirements of Parent and its Subsidiaries and upon fair and
reasonable terms between such Persons.
Section 11.8 Asset Dispositions. Parent will not permit any Asset
Disposition by Parent or any Subsidiary of Parent in excess of $1,000,000 for
any single Asset Disposition or $5,000,000 for all such Asset Dispositions
occurring after the Closing Date unless the Net Proceeds of such Asset
Disposition are applied as provided in Section 5.4(a)(ii); provided that no
Receivables of any Loan Party may be subject to any Asset Disposition.
Section 11.9 Lines of Business. Parent will not, and will not permit any
Subsidiary of Parent to, engage, as a major line of business, in any line or
lines of business activity other than the business activities in which they are
engaged (including lines of business in which Brite and its Subsidiaries are
engaged ) on the date hereof or a business reasonably related or incidental
thereto. From the Closing Date until the Brite Merger Date, Borrower shall not
engage in any business activity other than those activities related to the
Related Transactions.
Section 11.10 Limitations on Restrictions Affecting Parent and
Subsidiaries. Neither Parent, Borrower, nor any other Subsidiary of Parent shall
enter into or assume any agreement (other than the Loan Documents) prohibiting
the creation or assumption of any Lien upon its Properties, whether now owned or
hereafter acquired, other than pursuant to non-assignment provisions of a
license, lease, or Permitted Lien entered into in the ordinary course of
business and which is restricted solely to the Property which is the subject of
such license, lease, or Permitted Lien and which does not prohibit the Liens
created under the Loan Documents or pursuant to which the Liens created under
the Loan Documents will not constitute a default. Except as provided herein,
Parent will not, and will not permit any Subsidiary of Parent to, directly or
indirectly create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of Parent or
any Subsidiary of Parent to (a) pay dividends or make any other distribution on
any of its Capital Stock, (b) pay any Debt owed to Parent or any subsidiary of
Parent, (c) make loans or advances to Parent or any Subsidiary of Parent, (d)
transfer any Property of Parent or any Subsidiary of Parent to any other Person,
except pursuant to non-assignment provisions of licenses, leases, and Permitted
Liens entered into in the ordinary course of business, or (e) make any
prepayment of any of the Obligations.
Section 11.11 ERISA. Parent will not, and will not permit any Subsidiary of
Parent to:
CREDIT AGREEMENT - Page 72
79
(a) allow, or take (or permit any ERISA Affiliate to take) any action
which would cause, any unfunded or unreserved liability for benefits under
any Plan (exclusive of any Multiemployer Plan) in excess of $1,000,000 to
exist or to be created; or
(b) with respect to any Multiemployer Plan, allow or take (or permit
any ERISA Affiliate to take) any action which would cause any unfunded or
unreserved liability for benefits under any Multiemployer Plan in excess of
$1,000,000 to exist or to be created, either individually as to any such
Plan or in the aggregate as to all such Plans.
ARTICLE 12
Financial Covenants
Parent covenants and agrees that, as long as the Obligations or any part
thereof are outstanding or any Lender has any Commitment hereunder or any Letter
of Credit remains outstanding, it will perform and observe the following
financial covenants:
Section 12.1 Leverage Ratio. As of the end of each Fiscal Quarter ending
during the periods set forth below, Parent shall not permit the Leverage Ratio,
calculated as of the Fiscal Quarter ending May 31, 1999, and as of the end of
each Fiscal Quarter thereafter, for the preceding four (4) Fiscal Quarter period
then ending (provided that for the Fiscal Quarters ending August 31, 1999,
November 30, 1999, and February 29, 2000, such calculation shall be annualized
for the number of months elapsed since May 31, 1999, and thereafter shall be
calculated on a rolling four (4) Fiscal Quarters basis), to exceed the ratio set
forth below opposite the applicable period below:
================================================================================
Period End Leverage Ratio
================================================================================
May 31, 1999 through and including 2.50 to 1.00
November 30, 1999
--------------------------------------------------------------------------------
February 28, 2000 through and including 2.00 to 1.00
November 30, 2000
--------------------------------------------------------------------------------
February 28, 2001 and thereafter 1.50 to 1.00
================================================================================
Section 12.2 Fixed Charge Coverage Ratio. As of the end of each Fiscal
Quarter ending during the periods set forth below, Parent shall not permit the
Fixed Charge Coverage Ratio, calculated as of the Fiscal Quarter ending May 31,
1999, and as of the end of each Fiscal Quarter thereafter, for the preceding
four (4) Fiscal Quarter period then ending (provided that for the Fiscal
Quarters ending August 31, 1999, November 30, 1999, and February 29, 2000, such
calculation shall be annualized for the number of months elapsed since May 31,
1999, and thereafter shall be calculated on a rolling four (4) Fiscal Quarters
basis), to be less than the ratio set forth below opposite the applicable period
below:
CREDIT AGREEMENT - Page 73
80
================================================================================
Period End Fixed Charge Coverage Ratio
================================================================================
From May 31, 1999 through and 1.50 to 1.00
including November 30, 2000
--------------------------------------------------------------------------------
From February 28, 2001 and thereafter 1.25 to 1.00
================================================================================
Section 12.3 Minimum Adjusted Net Worth. At all times from and after the
Closing Date, Parent shall not permit its Adjusted Net Worth to be less than (a)
$61,896,000, plus (b) seventy-five percent (75.0%) of any increase in Adjusted
Net Worth which is attributable to the Brite Acquisition or the Brite Merger, or
minus one hundred percent (100%) of any decrease in Adjusted Net Worth
attributable to the Brite Acquisition or the Brite Merger, plus (c) seventy-five
percent (75.0%) of Parent's positive Net Income for each Fiscal Quarter
completed after February 28, 1999, plus (d) one hundred percent (100%) of any
increase in Adjusted Net Worth attributable to issuance of equity securities of
Parent or any Subsidiary of Parent after February 28, 1999, other than shares
issued in connection with the Brite Acquisition and the Brite Merger.
Section 12.4 Capital Expenditures. Parent shall not permit the aggregate
amount of all Capital Expenditures of Parent and its Subsidiaries made during
any Fiscal Year to exceed $20,000,000.
ARTICLE 13
Default
Section 13.1 Events of Default. Each of the following shall be deemed an
"Event of Default":
(a) Borrower shall fail to pay (i) when due any principal of any Loan
or any Reimbursement Obligation payable under any Loan Document or any part
thereof; (ii) within five (5) days of the date due any interest or fees
payable under the Loan Documents or any part thereof; or (iii) within five
(5) days after the date Borrower receives written notice of the failure to
pay when due, any other Obligation or any part thereof, or any
indebtedness, liability, or obligation due to any Lender under any Hedge
Agreement;
(b) Any representation, warranty, or certification made or deemed
made by any Loan Party (or any of their respective officers) in any Loan
Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with any Loan Document shall be untrue
or incorrect in any material respect when made or deemed to have been made;
(c) Any Loan Party shall fail to perform, observe, or comply with any
covenant, agreement, or term contained in Section 2.4, Section 3.4, Section
10.2, Section 10.6,
CREDIT AGREEMENT - Page 74
81
Article 11 (other than related to non-consensual Liens under Section 11.2),
or Article 12 of this Agreement;
(d) Any Loan Party shall fail to perform, observe, or comply with any
other agreement or term contained in any Loan Document (other than
covenants described in Section 13.1(a)-(c)) and (i) such failure shall
continue for a period of thirty (30) days after the earlier of (A) the date
Agent provides Parent or Borrower with notice thereof or (B) the date
Parent should have notified Agent thereof in accordance with Section
10.1(f) or (ii) as otherwise specifically provided by any other Loan
Document;
(e) Any Loan Party shall (i) apply for or consent to the appointment
of, or the taking of possession by, a receiver, custodian, trustee,
examiner, liquidator, or the like of itself or of all or a substantial part
of its Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect, the "Bankruptcy Code"),
(iv) institute any proceeding or file a petition seeking to take advantage
of any other law relating to bankruptcy, insolvency, reorganization,
liquidation, dissolution, winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate manner, or
acquiesce in writing to, any petition filed against it in an involuntary
case under the Bankruptcy Code, (vi) admit in writing its inability to, or
be generally unable to pay its debts as such debts become due, or (vii)
take any corporate action for the purpose of effecting any of the
foregoing;
(f) A proceeding or case shall be commenced, without the application,
approval, or consent of the applicable Loan Party in any court of competent
jurisdiction, seeking (i) its reorganization, liquidation, dissolution,
arrangement, or winding-up, or the composition or readjustment of its
debts, (ii) the appointment of a receiver, custodian, trustee, examiner,
liquidator, or the like of such Loan Party or of all or any substantial
part of its Property, or (iii) similar relief in respect of such Loan Party
under any law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or readjustment of debts, and such proceeding or
case shall continue undismissed, or an order, judgment, or decree approving
or ordering any of the foregoing shall be entered and continue unstayed and
in effect, for a period of sixty (60) or more days; or an order for relief
against any Loan Party shall be entered in an involuntary case under the
Bankruptcy Code;
(g) Any Loan Party shall fail within a period of thirty (30) days
after the commencement thereof to discharge or obtain a stay of any
attachment, sequestration, forfeiture, or similar proceeding or proceedings
involving an aggregate amount in excess of $3,000,000 against any of its
assets or Properties;
(h) A final judgment or judgments for the payment of money in excess
of $3,000,000 in the aggregate (to the extent not paid or covered by
insurance) shall be rendered by a court or courts against any Loan Party
and the same shall not be discharged (or provision shall not be made for
such discharge), or a stay of execution thereof shall not be procured,
within thirty (30) days from the date of entry thereof and the relevant
Loan Party shall not,
CREDIT AGREEMENT - Page 75
82
within said period of thirty (30) days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and cause
the execution thereof to be stayed during such appeal;
(i) Any Loan Party shall fail to pay when due any principal of or
interest on any Debt (other than the Obligations) beyond the period of
grace (if any) if the aggregate principal amount of the affected Debt
equals or exceeds $3,000,000, or the maturity of any such Debt shall have
been accelerated, or any such Debt shall have been required to be prepaid
prior to the stated maturity thereof or any event shall have occurred with
respect to any Debt in the aggregate principal amount equal to or in excess
of $3,000,000 that permits any holder or holders of such Debt or any Person
acting on behalf of such holder or holders to accelerate the maturity
thereof or require any prepayment thereof;
(j) This Agreement or any Security Document shall cease to be in full
force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any Loan Party
or any Loan Party shall deny that it has any further liability or
obligation under any of the Loan Documents or any Lien created or purported
to be created by the Loan Documents shall for any reason cease to be or
fail to be a valid, first priority perfected Lien (except for Liens
permitted under this Agreement or any other Loan Document, if any, which
are expressly permitted by the Loan Documents to have priority over the
Liens in favor of Agent) upon any of the Collateral purported to be covered
thereby;
(k) Any of the following events shall occur or exist with respect to
Parent, any Subsidiary of Parent, or any ERISA Affiliate and in each case,
such event or condition, together with all other such events or conditions,
if any, have subjected or could in the reasonable opinion of Agent or the
Required Lenders subject Parent or its Subsidiaries to any tax, penalty, or
other liability to a Plan, a Multiemployer Plan, the PBGC, or otherwise (or
any combination thereof) which in the aggregate could reasonably be
expected to exceed $1,000,000: (i) any Prohibited Transaction involving any
Plan; (ii) any Reportable Event with respect to any Plan; (iii) the filing
under Section 4041 of ERISA of a notice of intent to terminate any Plan or
the termination of any Plan; (iv) any event or circumstance that could
reasonably be expected to constitute grounds entitling the PBGC to
institute proceedings under Section 4042 of ERISA for the termination of,
or for the appointment of a trustee to administer, any Plan, or the
institution by the PBGC of any such proceedings; or (v) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or
the reorganization, insolvency, or termination of any Multiemployer Plan;
(l) Parent shall cease to own 100% of the Capital Stock of Borrower
or, during the period after funding of the initial Loans hereunder and
prior to the Brite Merger, Borrower shall cease to own at least the Minimum
Shares;
(m) The occurrence or the failure to occur (as applicable) of any the
following events:
CREDIT AGREEMENT - Page 76
83
(i) the Brite Acquisition, shall fail to be consummated on the
Closing Date; or
(ii) either Parent or Borrower takes any action to terminate
the Brite Merger Agreement or elects for any reason not to consummate
the Brite Merger; or
(n) Any Person or two or more Persons acting as a group (as defined
in Section 13d-3 of the Securities Exchange Act of 1934) shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of
1934) of 50.0% or more of the outstanding shares of Voting Stock of Parent.
Section 13.2 Remedies. If any Event of Default shall occur and be
continuing, Agent may (and if directed by the Required Lenders, shall) do any
one or more of the following:
(a) Acceleration. By notice to Borrower, declare all outstanding
principal of and accrued and unpaid interest on the Notes and all other
amounts payable by Borrower under the Loan Documents immediately due and
payable, and the same shall thereupon become immediately due and payable,
without further notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other formalities
of any kind, all of which are hereby expressly waived by Borrower except as
where required by the specific terms of this Agreement or the other Loan
Documents;
(b) Termination of Commitments. Terminate the Commitments, including,
without limitation, the obligation of the Issuing Bank to issue Letters of
Credit, without notice to Borrower or any other Person;
(c) Judgment. Reduce any claim to judgment;
(d) Foreclosure. Foreclose or otherwise enforce any Lien granted to
Agent, for the benefit of Agent and the Lenders to secure payment and
performance of the Obligations in accordance with the terms of the Loan
Documents; and
(e) Rights. Exercise any and all rights and remedies afforded by the
laws of the State of Texas, or any other jurisdiction governing any of the
Loan Documents, by equity, or otherwise;
provided, however, that, upon the occurrence of an Event of Default under
Section 13.1(e) or Section 13.1(f), the Commitments of all of the Lenders, and
the obligation of the Issuing Bank to issue Letters of Credit, shall
automatically terminate and the outstanding principal of and accrued and unpaid
interest on the Notes and all other amounts payable by Borrower or any other
Loan Party under the Loan Documents shall thereupon become immediately due and
payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other formalities of
any kind, all of which are hereby expressly waived by Parent and Borrower.
CREDIT AGREEMENT - Page 77
84
Section 13.3 Cash Collateral. If an Event of Default shall have occurred
and be continuing, Parent and/or Borrower shall, if requested by Agent or the
Required Lenders, pledge to Agent as security for the Obligations, pursuant to
agreements in form and substance satisfactory to Agent, an amount in immediately
available funds equal to the then outstanding Letter of Credit Liabilities, such
funds to be held in a cash collateral account by Agent without any right of
withdrawal by Parent or Borrower. If such Event of Default is subsequently
cured, then the balance of such cash collateral account shall be released to
Parent and/or Borrower, as applicable.
Section 13.4 Performance by Agent. Upon the occurrence of a Default, if
any Loan Party shall fail to perform any agreement in accordance with the terms
of the Loan Documents, Agent may, at the direction of the Required Lenders,
perform or attempt to perform such agreement on behalf of such Loan Party. In
such event, Parent and/or Borrower shall, at the request of Agent, promptly pay
any amount expended by Agent or the Lenders in connection with such performance
or attempted performance, to Agent at the Principal Office together with
interest thereon at the Default Rate applicable to Base Rate Accounts from and
including the date of such expenditure to but excluding the date such
expenditure is paid in full. Notwithstanding the foregoing, it is expressly
agreed that neither Agent, Arranger, nor any Lender shall have any liability or
responsibility for the performance of any obligation of any Loan Party under any
Loan Document.
Section 13.5 Set-off. If an Event of Default shall have occurred and be
continuing, each Lender is hereby authorized at any time and from time to time,
without notice to Parent, Borrower, or any other Person (any such notice being
hereby expressly waived), to set-off and apply any and all deposits (general or
special, time or demand, provisional or final) at any time held and other
indebtedness at any time owing by such Lender to or for the credit or the
account of Parent, Borrower, or any other Loan Party against any and all of the
Obligations now or hereafter existing under any Loan Document, irrespective of
whether or not Agent or such Lender shall have made any demand under such Loan
Documents and although the Obligations may be unmatured. Each Lender agrees
promptly to notify Parent and Borrower (with a copy to Agent) after any such
set-off and application, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights and remedies of
each Lender hereunder are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may have.
Section 13.6 Continuance of Default. For purposes of all Loan Documents, a
Default shall be deemed to have continued and exist until Agent shall have
actually received evidence satisfactory to Agent that such Default shall have
been remedied.
ARTICLE 14
Guaranty of Parent
Section 14.1 Guaranty. Parent hereby irrevocably and unconditionally
Guarantees to Agent, for the benefit of Agent and the Lenders, the full and
prompt payment and performance of the Guaranteed Indebtedness (as defined below)
upon the terms set forth in this Article 14. As used in this Article 14, the
term "Guaranteed Indebtedness" means all of the Obligations, and shall include,
without limitation, any and all post-petition interest and expenses (including,
without
CREDIT AGREEMENT - Page 78
85
limitation, attorneys' fees) whether or not allowed under any bankruptcy,
insolvency, or other similar law and all reasonable attorneys' fees and all
other costs and expenses incurred by Agent and the Lenders in connection with
the administration, enforcement, or collection of the Obligations pursuant to
this Article 14.
Section 14.2 Contribution. Parent, together with each other Guarantor
under any Guaranty, if any, relating to this Credit Agreement (the "Related
Guaranties") which contain a contribution provision similar to that set forth in
this Section, agrees that it and all such other Guarantors (collectively, the
"Contributing Guarantors") together desire to allocate among themselves, in a
fair and equitable manner, their obligations arising under this Agreement and
the Related Guaranties. Accordingly, in the event any payment or distribution is
made by Parent under this Agreement or a Guarantor under a Related Guaranty (a
"Funding Guarantor") that exceeds its Fair Share (as defined below), that
Funding Guarantor shall be entitled to a contribution from each of the other
Contributing Guarantors in the amount of such other Contributing Guarantor's
Fair Share Shortfall (as defined below), with the result that all such
contributions will cause each Contributing Guarantor's Aggregate Payments (as
defined below) to equal its Fair Share; provided, however, that the obligations
to or from any Funding Guarantor as described in this Section shall be
subordinate to the obligation of Parent to pay the Guaranteed Indebtedness as
more fully set forth in Section 14.1. "Fair Share" means, with respect to a
Contributing Guarantor as of any date of determination, an amount equal to (a)
the ratio of (i) the Adjusted Maximum Amount (as defined below) with respect to
such Contributing Guarantor to (ii) the aggregate of the Adjusted Maximum
Amounts with respect to all Contributing Guarantors, multiplied by (b) the
aggregate amount paid or distributed on or before such date by all Funding
Guarantors under this Agreement and the Related Guaranties in respect of the
obligations Guaranteed. "Fair Share Shortfall" means, with respect to a
Contributing Guarantor as of any date of determination, the excess, if any, of
the Fair Share of such Contributing Guarantor over the Aggregate Payments of
such Contributing Guarantor. "Adjusted Maximum Amount" means, with respect to a
Contributing Guarantor as of any date of determination, the maximum aggregate
amount of the obligations of such Contributing Guarantor under this Agreement or
a Related Guaranty, in each case determined in accordance with the provisions
hereof and thereof; provided that, solely for purposes of calculating the
"Adjusted Maximum Amount" with respect to any Contributing Guarantor for
purposes of this Section, the assets or liabilities arising by virtue of any
rights to or obligations of contribution hereunder or under any similar
provision contained in a Related Guaranty shall not be considered as assets or
liabilities of such Contributing Guarantor. "Aggregate Payments" means, with
respect to a Contributing Guarantor as of any date of determination, the
aggregate amount of all payments and distributions made on or before such date
by such Contributing Guarantor in respect of this Agreement and the Related
Guaranties (including, without limitation, in respect of this Section or any
similar provision contained in a Related Guaranty). The amounts payable as
contributions hereunder and under similar provisions in the Related Guaranties
shall be determined as of the date on which the related payment or distribution
is made by the applicable Funding Guarantor. The allocation among Contributing
Guarantors of their obligations as set forth in this Section or any similar
provision contained in a Related Guaranty shall not be construed in any way to
limit the liability of any Contributing Guarantor hereunder or under a Related
Guaranty. Each Contributing Guarantor under a Related Guaranty is a third party
beneficiary to the contribution agreement set forth in this Section.
CREDIT AGREEMENT - Page 79
86
Section 14.3 Guaranty of Performance. The Guaranty provided for in this
Article 14 shall be an absolute, continuing, irrevocable, and unconditional
guaranty of payment and performance, and not a guaranty of collection, and
Parent shall remain liable on its obligations hereunder until the payment and
performance in full of the Guaranteed Indebtedness. No set-off, counterclaim,
recoupment, reduction, or diminution of any obligation, or any defense of any
kind or nature (other than payment or performance) which Borrower may have
against Agent, any Lender, the Issuing Bank, or any other party, or which Parent
may have against Borrower, Agent, any Lender, the Issuing Bank, or any other
party, shall be available to, or shall be asserted by, Parent against Agent, any
Lender, or any subsequent holder of the Guaranteed Indebtedness or any part
thereof or against payment of the Guaranteed Indebtedness or any part thereof.
Section 14.4 Rights Cumulative. If Parent becomes liable for any
indebtedness owing by Borrower to Agent or any Lender by endorsement or
otherwise, other than pursuant to the terms of this Article 14, such liability
shall not be in any manner impaired or affected thereby, and the rights of Agent
and the Lenders hereunder shall be cumulative of any and all other rights that
Agent and the Lenders may ever have against Parent. The exercise by Agent and
the Lenders of any right or remedy under this Article 14 or under any other
instrument, or at law or in equity, shall not preclude the concurrent or
subsequent exercise of any other right or remedy.
Section 14.5 Payment Upon Event of Default; Subrogation. Upon the
occurrence of an Event of Default, whether for payment of any portion of the
Guaranteed Indebtedness or any other performance of the terms of this Agreement,
or otherwise when any portion of the Guaranteed Indebtedness becomes due,
whether by its terms, by acceleration, or otherwise, Parent shall promptly pay
the amount due thereon to Agent, for the benefit of Agent and the Lenders,
without notice or demand in lawful currency of the U.S., and it shall not be
necessary for Agent or any Lender, in order to enforce such payment by Parent,
first to institute suit or exhaust its remedies against Borrower or others
liable on such Guaranteed Indebtedness, or to enforce any rights against any
Collateral which shall ever have been given to secure such Guaranteed
Indebtedness. In the event such payment is made by Parent, then Parent shall be
subrogated to the rights then held by Agent and the Lenders with respect to the
Guaranteed Indebtedness to the extent to which the Guaranteed Indebtedness was
discharged by Parent and, in addition, upon payment by Parent of any sums to
Agent hereunder, all rights of Parent against Borrower, any other Guarantor or
any Collateral arising as a result therefrom by way of right of subrogation,
reimbursement, or otherwise shall in all respects be subordinate and junior in
right of payment to the prior indefeasible payment in full of the Guaranteed
Indebtedness and no such right or remedy of subrogation, reimbursement or
otherwise shall be exercised or otherwise entered unless and until the
Guaranteed Indebtedness has been indefeasibly paid in full.
Section 14.6 No Effect of Stay in Bankruptcy. If acceleration of the time
for payment of any amount payable by Borrower under the Guaranteed Indebtedness
is stayed upon the insolvency, bankruptcy, or reorganization of Borrower, all
such amounts otherwise subject to acceleration under the terms of the Guaranteed
Indebtedness shall nonetheless be payable by Parent hereunder forthwith on
demand by Agent or any Lender.
Section 14.7 Nonimpairment of Guaranty. Parent hereby agrees that its
obligations under this Article 14 shall not be released, discharged, diminished,
impaired, reduced, or affected for any
CREDIT AGREEMENT - Page 80
87
reason or by the occurrence of any event, including, without limitation, one or
more of the following occurrences or events, whether or not with notice to or
the consent of Parent: (a) the taking or accepting of collateral as security for
any or all of the Guaranteed Indebtedness or the release, surrender, exchange,
or subordination of any collateral now or hereafter securing any or all of the
Guaranteed Indebtedness; (b) any partial release of the liability of Parent
hereunder, or the full or partial release of any other Guarantor of the
Guaranteed Indebtedness from liability for any or all of the Guaranteed
Indebtedness; (c) any disability of Borrower, or the dissolution, insolvency, or
bankruptcy of Borrower, Parent, or any other party at any time liable for the
payment of any or all of the Guaranteed Indebtedness; (d) any renewal,
extension, modification, waiver, amendment, or rearrangement of any or all of
the Guaranteed Indebtedness or any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (e) any adjustment, indulgence, forbearance, waiver, or compromise
that may be granted or given by Agent or any Lender to Borrower, Parent, or any
other party ever liable for any or all of the Guaranteed Indebtedness; (f) any
neglect, delay, omission, failure, or refusal of Agent or any Lender to take or
prosecute any action for the collection of any of the Guaranteed Indebtedness or
to foreclose or take or prosecute any action in connection with any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or all
of the Guaranteed Indebtedness; (g) the unenforceability or invalidity of any or
all of the Guaranteed Indebtedness or of any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (h) any payment by Borrower or any other party to Agent or any
Lender is held to constitute a preference under applicable bankruptcy or
insolvency law or if for any other reason Agent or any Lender is required to
refund any payment or pay the amount thereof to someone else; (i) the settlement
or compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of
any Lien securing any or all of the Guaranteed Indebtedness; (k) any impairment
of any Collateral securing any or all of the Guaranteed Indebtedness; (l) the
failure of Agent or any Lender to sell any Collateral securing any or all of the
Guaranteed Indebtedness in a commercially reasonable manner or as otherwise
required by law; (m) any change in the corporate existence, structure, or
ownership of Borrower; or (n) any other circumstance which might otherwise
constitute a defense available to, or discharge of, Borrower, Parent, or any
other party at any time liable for the payment of any or all of the Guaranteed
Indebtedness other than payment of the Guaranteed Indebtedness.
Section 14.8 Additional representations and Warranties. In addition to the
representations and warranties contained in Article 9 of this Agreement, Parent
represents and warrants as follows:
(a) Borrower is a wholly-owned direct Subsidiary of Parent. The value
of the consideration received and to be received by Parent as a result of
Parent, Borrower, Agent, and the Lenders entering into this Agreement and
Parent's executing and delivering this Agreement and Parent's liability
under this Article 14 and the other Loan Documents to which it is a party
is reasonably worth at least as much as the liability and obligation of
Parent hereunder and thereunder, and this Agreement and such liability and
obligation of Parent have benefitted and may reasonably be expected to
benefit Parent directly or indirectly. Execution and delivery of this
Agreement and the other Loan Documents to which Parent is a party is
necessary or convenient to the conduct, promotion, and attainment of the
business of Parent.
CREDIT AGREEMENT - Page 81
88
(b) Parent has, independently and without reliance upon Agent or any
Lender and based upon such documents and information as Parent has deemed
appropriate, made its own analysis and decision to enter into the Loan
Documents to which it is a party.
(c) Parent has adequate means to obtain from Borrower on a continuing
basis information concerning the financial condition and assets of
Borrower, and Parent is not relying upon Agent, the Lenders, or the Issuing
Bank to provide (and neither Agent, any Lender, nor the Issuing Bank shall
have any duty to provide) any such information to Parent either now or in
the future.
Section 14.9 Subordination.
(a) Parent hereby agrees that the Subordinated Indebtedness (as
defined below) shall be subordinate and junior in right of payment to the
prior indefeasible payment in full of all Guaranteed Indebtedness as herein
provided. The Subordinated Indebtedness shall not be payable, and no
payment of principal, interest, or other amounts on account thereof, and no
property or Guarantee of any nature to secure or pay the Subordinated
Indebtedness or any part thereof shall be made or given, directly or
indirectly by or on behalf of any Debtor (as defined below) or received,
accepted, retained, or applied by Guarantor unless and until the Guaranteed
Indebtedness shall have been indefeasibly paid in full in cash; except that
prior to the occurrence of an Event of Default, Parent shall have the right
to receive payments on the Subordinated Indebtedness made in the ordinary
course of business unless, and except to the extent that, the payment or
receipt of such payments is prohibited or otherwise restricted by this
Agreement or another Loan Document. During the existence of a Default, no
payments of principal or interest may be made or given, directly or
indirectly, by or on behalf of any Debtor or received, accepted, retained,
or applied by Parent unless and until the Guaranteed Indebtedness shall
have been indefeasibly paid in full in cash. If any sums shall be paid to
Parent by any Debtor or any other Person on account of the Subordinated
Indebtedness when such payment is not permitted hereunder, such sums shall
be held in trust by Parent for the benefit of Agent (for the benefit of
Agent and the Lenders) and shall forthwith be paid to Agent without
affecting the liability of Parent under this Article 14 and may be applied
by Agent against the Guaranteed Indebtedness in accordance with the terms
of the Credit Agreement. Upon the request of Agent, Parent shall execute,
deliver, and endorse to Agent such documentation as Agent may request to
perfect, preserve, and enforce its rights hereunder. For purposes of this
Section 14.9, the term "Subordinated Indebtedness" means all indebtedness,
liabilities, and obligations of Borrower or any other party obligated at
any time to pay any of the Guaranteed Indebtedness other than Parent
(Borrower and such other obligated parties (including, without limitation,
any Contributing Guarantors) are referred to herein as the "Debtors") to
Parent, whether such indebtedness, liabilities, and obligations now exist
or are hereafter incurred or arise, or are direct, indirect, contingent,
primary, secondary, several, joint and several, or otherwise, and
irrespective of whether such indebtedness, liabilities, or obligations are
evidenced by a note, contract, open account, or otherwise, and irrespective
of the Person or Persons in whose favor such indebtedness, obligations, or
liabilities may, at their inception, have been, or may hereafter be
created, or the manner in which they have been or may hereafter be acquired
by Parent.
CREDIT AGREEMENT - Page 82
89
(b) Parent agrees that any and all Liens (including, without
limitation, any judgment liens), upon any Debtor's assets securing payment
of any Subordinated Indebtedness shall be and remain inferior and
subordinate to any and all Liens upon any Debtor's assets securing payment
of the Guaranteed Indebtedness, or any part thereof, regardless of whether
such Liens in favor of Parent, Agent, or any Lender presently exist or are
hereafter created or attached. Without the prior written consent of Agent,
until final repayment in full of all Guaranteed Indebtedness, Parent shall
not (i) file suit against any Debtor or exercise or enforce any other
creditor's right it may have against any Debtor, or (ii) foreclose,
repossess, sequester, or otherwise take steps or institute any action or
proceedings (judicial or otherwise, including, without limitation, the
commencement of, or joinder in, any liquidation, bankruptcy, rearrangement,
debtor's relief, or insolvency proceeding) to enforce any obligations of
any Debtor to Parent or any Liens held by Parent on assets of any Debtor.
(c) In the event of any receivership, bankruptcy, reorganization,
rearrangement, debtor's relief, or other insolvency proceeding involving
any Debtor as debtor, Agent shall have the right to prove and vote any
claim under the Subordinated Indebtedness and to receive directly from the
receiver, trustee, or other court custodian all dividends, distributions,
and payments made in respect of the Subordinated Indebtedness until the
Guaranteed Indebtedness has been indefeasibly paid in full in cash. Agent
may apply any such dividends, distributions, and payments against the
Guaranteed Indebtedness in accordance with the terms of this Agreement.
(d) Parent agrees that all promissory notes, accounts receivable,
ledgers, records, or any other evidence of Subordinated Indebtedness shall
contain a specific written notice thereon that the indebtedness evidenced
thereby is subordinated under the terms of this Article 14.
Section 14.10 Tolling of Limitations. Any acknowledgment or new promise,
whether by payment of principal or interest or otherwise and whether by Borrower
or others (including, without limitation, any other Guarantor), with respect to
any of the Guaranteed Indebtedness shall, if the statute of limitations in favor
of Parent against Agent or any Lender shall have commenced to run, toll the
running of such statute of limitations and, if the period of such statute of
limitations shall have expired, prevent the operation of such statute of
limitations.
Section 14.11 Waivers. Parent hereby waives promptness, diligence, notice
of any default under the Guaranteed Indebtedness, demand of payment, notice of
acceptance of the Guaranty contained in this Article 14, presentment, notice of
protest, notice of dishonor, notice of the incurring by Borrower of additional
indebtedness, and all other notices and demands with respect to the Guaranteed
Indebtedness and this Agreement.
CREDIT AGREEMENT - Page 83
90
ARTICLE 15
Agent
Section 15.1 Appointment and Authorization; "Agent".
(a) Each Lender hereby irrevocably (subject to Section 15.9)
appoints, designates, and authorizes Agent to take such action on its
behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall Agent
have or be deemed to have any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations, or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with
reference to Agent is not intended to connote any fiduciary or other
implied (or express) obligations arising under agency doctrine of any
applicable law. Instead, such term is used merely as a matter of market
custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
(b) The Issuing Bank shall act on behalf of the Lenders with respect
to any Letters of Credit issued by the Issuing Bank and the documents
associated therewith until such time and except for so long as Agent may
agree at the request of the Required Lenders to act for such Issuing Bank
with respect thereto; provided, however, that the Issuing Bank shall have
all of the benefits and immunities (i) provided to Agent in this Article 15
with respect to any acts taken or omissions suffered by the Issuing Bank in
connection with Letters of Credit issued by it or proposed to be issued by
it and the Letters of Credit Agreements pertaining to the Letters of Credit
as fully as if the term "Agent", as used in this Article 15, included the
Issuing Bank with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to the Issuing Bank.
Section 15.2 Delegation of Duties. Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents, employees,
or attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
Section 15.3 Liability of Agent. No Agent-Related Person shall (i) be
liable for any action taken or omitted to be taken by it under or in connection
with this Agreement or any other Loan Document or the transactions contemplated
hereby (except for such Person's own gross negligence or willful misconduct), or
(ii) be responsible in any manner to any of the Lenders for any recital,
statement, representation, or warranty made by Parent or any Subsidiary or
Affiliate of Parent, or any officer thereof, contained in this Agreement or in
any other Loan Document, or in any certificate,
CREDIT AGREEMENT - Page 84
91
report, statement, or other document referred to or provided for in, or received
by Agent under or in connection with, this Agreement or any other Loan Document,
or the validity, effectiveness, genuineness, enforceability, or sufficiency of
this Agreement or any other Loan Document, or for any failure of Parent or any
Subsidiary or Affiliate of Parent party to any Loan Document to perform its
obligations hereunder or thereunder. No Agent-Related Person shall be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books, or
records of Parent or any of Parent's Subsidiaries or Affiliates.
Section 15.4 Reliance By Agent.
(a) Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, telegram, facsimile, telex, or telephone message,
statement, or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel (including,
without limitation, counsel to Parent and its Subsidiaries), independent
accountants, and other experts selected by Agent. Agent shall be fully
justified in failing or refusing to take any action under this Agreement or
any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders as it deems appropriate and, if Agent
so requests, it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by
Agent by reason of taking or continuing to take any such action. Agent
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with
a request or consent of the Required Lenders and such request and any
action taken or failure to act pursuant thereto shall be binding upon all
of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in Section 8.1 and Section 8.2, each Lender that has executed
this Agreement shall be deemed to have consented to, approved or accepted,
or to be satisfied with, each document or other matter either sent by Agent
to such Lender for consent, approval, acceptance, or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lender.
Section 15.5 Notice of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest, and fees
required to be paid to Agent for the account of the Lenders, unless Agent shall
have received written notice from a Lender, Parent, or any Subsidiary of Parent
referring to this Agreement, describing such Default or Event of Default, and
stating that such notice is a "notice of default". Agent will notify the Lenders
of its receipt of any such notice. Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with Article 13; provided, however, that unless and until Agent has
received any such request, Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of the
Lenders.
CREDIT AGREEMENT - Page 85
92
Section 15.6 Credit Decision. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to such Lender,
and that no act by Agent hereinafter taken, including, without limitation, any
review of the affairs of Parent and its Subsidiaries, shall be deemed to
constitute any representation or warranty by any Agent-Related Person to any
Lender. Each Lender represents to Agent that it has, independently and without
reliance upon any Agent-Related Person and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, prospects, operations, property, financial and
other condition, and creditworthiness of Parent and its Subsidiaries, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to Borrower hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as such Lender shall deem appropriate at the
time, continue to make its own credit analysis, appraisals, and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigations as it deems necessary to inform itself as to the
business, prospects, operations, property, financial, and other condition and
creditworthiness of Parent and its Subsidiaries. Except for notices, reports,
and other documents expressly herein required to be furnished to the Lenders by
Agent, Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, prospects,
operations, property, financial and other condition, or creditworthiness of
Parent or any of its Subsidiaries which may come into the possession of any of
the Agent-Related Persons. For purposes of determining compliance with Section
8.1, each Lender that has executed this Agreement shall be deemed to have
consented to, approved, or accepted or to be satisfied with, each document or
other matter either sent by Agent to such Lender for consent, approval,
acceptance, or satisfaction, or required thereunder to be consented to or
approved by or acceptable or satisfactory to such Lender.
Section 15.7 Indemnification. THE LENDERS AGREE TO INDEMNIFY EACH
AGENT-RELATED PERSON (TO THE EXTENT NOT REIMBURSED UNDER SECTION 16.1 OR SECTION
16.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF PARENT AND BORROWER UNDER SUCH
SECTIONS) RATABLY IN ACCORDANCE WITH THEIR RESPECTIVE COMMITMENT PERCENTAGES,
FOR ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS' FEES), OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER THAT MAY BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST ANY AGENT-RELATED PERSON (INCLUDING,
WITHOUT LIMITATION, BY ANY LENDER) IN ANY WAY RELATING TO OR ARISING OUT OF ANY
LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR
OMITTED BY ANY AGENT- RELATED PERSON UNDER ANY LOAN DOCUMENT; PROVIDED THAT NO
LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE EXTENT THEY ARE FOUND IN
A FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A COURT OF COMPETENT JURISDICTION
TO HAVE ARISEN FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF, THE PERSON TO
BE INDEMNIFIED. WITHOUT LIMITING ANY PROVISION OF ANY LOAN DOCUMENT, IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER
THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL
CREDIT AGREEMENT - Page 86
93
LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS,
COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) ARISING OUT
OF OR RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. WITHOUT
LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO REIMBURSE THE APPLICABLE
AGENT- RELATED PERSON PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE (CALCULATED
BASED ON THE COMMITMENT PERCENTAGES) OF ANY COSTS OR EXPENSES PAYABLE BY PARENT
OR BORROWER UNDER SECTION 16.1 TO THE EXTENT THAT SUCH AGENT-RELATED PERSON IS
NOT PROMPTLY REIMBURSED FOR SUCH COSTS AND EXPENSES BY PARENT OR BORROWER. IN
THE CASE OF AN INVESTIGATION, LITIGATION, OR OTHER PROCEEDING TO WHICH THE
INDEMNITY IN THIS SECTION APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR
NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY ANY LOAN PARTY,
ITS DIRECTORS, SHAREHOLDERS, OR CREDITORS OR ANY PARTY ENTITLED TO
INDEMNIFICATION HEREUNDER OR ANY OTHER PERSON AND WHETHER OR NOT THE
TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED.
Section 15.8 Agent in Individual Capacity. Bank of America and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in, and generally engage in any kind of
banking, trust, financial advisory, underwriting, or other business with Parent
and its Subsidiaries and Affiliates as though Bank of America were not Agent or
the Issuing Bank hereunder and without notice to or consent of the Lenders. The
Lenders acknowledge that, pursuant to such activities, Bank of America or its
Affiliates may receive information regarding the Parent, its Subsidiaries, or
its Affiliates (including, without limitation, information that may be subject
to confidentiality obligations in favor of Parent or such Subsidiary or
Affiliate) and acknowledge that Agent shall be under no obligation to provide
such information to the Lenders. With respect to its Loans, Bank of America
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not Agent or the Issuing Bank.
Section 15.9 Successor Agent. Agent may resign as Agent upon thirty (30)
days prior notice to the Lenders. If Agent resigns under this Agreement, the
Required Lenders shall appoint from among the Lenders a successor agent for the
Lenders, which successor agent shall be approved by Parent. If no successor
agent is appointed prior to the effective date of the resignation of Agent,
Agent may appoint, after consulting with the Lenders and Parent, a successor
agent from among the Lenders. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers, and duties of the retiring Agent and the term "Agent" shall mean such
successor agent, and the retiring Agent's appointment, powers, and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Article 15 and Section 16.1 and Section 16.2 shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement. If no successor agent has accepted
appointment as Agent by the date which is thirty (30) days following a retiring
Agent's notice of resignation, the retiring Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of Agent hereunder until such time, if any, as the Required Lenders
appoint a successor agent as provided for above. Notwithstanding the foregoing,
CREDIT AGREEMENT - Page 87
94
if Agent is also acting as the Issuing Bank, simultaneously with appointment of
a successor agent as provided herein such successor agent shall assume all of
the duties and obligations of the retiring Agent as the Issuing Bank pursuant to
documentation in form and substance satisfactory to the retiring Agent.
Section 15.10 Withholding Tax.
(a) If any Lender is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Lender claims exemption from, or a
reduction of, U.S. withholding tax under Section 1441 or Section 1442 of
the Code, such Lender agrees with and in favor of Agent, to deliver to
Agent:
(i) if such Lender claims an exemption from, or a reduction
of, withholding tax under a U.S. tax treaty, two properly completed
and executed copies of IRS Form 1001 before the payment of any
interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(ii) if such Lender claims that interest paid under this
Agreement is exempt from U.S. withholding tax because it is
effectively connected with a U.S. trade or business of such Lender,
two properly completed and executed copies of IRS Form 4224 before the
payment of any interest is due in the first taxable year of such
Lender and in each succeeding taxable year of such Lender during which
interest may be paid under this Agreement; and
(iii) such other form or forms as may be required under the Code
or other laws of the U.S. as a condition to exemption from, or
reduction of, U.S. withholding tax.
Such Lender agrees to promptly notify Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Lender claims exemption from, or reduction of, withholding
tax under a U.S. tax treaty by providing IRS Form 1001 and such Lender
sells, assigns, grants a participation in, or otherwise transfers all or
part of the Obligations to another Lender, such assigning Lender agrees to
notify Agent of the percentage amount in which it is no longer the
beneficial owner of the Obligations. To the extent of such percentage
amount, Agent will treat such assigning Lender's IRS Form 1001 as no longer
valid.
(c) If any Lender claiming exemption from U.S. withholding tax by
filing IRS Form 4224 with Agent sells, assigns, grants a participation in,
or otherwise transfers all or part of the Obligations to another Lender,
the assigning Lender agrees to undertake sole responsibility for complying
with the withholding tax requirements imposed by Sections 1441 and 1442 of
the Code.
CREDIT AGREEMENT - Page 88
95
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, Agent may withhold from any interest payment to such
Lender an amount equivalent to the applicable withholding tax after taking
into account such reduction. However, if the forms or other documentation
required by Section 14.10(a) are not delivered to Agent, then Agent may
withhold from any interest payment to such Lender not providing such forms
or other documentation an amount equivalent to the applicable withholding
tax imposed by Section 1441 and Section 1442 of the Code, without
reduction.
(e) If the IRS or any other Governmental Authority of the U.S. or
other jurisdiction asserts a claim that Agent did not properly withhold tax
from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or was not properly executed, or because
such Lender failed to notify Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason) such Lender shall indemnify Agent fully for all
amounts paid, directly or indirectly, by Agent as tax or otherwise,
including, without limitation, penalties and interest and any taxes imposed
by any jurisdiction on the amounts payable to Agent under this Section
15.10, together with all costs and expenses (including, without limitation,
attorney's fees and expenses). The obligation of the Lenders under this
clause (e) shall survive the payment of the Obligations and the resignation
or replacement of Agent.
ARTICLE 16
Miscellaneous
Section 16.1 Expenses. Each of Parent and Borrower hereby agrees to pay
promptly after presentation of supporting documentation without duplication: (a)
all reasonable costs and expenses of Agent arising in connection with the
preparation, negotiation, execution, delivery, and administration of the Loan
Documents and all amendments or other modifications to the Loan Documents,
including, without limitation, the reasonable fees and expenses of legal counsel
for Agent (including, without limitation, the allocated cost of internal
counsel); (b) all reasonable fees, costs, and expenses of Agent or the Issuing
Bank arising in connection with any Letter of Credit, including, without
limitation, the Issuing Bank's customary fees for amendments, transfers, and
drawings on Letters of Credit; (c) all costs and expenses of Agent in connection
with any Default and the enforcement of any Loan Document or collection of the
Obligations, including, without limitation, the fees and expenses of legal
counsel for Agent (including, without limitation, the allocated cost of internal
counsel); (d) all fees, costs, and expenses of any Lender arising in connection
with an Event of Default and the enforcement of any Loan Document or collection
of the Obligations during the existence of an Event of Default; (e) all
transfer, stamp, documentary, or other similar taxes, assessments, or charges
(including, without limitation, the Taxes and any penalties or interest) levied
by any Governmental Authority in respect of any Loan Document or the
transactions contemplated thereby; (f) all reasonable costs, expenses,
assessments, and other charges incurred in connection with any filing,
registration, recording, or perfection of any security interest or other Lien
contemplated by any Loan Document; and (g) all other reasonable costs and
expenses incurred by Agent in connection with any Loan Document. The fees and
expenses of legal counsel for Agent that Borrower has agreed to pay hereunder
include, without limitation, the fees and expenses of legal
CREDIT AGREEMENT - Page 89
96
counsel for Agent arising in connection with advice given to Agent as to its
rights and responsibilities hereunder.
Section 16.2 Indemnification. EACH OF PARENT AND BORROWER SHALL INDEMNIFY
THE AGENT-RELATED PERSONS AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD
EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES,
PENALTIES, JUDGMENTS, SETTLEMENT COSTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES AND THE ALLOCATED
COST OF INTERNAL COUNSEL) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY
OR INDIRECTLY ARISE FROM OR RELATE TO (a) ANY BREACH BY ANY LOAN PARTY OF ANY
REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE
LOAN DOCUMENTS, (b) THE PRESENCE, RELEASE, THREATENED RELEASE, DISPOSAL,
REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON, ABOUT, WITHIN, OR
AFFECTING ANY OF THE ASSETS OF ANY LOAN PARTY, (c) THE USE OR PROPOSED USE OF
ANY LETTER OF CREDIT OR ANY PAYMENT OR FAILURE TO PAY WITH RESPECT TO ANY LETTER
OF CREDIT, (d) ANY AND ALL STAMP, FILING, OR SIMILAR TAXES (INCLUDING, WITHOUT
LIMITATION, THE "TAXES" AND ANY INTEREST OR PENALTY) LEVIES, DEDUCTIONS, AND
CHARGES IMPOSED ON ANY AGENT-RELATED PERSON OR ANY LENDER IN RESPECT OF ANY LOAN
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY, OR (e) ANY INVESTIGATION,
LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY THREATENED
INVESTIGATION, LITIGATION, OR OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING,
THE LOAN DOCUMENTS, THE RELATED TRANSACTIONS, OR THE TRANSACTIONS CONTEMPLATED
THEREBY; PROVIDED THAT THE PERSON ENTITLED TO BE INDEMNIFIED UNDER THIS SECTION
SHALL NOT BE INDEMNIFIED FROM OR HELD HARMLESS AGAINST ANY LOSSES, LIABILITIES,
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, OR EXPENSES
(INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES AND THE ALLOCATED COST OF
INTERNAL COUNSEL) FOUND IN A FINAL, NON-APPEALABLE JUDGMENT RENDERED BY A COURT
OF COMPETENT JURISDICTION TO HAVE ARISEN OUT OF OR RESULTED FROM ITS GROSS
NEGLIGENCE OR ITS WILLFUL MISCONDUCT. WITHOUT LIMITING ANY PROVISION OF ANY LOAN
DOCUMENT, IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO
BE INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS
AGAINST ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS' FEES AND THE ALLOCATED COST OF INTERNAL COUNSEL) ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. IN THE CASE
OF AN INVESTIGATION, LITIGATION, OR OTHER PROCEEDING TO WHICH THE INDEMNITY IN
THIS SECTION APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE WHETHER OR NOT SUCH
INVESTIGATION, LITIGATION, OR PROCEEDING IS BROUGHT BY BORROWER, ITS DIRECTORS,
CREDIT AGREEMENT - Page 90
97
SHAREHOLDERS, OR CREDITORS OR ANY PARTY ENTITLED TO INDEMNIFICATION HEREUNDER OR
ANY OTHER PERSON AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED.
Section 16.3 Limitation of Liability. No Agent-Related Person, Lender, or
any Affiliate, officer, director, employee, attorney, or agent thereof shall
have any liability with respect to Parent or Borrower for and, by the execution
of the Loan Documents to which it is a party, each other Loan Party, hereby
waives, releases, and agrees not to ▇▇▇ any of them upon, any claim for, any
special, indirect, incidental, consequential, or punitive damages suffered or
incurred by any Loan Party in connection with, arising out of, or in any way
related to any of the Loan Documents, or any of the transactions contemplated by
any of the Loan Documents.
Section 16.4 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by any of Agent, Arranger, or any
Lender shall have the right to act exclusively in the interest of Agent,
Arranger, and the Lenders and shall have no duty of disclosure, duty of loyalty,
duty of care, or other duty or obligation of any type or nature whatsoever to
any Loan Party, any shareholders of any Loan Party, or any other Person.
Section 16.5 No Fiduciary Relationship. The relationship between the Loan
Parties on the one hand and Agent, Arranger, and the Lenders on the other is
solely that of debtor and creditor, and neither any of Agent, Arranger, nor any
Lender has any fiduciary or other special relationship with any Loan Party, and
no term or condition of any of the Loan Documents shall be construed so as to
deem the relationship between the Loan Parties on the one hand and any of Agent,
Arranger, and each Lender on the other to be other than that of debtor and
creditor.
Section 16.6 Equitable Relief. Each of Parent and Borrower recognizes that
in the event any Loan Party fails to pay, perform, observe, or discharge any or
all of the obligations under the Loan Documents, any remedy at law may prove to
be inadequate relief to Agent and the Lenders. Each of Parent and Borrower
therefore agrees that Agent and the Lenders, if Agent or the Required Lenders so
request, shall be entitled to temporary and permanent injunctive relief in any
such case without the necessity of proving actual damages.
Section 16.7 No Waiver; Cumulative Remedies. No failure on the part of
Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under any Loan Document
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in the Loan Documents are
cumulative and not exclusive of any rights and remedies provided by law.
Section 16.8 Successors and Assigns.
(a) Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns. Neither Parent nor
CREDIT AGREEMENT - Page 91
98
Borrower may assign or transfer any of its rights or obligations hereunder
or under any other Loan Document without the prior written consent of Agent
and all of the Lenders.
(b) Assignment. Each Lender may assign to one or more Persons all or
a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Loans, its Notes, and its
Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee (as
used herein, "Eligible Assignee" means (A) a Lender; (B) an Affiliate
of a Lender or, with respect to any Lender that is a fund that invests
in bank loans, any other fund that invests in bank loans and is
managed by the same investment advisor as such Lender (herein a
"Related Fund"); and (C) any other Person approved by Agent and,
unless an Event of Default has occurred and is continuing at the time
any assignment is effected in accordance with this Section 16.8,
Parent and Borrower, such approval not to be unreasonably withheld,
conditioned, or delayed by Parent or Borrower and such approval to be
deemed given by Parent and Borrower if no objection is received by the
assigning Lender and Agent from Parent or Borrower within five (5)
Business Days after notice of such proposed assignment has been
provided by the assigning Lender to Agent, Parent, and Borrower;
provided, however, that neither Parent nor an Affiliate of Parent
shall qualify as an Eligible Assignee);
(ii) any such assignment may be made by a Lender to an Eligible
Assignee non-ratably with respect to the Loans and Commitments held by
such assigning Lender;
(iii) except in the case of an assignment to another Lender or
an assignment of all of a Lender's rights and obligations under this
Agreement or an assignment by a Lender to one of its Related Funds,
any such partial assignment shall be in an amount at least equal to
$10,000,000 and any partial assignment to a Related Fund shall be in
an amount at least equal to $2,000,000;
(iv) the parties to any such assignment shall execute and
deliver to Agent for its acceptance an Assignment and Acceptance,
together with any Note subject to such assignment and a processing fee
of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to
the extent of such assignment, have the obligations, rights, and
benefits of a Lender hereunder and the assigning Lender shall, to the
extent of such assignment, relinquish its rights and be released from
its obligations under this Agreement. Upon the consummation of any
assignment pursuant to this Section 16.8, the assignor, Agent, and
Borrower shall upon return of the assignor's Notes, if any, make
appropriate arrangements so that, if required, new Notes are issued to
the assignor and the assignee. If the assignee is not incorporated
under the laws of the U.S. or a state thereof, it shall deliver to
Borrower and Agent certification as to exemption from deduction or
withholding of Taxes in accordance with Section 15.10.
CREDIT AGREEMENT - Page 92
99
(c) Amendment of Schedule 1.1. Upon execution, delivery, and
acceptance of an Assignment and Acceptance, Schedule 1.1 shall be deemed to
be automatically amended to reflect the resulting Commitments of the
Lenders after giving effect to such Assignment and Acceptance; provided
that the Commitments of the Lenders not a party to such Assignment and
Acceptance shall not be affected as a result of such amendment to Schedule
1.1.
(d) Register. Agent shall maintain at the Principal Office a copy of
each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and
the Commitment of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and
Borrower, 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 Borrower or
any Lender at any reasonable time and from time to time upon reasonable
prior notice. Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note or Notes subject to such
assignment and payment of the processing fee, Agent shall, if such
Assignment and Acceptance has been completed, (i) accept such Assignment
and Acceptance, (ii) record the information contained therein in the
Register, and (iii) give prompt notice thereof to the parties thereto.
(e) Participations. Each Lender may sell participations to one or
more Persons in all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its
Commitment and its Loans); provided, however, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participant shall be entitled to
the benefit of the yield protection provisions contained in Article 6 (to
the extent that the Lender selling such participation would have been
entitled thereto) and the right of set-off contained in Section 13.5, and
(iv) Parent and Borrower shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations under
this Agreement, and such Lender shall retain the sole right to enforce the
obligations of Parent and Borrower relating to the Loans and to approve any
amendment, modification, waiver, or consent of any provision of any Loan
Document (other than amendments, modifications, waivers, or consents of the
types relating to the Loan or Commitment participated in under Section
16.11(a) and Section 16.11(b)).
(f) Pledge to Federal Reserve. Notwithstanding any other provision
set forth in this Agreement, any Lender may at any time assign and pledge
all or any portion of its Loans to any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of Governors of the Federal
Reserve System (as the same may be amended, modified, or supplemented from
time to time or any successor regulation therefor) and any Operating
Circular issued by such Federal Reserve Bank. No such assignment shall
release the assigning Lender from its obligations hereunder.
CREDIT AGREEMENT - Page 93
100
(g) Delivery of Information. Any Lender may furnish any information
concerning any Loan Party in the possession of such Lender from time to
time to assignees and including, without limitation, prospective assignees
and participants) subject to such Persons agreeing to being bound by the
provisions of Section 16.20.
Section 16.9 Survival. All representations and warranties made by any Loan
Party in any Loan Document or in any document, statement, or certificate
furnished in connection with any Loan Document shall survive the execution and
delivery of the Loan Documents and no investigation by Agent or any Lender or
any closing shall affect the representations and warranties or the right of
Agent and the Lenders to rely upon them. Without prejudice to the survival of
any other obligation of Parent or Borrower hereunder, the obligations under
Article 6, Section 15.5, Section 16.1, and Section 16.2 shall survive repayment
of the Notes and termination of the Commitments and the Letters of Credit.
Section 16.10 Entire Agreement. THIS AGREEMENT, THE NOTES, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Section 16.11 Amendments and Waivers. Any provision of any Loan Document
may be amended or waived and any consent to any departure by any Loan Party
therefrom may be granted if, but only if, such amendment, waiver, or consent is
in writing and is signed by Parent, Borrower, and the Required Lenders (and, if
Article 15 or the rights or duties of Agent are affected thereby, by Agent);
provided that no such amendment, waiver, or consent applicable to:
(a) a Loan, Letter of Credit, or Commitment which has the effect of
(i) increasing such Commitment,
(ii) reducing the principal of or rate of interest on such Loan
or any Reimbursement Obligation relating to such Letter of Credit or
any fees or other amounts payable hereunder with respect to such Loan,
Letter of Credit, or Commitment,
(iii) postponing any date fixed for the payment of any scheduled
installment of principal of or interest on such Loan or any
Reimbursement Obligation relating to such Letter of Credit or any fees
or other amounts payable hereunder with respect to such Loan, Letter
of Credit, or Commitment or changing any optional or mandatory
prepayment provision applicable to such Loan or Letter of Credit, or
CREDIT AGREEMENT - Page 94
101
(iv) postponing any date fixed for termination of such
Commitment
shall be effective unless also signed by each Lender holding (with respect
to Letters of Credit either directly or through a participation under
Section 2.6(a)) the Loan, Letter of Credit, or Commitment of the type being
modified; and
(b) any change (including a waiver)
(i) in the definition of Required Lenders or the provisions of
this Section 16.11,
(ii) in the conditions specified in Article 8,
(iii) which has the effect of releasing any Loan Party in a
transaction which is not otherwise permitted hereby,
(iv) which releases all or substantially all of the Collateral,
(v) which releases the Guaranty of Parent, or
(vi) which releases all or substantially all of the Guaranties
of the Guarantors, other than Parent,
shall not be effective unless signed by all Lenders.
Section 16.12 Maximum Interest Rate.
(a) No interest rate specified in any Loan Document (the "Contract
Rate") shall at any time exceed the Maximum Rate. If at any time the
Contract Rate for any Obligation shall exceed the Maximum Rate, thereby
causing the interest accruing on such Obligation to be limited to the
Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below
the Maximum Rate until the aggregate amount of interest accrued on such
Obligation equals the aggregate amount of interest which would have accrued
on such Obligation if the Contract Rate for such Obligation had at all
times been in effect.
(b) No provision of any Loan Document shall require the payment or
the collection of interest in excess of the Maximum Rate. If any excess of
interest in such respect is hereby provided for, or shall be adjudicated to
be so provided, in any Loan Document or otherwise in connection with this
loan transaction, the provisions of this Section shall govern and prevail
and neither Borrower nor the sureties, guarantors, successors, or assigns
of Borrower shall be obligated to pay the excess amount of such interest or
any other excess sum paid for the use, forbearance, or detention of sums
loaned pursuant hereto. In the event any Lender ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of
the Maximum Rate shall be applied as
CREDIT AGREEMENT - Page 95
102
a payment and reduction of the principal of the Obligations, and, if the
principal of the Obligations has been paid in full, any remaining excess
shall forthwith be paid to Borrower. In determining whether or not the
interest paid or payable exceeds the Maximum Rate, Borrower and each Lender
shall, to the extent permitted by applicable law, (a) characterize any
non-principal payment as an expense, fee, or premium rather than as
interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the
total amount of interest throughout the entire contemplated term of the
Obligations so that interest for the entire term does not exceed the
Maximum Rate.
Section 16.13 Notices. All notices and other communications provided for
in any Loan Document to which any Loan Party is a party shall be given or made
in writing (except as otherwise permitted by Section 5.3) and telecopied, mailed
by certified mail return receipt requested, or delivered to the intended
recipient at the "Address for Notices" specified below its name on Schedule
16.13 or with respect to any Loan Party, at the "Address for Notices" specified
below Borrower's name on Schedule 16.13, or with respect to a Lender not a party
to this Agreement on the Closing Date, in its Assignment and Acceptance, or, as
to any party at such other address as shall be designated by such party in a
notice to each other party given in accordance with this Section. Except as
otherwise provided in any Loan Document, all such communications shall be deemed
to have been duly given when transmitted by telecopy, subject to telephone
confirmation of receipt, or when personally delivered or, in the case of a
mailed notice, three (3) Business Days after being duly deposited in the mails,
in each case given or addressed as aforesaid; provided, however, notices to
Agent pursuant to Section 2.6 or Section 5.3 shall not be effective until
received by Agent. Any agreement of Agent and the Lenders herein to receive
certain notices by telephone or telecopy is solely for the convenience and at
the request of Parent and Borrower. Agent, the Lenders, and the Issuing Bank
shall be entitled to rely on the authority of any Person purporting to be a
Person authorized by Parent or Borrower to give such notice and neither Agent,
any Lender, nor the Issuing Bank shall have any liability to Parent or Borrower
or any other Person on account of any action taken or not taken by Agent, any
Lender, or the Issuing Bank in reliance upon such telephonic or telecopy notice.
The obligation of Borrower to repay the Loans and pay the Reimbursement
Obligations shall not be affected in any way or to any extent by any failure of
Agent, any Lender, or the Issuing Bank to receive written confirmation of any
telephonic or telecopy notice or the receipt by Agent, any Lender, or the
Issuing Bank of a confirmation which is at variance with the terms understood by
Agent, such Lender, or the Issuing Bank to be contained in such telephonic or
telecopy notice.
Section 16.14 Governing Law; Venue; Service of Process. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE U.S. ANY ACTION OR PROCEEDING AGAINST
PARENT OR BORROWER UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT MAY BE BROUGHT IN ANY TEXAS STATE COURT LOCATED IN DALLAS COUNTY, TEXAS
OR FEDERAL COURT IN THE NORTHERN DISTRICT OF TEXAS. EACH OF PARENT AND BORROWER
IRREVOCABLY (a) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (b)
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH
ACTION OR PROCEEDING BROUGHT IN SUCH COURT OR THAT
CREDIT AGREEMENT - Page 96
103
SUCH COURT IS AN INCONVENIENT FORUM. EACH OF PARENT AND BORROWER AGREES THAT
SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR DETERMINED IN ACCORDANCE WITH THE
PROVISIONS OF SECTION 16.13. NOTHING IN THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT SHALL AFFECT THE RIGHT OF AGENT OR ANY LENDER TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF AGENT OR ANY LENDER TO
BRING ANY ACTION OR PROCEEDING AGAINST PARENT OR BORROWER OR WITH RESPECT TO ANY
OF ITS PROPERTY IN COURTS IN OTHER JURISDICTIONS. ANY ACTION OR PROCEEDING BY
ANY LOAN PARTY AGAINST ANY OF AGENT, ARRANGER, OR ANY LENDER SHALL BE BROUGHT
ONLY IN A COURT LOCATED IN DALLAS COUNTY, TEXAS.
Section 16.15 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
Section 16.16 Severability. Any provision of any Loan Document held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of such Loan Document and the effect thereof shall
be confined to the provision held to be invalid or illegal.
Section 16.17 Non-Application of Chapter 15 of Texas Credit Code. The
provisions of Chapter 15 of the Texas Credit Code (relating to certain revolving
credit facilities) are specifically declared by the parties hereto not to be
applicable to any Loan Documents or to the transactions contemplated thereby.
Section 16.18 Independence of Covenants. All covenants under the Loan
Documents shall be given independent effect so that if a particular action or
condition is not permitted by any of such covenants, the fact that it would be
permitted by an exception to, or be otherwise within the limitations of, another
covenant shall not avoid the occurrence of a Default if such action is taken or
such condition exists.
Section 16.19 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF.
Section 16.20 Confidentiality. Agent and each Lender agrees to keep
confidential any information obtained by it from any Loan Party or its agents or
representatives pursuant hereto and the other Loan Documents in accordance with
such Lender's customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
CREDIT AGREEMENT - Page 97
104
and not disclose any of such information other than (a) to Agent's or such
Lender's officers, directors, employees, representatives, attorneys, agents, or
Affiliates who are advised of the confidential nature of such information, (b)
to the extent such information presently is or hereafter becomes available to
Agent or such Lender on a non-confidential basis from any source or as such
information that is in the public domain at the time of disclosure, (c) to the
extent disclosure is required by law, regulation, subpoena, or judicial order or
process (provided that notice of such requirement or order shall be promptly
furnished to Parent unless such notice is legally prohibited) or requested or
required by bank regulators or auditors or any administrative body, commission,
or other Governmental Authority to whose jurisdiction Agent or such Lender may
be subject, (d) to assignees or participants or potential assignees or
participants or to professional advisors or direct or indirect contractual
counterparties in swap agreements provided in each case such Person agrees to be
bound by the provisions of this Section, (e) to the extent required in
connection with any litigation between any Loan Party and Agent or any Lender
with respect to the Loans or this Agreement and the other Loan Documents, (f) to
rating agencies, their employees, representatives, attorneys, agents, or
affiliates who are advised of the confidential nature of such information, and
(g) with Parent's prior written consent.
[Remainder of page intentionally left blank]
CREDIT AGREEMENT - Page 98
105
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
BORROWER:
INTERVOICE ACQUISITION
SUBSIDIARY III, INC.
By: /s/ ▇▇▇-▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇-▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: President
-------------------------------------
CREDIT AGREEMENT - Page 99
106
PARENT:
INTERVOICE, INC.
By:/s/ ▇▇▇-▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name:▇▇▇-▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title:Chief Financial Officer
-------------------------------------
CREDIT AGREEMENT - Page 100
107
AGENT and ISSUING BANK:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Agent
and the Issuing Bank
By: /s/ ▇▇▇▇ ▇. ▇▇▇
----------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇
--------------------------------------
Title: Vice President
-------------------------------------
CREDIT AGREEMENT - Page 101
108
LENDERS:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------------------
Title: Managing Director
-------------------------------------
CREDIT AGREEMENT - Page 102
▇▇▇
▇▇▇▇ ▇▇▇, ▇▇▇▇▇, N.A.
By: /s/ R. ▇▇▇▇▇
----------------------------------------
Name: /s/ R. ▇▇▇▇▇
--------------------------------------
Title: Vice President
-------------------------------------
CREDIT AGREEMENT - Page 103
110
U.S. BANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
-------------------------------------
CREDIT AGREEMENT - Page 104
111
FLEET NATIONAL BANK
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Vice President
-------------------------------------
CREDIT AGREEMENT - Page 105
112
IBM CREDIT CORPORATION
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Manager Credit Ops.
-------------------------------------
CREDIT AGREEMENT - Page 106
▇▇▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇▇, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Title: Vice President
-------------------------------------
CREDIT AGREEMENT - Page 107
▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
By: /s/ F. C. H. ▇▇▇▇▇
----------------------------------------
Name: F. C. H. ▇▇▇▇▇
--------------------------------------
Title: Senior Manager Loan Operations
-------------------------------------
CREDIT AGREEMENT - Page 108
115
BANKBOSTON, N.A.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------
Title: Director
-------------------------------------
CREDIT AGREEMENT - Page 109
116
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Title: Executive Vice President
-------------------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------------------
Title: Associate
-------------------------------------
CREDIT AGREEMENT - Page 110
117
COMERICA BANK
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
----------------------------------------
Name: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, III
--------------------------------------
Title: Vice President
-------------------------------------
CREDIT AGREEMENT - Page 111
