EXHIBIT 99
CREDIT AGREEMENT
dated as of
February 23, 1998
among
BENCHMARK ELECTRONICS, INC.,
as the Company,
and
CHASE BANK OF TEXAS, N.A.,
Individually, as Issuing Bank and as Administrative Agent,
and
FINANCIAL INSTITUTIONS,
NOW OR HEREAFTER PARTIES HERETO
$25,000,000 Revolving Credit Facility
$40,000,000 Term Loan Facility
-------------------------------
CHASE SECURITIES INC.,
as Arranger
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TABLE OF CONTENTS
PAGE NO.
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ARTICLE 1
DEFINITIONS; CONSTRUCTION
Section 1.1 DEFINITIONS............................................................1
Section 1.2 ACCOUNTING TERMS AND DETERMINATIONS...................................16
Section 1.3 OTHER DEFINITIONAL TERMS..............................................16
ARTICLE 2
AMOUNT AND TERMS OF LOANS
Section 2.1 LOANS AND COMMITMENTS.................................................17
Section 2.2 BORROWING REQUESTS....................................................18
Section 2.3 LETTERS OF CREDIT.....................................................18
Section 2.4 DISBURSEMENT OF FUNDS.................................................22
Section 2.5 NOTES AND AMORTIZATION................................................22
Section 2.6 INTEREST..............................................................23
Section 2.7 INTEREST PERIODS......................................................24
Section 2.8 REPAYMENT OF LOANS....................................................25
Section 2.9 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS.....................25
Section 2.10 PREPAYMENTS...........................................................26
Section 2.11 CONTINUATION AND CONVERSION OPTIONS...................................26
Section 2.12 FEES..................................................................27
Section 2.13 PAYMENTS, ETC.........................................................28
Section 2.14 INTEREST RATE NOT ASCERTAINABLE, ETC..................................28
Section 2.15 ILLEGALITY............................................................29
Section 2.16 INCREASED COSTS.......................................................29
Section 2.17 CHANGE OF LENDING OFFICE..............................................31
Section 2.18 FUNDING LOSSES........................................................31
Section 2.19 SHARING OF PAYMENTS, ETC..............................................31
Section 2.20 TAXES.................................................................31
Section 2.21 PRO RATA TREATMENT....................................................32
Section 2.22 REPLACEMENT OF LENDERS................................................32
ARTICLE 3
CONDITIONS TO BORROWINGS
Section 3.1 CLOSING...............................................................33
Section 3.2 CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT...............35
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 CORPORATE EXISTENCE...................................................35
Section 4.2 CORPORATE POWER AND AUTHORIZATION.....................................35
Section 4.3 BINDING OBLIGATIONS...................................................35
Section 4.4 NO LEGAL BAR OR RESULTANT LIEN........................................35
Section 4.5 NO CONSENT............................................................36
Section 4.6 FINANCIAL INFORMATION.................................................36
Section 4.7 INVESTMENTS AND GUARANTIES............................................36
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Section 4.8 LITIGATION............................................................36
Section 4.9 USE OF PROCEEDS.......................................................36
Section 4.10 EMPLOYEE BENEFITS.....................................................37
Section 4.11 TAXES; GOVERNMENTAL CHARGES...........................................37
Section 4.12 TITLES, ETC...........................................................38
Section 4.13 DEFAULTS..............................................................38
Section 4.14 CASUALTIES; TAKING OF PROPERTIES......................................38
Section 4.15 COMPLIANCE WITH THE LAW...............................................38
Section 4.16 NO MATERIAL MISSTATEMENTS.............................................38
Section 4.17 INVESTMENT COMPANY ACT................................................38
Section 4.18 PUBLIC UTILITY HOLDING COMPANY ACT....................................39
Section 4.19 SUBSIDIARIES..........................................................39
Section 4.20 INSURANCE.............................................................39
Section 4.21 ENVIRONMENTAL MATTERS.................................................39
Section 4.22 SOLVENCY..............................................................40
Section 4.23 EMPLOYEE MATTERS......................................................40
ARTICLE 5
AFFIRMATIVE COVENANTS
Section 5.1 MAINTENANCE AND COMPLIANCE, ETC.......................................41
Section 5.2 PAYMENT OF TAXES AND CLAIMS, ETC......................................41
Section 5.3 FURTHER ASSURANCES....................................................41
Section 5.5 INSURANCE.............................................................41
Section 5.6 ACCOUNTS AND RECORDS..................................................41
Section 5.7 RIGHT OF INSPECTION...................................................41
Section 5.8 OPERATION AND MAINTENANCE OF PROPERTY.................................42
Section 5.9 NEW SUBSIDIARIES......................................................42
Section 5.10 REPORTING COVENANTS...................................................42
ARTICLE 6
NEGATIVE COVENANTS
Section 6.1 FINANCIAL COVENANTS...................................................45
Section 6.2 INDEBTEDNESS..........................................................45
Section 6.3 LIENS.................................................................46
Section 6.4 MERGERS, SALES, ETC...................................................47
Section 6.5 DIVIDENDS, ETC........................................................47
Section 6.6 INVESTMENTS, LOANS, ETC...............................................47
Section 6.7 SALES AND LEASEBACKS..................................................48
Section 6.8 NATURE OF BUSINESS....................................................49
Section 6.9 ERISA COMPLIANCE......................................................49
Section 6.10 SALE OR DISCOUNT OF RECEIVABLES.......................................50
Section 6.11 NEGATIVE PLEDGE AGREEMENTS............................................50
Section 6.12 TRANSACTIONS WITH AFFILIATES..........................................50
Section 6.13 UNCONDITIONAL PURCHASE OBLIGATIONS....................................50
Section 6.14 MODIFICATIONS TO SENIOR NOTES.........................................50
Section 6.15 INTERCOMPANY TRANSACTIONS.............................................50
Section 6.16 ACQUISITIONS; CREATION OF SUBSIDIARIES................................51
Section 6.17 SALE OF PROPERTIES....................................................51
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Section 6.18 ENVIRONMENTAL MATTERS.................................................51
Section 6.19 PROCEEDS OF NOTES..............................................51
ARTICLE 7
EVENTS OF DEFAULT
Section 7.1 PAYMENTS..............................................................51
Section 7.2 COVENANTS WITHOUT NOTICE..............................................51
Section 7.3 OTHER COVENANTS.......................................................51
Section 7.4 OTHER FINANCING DOCUMENT OBLIGATIONS..................................52
Section 7.5 REPRESENTATIONS.......................................................52
Section 7.6 NON-PAYMENTS OF OTHER INDEBTEDNESS....................................52
Section 7.7 DEFAULTS UNDER OTHER AGREEMENTS.......................................52
Section 7.8 BANKRUPTCY............................................................52
Section 7.9 MONEY JUDGMENT........................................................53
Section 7.10 DISCONTINUANCE OF BUSINESS............................................53
Section 7.11 FINANCING DOCUMENTS...................................................53
Section 7.12 CHANGE OF CONTROL.....................................................53
ARTICLE 8
THE ADMINISTRATIVE AGENT
Section 8.1 APPOINTMENT OF ADMINISTRATIVE AGENT...................................53
Section 8.2 LIMITATION OF DUTIES OF ADMINISTRATIVE AGENT..........................54
Section 8.3 LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT..........................54
Section 8.4 CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT............................54
Section 8.5 RELIANCE BY ADMINISTRATIVE AGENT......................................54
Section 8.6 INDEMNIFICATION OF ADMINISTRATIVE AGENT...............................55
Section 8.7 THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY...................55
Section 8.8 MAY TREAT LENDER AS OWNER.............................................55
Section 8.9 SUCCESSOR ADMINISTRATIVE AGENT........................................55
ARTICLE 9
MISCELLANEOUS
Section 9.1 NOTICES...............................................................56
Section 9.2 AMENDMENTS AND WAIVERS................................................56
Section 9.3 NO WAIVER; REMEDIES CUMULATIVE........................................57
Section 9.4 PAYMENT OF EXPENSES, INDEMNITIES, ETC.................................57
Section 9.5 RIGHT OF SETOFF.......................................................59
Section 9.6 BENEFIT OF AGREEMENT..................................................59
Section 9.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS................59
Section 9.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; ETC........................61
Section 9.9 INDEPENDENT NATURE OF LENDERS' RIGHTS.................................62
Section 9.10 INVALIDITY............................................................62
Section 9.11 RENEWAL, EXTENSION OR REARRANGEMENT...................................62
Section 9.12 CONFIDENTIALITY.......................................................62
Section 9.13 INTEREST..............................................................62
Section 9.14 EXISTING CREDIT AGREEMENT.............................................63
Section 9.15 ENTIRE AGREEMENT......................................................63
Section 9.16 ATTACHMENTS...........................................................63
Section 9.17 COUNTERPARTS..........................................................64
Section 9.18 SURVIVAL OF INDEMNITIES...............................................64
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Section 9.19 HEADINGS DESCRIPTIVE..................................................64
Section 9.20 SATISFACTION REQUIREMENT..............................................64
Section 9.21 EXCULPATION PROVISIONS................................................64
ANNEXES
Annex I- Loans and Commitments
SCHEDULES
Schedule 4.7 - Investments
Schedule 4.19 - Subsidiaries
Schedule 6.3 - Liens
EXHIBITS
Exhibit A - Form of Revolving Note
Exhibit B - Form of Term Note
Exhibit C - Form of Borrowing Request
Exhibit D - Form of Opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
Exhibit E - Form of Guaranty Agreement
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Borrowing Base Report
Exhibit H - Form of Compliance Certificate
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "AGREEMENT") is made and entered into as of
this 23rd day of February, 1998, among BENCHMARK ELECTRONICS, INC., a Texas
corporation ("COMPANY"), CHASE BANK OF TEXAS, N.A., individually, as a Lender,
as Issuing Bank and as Administrative Agent, and each of the lenders that is a
signatory hereto or which becomes a party hereto as provided in Section 9.7
(individually, a "LENDER" and, collectively, the "LENDERS").
RECITALS:
A. The Company and Chase Bank of Texas, N.A. (formerly known as Texas
Commerce Bank National Association), individually as a lender and as Agent,
entered into that certain Credit Agreement dated as of July 30, 1996, whereby,
pursuant to the terms and conditions contained therein, Chase Bank of Texas,
N.A. agreed to make loans to and extend credit on behalf of the Company (the
"EXISTING CREDIT AGREEMENT") up to the aggregate principal amount of $35,000,000
(the "EXISTING CREDIT FACILITY").
B. Pursuant to that certain Purchase Agreement (the "PURCHASE
AGREEMENT") dated as of January 22, 1998, between Lockheed ▇▇▇▇▇▇ Corporation, a
Maryland corporation, as Seller, and the Company, as buyer, the Company has
contracted to purchase all of the issued and outstanding shares of the capital
stock of Lockheed Commercial Electronics Company, a Delaware Corporation
("LCEC") (the "ACQUISITION").
C. Proceeds of the Term Loans (hereinafter defined) will be used solely
(a) to renew, extend, rearrange and modify the principal balance outstanding
under the Existing Credit Facility, (b) to finance a portion of the purchase
price of the Acquisition, and (c) to finance fees and expenses relating to the
Acquisition. Proceeds of the Revolving Credit Loans (hereinafter defined) will
be used solely for general corporate purposes of the Company; provided that no
more than $2,000,000 of the Revolving Credit Loans will be used to finance the
Acquisition.
AGREEMENT:
In consideration of the mutual covenants and agreements herein
contained, the Company, the Administrative Agent, the Issuing Bank and the
Lenders agree as follows:
ARTICLE 1
DEFINITIONS; CONSTRUCTION
Section 1.1 DEFINITIONS. As used herein, the following terms shall have
the meanings herein specified (to be equally applicable to both the singular and
plural forms of the terms defined). Reference to any party to a Financing
Document means that party and its successors and assigns.
"ACQUISITION" shall have the meaning set forth in the recitals
hereof.
"ADMINISTRATIVE AGENT" shall mean Chase Bank of Texas, N.A.,
acting in the manner and to the extent described in Article 8.
"ADVANCE NOTICE" shall mean written or telecopy notice (with
telephonic confirmation in the case of telecopy notice), which in each case
shall be irrevocable, from the Company to be received by the Administrative
Agent before 11:00 a.m. (Houston, Texas time), by the number of Business Days in
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advance of any Borrowing, conversion, continuation or prepayment of any Loan or
Loans pursuant to this Agreement as respectively indicated below:
(a) Eurodollar Loans - 3 Business Days; and
(b) Base Rate Loans - Same Business Day.
For the purpose of determining the respectively applicable Loans in the case of
the conversion from one Type of Loan into another, the Loans into which there is
to be a conversion shall control. The Administrative Agent, the Issuing Bank and
each Lender are entitled to rely upon and act upon telecopy notice made or
purportedly made by the Company, and the Company hereby waives the right to
dispute the authenticity and validity of any such transaction once the
Administrative Agent or any Lender has advanced funds or the Issuing Bank has
issued Letters of Credit, absent manifest error.
"AFFILIATE" shall mean any Person controlling, controlled by or
under common control with any other Person. For purposes of this definition,
"control" (including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to either (a) vote 10% or more
of the securities having ordinary voting power for election of directors of such
Person or (b) direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities or otherwise.
"AGGREGATE REVOLVING CREDIT EXPOSURE" shall mean the sum of all
of the Lenders' Revolving Credit Exposures.
"AGREEMENT" shall mean this Credit Agreement, as amended,
modified or supplemented from time to time.
"APPLICABLE COMMITMENT FEE PERCENTAGE" shall mean, on any day and
with respect to any Revolving Credit Loan, the applicable per annum percentage
set forth at the appropriate intersection in the table shown below, based on the
Debt Ratio for the Rolling Period ending on the most recent Quarterly Date with
respect to which the Company is required to deliver the Current Information
(said calculation to be made by the Administrative Agent as soon as practicable
after receipt by the Administrative Agent of all required Current Information
for the applicable period):
DEBT RATIO APPLICABLE COMMITMENT
FEE PERCENTAGE
Greater than or equal to 1.50 0.25%
Less than 1.50 0.20%
Each change in the Applicable Commitment Fee Percentage based on a change in the
Current Information (or the Company's failure to deliver the Current
Information) shall be effective as of the date the financial statements are due
pursuant to Section 5.10(b) (but based upon Current Information for the
immediately preceding Rolling Period), or if such day is not a Business Day,
then the first Business Day thereafter; provided that, the first such change in
the Applicable Commitment Fee Percentage shall be effective on June 1, 1998,
based upon Current Information for the Rolling Period ended March 31, 1998.
Notwithstanding the foregoing, (A) for the period from the Closing Date through
June 30, 1998, the initial Applicable Commitment Fee Percentage will be 0.25%
and (B) if at any time after June 30, 1998, the Company fails to deliver Current
Information on or before the date required pursuant to Section 5.10 (without
regard to
2
grace periods), the Applicable Commitment Fee Percentage will be 0.25% from the
date such Current Information is due (or as to the Current Information for the
Rolling Period ending March 31, 1998, from June 1, 1999) pursuant to Section
5.10 (without regard to grace periods) through the date the Administrative Agent
receives all Current Information then due pursuant to Section 5.10.
"APPLICABLE MARGIN" shall mean, on any day and with respect to
any Loan, the applicable per annum percentage set forth at the appropriate
intersection in the table shown below, based on the Debt Ratio for the Rolling
Period ending on the most recent Quarterly Date with respect to which the
Company is required to deliver the Current Information (said calculation to be
made by the Administrative Agent as soon as practicable after receipt by the
Administrative Agent of all required Current Information for the applicable
period):
DEBT RATIO EURODOLLAR LOAN BASE RATE LOAN
APPLICABLE MARGIN APPLICABLE
PERCENTAGE MARGIN PERCENTAGE
Greater than or equal to 2.00 1.375% 0.00%
Greater than or equal to 1.50 but 1.00% 0.00%
less than 2.00
Greater than or equal to 1.00 but 0.750% 0.00%
less than 1.50
Less than 1.00 0.625% 0.00%
Each change in the Applicable Margin based on a change in the Current
Information (or the Company's failure to deliver the Current Information) shall
be effective as of the date the financial statements are due pursuant to Section
5.10(b) (but based upon Current Information for the immediately preceding
Rolling Period), or if such day is not a Business Day, then the first Business
Day thereafter; provided that, the first such change in the Applicable Margin
shall be effective on June 1, 1998, based upon Current Information for the
Rolling Period ended March 31, 1998. Notwithstanding the foregoing, (A) for the
period from the Closing Date through June 30, 1998, the initial Eurodollar Loan
Applicable Margin will be 1.00% and the initial Base Rate Loan Applicable Margin
will be 0.00% and (B) if at any time after June 30, 1998, the Company fails to
deliver Current Information on or before the date required pursuant to Section
5.10 (without regard to grace periods), the Eurodollar Loan Applicable Margin
will be 1.375% and the Base Rate Loan Applicable Margin will be 0.00% from the
date such Current Information is due (or as to the Current Information for the
Rolling Period ending March 31, 1998, from June 1, 1998) pursuant to Section
5.10 (without regard to grace periods) through the date the Administrative Agent
receives all Current Information then due pursuant to Section 5.10.
"APPLICABLE PERCENTAGE" shall mean, with respect to any Lender,
such Lender's Revolving Credit Percentage and/or such Lender's Term Loan
Percentage, as applicable.
"APPLICATION" shall mean an "Application and Agreement for
Letters of Credit," or similar instruments or agreements, entered into between
the Company and the Issuing Bank in connection with any Letter of Credit.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning provided in
Section 9.7.
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"BANKRUPTCY CODE" shall have the meaning provided in Section 7.8.
"BASE RATE" shall have the meaning provided in Section 2.6(a).
"BASE RATE LOAN" shall mean a Revolving Credit Loan or a Term
Loan bearing interest at the rate provided in Section 2.6(a).
"BORROWING" shall mean a borrowing pursuant to a Borrowing
Request or a continuation or a conversion pursuant to Section 2.11 consisting,
in each case, of the same Type of Loans having, in the case of Eurodollar Loans,
the same Interest Period (except as otherwise provided in Sections 2.14 and
2.15) and made previously or being made concurrently by all of the Lenders.
"BORROWING BASE" shall mean at any time the amount equal to the
sum of 75% of Eligible Accounts PLUS 25% of Eligible Inventory.
"BORROWING BASE REPORT" shall mean the report of the Company
concerning the amount of the Borrowing Base, to be delivered pursuant to Section
5.10(d), substantially in the form attached as EXHIBIT G.
"BORROWING REQUEST" shall mean a request for a Borrowing pursuant
to Section 2.2, substantially in the form attached as EXHIBIT C.
"BUSINESS DAY" shall mean any day excluding Saturday, Sunday and
any other day on which banks are required or authorized to close in Houston,
Texas AND, if the applicable Business Day relates to Eurodollar Loans, on which
trading is carried on by and between banks in Dollar deposits in the applicable
interbank Eurodollar market.
"CAPITAL EXPENDITURES" shall mean, for any period, all
expenditures (whether paid in cash or accrued as a liability, including the
portion of Capital Lease Obligations originally incurred during such period that
are capitalized on the consolidated balance sheet of the Company) by the Company
and its Subsidiaries during such period, that, in conformity with GAAP, are
included in "capital expenditures," "additions to property, plant or equipment"
or comparable items in the consolidated financial statements of the Company, but
excluding expenditures for the restoration, repair or replacement of any fixed
or capital asset that was destroyed or damaged, in whole or in part, in an
amount equal to any insurance proceeds received in connection with such
destruction or damage.
"CAPITAL LEASE OBLIGATIONS" shall mean, as to any Person, the
obligations of such Person to pay rent or other amounts under a lease of (or
other agreement conveying the right to use) real and/or personal property which
obligations are required to be classified and accounted for as a liability for a
capital lease on a balance sheet of such Person and, for purposes of this
Agreement, the amount of such obligations shall be the capitalized amount
thereof.
"CASH INTEREST EXPENSE" shall mean as of the date of
determination thereof the sum of all cash payments of interest and prepayment
charges, if any, including, without limitation, all net amounts payable (or
receivable) under interest rate protection agreements and all imputed interest
in respect of capital lease obligations paid by the Company and its Subsidiaries
on a consolidated basis during such period.
"CHANGE OF CONTROL" shall mean any of the following events or
circumstances: if any person (as such term is used in section 13(d) and section
14(d)(2) of the Exchange Act as in effect on the Closing Date) or related
persons constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act
4
as in effect on the Closing Date) become the "beneficial owners" (as such term
is used in Rule 13d-3 under the Exchange Act as in effect on the date of the
Closing), directly or indirectly, of more than 50% of the total voting power of
all outstanding Voting Stock of the Company.
"CHASE" shall mean Chase Bank of Texas, N.A., in its individual
capacity or as the Issuing Bank, as the case may be, and not as Administrative
Agent.
"CLOSING DATE" shall mean the "as of" date of this Agreement set
forth in the first paragraph hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as amended,
and any successor statute.
"COMMITMENTS" shall mean, for any Lender, such Lender's Revolving
Credit Commitment and Term Loan Commitment.
"COMPANY" shall have the meaning set forth in the initial
paragraph hereof.
"CONSOLIDATED NET INCOME" shall mean, for the period of
determination thereof, the net income (or loss) of the Company and its
Subsidiaries during such period, calculated and consolidated or combined in
accordance with GAAP; PROVIDED that there shall be excluded from such net income
(to the extent otherwise included therein) the following: (i) any extraordinary
gains or losses, including gains or losses attributable to Property sales not in
the ordinary course of business, and (ii) the cumulative effect of a change in
accounting principals and any gains or losses attributable to writeups or
writedowns of assets.
"CONSOLIDATED NET TANGIBLE ASSETS" shall mean the total assets of
the Company and its Subsidiaries less, without duplication, (i) intangible
assets including, without limitation, goodwill, research and development costs,
trademarks, trade names, patents, franchises, copyrights, licenses and like
general intangibles, experimental or organizational expense, the excess of the
equity in any Subsidiary over the cost of the investment in such Subsidiary,
unamortized debt discount and expense carried as an asset, all reserves and any
write-up in the book of value of assets made after the Closing Date (other than
write-ups of assets of a going concern business made within 12 months after the
acquisition of such business), net of accumulated amortization and (ii) all
reserves for depreciation and other asset valuation reserves (but excluding
reserves for federal, state and other income taxes).
"CONSOLIDATED TANGIBLE NET WORTH" shall mean, at any time,
(a) the total assets of the Company and its Subsidiaries
which would be shown as assets on a consolidated balance sheet of
the Company and its Subsidiaries as of such time prepared in
accordance with GAAP, after eliminating all amounts properly
attributable to minority interests, if any, in the stock and
surplus of Subsidiaries, MINUS
(b) the total liabilities of the Company and its
Subsidiaries which would be shown as liabilities on a
consolidated balance sheet of the Company and its Subsidiaries as
of such time prepared in accordance with GAAP, MINUS
(c) the net book amount of all assets of the Company and
its Subsidiaries (after deducting any reserves applicable
thereto) that would be shown as intangible assets on a
consolidated balance sheet of the Company and its Subsidiaries as
of such time prepared in accordance with GAAP.
5
"COVER" when required by this Agreement for Letter of Credit
Liabilities, shall be effected by paying to the Administrative Agent in
immediately available funds an amount equal to the maximum amount of each
applicable Letter of Credit available for drawing at any time, to be held by the
Administrative Agent in a collateral account maintained by the Administrative
Agent at its Payment Office, which the Company hereby collaterally assigns to
the Administrative Agent as security for the Lender Indebtedness. Such amount
shall be retained by the Administrative Agent in such collateral account (as
security for the Lender Indebtedness) until such time as the applicable Letter
of Credit shall have expired and the Reimbursement Obligations, if any, with
respect thereto shall have been fully satisfied.
"CURRENT ASSETS" shall mean all assets of a Person which under
GAAP would be classified as current assets (excluding any cash or cash
equivalents but only to the extent same are outstanding under the Revolving
Credit Notes and shown as cash on the Company's balance sheet).
"CURRENT INFORMATION" shall mean, as of any day, the financial
statements and other related information for any applicable period most recently
required to be delivered to the Administrative Agent pursuant to Sections
5.10(a), 5.10(b) and 5.10(c).
"CURRENT LIABILITIES" shall mean all liabilities of a Person
which under GAAP would be classified as current liabilities, other than current
maturities of long term debt and the obligation to repay the Revolving Credit
Loans.
"CURRENT RATIO" shall mean, on any day, the ratio of (a) Current
Assets of the Company and its Subsidiaries on a consolidated basis to (b)
Current Liabilities of the Company and its Subsidiaries on a consolidated basis.
"DEBT RATIO" shall mean, on any day, the ratio of (a)
Indebtedness of the Company and its Subsidiaries on a consolidated basis as of
the date of determination to (b) EBITDA for the Rolling Period ending on the
most recent Quarterly Date as of the date of determination.
"DEBT SERVICE" shall mean the sum of (a) Cash Interest Expense
and (b) scheduled principal payments on Indebtedness for the applicable period.
"DEFAULT" shall mean an Event of Default or any condition or
event which, with notice or lapse of time or both, would constitute an Event of
Default.
"DOCUMENTARY LETTER OF CREDIT" shall mean a letter of credit
issued pursuant to this Credit Agreement that supports payment or performance
for a single identified purchase or exchange of products in the ordinary course
of business of the Company or its Subsidiaries.
"DOLLAR" and the sign "$" shall mean lawful money of the United
States of America.
"EBITDA" shall mean, as to the Company and its Subsidiaries on a
consolidated basis and for any period, without duplication, the amount equal to
Consolidated Net Income, PLUS to the extent deducted from net income, Interest
Expense, depreciation, amortization, other non-cash charges and income tax
expenses.
"ELIGIBLE ACCOUNT" shall mean at any time the invoice or ledger
amount owing on each account (which shall mean (a) any "account" as such term is
defined in Section 9.106 of the UCC and (b) any "chattel paper" as such term is
defined in Section 9.105(a)(2) of the UCC) of the Company or any of its
Subsidiaries (net of any credit balance, returns, trade discounts, or unbilled
amounts or retention) for which
6
each of the following statements is accurate and complete (and the Company by
including such account in any computation of the Borrowing Base shall be deemed
to represent and warrant to the Administrative Agent, the Issuing Bank and the
Lenders the accuracy and completeness of such statements):
(1) Said account is a binding and valid obligation of the obligor
thereon in full force and effect;
(2) Said account is genuine as appearing on its face or as
represented in the books and records of Company or any of its
Subsidiaries, as applicable;
(3) Said account is free from claims regarding rescission,
cancellation or avoidance, whether by operation of law or otherwise;
(4) Payment of said account is less than 90 days past due as
determined by the due date stated on the invoice therefor (or, if said
account is not paid by reference to an invoice in the ordinary course of
business but instead by reference to the terms of the agreements
creating said account, said account has not remained unpaid beyond 90
days after the due date therefor) or, if said account is a right to
payment for goods that have been shipped to the purchaser thereof, but
for which such purchaser has not yet been billed for payment, such goods
were not shipped more than 10 days prior to the date of determination;
(5) Said account is net of concessions, offset or understandings
with the obligor thereon that in any way could reasonably be expected to
adversely affect the payment of said account;
(6) If such account and other accounts are owed by a creditor of
the Company or any of its Subsidiaries, the amount of all such accounts
included as Eligible Accounts shall be the amount by which all such
accounts exceeds the aggregate accounts payable owed by the Company or
such Subsidiary to such creditor;
(7) The obligor on said account is not (a) an Affiliate of the
Company or any of its Subsidiaries, or (b) an employee of the Company or
any of the Subsidiaries;
(8) Said account arose in the ordinary course of business of the
Company or any of its Subsidiaries, as applicable;
(9) Said account is not payable by an obligor who is more than 91
days past due with regard to 20% or more of the total accounts owed to
the Company or its Subsidiaries by such obligor or any of its
Affiliates;
(10) All consents, licenses, approvals or authorizations of, or
registrations or declarations with, any Governmental Authority required
to be obtained, effected or given in connection with the execution,
delivery and performance of said account by each party obligated
thereunder have been duly obtained, effected or given and are in full
force and effect;
(11) The obligor on said account is not the subject of any
bankruptcy or insolvency proceeding, has not had a trustee or receiver
appointed for all or a substantial part of its property, has not made an
assignment for the benefit of creditors, admitted its inability to pay
its debts as they mature or suspended its business;
7
(12) The obligor of said account is subject to the jurisdiction
of federal, state or provincial courts in the United States of America;
and
(13) In the case of the sale of goods, the subject goods have
been sold to an obligor on a true sale basis on open account, or subject
to contract, and not on consignment, on approval or on a "sale or
return" basis or subject to any other repurchase or return agreement, no
material part of the subject goods has been returned, rejected, lost or
damaged, and said account is not, evidenced by chattel paper or an
instrument of any kind;
PROVIDED THAT, if any Eligible Account, when added to all other accounts
that are obligations of the same obligor and its Affiliates, results in
a total sum that exceeds 25% of the total balance then due on all
Eligible Accounts (without giving effect to any reduction in Eligible
Accounts pursuant to this proviso), the amount of said account in excess
of 25% of such total balance then due shall be excluded from Eligible
Accounts.
"ELIGIBLE INVENTORY" shall mean, at any time, all "inventory" (as
such term is defined in Section 9.109(4) of the UCC) of the Company and its
Subsidiaries for which each of the following statements is accurate and complete
(and the Company by including such inventory in any computation of the Borrowing
Base shall be deemed to represent and warrant to the Administrative Agent, the
Issuing Bank and each Lender the accuracy and completeness of such statements):
(a) Said inventory shall be valued on the lower of cost
(determined on a FIFO basis) or market in accordance with GAAP and (1)
shall include raw materials and finished goods but (2) shall not include
goods that are classified as work-in-progress;
(b) Said inventory is in good condition, meets all standards
imposed by any Governmental Authority having regulatory authority over
it or its use and/or sale and is either currently usable or currently
salable in the normal course of business of the Company and its
Subsidiaries;
(c) Said inventory is in possession of the Company or its
Subsidiaries;
(d) Said inventory does not include goods that are not owned by
the Company or its Subsidiaries or that are held by the Company or its
Subsidiaries pursuant to a consignment agreement or that are used for
demonstrations and display.
"ENVIRONMENTAL LAWS" shall mean any and all laws, statutes,
ordinances, rules, regulations, orders, or determinations of any Governmental
Authority pertaining to health or the environment in effect in any and all
jurisdictions in which the Company or its Subsidiaries are conducting or at any
time have conducted business, or where any Property of the Company or its
Subsidiaries is located, or where any hazardous substances generated by or
disposed of by the Company or its Subsidiaries are located, including but not
limited to the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as amended,
the Comprehensive Environmental, Response, Compensation, and Liability Act of
1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Superfund Amendments and Reauthorization Act of 1986, as amended, and other
environmental conservation or protection laws. The term "oil" shall have the
meaning specified in OPA; the terms "hazardous substance," "release" and
"threate ▇▇▇ release" have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal" (or "disposed") have the meanings specified in
RCRA; PROVIDED, HOWEVER, in the event either CERCLA or
8
RCRA is amended so as to change the meaning of any term defined thereby, such
changed meaning shall apply subsequent to the effective date of such amendment,
and PROVIDED, FURTHER, that, to the extent the laws of the state in which any
Property of the Company or its Subsidiaries is located establish a meaning for
"oil," "hazardous substance," "release," "solid waste" or "disposal" which is
broader than that specified in either OPA, CERCLA or RCRA, such broader meaning
shall apply.
"EQUITY" means shares of capital stock or a partnership, profits,
capital or member interest, or options, warrants or any other right to
substitute for or otherwise acquire the capital stock or a partnership, profits,
capital or member interest of the Company or any of the Company's Subsidiaries.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, and any successor statute.
"ERISA AFFILIATE" shall mean each trade or business (whether or
not incorporated) which together with the Company or a Subsidiary of the Company
would be deemed to be a "single employer" within the meaning of Section
4001(b)(1) of ERISA or Subsections 414(b), (c), (m) or (o) of the Code.
"ERISA TERMINATION EVENT" shall mean (a) a "Reportable Event"
described in Section 4043 of ERISA and the regulations issued thereunder (other
than a "Reportable Event" not subject to the provision for 30-day notice to the
PBGC under Subsections .14, .18, .19 or .20 of Part 2615 of the PBGC
regulations), (b) the withdrawal of the Company, a Subsidiary of the Company or
any ERISA Affiliate from a Plan during a plan year in which it was a
"substantial employer" as defined in Section 4001(a)(2) of ERISA, (c) the filing
of a notice of intent to terminate a Plan or the treatment of a Plan amendment
as a termination under Section 4041(c) of ERISA, (d) the institution of
proceedings to terminate a Plan by the PBGC, or (e) any other event or condition
which could reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Plan.
"EURODOLLAR LOAN" shall mean a Revolving Credit Loan or a Term
Loan a bearing interest at the rate provided in Section 2.6(b).
"EURODOLLAR RATE" shall mean, with respect to any Borrowing of
Eurodollar Loans for any Interest Period, the product of (a) (1) the interest
rate per annum shown on page 3750 of the Dow ▇▇▇▇▇ & Company Telerate screen or
any successor page as the composite offered rate for London interbank deposits
with a period comparable to the Interest Period for such Eurodollar Loan, as
shown under the heading "USD" at 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period or (2) if the rate in clause (1)
of this definition is not shown for any particular day, the average interest
rate per annum (rounded upwards, if necessary, to the next 1/16th of 1%) offered
to the Reference Banks in the interbank Eurodollar market for Dollar deposits of
amounts in funds comparable to the principal amount of the Eurodollar Loan to
which such Eurodollar Rate is to be applicable with maturities comparable to the
Interest Period for which such Eurodollar Rate will apply as of approximately
10:00 a.m. (Houston, Texas time) two Business Days prior to the commencement of
such Interest Period, times (b) Statutory Reserves.
"EVENT OF DEFAULT" shall have the meaning provided in Article 7.
"EXCLUDED TAXES" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Company hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other
9
jurisdiction in which the Company is located, and (c) in the case of a Foreign
Lender any withholding tax that is imposed on amounts payable to such Foreign
Lender at the time such Foreign Lender becomes a party to this Agreement (or
designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.20(f), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from the
Company with respect to such withholding tax pursuant to Section 2.20(a).
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the per
annum rate 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, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"FEE LETTER" shall mean the letter agreement dated January 22,
1998, regarding fees, executed by Chase and Chase Securities Inc. and accepted
and agreed to by the Company as of January 22, 1998.
"FIFO" shall mean first in first out.
"FINANCIAL STATEMENTS" shall mean the audited consolidated
financial statements of the Company for the Fiscal Year ended December 31, 1997,
and the unaudited consolidated financial statements of the Company for the
Fiscal Quarters ended March 31, 1997, June 30, 1997, and September 30, 1997.
"FINANCING DOCUMENTS" shall mean this Agreement, the Notes, the
Guaranty Agreements, the Applications, Letters of Credit, Borrowing Requests,
Borrowing Base Reports, the Fee Letter, and the other documents, instruments or
agreements described in Sections 3.1 and 3.2, together with any other document,
instrument or agreement (other than participation, agency or similar agreements
among the Lenders or between any Lender and any other bank or creditor with
respect to any indebtedness or obligations of the Company or its Subsidiaries
hereunder or thereunder) now or hereafter entered into in connection with the
Loans or the Lender Indebtedness, as such documents, instruments or agreements
may be amended, modified or supplemented from time to time.
"FISCAL QUARTER" shall mean the fiscal quarter of the Company,
ending on the last day of each March, June, September and December of each year.
"FISCAL YEAR" shall mean the fiscal year of the Company, ending
on December 31st of each year.
"FIXED CHARGE COVERAGE RATIO" shall mean the ratio for the
relevant period of (i) EBITDA plus operating lease and rental expenses and less
cash taxes to (ii) Debt Service plus Capital Expenditures plus operating lease
and rental expenses.
"FOREIGN LENDER" means any Lender that is organized under the
laws of a jurisdiction other than the United States of America, each State
thereof, or the District of Columbia.
"GAAP" shall mean generally accepted accounting principles as
applied in accordance with Section 1.2.
10
"GOVERNMENTAL AUTHORITY" shall mean any (domestic or foreign)
federal, state, province, county, city, municipal or other political subdivision
or government, department, commission, board, bureau, court, agency or any other
instrumentality of any of them, which exercises jurisdiction over the Company,
or any Subsidiary of the Company, or any Property (including, but not limited
to, the use and/or sale thereof) of the Company or any such Subsidiary, or any
Plan.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code,
ordinance, order, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other direction or requirement
(including but not limited to any of the foregoing which relate to Environmental
Laws, energy regulations and occupational, safety and health standards or
controls) of any Governmental Authority.
"GUARANTY AGREEMENTS" shall mean, collectively the Subsidiary
Guaranties.
"HIGHEST LAWFUL RATE" shall mean, with respect to each Lender,
the maximum nonusurious interest rate, if any, that at any time or from time to
time may be contracted for, taken, reserved, charged or received on the Notes or
on other Lender Indebtedness, as the case may be, owed to it under the law of
any jurisdiction whose laws may be mandatorily applicable to such Lender
notwithstanding other provisions of this Agreement, or law of the United States
of America applicable to such Lender and the Transactions, which would permit
such Lender to contract for, charge, take, reserve or receive a greater amount
of interest than under such jurisdiction's law.
"INDEBTEDNESS" of any Person shall mean:
(a) all obligations of such Person for borrowed money and
obligations evidenced by bonds, debentures, notes or other similar
instruments;
(b) all obligations of such Person (whether contingent or
otherwise) in respect of bankers' acceptances, letters of credit, surety
or other bonds and similar instruments;
(c) all obligations of such Person to pay the deferred purchase
price of Property or services (other than for borrowed money);
(d) all Capital Lease Obligations in respect of which such Person
is liable, contingently or otherwise, as obligor, guarantor or
otherwise, or in respect of which obligations such Person otherwise
assures a creditor against loss;
(e) all guaranties (direct or indirect), and other contingent
obligations of such Person in respect of, or obligations to purchase or
otherwise acquire or to assure payment of, Indebtedness (as described in
the other clauses of this definition) of other Persons;
(f) Indebtedness (as described in the other clauses of this
definition) of others secured by any Lien upon Property owned by such
Person, whether or not assumed;
(g) all obligations or undertakings of such Person to maintain or
cause to be maintained the financial position or financial covenants of
other Persons; and
(h) the net amount of obligations of such Person under agreements
of the types described in the definition of Interest Rate Swap
Agreements.
11
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INTERCOMPANY INDEBTEDNESS" shall mean any Indebtedness owed to
and held by the Company or any Wholly Owned Subsidiary; PROVIDED that any
subsequent issuance or transfer of any capital stock or similar equity interest
which results in any such Wholly Owned Subsidiary ceasing to be a Wholly Owned
Subsidiary or any subsequent transfer of such Indebtedness (other than to the
Company or another Wholly Owned Subsidiary) shall be deemed, in each case, to
constitute the incurrence of such Indebtedness by the issuer thereof.
"INTEREST COVERAGE RATIO" shall mean, on any day, the ratio of
(a) EBITDA less Capital Expenditures for the Rolling Period ending on the then
most recent Quarterly Date to (b) Cash Interest Expense during such Rolling
Period.
"INTEREST EXPENSE" shall mean, as to the Company and its
Subsidiaries on a consolidated basis and for any period, without duplication,
total interest expenses, whether paid or accrued as liabilities (including the
interest component of Capital Lease Obligations), with respect to all
outstanding Indebtedness, including, without limitation, all commissions,
discounts and other fees and charges owed with respect to any financing or
letters of credit and net costs under any Interest Rate Swap Agreement to the
extent that such costs are included within interest expense under GAAP.
"INTEREST PERIOD" shall mean, with respect to each Borrowing of
Eurodollar Loans, an interest period complying with the terms and provisions of
Section 2.7.
"INTEREST RATE SWAP AGREEMENT" shall mean any rate swap, rate
cap, rate floor, rate collar, forward rate agreement, futures or other rate
protection agreement or option with respect to any such transaction, designed to
hedge against fluctuations in interest rates.
"ISSUING BANK" shall mean, for each Letter of Credit, Chase, as
the issuing bank for such Letter of Credit.
"LENDER" and "LENDERS" shall have the respective meaning set
forth in the opening paragraph hereof.
"LENDER INDEBTEDNESS" shall mean any and all amounts owing or to
be owing by the Company to the Administrative Agent, the Issuing Bank or the
Lenders with respect to or in connection with the Loans, any Letter of Credit
Liabilities, the Notes, any Interest Rate Swap Agreement, this Agreement, or any
other Financing Document and, as to Interest Rate Swap Agreements, any and all
amounts owing or to be owing by the Company thereunder to any Affiliate of any
Lender that has entered into an Interest Rate Swap Agreement with the Company.
"LENDING OFFICE" shall mean for each Lender the office specified
opposite such Lender's name on the signature pages hereof, or in the Assignment
and Acceptance pursuant to which it became a Lender, with respect to each Type
of Loan, or such other office as such Lender may designate in writing from time
to time to the Company and the Administrative Agent with respect to such Type of
Loan.
"LETTERS OF CREDIT" shall have the meaning assigned such term in
Section 2.3(a).
"LETTER OF CREDIT LIABILITIES" shall mean, at any time and in
respect of any Letter of Credit, the sum of (a) the amount available for
drawings under such Letter of Credit as of the date of determination
12
plus (b) the aggregate unpaid amount of all Reimbursement Obligations due and
payable as of the date of determination in respect of previous drawings made
under such Letter of Credit.
"LIEN" shall mean any interest in Property securing an obligation
owed to, or a claim by, a Person other than the owner of the Property, whether
such interest is based on contract, constitutional, common, or statutory law,
and including but not limited to the lien or security interest arising from a
mortgage, encumbrance, pledge, security agreement, conditional sale or trust
receipt or a lease, consignment or bailment for security purposes. For the
purposes of this Agreement, the Company or any Subsidiary of the Company shall
be deemed to be the owner of any Property which it has acquired or holds subject
to a conditional sale agreement, financing lease or other arrangement pursuant
to which title to the Property has been retained by or vested in some other
Person for security purposes.
"LOAN" shall mean a Revolving Credit Loan or a Term Loan and
"LOANS" shall mean collectively the Revolving Credit Loans or the Term Loans or
one or more of them as provided herein.
"MARGIN STOCK" shall have the meaning provided in Regulations G,
U and X.
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse
effect on (a) the business, operations, assets, liabilities, condition
(financial or otherwise), prospects, or results of operations of the Company, on
an individual basis, or the Company and its Subsidiaries taken as a whole, (b)
the ability of the Company on an individual basis to carry out its business or
of the Company and its Subsidiaries taken as a whole to carry out their
business, or (c) the ability of the Company and its Subsidiaries, taken as a
whole, to perform the obligations under the Notes, this Agreement or the other
Financing Documents in accordance with their respective terms.
"MAXIMUM AVAILABLE AMOUNT" shall mean, at any date, an amount
equal to the lesser of (a) the aggregate Revolving Credit Commitments as of such
date, and (b) the Borrowing Base as of such date.
"NET WORTH" shall mean, at any time and from time to time, the
net worth of the Company and its Subsidiaries on a consolidated basis,
determined in accordance with GAAP.
"NOTE PURCHASE AGREEMENT" shall mean that certain Note Purchase
Agreement dated July 30, 1996, executed by the Company and The Northwestern
Mutual Life Insurance Company in connection with the Senior Notes, and any and
all amendments and supplements thereto.
"NOTES" shall mean the Revolving Credit Notes and the Term Notes.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"PAYMENT OFFICE" shall mean the Administrative Agent's office
located at ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇▇▇ ▇▇▇▇▇▇▇ (or
such other office or individual as the Administrative Agent may hereafter
designate in writing to the other parties hereto).
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or
any successor thereto.
"PERSON" shall mean any individual, partnership, firm,
corporation (including, but not limited to the Company), association, joint
venture, trust or other entity, or any government or political subdivision
13
or agency, department or instrumentality thereof; PROVIDED, HOWEVER, for the
purpose of the definition of "Change of Control," "PERSON" shall mean a "person"
or group of persons within the meaning of Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended.
"PLAN" shall mean any employee pension benefit plan, as defined
in Section 3(2) of ERISA (including, but not limited to, an employee pension
benefit plan, such as a foreign plan, which is not subject to the provisions of
ERISA), which (a) is currently or hereafter sponsored, maintained or contributed
to by the Company, a Subsidiary of the Company or an ERISA Affiliate, or (b) was
at any time during the six preceding Fiscal Years sponsored, maintained or
contributed to by the Company, a Subsidiary of the Company or an ERISA
Affiliate.
"PRIME RATE" shall mean the rate which the Administrative Agent
announces from time to time as its prime rate, effective as of the date
announced as the effective date of any change in such prime rate. Without notice
to the Company or any other Person, the Prime Rate shall change automatically
from time to time as and in the amount by which such prime rate shall fluctuate.
The Prime Rate is a reference rate and does not necessarily represent the lowest
or best rate actually charged to any customer. The Administrative Agent may make
commercial loans or other loans at rates of interest at, above or below the
Prime Rate.
"PROPERTY" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
recitals hereof.
"QUARTERLY DATES" shall mean the last day of each March, June,
September and December in each year.
"REFERENCE BANKS" shall mean the Administrative Agent.
"REGISTER" shall have the meaning assigned in Section 9.7(c).
"REGULATION D", "REGULATIONS G, U AND X" shall mean,
respectively, Regulation D under the Securities Act of 1933, as amended or
modified from time to time, and Regulation G, Regulation U and Regulation X of
the Board of Governors of the Federal Reserve System, as such regulations are
from time to time in effect and any successor regulations thereto.
"REIMBURSEMENT OBLIGATIONS" shall mean, at any date, the
obligations of the Company then outstanding in respect of the Letters of Credit,
to reimburse the Administrative Agent for the account of the Issuing Bank for
the amount paid by the Issuing Bank in respect of any drawings under the Letters
of Credit.
"REQUIRED LENDERS" shall mean at any time, the Lenders having 66
2/3% or more of the combined aggregate amount at such time of Term Loans then
outstanding and the Revolving Credit Commitments, or in the case of the
termination or expiration of the Revolving Credit Commitments, the aggregate
amount of Revolving Credit Loans then outstanding.
"RESPONSIBLE OFFICER" shall mean, with respect to any
corporation, the chairman of the board, the president, any vice president, the
chief executive officer or the chief operating officer, or any equivalent
officer (regardless of his or her title), and, in respect of financial or
accounting matters, the chief financial officer, the vice president of finance,
the treasurer, the controller, or any equivalent officer
14
(regardless of his or her title). Unless otherwise specified, all references to
a Responsible Officer herein shall mean a Responsible Officer of the Company.
"RESTRICTED PAYMENT" shall mean (i) the declaration of any
dividend on, or the incurrence of any liability to make any other payment or
distribution in respect of, capital stock (other than payment of distribution,
or incurrence of a liability therefor to the extent payable among the affiliated
companies or in capital stock) or (ii) distribution on account of the purchase,
redemption or other retirement of any such capital stock (other than any
payment, redemption or retirement among Affiliates or in capital stock).
"REVOLVING CREDIT COMMITMENT" shall have the meaning assigned
such term in Section 2.1(c).
"REVOLVING CREDIT EXPOSURE" shall mean, at any time and as to
each Lender, the sum of (a) the aggregate principal amount of the Revolving
Credit Loans made by such Lender outstanding as of such date plus (b) such
Lender's Revolving Credit Percentage of the aggregate amount of all Letter of
Credit Liabilities as of such date.
"REVOLVING CREDIT LOAN" shall have the meaning provided in
Section 2.1(a); the Revolving Credit Loans shall not include any Letter of
Credit Liabilities.
"REVOLVING CREDIT MATURITY DATE" shall mean March 31, 2003.
"REVOLVING CREDIT NOTE" shall mean a promissory note of the
Company described in Section 2.5(a) payable to any Lender and being
substantially in the form of EXHIBIT A, evidencing the aggregate Indebtedness of
the Company to such Lender resulting from Revolving Credit Loans made by such
Lender.
"REVOLVING CREDIT PERCENTAGE" shall mean as to any Lender, the
percentage of the aggregate Revolving Credit Commitments constituted by its
Revolving Credit Commitment (or, if the Revolving Credit Commitments have
terminated or expired, the percentage which such Lender's Revolving Credit
Exposure at such time constitutes of the Aggregate Revolving Credit Exposure at
such time).
"ROLLING PERIOD" shall mean any period of four consecutive Fiscal
Quarters (or, if less, the number of full Fiscal Quarters subsequent to the
Closing Date).
"SENIOR NOTES" shall mean the 8.02% Senior Notes, due July 31,
2006, issued by the Company pursuant to the Note Purchase Agreement in an amount
of up to $30,000,000.
"SOLVENT" shall mean with respect to any Person on a particular
date, the condition that, on such date, (a) the fair value of the property of
such Person is greater than the total amount of liabilities, including, without
limitation, contingent liabilities, of such Person, (b) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liabilities of such Person on its debts as they
become absolute and matured, (c) 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 (d) 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 an unreasonably
small amount of capital.
"STANDBY LETTER OF CREDIT" shall mean a letter of credit that (a)
is used in lieu or in support of performance guarantees or performance, surety
or other similar bonds (but expressly excluding stay and
15
appeal bonds) arising in the ordinary course of business, (b) is used in lieu or
in support of stay or appeal bonds, (c) supports the payment of insurance
premiums for reasonably necessary casualty insurance carried by the Company or
any of its consolidated Subsidiaries, or (d) supports payment or performance for
identified purchases or exchanges of products in the ordinary course of
business.
"STATUTORY RESERVES" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum applicable reserve
percentages, including any marginal, special, emergency or supplemental reserves
(expressed as a decimal) established by the Board of Governors of the Federal
Reserve System and any other banking authority to which the Lenders are subject
for Eurocurrency Liabilities (as defined in Regulation D) or any other category
of deposits or liabilities by reference to which the Eurodollar Rate is
determined. Such reserve percentages shall include those imposed pursuant to
Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"SUBSIDIARY" of any Person shall mean a corporation, limited
liability company, partnership or other entity of which a majority of the
outstanding shares of stock of each class having ordinary voting power or other
equity interests is owned by such Person, by one or more Subsidiaries of such
Person, or by such Person and one or more of its Subsidiaries.
"SUBSIDIARY GUARANTY" shall mean any and all Guaranty Agreements
executed by each Subsidiary of the Company, in form and substance satisfactory
to the Administrative Agent, as amended, modified, renewed, supplemented or
restated from time to time.
"SUBSIDIARY INDEBTEDNESS" as to any Subsidiary, shall mean (a)
Intercompany Indebtedness, and (b) other Indebtedness (other than Subsidiary
Indebtedness) of such Subsidiary permitted by Section 6.2.
"TAXES" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM LOAN" shall have the meaning set forth in Section 2.1(a).
"TERM NOTE" shall mean a promissory note of the Company described
in Section 2.5(b) payable to any Lender and being substantially in the form of
EXHIBIT B, evidencing the aggregate Indebtedness of the Company to such Lender
resulting from the Term Loans made by such Lender.
"TERM LOAN COMMITMENT" shall have the meaning assigned such term
in Section 2.1(d).
"TERM LOAN MATURITY DATE" shall mean March 31, 2003.
"TERM LOAN PERCENTAGE" shall mean as to any Lender, at any time
after the Closing Date, the percentage which such Lender's Term Loans then
outstanding constitutes of the Term Loans then outstanding.
"TRANSACTIONS" shall mean the transactions provided for in and
contemplated by this Agreement and the other Financing Documents.
"TYPE" of Loan shall mean a Base Rate Loan or Eurodollar Loan.
16
"UCC" shall mean the Uniform Commercial Code as from time to time
in effect in the State of Texas or, where applicable as to specific Collateral,
any other relevant state.
"VOTING STOCK" of any Person shall mean capital stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
"WHOLLY OWNED SUBSIDIARY" shall mean any Subsidiary of the
Company all the capital stock or other equity interests of which (other than
directors' qualifying shares and shares held by other than the Persons to the
extent such shares are required by applicable law to be held by a Person other
than the Company or one of its Subsidiaries) is owned by the Company or one or
more Wholly Owned Subsidiaries.
Section 1.2 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
defined or specified herein, all accounting terms shall be construed herein, all
accounting determinations hereunder shall be made, all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP
applied on a basis consistent with the Financial Statements (except for changes
concurred with by the Company's independent public accountant).
Section 1.3 OTHER DEFINITIONAL TERMS. The words "hereof," "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and article, section, schedule, exhibit and like references are to
this Agreement unless otherwise specified.
ARTICLE 2
AMOUNT AND TERMS OF LOANS
Section 2.1 LOANS AND COMMITMENTS.
(a) LOANS. Subject to the terms and conditions and relying on the
representations and warranties contained herein (1) each Lender severally agrees
to make, on the Closing Date, a term loan pursuant to its Term Loan Commitment
(each a "TERM LOAN") to the Company, and (2) on any Business Day on and after
the Closing Date, but prior to the Revolving Credit Maturity Date, each Lender
severally agrees to make revolving credit loans (each a "REVOLVING CREDIT LOAN")
to the Company. Except for in connection with a continuation or conversion
pursuant to Section 2.11, any Term Loan that is repaid or prepaid may not be
reborrowed.
(b) TYPES OF LOANS. The Revolving Credit Loans and the Term Loans
made pursuant hereto by each Lender shall, at the option of the Company, be
either Base Rate Loans or Eurodollar Loans and may be continued or converted
pursuant to Section 2.11, provided that, except as otherwise specifically
provided herein, all Loans made pursuant to the same Borrowing shall be of the
same Type.
(c) REVOLVING CREDIT COMMITMENTS. Each Lender's Revolving Credit
Exposure shall not exceed at any one time the amount set forth opposite such
Lender's name on Annex I under the caption "Revolving Credit Commitment" (as the
same may be reduced pursuant to Section 2.9 or otherwise from time to time
modified pursuant to Section 9.7, its "REVOLVING CREDIT COMMITMENT," and
collectively for all Lenders, the "REVOLVING CREDIT COMMITMENTS"); PROVIDED,
HOWEVER, that the Aggregate Revolving Credit Exposure at any one time
outstanding shall not exceed the Maximum Available Amount in effect at such
time; and, PROVIDED, FURTHER, the aggregate principal amount of all Revolving
Credit Loans at any one time
17
outstanding shall not exceed the difference between (1) the Maximum Available
Amount in effect at such time, and (2) the aggregate amount of all Letter of
Credit Liabilities at such time. There may be more than one Borrowing with
respect to Revolving Credit Loans on any day. Within the foregoing limits and
subject to the conditions set out in Article 3, the Company may obtain
Borrowings of Revolving Credit Loans, repay or prepay such Revolving Credit
Loans, and reborrow such Revolving Credit Loans.
(d) TERM LOAN COMMITMENTS. The Term Loans made pursuant hereto by
each Lender shall not exceed in aggregate principal amount outstanding the
amount set forth opposite such Lender's name on Annex I under the caption "Term
Loan Commitment" (its "TERM LOAN COMMITMENT," and collectively for all Lenders,
the "TERM LOAN COMMITMENTS"). Any portion of each such Lender's Term Loan
Commitment not utilized on the Effective Date shall be permanently canceled. Any
Term Loans that are repaid or prepaid may not be reborrowed.
(e) AMOUNTS OF BORROWINGS, ETC. The aggregate principal amount of
each Borrowing (1) of Eurodollar Loans shall be not less than $500,000 and shall
be in an integral multiple of $500,000, and (2) of Base Rate Loans hereunder
shall be not less than $500,000 and shall be in an integral multiple of
$500,000, except that any Borrowing of Revolving Credit Loans that are Base Rate
Loans may be in the aggregate amount of the unused Maximum Revolving Credit Loan
Amount in effect at such time. Borrowings of more than one Type may be
outstanding at the same time; PROVIDED, HOWEVER, that the Company shall not be
entitled to request any Borrowing that, if made, would result in an aggregate of
more than five (5) separate Borrowings of Eurodollar Loans being outstanding at
any one time. For purposes of the foregoing, Borrowings having different
Interest Periods, regardless of whether they commence on the same date, shall be
considered separate Borrowings.
Section 2.2 BORROWING REQUESTS.
(a) BORROWING REQUESTS. Whenever the Company desires to make a
Borrowing hereunder, it shall give Advance Notice in the form of a Borrowing
Request, specifying, subject to the provisions hereof (1) the aggregate
principal amount of the Revolving Credit Loans to be made pursuant to such
Borrowing, (2) the date of Borrowing (which shall be a Business Day), (3)
whether the Revolving Credit Loans being made pursuant to such Borrowing are to
be Base Rate Loans or Eurodollar Loans, and (4) in the case of Eurodollar Loans,
the Interest Period to be applicable thereto.
(b) NOTICE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall promptly give each Lender telecopy or telephonic notice (and, in the case
of telephonic notices, confirmed by telecopy or otherwise in writing) of the
proposed Borrowing, of such Lender's Applicable Percentage thereof and of the
other matters covered by the Advance Notice. The Company hereby waives the right
to dispute the Administrative Agent's record of the terms of such telephonic
notice, absent manifest error.
Section 2.3 LETTERS OF CREDIT.
(a) ISSUANCE OF LETTERS OF CREDIT. Subject to the terms and
conditions hereof, the Company shall have the right, in addition to Revolving
Credit Loans provided for in Section 2.1, to utilize the Revolving Credit
Commitments from time to time prior to the Revolving Credit Maturity Date by
obtaining the issuance of either Documentary Letters of Credit or Standby
Letters of Credit for the account of the Company by the Issuing Bank if the
Company shall so request in the notice referred to in Section 2.3(b)(1) (such
letters of credit being collectively referred to as the "LETTERS OF CREDIT");
PROVIDED, HOWEVER, that the Aggregate Revolving Credit Exposure at any one time
outstanding shall not exceed the Maximum Available Amount in effect at such time
and the aggregate of all Letter of Credit Liabilities at any one time
outstanding shall not exceed $5,000,000. The Letters of Credit shall be
denominated in Dollars and
18
may be issued to support the obligations of the Company or any of its
Subsidiaries. Upon the date of the issuance of a Letter of Credit, the Issuing
Bank shall be deemed, without further action by any party hereto, to have sold
to each Lender, and each Lender shall be deemed, without further action by any
party hereto, to have purchased from the Issuing Bank, a participation, to the
extent of such Lender's Revolving Credit Percentage, in such Letter of Credit
and the related Letter of Credit Liabilities. No Letter of Credit issued
pursuant to this Agreement shall have an expiry date beyond the earlier of one
year after the date of issuance or five days prior to the Revolving Credit
Maturity Date. Any Letter of Credit may give the beneficiary thereof either the
right to draw upon the Letter of Credit upon its expiry date or the right to
automatically extend the expiry date thereof for periods of up to one year per
extension; PROVIDED that no such extension shall extend the expiry date beyond
five days prior to the Revolving Credit Maturity Date.
(b) ADDITIONAL LETTER OF CREDIT PROVISIONS. The following
additional provisions shall apply to each Letter of Credit:
(1) The Company shall give the Administrative Agent and
the Issuing Bank at least three Business Days' prior notice (effective
upon receipt), or in each case, such shorter period as may be agreed to
by the Administrative Agent and the Issuing Bank, specifying the date
such Letter of Credit is to be issued (which shall be a Business Day)
and describing: (A) the face amount of the Letter of Credit, (B) the
expiration date of the Letter of Credit, (C) the name and address of the
beneficiary, (D) information concerning the transaction proposed to be
supported by such Letter of Credit as the Administrative Agent or the
Issuing Bank may reasonably request, (E) such other information and
documents relating to the Letter of Credit as the Administrative Agent
or the Issuing Bank may reasonably request, and (F) a precise
description of documents and the verbatim text of any certificate to be
presented by the beneficiary, which, if presented prior to the expiry
date of the Letter of Credit, would require the Issuing Bank to make
payment under the Letter of Credit; PROVIDED that the Issuing Bank, in
its reasonable judgment, may require changes in such documents and
certificates; and PROVIDED FURTHER that the Issuing Bank shall not be
required to issue any Letter of Credit that on its terms requires
payment thereunder prior to the next Business Day following receipt by
the Issuing Bank of such documents and certificates. Each such notice
shall be accompanied by the Issuing Bank's Application and by a
certificate executed by a Responsible Officer setting forth calculations
evidencing availability for such Letter of Credit pursuant to Section
2.3(b)(2) and stating that all conditions precedent to such issuance
have been satisfied. Each Letter of Credit shall, to the extent not
inconsistent with the express terms hereof or the applicable
Application, be subject to the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500 (together with any subsequent revisions thereof
approved by a Congress of the International Chamber of Commerce, the
"UCP"), and shall, as to matters not governed by the UCP, be governed
by, and construed and interpreted in accordance with, the laws of the
State of Texas.
(2) No Letter of Credit may be issued if after giving
effect thereto the Aggregate Revolving Credit Exposure would exceed the
Maximum Available Amount. On each day during the period commencing with
the issuance of any Letter of Credit and until such Letter of Credit
shall have expired or have been terminated, the Revolving Credit
Commitment of each Lender shall be deemed to be utilized for all
purposes hereof in an amount equal to such Lender's Revolving Credit
Percentage of the amount of the Letter of Credit Liabilities related to
such Letter of Credit.
(3) Upon receipt from the beneficiary of any Letter of
Credit of any demand for payment thereunder, the Issuing Bank shall
promptly notify the Company and the Administrative Agent of such demand
(provided that the failure of the Issuing Bank to give such notice shall
not
19
affect the Reimbursement Obligations of the Company hereunder) and the
Company shall immediately, and in any event no later than 10:00 a.m.
(Houston, Texas time) on the date of such drawing, reimburse the
Administrative Agent for the account of the Issuing Bank for any amount
paid by the Issuing Bank upon any drawing under any Letter of Credit,
without presentment, demand, protest or other formalities of any kind in
an amount, in same day funds, equal to the amount of such drawing.
Unless prior to 10:00 a.m. (Houston, Texas time) on the date of such
drawing, the Company shall have either notified the Issuing Bank and the
Administrative Agent that the Company intends to reimburse the
Administrative Agent for the account of the Issuing Bank for the amount
of such drawing with funds other than the proceeds of Revolving Credit
Loans or delivered to the Administrative Agent a Borrowing Request for
Revolving Credit Loans in an amount equal to such drawing, the Company
will be deemed to have given a Borrowing Request to the Administrative
Agent requesting that the Lenders make Revolving Credit Loans which
shall be Base Rate Loans on the date on which such drawing is honored in
an amount equal to the amount of such drawing; PROVIDED THAT such Loans
shall be subject to (A) the satisfaction of the conditions in Article 3
and (B) the existence of Revolving Credit Loan availability pursuant to
Section 2.1(c) hereof (after giving effect to repayment of the
applicable Reimbursement Obligations with the proceeds of the proposed
Revolving Credit Loans). Subject to the preceding sentence, if so
requested by the Administrative Agent, each of the Lenders shall, on the
date of such drawing, make such Revolving Credit Loans in an amount
equal to such Lender's Revolving Credit Percentage of such drawing or
the full amount of the unused Revolving Credit Loan available pursuant
to Section 2.1(c), as applicable, the proceeds of which shall be applied
directly by the Administrative Agent to reimburse the Issuing Bank to
the extent of such proceeds.
(4) If the Company fails to reimburse the Issuing Bank as
provided in clause (3) above for any reason, including, but not limited
to, failure to satisfy the conditions in Article 3 or insufficient
unused Revolving Credit Loan availability pursuant to Section 2.1(c),
the Issuing Bank shall promptly notify the Administrative Agent and the
Administrative Agent shall notify each Lender of the unreimbursed amount
of such drawing and of such Lender's respective participation therein
based on such Lender's Revolving Credit Percentage. Each Lender will pay
to the Administrative Agent for the account of the Issuing Bank on the
date of such notice an amount equal to such Lender's Revolving Credit
Percentage of such unreimbursed drawing (or, if such notice is made
after 1:00 p.m. (Houston, Texas time) on such date, on the next
succeeding Business Day). If any Lender fails to make available to the
Issuing Bank the amount of such Lender's participation in such Letter of
Credit as provided in this clause (4), the Issuing Bank shall be
entitled to recover such amount on demand from such Lender together with
interest at the Federal Funds Effective Rate for one Business Day and
thereafter at the Base Rate. Nothing in this clause (4) shall be deemed
to prejudice the right of any Lender to recover from the Issuing Bank
any amounts made available by such Lender to the Issuing Bank pursuant
to this clause (4) if it is determined by a court of competent
jurisdiction that the payment with respect to a Letter of Credit by the
Issuing Bank was wrongful and such wrongful payment was the result of
gross negligence or willful misconduct on the part of the Issuing Bank.
The Issuing Bank shall pay to the Administrative Agent and the
Administrative Agent to each Lender such Lender's Revolving Credit
Percentage of all amounts received from the Company for payment, in
whole or in part, of the Reimbursement Obligation in respect of any
Letter of Credit, but only to the extent such Lender has made payment to
the Issuing Bank in respect of such Letter of Credit pursuant to this
clause (4).
(5) The issuance by the Issuing Bank of each Letter of
Credit shall, in addition to the conditions precedent set forth in
Article 3, be subject to the conditions precedent that such Letter of
Credit shall be in the form and contain such terms as shall be
reasonably satisfactory to the Issuing Bank, and that the Company shall
have executed and delivered such other instruments and
20
agreements relating to the Letter of Credit as the Issuing Bank shall
have reasonably requested and that are not inconsistent with the terms
of this Agreement including the Issuing Bank's Application therefor. In
the event of a conflict between the terms of this Agreement and the
terms of any Application, the terms of this Agreement shall control.
(6) AS BETWEEN THE COMPANY AND THE ISSUING BANK, THE
COMPANY ASSUMES ALL RISKS OF THE ACTS AND OMISSIONS OF OR MISUSE OF THE
LETTERS OF CREDIT ISSUED BY THE ISSUING BANK BY THE RESPECTIVE
BENEFICIARIES OF SUCH LETTERS OF CREDIT. IN FURTHERANCE AND NOT IN
LIMITATION OF THE FOREGOING, THE ISSUING BANK SHALL NOT BE RESPONSIBLE:
(A) FOR THE FORM, VALIDITY, SUFFICIENCY, ACCURACY, GENUINENESS OR LEGAL
EFFECT OF ANY DOCUMENT SUBMITTED BY ANY PERSON IN CONNECTION WITH THE
APPLICATION FOR OR ISSUANCE OF SUCH LETTERS OF CREDIT, EVEN IF IT SHOULD
IN FACT PROVE TO BE IN ANY OR ALL RESPECTS INVALID, INSUFFICIENT,
INACCURATE, FRAUDULENT OR FORGED; (B) FOR THE VALIDITY OR SUFFICIENCY OF
ANY INSTRUMENT TRANSFERRING OR ASSIGNING OR PURPORTING TO TRANSFER OR
ASSIGN ANY SUCH 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; (C) FOR ERRORS, OMISSIONS, INTERRUPTIONS OR
DELAYS IN TRANSMISSION OR DELIVERY OF ANY MESSAGES, BY MAIL, CABLE,
TELEGRAPH, TELEX OR OTHERWISE, WHETHER OR NOT THEY ARE IN CIPHER; (D)
FOR ERRORS IN INTERPRETATION OF TECHNICAL TERMS; (E) FOR ANY LOSS OR
DELAY IN THE TRANSMISSION OR OTHERWISE OF ANY DOCUMENT REQUIRED IN ORDER
TO MAKE A DRAWING UNDER ANY SUCH LETTER OF CREDIT OR OF THE PROCEEDS
THEREOF; (F) FOR THE MISAPPLICATION BY THE BENEFICIARY OF ANY SUCH
LETTER OF CREDIT OF THE PROCEEDS OF ANY DRAWING UNDER SUCH LETTER OF
CREDIT; AND (G) FOR ANY CONSEQUENCES ARISING FROM CAUSES BEYOND THE
CONTROL OF THE ISSUING BANK, INCLUDING, WITHOUT LIMITATION, THE ACTIONS
OF ANY GOVERNMENTAL AUTHORITY. NONE OF THE ABOVE SHALL AFFECT, IMPAIR,
OR PREVENT THE VESTING OF ANY OF THE ISSUING BANK'S RIGHTS OR POWERS
HEREUNDER. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS
CLAUSE (G), THE COMPANY SHALL NOT ASSUME ANY RISK, AND SHALL HAVE NO
OBLIGATION TO INDEMNIFY THE ISSUING BANK, IN RESPECT OF ANY LIABILITY
INCURRED BY THE ISSUING BANK ARISING PRIMARILY OUT OF THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF THE ISSUING BANK, AS DETERMINED BY A
COURT OF COMPETENT JURISDICTION.
(7) The Issuing Bank will send to the Company and the
Administrative Agent immediately upon issuance of any Letter of Credit,
or an amendment thereto, a true and complete copy of such Letter of
Credit, or such amendment thereto. Upon issuance of any Letter of Credit
or an amendment thereto, the Administrative Agent shall promptly notify
each Lender of the terms of such Letter of Credit or amendment thereto,
and of such Lender's Revolving Credit Percentage of the amount of such
Letter of Credit or amendment thereto, and the Administrative Agent
shall provide to each Lender a copy of such Letter of Credit or such
amendment thereto. Upon cancellation or termination of any Letter of
Credit, the Issuing Bank shall promptly notify the Administrative Agent
and the Company, and the Administrative Agent will then promptly notify
each Lender, of such cancellation or termination.
(8) The obligation of the Company to reimburse the Issuing
Bank for Reimbursement Obligations with regard to the Letters of Credit
issued by it and the obligations of the Lenders under clause (4) shall
be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement and under all circumstances
including, without limitation, the following circumstances:
(A) any lack of validity or enforceability of
any Letter of Credit;
21
(B) the existence of any claim, set-off, defense
or other right that the Company may have at
any time against a beneficiary or any
transferee of any Letter of Credit (or any
Persons for whom any such transferee may be
acting), any Lender or any other Person,
whether in connection with this Agreement,
the transactions contemplated herein or any
unrelated transaction (including any
underlying transaction between the Company
or one of its Subsidiaries and the
beneficiary for which the Letter of Credit
was procured) other than a defense based on
the gross negligence (AS OPPOSED TO ORDINARY
NEGLIGENCE) or willful misconduct of the
Issuing Bank, as determined by a court of
competent jurisdiction;
(C) any draft, demand, certificate or any other
document presented under any Letter of
Credit is proved to be forged, fraudulent,
invalid or insufficient in any respect or
any statement therein is untrue or
inaccurate in any respect;
(D) any adverse change in the condition
(financial or otherwise) of the Company;
(E) any breach of this Agreement or any other
Financing Document by the Company,
Administrative Agent or any Lender (other
than the Issuing Bank);
(F) any other circumstance or happening
whatsoever which is similar to any of the
foregoing; PROVIDED that such other
occurrence or happening is not the result of
the gross negligence (AS OPPOSED TO ORDINARY
NEGLIGENCE) or willful misconduct of the
Issuing Bank, as finally judicially
determined by a court of competent
jurisdiction; or
(G) the fact that a Default shall have occurred
and be continuing.
Section 2.4 DISBURSEMENT OF FUNDS.
(a) AVAILABILITY. No later than 11:00 a.m. (or, in the case of
Base Rate Loans, 1:00 p.m.) (Houston, Texas time) on the date of each Borrowing,
each Lender will make available to the Administrative Agent such Lender's
Applicable Percentage of the amount (if any) by which the principal amount of
the Borrowing requested to be made on such date by such Lender exceeds the
principal amount of Loans (if any) of such Lender maturing on such date, in
Dollars and in immediately available funds at the Payment Office. The
Administrative Agent will make available to the Company at the Payment Office
the aggregate of the amounts (if any) so made available by the Lenders by
depositing such amounts, in immediately available funds, to an account of the
Company at the Administrative Agent designated by the Company for such purpose.
To the extent that Revolving Credit Loans mature or Reimbursement Obligations
are due and owing on the date of a requested Borrowing of Revolving Credit
Loans, the Lenders shall apply the proceeds of the Revolving Credit Loans then
being made, to the extent thereof, to the repayment of such maturing Revolving
Credit Loans or Reimbursement Obligations, such Revolving Credit Loans or
Reimbursement Obligations and repayments intended to be a contemporaneous
exchange.
22
(b) FUNDS TO THE ADMINISTRATIVE AGENT. Unless the Administrative
Agent shall have been notified by any Lender prior to the date of a Borrowing
that such Lender does not intend to make available to the Administrative Agent
such Lender's Applicable Percentage of the Borrowing to be made on such date,
the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date, and the Administrative Agent
may make available to the Company a corresponding amount. If such corresponding
amount is not in fact made available to the Administrative Agent by such Lender
on the date of a Borrowing, the Administrative Agent shall be entitled to
recover such corresponding amount on demand from such Lender together with
interest at the Federal Funds Effective Rate. If such Lender does not pay such
corresponding amount forthwith upon the Administrative Agent's demand therefor,
the Administrative Agent shall promptly notify the Company, and the Company
shall immediately pay such corresponding amount to the Administrative Agent
together with interest at the rate specified for the Borrowing which includes
such amount paid. Nothing in this Section shall be deemed to relieve any Lender
from its obligation to fulfill its Commitments hereunder or to prejudice any
rights which the Company may have against any Lender as a result of any default
by such Lender hereunder.
(c) LENDERS' RESPONSIBILITIES. No Lender shall be responsible for
any default by any other Lender in its obligation to make Loans hereunder, and
each Lender shall be obligated to make only such Loans provided to be made by it
hereunder, regardless of the failure of any other Lender to fulfill its
Commitment hereunder.
Section 2.5 NOTES AND AMORTIZATION.
(a) REVOLVING CREDIT NOTES. The Company's obligation to pay the
principal of, and interest on, the Revolving Credit Loans made by each Lender
shall be further evidenced by the Company's issuance, execution and delivery of
a Revolving Credit Note payable to the order of each such Lender in the amount
of such Lender's Revolving Credit Commitment and shall be dated as of the date
of issuance of such Revolving Credit Note. The principal amount of each
Revolving Credit Note shall be payable on or before the Revolving Credit
Maturity Date.
(b) TERM NOTES AND AMORTIZATION. The Company's obligation to pay
the principal of, and interest on, the Term Loans maintained outstanding by each
Lender shall be further evidenced by the Company's issuance, execution and
delivery of a Term Note payable to the order of each such Lender in the amount
of such Lender's Term Loan Commitment (if issued prior to the Closing Date) or
in the principal amount of such Lender's Term Loans (if issued after the Closing
Date), and dated as of the date of issuance of such Term Note. The aggregate
principal amount of the Term Notes applicable to the aggregate Term Loans of all
Lenders shall be payable in quarterly installments of the amounts set forth
below:
23
QUARTERLY DATE AMOUNT
June 30, 1998 $2,000,000
September 30, 1998 $2,000,000
December 31, 1998 $2,000,000
March 31, 1999 $2,000,000
June 30, 1999 $2,000,000
September 30, 1999 $2,000,000
December 31, 1999 $2,000,000
March 31, 2000 $2,000,000
June 30, 2000 $2,000,000
September 30, 2000 $2,000,000
December 31, 2000 $2,000,000
March 31, 2001 $2,000,000
June 30, 2001 $2,000,000
September 30, 2001 $2,000,000
December 31, 2001 $2,000,000
March 31, 2002 $2,000,000
June 30, 2002 $2,000,000
September 30, 2002 $2,000,000
December 31, 2002 $2,000,000
March 31, 2003 the aggregate unpaid
principal balance owing
under the Term Notes.
The first such quarterly installment shall be payable on June 30, 1998, and the
remaining quarterly installments shall be payable on each Quarterly Date
thereafter, with the final installment in the amount of the aggregate unpaid
principal balance then owing being payable on or before the Term Loan Maturity
Date.
Section 2.6 INTEREST. In all cases subject to Section 9.13:
(a) BASE RATE LOANS. Subject to Section 2.6(c), the Company
agrees to pay interest in respect of the unpaid principal amount of each Base
Rate Loan from the date thereof until payment in full thereof at a rate per
annum which shall be, for any day, equal to the sum of the Applicable Margin
plus the Base Rate in effect on such day, but in no event to exceed the Highest
Lawful Rate. The term "BASE RATE" shall mean, for any day, the highest of (1)
the Prime Rate in effect on such day, and (2) one-half of one percent (1/2%)
plus the Federal Funds Effective Rate in effect for such day (rounded upwards,
if necessary, to the nearest 1/16th of 1%), but in no event to exceed the
Highest Lawful Rate. For purposes of this Agreement, any change in the Base Rate
due to a change in the Federal Funds Effective Rate or the Prime Rate shall be
effective as of the opening of business on the effective date of such change in
the Federal Funds Effective Rate or the Prime Rate, as the case may be. If for
any reason the Administrative Agent shall have determined (which determination
shall be conclusive and binding, absent manifest error) that it is unable to
ascertain the Federal Funds Effective Rate for any reason, including but not
limited to the inability of the Administrative Agent to obtain sufficient bids
or publications in accordance with the terms hereof, the Base Rate shall be the
Prime Rate until the circumstances giving rise to such inability no longer
exist.
(b) EURODOLLAR LOANS. Subject to Section 2.6(c), the Company
agrees to pay interest in respect of the unpaid principal amount of each
Eurodollar Loan from the date thereof until payment in full
24
thereof at a rate per annum which shall be the sum of the relevant Applicable
Margin plus the Eurodollar Rate, but in no event to exceed the Highest Lawful
Rate.
(c) DEFAULT INTEREST. If the Company shall default in the payment
of the principal of or interest on any Loan or any other amount becoming due
hereunder or under any Financing Document, by acceleration or otherwise, the
Company shall on demand from time to time pay interest, to the extent permitted
by law, on such defaulted amount to but excluding the date of actual payment
(after as well as before judgment) at a rate per annum equal to (1) in the case
of any Eurodollar Loan, the rate that would be applicable under Section 2.6(b)
to such Eurodollar Loan, plus 2% per annum, and (2) in the case of any other
amount, the rate that would be applicable under Section 2.6(a) to a Base Rate
Loan, plus 2% per annum, but in no event to exceed the Highest Lawful Rate.
(d) INTEREST PAYMENT DATES. Interest on each Loan shall accrue
from and including the date of such Loan to but excluding the date of payment in
full thereof. Interest on each Eurodollar Loan shall be payable on the last day
of each Interest Period applicable thereto and, in the case of an Interest
Period in excess of three months, on each day which occurs every three months
after the initial date of such Interest Period, and on any prepayment (on the
amount prepaid), at maturity (whether by acceleration or otherwise) and, after
maturity, on demand. Interest on each Base Rate Loan shall be payable on each
Quarterly Date, commencing on the first of such days to occur after such Loan is
made, at maturity (whether by acceleration or otherwise) and, after maturity, on
demand.
(e) NOTICE BY THE ADMINISTRATIVE AGENT. The Administrative Agent,
upon determining the Eurodollar Rate for any Interest Period, shall promptly
notify by telecopy or telephone (in the case of telephonic notices, confirmed by
telecopy or otherwise in writing) or in writing the Company and the Lenders.
Section 2.7 INTEREST PERIODS. In connection with each Borrowing of
Eurodollar Loans, the Company shall elect an Interest Period to be applicable to
such Borrowing, which Interest Period shall begin on and include, as the case
may be, the date selected by the Company pursuant to Section 2.2(a), the
conversion date or the date of expiration of the then current Interest Period
applicable thereto, and end on but exclude the date which is either one, two,
three or six months thereafter, as selected by the Company; PROVIDED that:
(a) BUSINESS DAYS. If any Interest Period would otherwise expire
on a day which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day, PROVIDED, FURTHER, that if any Interest Period
(other than in respect of a Borrowing of Eurodollar Loans the Interest Period of
which is expiring pursuant to Section 2.15(b) hereof) would otherwise expire on
a day which is not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(b) MONTH END. Any Interest Period which begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall, subject to Section (c) below, end on the last Business Day of a calendar
month;
(c) PAYMENT LIMITATIONS. No Interest Period shall extend beyond
any date that any principal payment or prepayment is scheduled to be due unless
the aggregate principal amount of Borrowings which are Borrowings of Base Rate
Loans or which have Interest Periods which will expire on or before such date,
less the aggregate amount of any other principal payments or prepayments due
during such Interest Period, is equal to or in excess of the amount of such
principal payment or prepayment; and
25
(d) MATURITY DATES. No Interest Period with regard to Revolving
Credit Loans shall extend beyond the Revolving Credit Maturity Date and no
Interest Period with regard to Term Loans shall extend beyond the Term Loan
Maturity Date.
Section 2.8 REPAYMENT OF LOANS.
(a) The Company hereby unconditionally promises to pay to the
Administrative Agent for the account of each Lender (1), the then unpaid
principal amount of each Revolving Credit Loan of such Lender on the Revolving
Credit Maturity Date (or such earlier date on which the Revolving Credit Loans
become due and payable pursuant to Article 7); and (2) the amounts specified in
Section 2.5(b), on the dates specified in Section 2.5(b) (or such earlier date
on which the Term Loans become due and payable pursuant to Article 7). The
Company hereby further agrees to pay interest on the unpaid principal amount of
the Loans from time to time outstanding from the date hereof until payment in
full thereof at the rates per annum, and on the dates, set forth in Section 2.6.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Company to such
Lender resulting from each Loan of such Lender from time to time, including,
without limitation, the amounts of principal and interest payable and paid to
such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant
to Section 9.7(d), and a subaccount therein for each Lender, in which shall be
recorded (1) the amount of each Loan made hereunder, the Type thereof and each
Interest Period, if any, applicable thereto, (2) the amount of any principal or
interest due and payable or to become due and payable from the Company to each
Lender hereunder and (3) both the amount of any sum received by the
Administrative Agent hereunder from the Company and each Lender's Applicable
Percentage thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8(c) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Company therein recorded; PROVIDED, HOWEVER, that the failure
of any Lender or the Administrative Agent to maintain the Register or any such
account, or any error therein, shall not in any manner affect the obligation of
the Company to repay (with applicable interest) the Loans made to the Company by
such Lender in accordance with the terms of this Agreement.
Section 2.9 VOLUNTARY TERMINATION OR REDUCTION OF COMMITMENTS. The
Company may, upon at least three (3) Business Days' notice to the Administrative
Agent, terminate entirely at any time, or partially reduce from time to time by
an aggregate amount of $5,000,000 or any larger multiple of $5,000,000, the
unused portions of the Revolving Credit Commitments, provided that any such
reduction shall apply proportionately to the Revolving Credit Commitment of each
Lender. If the Revolving Credit Commitments are terminated in their entirety,
all accrued commitment fees with respect thereto shall be payable on the
effective date of such termination.
Section 2.10 PREPAYMENTS AND MANDATORY COMMITMENT REDUCTIONS.
(a) MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS.
(1) If at any time the Aggregate Revolving Credit Exposure
is in excess of the Maximum Available Amount, the Company shall
immediately pay to the Administrative Agent, for the account of the
Lenders, the amount of such excess to be applied (A) as a prepayment of
the Revolving Credit Loans and Reimbursement Obligations outstanding and
(B) after payment in full
26
of the Revolving Credit Loans and Reimbursement Obligations outstanding,
as Cover for the Letter of Credit Liabilities in an amount of such
remaining excess. Any such prepayment or Cover resulting from a
termination or reduction of the Commitments pursuant to Section 2.9,
shall be payable or provided in full on the date on which such reduction
or termination of the Commitments becomes effective.
(2) Any or all of the Term Loan Commitments remaining
unused after the Closing Date shall automatically terminate at 5:00 p.m.
(Houston, Texas time) on such date.
(b) VOLUNTARY PREPAYMENTS. The Company may, at its option, at any
time and from time to time, prepay the Loans and the Reimbursement Obligations,
in whole or in part, upon giving, in the case of any Eurodollar Loan, three
Business Days' prior written notice to the Administrative Agent, and, in the
case of any Base Rate Loan, prior written notice on the same Business Day to the
Administrative Agent. Such notice shall specify (1) in the case of any
prepayment of Loans, the date and amount of prepayment and whether the
prepayment is (A) of Term Loans or Revolving Credit Loans, or a combination
thereof and (B) of Eurodollar Loans, Base Rate Loans or a combination thereof,
and, in each case if a combination thereof, the principal amount allocable to
each; and (2) in the case of any prepayment of Reimbursement Obligations, the
date and amount of prepayment, the identity of the applicable Letter of Credit
or Letters of Credit and the amount allocable to each of such Reimbursement
Obligations. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender of the contents thereof and of such Lender's
Applicable Percentage of such prepayment. If any such notice is given, the
amount specified in such notice shall be due and payable on the date specified
therein, together with (if a Eurodollar Loan is prepaid other than at the end of
the Interest Period applicable thereto) any amounts payable pursuant to Section
2.18 and, in the case of prepayments of the Term Loans only, accrued interest to
such date on the amount prepaid. Prepayments of (A) the Term Loans pursuant to
this Section 2.10(b) shall be applied ratably to the remaining scheduled
installment payments of the Term Loans required pursuant to Section 2.5(b); and
(B) the Revolving Credit Loans and the Reimbursement Obligations pursuant this
Section shall (unless the Company otherwise directs) be applied, FIRST, to
payment of the Revolving Credit Loans then outstanding, SECOND, to payment of
any Reimbursement Obligations then outstanding and, LAST, to Cover any
outstanding Letter of Credit Liability. Each prepayment of Base Rate Loans shall
be in the minimum principal amount of $500,000 and in integral multiples of
$500,000 and each prepayment of Eurodollar Loans shall be in the minimum
principal amount of $500,000 and in integral multiples of $500,000 or, in the
case of either Base Rate Loans or Eurodollar Loans, the aggregate principal
balance outstanding on the Term Loans or on the Revolving Credit Loans and the
Reimbursement Obligations, as applicable.
(c) NOTICE BY ADMINISTRATIVE AGENT. Upon receipt of a notice of
prepayment pursuant to this Section, the Administrative Agent shall promptly
notify each Lender of the contents thereof and of such Lender's ratable share of
such prepayment.
Section 2.11 CONTINUATION AND CONVERSION OPTIONS.
(a) CONTINUATION. The Company may elect to continue all or any
part of any Borrowing of Eurodollar Loans beyond the expiration of the then
current Interest Period relating thereto by giving Advance Notice (which shall
be irrevocable) to the Administrative Agent of such election, specifying the
Eurodollar Loans or portion thereof to be continued and the Interest Period
therefor. In the absence of such a timely and proper election with regard to
Eurodollar Loans, the Company shall be deemed to have elected to convert such
Eurodollar Loans to Base Rate Loans pursuant to Section 2.11(d).
(b) AMOUNT OF CONTINUATIONS. All or part of any Eurodollar Loans
may be continued as provided herein, provided that any continuation of such
Loans shall not be (as to each Borrowing of such
27
Loans as continued for an applicable Interest Period) less than $500,000 and
shall be in an integral multiple of $500,000.
(c) CONTINUATION OR CONVERSION UPON DEFAULT. If no Default shall
have occurred and be continuing, each Eurodollar Loan may be continued or
converted as provided in this Section. If a Default shall have occurred and be
continuing, the Company shall not have the option to elect to continue any such
Eurodollar Loan pursuant to Section 2.11(a) or to convert Base Rate Loans to
Eurodollar Loans pursuant to Section 2.11(e).
(d) CONVERSION TO BASE RATE. The Company may elect to convert any
Eurodollar Loan on the last day of the then current Interest Period relating
thereto to a Base Rate Loan by giving Advance Notice to the Administrative Agent
of such election.
(e) CONVERSION TO EURODOLLAR RATE. The Company may elect to
convert any Base Rate Loan at any time or from time to time to a Eurodollar Loan
by giving Advance Notice (which shall be irrevocable) to the Administrative
Agent of such election, specifying each Interest Period therefor.
(f) AMOUNTS OF CONVERSIONS. All or any part of the outstanding
Loans may be converted as provided herein, provided that any conversion of such
Loans shall not result in a Borrowing of Eurodollar Loans in an amount less than
$500,000 and in integral multiples of $500,000.
Section 2.12 FEES.
(a) REVOLVING CREDIT COMMITMENTS. The Company shall pay to the
Administrative Agent for the account of and distribution to each Lender in
accordance with its Revolving Credit Percentage a commitment fee for the period
commencing on the Closing Date, to and including the Revolving Credit Maturity
Date (or such earlier date as the Revolving Credit Commitments shall have been
terminated entirely) computed at a rate per annum equal to the Applicable
Commitment Fee Percentage on the average daily excess amount of the Revolving
Credit Commitments over the Revolving Credit Exposure. The commitment fees on
the Revolving Credit Commitments earned from and after the Closing Date shall be
payable in arrears on each Quarterly Date, commencing on the first Quarterly
Date to occur after the Closing Date.
(b) LETTERS OF CREDIT.
(1) As consideration for acting as the Issuing Bank with
respect to any Letter of Credit, the Company will pay to the Issuing
Bank a fee computed at a rate per annum equal to 1/8% of 1% on the daily
average amount available for drawing on the applicable Letter of Credit,
payable in arrears on each Quarterly Date. The Company shall also pay to
the Issuing Bank, with respect to any issuance, amendment, transfer, or
cancellation prior to expiration of any Letter of Credit and for each
drawing made thereunder, documentary and processing charges in
accordance with the Issuing Bank's standard schedule for such charges in
effect at the time of, and payable at the time of, such issuance,
amendment, transfer, cancellation or drawing, as the case may be. All
fees payable pursuant to this clause (1) shall be retained by the
Issuing Bank.
(2) The Company will pay to the Administrative Agent for
the account of and pro rata distribution to each Lender a fee on the
daily average amount available for drawings under each Letter of Credit,
in each case for the period from and including the date of issuance of
such Letter of Credit to and excluding the date of expiration or
termination thereof computed at a per annum rate for each day equal to
the Applicable Margin for Revolving Credit Loans that are
28
Eurodollar Loans in effect on such day, provided that each Letter of
Credit shall bear a minimum fee of $500. Such fees shall be payable in
arrears on each Quarterly Date.
(c) FEE LETTER. The Company shall pay to the Administrative Agent
and to Chase Securities Inc. such fees as are set forth in the Fee Letter, as
the same has been or may be hereafter amended or supplemented, on the dates and
in the manner specified therein.
Section 2.13 PAYMENTS, ETC.
(a) WITHOUT SETOFF, ETC. Except as otherwise specifically
provided herein, all payments under this Agreement shall be made to the
Administrative Agent for the account of the Lenders without defense, set-off or
counterclaim to the Administrative Agent not later than 11:00 a.m. Houston,
Texas time on the date when due and shall be made in Dollars in immediately
available funds at the Payment Office. The Administrative Agent will promptly
thereafter distribute funds in the form received relating to the payment of
principal or interest or commitment fees ratably to the Lenders for the account
of their respective Lending Offices, and funds in the form received relating to
the payment of any other amount payable to any Lender to such Lender for the
account of its applicable Lending Office.
(b) NON-BUSINESS DAYS. Whenever any payment to be made hereunder
or under any Note shall be stated to be due on a day which is not a Business
Day, the due date thereof shall be extended to the next succeeding Business Day
(except as otherwise provided in Section 2.7 hereof) and, with respect to
payments of principal, interest thereon shall be payable at the applicable rate
during such extension.
(c) COMPUTATIONS. All computations of interest shall be made on
the basis of a year of 360 days (unless such calculation would result in a
usurious rate, in which case interest shall be calculated on the basis of a year
of 365 or 366 days, as the case may be) in the case of Eurodollar Loans or Base
Rate Loans that are based upon the Federal Funds Effective Rate, and 365 or 366
days (as the case may be) in the case of Base Rate Loans that are based upon the
Prime Rate, and all computations of fees shall be made on the basis of a year of
360 days (unless such calculation would result in a usurious rate, in which case
interest shall be calculated on the basis of a year of 365 or 366 days, as the
case may be), in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such interest
or fees are payable. Each determination by the Administrative Agent of an
interest rate or fee hereunder shall, except for manifest error, be final,
conclusive and binding for all purposes, provided that such determination shall
be made in good faith in a manner generally consistent with the Administrative
Agent's standard practice. If the Administrative Agent and the Company determine
that manifest error exists, said parties shall correct such error by way of an
adjustment to the payment due on the next Quarterly Date.
Section 2.14 INTEREST RATE NOT ASCERTAINABLE, ETC. In the event that the
Administrative Agent shall have determined (which determination shall be
reasonably exercised and shall, absent manifest error, be final, conclusive and
binding upon all parties) that on any date for determining the Eurodollar Rate
for any Interest Period, by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, or any Lender's position in
such market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate, then, and in any such event, the Administrative Agent shall
forthwith give notice (by telephone confirmed in writing) to the Company and to
the Lenders of such determination. Until the Administrative Agent notifies the
Company that the circumstances giving rise to the suspension described herein no
longer exist, the obligations of the Lenders to make Eurodollar Loans shall be
immediately suspended; any Borrowing of Eurodollar Loans that is requested (by
continuation, conversion or otherwise) shall instead be made as
29
a Borrowing of Base Rate Loans, and any outstanding Eurodollar Loan shall be
converted, on the last day of the then current Interest Period applicable
thereto, to a Base Rate Loan.
Section 2.15 ILLEGALITY.
(a) DETERMINATIONS OF ILLEGALITY. In the event that any Lender
shall have determined (which determination shall be reasonably exercised and
shall, absent manifest error, be final, conclusive and binding upon all parties)
at any time that the making or continuance of any Eurodollar Loan has become
unlawful as a result of compliance by such Lender in good faith with any
applicable law, governmental rule, regulation, guideline or order (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful), then, in any such event, the Lender shall give prompt notice (by
telephone confirmed in writing) to the Company and to the Administrative Agent
of such determination (which notice the Administrative Agent shall promptly
transmit to the other Lenders).
(b) EURODOLLAR LOANS SUSPENDED. Upon the giving of the notice to
the Company referred to in Section 2.15(a) above, (1) the Company's right to
request (by continuation, conversion or otherwise) and such Lender's obligation
to make Eurodollar Loans shall be immediately suspended, and thereafter, any
requested Borrowing of Eurodollar Loans shall, as to such Lender only, be deemed
to be a request for a Base Rate Loan, and (2) if the affected Eurodollar Loan or
Loans are then outstanding, the Company shall immediately, or if permitted by
applicable law, no later than the date permitted thereby, upon at least one
Business Day's written notice to the Administrative Agent and the affected
Lender, convert each such Eurodollar Loan into a Base Rate Loan, provided that
if more than one Lender is affected at any time, then all affected Lenders must
be treated the same pursuant to this subsection.
Section 2.16 INCREASED COSTS.
(a) EURODOLLAR REGULATIONS, ETC. If, by reason of (x) the
introduction of or any change (including, but not limited to, any change by way
of imposition or increase of reserve requirements) in or in the interpretation
of any law or regulation, or (y) the compliance with any guideline or request
issued by any central bank or other governmental authority or quasi-governmental
authority exercising control over banks or financial institutions generally
(whether or not having the force of law):
(1) any Lender (or its applicable Lending Office) shall be
subject to any tax, duty or other charge with respect to its Eurodollar
Loans or its obligation to make Eurodollar Loans, or shall change the
basis of taxation of payments to any Lender of the principal of or
interest on its Eurodollar Loans or its obligation to make Eurodollar
Loans (except for changes in the rate of tax on the overall net income
or gross receipts of such Lender or its applicable Lending Office
imposed by the jurisdiction in which such Lender's principal executive
office or applicable Lending Office is located); or
(2) any reserve (including, but not limited to, any
imposed by the Board of Governors of the Federal Reserve System, but
excluding any such reserve requirement that is reflected in the
Eurodollar Rate), special deposit or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any
Lender or its applicable Lending Office shall be imposed or deemed
applicable or any other condition affecting its Eurodollar Loans or its
obligations to make Eurodollar Loans shall be imposed on any Lender or
its applicable Lending Office or the interbank Eurodollar market or the
secondary certificate of deposit market;
and as a result thereof there shall be any increase in the cost to such Lender
of agreeing to make or making, funding or maintaining Eurodollar Loans (except
to the extent already included in the determination of the
30
applicable Eurodollar Rate) or there shall be a reduction in the amount received
or receivable by such Lender or its applicable Lending Office, then the Company
shall from time to time, upon written notice from and demand by such Lender
(with a copy of such notice and demand to the Administrative Agent), pay to such
Lender on demand additional amounts determined by such Lender in a reasonable
manner to be sufficient to indemnify such Lender against such increased cost. A
certificate as to the amount of such increased cost and the calculation thereof,
submitted to the Company and the Administrative Agent by such Lender, shall,
except for manifest error, be final, conclusive and binding for all purposes.
(b) COSTS. If any Lender shall advise the Administrative Agent
that at any time, because of the circumstances described in clauses (x) or (y)
in Section 2.16(a) or any other circumstances affecting such Lender or the
interbank Eurodollar market or such Lender's position in such market, the
Eurodollar Rate, as determined in good faith by the Administrative Agent, will
not adequately and fairly reflect the cost to such Lender of funding its
Eurodollar Loans, then, and in any such event:
(1) the Administrative Agent shall forthwith give notice
(by telephone confirmed in writing) to the Company and to the Lenders of
such advice;
(2) the Company's right to request a Borrowing of
Eurodollar Loans from such Lender and such Lender's obligation to make
Eurodollar Loans shall be immediately suspended, any such Borrowing of
Eurodollar Loans that is requested (by continuation, conversion or
otherwise) shall, as to such Lender only, be deemed to be a request for
a Base Rate Loan, and any such outstanding Eurodollar Loan from such
Lender shall be converted, on the last day of the then current Interest
Period applicable thereto, to a Base Rate Loan.
(c) CAPITAL ADEQUACY. If, by reason of (1) the introduction of or
any change (including, but not limited to, any change by way of imposition or
increase of reserve requirements) in or in the interpretation of any law or
regulation, or (2) the compliance with any guideline or request issued by any
central bank or other governmental authority or quasi-governmental authority
exercising control over banks or financial institutions generally (whether or
not having the force of law), affects or would affect the amount of capital
required to be maintained by any Lender or any corporation controlling such
Lender, and the amount of such capital is increased by or based upon the
existence of such Lender's Loans or such Lender's commitment to lend hereunder
and other commitments of this type or of the Letters of Credit (or similar
contingent obligations), then, upon written request therefor by such Lender
(with a copy of such request to the Administrative Agent), the Company shall pay
to such Lender, from time to time as specified by such Lender, additional
amounts sufficient to compensate such Lender for the increased cost of such
additional capital in light of such circumstances, to the extent that such
Lender reasonably determines such increase in capital to be allocable to the
existence of such Lender's Loans or such Lender's commitment to lend hereunder
or to the issuance or maintenance of the Letters of Credit. A certificate as to
such amounts and the calculation thereof, submitted to the Company and the
Administrative Agent by such Lender, shall be conclusive and binding for all
purposes, absent manifest error.
(d) ISSUING BANK. The rights and benefits of the Lenders under
this Section 2.16 shall also apply to the Issuing Bank in its capacity as such.
(e) TIME LIMIT. The Company shall not compensate any Lender or
the Administrative Agent for any costs payable under this Section 2.16(e)
accruing prior to one hundred eighty (180) days before such lender or the
Administrative Agent requests compensation.
Section 2.17 CHANGE OF LENDING OFFICE. Each Lender agrees that it will
use reasonable efforts to designate an alternate Lending Office with respect to
any of its Eurodollar Loans affected by the
31
matters or circumstances described in Sections 2.14, 2.15 or 2.16 to reduce the
liability of the Company or avoid the results provided thereunder, so long as
such designation is not disadvantageous to such Lender as determined by such
Lender in its sole discretion; provided that such Lender shall have no
obligation to so designate an alternate Lending Office located in the United
States.
Section 2.18 FUNDING LOSSES. The Company shall compensate each Lender,
upon its written request (which request shall set forth the basis for requesting
such amounts and shall, absent manifest error, be final, conclusive and binding
upon all of the parties hereto), for all losses, expenses and liabilities
(including, but not limited to, any interest paid by such Lender to lenders of
funds borrowed by it to make or carry its Eurodollar Loans to the extent not
recovered by the Lender in connection with the re-employment of such funds,
which the Lender may sustain: (a) if for any reason (other than a default by
such Lender) a Borrowing of Eurodollar Loans does not occur on the date
specified therefor in a Borrowing Request (whether or not withdrawn), including,
but not limited to a failure by the Company to fulfill on the date of any
Borrowing of Eurodollar Loans the conditions set forth in Article 3, or to
convert or continue any Eurodollar Loan hereunder after irrevocable notice of
such conversion or continuation has been given pursuant to Section 2.11; (b) if
any payment, prepayment or conversion of any of its Eurodollar Loans required or
permitted by any other provision of this Agreement or otherwise, or any
assignment of a Eurodollar Loan pursuant to Section 2.22, in each case is made
or deemed made on a date which is not the last day of the Interest Period
applicable thereto; or (c) if, for any reason, the Company defaults in its
obligation to repay its Eurodollar Loans or interest accrued thereon as and when
due and payable (at the due date thereof, whether at scheduled maturity, by
acceleration, irrevocable notice of prepayment or otherwise).
Section 2.19 SHARING OF PAYMENTS, ETC. If any Lender shall obtain any
payment or reduction (including, but not limited to, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of any obligation of the Company hereunder (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share of payments or reductions on account of such
obligations obtained by all the Lenders, such Lender shall forthwith (a) notify
each of the other Lenders and the Administrative Agent of such receipt, and (b)
purchase from the other Lenders such participations in the affected obligations
as shall be necessary to cause such purchasing Lender to share the excess
payment or reduction, net of costs incurred in connection therewith, ratably
with each of them, provided that if all or any portion of such excess payment or
reduction is thereafter recovered from such purchasing Lender or additional
costs are incurred, the purchase shall be rescinded and the purchase price
restored to the extent of such recovery or such additional costs, but without
interest. The Company agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section may, to the fullest extent permitted by
law, exercise all its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Company in the amount of such participation.
Section 2.20 TAXES.
(a) PAYMENTS FREE AND CLEAR. Any and all payments by or on
account of any obligation of the Company hereunder shall be made free and clear
of and without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that
if the Company shall be required to deduct any Indemnified Taxes or Other Taxes
from such payments, then (1) the sum payable shall be increased as necessary so
that after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (as the case may be) receives an amount equal to the sum it would
have received had no such deductions been made, (2) the Company shall make such
deductions, and (3) the Company shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
32
(b) OTHER TAXES. In addition, the Company shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
(c) INDEMNIFICATION. The Company shall indemnify the
Administrative Agent, each Lender and the Issuing Bank, upon written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes paid by
the Administrative Agent, such Lender or the Issuing Bank, as the case may be,
on or with respect to any payment by or on account of any obligation of the
Company hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section) and any
penalties, interest and reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or
legally imposed or asserted by the relevant Governmental Authority. A
certificate as to the amount of such payment or liability delivered to the
Company by a Lender or the Issuing Bank, or by the Administrative Agent on its
own behalf or on behalf of a Lender or the Issuing Bank, shall be conclusive
absent manifest error.
(d) RECEIPTS. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Company to a Governmental Authority, the
Company shall deliver to the Administrative Agent the original or a certified
copy of a receipt issued by such Governmental Authority evidencing such payment,
a copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) SURVIVAL. Without prejudice to the survival of any other
agreement contained herein, the agreements and obligations contained in this
Section 2.20 shall survive the payment in full of principal and interest
hereunder.
(f) LENDER REPRESENTATIONS AND AGREEMENTS. Any Foreign Lender
that is entitled to an exemption from or reduction of withholding tax under the
law of the jurisdiction in which the Company is located, or any treaty to which
such jurisdiction is a party, with respect to payments under this Agreement
shall deliver to the Company (with a copy to the Administrative Agent), at the
time or times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law or reasonably requested by the
Company as will permit such payments to be made without withholding or at a
reduced rate.
Section 2.21 PRO RATA TREATMENT. Subject to Section 2.4(b), each
Borrowing of Revolving Credit Loans shall be made, each payment on account of
any commitment fee in respect of the Revolving Credit Commitments hereunder
shall be allocated by the Administrative Agent, and any reduction of the
Revolving Credit Commitments of the Lenders shall be allocated by the
Administrative Agent, PRO RATA according to the relevant Revolving Credit
Percentages of the Lenders. Subject to Section 2.4(b), each payment (including
each prepayment) on account of principal of and interest on any Revolving Credit
Loans shall be allocated by the Administrative Agent PRO RATA according to the
respective outstanding principal amounts of such Revolving Credit Loans then
held by the Lenders. Each payment on account of principal of and interest on any
Term Loans shall be allocated by the Administrative Agent PRO RATA according to
the respective outstanding principal amounts of such Term Loans then held by the
Lenders. All proceeds (including proceeds from the realization upon the
Collateral) received after acceleration of the maturity of the Loans, shall be
applied FIRST to reimbursement of expenses and indemnities provided for in this
Agreement and the Financing Documents; SECOND, to other Lender Indebtedness
(including, without limitation, Letter of Credit Liabilities) until repaid in
full PRO RATA to each Lender; and, THIRD, to any other Person entitled to
receive such proceeds in accordance with applicable law.
Section 2.22 REPLACEMENT OF LENDERS. If any Lender does not make a
Eurodollar Loan pursuant to Section 2.15, is subject to increased costs pursuant
to Section 2.16, fails to designate an alternate
33
Lending Office pursuant to Section 2.17, or is owed or reasonably anticipates
being owed additional amounts pursuant to Section 2.20, the Company shall have
the right, if no Default then exists, to replace such Lender with another bank
or financial institution with the consent of the Administrative Agent, which
consent shall not be unreasonably withheld, provided that (a) the obligations of
the Company owing to the Lender being replaced (including such increased costs)
that are not being assigned to the replacement lender shall be paid in full to
the Lender being replaced concurrently with such replacement lender, (b) the
replacement lender shall execute an Assignment and Acceptance pursuant to which
it shall become a party hereto as provided in Section 9.7, and (c) upon
compliance with the provisions for assignment provided in Section 9.7 and the
payment of amounts referred to in clause (a), the replacement lender shall
constitute a "Lender" hereunder and the Lender being so replaced shall no longer
constitute a "Lender" hereunder.
ARTICLE 3
CONDITIONS TO BORROWINGS
Section 3.1 CLOSING. The obligation of each Lender to make its initial
Loan and the Issuing Bank to issue its Letter of Credit hereunder is subject to
(x) receipt by the Administrative Agent of the following items which are to be
delivered, in form and substance satisfactory to each Lender, with a copy
(except for the Notes and this Agreement) for each Lender and (y) the
satisfaction of the following conditions:
(a) TERM NOTES. A duly completed and executed Term Note for each
Lender and in each case dated as of the Closing Date, and payable to the order
of such Lender.
(b) REVOLVING CREDIT NOTES. A duly completed and executed
Revolving Credit Note for each Lender and in each case dated as of the Closing
Date, and payable to the order of such Lender.
(c) GUARANTY AGREEMENTS. The Guaranty Agreements, duly completed
and executed by the Subsidiaries other than EMD - Foreign Sales Corporation.
(d) RESOLUTIONS AND INCUMBENCY CERTIFICATES.
(1) certified copies of the resolutions of the Board of
Directors of the Company dated as of the Closing Date and approving, as
appropriate, the Loans, the Notes, this Agreement and the other
Financing Documents, and all other documents, if any, to which the
Company is a party and evidencing corporate authorization with respect
to such documents;
(2) a certificate of the Secretary or an Assistant
Secretary of the Company dated as of the Closing Date and certifying (A)
the name, title and true signature of each officer of such Person
authorized to execute the Notes, this Agreement, Applications and the
other Financing Documents to which it is a party, (B) the name, title
and true signature of each officer of such Person authorized to provide
the certifications required pursuant to this Agreement including, but
not limited to, certifications required pursuant to Section 5.10,
Borrowing Requests, and Borrowing Base Reports, and (C) that attached
thereto is a true and complete copy of the articles of incorporation and
the bylaws of the Company, each as amended to date, and a recent good
standing certificate from the Comptroller of Public Accounts for the
State of Texas and a recent certificate of existence from the Texas
Secretary of State;
(3) certified copies of the resolutions of the Board of
Directors of each Subsidiary dated as of the Closing Date and approving
the Financing Documents to which such
34
Subsidiary is a party, and all other documents, if any, to which such
Subsidiary is a party and evidencing corporate authorization with
respect to such documents; and
(4) a certificate of the Secretary or an Assistant
Secretary of each Subsidiary other than EMD - Foreign Sales Corporation
dated as of the Closing Date and certifying (A) the name, title and true
signature of each officer of such Subsidiary authorized to execute the
Financing Documents to which such Subsidiary is a party, and (B) that
attached thereto is a true and complete copy of the articles of
incorporation and the bylaws of such Subsidiary, each as amended to
date, and a recent good standing certificate from the Comptroller of
Public Accounts for the State of Texas and a recent certificate of
existence from the Texas Secretary of State.
(e) OPINIONS OF COUNSEL. An opinion of ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇,
L.L.P., counsel to the Company dated as of the Closing Date and substantially in
the form of EXHIBIT D hereto, addressed to the Administrative Agent, the Issuing
Bank and the Lenders and covering such matters as the Administrative Agent, the
Issuing Bank or the Lenders may reasonably request.
(f) DELIVERY OF PURCHASE AGREEMENT AND CONSUMMATION OF THE
ACQUISITION. (1) The Purchase Agreement duly completed and executed by the
parties thereto, and (2) the Acquisition shall have been consummated on terms
and conditions acceptable to the Lenders, including, but not limited to, the
aggregate cost of the Acquisition not having exceeded $70,000,000 as adjusted
for changes in working capital as provided in the Purchase Agreement.
(g) INSURANCE. Within fifteen (15) days after the Closing Date, a
certificate of insurance coverage, dated as of the Closing Date evidencing that
the Company and its Subsidiaries are carrying insurance in accordance with
Section 5.5 hereof.
(h) FINANCIAL STATEMENTS AND PROJECTIONS. The financial condition
of the Company reflected in the financial information and projections of the
Company that were delivered to the Lenders as of September 30, 1997 and December
4, 1997, respectively, by the Company, have not changed as of the Closing Date
in such a way as to materially and adversely affect the prospects of the Company
or otherwise cause or result in a Material Adverse Effect (after giving effect
to the Acquisition).
(i) CERTIFICATE OF TREASURER. A certificate of the Treasurer of
the Company dated as of the Closing Date and certifying, before and after giving
effect to the Acquisition and before and after the making of the initial Loan
and the issuance of the initial Letter of Credit, that no Default then, or
thereafter would, exist.
(j) CORPORATE STRUCTURE. Each Lender shall be satisfied in its
sole judgment with the corporate, capital, legal and management structure and
tax liabilities of the Company.
(k) LIEN SEARCHES. Lien searches reflecting no Liens on the
Property of the Company or its Subsidiaries other than Liens permitted
hereunder.
(l) FEES AND EXPENSES. Payment and/or reimbursement of (5)
Administrative Agent's counsel's fees and expenses rendered through the Closing
Date, to the extent invoiced, and (6) any fees or expenses required to be paid
pursuant to the Fee Letter.
(m) AMENDMENT OF SENIOR NOTES. A copy of Amendment No. 1 to the
Senior Notes, in form substantially the same as the draft thereof presented to
the Administrative Agent.
35
(n) DOCUMENTATION. The Administrative Agent shall have received
such other documents as the Administrative Agent (or any Lender acting through
the Administrative Agent) may reasonably request, all in form and substance
reasonably satisfactory to the Administrative Agent.
Section 3.2 CONDITIONS PRECEDENT TO ALL LOANS AND LETTERS OF CREDIT. The
obligation of each Lender to make each Loan hereunder (including the initial
Loan) and the obligation of the Issuing Bank to issue each Letter of Credit
(including the initial Letter of Credit) is subject to fulfillment of the
following conditions immediately prior to or contemporaneously with each such
Loan or issuance:
(a) REPRESENTATIONS AND WARRANTIES. All representations and
warranties contained herein and in the other Financing Documents executed and
delivered on or after the Closing Date shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Loan (unless such representation and
warranty is expressly limited to an earlier date.
(b) NO DEFAULT. There shall not exist a Default or Event of
Default hereunder.
(c) MAXIMUM AVAILABLE AMOUNT. The Aggregate Revolving Credit
Exposure, after giving effect to such proposed Loan or Letter of Credit, shall
not exceed the Maximum Available Amount then in effect.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Lenders (which
representations and warranties (a) will survive the delivery of the Notes, and
(b) made by the Company as of the Closing Date, were made assuming that the
Acquisition had occurred on or before the Closing Date) that:
Section 4.1 CORPORATE EXISTENCE. The Company and each of its
Subsidiaries are corporations duly organized, legally existing and in good
standing under the laws of the jurisdictions in which they are incorporated and
are duly qualified as foreign corporations in all jurisdictions wherein the
Property owned or the business transacted by them makes such qualification
necessary, except where the failure to be so qualified would not have a Material
Adverse Effect.
Section 4.2 CORPORATE POWER AND AUTHORIZATION. The Company is authorized
and empowered to create and issue the Notes; the Company and each of its
Subsidiaries are duly authorized and empowered to execute, deliver and perform
the Financing Documents, including this Agreement, to which they respectively
are parties; and all corporate action on the Company's part requisite for the
due creation and issuance of the Notes on the Company's and each of its
Subsidiaries' respective part requisite for the due execution, delivery and
performance of the Financing Documents, including this Agreement, to which the
Company and each of its Subsidiaries respectively are parties has been duly and
effectively taken.
Section 4.3 BINDING OBLIGATIONS. This Agreement does, and the Notes and
other material Financing Documents to which the Company and each of its
Subsidiaries respectively are parties upon their creation, issuance, execution
and delivery will, when issued and delivered under this Agreement, constitute
legal, valid and binding obligations of the Company and each such Subsidiary
that is a party thereto, respectively, and will be enforceable in accordance
with their respective terms (except that enforcement may be subject to any
applicable bankruptcy, insolvency or similar laws generally affecting the
enforcement of creditors' rights and subject to the availability of equitable
remedies).
36
Section 4.4 NO LEGAL BAR OR RESULTANT LIEN. The execution, delivery and
performance of the Notes and the other Financing Documents, including this
Agreement, to which the Company or any of its Subsidiaries is a party do not and
will not violate or create a default under any provisions of the articles or
certificate of incorporation or bylaws of the Company or any of its
Subsidiaries, or any contract, agreement, instrument or Governmental Requirement
to which the Company or any of its Subsidiaries is subject, or result in the
creation or imposition of any Lien upon any Properties of the Company or any of
its Subsidiaries.
Section 4.5 NO CONSENT. The Company's and each of its Subsidiaries'
respective execution, delivery and performance of the Notes and the other
Financing Documents, including this Agreement, to which the Company and each
such Subsidiary respectively are parties, and the consummation of the
Acquisition do not require notice to or filing or registration with, or the
authorization, consent or approval of or other action by any other Person,
including, but not limited to, any Governmental Authority, except those obtained
or made or where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
Section 4.6 FINANCIAL INFORMATION.
(a) FINANCIAL STATEMENTS AND PROJECTIONS. The audited
consolidated balance sheets of the Company and its Subsidiaries as of
December 31, 1996, and the related audited consolidated statements of
income, retained earnings and cash flow for the fiscal year ended on
said date, with the opinion of KPMG Peat Marwick, L.L.P., heretofore
delivered to the Lenders, fairly present the consolidated financial
condition of the Company and its Subsidiaries as at said date and the
consolidated results of operations for the fiscal year ended on said
date, in accordance with GAAP applied on a consistent basis.
(b) UNAUDITED FINANCIAL STATEMENTS. The September 30, 1997,
unaudited consolidated balance sheets of the Company and its
Subsidiaries, and the related consolidated statements of income,
retained earnings and cash flow, including in each case the related
schedules and notes, heretofore delivered to the Lenders were prepared
consistent with GAAP and fairly present the consolidated financial
condition of the Company and its Subsidiaries at such date and the
consolidated results of operations for the nine-month period then ended.
(c) NO MATERIAL ADVERSE EFFECT. Since December 31, 1996, there
has been no event or occurrence that could reasonably be expected to
have a Material Adverse Effect.
Section 4.7 INVESTMENTS AND GUARANTIES. Neither the Company nor any of
its Subsidiaries has made investments in or advances to any Person or guaranties
of the obligations of any Person that is not a Subsidiary of the Company, except
those reflected in the Financial Statements or in SCHEDULE 4.7 which schedule
may be amended from time to time by the Company and forwarded to the
Administrative Agent.
Section 4.8 LITIGATION. There is no action, suit or proceeding, or any
governmental investigation or any arbitration, in each case pending or, to the
knowledge of the Company, threatened against the Company or any of its
Subsidiaries or any Property of any thereof before any court or arbitrator or
any Governmental Authority which (a) challenges the validity of this Agreement,
any Note, any Application, any Guaranty Agreement or any of the other Financing
Documents or (b) could reasonably be expected to have a Material Adverse Effect.
37
Section 4.9 USE OF PROCEEDS. The Company will use the proceeds of the
Loans only for the purposes specified in the Recitals to this Agreement. The
Letters of Credit will be used only for the purposes provided in Section 2.3.
Neither the Company nor any of its Subsidiaries is engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose, whether immediate, incidental or ultimate, of buying or carrying Margin
Stock (within the meaning of Regulations, G, U or X) and no part of the proceeds
of any Loan hereunder will be used to buy or carry any Margin Stock in violation
of Regulation G, U, or X. Neither the Company nor any Person acting on behalf of
the Company has taken or will take any action which could reasonably be expected
to cause the Notes or any of the Financing Documents, including this Agreement,
to violate Regulations G, U or X or any other regulation of the Board of
Governors of the Federal Reserve System, in each case as now in effect or as the
same may hereinafter be in effect.
Section 4.10 EMPLOYEE BENEFITS.
(a) (1) the Company, its Subsidiaries and each ERISA Affiliate
have complied in all material respects with all applicable laws regarding each
Plan; (2) each Plan is, and has been, maintained and administered in substantial
compliance with its terms, applicable collective bargaining agreements, and all
applicable laws; and (3) no act, omission or transaction has occurred which
could result in an imposition on the Company, any Subsidiary of the Company or
any ERISA Affiliate (whether directly or indirectly) of (A) either a civil
penalty assessed pursuant to Subsections (c), (i) or (l) of Section 502 of ERISA
or a tax imposed pursuant to Chapter 43 of Subtitle D of the Code or (B) breach
of fiduciary duty liability damages under Section 409 of ERISA which has a
Material Adverse Effect.
(b) There exists no outstanding liability of the Company, any of
its Subsidiaries or any ERISA Affiliate with respect to any Plan that has been
terminated. No material liability to the PBGC (other than for the payment of
current premiums which are not past due) by the Company, any Subsidiary of the
Company or any ERISA Affiliate has been or is expected by the Company, any
Subsidiary of the Company or any ERISA Affiliate to be incurred with respect to
any Plan. No ERISA Termination Event with respect to any Plan has occurred or is
reasonably expected to occur.
(c) Full payment when due has been made of all amounts which the
Company, any of its Subsidiaries or any ERISA Affiliate is required under the
terms of each Plan or applicable law to have paid as contributions to such Plan
(excluding any nonpayment involving an amount that is not material), and no
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, exists with respect to any Plan.
(d) The actuarial present value of the benefit liabilities
(computed on an accumulated benefit obligation basis in accordance with GAAP)
under all Plans in the aggregate that are subject to Title IV of ERISA does not,
as of the end of the most recently ended fiscal year of such Plans, exceed the
current value of the assets of all Plans in the aggregate that are allocable to
such benefit liabilities. The term "actuarial present value of the benefit
liabilities" shall have the meaning specified in Section 4041 of ERISA.
(e) Neither the Company, any Subsidiary of the Company nor any
ERISA Affiliate sponsors, maintains or contributes to, or has at any time in the
preceding six-year period sponsored, main tained or contributed to, any
"multiemployer plan" (as defined in Section 3(37) or 4001(a)(3) of ERISA).
(f) Neither the Company, any Subsidiary of the Company nor any
ERISA Affiliate is required to provide security to a Plan pursuant to Section
401(a)(29) of the Code.
38
Section 4.11 TAXES; GOVERNMENTAL CHARGES. The Company and its
Subsidiaries have filed all tax returns and reports required to be filed and
have paid all taxes, assessments, fees and other governmental charges levied
upon any of them or upon any of their respective Properties or income which are
due and payable, including interest and penalties, except where failure to so
pay or file would not have a Material Adverse Effect, or have provided adequate
reserves for the payment thereof if required in accordance with GAAP for the
payment thereof, except such interest and penalties as are being contested in
good faith by appropriate actions or proceedings and for which adequate reserves
for the payment thereof as required by GAAP have been provided.
Section 4.12 TITLES, ETC. The Company and its Subsidiaries have good
title to their respective material Properties, and with respect to leased
Properties, indefeasible title to the leasehold estate with respect thereto,
pursuant to valid and enforceable leases, free and clear of all Liens except
Liens otherwise permitted or contemplated by this Agreement or the other
Financing Documents.
Section 4.13 DEFAULTS. Neither the Company nor any of its Subsidiaries
is in default nor has any event or circumstance occurred which, but for the
passage of time or the giving of notice, or both, would constitute a default (in
any respect that could individually or in the aggregate, have a Material Adverse
Effect) under any loan or credit agreement, indenture, mortgage, deed of trust,
security agreement or other instrument or agreement evidencing or pertaining to
any Indebtedness of the Company or any of its Subsidiaries including, without
limitation, the Note Purchase Agreement, or under any agreement or instrument to
which the Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound, including, without limitation, the Purchase
Agreement. No Default hereunder has occurred and is continuing. To the best of
the Company's knowledge, the Purchase Agreement is in full force and effect.
Section 4.14 CASUALTIES; TAKING OF PROPERTIES. Neither the business nor
the Properties of the Company or any of its Subsidiaries have been affected in a
manner that has had or could have a Material Adverse Effect as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, permits or concessions by any domestic or foreign
government or any agency thereof, riot, activities of armed forces or acts of
God or of any public enemy.
Section 4.15 COMPLIANCE WITH THE LAW. Neither the Company nor any of its
Subsidiaries:
(a) is in violation of any Governmental Requirement; and
(b) has failed to obtain any license, permit, right-of-way,
franchise or other right or governmental authorization necessary to the
ownership of any of their respective Properties or the conduct of their
respective business;
which violation or failure could, individually or in the aggregate, have (in the
event that such a violation or failure were asserted by any Person through
appropriate action) a Material Adverse Effect.
Section 4.16 NO MATERIAL MISSTATEMENTS. No written information, exhibit,
schedule or report prepared by or on behalf of the Company and furnished to the
Administrative Agent or the Lenders by or at the direction of the Company or any
of its Subsidiaries in connection with the negotiation of this Agreement
contained any material misstatement of fact or, when such statement is
considered with all other written statements furnished to the Lenders in that
connection, omitted to state a material fact or any fact necessary, when taken
as a whole, to make the statement contained therein not misleading; PROVIDED,
THAT, the financial information with respect to the Company's projections,
copies of which have been furnished
39
to each Lender prior to the Closing Date, were prepared in good faith on the
basis of the assumptions stated therein, which assumptions were believed by the
Company to be reasonable in all material respects at the time made.
Section 4.17 INVESTMENT COMPANY ACT. The Company is not an "investment
company" or a company "controlled" by an "investment company" that is
incorporated in or organized under the laws of the United States or any "State,"
as those terms are defined in the Investment Company Act of 1940, as amended.
The execution and delivery by the Company and its Subsidiaries of this Agreement
and the other Financing Documents to which they respectively are parties and
their respective performance of the obligations provided for therein, will not
result in a violation of the Investment Company Act of 1940, as amended.
Section 4.18 PUBLIC UTILITY HOLDING COMPANY ACT. The Company is not a
"holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company," or a "public utility" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
Section 4.19 SUBSIDIARIES. Except as set forth on SCHEDULE 4.19, as
amended and supplemented from time to time by the Company and forwarded to the
Administrative Agent in accordance with this Agreement, the Company has no
Subsidiaries other than EMC - Foreign Sales Corporation; and, upon closing of
the Acquisition, LCEC shall become a Subsidiary.
Section 4.20 INSURANCE. All policies of fire, liability, workmen's
compensation, casualty, flood, business interruption and other forms of
insurance owned or held by the Company, and each of its Subsidiaries are
sufficient for compliance with all requirements of law and of all agreements to
which the Company or any of its Subsidiaries is a party; are valid, outstanding
and enforceable policies; provide adequate insurance coverage in at least such
amounts and against at least such risks (but including in any event public
liability) as are usually insured against in the same general area by companies
engaged in the same or a similar business for the assets and operations of the
Company and each of its Subsidiaries; and will not in any way be affected by, or
terminate or lapse by reason of, the transactions contemplated by this
Agreement. All such policies are in full force and effect, all premiums with
respect thereto have been paid in accordance with their respective terms, and no
notice of cancellation or termination has been received with respect to any such
policy. Neither the Company nor any of its Subsidiaries maintains any formalized
self-insurance program with respect to its assets or operations or risks with
respect thereto other than health insurance and other than as timely
communicated to the Administrative Agent by the Company in writing from time to
time. The certificate of insurance to be delivered to the Lenders pursuant to
Section 3.1(g) contains an accurate and complete description of all policies of
insurance owned or held by the Company and each of its Subsidiaries on the
Closing Date.
Section 4.21 ENVIRONMENTAL MATTERS.
(a) ENVIRONMENTAL LAWS, ETC. Neither any Property of the Company
or its Subsidiaries nor the operations conducted thereon violate any
applicable order of any court or Governmental Authority or Environmental
Laws, which violation could reasonably be expected to have a Material
Adverse Effect or which could reasonably be expected to result in
remedial obligations having a Material Adverse Effect assuming
disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to the relevant
Property.
(b) NO LITIGATION. Without limitation of Section (a) above, no
Property of the Company or its Subsidiaries nor the operations currently
conducted thereon or by any prior owner or operator
40
of such Property or operation, are in violation of or subject to any
existing, pending or threatened action, suit, investigation, inquiry or
proceeding by or before any court or Governmental Authority or to any
remedial obligations under Environmental Laws, which violation, action,
suit, investigation, inquiry or proceeding could reasonably be expected
to have a Material Adverse Effect or which could reasonably be expected
to result in remedial obligations having a Material Adverse Effect
assuming disclosure to the applicable Governmental Authority of all
relevant facts, conditions and circumstances, if any, pertaining to the
relevant Property.
(c) NOTICES, PERMITS, ETC. All notices, permits, licenses or
similar authorizations, if any, required to be obtained or filed by the
Company or its Subsidiaries in connection with the operation or use of
any and all Property of the Company or its Subsidiaries, including but
not limited to past or present treatment, storage, disposal or release
of a hazardous substance or solid waste into the environment, have been
duly obtained or filed except to the extent the failure to obtain or
file such notices, permits, licenses or similar authorizations could not
reasonably be expected to have a Material Adverse Effect or which could
reasonably be expected to result in remedial obligations having a
Material Adverse Effect assuming disclosure to the applicable
Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to the relevant Property.
(d) HAZARDOUS SUBSTANCES CARRIERS. All hazardous substances or
solid waste generated at any and all Property of the Company or its
Subsidiaries have in the past been transported, treated and disposed of
only by carriers maintaining valid permits under RCRA and any other
Environmental Law, except to the extent the failure to have such
substances or waste transported, treated or disposed by such carriers
could not reasonably be expected to have a Material Adverse Effect, and
only at treatment, storage and disposal facilities maintaining valid
permits under RCRA and any other Environmental Law, which carriers and
facilities have been and are operating in compliance with such permits,
except to the extent the failure to have such substances or waste
treated, stored or disposed at such facilities, or the failure of such
carriers or facilities to so operate, could not reasonably be expected
to have a Material Adverse Effect or which could reasonably be expected
to result in remedial obligations having a Material Adverse Effect
assuming disclosure to the applicable Governmental Authority of all
relevant facts, conditions and circumstances, if any, pertaining to the
relevant Property.
(e) HAZARDOUS SUBSTANCES DISPOSAL. The Company and its
Subsidiaries have taken all reasonable steps necessary to determine and
have determined that no hazardous substances or solid waste have been
disposed of or otherwise released and there has been no threatened
release of any hazardous substances on or to any Property of the Company
or its Subsidiaries except in compliance with Environmental Laws, except
to the extent the failure to do so could not reasonably be expected to
have a Material Adverse Effect or which could reasonably be expected to
result in remedial obligations having a Material Adverse Effect assuming
disclosure to the applicable Governmental Authority of all relevant
facts, conditions and circumstances, if any, pertaining to the relevant
Property.
(f) NO CONTINGENT LIABILITY. The Company and its Subsidiaries
have no contingent liability in connection with any release or
threatened release of any hazardous substance or solid waste into the
environment other than such contingent liabilities at any one time and
from time to time for which adequate reserves for the payment thereof as
required by GAAP have not been provided, or which could reasonably be
expected to result in remedial obligations having a Material Adverse
Effect assuming disclosure to the applicable Governmental Authority of
all relevant facts, conditions and circumstances, if any, pertaining to
such release or threatened release.
41
Section 4.22 SOLVENCY. The Company and its Subsidiaries, taken as a
whole, and the Company and each of its material Subsidiaries are Solvent, both
before and after taking into account the Acquisition.
Section 4.23 EMPLOYEE MATTERS. None of the Company or its Subsidiaries ,
or any of their respective employees, is subject to any collective bargaining
agreement, except as timely notified to the Administrative Agent in writing by
the Company from time to time. There are no strikes, slowdowns, work stoppages
or controversies pending or, to the best knowledge of the Company, threatened
against the Company or its Subsidiaries, or their respective employees, which
could reasonably be expected to have, either individually or in the aggregate, a
Material Adverse Effect. Neither the Company nor any of its Subsidiaries is
subject to an employment contract as of the Closing Date.
ARTICLE 5
AFFIRMATIVE COVENANTS
So long as any Lender has any Commitment hereunder or any Loan
remains unpaid or any Revolving Credit Exposure remains outstanding, the Company
will at all times comply with the following covenants:
Section 5.1 MAINTENANCE AND COMPLIANCE, ETC. The Company will and will
cause each of its Subsidiaries to (a) preserve and maintain its corporate
existence and (b) except where failure to do so could not reasonably be expected
to have a Material Adverse Effect, observe and comply with all Governmental
Requirements, and (c) comply with all terms, conditions and provisions contained
in all material agreements to which it is a party, including, without
limitation, the Purchase Agreement and the Note Purchase Agreement, except where
the failure to do so would not cause a Material Adverse Effect.
Section 5.2 PAYMENT OF TAXES AND CLAIMS, ETC. The Company will pay, and
cause each of its Subsidiaries to pay, (a) all material taxes, assessments and
governmental charges imposed upon it or upon its Property, and (b) all material
claims (including, but not limited to, claims for labor, materials, supplies or
services) which could reasonably be expected, if unpaid, to become a Lien upon
its Property, unless, in each case, the validity or amount thereof is being
contested in good faith by appropriate action or proceedings and the Company has
established adequate reserves in accordance with GAAP with respect thereto.
Section 5.3 FURTHER ASSURANCES. The Company will and will cause each of
its Subsidiaries to cure promptly any defects in the creation and issuance of
the Notes, and the execution and delivery of the Financing Documents, including
this Agreement. The Company at its expense will, as promptly as practical,
execute and deliver to the Administrative Agent or the Issuing Bank upon request
all such other and further documents, agreements and instruments (or cause any
of its Subsidiaries to take such action) in compliance with or performance of
the covenants and agreements of the Company or any of its Subsidiaries in the
Financing Documents, including this Agreement, or to correct any omissions in
the Financing Documents.
Section 5.4 PERFORMANCE OF OBLIGATIONS. The Company will pay the Notes
according to the reading, tenor and effect thereof and in accordance with this
Agreement.
Section 5.5 INSURANCE. The Company will and will cause each of its
Subsidiaries to maintain or cause to be maintained, with financially sound and
reputable insurers, insurance with respect to their respective Properties and
business against such liabilities, casualties, risks and contingencies and in
42
such types (including business interruption insurance and flood insurance) and
amounts as is customary in the case of Persons engaged in the same or similar
businesses and similarly situated and in accordance with any Governmental
Requirement.
Section 5.6 ACCOUNTS AND RECORDS. The Company will keep and will cause
each of its Subsidiaries to keep proper books of record and account in
accordance with GAAP.
Section 5.7 RIGHT OF INSPECTION. The Company will permit and will cause
each of its Subsidiaries to permit any officer, employee or agent of the
Administrative Agent or any Lender to visit and inspect any of the Properties of
the Company or any of its Subsidiaries, examine the Company's or any such
Subsidiary's books of record and accounts, take copies and extracts therefrom,
and discuss the affairs, finances and accounts of the Company or any of its
Subsidiaries with the Company's or such Subsidiary's officers, accountants and
auditors, as often and all at such reasonable times during normal business hours
as may be reasonably requested by the Administrative Agent or any of the
Lenders.
Section 5.8 OPERATION AND MAINTENANCE OF PROPERTY. The Company will, and
will cause each of its Subsidiaries to, operate its Properties or cause its
Properties to be operated and maintained (a) in accordance with prudent industry
practice in all material respects and in compliance in all material respects
with the terms and provisions of all applicable leases, contracts and agreements
and (b) except where the noncompliance therewith could not reasonably be
expected to cause or result in a Material Adverse Effect, in compliance with all
applicable laws of the jurisdiction in which such Properties may be situated,
and all applicable laws, rules and regulations of every other Governmental
Authority from time to time constituted to regulate the ownership and operation
of such Properties.
Section 5.9 NEW SUBSIDIARIES.
(a) If at any time after the Closing Date, the Company or any of
its Subsidiaries create or acquire (subject to Sections 6.6 and 6.16)
any one or more Subsidiaries, the Company shall cause such new
Subsidiary to promptly execute and deliver to the Administrative Agent,
at the time of such Subsidiary's creation or acquisition, a Subsidiary
Guaranty.
(b) In connection with the execution and delivery of any guaranty
agreement or similar agreement pursuant to this Section 5.9, the Company
shall, or shall cause the relevant Subsidiary to, deliver to the Lenders
such corporate resolutions, member or partner consents, certificates,
and such other related documents as shall be reasonably requested by the
Required Lenders and consistent with the relevant forms and types
thereof delivered on the Closing Date or as shall be otherwise
reasonably acceptable to the Required Lenders.
Section 5.10 REPORTING COVENANTS. So long as any Lender has any
Commitment hereunder or any Loan remains unpaid or any Revolving Credit Exposure
remains outstanding, the Company will furnish the following to each of the
Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available and in any
event within 90 days after the end of each Fiscal Year, a consolidated balance
sheet of the Company and its Subsidiaries as at the end of such year and the
related consolidated statements of income, retained earnings and cash flows of
the Company and its Subsidiaries for such Fiscal Year, setting forth in each
case in comparative form the figures for the previous Fiscal Year, all in
reasonable detail and accompanied by a report thereon of independent public
accountants of recognized national standing, which such report shall state that
such consolidated financial statements present fairly the consolidated financial
condition as at the end of such Fiscal Year, and the consolidated results of
operations and cash flows for such Fiscal Year, of the Company and its
Subsidiaries in accordance with GAAP, applied on a consistent basis. At the same
time (but only for periods
43
during which LCEC is a Subsidiary), a consolidating balance sheet of the Company
and LCEC as at the end of such year and related consolidating statements of
income and cash flows for such Fiscal Year (in each case consolidating on the
basis of principal lines of business of the Company and LCEC), accompanied by a
certification thereon of a Responsible Officer, stating that such consolidating
financial statements form the basis of the Company's consolidated financial
statements and are fairly stated in all material respects when considered in
relation thereto.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in
any event within 45 days after the end of each Fiscal Quarter (other than the
fourth Fiscal Quarter), a consolidated balance sheet of the Company and its
Subsidiaries as at the end of such quarter and the related consolidated
statements of income, retained earnings and cash flows of the Company and its
Subsidiaries for such Fiscal Quarter and for the portion of the Company's Fiscal
Year ended at the end of such quarter, setting forth in each case in comparative
form the figures for the corresponding quarter and the corresponding portion of
the Company's previous Fiscal Year, all in reasonable detail and certified by a
Responsible Officer that such financial statements are complete and correct and
fairly present the consolidated financial condition as at the end of such Fiscal
Quarter, and the consolidated results of operations and cash flows for such
Fiscal Quarter and such portion of the Company's Fiscal Year, of the Company and
its Subsidiaries in accordance with GAAP (subject to normal, year-end
adjustments). At the same time (but only for periods during which LCEC is a
Subsidiary), a consolidating balance sheet of the Company and LCEC at the end of
such Fiscal Quarter and related consolidating statements of income and cash
flows, for the portion of the Company's Fiscal Year ended at such quarter (in
each case consolidating on the basis of principal lines of business of the
Company and LCEC), accompanied by a certification from a Responsible Officer
that such consolidating financial statements form the basis of the Company's
consolidated financial statements and are fairly stated in all material respects
when considered in relation thereto.
(c) NO DEFAULT/COMPLIANCE CERTIFICATE. Together with the
financial statements required pursuant to Sections 5.10(a) and 5.10(b) above, a
certificate of the Company, signed by a Responsible Officer (1) stating that a
review of such financial statements during the period covered thereby and of the
activities of the Company and its Subsidiaries has been made under such
Responsible Officer's supervision with a view to determining whether the Company
and its Subsidiaries have fulfilled all of their obligations under this
Agreement, the other Financing Documents, and the Notes; (2) stating that the
Company and its Subsidiaries have fulfilled their obligations under such
instruments and that all representations made in this Agreement continue to be
true and correct (or, if not correct, specifying the nature of any change), or
if there shall be a Default or Event of Default, specifying the nature and
status thereof and the Company's proposed response thereto; (3) demonstrating in
reasonable detail compliance (including, but not limited to, showing all
material calculations) as at the end of such Fiscal Year or such Fiscal Quarter
with Sections 6.1(a), 6.1(b), 6.1(c), 6.1(d) and 6.1(e); (4) stating the
Applicable Margin to be in effect until the next redetermination thereof
pursuant to the terms set forth in the definition of Applicable Margin, and (5)
containing or accompanied by such financial or other details, information and
material as the Administrative Agent may reasonably request to evidence such
compliance.
(d) BORROWING BASE REPORTS. As soon as available and in any event
by the 20th day following the close of each calendar month when there are any
outstanding Revolving Credit Loans and prior to new borrowings, a Borrowing Base
Report dated and reflecting amounts as of the close of business on the last day
of the preceding calendar month.
(e) NOTICE OF CERTAIN EVENTS. Promptly after the Company learns
of the receipt or occurrence of any of the following, a certificate of the
Company, signed by a Responsible Officer specifying (1) any official notice of
any violation, possible violation, non-compliance or possible non-compliance, or
claim made by any Governmental Authority pertaining to all or any part of the
Properties of the Company
44
or any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect; (2) any event which constitutes a Default or Event of Default,
together with a detailed statement specifying the nature thereof and the steps
being taken to cure such Default or Event of Default; (3) the receipt of any
notice from, or the taking of any other action by, the holder of any promissory
note, debenture or other evidence of indebtedness in excess of $1,000,000 of the
Company or any of its Subsidiaries with respect to a claimed default, together
with a detailed statement specifying the notice given or other action taken by
such holder and the nature of the claimed default and what action the Company or
its Subsidiary is taking or proposes to take with respect thereto; (4) any
default or noncompliance of any party to any of the Financing Documents with any
of the terms and conditions thereof or any notice of termination or other
proceedings or actions which could reasonably be expected to adversely affect
any of the Financing Documents; (5) the creation, dissolution, merger or
acquisition of any Subsidiary of the Company with material operations; (6) any
event or condition not previously disclosed to the Administrative Agent, which
violates any Environmental Law and which could have a Material Adverse Effect;
(7) any material amendment to, termination of, or default under any material
contract or any execution of, or material amendment to, termination of, or
material default under, any material collective bargaining agreement; or (8) any
event or condition which may reasonably be expected to have a Material Adverse
Effect.
(f) SHAREHOLDER COMMUNICATIONS, FILINGS. Promptly upon the
mailing, filing, or making thereof, copies of all registration statements,
periodic reports and other documents (excluding the related exhibits except to
the extent expressly requested by the Administrative Agent) filed by the Company
with the Securities and Exchange Commission (or any successor thereto) or any
national securities exchange.
(g) LITIGATION. Promptly after the occurrence thereof, notice of
the institution of or any material adverse development in any action, suit or
proceeding or any governmental investigation or any arbitration, before any
court or arbitrator or any governmental or administrative body, agency or
official, against the Company, Holding, or any Subsidiary or any material
Property of any thereof, in which the amount involved is material and is not
covered by insurance or which, if adversely determined, would have a Material
Adverse Effect.
(h) ERISA. Promptly after (1) the Company's obtaining knowledge
of the occurrence thereof, notice that an ERISA Termination Event or a
"prohibited transaction," as such term is defined in Section 406 of ERISA or
Section 4975 of the Code, with respect to any Plan has occurred, which such
notice shall specify the nature thereof, the Company's proposed response thereto
(and, if applicable, the proposed response thereto of any Subsidiary of the
Company and of any ERISA Affiliate) and, where known, any action taken or
proposed by the Internal Revenue Service, the Department of Labor or the PBGC
with respect thereto, (2) the Company's obtaining knowledge thereof, copies of
any notice of the PBGC's intention to terminate or to have a trustee appointed
to administer any Plan, and (3) the filing thereof with any Governmental
Authority (if requested by the Administrative Agent), copies of each annual and
other report (including applicable schedules) with respect to each Plan or any
trust created thereunder.
(i) INSURANCE COVERAGE. Annually upon renewal, a revised or
updated certificate evidencing the insurance coverages of the Company and its
Subsidiaries in form and substance reasonably satisfactory to the Administrative
Agent; and upon request of the Administrative Agent, copies of the applicable
policies.
(j) NOTICES TO HOLDERS OF SENIOR NOTES. Copies of any financial
or other report or notice delivered to, or received from, any holders of Senior
Notes, which report or notice has not been delivered to the Lenders hereunder.
45
(k) BUDGET PROJECTION. As soon as available, but in any event on
or before January 31 of each Fiscal Year, a budget projection (including balance
sheet, income statement and cash flow) of the Company and its Subsidiaries,
setting forth, in reasonable detail, the projected revenues and expenses of the
Company and its Subsidiaries for the following Fiscal Year.
(l) OTHER INFORMATION. With reasonable promptness, such other
information about the business and affairs and financial condition of the
Company or its Subsidiaries as the Administrative Agent may reasonably request
from time to time, including, without limitation, monthly accounts receivable
aging and reconciliation, accounts payable aging and reconciliation, sales
reports and inventory designations.
ARTICLE 6
NEGATIVE COVENANTS
So long as any Lender has any Commitment hereunder or any Loan remains
unpaid or any Revolving Credit Exposure remains outstanding, the Company will
not:
Section 6.1 FINANCIAL COVENANTS.
(a) Permit Consolidated Tangible Net Worth to be less than (1)
for the Fiscal Year ending December 31, 1997, $60,000,000, and (2) for Fiscal
Year beginning January 1, 1998, and for each Fiscal Year thereafter, the sum of
(A) the amount calculated pursuant to this Subsection for the previous Fiscal
Year, plus (B) 50% of the Company's Consolidated Net Income for the previous
Fiscal Year, plus (C) 100% of all adjustments to equity (in accordance with
GAAP) on the Company's balance sheet resulting from the issuance of any Equity;
PROVIDED such minimum amount shall not be decreased as a result of losses or
negative Consolidated Net Income.
(b) Permit the Current Ratio to be less than 1.50 to 1.00 at any
time.
(c) Permit the Fixed Charge Coverage Ratio to be less than 1.10
to 1.00 as of the last day of each Rolling Period for such Rolling Period.
(d) Permit the Debt Ratio at any time to be more than the ratio
for each Rolling Period indicated below:
PERIOD RATIO
------ -----
Each Rolling Period during the period 2.50 to 1.00
beginning on the Closing Date through
December 31, 1998
Each Rolling Period during the period 2.00 to 1.00
beginning January 1, 1999 through
December 31, 1999
Each Rolling Period thereafter 1.75 to 1.00
(e) Permit the Interest Coverage Ratio to be less than 2.50 to
1.00 as of the last day of each Rolling Period for such Rolling Period.
The Company shall be deemed to be in compliance with the covenants
contained in this Section 6.1 at any time so long as the then most recent
financial statements prepared by the Company (for internal use
46
or otherwise) and made available to the Lenders show, or provide a basis for
ascertaining, such compliance and no Responsible Officer has obtained any
information that causes such Responsible Officer to reasonably conclude that the
Company is not in compliance with the covenants contained in this Section 6.1.
Section 6.2 INDEBTEDNESS. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to exist, any
Indebtedness, other than:
(a) the Lender Indebtedness;
(b) Indebtedness outstanding on the date hereof which is set
forth on SCHEDULE 6.2;
(c) accounts payable (for the deferred purchase price of Property
or services) from time to time incurred in the ordinary course of business
(which, if greater than 90 days past due date are being contested in good faith
if reserves adequate under GAAP shall have been established therefor), and
guaranties by the Company in the ordinary course of business of any such
obligations incurred by any Subsidiary;
(d) obligations for current taxes, assessments and other
governmental charges and taxes, assessments or other governmental charges which
are not yet due or are being contested in good faith by appropriate action or
proceeding promptly initiated and diligently conducted, if reserves as shall be
required by GAAP shall have been made therefor;
(e) Indebtedness evidenced by the Senior Notes, up to the
aggregate principal amount of $30,000,000;
(f) Indebtedness owing pursuant to Interest Rate Swap Agreements
entered into in the ordinary course of business with the Agent or as approved by
the Required Lenders for the purpose of hedging against fluctuations in interest
rates (on money borrowed by the Company);
(g) Capital Lease Obligations incurred after the date hereof not
to exceed $2,000,000;
(h) Indebtedness under purchase money debt (as required to be
reported on the financial statements of the Company pursuant to GAAP) not to
exceed the purchase price of the property acquired;
(i) other Indebtedness of the Company and its Subsidiaries which
does not exceed in the aggregate $2,800,000 at any one time outstanding; and
(j) Subsidiary Indebtedness; PROVIDED, HOWEVER, the aggregate
amount of all Subsidiary Indebtedness (other than Intercompany Indebtedness) at
any one time outstanding shall not exceed 5% of Consolidated Net Tangible
Assets.
Section 6.3 LIENS. Create, incur, assume or suffer to exist, or permit
any of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on
any of its Property now owned or hereafter acquired to secure any Indebtedness
of the Company, any Subsidiary or any other Person, other than:
(a) Liens existing on the date hereof and set forth on
SCHEDULE 6.3;
(b) Liens (if any) securing the Lender Indebtedness;
47
(c) Liens for taxes, assessments or other governmental charges or
levies not yet due or which are being contested in good faith by appropriate
action or proceedings and with respect to which adequate reserves are being
maintained;
(d) statutory Liens of landlords and Liens of operators, vendors,
carriers, warehousemen, mechanics, materialmen, repairmen, workmen, and other
Liens imposed by law created in the ordinary course of business for amounts
which are not past due for more than 90 days or which are being contested in
good faith by appropriate action or proceedings and with respect to which
adequate reserves in accordance with GAAP are being maintained;
(e) Liens incurred or deposits or pledges made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance and other types of social security, old age or other similar
obligations, or to secure the performance of tenders, statutory obligations,
surety and appeal bonds, bids, leases, government contracts, performance and
return-of-money bonds and other similar obligations (exclusive of obligations
for the payment of borrowed money);
(f) any obligations or duties affecting any of the Property of
the Company or its Subsidiaries to any municipality or public authority with
respect to any franchise, grant, license or permit which do not materially
impair the use of such Property for the purposes for which it is held;
(g) Liens securing Capital Lease Obligations allowed under
Section 6.2(g) but only on the Property under lease;
(h) Liens securing purchase money debt allowed under Section
6.2(h) but only on the Property purchased with such purchase money debt;
PROVIDED, HOWEVER, (i) the Indebtedness secured thereby does not exceed the
purchase price of such property and (ii) such Liens are created within six (6)
months after the Company acquires such Property;
(i) Liens existing on acquired Property prior to acquisition
thereof;
(j) Liens securing Intercompany Indebtedness; and
(k) extensions, renewals or replacements of any Lien referred to
in Sections 6.3(a) and 6.3(f), provided that the principal amount of the
Indebtedness or obligation secured thereby is not increased and that any such
extension, renewal or replacement is limited to the Property originally
encumbered thereby.
Section 6.4 MERGERS, SALES, ETC. Neither the Company nor any Subsidiary
will merge into or with or consolidate with any other Person, or sell, lease or
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property or assets to any other Person, except
as permitted by Section 6.17 hereof; provided, however, that (A) the Company or
any Subsidiary may consolidate or merge with any other corporation if (i) the
Company or such Subsidiary is the survivor of such consolidation or merger, and
(ii) at the time of such consolidation or merger and after giving effect
thereto, no Event of Default shall have occurred and be continuing; or (B) the
Company or any Subsidiary may consolidate or merge with another corporation if
(i) the survivor corporation is a United States corporation, (ii) the surviving
corporation assumes the obligation under this Agreement and the Notes and (iii)
at the time of such consolidation or merger and after giving effect thereto, no
Event of Default shall have occurred and be continuing. Notwithstanding the
foregoing, the Company may merge or consolidate LCEC into the Company at any
time.
48
Section 6.5 DIVIDENDS, ETC. Make, or permit any Subsidiary to make, any
Restricted Payment PROVIDED, HOWEVER, that the Company and its Subsidiaries may
make Restricted Payments if at the time of such Restricted Payment and after
giving effect thereto (i) no Event of Default shall have occurred and be
continuing, and (ii) the total aggregate amount of such payments since January
1, 1998, is less than the sum of (a) $5,000,000 plus (b) Consolidated Net Income
from January 1, 1998.
Section 6.6 INVESTMENTS, LOANS, ETC. Make or permit any loans to or
investments in any Person, or permit any of its Subsidiaries to make or permit
any loans to or investments in any Person, other than:
(a) investments, loans or advances, the material details of which
have been set forth on SCHEDULE 4.7;
(b) investments in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the United
States of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in each
case maturing within one year from the date of acquisition thereof;
(c) investments in certificates of deposit of maturities less
than one year, issued by commercial banks in the United States having capital
and surplus in excess of $500,000,000 and having short-term credit ratings of at
least A1 and P1 by Standard & Poor's Ratings Group and ▇▇▇▇▇'▇ Investors
Service, Inc., respectively;
(d) investments in commercial paper of maturities less than one
year, rated the highest credit rating obtainable from Standard & Poor's Ratings
Group and ▇▇▇▇▇'▇ Investors Service, Inc.;
(e) investments in securities that are obligations of the United
States government purchased by the Company or any Subsidiary of the Company
under fully collateralized repurchase agreements pursuant to which arrangements
are made with selling financial institutions (being a financial institution
having unimpaired capital and surplus of not less than $500,000,000 and with
short-term credit ratings of at least A1 and P1 by Standard & Poor's Ratings
Group and ▇▇▇▇▇'▇ Investors Service, Inc., respectively) for such financial
institutions to repurchase such securities within 30 days from the date of
purchase by the Company or such Subsidiary, and other similar short-term
investments made in connection with the Company's or any of its Subsidiary's
cash management practices; PROVIDED THAT the Company shall take possession of
all securities purchased by the Company or any Subsidiary under repurchase
agreements and shall adhere to customary margin and ▇▇▇▇-to-market procedures
with respect to fluctuations in value;
(f) accounts receivable arising in the ordinary course of
business;
(g) stock or other securities received in the settlement of Debt
created in the ordinary course of business and permitted under Section 6.2(c);
(h) deposits in money market funds investing exclusively in
investments described in Sections 6.6(b), (c) or (d);
(i) investments, loans or advances by the Company to or in its
Subsidiaries, and by any Subsidiary to one another or to the Company;
(j) investments or loans of a newly acquired company (the
acquisition of which is permitted under this Agreement) and existing on the date
of such acquisition;
49
(k) reasonable advances to officers and employees of the Company
and any Subsidiary for travel arising in the ordinary course of business;
(l) investments by the Company in the capital stock of the
Subsidiaries;
(m) loans to officers and employees of the Company or any
Subsidiary, not to exceed $100,000 in the aggregate at any one time outstanding;
and
(n) investments, loans or advances in or in respect of a Person
engaged primarily in a line of business activity directly related to the
business of the Company [not to exceed a total of $2,000,000 in the aggregate at
any one time outstanding; provided, however, such $2,000,000 limitation shall
not be applicable to investments in such a Person which becomes a wholly-owned
Subsidiary of the Company or a Subsidiary contemporaneous with such investment.
Section 6.7 SALES AND LEASEBACKS. Enter into, or permit any of its
Subsidiaries to enter into, any arrangement, directly or indirectly, with any
Person whereby the Company or any such Subsidiary shall sell or transfer any
Property, whether now owned or hereafter acquired, and whereby the Company or
any such Subsidiary shall then or thereafter rent or lease as lessee such
Property or any part thereof or other Property which the Company or any such
Subsidiary intends to use for substantially the same purpose or purposes as the
Property sold or transferred.
Section 6.8 NATURE OF BUSINESS. Permit any material change to be made in
the character of its business or the business of any Subsidiary as carried on at
the date hereof, other than entering into lines of business that are reasonably
related to the lines of business in existence on the Closing Date.
Section 6.9 ERISA COMPLIANCE.
(a) Engage in, or permit a Subsidiary of the Company or any ERISA
Affiliate to engage in, any transaction in connection with which the Company, a
Subsidiary of the Company or any ERISA Affiliate could be subjected to either a
civil penalty assessed pursuant to Sections 502(c), (i) or (l) of ERISA or a tax
imposed by Chapter 43 of Subtitle D of the Code having a Material Adverse
Effect.
(b) Terminate, or permit a Subsidiary of the Company or any ERISA
Affiliate to terminate, any Plan in a manner, or take any other action with
respect to any Plan, which could reasonably be expected to result in any
material liability of the Company, a Subsidiary of the Company or any ERISA
Affiliate to the PBGC or any other Governmental Authority;
(c) Fail to make, or permit a Subsidiary of the Company or any
ERISA Affiliate to fail to make, full payment when due of all amounts which,
under the provisions of any Plan, agreement relating thereto or applicable law,
the Company, a Subsidiary of the Company or any ERISA Affiliate is required to
pay as contributions thereto;
(d) Permit to exist, or allow a Subsidiary of the Company or any
ERISA Affiliate to permit to exist, any accumulated funding deficiency within
the meaning of Section 302 of ERISA or Section 412 of the Code, whether or not
waived, with respect to any Plan;
(e) Contribute to or assume an obligation to contribute to, or
permit a Subsidiary of the Company or any ERISA Affiliate to contribute to or
assume an obligation to contribute to, any "multiem ployer plan" as such term is
defined in Section 3(37) or 4001(a)(3) of ERISA;
50
(f) Acquire, or permit a Subsidiary of the Company or any ERISA
Affiliate to acquire, an interest in any Person that causes such Person to
become an ERISA Affiliate with respect to the Company or a Subsidiary of the
Company or with respect to any ERISA Affiliate of the Company or a Subsidiary of
the Company if such Person sponsors, maintains or contributes to, or at any time
in the six-year period preceding such acquisition has sponsored, maintained, or
contributed to, any "multiemployer plan" as such term is defined in Section
3(37) or 4001(a)(3) of ERISA;
(g) Fail to pay, or cause to be paid, to the PBGC in a timely
manner, and without incurring any late payment or underpayment charge or
penalty, all premiums required pursuant to Sections 4006 and 4007 of ERISA;
(h) Amend, or permit a Subsidiary of the Company or any ERISA
Affiliate to amend, a Plan resulting in an increase in current liability such
that the Company, a Subsidiary of the Company or any ERISA Affiliate is required
to provide security to such Plan under Section 401(a)(29) of the Code;
(i) Incur, or permit a Subsidiary of the Company or any ERISA
Affiliate to incur, a material liability to or on account of a Plan under
Sections 515, 4062, 4063, 4064, 4201 or 4204 of ERISA; or
(j) Permit, or allow a Subsidiary of the Company or any ERISA
Affiliate to permit, the actuarial present value of the benefit liabilities
(computed on an accumulated benefit obligation basis in accordance with GAAP)
under all Plans in the aggregate to exceed the current value of the assets of
all Plans in the aggregate that are allocable to such benefit liabilities.
Section 6.10 SALE OR DISCOUNT OF RECEIVABLES. Sell, with or without
recourse, for discount or otherwise, or permit any of its Subsidiaries to
discount or sell, with or without recourse, for discount or otherwise, any notes
or accounts receivable.
Section 6.11 NEGATIVE PLEDGE AGREEMENTS. Create, incur, assume or suffer
to exist, or permit any of its Subsidiaries to create, incur, assume or suffer
to exist, any contract, agreement or understanding (other than this Agreement
and the other Financing Documents) which in any way prohibits or restricts the
granting, conveying, creation or imposition of any Lien on any Property of the
Company or its Subsidiaries in favor of the Lenders to secure obligations under
this Agreement, or which requires the consent of other Persons in connection
therewith, except for (i) the Note Purchase Agreement and (ii) capital lease
agreements and purchase money agreements which pertain to specific items of
Property of the Company or any Subsidiary and not all or substantially all of
the Property of the Company or any Subsidiary.
Section 6.12 TRANSACTIONS WITH AFFILIATES. Enter into any transaction or
series of transactions, or permit any of its Subsidiaries to enter into any
transaction or series of transactions, with Affiliates of the Company or its
Subsidiaries which involve an outflow of money or other Property from the
Company or its Subsidiaries to an Affiliate of the Company or its Subsidiaries,
including but not limited to repayment of Indebtedness, management fees,
compensation, salaries, asset purchase payments or any other type of fees or
payments similar in nature except for those which are in the ordinary course of
business of the Company and are on fair and reasonable terms no less favorable
than would be obtained in a comparable arm's length transaction with a Person
not an Affiliate.
Section 6.13 UNCONDITIONAL PURCHASE OBLIGATIONS. Enter into or be a
party to, or permit any of its Subsidiaries to enter into or be a party to, any
material contract for the purchase of materials, supplies or other property or
services, if such contract requires that payment be made by it regardless of
whether or not delivery is ever made of such materials, supplies or other
property or services.
51
Section 6.14 MODIFICATIONS TO SENIOR NOTES.
(a) Amend, modify, or waive any covenant contained in the Senior
Notes or the Note Purchase Agreement if the effect of such amendment,
modification, or waiver would be to make the terms of the Senior Notes or the
Note Purchase Agreement materially more onerous to the Company; or
(b) Amend, modify, or waive any provision of the Senior Notes or
the Note Purchase Agreement if the effect of such amendment, modification or
waiver (1) subjects the Company to any additional material obligation, (2)
increases the principal of or rate of interest on any Senior Note, (3)
accelerates the date fixed for any payment of principal or interest on any
Senior Note, or (4) would change the percentage of holders of such Senior Notes
required for any such amendment, modification, or waiver from the percentage
required on the Closing Date.
Section 6.15 INTERCOMPANY TRANSACTIONS. Create and will not permit any
of its Subsidiaries to, create or otherwise cause or permit to exist or become
effective, except as may be expressly permitted or required by the Financing
Documents, any consensual encumbrance or restriction of any kind on the ability
of any such Subsidiary to (a) pay dividends or make any other distribution to
the Company or any of its Subsidiaries in respect of such Subsidiary's capital
stock or with respect to any other interest or participation in, or measured by,
its profits, (b) pay any indebtedness owed to the Company or any of its
Subsidiaries, (c) make any loan or advance to the Company or any of its
Subsidiaries, or (d) sell, lease or transfer any of its Property to the Company
or any of its Subsidiaries.
Section 6.16 ACQUISITIONS; CREATION OF SUBSIDIARIES. Create or acquire,
or permit any of its Subsidiaries to create or acquire, any Subsidiary without
first giving five (5) Business Days' prior written notice to the Administrative
Agent. In every case (i) each new Subsidiary shall promptly execute a written
instrument of guaranty, unconditionally guaranteeing payment of all Lender
Indebtedness, and (ii) the Company shall deliver to Administrative Agent and the
Lenders a revised Schedule with respect to each new Subsidiary which shall be
automatically upon delivery an amendment to the prior Schedule. The Company
shall not and shall not permit any Subsidiary to sell or to issue any stock of a
Subsidiary or any interest in a partnership. The Company shall not permit any
Subsidiary to issue any stock except to the Company.
Section 6.17 SALE OF PROPERTIES. Sell, assign, convey or otherwise
transfer any interest in any, or permit any of its Subsidiaries to sell, assign,
convey or otherwise transfer any interest in, Property except for (i) assets
sold, transferred or otherwise disposed of in the ordinary course of business,
including obsolete assets; and (ii) other assets sold, transferred, terminated
or otherwise disposed of in any year; provided that the proceeds realized from
such sale, transfer, termination or disposition in any applicable year in excess
of the greater of (a) 10% of the Consolidated Net Tangible Assets of the Company
as of the beginning of such year or (b) 10% of Consolidated Net Income for such
year, are either reinvested within one year in similar assets or used to repay
the Lender Indebtedness of the Company. Until the net proceeds of such sale,
transfer or other disposition are reinvested, the funds may be invested pursuant
to Section 6.6(b), (c), (d) and (h) applied against the Lender Indebtedness.
Section6.18 ENVIRONMENTAL MATTERS. Cause or permit any of its Property
to be, or permit any of its Subsidiaries to cause or permit any of their
respective Property to be, in violation of, or do anything or permit anything to
be done which will subject any such Property to any remedial obligations under
any Environmental Laws, assuming disclosure to the applicable Governmental
Authority of all relevant facts, conditions and circumstances, if any,
pertaining to such Property where such violations or remedial obligations would
have a Material Adverse Effect.
52
Section 6.19 PROCEEDS OF NOTES. Permit the proceeds of the
Notes to be used for any purpose other than those permitted by Section 4.9.
ARTICLE 7
EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the following
specified events (each an "EVENT OF DEFAULT"):
Section 7.1 PAYMENTS. (a) The Company shall fail to pay when due
(including, but not limited to, by mandatory prepayment required pursuant to
Section 2.10) any principal of any Loan or any Note, or any Reimbursement
Obligation, or (b) the Company shall fail to pay when due any interest on any
Loan or any Note, or any fee or any other amount payable hereunder or under the
Fee Letter or any other Financing Document, and such failure continues
unremedied for a period of five (5) Business Days; or
Section 7.2 COVENANTS WITHOUT NOTICE. The Company shall fail to
observe or perform any covenant or agreement contained in Sections 5.1, 5.5,
5.7, 5.9, 5.10(e) or Article 6; or
Section 7.3 OTHER COVENANTS. The Company shall fail to observe or
perform any covenant or agreement contained in this Agreement, other than those
referred to in Sections 7.1 or 7.2 and, if capable of being remedied, such
failure shall remain unremedied for 30 days after the earlier of (a) the
Company's obtaining knowledge thereof, or (b) written notice thereof shall have
been given to the Company by any Lender, any Issuing Bank or the Administrative
Agent; or
Section 7.4 OTHER FINANCING DOCUMENT OBLIGATIONS. Default is made in the
due observance or performance by the Company or any Subsidiary of the Company of
any of the covenants or agreements contained in any Financing Document other
than this Agreement, and such default continues unremedied beyond the expiration
of any applicable grace period which may be expressly allowed under such
Financing Document; or
Section 7.5 REPRESENTATIONS. Any representation, warranty or statement
made or deemed to be made by the Company or any Subsidiary of the Company or any
of such Company's, or Subsidiary's officers herein or in any other Financing
Document, or in any certificate, request or other document furnished pursuant to
or under this Agreement or any other Financing Document, shall have been
incorrect in any material respect as of the date when made or deemed to be made;
or
Section 7.6 NON-PAYMENTS OF OTHER INDEBTEDNESS. The Company or any of
its Subsidiaries shall fail to make any payment or payments of principal of or
interest on any Indebtedness of the Company or such Subsidiary (other than (a)
the Lender Indebtedness and (b) any trade account subject to a bona fide dispute
and the trade creditor has neither filed a lawsuit nor caused a Lien to be
placed upon any Property of the Company or such Subsidiary) in excess of
$1,000,000 in the aggregate when due (whether at stated maturity, by
acceleration, on demand or otherwise) after giving effect to any applicable
grace period; or
Section 7.7 DEFAULTS UNDER OTHER AGREEMENTS. The Company or any of its
Subsidiaries shall fail to observe or perform any covenant or agreement
contained in any agreement(s) or instrument(s) relating to Indebtedness of the
Company or such Subsidiary of $1,000,000 or more in the aggregate within any
applicable grace period, or any other event shall occur, if the effect of such
failure or other event is to accelerate, or, with respect to the Company and its
Subsidiaries, to permit the holder of such Indebtedness
53
or any other Person to accelerate, the maturity of $1,000,000 or more in the
aggregate of such Indebtedness; or $100,000 or more in the aggregate of any such
Indebtedness shall be, or if as a result of such failure or other event may be,
required to be prepaid (other than prepayments resulting from excess cash flow)
in whole or in part prior to its stated maturity; or
Section 7.8 BANKRUPTCY. The Company or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy" as now or hereafter in effect, or any successor
thereto (the "BANKRUPTCY CODE"); or an involuntary case is commenced against the
Company or any of its Subsidiaries and the petition is not controverted within
10 days, or is not stayed or dismissed within 60 days, after commencement of the
case; or a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or any substantial part of the property of the Company or
any of its Subsidiaries; or the Company or any of its Subsidiaries commences any
other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Company or such
Subsidiary or there is commenced against the Company or any of its Subsidiaries
any such proceeding which remains unstayed or undismissed for a period of 60
days; or the Company or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or the Company or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
Property to continue undischarged or unstayed for a period of 60 days; or the
Company or any of its Subsidiaries makes a general assignment for the benefit of
creditors; or the Company or any of its Subsidiaries shall fail to pay, or shall
state in writing that it is unable to pay, or shall be unable to pay, its debts
generally as they become due; or the Company or any of its Subsidiaries shall by
any act or failure to act indicate its consent to, approval of or acquiescence
in any of the foregoing; or any corporate action is taken by the Company or any
of its Subsidiaries for the purpose of effecting any of the foregoing; or
Section 7.9 MONEY JUDGMENT. Judgments or orders for the payment of money
involving in the aggregate at any time a liability (net of any insurance
proceeds or indemnity payments actually received in respect thereof prior to or
within 60 days from the entry thereof, or to be received in respect thereof in
the event any appeal thereof shall be unsuccessful) of more than $1,000,000, or
that would otherwise have a Material Adverse Effect shall be rendered against
the Company or any of it Subsidiaries and such judgment or order shall continue
unsatisfied in accordance with the terms of such judgment or order (in the case
of a money judgment) and in effect for a period of 60 days during which
execution shall not be effectively stayed or deferred (whether by action of a
court, by agreement or otherwise); or
Section 7.10 DISCONTINUANCE OF BUSINESS. The Company or any material
Subsidiary shall cease to be principally engaged in the businesses and
operations in which the Company and its then existing Subsidiaries were
principally engaged on the Closing Date; or
Section 7.11 FINANCING DOCUMENTS. Any Material Provision of any of the
Financing Documents after delivery thereof shall for any reason, except to the
extent permitted by the terms thereof, cease to be in full force and effect and
valid, binding and enforceable (except as enforceability may be limited as
stated in Section 4.3) in accordance with its terms, or the Company or any of
its Subsidiaries shall so state in writing. As used in this Section 7.11,
"MATERIAL PROVISION" shall mean (a) with respect to this Agreement, the Notes,
or any Guaranty Agreement, any material term, covenant, or agreement set forth
therein, and (b) with respect to any other Financing Document, any provision if
the validity and enforceability thereof is necessary for such Financing Document
to accomplish its stated, or clearly intended, purpose or otherwise necessary in
order for any Lender to enforce any material right or remedy under any Financing
Document; or
54
Section 7.12 CHANGE OF CONTROL. The occurrence of a Change of Control;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written or telex
request of the Required Lenders, shall, by written notice to the Company, take
any or all of the following actions, without prejudice to the rights of the
Administrative Agent, any Lender or the holder of any Note, to enforce its
claims against the Company: (a) declare the Revolving Credit Commitment and
other lending obligations, if any, terminated, whereupon the Revolving Credit
Commitment and other lending obligations, if any, of each Lender shall terminate
immediately; or (b) declare the entire principal amount of and all accrued
interest on all Lender Indebtedness then outstanding to be, whereupon the same
shall become, forthwith due and payable without presentment, demand, protest,
notice of protest or dishonor, notice of acceleration, notice of intent to
accelerate or other notice of any kind, all of which are hereby expressly waived
by the Company, and thereupon take such action as it may deem desirable under
and pursuant to the Financing Documents; provided, that, if an Event of Default
specified in Section 7.8 shall occur, the result which would occur upon the
giving of written notice by the Administrative Agent to the Company, as
specified in clauses (a) and (b) above, shall occur automatically without the
giving of any such notice; or (c) if any Letter of Credit shall then be
outstanding, demand Cover which the Company shall immediately pay to the
Administrative Agent for deposit in an account established and maintained at the
Agent as cash collateral securing any such Letter of Credit; and the Company
hereby grants to and its deposit with the Administrative Agent grants to the
Administrative Agent a security interest in such cash Collateral.
ARTICLE 8
THE ADMINISTRATIVE AGENT
Section 8.1 APPOINTMENT OF ADMINISTRATIVE AGENT. Each Lender (and each
Affiliate by and through its affiliated Lender) and the Issuing Bank hereby
designates Chase Bank of Texas, N.A., as Administrative Agent to act as herein
specified and as specified in the other Financing Documents. Each Lender (and
each Affiliate by and through its affiliated Lender) and the Issuing Bank hereby
irrevocably authorizes the Administrative Agent to take such action on its
behalf under the provisions of this Agreement, the Notes, and the other
Financing Documents and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Administrative Agent may perform any of
its duties hereunder by or through its agents or employees.
Section 8.2 LIMITATION OF DUTIES OF ADMINISTRATIVE AGENT. The
Administrative Agent shall have no duties or responsibilities except those
expressly set forth with respect to the Administrative Agent in this Agreement
and as specified in the other Financing Documents. Neither the Administrative
Agent nor any of its officers, directors, employees or agents shall be liable
for any action taken or omitted by it as such hereunder or in connection
herewith, unless caused by its or their gross negligence or willful misconduct.
The duties of the Administrative Agent shall be mechanical and administrative in
nature; the Administrative Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender; and nothing in this Agreement,
expressed or implied, is intended to or shall be so construed as to impose upon
the Administrative Agent any obligations in respect of this Agreement except as
expressly set forth herein.
Section 8.3 LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT.
(a) INDEPENDENT INVESTIGATION. Independently and without
reliance upon the Administrative Agent, each Lender, to the extent it deems
appropriate, has made and shall continue to make
55
(1) its own independent investigation of the financial condition and affairs of
the Company in connection with the taking or not taking of any action in
connection herewith, and (2) its own appraisal of the creditworthiness of the
Company, and, except as expressly provided in this Agreement, and the other
Financing Documents, the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the consummation of the transactions contemplated herein
or at any time or times thereafter.
(b) ADMINISTRATIVE AGENT NOT RESPONSIBLE. The Administrative
Agent shall not be responsible to any Lender or the Issuing Bank for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
collectibility, priority or sufficiency of this Agreement, the Notes, the
Letters of Credit or the other Financing Documents or the financial condition of
the Company or be required to make any inquiry concerning either the performance
or observance of any of the terms, provisions or conditions of this Agreement,
the Notes or the other Financing Documents, or the financial condition of the
Company, or the existence or possible existence of any Default or Event of
Default.
Section 8.4 CERTAIN RIGHTS OF THE ADMINISTRATIVE AGENT. If the
Administrative Agent shall request instructions from the Required Lenders with
respect to any act or action (including the failure to act) in connection with
this Agreement, the Notes and the other Financing Documents, the Administrative
Agent shall be entitled to refrain from such act or taking such action unless
and until the Administrative Agent shall have received instructions from the
Required Lenders; and the Administrative Agent shall not incur liability to any
Person by reason of so refraining. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting under this
Agreement, the Notes and the other Financing Documents in accordance with the
instructions of the Required Lenders, or to the extent required by Section 9.2,
all of the Lenders.
Section 8.5 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex, teletype
or telecopier message, cablegram, radiogram, order or other documentary
teletransmission or telephone message believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person. The Administrative
Agent may consult with legal counsel (including counsel for the Company),
independent public accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken by it in good faith in
accordance with the advice of such counsel, accountants or experts.
Section 8.6 INDEMNIFICATION OF ADMINISTRATIVE AGENT. TO THE EXTENT THE
ADMINISTRATIVE AGENT IS NOT REIMBURSED AND INDEMNIFIED BY THE COMPANY, EACH
LENDER WILL REIMBURSE AND INDEMNIFY THE ADMINISTRATIVE AGENT ON A PRO RATA
BASIS, FOR AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES (INCLUDING REASONABLE
COUNSEL FEES AND DISBURSEMENTS) OR DISBURSEMENTS OF ANY KIND OR NATURE
WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE
ADMINISTRATIVE AGENT IN PERFORMING ITS DUTIES HEREUNDER, IN ANY WAY RELATING TO
OR ARISING OUT OF THIS AGREEMENT AND BY REASON OF THE ORDINARY NEGLIGENCE OF THE
ADMINISTRATIVE AGENT; PROVIDED THAT NO LENDER SHALL BE LIABLE TO THE
ADMINISTRATIVE AGENT FOR ANY PORTION OF SUCH LIABILITIES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
RESULTING FROM, AS TO THE ADMINISTRATIVE AGENT, THE ADMINISTRATIVE AGENT'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT.
56
Section 8.7 THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With
respect to their obligations under this Agreement, the Loans made by it and the
Notes issued to it, the Administrative Agent shall have the same rights and
powers hereunder as any other Lender or holder of a Note and may exercise the
same as though it were not performing the duties, if any, specified herein; and
the terms "Lenders," "Required Lenders," "holders of Notes" or any similar terms
shall, unless the context clearly otherwise indicates, include the
Administrative Agent in its individual capacity. The Administrative Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust, financial advisory or other business with the Company or any
affiliate of the Company as if it were not performing the duties, if any,
specified herein, and may accept fees and other consideration from the Company
for services in connection with this Agreement and otherwise without having to
account for the same to the Lenders.
Section 8.8 MAY TREAT LENDER AS OWNER. The Company, the Administrative
Agent and the Issuing Bank may deem and treat each Lender as the owner of such
Lender's Note for all purposes hereof unless and until a written notice of the
assignment or transfer thereof shall have been filed with the Administrative
Agent. Any request, authority or consent of any Person who at the time of making
such request or giving such authority or consent is the owner of a Note shall be
conclusive and binding on any subsequent owner, transferee or assignee of such
Note or any promissory note or notes issued in exchange therefor.
Section 8.9 SUCCESSOR ADMINISTRATIVE AGENT.
(a) ADMINISTRATIVE AGENT RESIGNATION. The Administrative Agent
may resign at any time by giving written notice thereof to the Lenders, the
Issuing Bank and the Company and may be removed at any time with or without
cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right, upon five days' notice to the Company, to
appoint a successor Administrative Agent, subject to the approval of the
Company, such approval not to be unreasonably withheld. If no successor
Administrative Agent shall have been so appointed by the Required Lenders, and
shall have accepted such appointment, within 30 days after the retiring
Administrative Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Administrative Agent, then, upon five days' notice to
the Company, the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent (subject to approval of the Company,
such approval not to be unreasonably withheld), which shall be a bank which
maintains an office in the United States, or a commercial bank organized under
the laws of the United States of America or of any State thereof, or any
Affiliate of such bank, having a combined capital and surplus of at least
$250,000,000.
(b) RIGHTS, POWERS, ETC. Upon the acceptance of any appointment
as Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations under this Agreement. After any retiring Administrative Agent's
resignation or removal hereunder as Administrative Agent, the provisions of this
Article 8 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement.
ARTICLE 9
MISCELLANEOUS
Section 9.1 NOTICES. All notices, requests and other communications to
any party hereunder shall be in writing (including, telecopy or similar
teletransmission or writing) and shall be given to such party at its address or
telecopy number set forth on the signature pages hereof or such other address
57
or telecopy number as such party may hereafter specify by notice to the
Administrative Agent and the Company. Each such notice, request or other
communication shall be effective (a) if given by mail, 72 hours after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (b) if given by any other means (including, but not
limited to, by air courier), when delivered at the address specified in this
Section; provided that notices to the Administrative Agent shall not be
effective until actually and physically received.
Section 9.2 AMENDMENTS AND WAIVERS. Neither this Agreement nor any other
Financing Document, nor any terms hereof or thereof, may be amended,
supplemented or modified except in accordance with the provisions of this
Section. The Required Lenders may, or, with the written consent of the Required
Lenders, the Administrative Agent shall, from time to time, (x) enter into with
the Company, written amendments, supplements or modifications hereto and to the
other Financing Documents for the purpose of adding any provisions to this
Agreement or to the other Financing Documents or changing in any manner the
rights or obligations of the Lenders or the Company hereunder or thereunder or
(y) waive at the Company's request, on such terms and conditions as the Required
Lenders or the Administrative Agent, as the case may be, may specify in such
instrument, any of the requirements of this Agreement or the other Financing
Documents or any Default and its consequences; PROVIDED, HOWEVER, that no such
waiver and no such amendment, supplement or modification shall:
(a) reduce the amount or extend the scheduled date of maturity of
any Loan or any Reimbursement Obligation or of any scheduled installment thereof
or reduce the stated rate of any interest or fee payable hereunder or extend the
scheduled date of any payment thereof or modify any provision that provides for
the ratable sharing by the Lenders of any payment or prepayment of Lender
Indebtedness to provide for a non-ratable sharing thereof or increase the amount
or extend the expiration date of any Lender's Revolving Credit Commitment or
Term Loan Commitment or amend, modify or waive any provision of Section 2.19, in
each case without the prior written consent of each Lender directly affected
thereby;
(b) change the currency in which any Loan or Reimbursement
Obligation is payable or amend, modify or waive any provision of this Section
9.2 or reduce the percentage specified in the definition of Required Lenders, in
each case without the written consent of all of the Lenders;
(c) release any Guarantor from its obligations under its Guaranty
Agreement;
(d) amend, modify or waive any provision of Article 8 without the
written consent of the Administrative Agent; or
(e) amend, modify or waive (1) any Letter of Credit Liability
without the written consent of the Issuing Bank or (2) any Letter of Credit
without the consent of each Lender if such Letter of Credit, after giving effect
to such amendment, modification or waiver, would no longer satisfy the
requirements hereof if such Letter of Credit was being issued AB INITIO at such
time, PROVIDED THAT in all cases other than clauses (1) or (2), only the consent
of the Issuing Bank shall be required to amend, modify or waive any Letter of
Credit.
Any waiver and any amendment, supplement or modification pursuant
to this Section 9.2 shall apply to each of the Lenders and shall be binding upon
the Company, the Lenders, the Administrative Agent and all future holders of the
Loans. In the case of any waiver, the Company, the Lenders and the
Administrative Agent shall be restored to their former position and rights
hereunder and under the other Financing Documents, and any Default waived shall
be deemed to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default, or impair any right consequent thereon.
58
Section 9.3 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Company or the Administrative Agent or any Lender or any holder of
any Note in exercising any right or remedy under this Agreement or any other
Financing Document and no course of dealing between the Company and the
Administrative Agent or any Lender or any holder of any Note shall operate as a
waiver thereof, nor shall any single or partial exercise of any right or remedy
under the Notes, this Agreement or any other Financing Document preclude any
other or further exercise thereof or the exercise of any other right or remedy
under the Notes, this Agreement or any other Financing Document. The rights and
remedies herein expressly provided are cumulative and not exclusive of any
rights or remedies which the Company, the Administrative Agent or any Lender
would otherwise have. No notice to or demand on the Company not required under
the Notes, this Agreement or any other Financing Document in any case shall
entitle the Company to any other or further notice or demand in similar or other
circumstances or constitute a waiver of the rights of the Administrative Agent
or the Lenders to any other or further action in any circumstances without
notice or demand.
Section 9.4 PAYMENT OF EXPENSES, INDEMNITIES, ETC. The Company agrees
to (and shall be liable for):
(a) EXPENSES. Whether or not the transactions hereby contemplated
are consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent, and the Issuing Bank in the administration (both before
and after the execution hereof and including advice of counsel for the
Administrative Agent as to the rights and duties of the Administrative Agent and
the Lenders with respect thereto) of, and in connection with the preparation,
execution and delivery of, recording or filing of, preservation of rights under,
enforcement of, and, after a Default, refinancing, renegotiation or
restructuring of, this Agreement, the Notes, and the other Financing Documents
and any amendment, waiver or consent relating thereto (including, but not
limited to, the reasonable fees and disbursements of counsel for the
Administrative Agent and in the case of enforcement for any of the Lenders) and
promptly reimburse the Administrative Agent for all amounts expended, advanced,
or incurred by the Administrative Agent or the Lenders to satisfy any obligation
of the Company, Holding, or the Subsidiaries under this Agreement or any other
Financing Document;
(B) INDEMNIFICATION. INDEMNIFY THE ADMINISTRATIVE AGENT, THE
ISSUING BANK AND EACH LENDER, EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, REPRESENTATIVES, AGENTS AND AFFILIATES FROM, HOLD EACH OF THEM
HARMLESS AGAINST, AND PROMPTLY UPON DEMAND PAY OR REIMBURSE EACH OF THEM FOR,
ANY AND ALL ACTIONS, SUITS, PROCEEDINGS (INCLUDING ANY INVESTIGATIONS,
LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES, LIABILITIES, DAMAGES OR
EXPENSES OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE INCURRED BY OR ASSERTED
AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS DESIGNATED A PARTY
THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED TO (1) ANY ACTUAL
OR PROPOSED USE BY THE COMPANY OR ANY SUBSIDIARY OF THE COMPANY OF THE PROCEEDS
OF ANY OF THE LOANS; OR (2) ANY OTHER ASPECT OF THIS AGREEMENT, THE NOTES, AND
THE FINANCING DOCUMENTS, INCLUDING BUT NOT LIMITED TO THE REASONABLE FEES AND
DISBURSEMENTS OF COUNSEL (INCLUDING ALLOCATED COSTS OF INTERNAL COUNSEL) AND ALL
OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR PREPARING
TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY INVESTIGATIONS,
LITIGATION OR INQUIRIES) OR CLAIM, AND INCLUDING ALL ACTIONS, SUITS, PROCEEDINGS
(INCLUDING ANY INVESTIGATIONS, LITIGATION OR INQUIRIES), CLAIMS, COSTS, LOSSES,
LIABILITIES, DAMAGES OR EXPENSES ARISING BY REASON OF ORDINARY NEGLIGENCE OF ANY
OF THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND EACH LENDER, EACH OF THEIR
RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, REPRESENTATIVES, AGENTS AND
AFFILIATES; PROVIDED, HOWEVER, THE PROVISIONS OF THIS SECTION 9.4(B) SHALL NOT
APPLY TO ANY ACTION, SUITS, PROCEEDINGS, CLAIMS,
59
COSTS, LOSSES, LIABILITIES, DAMAGES, OR EXPENSES TO THE EXTENT, BUT ONLY TO THE
EXTENT, CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY
SEEKING INDEMNIFICATION;
(C) ENVIRONMENTAL INDEMNIFICATION. INDEMNIFY AND HOLD HARMLESS
FROM TIME TO TIME THE ADMINISTRATIVE AGENT, THE ISSUING BANK AND THE LENDERS,
EACH PERSON CLAIMING BY, THROUGH, UNDER OR ON ACCOUNT OF ANY OF THE FOREGOING
AND THE RESPECTIVE DIRECTORS, OFFICERS, COUNSEL, EMPLOYEES, AGENTS, AFFILIATES,
SUCCESSORS AND ASSIGNS OF EACH OF THE FOREGOING FROM AND AGAINST ANY AND ALL
LOSSES, CLAIMS, COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS,
DAMAGES AND LIABILITIES (WHICH RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE
LETTERS OF CREDIT OR ANY FINANCING DOCUMENT) TO WHICH ANY SUCH PERSON MAY BECOME
SUBJECT AND INCLUDING ANY AND ALL LOSSES, CLAIMS, COST RECOVERY ACTIONS,
ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND LIABILITIES (WHICH RELATE TO
OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY FINANCING
DOCUMENT) ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF THE ADMINISTRATIVE
AGENT, THE ISSUING BANK AND THE LENDERS, EACH PERSON CLAIMING BY, THROUGH, UNDER
OR ON ACCOUNT OF ANY OF THE FOREGOING AND THE RESPECTIVE DIRECTORS, OFFICERS,
COUNSEL, EMPLOYEES, AGENTS, AFFILIATES, SUCCESSORS AND ASSIGNS OF EACH OF THE
FOREGOING (1) UNDER ANY ENVIRONMENTAL LAW APPLICABLE TO THE COMPANY OR ANY OF
ITS SUBSIDIARIES OR ANY OF THEIR RESPECTIVE PROPERTIES, INCLUDING WITHOUT
LIMITATION, THE TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON ANY OF THEIR
RESPECTIVE PROPERTIES, (2) AS A RESULT OF THE BREACH OR NON-COMPLIANCE BY THE
COMPANY OR ANY OF ITS SUBSIDIARIES WITH ANY ENVIRONMENTAL LAW APPLICABLE TO THE
COMPANY OR ANY OF ITS SUBSIDIARIES, (3) DUE TO PAST OWNERSHIP BY THE COMPANY OR
ANY OF ITS SUBSIDIARIES OF ANY OF THEIR RESPECTIVE PROPERTIES OR PAST ACTIVITY
ON ANY OF THEIR RESPECTIVE PROPERTIES OR PAST ACTIVITY ON ANY OF THEIR
RESPECTIVE PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME,
COULD RESULT IN PRESENT LIABILITY, (4) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE PROPERTIES
OWNED OR OPERATED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR (5) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THIS AGREEMENT, THE
NOTES OR ANY OTHER FINANCING DOCUMENT; PROVIDED, HOWEVER, NO INDEMNITY SHALL BE
AFFORDED UNDER THIS SECTION 9.4(C) IN RESPECT OF ANY PROPERTY FOR ANY OCCURRENCE
ARISING PRIMARILY FROM THE ACTS OR OMISSIONS OF THE ADMINISTRATIVE AGENT OR ANY
LENDER DURING THE PERIOD AFTER WHICH SUCH PERSON, ITS SUCCESSORS OR ASSIGNS
SHALL HAVE OBTAINED ACTUAL PHYSICAL POSSESSION OF SUCH PROPERTY (WHETHER BY
FORECLOSURE OR DEED IN LIEU OF FORECLOSURE, AS MORTGAGEE-IN-POSSESSION OR
OTHERWISE); AND
(d) ENVIRONMENTAL WAIVER. WITHOUT LIMITING THE FOREGOING
PROVISIONS, THE COMPANY HEREBY DOES WAIVE, RELEASE AND COVENANT NOT TO BRING
AGAINST ANY OF THE PERSONS INDEMNIFIED IN THIS SECTION 9.4 ANY DEMAND, CLAIM,
COST RECOVERY ACTION OR LAWSUIT THEY MAY NOW OR HEREAFTER HAVE OR ACCRUE (WHICH
RELATE TO OR ARISE AS A RESULT OF THE LOANS, THE LETTERS OF CREDIT OR ANY
FINANCING DOCUMENT) ARISING FROM (1) ANY ENVIRONMENTAL LAW NOW OR HEREAFTER
ENACTED (INCLUDING THOSE APPLICABLE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES)
UNLESS THE ACTS OR OMISSIONS OF ANY SUCH PERSON OR THEIR RESPECTIVE SUCCESSORS
AND ASSIGNS ARE THE PRIMARY CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH
DEMAND, COST RECOVERY ACTION OR LAWSUIT, (2) THE PRESENCE, USE, RELEASE,
STORAGE, TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY THE COMPANY OR ANY OF ITS SUBSIDIARIES, OR (3)
THE BREACH OR NON-COMPLIANCE BY THE COMPANY WITH ANY ENVIRONMENTAL LAW OR
ENVIRONMENTAL COVENANT APPLICABLE TO THE COMPANY OR ANY OF ITS SUBSIDIARIES,
UNLESS THE ACTS OR OMISSIONS OF SUCH PERSON, ITS SUCCESSORS AND ASSIGNS ARE THE
PRIMARY CAUSE OF THE CIRCUMSTANCES GIVING RISE TO SUCH DEMAND, CLAIM, COST
RECOVERY ACTION OR LAWSUIT.
60
If and to the extent that the obligations of the Company under this Section 9.4
are unenforceable for any reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of such obligations which is
permissible under applicable law. The Company's obligations under this Section
shall survive any termination of this Agreement and the payment of the Notes.
Section 9.5 RIGHT OF SETOFF. In addition to and not in limitation of all
rights of offset that any Lender or the Issuing Bank may have under applicable
law, each Lender or other holder of a Note, or any other Lender Indebtedness
shall, upon the occurrence of any Event of Default and at any time during the
continuance thereof and whether or not such Lender, the Issuing Bank or such
holder has made any demand or the Company's obligations are matured, have the
right at any time and from time to time, without notice to the Company (any such
notice being expressly waived by the Company) 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 any Lender or the Issuing Bank
to or for the credit or the account of the Company against any and all of the
Lender Indebtedness owing to such Lender or the Issuing Bank then outstanding,
subject to the provisions of Section 2.19.
Section 9.6 BENEFIT OF AGREEMENT. The Notes, this Agreement and the
other Financing Documents shall be binding upon and inure to the benefit of and
be enforceable by the respective successors and assigns of the parties hereto,
provided that the Company may not assign or transfer any of its interest
hereunder or thereunder without the prior written consent of the Lenders.
Section 9.7 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that the Company may not assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by the
Company without such consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit)
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent, the Issuing Bank and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); PROVIDED that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
each of the Company and the Administrative Agent (and, in the case of an
assignment of all or a portion of a Commitment or any Lender's obligations in
respect of its Revolving Credit Exposure, the Issuing Bank) must give their
prior written consent to such assignment (which consent shall not be
unreasonably withheld), (ii) except in the case of an assignment to a Lender or
an Affiliate of a Lender or an assignment of the entire remaining amount of the
assigning Lender's Commitment, the amount of the Commitment of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of the
Company and the Administrative Agent otherwise consent, (iii) each partial
assignment shall be made as an assignment of a proportionate part of all the
assigning Lender's rights and obligations under this Agreement, (iv) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, and (v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire; and
61
PROVIDED FURTHER that any consent of the Company otherwise required under this
paragraph shall not be required if an Event of Default has occurred and is
continuing. Subject to acceptance and recording thereof pursuant to Section
9.7(d), from and after the effective date specified in each Assignment and
Acceptance the assignee thereunder shall be a party hereto and, to the extent of
the interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.16,
2.18, 2.20 and 9.4). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall
be treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with this Section
9.7(b).
(c) The Administrative Agent, acting for this purpose as an agent
of the Company, shall maintain at one of its offices in Houston, Texas a copy of
each Assignment and Acceptance delivered to 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 and Reimbursement Obligations owing to, each
Lender pursuant to the terms hereof from time to time (the "REGISTER"). The
entries in the Register shall be conclusive, and the Company, the Administrative
Agent, the Issuing Bank and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Company, the Issuing Bank and
any Lender, at any reasonable time and from time to time upon reasonable prior
notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in Section
9.7(b) and any written consent to such assignment required by Section 9.7(b),
the Administrative Agent shall accept such Assignment and Acceptance and record
the information contained therein in the Register. No assignment shall be
effective for purposes of this Agreement unless it has been recorded in the
Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Company, the
Administrative Agent or the Issuing Bank, sell participations to one or more
banks or other entities (a "PARTICIPANT") in all or a portion of such Lender's
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans and Reimbursement Obligations owing to it); PROVIDED
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 and (iii) the Company, the Administrative
Agent, the Issuing Bank and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Any agreement or instrument pursuant to which
a Lender sells such a participation shall provide that such Lender shall retain
the sole right to enforce this Agreement and to approve any amendment,
modification or waiver of any provision of this Agreement; PROVIDED that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in Sections 9.2(a) or 9.2(b) that affects such Participant. Subject to
this Section 9.7(e), the Company agrees that each Participant shall be entitled
to the benefits of Sections 2.16, 2.18 and 2.20 to the same extent as if it were
a Lender and had acquired its interest by assignment pursuant to Section 9.7(b).
To the extent permitted by law, each Participant also shall be entitled to the
benefits of Section 9.5 as though it were a Lender, provided such Participant
agrees to be subject to Section 2.19 as though it were a Lender.
62
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.18 or 2.20 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Company's prior written consent. A Participant that would be a Foreign Lender if
it were a Lender shall not be entitled to the benefits of Section 2.20 unless
the Company is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Company, to comply with Section
2.20(f) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section 9.7 shall not apply to
any such pledge or assignment of a security interest; PROVIDED that no such
pledge or assignment of a security interest shall release a Lender from any of
its obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.
(h) The Company authorizes each Lender to disclose to any
participant or Assignee (each, a "TRANSFEREE") and any prospective Transferee
any and all information in such Lender's possession concerning the Company and
its Affiliates which has been delivered to such Lender by or on behalf of the
Company pursuant to this Agreement or which has been delivered to such Lender by
or on behalf of the Company in connection with such Lender's credit evaluation
of the Company and its Affiliates prior to becoming a party to this Agreement.
No assignment or participation made or purported to be made to any Transferee
shall be effective without the prior written consent of the Company if it would
require it to make any filing with any Governmental Authority or qualify any
Loan or Note under the laws of any jurisdiction, and the Company shall be
entitled to request and receive such information and assurances as it may
reasonably request from any Lender or any Transferee to determine whether any
such filing or qualification is required or whether any assignment or
participation is otherwise in accordance with applicable law.
Section 9.8 GOVERNING LAW; SUBMISSION TO JURISDICTION; ETC.
(A) GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND UNDER THE NOTES SHALL BE CONSTRUED IN ACCORDANCE
WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF TEXAS AND, TO THE EXTENT
CONTROLLING, LAWS OF THE UNITED STATES OF AMERICA.
(B) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE OTHER FINANCING DOCUMENTS MAY
BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE COMPANY, LENDER AND AGENT HEREBY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING, BUT NOT LIMITED TO, ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE JURISDICTIONS.
(C) WAIVER OF CONSEQUENTIAL DAMAGES. TO THE MAXIMUM EXTENT
ALLOWED BY APPLICABLE LAW, EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT, THE
ISSUING BANK AND THE LENDERS (I) IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO
CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES;
(II) CERTIFIES THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR COUNSEL FOR ANY
PARTY HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
63
OR IMPLIED THAT SUCH PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO
ENFORCE THE FOREGOING WAIVER; AND (IV) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO
ENTER INTO THIS AGREEMENT, THE OTHER FINANCING DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY BASED UPON, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION.
Section 9.9 INDEPENDENT NATURE OF LENDERS' RIGHTS. The amounts payable
at any time hereunder to each Lender shall be a separate and independent debt,
and each Lender shall be entitled to protect and enforce its rights arising out
of this Agreement, and it shall not be necessary for any other Lender to be
joined as an additional party in any proceeding for such purpose.
Section 9.10 INVALIDITY. In the event that any one or more of the
provisions contained in the Notes, this Agreement or in any other Financing
Document shall, for any reason, be held invalid, illegal or unenforceable in any
respect, (a) the Company agrees that such invalidity, illegality or
unenforceability shall not affect any other provision of the Notes, this
Agreement or any other Financing Document and (b) the Company and the
Administrative Agent (acting on behalf and at the direction of the Lenders) will
negotiate in good faith to amend such provision so as to be legal, valid, and
enforceable.
Section 9.11 RENEWAL, EXTENSION OR REARRANGEMENT. All provisions of this
Agreement and of any other Financing Documents relating to the Notes or other
Lender Indebtedness shall apply with equal force and effect to each and all
promissory notes hereafter executed which in whole or in part represent a
renewal, extension for any period, increase or rearrangement of any part of the
Lender Indebtedness originally represented by the Notes, or of any part of such
other Lender Indebtedness.
Section 9.12 CONFIDENTIALITY. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the Company or (h) to the extent such
Information (i) becomes publicly available other than as a result of a breach of
this Section or (ii) becomes available to the Administrative Agent, the Issuing
Bank or any Lender on a nonconfidential basis from a source other than the
Company. For the purposes of this Section, "INFORMATION" means all information
received from the Company relating to the Company or its business, other than
any such information that is available to the Administrative Agent, the Issuing
Bank or any Lender on a nonconfidential basis prior to disclosure by the
Company; PROVIDED that, in the case of information received from the Company
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
Section 9.13 INTEREST. It is the intention of the parties hereto to
conform strictly to usury laws applicable to the Administrative Agent, the
Issuing Bank and the Lenders (collectively, the "FINANCING PARTIES") and the
Transactions. Accordingly, if the Transactions would be usurious as to any
Financing Party
64
under laws applicable to it, then, notwithstanding anything to the contrary in
the Notes, this Agreement or in any other Financing Document or agreement
entered into in connection with the Transactions or as security for the Notes,
it is agreed as follows: (a) the aggregate of all consideration which
constitutes interest under law applicable to any Financing Party that is
contracted for, taken, reserved, charged or received by such Financing Party
under the Notes, this Agreement or under any of such other Financing Documents
or agreements or otherwise in connection with the Transactions shall under no
circumstances exceed the maximum amount allowed by such applicable law, (b) in
the event that the maturity of the Notes is accelerated for any reason, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under law applicable to any Financing Party may never
include more than the maximum amount allowed by such applicable law, and (c)
excess interest, if any, provided for in this Agreement or otherwise in
connection with the Transactions shall be canceled automatically by such
Financing Party and, if theretofore paid, shall be credited by such Financing
Party on the principal amount of the Company's Indebtedness to such Financing
Party (or, to the extent that the principal amount of the Company's Indebtedness
to such Financing Party shall have been or would thereby be paid in full,
refunded by such Financing Party to the Company). The right to accelerate the
maturity of the Notes does not include the right to accelerate any interest
which has not otherwise accrued on the date of such acceleration, and the
Financing Parties do not intend to collect any unearned interest in the event of
acceleration. All sums paid or agreed to be paid to the Financing Parties for
the use, forbearance or detention of sums included in the Lender Indebtedness
shall, to the extent permitted by law applicable to such Financing Party, be
amortized, prorated, allocated and spread throughout the full term of the Notes
until payment in full so that the rate or amount of interest on account of the
Lender Indebtedness does not exceed the applicable usury ceiling, if any. As
used in this Section, the terms "APPLICABLE LAW" or "LAWS APPLICABLE TO ANY
FINANCING PARTY" shall mean the law of any jurisdiction whose laws may be
mandatorily applicable notwithstanding other provisions of this Agreement, or
law of the United States of America applicable to any Financing Party and the
Transactions which would permit such Financing Party to contract for, charge,
take, reserve or receive a greater amount of interest than under such
jurisdiction's law. To the extent that Article 5069-1.04 of the Texas Revised
Civil Statutes is relevant to any Financing Party for the purpose of determining
the Highest Lawful Rate, such Financing Party hereby elects to determine the
applicable rate ceiling under such Article by the indicated (weekly) rate
ceiling from time to time in effect, subject to such Financing Party's right
subsequently to change such method in accordance with applicable law.
Section 9.14 EXISTING CREDIT AGREEMENT. This Agreement amends and
restates in its entirety the Existing Credit Agreement, and the "Commitments"
(as defined in the Existing Credit Agreement) of the lenders party to the
Existing Credit Agreement are hereby terminated.
Section 9.15 ENTIRE AGREEMENT. THE NOTES, THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE
ADMINISTRATIVE AGENT, THE ISSUING BANK OR THE LENDERS AND THE OTHER RESPECTIVE
PARTIES HERETO AND THERETO AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS
BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 9.16 ATTACHMENTS. The exhibits, schedules and annexes attached
to this Agreement are incorporated herein and shall be considered a part of this
Agreement for the purposes stated herein, except that in the event of any
conflict between any of the provisions of such exhibits and the provisions of
this Agreement, the provisions of this Agreement shall prevail.
65
Section 9.17 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original
but all of which shall together constitute one and the same instrument.
Section 9.18 SURVIVAL OF INDEMNITIES. The Company's obligations under
Sections 2.16, 2.18, 2.20 and 9.4 shall survive the payment in full of the Loans
and the Letter of Credit Liabilities.
Section 9.19 HEADINGS DESCRIPTIVE. The headings of the several sections
and subsections of this Agreement, and the Table of Contents, are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.
Section 9.20 SATISFACTION REQUIREMENT. If any agreement, certificate,
instrument or other writing, or any action taken or to be taken, is by the terms
of this Agreement required to be satisfactory to any party, the determination of
such satisfaction shall be made by such party in its sole and exclusive judgment
exercised reasonably and in good faith.
Section 9.21 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE OTHER
FINANCING DOCUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF
THE TERMS OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS; THAT IT HAS IN
FACT READ THIS AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE
OF THE TERMS, CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN
REPRESENTED BY LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS; AND HAS
RECEIVED THE ADVICE OF ITS ATTORNEYS IN ENTERING INTO THIS AGREEMENT AND THE
OTHER FINANCING DOCUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF
THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS RESULT IN ONE PARTY ASSUMING
THE LIABILITY INHERENT IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE
OTHER PARTY OF ITS RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES
AND COVENANTS THAT IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY
EXCULPATORY PROVISION OF THIS AGREEMENT AND THE OTHER FINANCING DOCUMENTS ON THE
BASIS THAT THE PARTY HAD NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE
PROVISION IS NOT "CONSPICUOUS."
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
66
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
duly executed as of the date first above written.
COMPANY: BENCHMARK ELECTRONICS, INC.
By:__________________________________
Name:
Title:
Address: _____________________________
_____________________________
Attention: _____________________________
Telephone: _____________________________
Telecopy: _____________________________
ADMINISTRATIVE AGENT, CHASE BANK OF TEXAS, N.A., individually, as
DOCUMENTATION AGENT, ISSUING Issuing Bank and as Administrative Agent
BANK AND THE LENDERS:
By:___________________________________
Name:
Title:
Address: _____________________________
Attention: _____________________________
Telephone: _____________________________
Telecopy: _____________________________
67
ANNEX I
REVOLVING CREDIT TERM LOAN
LENDER COMMITMENT COMMITMENT
Chase Bank of Texas, N.A. $25,000,000 $40,000,000
Annex I - 1
EXHIBIT A
FORM OF REVOLVING CREDIT NOTE
$__________ ___________, 1997
BENCHMARK ELECTRONICS, INC. a Texas corporation (the "COMPANY"), for
value received, promises and agrees to pay to (the "LENDER"), or order, at the
Payment Office of CHASE BANK OF TEXAS, N.A. (the "ADMINISTRATIVE AGENT"), at ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, the principal sum of
_____________________________ DOLLARS ($___________________), or such lesser
amount as shall equal the aggregate unpaid principal amount of the Revolving
Credit Loans made by Lender hereunder to the Company under the Credit Agreement,
as hereafter defined, in lawful money of the United States of America and in
immediately available funds, on the dates and in the principal amounts provided
in the Credit Agreement referred to below, and to pay interest on the unpaid
principal amount as provided in the Credit Agreement for such Revolving Credit
Loans made by the Lender to the Company under the Credit Agreement, at such
office, in like money and funds, for the period commencing on the date of each
such Revolving Credit Loan until such Revolving Credit Loan shall be paid in
full, at the rates per annum and on the dates provided in the Credit Agreement.
In addition to and cumulative of any payments required to be made
against this note pursuant to the Credit Agreement, this note, including all
principal and accrued interest then unpaid, shall be due and payable on the
Revolving Credit Maturity Date. All payments shall be applied first to accrued
interest and the balance to principal, except as otherwise expressly provided in
the Credit Agreement. Prepayments on this note shall be applied in the manner
set forth in the Credit Agreement.
This note is one of the Revolving Credit Notes referred to in the Credit
Agreement dated as of February ___, 1998, by and among the Company, Chase Bank
of Texas, N.A., individually, as Issuing Bank and as Administrative Agent, and
the other financial institutions (including Lender) parties thereto (such Credit
Agreement, together with all amendments or supplements thereto, being the
"CREDIT AGREEMENT"). This note evidences the Revolving Credit Loans made by the
Lender thereunder and shall be governed by the Credit Agreement. Capitalized
terms used but not defined in this note and which are defined in the Credit
Agreement shall have the meanings herein as are assigned in the Credit
Agreement.
The Lender is hereby authorized by the Company to endorse on SCHEDULE A
(or a continuation thereof) attached to this note, the amount and date of each
payment or prepayment of principal of each Revolving Credit Loan received by the
Lender, and interest rates applicable to each Revolving Credit Loan, provided
that any failure by the Lender to make any such endorsement shall not affect the
obligations of the Company under the Credit Agreement or under this note in
respect of such Revolving Credit Loans.
Except only for any notices which are specifically required by the
Credit Agreement or the other Financing Documents, the Company and any and all
co-makers, endorsers, guarantors and sureties severally waive notice (including
but not limited to notice of intent to accelerate and notice of acceleration,
notice of protest and notice of dishonor), demand, presentment for payment,
protest, diligence in collecting and the filing of suit for the purpose of
fixing liability, and consent that the time of payment hereof may be extended
and re-extended from time to time without notice to any of them. Each such
person agrees that his, her or its liability on or with respect to this note
shall not be affected by any release of or change in any guaranty or security at
any time existing or by any failure to perfect or maintain perfection of any
lien against or
A-1
security interest in any such security or the partial or complete enforceability
of any guaranty or other surety obligation, in each case in whole or in part,
with or without notice and before or after maturity.
The Credit Agreement provides for the acceleration of the maturity of
this note upon the occurrence of certain events and for prepayment of Revolving
Credit Loans upon the terms and conditions specified therein. Reference is made
to the Credit Agreement for all other pertinent purposes.
This note is issued pursuant to and is entitled to the benefits of the
Credit Agreement and is secured by the Security Instruments.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE
LAW OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO TIME IN
EFFECT.
BENCHMARK ELECTRONICS, INC.
By:_______________________________
Name:
Title:
A-2
SCHEDULE A
This Note evidences Revolving Credit Loans made by the Lender under the
within-described Credit Agreement to the Company, which Revolving Credit Loans
are in the principal amounts, at the interest rates (and interest periods), and
were made and repaid or prepaid on the dates set forth below:
PRINCIPAL TYPE DATE OF AMOUNT
DATE AMOUNT OF OF INTEREST INTEREST MATURITY PAYMENT OR PAID OR BALANCE
MADE REVOLVING LOAN PERIOD RATE DATE PREPAYMEN PREPAID OUTSTANDING
---- LOAN ---- ------ ---- ---- --------- ------- -----------
----
Schedule A-1
EXHIBIT B
FORM OF TERM NOTE
$__________ ______________, 1997
BENCHMARK ELECTRONICS, INC., a Texas corporation (the "COMPANY"),
for value received, promises and agrees to pay to (the "LENDER"), or order, at
the Payment Office of CHASE BANK OF TEXAS, N.A., at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇, the principal sum of ___________________________________ DOLLARS
($___________________), in lawful money of the United States of America and in
immediately available funds, in installments on the dates and in the principal
amounts provided in the Credit Agreement referred to below, and to pay interest
on the unpaid principal amount of the Term Loans made by the Lender to the
Company under the Credit Agreement, at such office, in like money and funds, for
the period commencing on the date of such Term Loans until such Term Loans shall
be paid in full, at the rates per annum and on the dates provided in the Credit
Agreement.
In addition to and cumulative of any payment required to be made
against this note pursuant to the Credit Agreement, this note, including all
principal and accrued interest then unpaid thereon, shall be due and payable on
the Term Loan Maturity Date. All payments shall be applied first to accrued
interest and the balance to principal, except as otherwise expressly provided in
the Credit Agreement. Prepayments on this note shall be applied in the manner
set forth in the Credit Agreement.
This note is one of the Term Notes referred to in the Credit
Agreement dated as of February ___, 1998, by and among the Company, Chase Bank
of Texas, N.A., individually, as Issuing Bank, and as Administrative Agent, and
the other financial institutions (including Lender) parties thereto (such Credit
Agreement, together with all amendments or supplements thereto, being the
"CREDIT AGREEMENT"). This note evidences the Term Loans made by the Lender
thereunder and shall be governed by the Credit Agreement. Capitalized terms used
but not defined in this note and which are defined in the Credit Agreement shall
have the meanings herein as are assigned in the Credit Agreement.
The Lender is hereby authorized by the Company to endorse on
SCHEDULE A (or a continuation thereof) attached to this note, the amount and
date of each payment or prepayment of principal of the Term Loans received by
the Lender and the interest rates applicable to the Term Loans, provided that
any failure by the Lender to make any such endorsement shall not affect the
obligations of the Company under the Credit Agreement or under this note in
respect of the Term Loans.
Except only for any notices which are specifically required by
the Credit Agreement or the other Financing Documents, the Company and any and
all co-makers, endorsers, guarantors and sureties severally waive notice
(including but not limited to notice of intent to accelerate and notice of
acceleration, notice of protest and notice of dishonor), demand, presentment for
payment, protest, diligence in collecting and the filing of suit for the purpose
of fixing liability, and consent that the time of payment hereof may be extended
and re-extended from time to time without notice to any of them. Each such
person agrees that his, her or its liability on or with respect to this note
shall not be affected by any release of or change in any guaranty or security at
any time existing or by any failure to perfect or maintain perfection of any
lien against or security interest in any such security or the partial or
complete enforceability of any guaranty or other surety obligation, in each case
in whole or in part, with or without notice and before or after maturity.
B-1
The Credit Agreement provides for the acceleration of the
maturity of this note upon the occurrence of certain events and for prepayment
of Term Loans upon the terms and conditions specified therein. Reference is made
to the Credit Agreement for all other pertinent purposes.
This note is issued pursuant to and is entitled to the benefits
of the Credit Agreement and is secured by the Security Instruments.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED
BY THE LAW OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA FROM TIME TO
TIME IN EFFECT.
BENCHMARK ELECTRONICS, INC.
By:______________________________
Name:
Title:
B-2
SCHEDULE A
This Note evidences Term Loans made by the Lender under the within-described
Credit Agreement to the Company, which Term Loans are in the principal amounts,
at the interest rates (and interest periods), and were made and repaid or
prepaid on the dates set forth below:
PRINCIPAL TYPE DATE OF AMOUNT
DATE AMOUNT OF INTEREST INTEREST MATURITY PAYMENT OR PAID OR BALANCE
MADE OF LOAN LOAN PERIOD RATE DATE PREPAYMENT PREPAID OUTSTANDING
---- ------- ---- ------ ---- ---- ---------- ------- -----------
Schedule A-1
EXHIBIT C
FORM OF BORROWING, CONTINUATION AND CONVERSATION REQUEST
____________, 199__
BENCHMARK ELECTRONICS, INC., a Texas corporation (the "COMPANY"),
pursuant to the Credit Agreement dated as of February __, 1998 (together with
all amendments or supplements thereto, the "CREDIT AGREEMENT") among the
Company, CHASE BANK OF TEXAS, N.A., as Administrative Agent, and the financial
institutions now or hereafter parties thereto (the "LENDERS"), and hereby makes
the requests indicated below (unless otherwise defined herein, capitalized terms
are defined in the Credit Agreement):
o 1. Term Loan:
(a) Aggregate amount of Term Loan to be $40,000,000.00;
(b) Requested funding date is February ___, 1998;
(c) $______________________ of such borrowings are to be Eurodollar
Loans;
$______________________ of such borrowings are to be Base Rate
Loans; and
(d) Length of Interest Period for Eurodollar Loans is:
-----------------------.
o 2. Revolving Credit Loans:
(a) Aggregate amount of new Loans to be $_______________;
(b) Requested funding date is _____________, ____;
(c) $______________________ of such borrowings are to be Eurodollar
Loans;
$______________________ of such borrowings are to be Base Rate
Loans; and
(d) Length of Interest Period for Eurodollar Loans is:
-----------------------.
o 3. Eurodollar Loan Continuation for Eurodollar Loans maturing on
---------------------------:
(a) Aggregate amount to be continued as Eurodollar Loans is
$___________________;
(b) Aggregate amount to be converted to Base Rate Loans is
$____________________;
C-1
(c) Length of Interest Period for continued Eurodollar Loans is
___________________.
o 4. Conversion of Outstanding Base Rate Loans to Eurodollar Loans:
Convert $_________________ of the outstanding Base Rate Loans to
Eurodollar Loans on _________________________ with an Interest
Period of _____________________.
o 5. Conversion of outstanding Eurodollar Loans to Base Rate Loans:
Convert $___________________ of the outstanding Eurodollar Loans
with Interest Period maturing on ___________________________,
199_, to Base Rate Loans.
The undersigned certifies that he/she is the ___________________ of the
Company, and that as such he/she is authorized to execute this certificate on
behalf of the Company. The undersigned further certifies, represents and
warrants on behalf of the Company that the Company is entitled to receive the
requested borrowing, continuation or conversion under the terms and conditions
of the Credit Agreement.
BENCHMARK ELECTRONICS, INC.
By:_______________________________________
Name:
Title:
C-2
EXHIBIT D
FORM OF OPINION OF
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, L.L.P.
[OMITTED]
D-1
EXHIBIT E
FORM OF
GUARANTY AGREEMENT
BY
-----------------------------------
IN FAVOR OF
CHASE BANK OF TEXAS, N.A., AS
ADMINISTRATIVE AGENT
FEBRUARY ___, 1998
E-1
TABLE OF CONTENTS
PAGE
ARTICLE 1
GENERAL TERMS
Section 1.1 TERMS DEFINED ABOVE......................................3
Section 1.2 CERTAIN DEFINITIONS......................................3
Section 1.3 CREDIT AGREEMENT DEFINITIONS.............................5
ARTICLE 2
THE GUARANTY
Section 2.1 LIABILITIES GUARANTEED..................................5
Section 2.2 NATURE OF GUARANTY......................................5
Section 2.3 AGENT'S RIGHTS..........................................5
Section 2.4 GUARANTOR'S WAIVERS.....................................5
Section 2.5 MATURITY OF LIABILITIES; PAYMENT........................6
Section 2.6 AGENT'S EXPENSES........................................6
Section 2.7 LIABILITY...............................................6
Section 2.8 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING
GUARANTOR'S OBLIGATIONS.................................6
Section 2.9 RIGHT OF SUBROGATION AND CONTRIBUTION...................8
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 BY GUARANTOR............................................8
Section 3.2 NO REPRESENTATION BY LENDERS............................9
Section 3.3 INCORPORATION OF CREDIT AGREEMENT REPRESENTATIONS,
WARRANTIES AND COVENANTS................................9
ARTICLE 4
MISCELLANEOUS
Section 4.1 SUCCESSORS AND ASSIGNS..................................9
Section 4.2 NOTICES.................................................9
Section 4.3 BUSINESS AND FINANCIAL INFORMATION......................9
Section 4.4 CONSTRUCTION............................................9
Section 4.5 INVALIDITY.............................................10
Section 4.6 ENTIRE AGREEMENT.......................................10
E-2
GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT by ___________________________ (hereinafter
called "GUARANTOR"), is in favor of CHASE BANK OF TEXAS, N.A., as Administrative
Agent (the "AGENT") for the lenders (the "LENDERS") that are or become parties
to the Credit Agreement defined below.
W I T N E S S E T H:
WHEREAS, on even date herewith, Benchmark Electronics, Inc., a Texas
corporation (hereinafter called "COMPANY"), the Agent and the Lenders have
entered into that certain Credit Agreement (as the same may be amended from time
to time, the "CREDIT AGREEMENT"); and
WHEREAS, one of the terms and conditions stated in the Credit Agreement
for the making of the loans and extensions of credit described therein is the
execution and delivery to the Agent for the benefit of the Lenders of this
Guaranty Agreement;
NOW, THEREFORE, (i) in order to comply with the terms and conditions of
the Credit Agreement, (ii) to induce the Lenders, at any time or from time to
time, to loan monies or extend credit, with or without security, to or for the
account of the Company in accordance with the terms of the Credit Agreement,
(iii) at the special insistence and request of the Lenders, and (iv) for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Guarantor hereby agrees as follows:
ARTICLE 1
GENERAL TERMS
Section 1.1 TERMS DEFINED ABOVE. As used in this Guaranty Agreement, the
terms "Agent", "Company", "Credit Agreement", "Guarantor" and "Lenders" shall
have the meanings indicated above.
Section 1.2 CERTAIN DEFINITIONS. As used in this Guaranty Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"CONTRIBUTION OBLIGATION" shall mean an amount equal, at any time and
from time to time and for each respective Subsidiary Guarantor, to the
product of (i) its Contribution Percentage times (ii) the sum of all
payments made previous to or at the time of calculation by all
Subsidiary Guarantors in respect of the Liabilities, as a Subsidiary
Guarantor (less the amount of any such payments previously returned to
any Subsidiary Guarantor by operation of law or otherwise, but not
including payments received by any Subsidiary Guarantor by way of its
rights of subrogation and contribution under Section 2.9 of the other
Guaranty Agreements), provided, however, such Contribution Obligation
for any Subsidiary Guarantor shall in no event exceed such Subsidiary
Guarantor's Maximum Guaranteed Amount, as defined in the respective
Guaranty Agreement of such Subsidiary Guarantor.
"CONTRIBUTION PERCENTAGE" shall mean for any Subsidiary Guarantor for
any applicable date as of which such percentage is being determined, an
amount equal to the quotient of (i) the Net Worth of such Subsidiary
Guarantor as of such date, divided by (ii) the sum of the Net Worth of
all the Subsidiary Guarantors as of such date.
"GUARANTOR CLAIMS" shall have the meaning indicated in Section 5.1
hereof.
E-3
"GUARANTY AGREEMENT" shall mean this Guaranty Agreement, and where the
context indicates, the Guaranty Agreement of any other Subsidiary
Guarantor, as the same may from time to time be amended or supplemented.
"LIABILITIES" shall mean (a) any and all indebtedness, obligations and
liabilities of the Company pursuant to the Credit Agreement, including
without limitation, the unpaid principal of and interest on the Notes,
including without limitation, interest accruing subsequent to the filing
of a petition or other action concerning bankruptcy or other similar
proceeding, and performance of all letter of credit reimbursement
agreements executed from time to time by the Company under or pursuant
to the Credit Agreement and all reimbursement obligations for drawn or
undrawn portions under any Letter of Credit now outstanding or hereafter
issued under or pursuant to the Credit Agreement; (b) any additional
loans made by the Lenders to the Company; (c) payment of and performance
of any and all present or future obligations of the Company to the Agent
or any Lender according to the terms of any present or future Interest
Rate Swap Agreement entered into between the Company and the Agent; (d)
any and all other indebtedness consisting of obligations with respect to
overdrafts created on accounts of the Company at the Agent or any one of
the Lenders; and (e) all renewals, rearrangements, increases, extensions
for any period, amendments or supplement in whole or in part of the
Notes or any documents evidencing the above.
"MAXIMUM GUARANTEED AMOUNT" shall mean, for the Guarantor, the greater
of (i) the "reasonably equivalent value" or "fair consideration" (or
equivalent concept) received by the Guarantor in exchange for the
obligation incurred hereunder, within the meaning of any applicable
state or federal fraudulent conveyance or transfer laws; or (ii) the
lesser of (A) the maximum amount that will not render the Guarantor
insolvent, or (B) the maximum amount that will not leave the Guarantor
with any property deemed an unreasonably small capital. Clauses (A) and
(B) are and shall be determined pursuant to and as of the appropriate
date mandated by such applicable state or federal fraudulent conveyance
or transfer laws and to the extent allowed by law take into account the
rights to contribution and subrogation under Section 2.9 in each
Guaranty Agreement so as to provide for the largest Maximum Guaranteed
Amount possible.
"NET PAYMENTS" shall mean an amount equal, at any time and from time to
time and for each respective Subsidiary Guarantor, to the difference of
(i) the sum of all payments made previous to or at the time of
calculation by such Subsidiary Guarantor in respect to the Liabilities,
as a Subsidiary Guarantor, and in respect of its obligations contained
in this Guaranty Agreement, less (ii) the sum of all such payments
previously returned to such Subsidiary Guarantor by operation of law or
otherwise and including payments received by such Subsidiary Guarantor
by way of its rights of subrogation and contribution under Section 2.9
of the other Guaranty Agreements.
"NET WORTH" shall mean for any Subsidiary Guarantor, calculated on and
as of any applicable date on which such amount is being determined, the
difference between (i) the sum of all such Subsidiary Guarantor's
property, at a fair valuation and as of such date, minus (ii) the sum of
all such Subsidiary Guarantor's debts, at a fair valuation and as of
such date, excluding the Liabilities.
"SUBSIDIARY GUARANTORS" shall mean the Guarantors as defined in the
Credit Agreement, including the Guarantor.
E-4
Section 1.3 CREDIT AGREEMENT DEFINITIONS. Unless otherwise defined
herein, all terms beginning with a capital letter which are defined in the
Credit Agreement shall have the same meanings herein as therein.
ARTICLE 2
THE GUARANTY
Section 2.1 LIABILITIES GUARANTEED. Guarantor hereby irrevocably and
unconditionally guarantees the prompt payment of the Liabilities when due,
whether at maturity or otherwise, provided, however, that, notwithstanding
anything herein or in any other Financing Document to the contrary, the maximum
liability of Guarantor hereunder shall in no event exceed the Maximum Guaranteed
Amount.
Section 2.2 NATURE OF GUARANTY. This Guaranty Agreement is an absolute,
irrevocable, completed and continuing guaranty of payment and not a guaranty of
collection, and no notice of the Liabilities or any extension of credit already
or hereafter contracted by or extended to Company need be given to Guarantor.
This Guaranty Agreement may not be revoked by Guarantor and shall continue to be
effective with respect to debt under the Liabilities arising or created after
any attempted revocation by Guarantor and shall remain in full force and effect
until the Liabilities are paid in full and the Commitments are terminated,
notwithstanding that from time to time prior thereto no Liabilities may be
outstanding. The Company and the Lenders may modify, alter, rearrange, extend
for any period and/or renew from time to time, the Liabilities, and the Lenders
may waive any Default or Events of Default without notice to the Guarantor and
in such event Guarantor will remain fully bound hereunder on the Liabilities.
This Guaranty Agreement shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of the Liabilities is rescinded or must
otherwise be returned by any of the Lenders upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, all as though such payment had not
been made. This Guaranty Agreement may be enforced by the Agent and any
subsequent holder of any of the Liabilities and shall not be discharged by the
assignment or negotiation of all or part of the Liabilities. Except as
specifically required in this Guaranty, Guarantor hereby expressly waives
presentment, demand, notice of non-payment, protest and notice of protest and
dishonor, notice of Default or Event of Default, notice of intent to accelerate
the maturity and notice of acceleration of the maturity and any other notice in
connection with the Liabilities, and also notice of acceptance of this Guaranty
Agreement, acceptance on the part of the Lenders being conclusively presumed by
the Lenders' request for this Guaranty Agreement and delivery of the same to the
Agent.
Section 2.3 AGENT'S RIGHTS. Guarantor authorizes the Agent, without
notice or demand and without affecting Guarantor's liability hereunder, to take
and hold security for the payment of this Guaranty Agreement and/or the
Liabilities, and exchange, enforce, waive and release any such security; and to
apply such security and direct the order or manner of sale thereof as the Agent
in its discretion may determine; and to obtain a guaranty of the Liabilities
from any one or more Persons and at any time or times to enforce, waive,
rearrange, modify, limit or release any of such other Persons from their
obligations under such guaranties.
Section 2.4 GUARANTOR'S WAIVERS.
(a) GENERAL. Guarantor waives any right to require any of the
Lenders to (i) proceed against the Company or any other person liable on
the Liabilities, (ii) enforce any of their rights against any other
guarantor of the Liabilities, (iii) proceed or enforce any of their
rights against or exhaust any security given to secure the Liabilities,
(iv) have the Company joined with Guarantor in any suit arising out of
this Guaranty Agreement and/or the Liabilities, or (v) pursue any other
E-5
remedy in the Lenders' powers whatsoever. The Lenders shall not be
required to mitigate damages or take any action to reduce, collect or
enforce the Liabilities. Guarantor waives any defense arising by reason
of any disability, lack of corporate authority or power, or other
defense of the Company or any other guarantor of the Liabilities, and
shall remain liable hereon regardless of whether the Company or any
other guarantor be found not liable thereon for any reason. Whether and
when to exercise any of the remedies of the Lenders under any of the
Financing Documents shall be in the sole and absolute discretion of the
Agent, and no delay by the Agent in enforcing any remedy, including
delay in conducting a foreclosure sale, shall be a defense to the
Guarantor's liability under this Guaranty Agreement.
(b) SUBROGATION. Until the Liabilities have been paid in full,
the Guarantor waives all rights of subrogation or reimbursement against
the Company, whether arising by contract or operation of law (including,
without limitation, any such right arising under any federal or state
bankruptcy or insolvency laws) and waives any right to enforce any
remedy which the Lenders now have or may hereafter have against the
Company, and waives any benefit or any right to participate in any
security now or hereafter held by the Agent or any Lender.
Section 2.5 MATURITY OF LIABILITIES; PAYMENT. Guarantor agrees that if
the maturity of any of the Liabilities is accelerated by bankruptcy or
otherwise, such maturity shall also be deemed accelerated for the purpose of
this Guaranty Agreement without demand or notice to Guarantor. Guarantor will,
forthwith upon notice from the Agent, pay to the Agent the amount due and unpaid
by the Company and guaranteed hereby. The failure of the Agent to give this
notice shall not in any way release Guarantor hereunder.
Section 2.6 AGENT'S EXPENSES. If Guarantor fails to pay the Liabilities
after notice from the Agent of the Company's failure to pay any Liabilities at
maturity, and if the Agent obtains the services of an attorney for collection of
amounts owing by Guarantor hereunder, or obtaining advice of counsel in respect
of any of their rights under this Guaranty Agreement, or if suit is filed to
enforce this Guaranty Agreement, or if proceedings are had in any bankruptcy,
probate, receivership or other judicial proceedings for the establishment or
collection of any amount owing by Guarantor hereunder, or if any amount owing by
Guarantor hereunder is collected through such proceedings, Guarantor agrees to
pay to the Agent the Agent's reasonable attorneys' fees.
Section 2.7 LIABILITY. It is expressly agreed that the liability of the
Guarantor for the payment of the Liabilities guaranteed hereby shall be primary
and not secondary.
Section 2.8 EVENTS AND CIRCUMSTANCES NOT REDUCING OR DISCHARGING
GUARANTOR'S OBLIGATIONS. Guarantor hereby consents and agrees to each of the
following to the fullest extent permitted by law, and agrees that Guarantor's
obligations under this Guaranty Agreement shall not be released, diminished,
impaired, reduced or adversely affected by any of the following, and waives any
rights (including without limitation rights to notice) which Guarantor might
otherwise have as a result of or in connection with any of the following:
(a) MODIFICATIONS, ETC. Any renewal, extension, modification,
increase, decrease, alteration or rearrangement of all or any part of
the Liabilities, or of the Notes, or the Credit Agreement or any
instrument executed in connection therewith, or any contract or
understanding between the Company and any of the Lenders, or any other
Person, pertaining to the Liabilities;
E-6
(b) ADJUSTMENT, ETC. Any adjustment, indulgence, forbearance or
compromise that might be granted or given by any of the Lenders to the
Company or Guarantor or any Person liable on the Liabilities;
(c) CONDITION OF COMPANY OR GUARANTOR. The insolvency, bankruptcy
arrangement, adjustment, composition, liquidation, disability,
dissolution, death or lack of power of the Company or Guarantor or any
other Person at any time liable for the payment of all or part of the
Liabilities; or any dissolution of the Company or Guarantor, or any
sale, lease or transfer of any or all of the assets of the Company or
Guarantor, or any changes in the shareholders, partners, or members of
the Company or Guarantor; or any reorganization of the Company or
Guarantor;
(d) INVALIDITY OF LIABILITIES. The invalidity, illegality or
unenforceability of all or any part of the Liabilities, or any document
or agreement executed in connection with the Liabilities, for any reason
whatsoever, including without limitation the fact that the Liabilities,
or any part thereof, exceed the amount permitted by law, the act of
creating the Liabilities or any part thereof is ULTRA ▇▇▇▇▇, the
officers or representatives executing the documents or otherwise
creating the Liabilities acted in excess of their authority, the
Liabilities violate applicable usury laws, the Company has valid
defenses, claims or offsets (whether at law, in equity or by agreement)
which render the Liabilities wholly or partially uncollectible from the
Company, the creation, performance or repayment of the Liabilities (or
the execution, delivery and performance of any document or instrument
representing part of the Liabilities or executed in connection with the
Liabilities, or given to secure the repayment of the Liabilities) is
illegal, uncollectible, legally impossible or unenforceable, or the
Credit Agreement or other documents or instruments pertaining to the
Liabilities have been forged or otherwise are irregular or not genuine
or authentic;
(e) RELEASE OF OBLIGORS. Any full or partial release of the
liability of the Company on the Liabilities or any part thereof, of any
co-guarantors, or any other Person now or hereafter liable, whether
directly or indirectly, jointly, severally, or jointly and severally, to
pay, perform, guarantee or assure the payment of the Liabilities or any
part thereof, it being recognized, acknowledged and agreed by Guarantor
that Guarantor may be required to pay the Liabilities in full without
assistance or support of any other Person, and Guarantor has not been
induced to enter into this Guaranty Agreement on the basis of a
contemplation, belief, understanding or agreement that other parties
other than the Company will be liable to perform the Liabilities, or the
Lenders will look to other parties to perform the Liabilities.
(f) OTHER SECURITY. The taking or accepting of any other
security, collateral or guaranty, or other assurance of payment, for all
or any part of the Liabilities;
(g) RELEASE OF COLLATERAL, ETC. Any release, surrender, exchange,
subordination, deterioration, waste, loss or impairment (including
without limitation negligent, willful, unreasonable or unjustifiable
impairment) of any collateral, property or security, at any time
existing in connection with, or assuring or securing payment of, all or
any part of the Liabilities;
(h) CARE AND DILIGENCE. The failure of the Lenders or any other
Person to exercise diligence or reasonable care in the preservation,
protection, enforcement, sale or other handling or treatment of all or
any part of such collateral, property or security;
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(i) PAYMENTS RESCINDED. Any payment by the Company to the Lenders
is held to constitute a preference under the bankruptcy laws, or for any
reason the Lenders are required to refund such payment or pay such
amount to the Company or someone else; or
(j) OTHER ACTIONS TAKEN OR OMITTED. Any other action taken or
omitted to be taken with respect to the Credit Agreement, the
Liabilities, or the security and collateral therefor, whether or not
such action or omission prejudices Guarantor or increases the likelihood
that Guarantor will be required to pay the Liabilities pursuant to the
terms hereof; it being the unambiguous and unequivocal intention of
Guarantor that Guarantor shall be obligated to pay the Liabilities when
due, notwithstanding any occurrence, circumstance, event, action, or
omission whatsoever, whether contemplated or uncontemplated, and whether
or not otherwise or particularly described herein, except for the full
and final payment and satisfaction of the Liabilities.
Section 2.9 RIGHT OF SUBROGATION AND CONTRIBUTION. If Guarantor makes a
payment in respect of the Liabilities, it shall be subrogated to the rights of
the Lenders against the Company with respect to such payment and shall have the
rights of contribution against the other Subsidiary Guarantors set forth in
Section 2.9 of the Subsidiary Guarantors' Guaranty Agreements; provided that
Subsidiary Guarantor shall not enforce its rights to any payment by way of
subrogation or by exercising its rights of contribution or reimbursement or the
right to participate in any security now or hereafter held by or for the benefit
of the Lenders until the Liabilities have been paid in full. The Guarantor
agrees that after all the Liabilities have been paid in full that if its then
current Net Payments are less than the amount of its then current Contribution
Obligation, Guarantor shall pay to the other Subsidiary Guarantors an amount
(together with any payments required of the other Subsidiary Guarantors by
Section 2.9 of each other Guaranty Agreement) such that the Net Payments made by
all Subsidiary Guarantors in respect of the Liabilities shall be shared among
all of the Subsidiary Guarantors in proportion to their respective Contribution
Percentage.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
Section 3.1 BY GUARANTOR. The Guarantor represents and warrants to the
Lenders (which representations and warranties will survive the creation of the
Liabilities and any extension of credit thereunder) that:
(a) BENEFIT TO GUARANTOR. Guarantor's guaranty pursuant to this
Guaranty Agreement reasonably may be expected to benefit, directly or
indirectly, Guarantor.
(b) CORPORATE EXISTENCE. Guarantor is a corporation duly
organized, legally existing and in good standing under the laws of the
State of ______________ and is duly qualified as a foreign corporation
in all jurisdictions wherein the property owned or the business
transacted by it makes such qualification necessary and where failure to
so qualify would have a Material Adverse Effect.
(c) CORPORATE POWER AND AUTHORIZATION. Guarantor is duly
authorized and empowered to execute, deliver and perform this Guaranty
Agreement and all corporate action on Guarantor's part requisite for the
due execution, delivery and performance of this Guaranty Agreement has
been duly and effectively taken.
E-8
(d) BINDING OBLIGATIONS. This Guaranty Agreement constitutes
valid and binding obligations of Guarantor, enforceable in accordance
with its terms (except that enforcement may be subject to any applicable
bankruptcy, insolvency or similar laws generally affecting the
enforcement of creditors' rights).
(e) NO LEGAL BAR OR RESULTANT LIEN. This Guaranty Agreement will
not violate any provisions of Guarantor's articles or certificate of
incorporation, bylaws, or any contract, agreement, law, regulation,
order, injunction, judgment, decree or writ to which Guarantor is
subject, or result in the creation or imposition of any Lien upon any
Properties of Guarantor.
(f) NO CONSENT. Except for consents which have been obtained,
Guarantor's execution, delivery and performance of this Guaranty
Agreement does not require the consent or approval of any other Person,
including without limitation any regulatory authority or governmental
body of the United States or any state thereof or any political
subdivision of the United States or any state thereof.
(g) SOLVENCY. The Guarantor hereby represents that (i) it is not
insolvent as of the date hereof and will not be rendered insolvent as a
result of this Guaranty Agreement, (ii) it is not engaged in business or
a transaction, or about to engage in a business or a transaction, for
which any property or assets remaining with such Guarantor is
unreasonably small capital, and (iii) it does not intend to incur, or
believe it will incur, debts that will be beyond its ability to pay as
such debts mature.
Section 3.2 NO REPRESENTATION BY LENDERS. Neither the Lenders nor any
other Person has made any representation, warranty or statement to the Guarantor
in order to induce the Guarantor to execute this Guaranty Agreement.
Section 3.3 INCORPORATION OF CREDIT AGREEMENT REPRESENTATIONS,
WARRANTIES AND COVENANTS. The Guarantor hereby represents and warrants that the
matters contained in each of the applicable representations and warranties
contained in Article 4 of the Credit Agreement pertaining to the Guarantor or
its Properties are true and correct as of the date of this Guaranty Agreement,
and covenants and agrees, so long as any of the Liabilities or Commitment
remains outstanding, to comply with the applicable covenants contained in
Articles 5 and 6 of the Credit Agreement pertaining to the Guarantor or its
Properties. The guarantor hereby acknowledges that it has been furnished a copy
of the Credit Agreement and that it is thoroughly familiar with the
representations, warranties and covenants which are incorporated herein by
virtue of this Section 3.3.
ARTICLE 4
MISCELLANEOUS
Section 4.1 SUCCESSORS AND ASSIGNS. This Guaranty Agreement is and shall
be in every particular available to the successors and assigns of the Lenders
and is and shall always be fully binding upon the successors and assigns of
Guarantor, notwithstanding that some or all of the monies, the repayment of
which this Guaranty Agreement applies, may be actually advanced after any
bankruptcy, receivership, reorganization, death, disability or other event
affecting Guarantor.
Section 4.2 NOTICES. Any notice or demand to Guarantor under or in
connection with this Guaranty Agreement may be given and shall conclusively be
deemed and considered to have been given and
E-9
received in accordance with Section 9.1 of the Credit Agreement, addressed to
Guarantor at the address on the signature page hereof or at such other address
provided to the Agent in writing.
Section 4.3 BUSINESS AND FINANCIAL INFORMATION. The Guarantor will
promptly furnish to the Agent and the Lenders from time to time upon request
such information regarding the business and affairs and financial condition of
the Guarantor and its subsidiaries as the Agent and the Lenders may reasonably
request.
Section 4.4 CONSTRUCTION. This Guaranty Agreement is a contract made
under and shall be construed in accordance with and governed by the laws of the
State of Texas.
Section 4.5 INVALIDITY. In the event that any one or more of the
provisions contained in this Guaranty Agreement shall, for any reason, be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Guaranty
Agreement.
Section 4.6 ENTIRE AGREEMENT. THIS WRITTEN GUARANTY AGREEMENT EMBODIES
THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE LENDERS AND THE GUARANTOR AND
SUPERSEDES ALL OTHER AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING
TO THE SUBJECT MATTER HEREOF AND THEREOF. THIS WRITTEN GUARANTY AGREEMENT
REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED
BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
E-10
WITNESS THE EXECUTION HEREOF, as of this the ____ day of _____________.
------------------------------------
By:____________________________
Name:
Title:
Address: __________________
------------------
Telecopier No.:__________________
Telephone No.: __________________
Attention: ______________________
E-11
Accepted as of the ____ day of _____________.
CHASE BANK OF TEXAS, N.A., as Administrative Agent
By:
Name:
Title:
E-12
EXHIBIT F
FORM OF ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement, dated as of February ___,
1998 (as amended, supplemented, waived or otherwise modified from time to time,
the "CREDIT AGREEMENT"), among BENCHMARK ELECTRONICS, INC., as the Company, and
CHASE BANK OF TEXAS, N.A., individually, as Issuing Bank, and as Administrative
Agent, and the Lenders now or hereafter parties thereto. Unless otherwise
defined herein, terms defined in the Credit Agreement and used herein shall have
the meanings given to them in the Credit Agreement.
______________________ (the "ASSIGNOR") and _________________ (the
"ASSIGNEE") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Transfer Effective Date (as defined below), a percentage interest (the "ASSIGNED
INTEREST") as set forth in SCHEDULE 1 in and to all the Assignor's rights and
obligations under the Credit Agreement and the other Financing Documents with
respect to the credit facilities provided for in the Credit Agreement (the
"ASSIGNED FACILITIES"), in a principal amount for each Assigned Facility as set
forth on SCHEDULE 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement, any other Financing Document
or any other instrument or document furnished pursuant thereto or the execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
Credit Agreement, any other Financing Document or any other instrument or
document furnished pursuant thereto, other than that it has not created any
adverse claim upon the interest being assigned by it hereunder and that such
interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Company, any of its Subsidiaries or any other obligor
or the performance or observance by the Company, any of its Subsidiaries or any
other obligor of any of their respective obligations under the Credit Agreement,
any other Financing Document or any other instrument or document furnished
pursuant hereto or thereto; and (c) attaches the Notes held by it evidencing the
Assigned Facilities and requests that the Administrative Agent exchange such
Notes for new Notes payable to the Assignee and (if the Assignor has retained
any interest in the Assigned Facilities) new Notes payable to the Assignor in
the respective amounts which reflect the assignment being made hereby (and after
giving effect to any other assignments which have become effective on the
Transfer Effective Date).1
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement together with copies of the
Financial Statements and/or such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (c) agrees that it will, independently and
without reliance upon the Assignor, the Administrative Agent or any other Lender
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement, the other Financing
--------
1 Notes should only be requested when specifically required by the
Assignee and/or the Assignor, as the case may be.
F-1
Documents or any other instrument or document furnished pursuant hereto or
thereto; (d) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such power and discretion under
the Credit Agreement, the other Financing Documents or any other instrument or
document furnished pursuant hereto or thereto as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; (e) hereby affirms the acknowledgments of such Assignee as a
Lender contained in Section 8.3 of the Credit Agreement; and (f) agrees that it
will be bound by the provisions of the Credit Agreement and will perform in
accordance with the terms of the Credit Agreement all the obligations which by
the terms of the Credit Agreement are required to be performed by it as a
Lender, including, but not limited to, if it is organized under the laws of a
jurisdiction outside the United States, its obligations pursuant to Section
2.20(f) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be
____________, 19__ (the "TRANSFER EFFECTIVE DATE"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Administrative Agent
for acceptance by it and recording by the Administrative Agent pursuant to
Section 9.7 of the Credit Agreement, effective as of the Transfer Effective Date
(which shall not, unless otherwise agreed to by the Administrative Agent, be
earlier than five Business Days after the date of such acceptance and recording
by the Administrative Agent).
5. Upon such acceptance and recording, from and after the Transfer
Effective Date, the Administrative Agent shall make all payments in respect of
the Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the Transfer
Effective Date or accrued subsequent to the Transfer Effective Date. The
Assignor and the Assignee shall make all appropriate adjustments in payments by
the Administrative Agent for the periods prior to the Transfer Effective Date or
with respect to the making of this assignment directly between themselves.
6. From and after the Transfer Effective Date, (a) the Assignee shall be
a party to the Credit Agreement and, to the extent provided in this Assignment
and Acceptance, have the rights and obligations of a Lender thereunder and under
the other Financing Documents and shall be bound by the provisions thereof and
(b) the Assignor shall, to the extent provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Credit Agreement, but shall nevertheless continue to be entitled to the benefits
of Sections 2.16, 2.18, 2.20 and 9.4 thereof.
7. Notwithstanding any other provision hereof, if the consents of the
Company and the Administrative Agent hereto are required under Section 9.7 of
the Credit Agreement, this Assignment and Acceptance shall not be effective
unless such consents shall have been obtained.
8. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of Texas without regard to the principles
of conflict of laws thereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of the date first above written by
their respective duly authorized officers on SCHEDULE 1 hereto.
F-2
SCHEDULE 1
TO THE
ASSIGNMENT AND ACCEPTANCE
Re: Credit Agreement, dated as of _______, 1997, among BENCHMARK ELECTRONICS
INC., as the Company, and Texas Commerce Bank National Association,
Individually, as Issuing Bank, and as Administrative Agent and, the
Lenders Now or Hereafter parties thereto
Name of Assignor:
Name of Assignee:
Transfer Effective Date of Assignment:
PERCENTAGE OF
ASSIGNOR'S
INTEREST IN
CREDIT CREDIT PRINCIPAL COMMITMENT
FACILITY FACILITY AMOUNT PERCENTAGE
ASSIGNED ASSIGNED ASSIGNED ASSIGNED
-------- -------- -------- --------
--------% $-------- --.----%
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By:__________________________ By:_________________________
Title: Title:
Accepted for recording in the Consented To:
Register:
CHASE BANK OF TEXAS, N.A., BENCHMARK ELECTRONICS, INC.
as Administrative Agent
By:__________________________ By:_________________________
Title: Title:
Schedule ▇-▇
▇▇▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇.▇., as
Administrative Agent
By:_________________________
Title:
Schedule 1-2
EXHIBIT G
FORM OF BORROWING BASE REPORT
The undersigned hereby certifies that he/she is the ______________________ of
BENCHMARK ELECTRONICS, INC., a Texas corporation (the "COMPANY"), and that as
such he/she is authorized to executes this certificate on behalf of the Company.
With reference to the Credit Agreement dated February ___, 1998 (together with
all amendments, supplements, restatements, or other modifications thereto,
herein called the "AGREEMENT"), by and between the Company and CHASE BANK OF
TEXAS, N.A., as Agent for the lenders (the "LENDERS") which are or become a
party thereto, and such Lenders, the undersigned hereby certifies, represents
and warrants as follows (each capitalized term used herein having the same
meaning given to it in the Agreement unless otherwise specified):
1. Total Accounts Receivable $______________
(net of credit balance, returns, trade discounts
unbilled amounts or retention)
2. Ineligible accounts receivable
(as set forth in the definition of
Eligible Accounts Receivable)
(a) $____________ (20% Rule)
(b) $____________ (accounts unpaid for 91 days)
(c) $____________ (trade discounts, returns, allowances, etc.)
(d) $____________ (contra accounts, setoffs, defenses, etc.)
(e) $____________ (amount billed for retainage until
all prerequisites have been satisfied)
(f) $____________ (amounts owed by insolvent account debtors)
(g) $____________ (all accounts owed by any Person in which
the Company has an equity interest)
(h) $____________ (all accounts with a due date more than 90
days after the invoice date)
(i) $____________ (all accounts of the same obligor that in
aggregate exceeds 25% of the total of all
Eligible Accounts)
$-----------------
3. Eligible Accounts Receivable
$--------------
(line 1 minus line 2)
4. 75% of Eligible Accounts Receivable $______________
G-1
5. Total Inventory $______________
6. Ineligible inventory
(as set forth in the definition
of Eligible Inventory)
(a) $_______________ (work in progress)
(b) $_______________ (reserve for obsolescence)
(c) $_______________ (reserve for slow moving inventory)
(d) $_______________ (any other contra account to inventory)
(e) $_______________ (consigned inventory)
$----------------
7. Eligible Inventory
(line 5 minus line 6) $________________
8. 25% of Eligible Inventory $________________
9. Borrowing Base
(line 4 PLUS line 8) $________________
----
10. Outstanding balance of Loans
as of report date $________________
11. Available for further advances (lesser
of (i) Aggregate Commitment and (ii) line 9
minus line 10) $________________
Executed and delivered on this the ____ day of _______________,________.
BENCHMARK ELECTRONICS, INC.
By:________________________________
Name:
Title:
G-2
EXHIBIT H
FORM OF COMPLIANCE CERTIFICATE
[OMITTED]
H-1
SCHEDULE 4.7
INVESTMENTS
NONE
Schedule 4.7 - Page 1
SCHEDULE 6.3
LIENS
NONE
Schedule 6.3 - Page 1
SCHEDULE 4.19
SUBSIDIARIES
1. EMC - Foreign Sales Corporation
2. Lockheed Commercial Electronics Company, a Delaware corporation
(which will become a Subsidiary of the Company upon the closing of the
Acquisition)
Schedule 4.19 - Page 1