EXHIBIT 10.26
AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF FEBRUARY 25, 2004
AMONG
NEWPARK RESOURCES, INC., A DELAWARE CORPORATION,
▇▇▇▇▇▇-MILL, L.P., A TEXAS LIMITED PARTNERSHIP,
DURA-BASE NEVADA, INC., A NEVADA CORPORATION,
EXCALIBAR MINERALS, INC., A TEXAS CORPORATION,
EXCALIBAR MINERALS OF LA., L.L.C.,
A LOUISIANA LIMITED LIABILITY COMPANY,
NES PERMIAN BASIN, L.P., A TEXAS LIMITED PARTNERSHIP,
NEWPARK DRILLING FLUIDS, L.L.C., A TEXAS LIMITED LIABILITY COMPANY,
NEWPARK ENVIRONMENTAL SERVICES, L.L.C.,
A LOUISIANA LIMITED LIABILITY COMPANY,
NEWPARK ENVIRONMENTAL MANAGEMENT COMPANY,
L.L.C., A LOUISIANA LIMITED LIABILITY COMPANY,
NEWPARK ENVIRONMENTAL SERVICES OF TEXAS, L.P.,
A TEXAS LIMITED PARTNERSHIP,
NEWPARK HOLDINGS, INC., A LOUISIANA CORPORATION,
NEWPARK TEXAS L.L.C., A LOUISIANA LIMITED LIABILITY COMPANY,
NID, L.P., A TEXAS LIMITED PARTNERSHIP,
OGS LABORATORY, INC., A TEXAS CORPORATION,
SOLOCO, L.L.C., A LOUISIANA LIMITED LIABILITY COMPANY,
SOLOCO TEXAS, L.P., A TEXAS LIMITED PARTNERSHIP, and
SUPREME CONTRACTORS, L.L.C., A LOUISIANA LIMITED LIABILITY COMPANY,
AS BORROWERS,
THE LOAN PARTIES PARTY HERETO,
THE LENDERS PARTY HERETO FROM TIME TO TIME,
BANK ONE, NA (MAIN OFFICE CHICAGO),
AS AGENT AND LC ISSUER,
BANC ONE CAPITAL MARKETS, INC.,
AS LEAD ARRANGER AND SOLE BOOK RUNNER
AND
FLEET CAPITAL CORPORATION,
AS SYNDICATION AGENT
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.......................................................................................... 2
ARTICLE II THE FACILITY........................................................................................ 25
2.1. The Facility.................................................................................... 25
2.1.1. Revolving Loans........................................................................... 25
2.1.2. Facility LCs.............................................................................. 26
2.1.3. Non-Ratable Loans......................................................................... 31
2.1.4. Protective Advances and Overadvances...................................................... 31
2.1.5. Term A Loans.............................................................................. 32
2.1.6. Supplemental Term Loans................................................................... 32
2.1.7. Reallocation of Loans and Commitments..................................................... 33
2.2. Ratable Loans; Risk Participation............................................................... 33
2.3. Payment of the Obligations...................................................................... 34
2.4. Minimum Amount of Each Advance.................................................................. 34
2.5. Funding Account................................................................................. 34
2.6. Reliance Upon Authority; No Liability........................................................... 34
2.7. Conversion and Continuation of Outstanding Advances............................................. 34
2.8. Telephonic Notices.............................................................................. 35
2.9. Notification of Advances, Interest Rates and Repayments......................................... 35
2.10. Fees............................................................................................ 35
2.11. Interest Rates.................................................................................. 35
2.12. Eurodollar Advances Post Default; Default Rates................................................. 36
2.13. Interest Payment Dates; Interest and Fee Basis.................................................. 36
2.14. Voluntary Prepayments........................................................................... 36
2.15. Mandatory Prepayments........................................................................... 37
2.16. Termination of the Facility..................................................................... 38
2.17. Method of Payment............................................................................... 39
2.18. Apportionment, Application, and Reversal of Payments............................................ 40
2.19. Settlement...................................................................................... 40
2.20. Indemnity for Returned Payments................................................................. 41
2.21. Noteless Agreement; Evidence of Indebtedness.................................................... 41
2.22. Lending Installations........................................................................... 42
2.23. Non-Receipt of Funds by the Agent; Defaulting Lenders........................................... 42
2.24. Limitation of Interest.......................................................................... 43
ARTICLE III YIELD PROTECTION; TAXES............................................................................ 44
3.1. Yield Protection................................................................................ 44
3.2. Changes in Capital Adequacy Regulations......................................................... 45
3.3. Availability of Types of Advances............................................................... 45
3.4. Funding Indemnification......................................................................... 46
3.5. Taxes........................................................................................... 46
3.6. Lender Statements; Survival of Indemnity........................................................ 47
ARTICLE IV CONDITIONS PRECEDENT................................................................................ 48
4.1. Effectiveness................................................................................... 48
4.2. Each Credit Extension........................................................................... 51
ARTICLE V REPRESENTATIONS AND WARRANTIES....................................................................... 52
A&R CREDIT AGREEMENT
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5.1. Existence and Standing.......................................................................... 52
5.2. Authorization and Validity...................................................................... 52
5.3. No Conflict; Government Consent................................................................. 52
5.4. Security Interest in Collateral................................................................. 53
5.5. Financial Statements............................................................................ 53
5.6. Material Adverse Change......................................................................... 53
5.7. Taxes........................................................................................... 53
5.8. Litigation and Contingent Obligations........................................................... 53
5.9. Capitalization and Subsidiaries................................................................. 54
5.10. ERISA........................................................................................... 54
5.11. Accuracy of Information......................................................................... 54
5.12. Names; Prior Transactions....................................................................... 54
5.13. Regulation U.................................................................................... 54
5.14. Material Agreements............................................................................. 54
5.15. Compliance With Laws............................................................................ 55
5.16. Ownership of Properties......................................................................... 55
5.17. Plan Assets; Prohibited Transactions............................................................ 55
5.18. Environmental Matters........................................................................... 55
5.19. Investment Company Act.......................................................................... 55
5.20. Public Utility Holding Company Act.............................................................. 55
5.21. Bank Accounts................................................................................... 55
5.22. Indebtedness.................................................................................... 55
5.23. Affiliate Transactions.......................................................................... 55
5.24. Real Property; Leases........................................................................... 56
5.25. Intellectual Property Rights.................................................................... 56
5.26. Insurance....................................................................................... 56
5.27. Solvency........................................................................................ 56
5.28. Subordinated Indebtedness; Indenture............................................................ 57
5.29. Post-Retirement Benefits........................................................................ 57
5.30. Common Enterprise............................................................................... 57
5.31. Reportable Transaction.......................................................................... 57
5.32. Labor Disputes.................................................................................. 57
5.33. Joint Venture................................................................................... 57
ARTICLE VI COVENANTS........................................................................................... 58
6.1. Financial and Collateral Reporting.............................................................. 58
6.2. Use of Proceeds................................................................................. 61
6.3. Notices......................................................................................... 61
6.4. Conduct of Business............................................................................. 63
6.5. Taxes........................................................................................... 63
6.6. Payment of Indebtedness and Other Liabilities................................................... 63
6.7. Insurance....................................................................................... 64
6.8. Compliance with Laws............................................................................ 65
6.9. Maintenance of Properties and Intellectual Property Rights...................................... 65
6.10. Inspection...................................................................................... 65
6.11. Appraisals; Additional Real Property Requirements............................................... 66
6.12. Communications with Accountants................................................................. 66
6.13. Collateral Access Agreements and Real Estate Purchases.......................................... 66
6.14. Deposit Account Control Agreements.............................................................. 67
6.15. Additional Collateral; Further Assurances....................................................... 67
6.16. Dividends....................................................................................... 68
A&R CREDIT AGREEMENT
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6.17. Indebtedness.................................................................................... 69
6.18. Capital Structure............................................................................... 70
6.19. Merger.......................................................................................... 70
6.20. Sale of Assets.................................................................................. 70
6.21. Investments and Acquisitions.................................................................... 70
6.22. Liens........................................................................................... 72
6.23. Change of Name or Location; Change of Fiscal Year............................................... 73
6.24. Affiliate Transactions.......................................................................... 73
6.25. Amendments to Agreements........................................................................ 73
6.26. Prepayment of Indebtedness; Subordinated Indebtedness........................................... 74
6.27. Financial Contracts............................................................................. 74
6.28. Capital Expenditures............................................................................ 74
6.29. Financial Covenants............................................................................. 74
6.29.1. Fixed Charge Coverage Ratio............................................................... 74
6.29.2. Minimum Tangible Net Worth................................................................ 75
6.29.3. Minimum Excess Availability............................................................... 75
6.30. Depository Banks................................................................................ 75
6.31. Real Property Purchases......................................................................... 75
6.32. Sale of Accounts................................................................................ 75
6.33. Canadian Subsidiaries Negative Pledge........................................................... 75
ARTICLE VII DEFAULTS........................................................................................... 75
ARTICLE VIII REMEDIES; WAIVERS AND AMENDMENTS.................................................................. 78
8.1. Remedies........................................................................................ 78
8.2. Waivers by Loan Parties......................................................................... 79
8.3. Amendments...................................................................................... 80
8.4. Preservation of Rights.......................................................................... 81
ARTICLE IX GENERAL PROVISIONS.................................................................................. 81
9.1. Survival of Representations..................................................................... 81
9.2. Governmental Regulation......................................................................... 81
9.3. Headings........................................................................................ 81
9.4. Entire Agreement................................................................................ 81
9.5. Several Obligations; Benefits of this Agreement................................................. 81
9.6. Expenses; Indemnification....................................................................... 82
9.7. Numbers of Documents............................................................................ 83
9.8. Accounting...................................................................................... 83
9.9. Severability of Provisions...................................................................... 84
9.10. Nonliability of Lenders......................................................................... 84
9.11. Confidentiality................................................................................. 84
9.12. Nonreliance..................................................................................... 85
9.13. Disclosure...................................................................................... 85
9.14. Patriot Act Notice.............................................................................. 85
9.15. Amendment and Restatement....................................................................... 86
ARTICLE X THE AGENT............................................................................................ 86
10.1. Appointment; Nature of Relationship............................................................. 86
10.2. Powers.......................................................................................... 86
10.3. General Immunity................................................................................ 87
10.4. No Responsibility for Credit Extensions, Recitals, etc.......................................... 87
A&R CREDIT AGREEMENT
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10.5. Action on Instructions of the Lenders........................................................... 87
10.6. Employment of Agents and Counsel................................................................ 87
10.7. Reliance on Documents; Counsel.................................................................. 87
10.8. Agent's Reimbursement and Indemnification....................................................... 87
10.9. Notice of Default............................................................................... 88
10.10. Rights as a Lender.............................................................................. 88
10.11. Lender Credit Decision.......................................................................... 88
10.12. Successor Agent................................................................................. 89
10.13. Delegation to Affiliates........................................................................ 89
10.14. Execution of Loan Documents..................................................................... 89
10.15. Collateral Matters.............................................................................. 90
10.16. Co-Agents, Documentation Agent, Syndication Agent, etc.......................................... 91
ARTICLE XI SETOFF; RATABLE PAYMENTS............................................................................ 92
11.1. Setoff.......................................................................................... 92
11.2. Ratable Payments................................................................................ 92
ARTICLE XII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.................................................. 92
12.1. Successors and Assigns.......................................................................... 92
12.2. Participations.................................................................................. 93
12.3. Assignments..................................................................................... 93
12.4. Dissemination of Information.................................................................... 95
12.5. Tax Treatment................................................................................... 95
12.6. Assignment by LC Issuer......................................................................... 95
ARTICLE XIII NOTICES........................................................................................... 95
13.1. Notices; Effectiveness; Electronic Communications............................................... 95
13.2. Change of Address, Etc.......................................................................... 96
ARTICLE XIV COUNTERPARTS....................................................................................... 96
ARTICLE XV GUARANTY............................................................................................ 97
15.1. Guaranty........................................................................................ 97
15.2. Guaranty of Payment............................................................................. 97
15.3. No Discharge or Diminishment of Guaranty........................................................ 97
15.4. Defenses Waived................................................................................. 98
15.5. Rights of Subrogation........................................................................... 99
15.6. Reinstatement; Stay of Acceleration............................................................. 99
15.7. Information..................................................................................... 99
15.8. Termination..................................................................................... 99
15.9. Taxes........................................................................................... 99
15.10. Severability.................................................................................... 100
15.11. Contribution.................................................................................... 100
15.12. Lending Installations........................................................................... 101
15.13. Liability Cumulative............................................................................ 101
ARTICLE XVI CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL....................................... 101
16.1. CHOICE OF LAW................................................................................... 101
16.2. CONSENT TO JURISDICTION......................................................................... 101
16.3. WAIVER OF JURY TRIAL............................................................................ 102
ARTICLE XVII THE BORROWER REPRESENTATIVE....................................................................... 102
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17.1. Appointment; Nature of Relationship............................................................. 102
17.2. Powers.......................................................................................... 102
17.3. Employment of Agents............................................................................ 102
17.4. Notices......................................................................................... 102
17.5. Successor Borrower Representative............................................................... 102
17.6. Execution of Loan Documents; Aggregate Borrowing Base Certificate............................... 102
17.7. Reporting....................................................................................... 103
PRICING SCHEDULE............................................................................................... ii
EXHIBIT A BORROWING NOTICE.................................................................................... 1
EXHIBIT B CONVERSION/CONTINUATION NOTICE....................................................................... 1
EXHIBIT C-1 REVOLVING NOTE.................................................................................... 1
EXHIBIT C-2 TERM A NOTE....................................................................................... 1
EXHIBIT D FORM OF OPINION..................................................................................... 1
EXHIBIT E COMPLIANCE CERTIFICATE.............................................................................. 1
EXHIBIT F JOINDER AGREEMENT................................................................................... 1
EXHIBIT G ASSIGNMENT AND ASSUMPTION AGREEMENT................................................................. 1
EXHIBIT H BORROWING BASE CERTIFICATE.......................................................................... 1
EXHIBIT I AGGREGATE BORROWING BASE CERTIFICATE................................................................ 1
SCHEDULE 5.8 LITIGATION AND CONTINGENT OBLIGATIONS............................................................ ii
SCHEDULE 5.9 CAPITALIZATION AND SUBSIDIARIES.................................................................. iii
SCHEDULE 5.12 NAMES; PRIOR TRANSACTIONS....................................................................... iv
SCHEDULE 5.14 MATERIAL AGREEMENTS............................................................................. v
SCHEDULE 5.16 OWNERSHIP OF PROPERTIES.......................................................................... vi
SCHEDULE 5.22 INDEBTEDNESS.................................................................................... vii
SCHEDULE 5.23 AFFILIATE TRANSACTIONS.......................................................................... viii
SCHEDULE 5.24 REAL PROPERTY; LEASES........................................................................... ix
SCHEDULE 5.25 INTELLECTUAL PROPERTY RIGHTS.................................................................... x
SCHEDULE 5.26 INSURANCE....................................................................................... xi
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SCHEDULE 5.32 LABOR MATTERS................................................................................... xii
SCHEDULE 6.7 INSURANCE EXCEPTIONS............................................................................. xiii
SCHEDULE 6.21 OTHER INVESTMENTS............................................................................... xiv
SCHEDULE 6.22 LIENS........................................................................................... 15
A&R CREDIT AGREEMENT
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AMENDED AND RESTATED
CREDIT AGREEMENT
This Amended and Restated Credit Agreement, dated as of February 25,
2004, is among Newpark Resources, Inc., a Delaware corporation, as the Company
and as a Borrower, ▇▇▇▇▇▇-Mill, L.P., a Texas limited partnership, Dura-base
Nevada, Inc., a Nevada corporation, Excalibar Minerals, Inc., a Texas
corporation, Excalibar Minerals of LA., L.L.C., a Louisiana limited liability
company, NES Permian Basin, L.P., a Texas limited partnership, Newpark Drilling
Fluids, L.L.C., a Texas limited liability company, Newpark Environmental
Services, L.L.C., a Louisiana limited liability company, Newpark Environmental
Management Company, L.L.C., a Louisiana limited liability company, Newpark
Environmental Services of Texas, L.P., a Texas limited partnership, Newpark
Holdings, Inc., a Louisiana corporation, Newpark Texas L.L.C., a Louisiana
limited liability company, NID, L.P., a Texas limited partnership, OGS
Laboratory, Inc., a Texas corporation, SOLOCO, L.L.C., a Louisiana limited
liability company, SOLOCO Texas, L.P., a Texas limited partnership, and Supreme
Contractors, L.L.C., a Louisiana limited liability company, each as a Borrower,
the other Loan Parties, the Lenders and Bank One, NA, a national banking
association with its main office in Chicago, Illinois, as an LC Issuer and as
the Agent.
RECITALS
WHEREAS, previous hereto, the Company, certain lenders, certain
guarantors, and Bank One, N.A., as agent entered into the Original Loan
Agreement (as defined herein), which Original Loan Agreement has since been
amended, restated, modified, extended, renewed and restructured from time to
time, through and including the Amended Loan Agreement (as defined herein);
WHEREAS, the Borrowers have now requested that the lenders further
amend, restate, modify, extend, renew and restructure the loans made pursuant to
the Amended Loan Agreement, to admit additional Persons as borrowers,
guarantors, and lenders, as the case may be, and make available to the Borrowers
loans and other extensions of credit, on the terms and conditions set forth
herein in an aggregate original principal amount not to exceed $85,000,000,
which extensions of credit will be used by the Borrowers for the purposes set
forth in Section 6.2;
WHEREAS, the Borrowers and the other Loan Parties have agreed to secure
all of their obligations under the Loan Documents by granting to the Agent, on
behalf of the Lenders, a security interest in and lien upon the Collateral as
set forth in the Collateral Documents; and
WHEREAS, the Guarantors have agreed to guarantee all of the Obligations
of the Borrowers under the Loan Documents to the Agent and the Lenders as set
forth in the Guaranty;
NOW, THEREFORE, in consideration of these premises and the terms and
conditions set forth in this Agreement, and for other good and valuable
consideration, the receipt of which is hereby acknowledged, the parties hereto
do hereby amend and completely restate the Amended Loan Agreement, effective as
of the Closing Date as defined below, and do hereby agree as follows:
A&R CREDIT AGREEMENT
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Account" shall have the meaning given to such term in the Security
Agreement.
"Account Debtor" means any Person obligated on an Account.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which any Loan Party
(a) acquires any going business or all or substantially all of the assets of any
Person, whether through purchase of assets, merger or otherwise or (b) directly
or indirectly acquires (in one transaction or as the most recent transaction in
a series of transactions) at least a majority (in number of votes) of the
Capital Stock of a Person which has ordinary voting power for the election of
directors or other similar management personnel of a Person (other than Capital
Stock having such power only by reason of the happening of a contingency) or a
majority of the outstanding Capital Stock of a Person.
"Adjusted Excess Cash Flow" means, for the relevant period of
determination, the amount of Consolidated EBITDA in excess of the amount of
Consolidated EBITDA required for the Company's Fixed Charge Coverage Ratio to
equal 1.5 to 1.0 for such period.
"Advance" means a borrowing hereunder, (a) made by some or all of the
Lenders on the same Borrowing Date, or (b) converted or continued by the Lenders
on the same date of conversion or continuation, consisting, in either case, of
the aggregate amount of the several Loans of the same Type and, in the case of
Eurodollar Loans, for the same Interest Period. The term Advance shall include
Non-Ratable Loans Overadvances and Protective Advances unless otherwise
expressly provided.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of the voting Capital Stock of the controlled Person or
possesses, directly or indirectly, the power to direct or cause the direction of
the management or policies of the controlled Person, whether through ownership
of Capital Stock, by contract or otherwise.
"Agent" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"Aggregate Borrowing Base" means the sum of (a) aggregate of the
Borrowing Bases of all of the Borrowers, plus (b) the Bridge Availability.
"Aggregate Borrowing Base Certificate" means a certificate signed by an
Authorized Officer of the Borrower Representative in the form of Exhibit I or
another form which is acceptable to the Agent in its sole discretion.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced or increased from time to time pursuant to the terms
hereof, which Aggregate Commitment shall initially be in the amount of
$85,000,000.
A&R CREDIT AGREEMENT
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"Aggregate Credit Exposure" means, at any time, the aggregate of the
Credit Exposure of all the Lenders.
"Aggregate Revolving Exposure" means, at any time, the aggregate
Revolving Exposure of all the Lenders.
"Agreement" means this Credit Agreement, as it may be amended or
modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (a) the Prime Rate for such day and (b) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Amended Agreement Lenders" has the meaning specified in Section 2.1.7.
"Amended Loan Agreement" has the meaning specified in Section 9.15.
"Applicable LC Fee Rate" means, at any time, the percentage rate per
annum at which fees accrue on the average daily undrawn stated amount under each
Facility LC.
"Applicable Unused Commitment Fee Rate" means, at any time, the
percentage rate per annum at which fees accrue on Available Revolving Commitment
at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Approved Bridge Availability Refinancing" means a refinancing or other
repayment of a portion of the Revolving Obligations in an amount equal to the
amount by which the aggregate outstanding Revolving Obligations exceeds the
aggregate Borrowing Bases of all Borrowers, which refinancing or repayment has
been approved by Required Bridge Lenders in their sole discretion and otherwise
complies with this Agreement.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"Arranger" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Assignment Agreement" is defined in Section 12.3(a).
"Authorized Officer" means any of ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇.
"Availability" means, with respect to all of the Borrowers, at any
time, an amount equal to the lesser of (a) the Revolving Commitment and (b) the
Aggregate Borrowing Base, in each case, minus the Aggregate Revolving Exposure.
"Available Revolving Commitment" means, at any time, the Revolving
Commitment then in effect minus the Aggregate Revolving Exposure at such time.
A&R CREDIT AGREEMENT
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"Bank One" means Bank One, NA, a national banking association, with its
main office in Chicago, Illinois, in its individual capacity, and its
successors.
"Banking Services" means each and any of the following bank services
provided to any Loan Party by Bank One or any of its Affiliates: (a) commercial
credit cards, (b) stored value cards and (c) treasury management services
(including, without limitation, controlled disbursement, automated clearinghouse
transactions, return items, overdrafts and interstate depository network
services).
"Banking Services Obligations" of the Loan Parties means any and all
obligations of the Loan Parties, whether absolute or contingent and howsoever
and whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor) in connection
with Banking Services.
"Banking Services Reserves" means all Reserves which the Agent from
time to time establishes in its Permitted Discretion for Banking Services then
provided or outstanding.
"Bankruptcy Code" means Title 11 of the U.S. Code (11 U.S.C. Section
101 et seq.) as amended, reformed, or otherwise modified froM time to time, and
any rule or regulation issued thereunder.
"Borrower" or "Borrowers" means, individually or collectively, jointly
and severally, the Company, ▇▇▇▇▇▇-Mill, L.P., a Texas limited partnership,
Dura-base Nevada, Inc., a Nevada corporation, Excalibar Minerals, Inc., a Texas
corporation, Excalibar Minerals of LA., L.L.C., a Louisiana limited liability
company, NES Permian Basin, L.P., a Texas limited partnership, Newpark Drilling
Fluids, L.L.C., a Texas limited liability company, Newpark Environmental
Services, L.L.C., a Louisiana limited liability company, Newpark Environmental
Management Company, L.L.C., a Louisiana limited liability company, Newpark
Environmental Services of Texas, L.P., a Texas limited partnership, Newpark
Holdings, Inc., a Louisiana corporation, Newpark Texas L.L.C., a Louisiana
limited liability company, NID, L.P., a Texas limited partnership, OGS
Laboratory, Inc., a Texas corporation, SOLOCO, L.L.C., a Louisiana limited
liability company, SOLOCO Texas, L.P., a Texas limited partnership, and Supreme
Contractors, L.L.C., a Louisiana limited liability company.
"Borrower Representative" means the Company, in its capacity as
contractual representative of the Borrowers pursuant to Article XVII.
"Borrowing Base" means, at any time, with respect to each Borrower, the
sum of (a) 85% of such Borrower's Eligible Accounts at such time, plus (b) 70%
of such Borrower's Eligible Unbilled Accounts, plus (c) the lesser of (i) 60% of
such Borrower's Eligible Inventory, valued at the lower of cost or market value,
determined on a first-in-first-out basis, at such time and (ii) 85% of the Net
Orderly Liquidation Value of such Borrower's Eligible Inventory, minus (d)
Reserves related to such Borrower. The Agent may, in its Permitted Discretion,
reduce the advance rates set forth above or reduce one or more of the other
elements used in computing the Borrowing Base.
"Borrowing Base Certificate" means a certificate, signed by an
Authorized Officer of a Borrower, in the form of Exhibit H or another form which
is acceptable to the Agent in its sole discretion.
"Borrowing Date" means a date on which an Advance or a Loan is made
hereunder.
"Borrowing Notice" is defined in Section 2.1.1(b).
"Bridge Availability" means (a) during the Bridge Period, the aggregate
amount of the Bridge Revolving Commitment, and (b) thereafter, $0.
A&R CREDIT AGREEMENT
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"Bridge Component" means, as to Revolving Obligations during the Bridge
Period, all Revolving Obligations to the extent that the aggregate sum thereof
at such time do not exceed the amount of the Bridge Revolving Commitment.
"Bridge Period" means the period commencing on the Closing Date and
ending on the earlier of (i) August 25, 2004 (or such later date as may be
approved in writing by Required Bridge Lenders in their sole discretion), or
(ii) the effective date of an Approved Bridge Availability Refinancing.
"Bridge Revolving Commitment" means, (a) as to any Revolving Lender,
the aggregate commitment of such Revolving Lender to make the Bridge Component
of Revolving Loans or incur the Bridge Component of LC Obligations during the
Bridge Period as set forth in the Commitment Schedule or in the most recent
Assignment Agreement executed by such Revolving Lender and (b) as to all
Revolving Lenders, the aggregate commitment of all Revolving Lenders to make the
Bridge Component of Revolving Loans or incur the Bridge Component of LC
Obligations during the Bridge Period, which aggregate commitment shall be Eight
Million and No/100 Dollars ($8,000,000) on the Closing Date, as such amount may
be adjusted, if at all, from time to time in accordance with this Agreement or
as otherwise agreed by Required Bridge Lenders.
"Business Day" means (a) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in U.S. dollars are
carried on in the London interbank market and (b) for all other purposes, a day
(other than a Saturday or Sunday) on which banks generally are open in Chicago
for the conduct of substantially all of their commercial lending activities and
interbank wire transfers can be made on the Fedwire system.
"Canadian Subsidiaries" is defined in Section 6.33.
"Capital Expenditures" means, without duplication, any expenditure or
commitment to expend money for any purchase or other acquisition of any asset
which would be classified as a fixed or capital asset on a consolidated balance
sheet of the Company and its Subsidiaries prepared in accordance with GAAP.
"Capital Stock" means any and all corporate stock, units, shares,
partnership interests, membership interests, equity interests, rights,
securities, or other equivalent evidences of ownership (howsoever designated)
issued by any Person.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the aggregate amount
of the obligations of such Person under Capitalized Leases which would be shown
as a liability on a balance sheet of such Person prepared in accordance with
GAAP.
"Cash Equivalent Investments" means (a) short-term obligations of, or
fully guaranteed by, the U.S., (b) commercial paper rated A-1 or better by S&P
or P-1 or better by Moody's, (c) demand deposit accounts maintained in the
ordinary course of business with any domestic office of any commercial bank
organized under the laws of the U.S. or any State thereof that has a combined
capital and surplus and undivided profits of not less than $500,000,000, and (d)
certificates of deposit issued by and time deposits with any domestic office of
any commercial bank organized under the laws of the U.S. or any State thereof
that has a combined capital and surplus and undivided profits of not less than
$500,000,000;
A&R CREDIT AGREEMENT
5
provided that, in each case, the same provides for payment of both principal and
interest (and not principal alone or interest alone) and is not subject to any
contingency regarding the payment of principal or interest.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d3 of the Securities and Exchange Commission under the Securities Exchange Act
of 1934) of 30% or more of the outstanding shares of voting Capital Stock of any
Borrower.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, and any rule or regulation issued
thereunder.
"Collateral" means any and all Property covered by the Collateral
Documents and any and all other Property of any Loan Party, now existing or
hereafter acquired, that may at any time be or become subject to a security
interest or Lien in favor of the Agent, on behalf of itself and the Lenders, to
secure the Secured Obligations.
"Collateral Access Agreement" means any landlord waiver or other
agreement, in form and substance satisfactory to the Agent, between the Agent
and any third party (including any bailee, consignee, customs broker, processor,
or other similar Person) in possession of any Collateral or any landlord of any
Loan Party for any real Property where any Collateral is located, as such
landlord waiver or other agreement may be amended, restated, or otherwise
modified from time to time.
"Collateral Documents" means, collectively, the Security Agreement, the
Mortgages and any other documents granting a Lien upon the Collateral as
security for payment of the Secured Obligations.
"Collateral Shortfall Amount" is defined in Section 2.1.2(l).
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans to the Borrowers, and participate in Facility LCs issued upon the
application of any Borrower, in an aggregate amount not exceeding the amount set
forth in the Commitment Schedule or as set forth in any Assignment Agreement
that has become effective pursuant to Section 12.3(c), as such amount may be
modified from time to time pursuant to the terms hereof.
"Commitment Schedule" means the Schedule attached hereto identified as
such.
"Company" means Newpark Resources, Inc., a Delaware corporation and its
successors and assigns.
"Compliance Certificate" is defined in Section 6.1(e).
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Company and its Subsidiaries calculated
on a consolidated basis for such period.
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (a) Consolidated
Interest Expense, (b) expense for taxes paid or accrued, net of tax refunds, (c)
depreciation and (d) amortization, minus, to the extent included in Consolidated
Net Income, extraordinary gains (as determined in accordance with GAAP)
A&R CREDIT AGREEMENT
6
realized other than in the ordinary course of business, all calculated for the
Company and its Subsidiaries on a consolidated basis.
"Consolidated Fixed Charges" means, with reference to any period,
without duplication, cash Consolidated Interest Expense, plus prepayments and
scheduled principal payments on Indebtedness (other than with respect to the
Revolving Loans under this Agreement) made during such period, plus expense for
taxes paid in cash, plus dividends or distributions paid in cash, plus
Capitalized Lease payments, plus cash contributions to any Plan, all calculated
for the Company and its Subsidiaries on a consolidated basis.
"Consolidated Interest Expense" means, with reference to any period,
the interest expense of the Company and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Company and its Subsidiaries calculated on a
consolidated basis for such period.
"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Company and its Subsidiaries calculated on a
consolidated basis as of such time.
"Consolidated Tangible Net Worth" means Consolidated Net Worth, minus
Intangibles.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Company or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Conversion/Continuation Notice" is defined in Section 2.7.
"Copyrights" shall have the meaning given to such term in the Security
Agreement.
"Credit Exposure" means, as to any Lender at any time, the sum of (a)
such Lender's Revolving Exposure at such time, plus (b) an amount equal to the
aggregate principal amount of its Term Loans outstanding at such time, plus (c)
an amount equal to its Pro Rata Share, if any, of the aggregate principal amount
of Non-Ratable Loans, Overadvances and Protective Advances outstanding at such
time.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Customer List" means a list of a Borrower's customers, specifying each
customer's name, mailing address and phone number.
A&R CREDIT AGREEMENT
7
"Default" means an event described in Article VII.
"Defaulting Lender" is defined in Section 2.23(b).
"Deposit Account Control Agreement" means an agreement, in form and
substance satisfactory to the Agent, among any Loan Party, a banking institution
holding such Loan Party's funds, and the Agent with respect to collection and
control of all deposits and balances held in a deposit account maintained by any
Loan Party with such banking institution.
"Document" shall have the meaning given to such term in the Security
Agreement.
"Domestic Subsidiary" means any Subsidiary which is organized under the
laws of the U.S. or any state of the U.S.
"Effective Date" means the date that the conditions precedent set forth
in Article IV are satisfied.
"Eligible Accounts" means, at any time, the Accounts of a Borrower
which the Agent determines in its Permitted Discretion are eligible as the basis
for Credit Extensions hereunder. Without limiting the Agent's discretion
provided herein, Eligible Accounts shall not include any Account:
(a) which is not subject to a first priority
perfected security interest in favor of the Agent;
(b) which is subject to any Lien other than (i)
a Lien in favor of the Agent and (ii) a Permitted Lien which
does not have priority over the Lien in favor of the Agent;
(c) with respect to which more than 90 days have
elapsed since the date of the original invoice therefor or
which is more than 60 days past the due date for payment,
whichever is the earlier to occur;
(d) which is owing by an Account Debtor for
which more than 25% of the Accounts owing from such Account
Debtor and its Affiliates are ineligible hereunder;
(e) which is owing by an Account Debtor to the
extent the aggregate amount of Accounts owing from such
Account Debtor and its Affiliates to (i) such Borrower exceeds
25% of the aggregate amount of Eligible Accounts of such
Borrower or (ii) all Borrowers exceeds 25% of the aggregate
amount of Eligible Accounts of all Borrowers;
(f) with respect to which any covenant,
representation, or warranty contained in this Agreement or in
the Security Agreement has been breached or is not true;
(g) which (i) does not arise from the sale of
goods or performance of services in the ordinary course of
business, (ii) is not evidenced by an invoice or other
documentation satisfactory to the Agent which has been sent to
the Account Debtor, (iii) represents a progress billing, (iv)
is contingent upon such Borrower's completion of any further
performance, or (v) represents a sale on a ▇▇▇▇-and-hold,
guaranteed sale, sale-and-return, sale on approval,
consignment, cash-on-delivery or any other repurchase or
return basis;
A&R CREDIT AGREEMENT
8
(h) for which the goods giving rise to such
Account have not been shipped to the Account Debtor or for
which the services giving rise to such Account have not been
performed by a Borrower;
(i) with respect to which any check or other
instrument of payment has been returned uncollected for any
reason;
(j) which is owed by an Account Debtor which has
(i) applied for, suffered, or consented to the appointment of
any receiver, custodian, trustee, or liquidator of its assets,
(ii) has had possession of all or a material part of its
property taken by any receiver, custodian, trustee or
liquidator, (iii) filed, or had filed against it, any request
or petition for liquidation, reorganization, arrangement,
adjustment of debts, adjudication as bankrupt, winding-up, or
voluntary or involuntary case under any state or federal
bankruptcy laws, (iv) has admitted in writing its inability,
or is generally unable to, pay its debts as they become due,
(v) become insolvent, or (vi) ceased operation of its
business;
(k) which is owed by any Account Debtor which
has sold all or substantially all of its assets;
(l) which is owed by an Account Debtor which (i)
does not maintain its chief executive office in the U.S. or
Canada (other than the Province of Newfoundland) or (ii) is
not organized under applicable law of the U.S., any state of
the U.S., Canada, or any province of Canada other than the
Province of Newfoundland) unless, in either case, such Account
is backed by a Letter of Credit acceptable to the Agent which
is in the possession of the Agent;
(m) which is owed in any currency other than
U.S. dollars;
(n) which is owed by (i) the government (or any
department, agency, public corporation, or instrumentality
thereof) of any country other than the U.S. unless such
Account is backed by a Letter of Credit acceptable to the
Agent which is in the possession of the Agent, or (ii) the
government of the U.S., or any department, agency, public
corporation, or instrumentality thereof, unless the Federal
Assignment of Claims Act of 1940, as amended (31 U.S.C.
Section 3727 et seq. and 41 U.S.C. Section 15 et seq.), and
any other steps necessary to perfect the Lien of the Agent in
such Account have been complied with to the Agent's
satisfaction;
(o) which is owed by any Affiliate, employee, or
director of any Loan Party;
(p) which, for any Account Debtor, exceeds a
credit limit determined by the Agent, to the extent of such
excess;
(q) which is owed by an Account Debtor or any
Affiliate of such Account Debtor to which any Loan Party is
indebted, but only to the extent of such indebtedness;
(r) which is subject to any counterclaim,
deduction, defense, setoff or dispute;
(s) which is evidenced by any promissory note,
chattel paper, or instrument;
A&R CREDIT AGREEMENT
9
(t) which is owed by an Account Debtor located
in any jurisdiction which requires filing of a "Notice of
Business Activities Report" or other similar report in order
to permit such Borrower to seek judicial enforcement in such
jurisdiction of payment of such Account, unless such Borrower
has filed such report or qualified to do business in such
jurisdiction;
(u) with respect to which such Borrower has made
any agreement with the Account Debtor for any reduction
thereof, other than discounts and adjustments given in the
ordinary course of business; or
(v) which the Agent determines may not be paid
by reason of the Account Debtor's inability to pay or which
the Agent otherwise determines is unacceptable for any reason
whatsoever.
In the event that an Account which was previously an Eligible Account ceases to
be an Eligible Account hereunder, such Borrower or the Borrower Representative
shall notify the Agent thereof (i) within three Business Days of the earlier of
the date such Borrower or the Borrower Representative has obtained knowledge
thereof if any such Account is in excess of $1,000,000 in the aggregate and (ii)
on and at the time of submission by the Borrower Representative to the Agent of
the next Aggregate Borrowing Base Certificate in all other cases.
"Eligible Inventory" means, at any time, the Inventory of a Borrower
which the Agent determines in its Permitted Discretion is eligible as the basis
for Credit Extensions hereunder. Without limiting the Agent's discretion
provided herein, Eligible Inventory shall not include any Inventory:
(a) which is not subject to a first priority
perfected Lien in favor of the Agent;
(b) which is subject to any Lien other than (i)
a Lien in favor of the Agent and (ii) a Permitted Lien which
does not have priority over the Lien in favor of the Agent;
(c) which is, in the Agent's opinion, slow
moving, obsolete, unmerchantable, defective, unfit for sale,
not salable at prices approximating at least the cost of such
Inventory in the ordinary course of business or unacceptable
due to age, type, category and/or quantity;
(d) with respect to which any covenant,
representation, or warranty contained in this Agreement or the
Security Agreement has been breached or is not true;
(e) which does not conform to all standards
imposed by any governmental authority;
(f) which is not finished goods or raw materials
purchased in the ordinary course by a Borrower, and used in
the manufacture of other Inventory of such Borrower, or which
constitutes work-in-process, spare or replacement parts,
subassemblies, packaging and shipping material, manufacturing
supplies, display items, ▇▇▇▇-and-hold goods, returned or
repossessed goods, defective goods, goods held on consignment,
or goods which are not of a type held for sale in the ordinary
course of business;
A&R CREDIT AGREEMENT
10
(g) which is not located in the U.S. or is in
transit with a common carrier from vendors and suppliers,
provided that, up to $6,000,000 of Inventory in transit that
otherwise constitutes Eligible Inventory may be included as
eligible pursuant to this clause (g) so long as (i) the Agent
shall have received (1) a true and correct copy of the
non-negotiable ▇▇▇▇ of lading and other shipping documents for
such Inventory, (2) casualty insurance naming the Agent as
loss payee and otherwise covering such risks as the Agent may
reasonably request, (3) a duly executed Collateral Access
Agreement from the applicable customs broker for such
Inventory, and (4) such other documentation as the Agent may
request in its Permitted Discretion, and (ii) the common
carrier is not an Affiliate of the applicable vendor or
supplier;
(h) which is located in any location leased by
such Borrower unless the lessor has delivered to the Agent a
Collateral Access Agreement;
(i) which is located in any third party
warehouse or is in the possession of a bailee and is not
evidenced by a Document (other than non-negotiable bills of
lading to the extent permitted pursuant to clause (g) above),
unless such warehouseman or bailee has delivered to the Agent
a Collateral Access Agreement and such other documentation as
the Agent may require;
(j) which is the subject of a consignment by
such Borrower as consignor;
(k) which is perishable;
(l) which contains or bears any Intellectual
Property Rights licensed to such Borrower unless the Agent is
satisfied that it may sell or otherwise dispose of such
Inventory without (i) infringing the rights of such licensor,
(ii) violating any contract with such licensor, or (iii)
incurring any liability with respect to payment of royalties
other than royalties incurred pursuant to sale of such
Inventory under the current licensing agreement;
(m) which is not reflected in a current
perpetual inventory report of such Borrower (unless such
Inventory is reflected in a report to the Agent as "in
transit" Inventory); or
(n) which the Agent otherwise determines is
unacceptable for any reason whatsoever.
In the event that Inventory which was previously Eligible Inventory ceases to be
Eligible Inventory hereunder, such Borrower or the Borrower Representative shall
notify the Agent thereof (i) within three Business Days of the earlier of the
date the Borrower or the Borrower Representative has obtained knowledge thereof
if any such Inventory has a value (based on the lower of cost, determined on a
first-in, first-out basis, or market) in excess of $1,000,000 in the aggregate
and (ii) on and at the time of submission by the Borrower Representative to the
Agent of the next Aggregate Borrowing Base Certificate in all other cases.
"Eligible Unbilled Accounts" means, at any time, Accounts of a Borrower
that are not Eligible Accounts for the sole reason that such Accounts are not
evidenced by invoices or other documentation satisfactory to the Agent which
have been sent to the Account Debtor; provided, however, that no such Account
shall be an Eligible Unbilled Account if evidence of such Account (by an invoice
or other documentation satisfactory to the Agent) is not sent to the Account
Debtor within thirty (30) days (or 60
A&R CREDIT AGREEMENT
11
days with respect to Accounts owing by Account Debtors approved by Agent in its
Permitted Discretion), provided that the amount of such Eligible Unbilled
Accounts shall not exceed $10,000,000 at any time of the date such Account is
created. In the event that an Account which was previously an Eligible Unbilled
Account ceases to be an Eligible Unbilled Account hereunder, such Borrower or
the Borrower Representative shall notify the Agent thereof (i) within three
Business Days of the earlier of the date such Borrower or the Borrower
Representative has obtained knowledge thereof if any such Account is in excess
of $500,000 in the aggregate and (ii) in all other cases, at the time of
submission by the Borrower Representative to the Agent of the next Aggregate
Borrowing Base Certificate.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(a) the protection of the environment, (b) the effect of the environment on
human health, (c) emissions, discharges or releases of pollutants, contaminants,
hazardous substances or wastes into surface water, ground water or land, or (d)
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, hazardous substances or
wastes or the clean-up or other remediation thereof.
"Equipment" has the meaning specified in the Security Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.12, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (a) the quotient of (i) the Eurodollar Base
Rate applicable to such Interest Period, divided by (ii) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(b) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall revenue or net
income, and franchise taxes imposed on it, by (a) the jurisdiction under the
laws of which such Lender or the Agent is incorporated or organized or (b) the
jurisdiction in which the Agent's or such Lender's principal executive office or
such Lender's applicable Lending Installation is located.
A&R CREDIT AGREEMENT
12
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"Existing Obligations" means the Obligations (as defined in the Amended
Loan Agreement) outstanding on the Effective Date, immediately prior to the
effectiveness of this Agreement.
"Existing Preferred Stock" means the Company's 80,000 shares of Series
B Convertible Preferred Stock issued June 1, 2000 and outstanding on the
Effective Date.
"Facility" means the credit facility described in Section 2.1 hereof to
be provided to the Borrowers on the terms and conditions set forth in this
Agreement.
"Facility LC" is defined in Section 2.1.2(a).
"Facility LC Application" is defined in Section 2.1.2(c).
"Facility LC Collateral Account" is defined in Section 2.1.2(j).
"Facility Termination Date" means February 25, 2007, or any earlier
date on which the Aggregate Commitment is reduced to zero or otherwise
terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Fee Letter" is defined in Section 2.10(c).
"Financial Contract" of a Person means (a) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (b) any Rate Management Transaction.
"Fiscal Month" means any of the monthly accounting periods of the
Company.
"Fiscal Quarter" means any of the quarterly accounting periods of the
Company, ending on March 31, June 30, September 30 and December 31 of each year.
"Fiscal Year" means any of the annual accounting periods of the Company
ending on December 31 of each year.
"Fixed Charge Coverage Ratio" means, the ratio, determined as of the
end of each Fiscal Quarter of the Company for the applicable Test Period, of (a)
Consolidated EBITDA minus the unfinanced portion of Consolidated Capital
Expenditures to (b) Consolidated Fixed Charges, all calculated for the Company
and its Subsidiaries on a consolidated basis.
"Fixtures" has the meaning specified in the Security Agreement.
A&R CREDIT AGREEMENT
13
"Floating Rate" means, for any day, a rate per annum equal to (a) the
Alternate Base Rate for such day plus (b) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.12, bears interest at the Floating Rate.
"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.12, bears interest at the Floating Rate.
"Foreign Intercompany Notes" is defined in section 6.21(g).
"Foreign Subsidiary" means any Subsidiary which is not a Domestic
Subsidiary.
"Form 10-K" means, for any Fiscal Year, the Company's annual report on
Form 10-K (or any successor form) and the accompanying consolidated financial
statements filed with the Securities and Exchange Commission.
"Form 10-Q" means, for any Fiscal Quarter, the Company's quarterly
report on Form 10-Q (or any successor form) and the accompanying consolidated
financial statements filed with the Securities and Exchange Commission.
"Fund" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funding Account" is defined in Section 2.5.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied in a manner consistent with that used in preparing the
financial statements referred to in Section 5.5.
"Guaranteed Obligations" is defined in Section 15.1.
"Guarantor" means each Loan Party, any other Person who becomes a Loan
Party pursuant to a Joinder Agreement, any other Person who executes a Guaranty
and their respective successors and assigns.
"Guaranty" means Article XV of this Agreement and each separate
guaranty, in form and substance satisfactory to the Agent, delivered by (if
required by Agent) a Foreign Subsidiary (which guaranty shall be governed by the
laws of the country in which such Foreign Subsidiary is located), as it may be
amended or modified and in effect from time to time.
"Highest Lawful Rate" shall mean, on any day, the maximum nonusurious
rate of interest permitted for that day by applicable federal or Texas law
stated as a rate per annum. On each day, if any, that Chapter 303 of the Texas
Finance Code, as amended (formerly Tex. Rev. Civ. Stat. ▇▇▇. Art. 5069-1D.003)
establishes the Highest Lawful Rate, such rate shall be the "indicated (weekly)
rate ceiling" (as defined in Chapter 303 of the Texas Finance Code, as amended)
for that day.
"Indebtedness" of a Person means such Person's (a) obligations for
borrowed money, (b) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (c)
A&R CREDIT AGREEMENT
14
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (d) obligations which are evidenced by notes, acceptances, or other
instruments, (e) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property or any other Off-Balance Sheet
Obligations, (f) Capitalized Lease Obligations, (g) Contingent Obligations for
which the underlying transaction constitutes Indebtedness under this definition,
(h) the maximum available stated amount of all letters of credit or bankers'
acceptances created for the account of such Person and, without duplication, all
reimbursement obligations with respect to letters of credit, (i) Rate Management
Transactions/Net ▇▇▇▇-to-Market Exposure under all Rate Management Transactions,
(j) obligations of such Person under any Sale and Leaseback Transaction, (k)
obligations under any liquidated earn-out and (l) any other obligation for
borrowed money or other financial accommodation which in accordance with GAAP
would be shown as a liability on the consolidated balance sheet of such Person.
"Indenture" means that certain Indenture, dated December 17, 1997,
among the Company, certain Subsidiaries of the Company, as guarantors and U.S.
Bank, N.A., as trustee, as in effect on the Effective Date.
"Intangibles" means, as of any date, all of the intangible assets of a
Person including, without limitation, (a) any surplus resulting from any
write-up of assets subsequent to the Closing Date; (b) deferred assets
(including without limitation, deferred taxes), other than prepaid insurance and
prepaid taxes; (c) Intellectual Property Rights, non-compete agreements,
franchises and other similar intangibles; and (d) goodwill, including any
amounts, however designated on a balance sheet, representing the excess of the
purchase price paid for assets or stock over the value assigned thereto on the
books of such Person.
"Intellectual Property Rights" means, with respect to any Person, all
of such Person's Patents, Copyrights, Trademarks, and Licenses, all other rights
under any of the foregoing, all extensions, renewals, reissues, divisions,
continuations and continuations-in-part of any of the foregoing, and all rights
to ▇▇▇ for past, present, and future infringement of any of the foregoing.
"Intercompany Notes" is defined in Section 6.17(e).
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower Representative pursuant to this Agreement. Such Interest Period shall
end on the day which corresponds numerically to such date one, two, three or six
months thereafter, provided however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided however, that if said next succeeding Business
Day falls in a new calendar month, such Interest Period shall end on the
immediately preceding Business Day.
"Inventory" has the meaning specified in the Security Agreement.
"Investment" of a Person means any (a) loan, advance, extension of
credit (other than accounts receivable arising in the ordinary course of
business on terms customary in the trade) or contribution of capital by such
Person, (b) stocks, bonds, mutual funds, partnership interests, notes,
debentures, securities or other Capital Stock owned by such Person, (c) any
deposit accounts and certificate of deposit owned by such Person, and (d)
structured notes, derivative financial instruments and other similar instruments
or contracts owned by such Person.
A&R CREDIT AGREEMENT
15
"Joinder Agreement" is defined in Section 6.15(a).
"LC Fee" is defined in Section 2.10(b).
"LC Issuer" means Bank One (or any subsidiary or Affiliate of Bank One
designated by Bank One) in its capacity as an issuer of Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(a) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (b) the aggregate unpaid amount at such time of all Reimbursement
Obligations.
"LC Payment Date" is defined in Section 2.1.2(d).
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender, the LC Issuer
or the Agent, the office, branch, subsidiary or Affiliate of such Lender, LC
Issuer or the Agent listed on the signature pages hereof or on a Schedule or
otherwise selected by such Lender, the LC Issuer or the Agent pursuant to
Section 2.22.
"Letter of Credit" of a Person means a letter of credit, bankers'
acceptances or similar instrument which is issued upon the application of such
Person or upon which such Person is an account party or for which such Person is
in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Licenses" shall have the meaning given to such term in the Security
Agreement.
"Loan Documents" means this Agreement, any Notes, the Facility LC
Applications, the Collateral Documents and all other agreements, instruments,
documents and certificates identified in Section 4.1 executed and delivered to,
or in favor of, Agent or any Lenders and including all other pledges, powers of
attorney, consents, assignments, contracts, notices, letter of credit agreements
and all other written matter whether heretofore, now or hereafter executed by or
on behalf of any Loan Party, or any employee of any Loan Party, and delivered to
the Agent or any Lender in connection with the Agreement or the transactions
contemplated thereby. Any reference in the Agreement or any other Loan Document
to a Loan Document shall include all appendices, exhibits or schedules thereto,
and all amendments, restatements, supplements or other modifications thereto,
and shall refer to the Agreement or such Loan Document as the same may be in
effect at any and all times such reference becomes operative.
"Loan Parties" means the Borrowers, the Borrower's Domestic
Subsidiaries and any other Person who becomes a party to this Agreement pursuant
to a Joinder Agreement and their successors and assigns.
"Loans" means, with respect to a Lender, such Lender's loans made
pursuant to Article II (or any conversion or continuation thereof), including
Non-Ratable Loans, Overadvances and Protective Advances.
A&R CREDIT AGREEMENT
16
"Material Adverse Effect" means a material adverse effect on (a) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of a Borrower and its Subsidiaries taken as a whole, (b) the
ability of any Loan Party to perform its obligations under the Loan Documents to
which it is a party, (c) the Collateral, or the Agent's Liens (on behalf of
itself and the Lenders) on the Collateral or the priority of such Liens or (d)
the validity or enforceability of any of the Loan Documents or the rights or
remedies of the Agent, the LC Issuer or the Lenders thereunder.
"Material Indebtedness" means Indebtedness in an outstanding principal
amount of $1,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).
"Material Indebtedness Agreement" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"Modify" and "Modification" are defined in Section 2.1.2(a).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc.
"Mortgages" means any mortgage, deed of trust or other agreement which
conveys or evidences a Lien in favor of the Agent, for the benefit of the Agent
and the Lenders, on real Property of Loan Party, including any amendment,
modification or supplement thereto.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Company or any member
of the Controlled Group is a party to which more than one employer is obligated
to make contributions.
"Net Cash Proceeds" means, if in connection with (a) an asset
disposition, cash proceeds net of (i) commissions and other reasonable and
customary transaction costs, fees and expenses properly attributable to such
transaction and payable by such Loan Party in connection therewith (in each
case, paid to non-Affiliates), (ii) transfer taxes, (iii) amounts payable to
holders of senior Liens on such asset (to the extent such Liens constitute
Permitted Liens hereunder), if any, and (iv) an appropriate reserve for income
taxes in accordance with GAAP established in connection therewith, (b) the
issuance or incurrence of Indebtedness, cash proceeds net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith or, (c) an equity issuance, cash proceeds net of
underwriting discounts and commissions and other reasonable costs paid to
non-Affiliates in connection therewith.
"Net ▇▇▇▇-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. As used in
this definition, "unrealized losses" means the fair market value of the cost to
such Person of replacing such Rate Management Transaction as of the date of
determination (assuming the Rate Management Transaction were to be terminated as
of that date), and "unrealized profits" means the fair market value of the gain
to such Person of replacing such Rate Management Transaction as of the date of
determination (assuming such Rate Management Transaction were to be terminated
as of that date).
"Net Orderly Liquidation Value" means, with respect to Inventory of any
Person, the orderly liquidation value thereof as determined in a manner
acceptable to the Agent by an appraiser acceptable to the Agent, net of all
estimated costs of liquidation thereof.
A&R CREDIT AGREEMENT
17
"Non-Bridge Component" means, as to Revolving Obligations during the
Bridge Period, all Revolving Obligations to the extent that the aggregate sum
thereof at such time exceed the amount of the Bridge Revolving Commitment.
"Non-Bridge Revolving Commitment" means, (a) as to any Revolving
Lender, the aggregate commitment of such Revolving Lender to make the Non-Bridge
Component of Revolving Loans or incur the Non-Bridge Component of LC Obligations
during the Bridge Period as set forth in the Commitment Schedule or in the most
recent Assignment Agreement executed by such Revolving Lender and (b) as to all
Revolving Lenders, the aggregate commitment of all Revolving Lenders to make the
Non-Bridge Component of Revolving Loans or incur the Non-Bridge Component of LC
Obligations during the Bridge Period, which aggregate commitment shall be
Sixty-Two Million and No/100 Dollars ($62,000,000) on the Closing Date, as such
amount may be adjusted, if at all, from time to time in accordance with this
Agreement.
"Non-Ratable Loan" and "Non-Ratable Loans" are defined in Section
2.1.3.
"Non-U.S. Lender" is defined in Section 3.5(d).
"Notes" means, collectively, the Revolving Notes and the Term Notes.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, all LC Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and other obligations of the Loan Parties
to the Lenders or to any Lender, the Agent, the LC Issuer or any indemnified
party arising under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (a) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (b) any indebtedness, liability or obligation
under any Sale and Leaseback Transaction which is not a Capitalized Lease, (c)
any indebtedness, liability or obligation under any so-called "synthetic lease"
transaction entered into by such Person, or (d) any indebtedness, liability or
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(d) Operating Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Operating Lease Obligations" means, as at any date of determination,
the amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under GAAP if such
Operating Lease were a Capitalized Lease) from the date on which each fixed
lease payment is due under such Operating Lease to such date of determination,
of all fixed lease payments due under all Operating Leases of the Company and
its Subsidiaries.
"Original Loan Agreement" means that certain Credit Agreement, dated
June 25, 1995, by and among Newpark Resources, Inc., certain of its
Subsidiaries, the lending institutions party thereto as lenders, Bank One,
Louisiana, National Association, as administrative and syndication agent and the
other parties thereto, as amended.
"Other Taxes" is defined in Section 3.5(b).
A&R CREDIT AGREEMENT
18
"Overadvances" has the meaning specified in Section 2.1.4(b).
"Participants" is defined in Section 12.2(a).
"Patents" shall have the meaning given to such term in the Security
Agreement.
"Payment Date" means (a) with respect to interest payments due on any
Floating Rate Loan, the first day of each calendar month and the Facility
Termination Date, (b) with respect to interest payments due on any Eurodollar
Loan, (i) the last day of the applicable Interest Period, and (ii) in the case
of any Interest Period in excess of three months, the day which is three months
after the first day of such Interest Period, and (iii) the Facility Termination
Date, and (c) with respect to any payment of LC Fees or Unused Commitment Fees,
the first day of each calendar month and the Facility Termination Date.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisitions" means Acquisitions, in each case, in the event
(a) the cumulative aggregate cash consideration (defined as total net cash to be
paid, plus Indebtedness and Contingent Obligations to be assumed in connection
with such Acquisition, plus the Acquisition costs associated with such
Acquisitions) is less than $15,000,000 through the Facility Termination Date and
(b) (i) the acquisition target is in the same or similar line of business as the
Company and its Subsidiaries; (ii) the Company or a Domestic Subsidiary is the
surviving entity holding one hundred percent (100%) of the Capital Stock in the
Acquisition target; (iii) no Default or Unmatured Default shall exist before or
after such Acquisition; (iv) such Acquisition shall be completed in accordance
with applicable laws; (v) Agent shall be provided with satisfactory opinions
with regard to such Acquisition as it may request; (vi) the terms of Section
6.15(a) or 6.15(c) as the case may be, are satisfied; (vii) the board of
directors of the Acquisition target approves the Acquisition; and (viii) both
before and (on a pro-forma basis) after giving effect to such Acquisition, (A)
the Company's Fixed Charge Coverage Ratio shall be equal to or greater than 1.25
to 1.0 and (B) the Borrowers' Availability shall be in excess of $15,000,000.
"Permitted Discretion" means a determination made in good faith and in
the exercise of reasonable (from the perspective of a secured asset-based
lender) business judgment.
"Permitted Liens" is defined in Section 6.22.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which a Loan Party or any member of the Controlled Group may have any
liability.
"Prepayment Fee" is defined in Section 2.16(b).
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Prior Loan Agreements" has the meaning specified in Section 9.15.
A&R CREDIT AGREEMENT
19
"Projections" is defined in Section 6.1(d).
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Pro Rata Share" means, with respect to any Lender, (a) with respect to
Revolving Obligations at all times other than during the Bridge Period, a
portion thereof equal to a fraction the numerator of which is such Lender's
Revolving Commitment and the denominator of which is the aggregate Revolving
Commitment of all Revolving Lenders, (b) with respect to Revolving Obligations
during the Bridge Period, a portion thereof equal to (i) as to the Bridge
Component thereof, a fraction the numerator of which is such Lender's Bridge
Revolving Commitment and the denominator of which is the aggregate Bridge
Revolving Commitment of all Revolving Lenders and (ii) as to the Non-Bridge
Component thereof, a fraction the numerator of which is the amount of such
Lender's Non-Bridge Revolving Commitment and the denominator of which is the
aggregate Non-Bridge Revolving Commitment of all Revolving Lenders, (c) with
respect to Term A Loans, a portion equal to a fraction the numerator of which is
such Lender's outstanding principal amount of the Term A Loan and the
denominator of which is the aggregate outstanding amount of the Term A Loans of
all Term A Lenders, (d) with respect to Supplemental Term Loans, a portion equal
to a fraction the numerator of which is such Lender's outstanding principal
amount of its Supplemental Term Loan and the denominator of which is the
aggregate outstanding amount of the Supplemental Term Loans of all Supplemental
Term Lenders, (e) with respect to Protective Advances or with respect to all
Credit Extensions in the aggregate prior to the Facility Termination Date, a
portion equal to a fraction the numerator of which is such Lender's Commitment
and the denominator of which is the Aggregate Commitment of all Lenders, and (f)
with respect to Protective Advances or with respect to all Credit Extensions in
the aggregate after the Facility Termination Date, a portion equal to a fraction
the numerator of which is such Lender's Credit Exposure and the denominator of
which is the Aggregate Credit Exposure of all Lenders.
"Protective Advances" is defined in Section 2.1.4(a).
"Purchasers" is defined in Section 12.3(a).
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (a) any and all Rate
Management Transactions, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by any Loan
Party which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
A&R CREDIT AGREEMENT
20
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrowers then outstanding under Section 2.1.2 to reimburse
the LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within thirty
days of the occurrence of such event, provided however, that a failure to meet
the minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such waiver
of the notice requirement in accordance with either Section 4043(a) of ERISA or
Section 412(d) of the Code.
"Reports" means reports prepared by Bank One or another Person showing
the results of appraisals, field examinations or audits pertaining to the
Borrowers' assets from information furnished by or on behalf of the Borrowers,
after Bank One has exercised its rights of inspection pursuant to this
Agreement, which Reports may be distributed to the Lenders by Bank One.
"Required Bridge Lenders" means Revolving Lenders in the aggregate
having at least 66-2/3% of the Bridge Revolving Commitment.
"Required Lenders" means Lenders in the aggregate having at least a
majority of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least a majority of the
Aggregate Credit Exposure.
"Required Revolving Lenders" means Revolving Lenders in the aggregate
having at least a majority of the Revolving Commitment or, if the Revolving
Commitment has been terminated, Revolving Lenders in the aggregate holding at
least a majority of the Aggregate Revolving Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Reserves" means any and all reserves which the Agent deems necessary,
in its Permitted Discretion, to maintain (including, without limitation,
reserves for accrued and unpaid interest on the Secured Obligations, Banking
Services Reserves, reserves for rent at locations leased by any Loan Party and
for consignee's, warehousemen's and bailee's charges, reserves for dilution of
Accounts, reserves for Inventory shrinkage, reserves for customs charges and
shipping charges related to any Inventory in transit, reserves for Rate
Management Transactions, reserves for contingent liabilities of any Loan Party,
reserves for uninsured losses of any Loan Party and reserves for taxes, fees,
assessments, and other governmental charges) with respect to the Collateral or
any Loan Party.
"Revolving Commitment" means, (a) except during the Bridge Period (i)
as to any Revolving Lender, the aggregate commitment of such Revolving Lender to
make Revolving Loans or incur LC Obligations as set forth in the Commitment
Schedule or in the most recent Assignment Agreement executed by such Revolving
Lender and (ii) as to all Revolving Lenders, the aggregate commitment of all
Revolving Lenders to make the Non-Bridge Component of Revolving Loans or incur
the Bridge
A&R CREDIT AGREEMENT
21
Component of LC Obligations during the Bridge Period, which aggregate commitment
shall be Seventy Million and No/100 Dollars ($70,000,000) on the Closing Date,
as such amount may be adjusted, if at all, from time to time in accordance with
this Agreement, and (b) during the Bridge Period, (i) as to any Revolving
Lender, the Bridge Revolving Commitment of such Lender and the Non-Bridge
Revolving Commitment of such Lender and (ii) as to all Revolving Lenders, the
aggregate Bridge Revolving Commitment of all Revolving Lenders and the aggregate
Non-Bridge Revolving Commitment of all Revolving Lenders.
"Revolving Exposure" means, as to any Lender at any time, the sum of
(a) an amount equal to its Pro Rata Share of the aggregate principal amount of
the Revolving Loans outstanding at such time, plus (b) an amount equal to its
Pro Rata Share of any LC Obligations at such time, plus (c) an amount equal to
its Pro Rata Share of the aggregate principal amount of Non-Ratable Loans and
Overadvances outstanding at such time.
"Revolving Lenders" means, as of any date of determination, Lenders
having a Revolving Commitment.
"Revolving Loans" means the revolving loans extended by the Lenders to
the Borrowers pursuant to Section 2.1.1 hereof.
"Revolving Note" is defined in Section 2.21(d).
"Revolving Obligations" means Revolving Loans, LC Obligations,
Non-Ratable Loans and Overadvances.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations; (ii)
all Banking Services Obligations; and (iii) all Rate Management Obligations
owing to one or more Lenders or any of their respective Affiliates, provided
that at or prior to the time that any Rate Management Transaction relating to
such Rate Management Obligation is executed, the Lender party thereto (other
than Bank One) shall have delivered written notice to the Agent that such a Rate
Management Transaction has been entered into and that it constitutes a Secured
Obligation entitled to the benefits of the Collateral Documents.
"Security Agreement" means that certain Pledge and Security Agreement,
dated as of the date hereof, between the Loan Parties and the Agent, for the
benefit of the Agent and the Lenders, and any other pledge or security agreement
entered into, after the Closing Date by any other Loan Party (as required by
this Agreement or any other Loan Document), or any other Person, as the same may
be amended, restated or otherwise modified from time to time.
A&R CREDIT AGREEMENT
22
"Senior Subordinated Notes" means, collectively, the Company's 8 5/8%
Senior Subordinated Notes due 2007, Series A, and 8 5/8% Senior Subordinated
Notes due 2007, Series B, each as issued pursuant to the Indenture.
"Single Employer Plan" means a Plan maintained by the Company or any
member of the Controlled Group for employees of the Company or any member of the
Controlled Group.
"Stated Rate" is defined in Section 2.24.
"Subordinated Indebtedness" of a Person means any Indebtedness of such
Person the payment of which is subordinated to payment of the Secured
Obligations to the written satisfaction of the Agent.
"Subsidiary" of a Person means, any corporation, partnership, limited
liability company, association, joint venture or similar business organization
more than 50% of the outstanding Capital Stock having ordinary voting power of
which shall at the time be owned or controlled by such Person. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of a Borrower.
"Substantial Portion" means Property which represents more than 10% of
the consolidated assets of the Company and its Subsidiaries or property which is
responsible for more than 10% of the consolidated net sales or of the
consolidated net income of the Company and its Subsidiaries, in each case, as
would be shown in the consolidated financial statements of the Company and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made (or if financial statements have not
been delivered hereunder for that month which begins the twelve-month period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that month).
"Supplemental Term Lenders" means, as of any date of determination,
Lenders having a Supplemental Term Loan Commitment.
"Supplemental Term Loan Commitment" means (a) as to any Supplemental
Term Lender, the aggregate commitment of such Supplemental Term Lender to make
Supplemental Term Loans as set forth in the Commitment Schedule or in the most
recent Assignment Agreement executed by such Supplemental Term Lender and (b) as
to all Supplemental Term Lenders, the aggregate commitment of all Supplemental
Term Lenders to make Supplemental Term Loans, which aggregate commitment shall
be Eleven Million One Hundred Thousand and No/l00 Dollars ($11,100,000) on the
Closing Date. After advancing the Supplemental Term Loan, each reference to a
Lender's Supplemental Term Loan Commitment shall refer to that Lender's Pro Rata
Share.
"Supplemental Term Loans" means the term loans extended by the Lenders
to the Borrowers pursuant to Section 2.1.6 hereof.
"Supplemental Term Note" is defined in Section 2.21(d).
"Supporting Letter of Credit" is defined in Section 2.1.2(l).
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
A&R CREDIT AGREEMENT
23
"Term A Lenders" means, as of any date of determination, Lenders having
a Term A Loan Commitment.
"Term A Loan Commitment" means (a) as to any Term A Lender, the
aggregate commitment of such Term A Lender to make Term A Loans as set forth in
the Commitment Schedule or in the most recent Assignment Agreement executed by
such Term A Lender and (b) as to all Term A Lenders, the aggregate commitment of
all Term A Lenders to make Term A Loans, which aggregate commitment shall be
Three Million Nine Hundred Thousand and No/l00 Dollars ($3,900,000) on the
Closing Date. After advancing the Term A Loan, each reference to a Lender's Term
A Loan Commitment shall refer to that Lender's Pro Rata Share.
"Term A Loans" means the term loans extended by the Lenders to the
Borrowers pursuant to Section 2.1.5 hereof.
"Term A Note" is defined in Section 2.21(d).
"Term Notes" means, collectively, the Term A Notes and the Supplemental
Term Notes.
"Test Period" means (i) as of March 31, 2004, the Fiscal Quarter then
ending, (ii) as of June 30, 2004, the two (2) consecutive Fiscal Quarters then
ending, (iii) as of September 30, 2004, the three (3) consecutive Fiscal
Quarters then ending, and (iv) as of December 31, 2004 and as of the last day of
each Fiscal Quarter thereafter, the four (4) consecutive Fiscal Quarters then
ending.
"Trademarks" shall have the meaning given to such term in the Security
Agreement.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance and with respect to any Loan, its nature as
a Floating Rate Loan or a Eurodollar Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time
in the State of Texas or any other state the laws of which are required to be
applied in connection with the issue of perfection of security interests.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unliquidated Secured Obligations" means, at any time, any Secured
Obligations (or portion thereof) that is contingent in nature or unliquidated at
such time, including any Secured Obligation that is: (i) an obligation to
reimburse a bank for drawings not yet made under a letter of credit issued by
it; (ii) any other obligation (including any guarantee) that is contingent in
nature at such time; or (iii) an obligation to provide collateral to secure any
of the foregoing types of obligations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Unused Commitment Fee" is defined in Section 2.10(a).
A&R CREDIT AGREEMENT
24
"U.S." means the United States of America.
"Wholly-Owned Subsidiary" of a Person means, any Subsidiary all of the
outstanding Capital Stock of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE FACILITY
2.1. The Facility. Each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to (a) make Loans to the Borrowers as
set forth below and (b) participate in Facility LCs issued upon the request of a
Borrower, provided that, after giving effect to the making of each such Loan and
the issuance of each such Facility LC, such Lender's Credit Exposure shall not
exceed its Commitment; provided further, that the Aggregate Credit Exposure
shall not exceed the Aggregate Commitment. The LC Issuer will issue Facility LCs
hereunder on the terms and conditions set forth in Section 2.1.2. The Facility
shall be composed of Revolving Loans, Non-Ratable Loans, Protective Advances,
Overadvances and Facility LCs and Term Loans as set forth below:
2.1.1. Revolving Loans.
(a) Amount. From and including the Effective
Date and prior to the Facility Termination Date, each
Revolving Lender severally agrees, on the terms and conditions
set forth in this Agreement, to make revolving loans (the
"Revolving Loans") to the Borrower Representative on behalf of
the applicable Borrower and participate in Facility LCs issued
to any Borrower as set forth in Section 2.1.2 below, in
aggregate amounts not to exceed such Lender's Pro Rata Share
at such time. If any advance of a Revolving Loan or
participation in a Facility LC would exceed the Borrowers'
Availability, the Revolving Lenders will refuse to make or may
otherwise restrict the making of Revolving Loans or the
issuance of Facility LCs as the Required Revolving Lenders
determine until such excess has been eliminated, subject to
the Agent's authority, in its sole discretion, to make
Protective Advances and Overadvances pursuant to the terms of
Section 2.1.4. The Revolving Loans may consist of Floating
Rate Advances or Eurodollar Advances, or a combination
thereof, selected by the Borrower Representative in accordance
with Sections 2.1.1(b) and 2.7. Subject to the terms of this
Agreement, the Borrowers may borrow, repay and reborrow
Revolving Loans at any time prior to the Facility Termination
Date. The Commitments to extend credit under this Section
2.1.1(a) shall expire on the Facility Termination Date.
(b) Borrowing Procedures. The Borrower
Representative shall select the Type of Advance and, in the
case of each Eurodollar Advance, the Interest Period
applicable thereto, from time to time. The Borrower
Representative shall give the Agent irrevocable notice in the
form of Exhibit A (a "Borrowing Notice") not later than 11:00
a.m. (Chicago time) on the Borrowing Date of each Floating
Rate Advance and three Business Days before the Borrowing Date
for each Eurodollar Advance, specifying: (1) the name of the
applicable Borrower, (2) the Borrowing Date, which shall be a
Business
A&R CREDIT AGREEMENT
25
Day, of such Advance, (3) the aggregate amount of such
Advance, (4) the Type of Advance selected; provided that, if
the Borrower Representative fails to specify the Type of
Advance requested, such request shall be deemed a request for
a Floating Rate Advance; and (5) the duration of the Interest
Period if the Type of Advance requested is a Eurodollar
Advance; provided that, if the Borrower Representative fails
to select the duration of the Interest Period for the
requested Eurodollar Advance, the Borrower Representative
shall be deemed to have requested on behalf of the applicable
Borrower that such Eurodollar Advance be made with an Interest
Period of one month.
(c) The Agent's Election. Promptly after receipt
of a Borrowing Notice (or telephonic notice in lieu thereof)
of a requested Floating Rate Advance, the Agent shall elect in
its sole discretion to have the terms of Section 2.1.1(d) (pro
rata advance by all Revolving Lenders) or Section 2.1.3
(advance by the Agent, in the form of a Non-Ratable Loan, on
behalf of the Revolving Lenders) apply to such requested
Advance.
(d) Pro Rata Advance. Unless the Agent elects to
have the terms of Section 2.1.3 apply to a requested Floating
Rate Advance, or a requested Advance is for a Eurodollar
Advance, then promptly after receipt of a Borrowing Notice or
telephonic notice in lieu thereof as permitted by Section 2.8,
the Agent shall notify the Lenders by telecopy, telephone, or
e-mail of the requested Advance. Not later than noon (Chicago
time) on each Borrowing Date, each Lender shall make available
its Revolving Loan in funds immediately available in Chicago
to the Agent and the Agent will make the funds so received
from the Lenders available to the Borrower Representative at
the Funding Account as set forth in Section 2.5.
(e) Increase in Aggregate Commitment. With the
prior written consent of Agent, and provided that such
increase would not cause an Event of Default, the Company
shall have the option to request that the Revolving Lenders
increase their respective Revolving Commitments such that the
Aggregate Revolving Commitment shall be increased by a minimum
amount of $10,000,000 (in each case, and not to exceed
$20,000,000 in the aggregate), but no Revolving Lender shall
have any obligation whatsoever to agree to any such requested
increase, and each Revolving Lender may in its sole and
absolute discretion reject any such requested increase. If the
Revolving Lenders do not agree to increase their respective
Revolving Commitments by amounts sufficient to provide the
entire amount of the requested increase in the Aggregate
Revolving Commitment, the Agent shall have the right to admit
additional Revolving Lenders, if any are agreeable, to
increase the Aggregate Revolving Commitment to the amount
requested by the Borrower, up to the maximum amount of
$95,000,000. In the event of such increase, whether by
increase in the respective Revolving Commitments of existing
Revolving Lenders or by admission of additional Revolving
Lenders, the Pro Rata Share of the Revolving Lenders
automatically shall be adjusted.
2.1.2. Facility LCs.
(a) Issuance. The LC Issuer hereby agrees, on
the terms and conditions set forth in this Agreement, to issue
to any Borrower standby and commercial Letters of Credit
(each, a "Facility LC") and to renew, extend, increase,
decrease or otherwise modify each Facility LC ("Modify," and
each such action a "Modification"), from time to time from and
including the Effective Date and prior to the Facility
Termination Date upon the request of the Borrower
Representative for the account of the applicable Borrower;
provided that, the maximum face amount of the Facility LC to
be issued or
A&R CREDIT AGREEMENT
26
Modified, does not exceed the least of (i) an amount equal to
$20,000,000 minus the sum of (1) the aggregate undrawn amount
of all outstanding Facility LCs at such time plus, without
duplication, (2) the aggregate unpaid Reimbursement
Obligations with respect to all Facility LCs outstanding at
such time and (ii) the Borrowers' Availability. No Facility LC
(or any renewal thereof) shall have an expiry date later than
the earlier of (x) the thirtieth (30th) Business Day prior to
the Facility Termination Date and (y) one year after its
issuance; provided that any Letter of Credit with a one-year
tenor may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the
date referred to in clause (x) above).
(b) Participations. Upon the issuance or
Modification by the LC Issuer of a Facility LC in accordance
with this Section 2.1.2, the LC Issuer shall be deemed,
without further action by any party hereto, to have
unconditionally and irrevocably sold to each Revolving Lender,
and each Revolving Lender shall be deemed, without further
action by any party hereto, to have unconditionally and
irrevocably purchased from the LC Issuer, a participation in
such Facility LC (and each Modification thereof) and the
related LC Obligations in proportion to its Pro Rata Share.
(c) Notice. Subject to Section 2.1.2(a), the
Borrower Representative, on behalf of the applicable Borrower,
shall give the LC Issuer notice prior to 11:00 a.m. (Chicago
time) at least three Business Days prior to the proposed date
of issuance or Modification of each Facility LC, specifying
the beneficiary, the proposed date of issuance (or
Modification) and the expiry date of such Facility LC, and
describing the proposed terms of such Facility LC and the
nature of the transactions proposed to be supported thereby.
Upon receipt of such notice, the LC Issuer shall promptly
notify the Agent, and the Agent shall promptly notify each
Revolving Lender, of the contents thereof and of the amount of
such Revolving Lender's participation in such proposed
Facility LC. The issuance or Modification by the LC Issuer of
any Facility LC shall, in addition to the conditions precedent
set forth in Article IV (the satisfaction of which the LC
Issuer shall have no duty to ascertain), be subject to the
conditions precedent that such Facility LC shall be
satisfactory to the LC Issuer and that the applicable Borrower
shall have executed and delivered such application agreement
and/or such other instruments and agreements relating to such
Facility LC as the LC Issuer shall have reasonably requested
(each, a "Facility LC Application"). In the event of any
conflict between the terms of this Agreement and the terms of
any Facility LC Application, the terms of this Agreement shall
control.
(d) Administration; Reimbursement by Revolving
Lenders. Upon receipt from the beneficiary of any Facility LC
of any demand for payment under such Facility LC, the LC
Issuer shall notify the Agent and the Agent shall promptly
notify the Borrower Representative and each other Revolving
Lender as to the amount to be paid by the LC Issuer as a
result of such demand and the proposed payment date (the "LC
Payment Date"). The responsibility of the LC Issuer to the
Borrower Representative, the Borrowers and each Revolving
Lender shall be only to determine that the documents
(including each demand for payment) delivered under each
Facility LC in connection with such presentment shall be in
conformity in all material respects with such Facility LC. The
LC Issuer shall endeavor to exercise the same care in the
issuance and administration of the Facility LCs as it does
with respect to letters of credit in which no participations
are granted, it being understood that in the absence of any
gross negligence or willful misconduct by the LC Issuer, each
Revolving Lender shall be unconditionally and irrevocably
liable without regard to the occurrence of any Default or any
condition
A&R CREDIT AGREEMENT
27
precedent whatsoever, to reimburse the LC Issuer on demand for
(i) such Revolving Lender's Pro Rata Share of the amount of
each payment made by the LC Issuer under each Facility LC to
the extent such amount is not reimbursed by the Borrowers
pursuant to Section 2.1.2(e) below, plus (ii) interest on the
foregoing amount to be reimbursed by such Revolving Lender,
for each day from the date of the LC Issuer's demand for such
reimbursement (or, if such demand is made after 11:00 a.m.
(Chicago time) on such date, from the next succeeding Business
Day) to the date on which such Revolving Lender pays the
amount to be reimbursed by it, at a rate of interest per annum
equal to the Federal Funds Effective Rate for the first three
days and, thereafter, at a rate of interest equal to the rate
applicable to Floating Rate Advances.
(e) Reimbursement by Borrowers. Each Borrower
shall be irrevocably and unconditionally obligated to
reimburse the LC Issuer on or before the applicable LC Payment
Date for any amounts to be paid by the LC Issuer upon any
drawing under any Facility LC, without presentment, demand,
protest or other formalities of any kind; provided that, no
Borrower nor any Revolving Lender shall hereby be precluded
from asserting any claim for direct (but not consequential)
damages suffered by such Borrower or such Revolving Lender to
the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of the LC Issuer in determining
whether a request presented under any Facility LC issued by it
complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it
after the presentation to it of a request strictly complying
with the terms and conditions of such Facility LC. All such
amounts paid by the LC Issuer and remaining unpaid by the
Borrowers shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to (x) the rate
applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the
sum of 2% plus the rate applicable to Floating Rate Advances
for such day if such day falls after such LC Payment Date. The
LC Issuer will pay to each Revolving Lender ratably in
accordance with its Pro Rata Share all amounts received by it
from the Borrowers for application in payment, in whole or in
part, of the Reimbursement Obligation in respect of any
Facility LC issued by the LC Issuer, but only to the extent
such Revolving Lender has made payment to the LC Issuer in
respect of such Facility LC pursuant to Section 2.1.2(d).
Subject to the terms and conditions of this Agreement
(including without limitation the submission of a Borrowing
Notice in compliance with Section 2.1.1(b) and the
satisfaction of the applicable conditions precedent set forth
in Article IV), the Borrower Representative may request an
Advance hereunder on behalf of the applicable Borrower for the
purpose of satisfying any Reimbursement Obligation.
(f) Obligations Absolute. Each Borrower's
obligations under this Section 2.1.2 shall be absolute and
unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment which any
Borrower may have or have had against the LC Issuer, any
Revolving Lender or any beneficiary of a Facility LC. Each
Borrower further agrees with the LC Issuer and the Revolving
Lenders that the LC Issuer and the Revolving Lenders shall not
be responsible for, and such Borrower's Reimbursement
Obligation in respect of any Facility LC shall not be affected
by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such
documents should in fact prove to be in any or all respects
invalid, fraudulent or forged, or any dispute between or among
any Borrower, any of its Affiliates, the beneficiary of any
Facility LC or any financing institution or other party to
whom any Facility LC may be transferred or any claims or
defenses whatsoever of any Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any
such
A&R CREDIT AGREEMENT
28
transferee. The LC Issuer shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or
delivery of any message or advice, however transmitted, in
connection with any Facility LC. Each Borrower agrees that any
action taken or omitted by the LC Issuer or any Revolving
Lender under or in connection with each Facility LC and the
related drafts and documents, if done without gross negligence
or willful misconduct, shall be binding upon such Borrower and
shall not put the LC Issuer or any Revolving Lender under any
liability to any Borrower. Nothing in this Section 2.1.2(f) is
intended to limit the right of the Borrowers to make a claim
against the LC Issuer for damages as contemplated by the
proviso to the first sentence of Section 2.1.2(e).
(g) Actions of LC Issuer. The LC Issuer shall be
entitled to rely, and shall be fully protected in relying,
upon any Facility LC, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram,
telecopy, telex or teletype message, statement, order or other
document believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons, and
upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The
LC Issuer shall be fully justified in failing or refusing to
take any action under this Agreement unless it shall first
have received such advice or concurrence of the Required
Revolving Lenders as it reasonably deems appropriate or it
shall first be indemnified to its reasonable satisfaction by
the Revolving Lenders against any and all liability and
expense which may be incurred by it by reason of taking or
continuing to take any such action. Notwithstanding any other
provision of this Section 2.1.2, the LC Issuer shall in all
cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of
the Required Revolving Lenders, and such request and any
action taken or failure to act pursuant thereto shall be
binding upon the Revolving Lenders and any future holders of a
participation in any Facility LC.
(h) Indemnification. Each Borrower hereby agrees
to, jointly and severally, indemnify and hold harmless each
Revolving Lender, the LC Issuer and the Agent, and their
respective directors, officers, agents and employees from and
against any and all claims and damages, losses, liabilities,
costs or expenses which such Revolving Lender, the LC Issuer
or the Agent may incur (or which may be claimed against such
Revolving Lender, the LC Issuer or the Agent by any Person
whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to
pay under any Facility LC or any actual or proposed use of any
Facility LC, including, without limitation, any claims,
damages, losses, liabilities, costs or expenses which the LC
Issuer may incur by reason of or in connection with (i) the
failure of any other Revolving Lender to fulfill or comply
with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights any Borrower may have
against any Defaulting Lender) or (ii) by reason of or on
account of the LC Issuer issuing any Facility LC which
specifies that the term "Beneficiary" included therein
includes any successor by operation of law of the named
Beneficiary, but which Facility LC does not require that any
drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the LC Issuer,
evidencing the appointment of such successor Beneficiary;
provided that, the Borrowers shall not be required to
indemnify any Revolving Lender, the LC Issuer or the Agent for
any claims, damages, losses, liabilities, costs or expenses to
the extent, but only to the extent, caused by (x) the willful
misconduct or gross negligence of the LC Issuer in determining
whether a request presented under any Facility LC complied
with the terms of such Facility LC or (y) the LC Issuer's
failure to pay under any Facility LC after the presentation to
it of a request strictly complying with the terms and
conditions of such Facility LC. Nothing in this
A&R CREDIT AGREEMENT
29
Section 2.1.2(h) is intended to limit the obligations of the
Borrowers under any other provision of this Agreement.
(i) Revolving Lenders' Indemnification. Each
Revolving Lender shall, ratably in accordance with its Pro
Rata Share, indemnify the LC Issuer, its Affiliates and their
respective directors, officers, agents and employees (to the
extent not reimbursed by the Borrowers) against any cost,
expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as
result from such indemnitees' gross negligence or willful
misconduct or the LC Issuer's failure to pay under any
Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of the Facility LC)
that such indemnitees may suffer or incur in connection with
this Section 2.1.2 or any action taken or omitted by such
indemnitees hereunder.
(j) Facility LC Collateral Account. The
Borrowers agree that they will, upon the request of the Agent
in its Permitted Discretion or the Required Revolving Lenders
and until the final expiration date of any Facility LC and
thereafter as long as any amount is payable to the LC Issuer
or the Revolving Lenders in respect of any Facility LC,
maintain a special collateral account pursuant to arrangements
satisfactory to the Agent (the "Facility LC Collateral
Account") at the Agent's office at the address specified
pursuant to Article XIII, in the name of the Borrowers but
under the sole dominion and control of the Agent, for the
benefit of the Lenders and in which the Borrowers shall have
no interest other than as set forth in Section 8.1. Nothing in
this Section 2.1.2(j) shall either obligate the Agent to
require any Borrower to deposit any funds in the Facility LC
Collateral Account or limit the right of the Agent to release
any funds held in the Facility LC Collateral Account in each
case other than as required by Section 8.1. Each Borrower
hereby pledges, assigns and grants to the Agent, on behalf of
and for the ratable benefit of the Lenders and the LC Issuer,
a security interest in all of such Borrower's right, title and
interest in and to all funds which may from time to time be on
deposit in the Facility LC Collateral Account to secure the
prompt and complete payment and performance of the Secured
Obligations. The Agent will invest any funds on deposit from
time to time in the Facility LC Collateral Account in
certificates of deposit of Bank One having a maturity not
exceeding thirty days.
(k) Rights as a Lender. In its capacity as a
Lender, the LC Issuer shall have the same rights and
obligations as any other Lender.
(l) Termination of the Facility. If,
notwithstanding the provisions of this Section 2.1.2, any
Facility LC is outstanding upon the earlier of (x) the
termination of this Agreement and (y) the Facility Termination
Date, then upon such termination the Borrowers shall deposit
with the Agent, for the benefit of the Agent and the Lenders,
with respect to all LC Obligations, as the Agent in its
discretion shall specify, either (i) a standby letter of
credit (a "Supporting Letter of Credit"), in form and
substance satisfactory to the Agent, issued by an issuer
satisfactory to the Agent, in a stated amount equal to 105% of
the difference of (x) the amount of LC Obligations at such
time, less (y) the amount on deposit in the Facility LC
Collateral Account at such time which is free and clear of all
rights and claims of third parties and has not been applied
against the Obligations (such difference, the "Collateral
Shortfall Amount"), under which Supporting Letter of Credit
the Agent is entitled to draw amounts necessary to reimburse
the Agent, the LC Issuer and the Lenders for payments to be
made by the Agent, the LC Issuer and the Lenders under any
such Facility LC and any fees and expenses associated with
such
A&R CREDIT AGREEMENT
30
Facility LC, or (ii) cash, in immediately available funds, in
an amount equal to 105% of the Collateral Shortfall Amount to
be held in the Facility LC Collateral Account. Such Supporting
Letter of Credit or deposit of cash shall be held by the
Agent, for the benefit of the Agent and the Lenders, as
security for, and to provide for the payment of, the aggregate
undrawn amount of such Facility LC remaining outstanding.
2.1.3. Non-Ratable Loans. Subject to the restrictions set
forth in Section 2.1.1(a), the Agent may elect to have the terms of this Section
2.1.3 apply to any requested Floating Rate Advance and Bank One shall thereafter
make an Advance, on behalf of the Revolving Lenders and in the amount requested,
available to the Borrowers on the applicable Borrowing Date by transferring same
day funds to the Funding Account. Each Advance made solely by the Agent pursuant
to this Section 2.1.3 is referred to in this Agreement as a "Non-Ratable Loan,"
and such Advances are referred to as the "Non-Ratable Loans." Each Non-Ratable
Loan shall be subject to all the terms and conditions applicable to other
Advances funded by the Revolving Lenders, except that all payments thereon shall
be payable to Bank One solely for its own account. The Agent shall not make any
Non-Ratable Loan if the requested Non-Ratable Loan exceeds the Borrowers'
Availability (before giving effect to such Non-Ratable Loan). Non-Ratable Loans
may be made even if a Default or Unmatured Default exists, but may not be made
if the conditions precedent set forth in Section 4.2 have not been satisfied.
The Non-Ratable Loans shall be secured by the Liens granted to the Agent in and
to the Collateral and shall constitute Obligations hereunder. All Non-Ratable
Loans shall be Floating Rate Advances and are subject to the settlement
provisions set forth in Section 2.19.
2.1.4. Protective Advances and Overadvances.
(a) Protective Advances. Subject to the
limitations set forth below, after the occurrence and during
the continuance of a Default or an Unmatured Default, the
Agent is authorized by the Borrowers and the Lenders, from
time to time in the Agent's sole discretion (but shall have
absolutely no obligation to), to make Advances, on behalf of
all Lenders, in an aggregate amount outstanding at any time
not to exceed $7,000,000, which the Agent, in its Permitted
Discretion, deems necessary or desirable (i) to preserve or
protect the Collateral, or any portion thereof, (ii) to
enhance the likelihood of, or maximize the amount of,
repayment of the Loans and other Obligations, or (iii) to pay
any other amount chargeable to or required to be paid by the
Borrowers pursuant to the terms of this Agreement, including
costs, fees, and expenses as described in Section 9.6 (any of
such Advances are herein referred to as "Protective
Advances"); provided that, no Protective Advance shall cause
the Aggregate Credit Exposure to exceed the Aggregate
Commitment. Protective Advances may be made even if the
conditions precedent set forth in Section 4.2 have not been
satisfied. The Protective Advances shall be secured by the
Liens in favor of the Agent in and to the Collateral and shall
constitute Obligations hereunder. All Protective Advances
shall be Floating Rate Advances, shall bear interest at the
default rate set forth in Section 2.12 and shall be payable on
the earlier of demand or the Facility Termination Date. The
Required Lenders may at any time revoke the Agent's
authorization to make Protective Advances. Any such revocation
must be in writing and shall become effective prospectively
upon the Agent's receipt thereof. At any time that there is
sufficient Availability and the conditions precedent set forth
in Section 4.2 have been satisfied, the Agent may request the
Revolving Lenders to make a Revolving Loan to repay a
Protective Advance. At any other time the Agent may require
the Lenders to fund their risk participations described in
Section 2.2.
(b) Overadvances. Any provision of this
Agreement to the contrary notwithstanding, at the request of
the Borrower Representative on behalf of any
A&R CREDIT AGREEMENT
31
Borrower, the Agent may in its sole discretion (but shall have
absolutely no obligation to), make Advances to the Borrower
Representative (for the account of such Borrower), on behalf
of the Revolving Lenders, in amounts that exceed the
Borrowers' Availability (any such excess Advances are herein
referred to collectively as "Overadvances"); provided that,
(i) no such Overadvance shall be outstanding for more than
thirty (30) consecutive days, (ii) no such event or occurrence
shall cause or constitute a waiver of the Agent's or Revolving
Lenders' right to refuse to make any further Overadvances,
Revolving Loans or Non-Ratable Loans, or issue Facility LCs,
as the case may be, at any time that an Overadvance exists,
and (iii) no Overadvance shall result in a Default or
Unmatured Default due to such Borrower's failure to comply
with Section 2.1.1(a) for so long as the Agent permits such
Overadvance to remain outstanding, but solely with respect to
the amount of such Overadvance. In addition, Overadvances may
be made even if a Default or Unmatured Default exists, but may
not be made if the conditions precedent set forth in Section
4.2 have not been satisfied (other than the condition
regarding Availability). All Overadvances shall constitute
Floating Rate Advances, shall bear interest at the default
rate set forth in Section 2.12, shall be payable on the
earlier of demand or the Facility Termination Date and are
subject to the settlement provisions set forth in Section
2.19. The authority of the Agent to make Overadvances is
limited to an aggregate amount not to exceed $7,000,000 at any
time, and no Overadvance shall cause any Revolving Lender's
Revolving Credit Exposure to exceed its Revolving Commitment
or the Aggregate Credit Exposure to exceed the Aggregate
Commitment; provided that, the Required Revolving Lenders may
at any time revoke the Agent's authorization to make
Overadvances. Any such revocation must be in writing and shall
become effective prospectively upon the Agent's receipt
thereof.
2.1.5. Term A Loans.
(a) Amounts of Term A Loans. Borrowers and
Lenders agree that on the Effective Date a portion of the
Existing Obligations equal to the aggregate Term A Loan
Commitment shall be restructured as terms loans made by each
Lender, respectively (any such term loan being referred to as
a "Term A Loan" and such term loans being referred to
collectively as the "Term A Loans"), to the Borrowers, in an
amount equal to such Lender's Pro Rata Share of the Term A
Loan Commitment. The Term A Loans shall initially be Floating
Rate Advances but may be converted into Eurodollar Advances in
accordance with Section 2.7.
(b) Amortization; Payments. The Term A Loans
shall amortize in thirty-six (36) monthly installments. Each
of the first thirty-five (35) installments of principal shall
be in an amount equal to $65,000 and shall be payable on the
first day of each month, commencing on March 1, 2004, and
ending on February 1, 2007. The final installment of principal
shall be in the amount of $1,625,000 or otherwise in an amount
equal to the then remaining principal balance of the Term A
Loans and shall be payable on the Facility Termination Date.
Each such installment shall be payable to the Agent for the
account of the applicable Term A Lender. Payments or
prepayments of the Term A Loans may not be reborrowed.
2.1.6. Supplemental Term Loans.
(a) Amounts of Supplemental Term Loans.
Borrowers and Lenders agree that on the Effective Date a
portion of the Existing Obligations equal to the aggregate
Supplemental Term Loan Commitment shall be restructured as
terms loans made by each
A&R CREDIT AGREEMENT
32
Lender, respectively (any such term loan being referred to as
a "Supplemental Term Loan" and such term loans being referred
to collectively as the "Supplemental Term Loans"), to the
Borrowers, in an amount equal to such Lender's Pro Rata Share
of the Supplemental Term Loan Commitment. The Supplemental
Term Loans shall initially be Floating Rate Advances but may
be converted into Eurodollar Advances in accordance with
Section 2.7.
(b) Amortization; Payments. The Supplemental
Term Loans shall amortize in thirty-six (36) monthly
installments. Each of the first thirty-five (35) installments
of principal shall be in an amount equal to $185,000 and shall
be payable on the first day of each month, commencing on March
1, 2004, and ending on February 1, 2007. The final installment
of principal shall be in the amount of $4,625,000 or otherwise
in an amount equal to the then remaining principal balance of
the Supplemental Term Loans and shall be payable on the
Facility Termination Date. Each such installment shall be
payable to the Agent for the account of the applicable
Supplemental Term Lender. Payments or prepayments of the
Supplemental Term Loans may not be reborrowed.
2.1.7. Reallocation of Loans and Commitments. On the
Effective Date, each Lender, if any, whose relative proportion of its
Commitment hereunder is increasing over the proportion of the
Commitment held by it prior to the Effective Date shall, by assignments
from the Lenders which were parties to the Amended Loan Agreement prior
to the Effective Date (the "Amended Agreement Lenders") (which
assignments shall be deemed to occur hereunder automatically, and
without any requirement for additional documentation, on the Effective
Date) acquire a portion of the Loans and Commitments of the Lenders so
designated in such amounts, and the Lenders shall, through Agent, make
such other adjustments among themselves as shall be necessary so that
after giving effect to assignments and adjustments, the Lenders shall
hold all Loans outstanding under this Agreement ratably in accordance
with their respective Commitments as reflected on the signature pages
under such Lender's name, as modified from time to time pursuant to the
terms hereof. On the Effective Date, all Interest Periods under the
Amended Loan Agreement in respect of any Existing Obligations under the
Amended Loan Agreement shall automatically be terminated (and the
Borrowers shall on the Effective Date make payments to the Amended
Agreement Lenders that held such Existing Obligations to compensate for
such termination as if such termination were a payment or prepayment
referred to in said Section 3.4), and subject to the other restrictions
contained herein, the Borrower shall be permitted to continue such
Eurodollar Advances or to convert such Eurodollar Advances into
Floating Rate Advances or Floating Rate Loans, respectively, hereunder.
2.2. Ratable Loans; Risk Participation. Except as otherwise
provided below, each Advance made in connection with a Revolving Loan or a Term
Loan shall consist of Loans made by each Lender in an amount equal to such
Lender's Pro Rata Share. Upon the making of an Advance by the Agent in
connection with a Non-Ratable Loan or an Overadvance (whether before or after
the occurrence of a Default or an Unmatured Default and regardless of whether
the Agent has requested a Settlement with respect to such Non-Ratable Loan or
Overadvance), the Agent shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably sold to each Revolving Lender
and each Revolving Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the Agent,
without recourse or warranty, an undivided interest and participation in such
Non-Ratable Loan or Overadvance in proportion to its Pro Rata Share of the
Revolving Commitment. Upon the making of an Advance by the Agent in connection
with a Protective Advance (whether before or after the occurrence of a Default
or an Unmatured Default and regardless of whether the Agent has requested a
Settlement with respect to such Protective Advance), the Agent shall be deemed,
without further action by any party hereto, to have unconditionally and
irrevocably sold to
A&R CREDIT AGREEMENT
33
each Lender and each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the Agent,
without recourse or warranty, an undivided interest and participation in such
Protective Advance in proportion to its Pro Rata Share of the Aggregate
Commitment. From and after the date, if any, on which any Lender is required to
fund its participation in any Non-Ratable Loan, Overadvance or Protective
Advance purchased hereunder, the Agent shall promptly distribute to such Lender,
such Lender's Pro Rata Share of all payments of principal and interest and all
proceeds of Collateral received by the Agent in respect of such Loan.
2.3. Payment of the Obligations. The Borrowers shall repay the
outstanding principal balance of the Loans, together with all other Obligations,
including all accrued and unpaid interest thereon, on the Facility Termination
Date.
2.4. Minimum Amount of Each Advance. Each Eurodollar Advance shall
be in the minimum amount of $5,000,000 and in multiples of $1,000,000 if in
excess thereof. Floating Rate Advances may be in any amount.
2.5. Funding Account. The Borrower Representative shall deliver to
the Agent, on the Effective Date, a notice setting forth the deposit account of
the Borrower Representative (the "Funding Account") to which the Agent is
authorized by the Borrowers to transfer the proceeds of any Advances requested
pursuant to this Agreement. The Borrower Representative may designate a
replacement Funding Account from time to time by written notice to the Agent.
Any designation by the Borrower Representative of the Funding Account must be
reasonably acceptable to the Agent.
2.6. Reliance Upon Authority; No Liability. The Agent is entitled
to rely conclusively on any individual's request for Advances hereunder, so long
as the proceeds thereof are to be transferred to the Funding Account. The Agent
shall have no duty to verify the identity of any individual representing himself
or herself as a person authorized by the Borrowers to make such requests on
their behalf. The Agent shall not incur any liability to the Borrowers as a
result of acting upon any notice referred to in Section 2.1 which the Agent
reasonably believes to have been given by an officer or other person duly
authorized by the Borrowers to request Advances on their behalf or for otherwise
acting under this Agreement. The crediting of Advances to the Funding Account
shall conclusively establish the joint and several obligation of the Borrowers
to repay such Advances as provided herein.
2.7. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.7 or are repaid in accordance with this Agreement. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with this Agreement or (y) the
Borrower Representative shall have given the Agent a Conversion/Continuation
Notice (as defined below) requesting that, at the end of such Interest Period,
such Eurodollar Advance continue as a Eurodollar Advance for the same or another
Interest Period. Subject to the terms of Section 2.4, the Borrower
Representative may elect from time to time to convert all or any part of a
Floating Rate Advance into a Eurodollar Advance on behalf of the applicable
Borrower. The Borrower Representative shall give the Agent irrevocable notice in
the form of Exhibit B (a "Conversion/Continuation Notice") of each conversion of
a Floating Rate Advance into a Eurodollar Advance or continuation of a
Eurodollar Advance not later than 11:00 a.m. (Chicago time) at least three
Business Days prior to the date of the requested conversion or continuation,
specifying (i) the requested date, which shall be a Business Day, of such
conversion or continuation, (ii) the aggregate amount and Type of the Advance
which is to be converted or continued, and (iii) the amount of such Advance
which is to be converted into or continued as a Eurodollar Advance and the
duration of the Interest Period applicable thereto.
A&R CREDIT AGREEMENT
34
2.8. Telephonic Notices. Each Borrower hereby authorizes the
Lenders and the Agent to extend, convert or continue Advances, effect selections
of Types of Advances and to transfer funds based on telephonic notices made by
any person or persons the Agent or any Lender in good faith believes to be
acting on behalf of the Borrower Representative, it being understood that the
foregoing authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically. The Borrower
Representative agrees to deliver promptly to the Agent a written confirmation,
if such confirmation is requested by the Agent or any Lender, of each telephonic
notice signed by an Authorized Officer of the Borrower Representative. If the
written confirmation differs in any material respect from the action taken by
the Agent and the Lenders, the records of the Agent and the Lenders shall govern
absent manifest error.
2.9. Notification of Advances, Interest Rates and Repayments.
Promptly after receipt thereof, the Agent will notify each Lender of the
contents of each Borrowing Notice, Conversion/Continuation Notice, and repayment
notice received by it hereunder. Promptly after notice from the LC Issuer, the
Agent will notify each Revolving Lender of the contents of each request for
issuance of a Facility LC hereunder or any Modification. The Agent will notify
each Lender of the interest rate applicable to each Eurodollar Advance promptly
upon determination of such interest rate and will give each Lender prompt notice
of each change in the Alternate Base Rate.
2.10. Fees.
(a) Unused Commitment Fee. The Borrowers agree
to pay to the Agent, for the account of each Revolving Lender
in accordance with such Lender's Pro Rata Share, an unused
commitment fee at a per annum rate equal to the Applicable
Unused Commitment Fee Rate on the average daily Available
Revolving Commitment, payable on each Payment Date hereafter
and on the Facility Termination Date (the "Unused Commitment
Fee").
(b) LC Fees. The Borrowers shall pay to the
Agent, for the account of the Revolving Lenders ratably in
accordance with their respective Pro Rata Shares, a letter of
credit fee at a per annum rate equal to the Applicable LC Fee
Rate on the average daily undrawn stated amount under each
Facility LC, such fee to be payable in arrears on each Payment
Date (the "LC Fee"). The Borrowers shall also pay to the LC
Issuer for its own account (x) at the time of issuance of each
Facility LC, a fronting fee of 0.125% of the face amount of
the Facility LC, and (y) documentary and processing charges in
connection with the issuance or Modification of and draws
under Facility LCs in accordance with the LC Issuer's standard
schedule for such charges as in effect from time to time.
(c) Agent and Arranger Fees. The Borrowers agree
to pay to the Agent and the Arranger such additional fees as
are specified in the fee letter dated as of the Effective
Date, among the Agent, the Arranger and the Borrowers (the
"Fee Letter").
2.11. Interest Rates. Each Floating Rate Advance shall bear interest
on the outstanding principal amount thereof, for each day from and including the
date such Advance is made or is automatically converted from a Eurodollar
Advance into a Floating Rate Advance pursuant to Section 2.7, to but excluding
the date it is paid or is converted into a Eurodollar Advance pursuant to
Section 2.7 hereof, at a rate per annum equal to the Floating Rate for such day.
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but
A&R CREDIT AGREEMENT
35
not including) the last day of such Interest Period at the interest rate
determined by the Agent as applicable to such Eurodollar Advance based upon the
Borrower Representative's selections under Sections 2.1.1 and 2.7 and otherwise
in accordance with the terms hereof. No Interest Period may end after the
Facility Termination Date. If at any time Loans are outstanding with respect to
which the Borrower Representative has not delivered a notice to the Agent
specifying the basis for determining the interest rate applicable thereto, those
Loans shall bear interest at the Floating Rate.
2.12. Eurodollar Advances Post Default; Default Rates.
Notwithstanding anything to the contrary contained hereunder, during the
continuance of a Default or Unmatured Default the Agent or the Required Lenders
may, at their option, by notice to the Borrower Representative (which notice may
be revoked at the option of the Required Lenders notwithstanding any provision
of Section 8.3 requiring unanimous consent of the Lenders to reductions in
interest rates), declare that no Advance may be made as, converted into or
continued as a Eurodollar Advance. During the continuance of a Default the Agent
or the Required Lenders may, at their option, by notice to the Borrower
Representative (which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 8.3 requiring unanimous consent
of the Lenders to reductions in interest rates), declare that (i) each
Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum
and (iii) the LC Fee shall be increased by 2% per annum, provided that, during
the continuance of a Default under subsection (f) or (g) of Article VII, the
interest rates set forth in clauses (i) and (ii) above and the increase in the
LC Fee set forth in clause (iii) above shall be applicable to all Credit
Extensions without any election or action on the part of the Agent or any
Lender.
2.13. Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof and at
maturity. Interest accrued on each Eurodollar Advance shall be payable on the
last day of its applicable Interest Period, on any date on which the Eurodollar
Advance is prepaid, whether by acceleration or otherwise, and at maturity.
Interest accrued on each Eurodollar Advance having an Interest Period longer
than three months shall also be payable on the last day of each three-month
interval during such Interest Period. Interest on all Advances, Unused
Commitment Fees and LC Fees shall be calculated for actual days elapsed on the
basis of a 360-day year. Interest shall be payable for the day an Advance is
made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment. After giving
effect to any Loan, Advance, continuation, or conversion of any Eurodollar Rate
Loan, there may not be more than eight different Interest Periods in effect
hereunder.
2.14. Voluntary Prepayments. The Borrowers may from time to time
prepay, without penalty or premium, all or any portion of the outstanding
Floating Rate Advances upon written notice to the Agent. The Borrowers may also
from time to time prepay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $100,000 in excess thereof, any portion of the outstanding
Eurodollar Advances upon three Business Days' prior notice to the Agent.
A&R CREDIT AGREEMENT
36
2.15. Mandatory Prepayments.
(a) Borrowing Base Compliance. Except for
Overadvances permitted pursuant to Section 2.1.4(b), the
Borrowers shall immediately repay the Revolving Loans,
Reimbursement Obligations and/or Non-Ratable Loans if at any
time the Aggregate Revolving Exposure exceeds the lesser of
(i) the Revolving Commitment and (ii) the Aggregate Borrowing
Base, to the extent required to eliminate such excess. If any
such excess remains after repayment in full of all outstanding
Revolving Loans, Reimbursement Obligations and Non-Ratable
Loans, the Borrowers shall provide cash collateral or a
Supporting Letter of Credit for the LC Obligations in the
manner set forth in Section 2.1.2(l) to the extent required to
eliminate such excess.
(b) Sale of Assets. Immediately upon receipt by
any Loan Party of the Net Cash Proceeds of any asset
disposition (other than sales of inventory in the ordinary
course of business and sales the Net Cash Proceeds of which do
not exceed $100,000) the applicable Borrower shall prepay the
Obligations or shall cause the applicable Loan Party to
deliver funds to the Agent for application to the Obligations,
in an amount equal to all such Net Cash Proceeds. Any such
prepayment shall be applied first, to pay the principal of the
Overadvances and Protective Advances, second, to scheduled
principal installments of the Supplemental Term Loans in
inverse order of maturity and then to the Term Loans A in the
inverse order of maturity, third, to pay the principal of the
Non-Ratable Loans, fourth, to pay the principal of the
Revolving Loans without (unless otherwise necessary to comply
with the Indenture) a concomitant reduction in the Revolving
Commitment, and fifth, to cash collateralize outstanding
Facility LCs; provided, however, that if such Net Cash
Proceeds are received in connection with an Approved Bridge
Availability Refinancing, such Net Cash Proceeds shall be
applied first to such Approved Bridge Availability Refinancing
and then to the Obligations in the order set forth above.
(c) Issuance of Debt or Equity. If any Borrower
issues Capital Stock or any Loan Party issues Indebtedness
(other than Indebtedness permitted by Sections
6.17(a),(c),(e), (g) and (h)) or if any Loan Party receives
any dividend or distribution from a Person other than a Loan
Party, no later than the Business Day following the date of
any Net Cash Proceeds of such issuance or receipt of such
dividend, distribution, loan or advance, the Borrowers shall
prepay the Obligations in an amount equal to all such Net Cash
Proceeds, dividends, distributions, loans or advances. Any
such prepayment shall be applied first, to pay the principal
of the Overadvances and Protective Advances, second, to
scheduled principal installments of the Supplemental Term
Loans in inverse order of maturity and then to the Term A
Loans in the inverse order of maturity, third, to pay the
principal of the Non-Ratable Loans, fourth, to pay the
principal of the Revolving Loans without a concomitant
reduction in the Revolving Commitment, and fifth, to cash
collateralize outstanding Facility LCs; provided, however,
that if such Net Cash Proceeds are received in connection with
an Approved Bridge Availability Refinancing, such Net Cash
Proceeds shall be applied first to such Approved Bridge
Availability Refinancing and then to the Obligations in the
order set forth above.
(d) Adjusted Excess Cash Flow. Until the Term
Loan Facility Termination Date, the Borrowers shall prepay the
Supplemental Term Loans on the date that is ten days after the
earlier of (i) the date on which Borrowers' annual audited
Financial Statements for the immediately preceding Fiscal Year
are delivered pursuant to Section 6.1 or (ii) the date on
which such annual audited Financial Statements were
A&R CREDIT AGREEMENT
37
required to be delivered pursuant to Section 6.1, in an amount
equal to one hundred percent (100%) of the Company's Adjusted
Excess Cash Flow for the immediately preceding Fiscal Year,
not to exceed the aggregate amount of the principal payments
due and payable with respect to the Supplemental Term Loans
during such Fiscal Year. Each such prepayment shall be
accompanied by a certificate signed by the chief financial
officer of the Borrower Representative (on behalf of the
Borrowers) certifying the manner in which Adjusted Excess Cash
Flow and the resulting prepayment were calculated, which
certificate shall be in form and substance satisfactory to the
Agent.
(e) Insurance/Condemnation Proceeds. Any
insurance or condemnation proceeds to be applied to the
Obligations in accordance with Section 6.7(c) shall be applied
as follows: (i) insurance proceeds from casualties or losses
to cash or Inventory shall be applied, first, to the
Overadvances and Protective Advances, pro rata, second, to the
Non-Ratable Loans, third, to the Revolving Loans of the
Borrower who received such proceeds, fourth, to cash
collateralize outstanding Facility LCs of the Borrower who
received such proceeds, fifth, to the Revolving Loans of the
other Borrowers, sixth, to the to cash collateralize
outstanding Facility LCs of the other Borrowers, and seventh,
to scheduled principal installments of the Supplemental Term
Loans in inverse order of maturity and then, to the Term A
Loans in the inverse order of maturity; and (ii) insurance or
condemnation proceeds from casualties or losses to Equipment,
Fixtures and real Property shall be applied first, to pay the
principal of the Overadvances and Protective Advances, second,
to scheduled principal installments of the Supplemental Term
Loans in inverse order of maturity and then to the Term A
Loans in the inverse order of maturity, third, to pay the
principal of the Non-Ratable Loans, fourth, to pay the
principal of the Revolving Loans, and fifth, to cash
collateralize outstanding Facility LCs. The Revolving
Commitment shall not be permanently reduced by the amount of
any such prepayments. If the precise amount of insurance or
condemnation proceeds allocable to Inventory as compared to
Equipment, Fixtures and real Property is not otherwise
determined, the allocation and application of those proceeds
shall be determined by the Agent, in its Permitted Discretion.
(f) General. Without in any way limiting the
foregoing, immediately upon receipt by any Loan Party of
proceeds of any sale of any Collateral, the Borrowers shall
cause such Loan Party to deliver such proceeds to the Agent,
or deposit such proceeds in a deposit account subject to a
Deposit Account Control Agreement. All of such proceeds shall
be applied as set forth above or otherwise as provided in
Section 2.18. Nothing in this Section 2.15 shall be construed
to constitute Agent's or any Lender's consent to any
transaction that is not permitted by other provisions of this
Agreement or the other Loan Documents.
2.16. Termination of the Facility.
(a) Without limiting Section 2.3 or Section 8.1,
(a) the Aggregate Commitments shall expire on the Facility
Termination Date and (b) the Aggregate Credit Exposure and all
other unpaid Obligations shall be paid in full by the
Borrowers on the Facility Termination Date.
(b) The Borrowers may terminate this Agreement
with at least ten Business Days' prior written notice thereof
to the Agent and the Lenders, upon (i) the payment in full of
all outstanding Loans, together with accrued and unpaid
interest thereon, (ii) the cancellation and return of all
outstanding Facility LCs (or alternatively, with respect to
A&R CREDIT AGREEMENT
38
each such Facility LC, the furnishing to the Agent of a cash
deposit or Supporting Letter of Credit as required by Section
2.1.2(l)), (iii) the payment in full of the early termination
fee set forth in the following sentence (the "Prepayment
Fee"), (iv) the payment in full of all reimbursable expenses
and other Obligations together with accrued and unpaid
interest thereon, and (v) the payment in full of any amount
due under Section 3.4. Subject to Section 2.24, if this
Agreement is terminated at any time prior to the Facility
Termination Date, whether pursuant to this Section 2.16 or
pursuant to Section 8.1, the Borrower shall pay to the Agent,
for the account of the Lenders, an early termination fee
determined in accordance with the following table:
Period during which early
termination occurs Prepayment Fee
------------------------------------------- -----------------------
On or prior to the first anniversary of the 1.0% of the Aggregate
Closing Date Commitment
After the first anniversary of the Closing
Date but on or prior to the second 0.50% of the Aggregate
anniversary of the Closing Date Commitment
No such Prepayment Fee shall be payable in the event this
Agreement is terminated in connection with refinancing of the
Obligations in a transaction in which Bank One or one of its
Affiliates that is a banking institution provides or arranges
a replacement bank credit facility for the Borrowers.
2.17. Method of Payment.
(a) All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in
immediately available funds to the Agent at the Agent's
address specified pursuant to Article XIII, or at any other
Lending Installation of the Agent specified in writing by the
Agent to the Borrower Representative, by noon (local time) on
the date when due and shall be applied ratably by the Agent
among the Lenders. Any payment received by the Agent after
such time shall be deemed to have been received on the
following Business Day and any applicable interest or fee
shall continue to accrue. Solely for purposes of determining
the amount of Loans available for borrowing purposes, checks
and cash or other immediately available funds from collections
of items of payment and proceeds of any Collateral shall be
applied in whole or in part against the Obligations, on the
day of receipt, subject to actual collection. Each payment
delivered to the Agent for the account of any Lender shall be
delivered promptly by the Agent to such Lender in the same
type of funds that the Agent received at its address specified
pursuant to Article XIII or at any Lending Installation
specified in a notice received by the Agent from such Lender.
(b) At the election of the Agent, all payments
of principal, interest, reimbursement obligations in
connection with Facility LCs, fees, premiums, reimbursable
expenses (including, without limitation, all reimbursement for
fees and expenses pursuant to Section 9.6), and other sums
payable under the Loan Documents, may be paid from the
proceeds of Advances made hereunder whether made following a
request by the Borrower Representative pursuant to Section 2.1
or a deemed request as provided in this Section 2.17 or may be
deducted from the Funding Account or any other deposit account
of any Borrower maintained with the Agent. Each Borrower
hereby irrevocably authorizes (i) the Agent to make an Advance
for the purpose of paying each payment of
A&R CREDIT AGREEMENT
39
principal, interest and fees as it becomes due hereunder or
any other amount due under the Loan Documents and agrees that
all such amounts charged shall constitute Loans (including
Non-Ratable Loans, Overadvances and Protective Advances) and
that all such Advances shall be deemed to have been requested
pursuant to Section 2.1 and (ii) the Agent to charge the
Funding Account or any other deposit account of any Borrower
maintained with Bank One for each payment of principal,
interest and fees as it becomes due hereunder or any other
amount due under the Loan Documents.
2.18. Apportionment, Application, and Reversal of Payments. Except
as otherwise required pursuant to Section 2.19, principal and interest payments
shall be apportioned ratably among the Lenders as set forth in this Article II
and payments of the fees shall, as applicable, be apportioned ratably among the
Lenders, except for fees payable solely to the Agent or the LC Issuer and except
as provided in Section 2.10(c). All payments shall be remitted to the Agent and
all such payments not relating to principal or interest of specific Loans or not
constituting payment of specific fees as specified by the Borrower
Representative, and all proceeds of any Collateral received by the Agent, shall
be applied, ratably, subject to the provisions of this Agreement, first, to pay
any fees, indemnities, or expense reimbursements including amounts then due to
the Agent from the Borrowers (other than in connection with Banking Services or
Rate Management Obligations), second, to pay any fees or expense reimbursements
then due to the Lenders from the Borrowers (other than in connection with
Banking Services or Rate Management Obligations), third, to pay interest due in
respect of the Overadvances and Protective Advances, fourth, to pay the
principal of the Overadvances and Protective Advances, fifth, to interest then
due and payable on the Supplemental Term Loans and then the Term A Loans, sixth,
to prepay the principal installments of the Supplemental Term Loans in inverse
order of maturity and then to the Term A Loans in the inverse order of maturity,
seventh, to pay interest due in respect of the Non-Ratable Loans, eighth, to pay
interest due in respect of the Revolving Loans (other than Non-Ratable Loans,
Overadvances and Protective Advances), ninth, to pay or prepay principal of the
Non-Ratable Loans, tenth, to pay or prepay principal of the Revolving Loans
(other than Non-Ratable Loans, Overadvances and Protective Advances) and unpaid
reimbursement obligations in respect of Facility LCs (except, in each case,
during the Bridge Period, the Bridge Component thereof), eleventh, to pay an
amount to the Agent equal to one hundred five percent (105%) of the aggregate
undrawn face amount of all outstanding Facility LCs and the aggregate amount of
any unpaid reimbursement obligations in respect of Facility LCs, to be held as
cash collateral for such Obligations, twelfth, during the Bridge Period, to pay
or prepay the Bridge Component of the principal of the Revolving Loans (other
than Non-Ratable Loans, Overadvances and Protective Advances) and unpaid
reimbursement obligations in respect of Facility LCs, thirteenth, to payment of
any amounts owing with respect to Banking Services and Rate Management
Obligations, and fourteenth, to the payment of any other Secured Obligation due
to the Agent or any Lender by the Borrowers. Notwithstanding anything to the
contrary contained in this Agreement, unless so directed by the Borrower
Representative, or unless a Default is in existence, neither the Agent nor any
Lender shall apply any payment which it receives to any Eurodollar Loan, except
(a) on the expiration date of the Interest Period applicable to any such
Eurodollar Loan or (b) in the event, and only to the extent, that there are no
outstanding Floating Rate Loans and, in any event, the Borrowers shall pay the
Eurodollar breakage losses in accordance with Section 3.4. The Agent and the
Lenders shall have the continuing and exclusive right to apply and reverse and
reapply any and all such proceeds and payments to any portion of the Secured
Obligations. All Loans to Borrowers and all of the other Obligations of
Borrowers arising under this Agreement and the other Loan Documents shall
constitute one general obligation of Borrowers secured by all of the Collateral.
2.19. Settlement. Each Revolving Lender's funded portion of the
Loans is intended by the Revolving Lenders to be equal at all times to such
Revolving Lender's Pro Rata Share of the outstanding Loans. Notwithstanding such
agreement, the Agent, Bank One, and the Lenders agree (which agreement shall not
be for the benefit of or enforceable by the Loan Parties) that in order to
facilitate the
A&R CREDIT AGREEMENT
40
administration of this Agreement and the other Loan Documents, settlement among
them as to the Loans, including the Non-Ratable Loans and Overadvances shall
take place on a periodic basis as follows. The Agent shall request settlement (a
"Settlement") with the Lenders on at least a weekly basis, or on a more frequent
basis at the Agent's election, by notifying the Lenders of such requested
Settlement by telecopy, telephone, or e-mail no later than 12:00 noon (Chicago
time) on the date of such requested Settlement (the "Settlement Date"). Each
Revolving Lender (other than the Agent, in the case of the Non-Ratable Loans and
Overadvances) shall transfer the amount of such Revolving Lender's Pro Rata
Share of the outstanding principal amount of the applicable Loan with respect to
which Settlement is requested to the Agent, to such account of the Agent as the
Agent may designate, not later than 2:00 p.m. (Chicago time), on the Settlement
Date applicable thereto. Settlements may occur during the existence of a Default
or an Unmatured Default and whether or not the applicable conditions precedent
set forth in Section 4.2 have then been satisfied. Such amounts transferred to
the Agent shall be applied against the amounts of the applicable Loan and,
together with Bank One's Pro Rata Share of such Non-Ratable Loan or Overadvance,
shall constitute Revolving Loans of such Lenders, respectively. If any such
amount is not transferred to the Agent by any Lender on the Settlement Date
applicable thereto, the Agent shall be entitled to recover such amount on demand
from such Lender together with interest thereon as specified in Section 2.23.
2.20. Indemnity for Returned Payments. If after receipt of any
payment which is applied to the payment of all or any part of the Obligations,
the Agent or any Lender is for any reason compelled to surrender such payment or
proceeds to any Person because such payment or application of proceeds is
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, impermissible setoff, or a diversion of trust funds, or for any
other reason, then the Obligations or part thereof intended to be satisfied
shall be revived and continued and this Agreement shall continue in full force
as if such payment or proceeds had not been received by the Agent or such Lender
and the Borrowers shall be liable to pay to the Agent and the Lenders, and each
Borrower hereby indemnifies the Agent and the Lenders and holds the Agent and
the Lenders harmless for the amount of such payment or proceeds surrendered. The
provisions of this Section 2.20 shall be and remain effective notwithstanding
any contrary action which may have been taken by the Agent or any Lender in
reliance upon such payment or application of proceeds, and any such contrary
action so taken shall be without prejudice to the Agent's and the Lenders'
rights under this Agreement and shall be deemed to have been conditioned upon
such payment or application of proceeds having become final and irrevocable. The
provisions of this Section 2.20 shall survive the termination of this Agreement.
2.21. Noteless Agreement; Evidence of Indebtedness.
(a) Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the
indebtedness of the Borrowers to such Lender resulting from
each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such
Lender from time to time hereunder.
(b) The Agent shall also maintain accounts in
which it will record (i) the amount of each Loan extended
hereunder, the Type thereof, the name of the Borrower who
requested such Loan and the Interest Period with respect
thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrowers to
each Lender hereunder, (iii) the original stated amount of
each Facility LC and the amount of LC Obligations outstanding
at any time, and (iv) the amount of any sum received by the
Agent hereunder from the Borrowers and each Lender's share
thereof.
A&R CREDIT AGREEMENT
41
(c) The entries maintained in the accounts
maintained pursuant to paragraphs (a) and (b) above shall be
prima facie evidence of the existence and amounts of the
Obligations therein recorded; provided however, that the
failure of the Agent or any Lender to maintain such accounts
or any error therein shall not in any manner affect the
obligation of the Borrowers to repay the Obligations in
accordance with their terms.
(d) Any Lender may request that its Revolving
Loans be evidenced by a promissory note in substantially the
form of Exhibit C-1 (a "Revolving Note"), that its Term A
Loans be evidenced by a promissory note in substantially the
form of Exhibit C-2 attached hereto (a "Term A Note") and that
its Supplemental Term Loans be evidenced by a promissory note
in substantially the form of Exhibit C-3 attached hereto (a
"Supplemental Term Note"). In such event, each Borrower shall
prepare, execute and deliver to such Lender such Note payable
to the order of such Lender. Thereafter, the Revolving Loans
evidenced by such Revolving Note, the Term A Loans evidenced
by such Term A Note, the Supplemental Term Loans evidenced by
such Supplemental Term Note and interest on the foregoing
shall at all times (prior to any assignment pursuant to
Section 12.3) be represented by one or more Notes payable to
the order of the payee named therein, except to the extent
that any such Lender subsequently returns any such Note for
cancellation and requests that such Revolving Loans, Term A
Loans or Supplemental Term Loans once again be evidenced as
described in paragraphs (a) and (b) above.
2.22. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, Reimbursement Obligations and any Notes issued hereunder
shall be deemed held by each Lender or the LC Issuer, as the case may be, for
the benefit of any such Lending Installation. Each Lender and the LC Issuer may,
by written notice to the Agent and the Borrower Representative in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it or Facility LCs will be issued by it and
for whose account Loan payments or payments with respect to Facility LCs are to
be made.
2.23. Non-Receipt of Funds by the Agent; Defaulting Lenders.
(a) Unless the Borrower Representative or a
Lender, as the case may be, notifies the Agent prior to the
date on which it is scheduled to make payment to the Agent of
(i) in the case of a Lender, the proceeds of a Loan or (ii) in
the case of the Borrowers, a payment of principal, interest or
fees to the Agent for the account of the Lenders, that it does
not intend to make such payment, the Agent may assume that
such payment has been made. The Agent may, but shall not be
obligated to, make the amount of such payment available to the
intended recipient in reliance upon such assumption. If such
Lender or the Borrowers, as the case may be, have not in fact
made such payment to the Agent, the recipient of such payment
shall, on demand by the Agent, repay to the Agent the amount
so made available together with interest thereon in respect of
each day during the period commencing on the date such amount
was so made available by the Agent until the date the Agent
recovers such amount at a rate per annum equal to (x) in the
case of payment by a Lender, the Federal Funds Effective Rate
for such day for the first three days and, thereafter, the
interest rate applicable to the relevant Loan or (y) in the
case of payment by the Borrowers, the interest rate applicable
to the relevant Loan.
A&R CREDIT AGREEMENT
42
(b) If a payment has not been made by a Lender
(a "Defaulting Lender"), the Agent will notify the Borrower
Representative of such failure to fund and, upon demand by the
Agent, the Borrowers shall pay such amount (to the extent such
amount had been made available to Borrowers hereunder) to the
Agent for the Agent's account, together with interest thereon
for each day elapsed since the Borrowing Date at a rate per
annum equal to the interest rate applicable to the relevant
Loan. The Agent shall not be obligated to transfer to a
Defaulting Lender any payments made by the Borrowers to the
Agent for the Defaulting Lender's benefit, and, in the absence
of such transfer to the Defaulting Lender, the Agent shall
transfer any such payments to each other non-Defaulting Lender
ratably in accordance with their Pro Rata Share of the
Commitments (but only to the extent that such Defaulting
Lender's Advance was funded by the other Lenders) or, if so
directed by the Borrower Representative and if no Unmatured
Default or Default has occurred and is continuing (and to the
extent such Defaulting Lender's Advance was not funded by the
other Lenders), retain the same to be re-advanced to the
Borrowers as if such Defaulting Lender had made Advances to
the Borrowers. Subject to the foregoing, the Agent may hold
and, in its Permitted Discretion, setoff such Defaulting
Lender's funding shortfall against that Defaulting Lender's
Pro Rata Share of all payments received from the Borrowers or
re-lend to the Borrowers for the account of such Defaulting
Lender the amount of all such payments received and retained
by the Agent for the account of such Defaulting Lender. Until
a Defaulting Lender cures its failure to fund its Pro Rata
Share of any Advance (i) solely for the purposes of voting or
consenting to matters with respect to the Loan Documents, such
Defaulting Lender shall be deemed not to be a "Lender" and
such Defaulting Lender's Commitment shall be deemed to be
zero, (ii) such Defaulting Lender shall not be entitled to any
portion of the Unused Commitment Fee and (iii) the Unused
Commitment Fee shall accrue in favor of the Lenders which have
funded their respective Pro Rata Shares of such requested
Advance and shall be allocated among such non-Defaulting
Lenders ratably based on their Pro Rata Share of the
Commitments. This Section shall remain effective with respect
to such Defaulting Lender until (x) the Obligations under this
Agreement shall have been declared or shall have become
immediately due and payable, (y) the non-Defaulting Lenders,
the Agent, and the Borrower Representative shall have waived
such Defaulting Lender's default in writing, or (z) the
Defaulting Lender makes its Pro Rata Share of the applicable
Advance and pays to the Agent all amounts owing by the
Defaulting Lender in respect thereof. The operation of this
Section shall not be construed to increase or otherwise affect
the Commitment of any Lender, to relieve or excuse the
performance by such Defaulting Lender or any other Lender of
its duties and obligations hereunder.
2.24. Limitation of Interest. The Borrowers, the Agent and the
Lenders intend to strictly comply with all applicable laws, including applicable
usury laws. Accordingly, the provisions of this Section 2.24 shall govern and
control over every other provision of this Agreement or any other Loan Document
which conflicts or is inconsistent with this Section 2.24, even if such
provision declares that it controls. As used in this Section 2.24, the term
"interest" includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal parts during the full term
of the Obligations. In no event shall the Borrowers or any other Person be
obligated to pay, or any Lender have any right or privilege to reserve, receive
or retain, (a) any interest in excess of the maximum amount of nonusurious
interest permitted under the laws of the State of Texas or the applicable laws
(if any) of the U.S. or of any other applicable
A&R CREDIT AGREEMENT
43
state, or (b) total interest in excess of the amount which such Lender could
lawfully have contracted for, reserved, received, retained or charged had the
interest been calculated for the full term of the Obligations at the Highest
Lawful Rate. On each day, if any, that the interest rate (the "Stated Rate")
called for under this Agreement or any other Loan Document exceeds the Highest
Lawful Rate, the rate at which interest shall accrue shall automatically be
fixed by operation of this sentence at the Highest Lawful Rate for that day, and
shall remain fixed at the Highest Lawful Rate for each day thereafter until the
total amount of interest accrued equals the total amount of interest which would
have accrued if there were no such ceiling rate as is imposed by this sentence.
Thereafter, interest shall accrue at the Stated Rate unless and until the Stated
Rate again exceeds the Highest Lawful Rate when the provisions of the
immediately preceding sentence shall again automatically operate to limit the
interest accrual rate. The daily interest rates to be used in calculating
interest at the Highest Lawful Rate shall be determined by dividing the
applicable Highest Lawful Rate per annum by the number of days in the calendar
year for which such calculation is being made. None of the terms and provisions
contained in this Agreement or in any other Loan Document which directly or
indirectly relate to interest shall ever be construed without reference to this
Section 2.24, or be construed to create a contract to pay for the use,
forbearance or detention of money at an interest rate in excess of the Highest
Lawful Rate. If the term of any Obligation is shortened by reason of
acceleration of maturity as a result of any Default or by any other cause, or by
reason of any required or permitted prepayment, and if for that (or any other)
reason any Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Highest Lawful Rate, then and in any such event all
of any such excess interest shall be canceled automatically as of the date of
such acceleration, prepayment or other event which produces the excess, and, if
such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of the Borrowers'
obligations to such Lender, effective as of the date or dates when the event
occurs which causes it to be excess interest, until such excess is exhausted or
all of such principal has been fully paid and satisfied, whichever occurs first,
and any remaining balance of such excess shall be promptly refunded to its
payor. Chapter 346 of the Texas Finance Code (which regulates certain revolving
credit accounts (formerly Tex. Rev. Civ. Stat. ▇▇▇. Art. ▇▇▇▇, ▇▇. 15)) shall
not apply to this Agreement or to any Loan, nor shall this Agreement or any Loan
be governed by or be subject to the provisions of such Chapter 346 in any manner
whatsoever.
ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the Closing Date, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(a) subjects any Lender or any applicable Lending
Installation or the LC Issuer to any Taxes, or changes the
basis of taxation of payments (other than with respect to
Excluded Taxes) to any Lender or the LC Issuer in respect of
its Eurodollar Loans, Facility LCs or participations therein,
or
(b) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender or any
applicable Lending
A&R CREDIT AGREEMENT
44
Installation or the LC Issuer (other than reserves and assessments
taken into account in determining the interest rate applicable to
Eurodollar Advances), or
(c) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its Eurodollar
Loans, or of issuing or participating in Facility LCs, or reduces any
amount receivable by any Lender or any applicable Lending Installation
or the LC Issuer in connection with its Eurodollar Loans, Facility LCs
or participations therein, or requires any Lender or any applicable
Lending Installation or the LC Issuer to make any payment calculated by
reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received by it, by
an amount deemed material by such Lender or the LC Issuer as the case
may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within fifteen days of demand by such Lender or the LC Issuer, as the case may
be, the Borrowers shall pay such Lender or the LC Issuer, as the case may be,
such additional amount or amounts as will compensate such Lender or the LC
Issuer, as the case may be, for such increased cost or reduction in amount
received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within fifteen days of demand by such Lender or
the LC Issuer, the Borrowers shall pay such Lender or the LC Issuer the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender or the LC Issuer determines is
attributable to this Agreement, its Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines (as defined below) or (ii) any
adoption of or change in any other law, governmental or quasi-governmental rule,
regulation, policy, guideline, interpretation, or directive (whether or not
having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or the LC
Issuer or any Lending Installation or any corporation controlling any Lender or
the LC Issuer. "Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the U.S. on the date of this Agreement, including
transition rules, and (ii) the corresponding capital regulations promulgated by
regulatory authorities outside the U.S. implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines
that maintenance of its Eurodollar Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
A&R CREDIT AGREEMENT
45
3.4. Funding Indemnification. If any payment of a Eurodollar
Advance occurs on a date which is not the last day of the applicable Interest
Period, whether because of acceleration, prepayment or otherwise, or a
Eurodollar Advance is not made on the date specified by the Borrower
Representative for any reason other than default by the Lenders, the Borrowers
will indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain such Eurodollar Advance.
3.5. Taxes.
(a) All payments by the Borrowers to or for the
account of any Lender, the LC Issuer or the Agent hereunder or
under any Note or Facility LC Application shall be made free
and clear of and without deduction for any and all Taxes. If
any Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to any Lender, the
LC Issuer or the Agent, (a) 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 3.5) such Lender, the LC Issuer or the
Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (b)
such Borrower shall make such deductions, (c) such Borrower
shall pay the full amount deducted to the relevant authority
in accordance with applicable law and (d) such Borrower shall
furnish to the Agent the original copy of a receipt evidencing
payment thereof within thirty days after such payment is made.
(b) In addition, each Borrower hereby agrees to
pay any present or future stamp or documentary taxes and any
other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or under any Note
or Facility LC Application or from the execution or delivery
of, or otherwise with respect to, this Agreement or any Note
or Facility LC Application ("Other Taxes").
(c) The Borrowers hereby agree to, jointly and
severally, indemnify the Agent, the LC Issuer and each Lender
for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed on
amounts payable under this Section 3.5) paid by the Agent, the
LC Issuer or such Lender as a result of its Commitment, any
Loans made by it hereunder, any Facility LC issued hereunder
or otherwise in connection with its participation in this
Agreement and any liability (including penalties, interest and
expenses) arising therefrom or with respect thereto. Payments
due under this indemnification shall be made within thirty
days of the date the Agent, the LC Issuer or such Lender makes
demand therefor pursuant to Section 3.6.
(d) Each Lender that is not incorporated under
the laws of the U.S. or a state thereof (each a "Non-U.S.
Lender") agrees that it will, not more than ten Business Days
after the date of this Agreement, (i) deliver to the Agent two
duly completed copies of U.S. Internal Revenue Service Form
W-8BEN or W-8ECI, certifying in either case that such Lender
is entitled to receive payments under this Agreement without
deduction or withholding of any U.S. federal income taxes, and
(ii) deliver to the Agent a U.S. Internal Revenue Form W-8 or
W-9, as the case may be, and certify that it is entitled to an
exemption from U.S. backup withholding tax. Each Non-U.S.
Lender further undertakes to deliver to each of the Borrower
Representative and the Agent (x) renewals or additional copies
of such form (or any successor form) on or before the date
that such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent
forms so delivered by it, such additional forms or amendments
A&R CREDIT AGREEMENT
46
thereto as may be reasonably requested by the Borrower
Representative or the Agent. All forms or amendments described
in the preceding sentence shall certify that such Lender is
entitled to receive payments under this Agreement without
deduction or withholding of any U.S. federal income taxes,
unless an event (including without limitation any change in
treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent
such Lender from duly completing and delivering any such form
or amendment with respect to it and such Lender advises the
Borrower Representative and the Agent that it is not capable
of receiving payments without any deduction or withholding of
U.S. federal income tax.
(e) For any period during which a Non-U.S.
Lender has failed to provide the Borrower Representative with
an appropriate form pursuant to clause (d), above (unless such
failure is due to a change in treaty, law or regulation, or
any change in the interpretation or administration thereof by
any governmental authority, occurring subsequent to the date
on which a form originally was required to be provided), such
Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the U.S.;
provided that, should a Non-U.S. Lender which is otherwise
exempt from or subject to a reduced rate of withholding tax
become subject to Taxes because of its failure to deliver a
form required under clause (d), above, the Borrowers shall
take such steps as such Non-U.S. Lender shall reasonably
request to assist such Non-U.S. Lender to recover such Taxes.
(f) Any Lender that is entitled to an exemption
from or reduction of withholding tax with respect to payments
under this Agreement or any Note pursuant to the law of any
relevant jurisdiction or any treaty shall deliver to the
Borrower Representative (with a copy to the Agent), at the
time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable
law as will permit such payments to be made without
withholding or at a reduced rate.
(g) If the U.S. Internal Revenue Service or any
other governmental authority of the U.S. or any other country
or any political subdivision thereof asserts a claim that the
Agent did not properly withhold tax from amounts paid to or
for the account of any Lender (because the appropriate form
was not delivered or properly completed, because such Lender
failed to notify the Agent of a change in circumstances which
rendered its exemption from withholding ineffective, or for
any other reason), such Lender shall indemnify the Agent fully
for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties
and interest, and including taxes imposed by any jurisdiction
on amounts payable to the Agent under this subsection,
together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for
the Agent, which attorneys may be employees of the Agent). The
obligations of the Lenders under this Section 3.5(g) shall
survive the payment of the Obligations and termination of this
Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrowers to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Borrower Representative (with a copy to the Agent) as to the amount due, if any,
under Section 3.1, 3.2, 3.4 or 3.5. Such written statement shall set forth in
reasonable detail the calculations upon which
A&R CREDIT AGREEMENT
47
such Lender determined such amount and shall be final, conclusive and binding on
the Borrowers in the absence of manifest error. Determination of amounts payable
under such Sections in connection with a Eurodollar Loan shall be calculated as
though each Lender funded its Eurodollar Loan through the purchase of a deposit
of the type and maturity corresponding to the deposit used as a reference in
determining the Eurodollar Rate applicable to such Loan, whether in fact that is
the case or not. Unless otherwise provided herein, the amount specified in the
written statement of any Lender shall be payable on demand after receipt by the
Borrower Representative of such written statement. The obligations of the
Borrowers under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the
Obligations and termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Effectiveness. This Agreement will not become effective unless
the Loan Parties have satisfied each of the following conditions in a manner
satisfactory to the Agent and the Lenders, and with respect to any condition
requiring delivery of any agreement, certificate, document, or instrument, the
Loan Parties shall have furnished to the Agent sufficient copies of any such
agreement, certificate, document, or instrument for distribution to the Lenders:
(a) This Agreement or counterparts hereof shall
have been duly executed by each Loan Party, the Agent and the
Lenders; and the Agent shall have received duly executed
copies of the Loan Documents and such other documents,
instruments, agreements and legal opinions as the Agent shall
reasonably request in connection with the transactions
contemplated by this Agreement and the other Loan Documents,
each in form and substance reasonably satisfactory to the
Agent.
(b) Each Loan Party shall have delivered copies
of its articles or certificate of incorporation, organization
or limited partnership, together with all amendments, and a
certificate of good standing, each certified by the
appropriate governmental officer in its jurisdiction of
incorporation or organization.
(c) Each Loan Party shall have delivered copies,
certified by its Secretary or Assistant Secretary, of its
by-laws or operating, management or partnership agreement and
of its Board of Directors' resolutions or the resolutions of
its members and of resolutions or actions of any other body
authorizing the execution, delivery and performance of the
Loan Documents to which such Loan Party is a party.
(d) Each Loan Party shall have delivered an
incumbency certificate, executed by its Secretary or Assistant
Secretary (or Secretary or Assistant Secretary of the general
partner of such Borrower, if applicable), which shall identify
by name and title and bear the signatures of the Authorized
Officers and any other officers such Loan Party authorized to
sign the Loan Documents to which such Loan Party is a party,
upon which certificate the Agent and the Lenders shall be
entitled to rely until informed of any change in writing by
such Loan Party.
(e) Each Borrower and each other Loan Party
shall have delivered a certificate, signed by the chief
financial officer of such Borrower and such other Loan Party,
on the initial Credit Extension Date (i) stating that no
Default or Unmatured Default has occurred and is continuing,
(ii) stating that the representations and warranties
A&R CREDIT AGREEMENT
48
contained in Article V are true and correct as of such Credit
Extension Date, (iii) specifying the deposit account at Bank
One which shall be used as the Funding Account and (iv)
certifying any other factual matters as may be reasonably
requested by the Agent or any Lender.
(f) The Loan Parties shall have delivered a
written opinion of the Loan Parties' counsel, addressed to the
Agent, the LC Issuer and the Lenders in substantially the form
of Exhibit D.
(g) The Borrowers shall have delivered any Notes
requested by a Lender pursuant to Section 2.21 payable to the
order of each such requesting Lender.
(h) The Borrowers shall have delivered money
transfer authorizations as the Agent may have reasonably
requested.
(i) Unless otherwise agreed by the Agent, the
Loan Parties shall have delivered, with respect to each parcel
of real Property which is required to be subject to a Lien in
favor of the Agent, each of the following, in form and
substance reasonably satisfactory to the Agent:
(i) a Mortgage on such property;
(ii) evidence that a counterpart of the
Mortgage has been recorded in the place necessary, in
the Agent's judgment, to create a valid and
enforceable first priority Lien in favor of the Agent
for the benefit of itself and the Lenders;
(iii) ALTA or other mortgagee's title
policy;
(iv) copies of Phase I Environmental
Reports or other similar reports, (in form and
substance satisfactory to the Agent) as the Agent may
require;
(v) an opinion of counsel in the state
in which such parcel of real Property is located in
form and substance and from counsel reasonably
satisfactory to the Agent; and
such other information, documentation, and certifications as
may be reasonably required by the Agent.
(j) The Agent shall have received all Lien and
other searches that the Agent deems necessary, the Loan
Parties shall have delivered UCC termination statements or
amendments to existing UCC financing statements with respect
to any filings against the Collateral as may be requested by
the Agent and shall have authorized the filing of such
termination statements or amendments, the Agent shall have
been authorized to file any UCC financing statements that the
Agent deems necessary to perfect its Liens in the Collateral
and Liens creating a first priority security interest in the
Collateral in favor of the Agent shall have been perfected.
(k) The Borrower Representative shall have
delivered an Aggregate Borrowing Base Certificate which
calculates the Aggregate Borrowing Base as of the end of the
Business Day immediately preceding the Effective Date and each
Borrower shall have delivered a duly executed Borrowing Base
Certificate for such Borrower which
A&R CREDIT AGREEMENT
49
calculates such Borrower's Borrowing Base as of the end of the
Business Day immediately preceding the Effective Date.
(l) The Borrowers shall have delivered to the
Agent and the Lenders the unaudited consolidated financial
statements of the Company and its Subsidiaries for the
twelve-month period ending on December 31, 2003.
(m) The Agent shall have completed its business
due diligence and the Loan Parties' corporate structure,
capital structure, material accounts and governing documents
shall be acceptable to the Agent. In addition, the terms and
conditions of all Indebtedness of each Loan Party shall be
acceptable to the Agent.
(n) All legal (including tax implications) and
regulatory matters, including, but not limited to compliance
with applicable requirements of Regulations U, T and X of the
Board of Governors of the Federal Reserve System, shall be
satisfactory to the Agent and the Lenders.
(o) The Loan Parties shall have delivered (i)
Collateral audits, satisfactory to the Agent, prepared by an
independent firm engaged directly by the Agent and (ii) unless
otherwise agreed by the Agent, appraisals, prepared by an
independent appraiser engaged directly by the Agent, of each
parcel of real property or interest in real property described
in the Mortgages, which appraisals satisfy the requirements of
the Financial Institutions Reform, Recovery and Enforcement
Act, as amended, and the regulations promulgated thereunder,
if applicable, and which shall evidence compliance with the
supervisory loan-to-value limits set forth in the Federal
Deposit Insurance Corporation Improvement Act of 1991, as
amended, and the regulations promulgated thereunder, if
applicable, which audits and appraisals shall be satisfactory
to the Agent, together with evidence of compliance with
applicable federal regulations governing loans in areas having
special flood hazards
(p) The Loan Parties shall have delivered any
requested environmental review reports from firm(s)
satisfactory to the Agent, which review reports shall be
acceptable to the Agent. Any environmental hazards or
liabilities identified in any such environmental review
reports shall indicate the Loan Parties' plans with respect
thereto.
(q) The Borrowers shall have delivered evidence
of insurance coverage in form, scope, and substance reasonably
satisfactory to the Agent and otherwise in compliance with the
terms of Section 6.7.
(r) The Borrowers shall have delivered each
Collateral Access Agreement required to be provided pursuant
to Section 6.13.
(s) The Borrowers shall have delivered each
Deposit Account Control Agreement required to be provided
pursuant to Section 6.14.
(t) The Agent shall have determined that (i)
since December 31, 2003, there is an absence of any material
adverse change or disruption in primary or secondary loan
syndication markets, financial markets or in capital markets
generally that would likely impair syndication of the Credit
Extensions hereunder and (ii) the Loan Parties shall have
fully cooperated with the Agent's syndication efforts
including, without limitation, by providing the Agent with
information regarding the Loan Parties' operations and
A&R CREDIT AGREEMENT
50
prospects and such other information as the Agent deems
necessary to successfully syndicate the Credit Extensions
hereunder.
(u) The Borrowers shall have delivered a
properly completed Facility LC Application if the initial
Credit Extension will include the issuance of a Facility LC.
The Borrowers shall have executed the LC Issuer's master
agreement for the issuance of Letters of Credit.
(v) After giving effect to all Credit Extensions
to be made on the Effective Date and payment of all fees and
expenses due hereunder, and with all of the Loan Parties'
indebtedness, liabilities, and current obligations, the
Borrowers' Availability shall not be less than $12,000,000.
(w) The Borrowers shall have paid all of the
fees and expenses owing to the Agent, the Arranger, the LC
Issuer and the Lenders pursuant to Section 2.10, and Section
9.6(a).
(x) The Borrowers shall have delivered to the
Agent true and complete Customer Lists for each Borrower.
(y) The Loan Parties shall have delivered to the
Agent their most recent statement of the Unfunded Liabilities
of each Single Employer Plan, certified as correct by an
actuary enrolled under ERISA.
(z) The Company shall have delivered a copy of a
fully executed supplemental indenture to the Indenture
(together with any related documents or agreements delivered
to the Indenture trustee in connection therewith), in form and
substance satisfactory to Agent in its discretion, reflecting
the addition of certain Loan Parties as guarantors under the
Indenture and including any other modifications necessary for
the Loan Parties to comply with the terms of the Indenture as
a result of the consummation of the transactions contemplated
by this Agreement.
(aa) The Loan Parties shall have delivered such
other documents as the Agent, the LC Issuer, any Lender or
their respective counsel may have reasonably requested.
4.2. Each Credit Extension. Except as otherwise expressly provided
herein, the Lenders shall not be required to make any Credit Extension if on the
applicable Credit Extension Date:
(a) There exists any Default or Unmatured
Default or any Default or Unmatured Default shall result from
any such Credit Extension and the Agent or the Required
Lenders shall have determined not to make any Credit Extension
as a result of such Default or Unmatured Default.
(b) Any representation or warranty contained in
Article V is untrue or incorrect as of such Credit Extension
Date except to the extent any such representation or warranty
is stated to relate solely to an earlier date, and the Agent
or the Required Lenders shall have determined not to make any
Credit Extension as a result of the fact that such
representation or warranty is untrue or incorrect.
A&R CREDIT AGREEMENT
51
(c) After giving effect to any Credit Extension,
the Borrowers' Availability would be less than zero.
(d) Any legal matter incident to the making of
such Credit Extension shall not be satisfactory to the Agent
and its counsel.
Each Borrowing Notice or request for issuance of Facility LC with
respect to each such Credit Extension shall constitute a representation and
warranty by each Borrower that the conditions contained in Section 4.1 have been
satisfied and that none of the conditions set forth in Section 4.2 exist as of
the applicable Credit Extension Date. Any Lender may require a duly completed
Compliance Certificate as a condition to making a Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each Loan Party represents and warrants to the Lenders as follows:
5.1. Existence and Standing. Each Loan Party is a corporation,
partnership (in the case of Subsidiaries only) or limited liability company duly
and properly incorporated or organized, as the case may be, validly existing and
(to the extent such concept applies to such entity) in good standing under the
laws of its jurisdiction of incorporation or organization and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
5.2. Authorization and Validity. Each Loan Party has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by each Loan Party of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by proper
proceedings, and the Loan Documents to which such Loan Party is a party
constitute legal, valid and binding obligations of such Loan Party enforceable
against such Loan Party in accordance with their terms, except as enforceability
may be limited by bankruptcy, insolvency or similar laws affecting the
enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by any Loan Party of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (a) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Loan Party or (b) any Loan
Party's articles or certificate of incorporation, partnership agreement,
certificate of partnership, articles or certificate of organization, by-laws, or
operating or other management agreement, as the case may be, or (c) the
provisions of any indenture, instrument or agreement to which any Loan Party is
a party or is subject, or by which it, or its Property, is bound, or conflict
with or constitute a default thereunder, or result in, or require, the creation
or imposition of any Lien in, of or on the Property of such Loan Party pursuant
to the terms of any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by a Loan Party, is required to be obtained by any Loan
Party in connection with the execution and delivery of the Loan Documents, the
borrowings under this Agreement, the payment and performance by the Loan Parties
of the Obligations or the legality, validity, binding effect or enforceability
of any of the Loan Documents.
A&R CREDIT AGREEMENT
52
5.4. Security Interest in Collateral. The provisions of this
Agreement and the other Loan Documents create legal and valid Liens on all the
Collateral in favor of the Agent, for the benefit of the Agent and the Lenders,
and such Liens constitute perfected and continuing Liens on the Collateral,
securing the Obligations, enforceable against the applicable Loan Party and all
third parties, and having priority over all other Liens on the Collateral except
in the case of (a) Permitted Liens, to the extent any such Permitted Liens would
have priority over the Liens in favor of the Agent pursuant to any applicable
law or agreement and (b) Liens perfected only by possession (including
possession of any certificate of title) to the extent the Agent has not obtained
or does not maintain possession of such Collateral.
5.5. Financial Statements.
(a) The audited consolidated financial
statements of the Company and its Subsidiaries for the Fiscal
Year ended on December 31, 2002 heretofore delivered to the
Lenders were prepared in accordance with GAAP (as in effect on
the date such statements were prepared) and fairly present the
consolidated financial condition and operations of the Company
and its Subsidiaries at such date and the consolidated results
of their operations for the period then ended. The unaudited
consolidated financial statements of the Company and its
Subsidiaries for the Fiscal Year ended December 31, 2003
heretofore delivered by the Borrowers to the Lenders were
prepared in accordance with GAAP (as in effect on the date
such statements were prepared except for the presentation of
footnotes and for applicable normal year-end audit
adjustments) and fairly present the consolidated financial
condition and operations of the Company and its Subsidiaries
at such date and the consolidated results of their operations
for the period then ended.
(b) The Projections for the Fiscal Year ending
December 31, 2004, and the most recent Projections delivered
to the Agent and the Lenders pursuant to Section 6.1(d),
represent the Borrowers' good faith estimate of the future
financial performance of the Borrowers for the period set
forth therein.
5.6. Material Adverse Change. Since December 31, 2003 there has
been no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Loan Parties which could reasonably
be expected to have a Material Adverse Effect.
5.7. Taxes. The Loan Parties have filed all U.S. federal tax
returns and all other tax returns which are required to be filed and have paid
all taxes due pursuant to said returns or pursuant to any assessment received by
any Loan Party, except such taxes, if any, as are being contested in good faith
and as to which adequate reserves have been provided in accordance with GAAP and
as to which no Lien exists. The U.S. income tax returns of the Loan Parties have
been audited by the Internal Revenue Service through the Fiscal Year ended
December 31, 2002. No tax liens have been filed and no claims are being asserted
with respect to any such taxes. The charges, accruals and reserves on the books
of the Loan Parties in respect of any taxes or other governmental charges are
adequate. If any Loan Party is a limited liability company, each such limited
liability company that has elected to be taxed as a partnership qualifies for
partnership tax treatment under U.S. federal tax law.
5.8. Litigation and Contingent Obligations. Except as set forth on
Schedule 5.8, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting any Loan Party (including, without limitation,
with respect to the Company's interest in, or potential litigation with respect
to, The Loma Company, LLC, a Louisiana limited liability company) which could
reasonably be expected to have a Material Adverse Effect or which seeks to
prevent, enjoin or delay the making of any Credit Extensions. Other than any
A&R CREDIT AGREEMENT
53
liability incident to any litigation, arbitration or proceeding which (i) could
not reasonably be expected to have a Material Adverse Effect or (ii) is set
forth on Schedule 5.8, no Loan Party has any material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.5.
5.9. Capitalization and Subsidiaries. Schedule 5.9 sets forth (a) a
correct and complete list of the name and relationship to the Company of each
and all of the Company's Subsidiaries, (b) the location of the chief executive
office of each Loan Party and each of its Subsidiaries and each other location
where any of them have maintained their chief executive office in the past five
years, (c) a true and complete listing of each class of each Loan Party's
authorized Capital Stock, of which all of such issued shares or interests are
validly issued and outstanding and, to the extent applicable, fully paid,
non-assessable and owned beneficially and of record by the Persons identified on
Schedule 5.9, and (d) the type of entity of each Loan Party. With respect to
each Loan Party, Schedule 5.9 also sets forth the employer or taxpayer
identification number of each Loan Party and the organizational identification
number issued by each Loan Party's jurisdiction of organization or a statement
that no such number has been issued. All of the issued and outstanding Capital
Stock owned by any Loan Party has been (to the extent such concepts are relevant
with respect to such ownership interests) duly authorized and issued and, to the
extent applicable, is fully paid and non-assessable.
5.10. ERISA. The Unfunded Liabilities of all Single Employer Plans
do not in the aggregate exceed $1,000,000. Neither the Company nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
any withdrawal liability to Multiemployer Plans in excess of $1,000,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Company nor any other member of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan.
5.11. Accuracy of Information. No information, exhibit or report
furnished by any Loan Party to the Agent or to any Lender in connection with the
negotiation of, or compliance with, the Loan Documents contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein not misleading.
5.12. Names; Prior Transactions. Except as set forth on Schedule
5.12, the Loan Parties have not, during the past five years, been known by or
used any other corporate or fictitious name, or been a party to any merger or
consolidation, or been a party to any Acquisition.
5.13. Regulation U. No Loan Party is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" as such
terms are defined in Regulation U of the Federal Reserve Board as now and from
time to time hereafter in effect (such securities being referred to herein as
"Margin Stock"). No Loan Party owns any Margin Stock, and none of the proceeds
of the Loans or other extensions of credit under this Agreement will be used,
directly or indirectly, for the purpose of purchasing or carrying any Margin
Stock, for the purpose of reducing or retiring any Indebtedness that was
originally incurred to purchase or carry any Margin Stock or for any other
purpose that might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulations T, U or X of the Federal Reserve Board. No Loan Party will take or
permit to be taken any action that might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
5.14. Material Agreements. Schedule 5.14 hereto sets forth as of the
Closing Date all material agreements and contracts to which any Loan Party is a
party or is bound as of the date hereof. No Loan Party is subject to any charter
or other corporate restriction which could reasonably be expected to have a
Material Adverse Effect. No Loan Party is in default in the performance,
observance or fulfillment of any
A&R CREDIT AGREEMENT
54
of the obligations, covenants or conditions contained in (i) any material
agreement to which it is a party or (ii) any agreement or instrument evidencing
or governing Indebtedness.
5.15. Compliance With Laws. The Loan Parties have complied with all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property.
5.16. Ownership of Properties. Except as set forth on Schedule 5.16,
on the date of this Agreement, the Loan Parties will have good title, free of
all Liens other than those permitted by Section 6.22, to all of the Property and
assets reflected in the Loan Parties' most recent consolidated financial
statements provided to the Agent as owned by the Loan Parties.
5.17. Plan Assets; Prohibited Transactions. No Loan Party is an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code. No "benefit plan
investors" (as defined in 29 C.F.R. Section 2510.3 (101(f)) own 25% or more of
the value of any class of equity interests in any Borrower.
5.18. Environmental Matters. In the ordinary course of its business,
the officers of each Loan Party consider the effect of Environmental Laws on the
business of such Loan Party, in the course of which they identify and evaluate
potential risks and liabilities accruing to such Loan Party due to Environmental
Laws. On the basis of this consideration, the Loan Parties have concluded that
Environmental Laws cannot reasonably be expected to have a Material Adverse
Effect. No Loan Party has received any notice to the effect that its operations
are not in material compliance with any of the requirements of applicable
Environmental Laws or are the subject of any federal or state investigation
evaluating whether any remedial action is needed to respond to a release of any
toxic or hazardous waste or substance into the environment.
5.19. Investment Company Act. No Loan Party is an "investment
company" or a company "controlled" by an "investment company," within the
meaning of the Investment Company Act of 1940, as amended.
5.20. Public Utility Holding Company Act. No Loan Party is 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", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.21. Bank Accounts. As of the Closing Date, Exhibit B to the
Security Agreement contains a complete and accurate list of all bank accounts
maintained by each Loan Party with any bank or other financial institution.
5.22. Indebtedness. As of the Closing Date and after giving effect
to the Credit Extensions to be made on the Closing Date (if any), the Loan
Parties have no Indebtedness, except for (a) the Obligations, and (b) any
Indebtedness described on Schedule 5.22.
5.23. Affiliate Transactions. Except as set forth on Schedule 5.23,
as of the Closing Date, there are no existing or proposed agreements,
arrangements, understandings, or transactions between any Loan Party and any of
the officers, members, managers, directors, stockholders, parents, other
interest holders,
A&R CREDIT AGREEMENT
55
employees, or Affiliates (other than Subsidiaries) of any Loan Party or any
members of their respective immediate families, and none of the foregoing
Persons are directly or indirectly indebted to or have any direct or indirect
ownership, partnership, or voting interest in any Affiliate of any Loan Party or
any Person with which any Loan Party has a business relationship or which
competes with any Loan Party.
5.24. Real Property; Leases. As of the Closing Date, Schedule 5.24
sets forth a correct and complete list of all real Property owned by each Loan
Party, all leases and subleases of real Property by each Loan Party as lessee or
sublessee, and all leases and subleases of real Property by each Loan Party as
lessor or sublessor. Each of such leases and subleases is valid and enforceable
in accordance with its terms and is in full force and effect, and no default by
any party to any such lease or sublease exists. Each Loan Party has good and
indefeasible title in fee simple to the real Property identified on Schedule
5.24 as owned by such Loan Party, or valid leasehold interests in all real
Property designated therein as "leased" by such Loan Party.
5.25. Intellectual Property Rights. As of the Closing Date: (a)
Schedule 5.25 sets forth a correct and complete list of all Intellectual
Property Rights of each Loan Party; (b) none of the Intellectual Property Rights
listed in Schedule 5.25 is subject to any licensing agreement or similar
arrangement except as set forth in Schedule 5.25; (c) the Intellectual Property
Rights described in Schedule 5.25 constitute all of the property of such type
necessary to the current and anticipated future conduct of the Loan Parties'
business; (d) to the best of each Loan Party's knowledge, no slogan or other
advertising device, product, process, method, substance, part, or other material
now employed, or now contemplated to be employed, by any Loan Party infringes in
any material respect upon any rights held by any other Person; and (e) no claim
or litigation regarding any of the foregoing is pending or threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard, or code is pending or, to the knowledge of any Loan Party,
proposed.
5.26. Insurance. Schedule 5.26 lists all insurance policies of any
nature maintained, as of the Closing Date, by each Loan Party, as well as a
summary of the terms of each such policy.
5.27. Solvency.
(a) Immediately after the consummation of the
transactions to occur on the date hereof and immediately
following the making of each Credit Extension, if any, made on
the date hereof and after giving effect to the application of
the proceeds of such Credit Extensions, (a) the fair value of
the assets of each Loan Party, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or
otherwise, of each Loan Party; (b) the present fair saleable
value of the Property of each Loan Party will be greater than
the amount that will be required to pay the probable liability
of each Loan Party on its debts and other liabilities,
subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) each Loan Party
will be able to pay its debts and liabilities, subordinated,
contingent or otherwise, as such debts and liabilities become
absolute and matured; and (d) each Loan Party will not have
unreasonably small capital with which to conduct the
businesses in which it is engaged as such businesses are now
conducted and are proposed to be conducted after the date
hereof.
(b) No Borrower intends to, nor will any
Borrower permit any of its Subsidiaries to, and no Borrower
believes that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking
into account the timing of and amounts of cash to be received
by it or any such Subsidiary and the timing of the
A&R CREDIT AGREEMENT
56
amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness of any such Subsidiary.
5.28. Subordinated Indebtedness; Indenture. The Secured Obligations
constitute senior indebtedness which is entitled to the benefits of the
subordination provisions of all outstanding Subordinated Indebtedness. In
addition, (a) no Event of Default or Default (each as defined in the Indenture)
exists, nor will any such Event of Default or Default exist immediately after
the granting or continuation of any Loan, under the Indenture, the Senior
Subordinated Notes or any agreement executed by any Borrower in connection
therewith; (b) no Loan Party nor any of its Subsidiaries has incurred any
Indebtedness (as defined in the Indenture) in violation of Section 1008 of the
Indenture; and (c) all of the Obligations constitute Indebtedness permitted by
the terms of Section 1008 of the Indenture.
5.29. Post-Retirement Benefits. The present value of the expected
cost of post-retirement medical and insurance benefits payable by each Loan
Party to its employees and former employees, as estimated by such Loan Party in
accordance with procedures and assumptions deemed reasonable by the Required
Lenders, does not exceed $500,000.
5.30. Common Enterprise. The successful operation and condition of
each of the Loan Parties is dependent on the continued successful performance of
the functions of the group of the Loan Parties as a whole and the successful
operation of each of the Loan Parties is dependent on the successful performance
and operation of each other Loan Party. Each Loan Party expects to derive
benefit (and its board of directors or other governing body has determined that
it may reasonably be expected to derive benefit), directly and indirectly, from
(i) successful operations of each of the other Loan Parties and (ii) the credit
extended by the Lenders to the Borrowers hereunder, both in their separate
capacities and as members of the group of companies. Each Loan Party has
determined that execution, delivery, and performance of this Agreement and any
other Loan Documents to be executed by such Loan Party is within its purpose,
will be of direct and indirect benefit to such Loan Party, and is in its best
interest.
5.31. Reportable Transaction. The Borrowers do not intend to treat
the Advances and related transactions as being a "reportable transaction"
(within the meaning of Treasury Regulation Section 1.6011-4). In the event a
Borrower determines to take any action inconsistent with such intention, it will
promptly notify the Agent thereof.
5.32. Labor Disputes. Except as set forth on Schedule 5.32, as of
the Closing Date (a) there is no collective bargaining agreement or other labor
contract covering employees of the Borrower or any of its Subsidiaries, (b) no
such collective bargaining agreement or other labor contract is scheduled to
expire during the term of this Agreement, (c) no union or other labor
organization is seeking to organize, or to be recognized as, a collective
bargaining unit of employees of the Borrower or any of its Subsidiaries or for
any similar purpose, and (d) there is no pending or (to the best of the
Borrower's knowledge) threatened, strike, work stoppage, material unfair labor
practice claim, or other material labor dispute against or affecting the
Borrower or its Subsidiaries or their employees.
5.33. Joint Venture. The Company has set aside adequate reserves on
its books to satisfy any obligations that may arise as a result of the potential
dissolution of The Loma Company, LLC, a Louisiana limited liability company.
A&R CREDIT AGREEMENT
57
ARTICLE VI
COVENANTS
Each Loan Party executing this Agreement jointly and severally agrees
as to all Loan Parties that from and after the date hereof and until the
Facility Termination Date:
6.1. Financial and Collateral Reporting. Each Loan Party will
maintain, for itself and each Subsidiary, a system of accounting established and
administered in accordance with GAAP, and will furnish to the Lenders:
(a) on the date of the filing of Form 10-K with
the Securities and Exchange Commission, but in no event later
than ninety days after the close of each Fiscal Year of the
Company and its Subsidiaries, an audit report certified
without a "going concern" or like qualification or exception,
or qualification arising out of the scope of the audit, by
independent certified public accountants acceptable to the
Required Lenders, prepared in accordance with GAAP on a
consolidated and consolidating basis (consolidating statements
need not be certified by such accountants), including balance
sheets as of the end of such Fiscal Year, related profit and
loss and reconciliation of surplus statements, and a statement
of cash flows, accompanied by (i) any management letter
prepared by said accountants and (ii) a certificate of said
accountants that, in the course of their examination necessary
for their certification of the foregoing, they have obtained
no knowledge of any Default or Unmatured Default, or if, in
the opinion of such accountants, any Default or Unmatured
Default shall exist, stating the nature and status thereof;
(b) on the date of the filing of Form 10-Q with
the Securities and Exchange Commission, but in no event later
than forty-five days after the close of the first three
quarterly periods of each Fiscal Year of the Company and its
Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such Fiscal Quarter and
consolidated and consolidating profit and loss and
reconciliation of surplus statements and a statement of cash
flows for the period from the beginning of the applicable
Fiscal Year to the end of such Fiscal Quarter, all certified
by its chief financial officer and prepared in accordance with
GAAP (except for exclusion of footnotes and subject to normal
year-end audit adjustments);
(c) within thirty days after the close of each
Fiscal Month of the Company and its Subsidiaries, consolidated
and consolidating unaudited balance sheets as at the close of
each such Fiscal Month and consolidated and consolidating
profit and loss and reconciliation of surplus statements, and
certain cash flow items deemed necessary by Agent in its
discretion, from the beginning of the applicable Fiscal Year
to the end of such Fiscal Month, all prepared in accordance
with GAAP (except for exclusion of footnotes and subject to
normal year-end audit adjustments) and certified by its chief
financial officer;
(d) as soon as available, but not later than
thirty days prior to the end of such Fiscal Year, a copy of
the plan and forecast (including a projected consolidated and
consolidating balance sheet, income statement and funds flow
statement) of the Company for each Fiscal Quarter of the
following Fiscal Year (the "Projections") in form reasonably
satisfactory to the Agent;
A&R CREDIT AGREEMENT
58
(e) together with each of the financial
statements required under Sections 6.1(a), (b) and (c), a
compliance certificate in substantially the form of Exhibit E
(a "Compliance Certificate") signed by the chief financial
officer of the Borrower Representative showing the
calculations necessary to determine compliance with this
Agreement and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating
the nature and status thereof.
(f) as soon as available but in any event within
three days of the end of each calendar week (or Fiscal Month
if Borrowers' average Availability for the prior thirty-day
period exceeds $20,000,000), and at such other times as may be
requested by the Agent, as of the period then ended, an
Aggregate Borrowing Base Certificate, together with a duly
executed Borrowing Base Certificate for each Borrower which
calculates such Borrower's Borrowing Base, and supporting
information in connection therewith;
(g) as soon as available but in any event within
fifteen days of the end of each Fiscal Month and at such other
times as may be requested by the Agent, as of the period then
ended:
(i) a detailed aging of each Borrower's
Accounts (1) including all invoices aged by invoice
date and (2) reconciled to the Aggregate Borrowing
Base Certificate and such Borrower's Borrowing Base
Certificate delivered as of such date prepared in a
manner reasonably acceptable to the Agent, together
with a summary specifying the name, address, and
balance due for each Account Debtor;
(ii) a schedule detailing each
Borrower's Inventory, in form satisfactory to the
Agent, (1) by location (showing Inventory in transit,
any Inventory located with a third party under any
consignment, bailee arrangement, or warehouse
agreement), by class (raw material, work-in-process
and finished goods), by product type, and by volume
on hand, which Inventory shall be valued at the lower
of cost (determined on a first-in, first-out basis)
or market and adjusted for Reserves as the Agent has
previously indicated to the Borrower are deemed by
the Agent to be appropriate, (2) including a report
of any variances or other results of Inventory counts
performed by such Borrower since the last Inventory
schedule (including information regarding sales or
other reductions, additions, returns, credits issued
by such Borrower and complaints and claims made
against such Borrower), and (3) reconciled to such
Borrower's Borrowing Base Certificate delivered as of
such date;
(iii) a worksheet of calculations
prepared by each Borrower to determine Eligible
Accounts, Eligible Unbilled Accounts and Eligible
Inventory, such worksheets detailing the Accounts and
Inventory excluded from Eligible Accounts, Eligible
Unbilled Accounts and Eligible Inventory and the
reason for such exclusion;
(iv) a reconciliation of each Borrower's
Accounts and Inventory between the amounts shown in
such Borrower's general ledger and financial
statements and the reports delivered pursuant to
clauses (i) and (ii) above; and
(v) a reconciliation of the loan
balance per each Borrower's general ledger to the
loan balance under this Agreement.
A&R CREDIT AGREEMENT
59
(h) as soon as available but in any event within
fifteen days of the end of each Fiscal Month, and at such
other times as may be requested by the Agent, as of the month
then ended, a schedule and aging of the Borrowers' accounts
payable;
(i) promptly upon the Agent's request:
(i) copies of invoices in connection
with the invoices issued by the Borrowers in
connection with any Accounts, credit memos, shipping
and delivery documents, and other information related
thereto;
(ii) copies of purchase orders,
invoices, and shipping and delivery documents in
connection with any Inventory or Equipment purchased
by any Loan Party; and
(iii) a schedule detailing the balance of
all intercompany accounts of the Loan Parties;
(j) as soon as available but in any event within
three days of the end of each calendar week and at such other
times as may be requested by the Agent, as of the period then
ended, the Borrower's sales journal, cash receipts journal
(identifying trade and non-trade cash receipts) and debit
memo/credit memo journal;
(k) as soon as possible and in any event within
thirty days of filing thereof, copies of all tax returns filed
by any Loan Party with the U.S. Internal Revenue Service;
(l) as soon as possible and in any event within
two-hundred and seventy days after the close of the Fiscal
Year of the Company, a statement of the Unfunded Liabilities
of each Single Employer Plan, certified as correct by an
actuary enrolled under ERISA;
(m) as soon as possible and in any event within
ten days after any Borrower knows that any Reportable Event
has occurred with respect to any Plan, a statement, signed by
the chief financial officer of such Borrower, describing said
Reportable Event and the action which such Borrower proposes
to take with respect thereto;
(n) as soon as possible and in any event within
thirty days of filing therewith with the PBGC, the U.S.
Internal Revenue Service or any other governmental entity, a
copy of each annual report or other filing with respect to any
Plan;
(o) as soon as possible and in any event within
ten days after receipt by any Loan Party, a copy of (i) any
material notice or claim to the effect that any Loan Party is
or may be liable to any Person as a result of the release by
any Loan Party, or any other Person of any toxic or hazardous
waste or substance into the environment, and (ii) any material
notice alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the any
Loan Party;
(p) within ten days of each March 31 and
September 30 (commencing September 30, 2004), an updated
Customer List for each Borrower, certified as true and correct
by an Authorized Officer of each such Borrower;
A&R CREDIT AGREEMENT
60
(q) concurrently with the furnishing thereof to
the shareholders of the Borrowers, copies of all financial
statements, reports and proxy statements so furnished;
(r) promptly upon the filing thereof, copies of
all registration statements and annual, quarterly, monthly or
other regular reports which any Loan Party files with the
Securities and Exchange Commission;
(s) as soon as possible and in any event within
ten days after the end of each Fiscal Quarter (or more
frequently as requested by Agent in its discretion), a
detailed listing of all advances of proceeds of Loans made by
the Borrower Representative to each Borrower during the
immediately preceding Fiscal Month and a detailed listing of
all intercompany loans made by the Borrowers during such
Fiscal Month;
(t) on the first Business Day of the month of
each March and September (commencing September 2004), a
certificate of good standing for each Loan Party from the
appropriate governmental officer in its jurisdiction of
incorporation, formation, or organization; and
(u) such other information (including
non-financial information) as the Agent or any Lender may from
time to time reasonably request.
6.2. Use of Proceeds.
(a) The Borrowers will use the proceeds of the
Credit Extensions (i) for general corporate purposes (not
otherwise prohibited by this Agreement) and (ii) for Permitted
Acquisitions.
(b) No Loan Party will use any of the proceeds
of the Credit Extensions to (i) purchase or carry any Margin
Stock in violation of Regulation U, (ii) repay or refinance
any Indebtedness of any Person incurred to buy or carry any
Margin Stock, (iii) acquire any security in any transaction
that is subject to Section 13 or Section 14 of the Securities
Exchange Act of 1934 (and the regulations promulgated
thereunder), or (iv) make any Acquisition other than Permitted
Acquisitions.
6.3. Notices. Each Loan Party will give prompt notice in writing to
the Agent and the Lenders of:
(a) the occurrence of any Default or Unmatured
Default;
(b) any other development, financial or
otherwise, which could reasonably be expected to have a
Material Adverse Effect;
(c) the assertion by the holder of any Capital
Stock of any Loan Party or the holder of any Indebtedness of
any Loan Party in excess of $1,000,000 that any default exists
with respect thereto or that any Loan Party is not in
compliance therewith;
(d) receipt of any material written notice that
any Loan Party is subject to any investigation by any
governmental entity with respect to any potential or alleged
violation of any applicable Environmental Law or of imposition
of any Lien against any Property of any Loan Party for any
liability with respect to damages arising from, or costs
resulting from, any violation of any Environmental Laws;
A&R CREDIT AGREEMENT
61
(e) receipt of any notice of litigation
commenced or threatened against any Loan Party that (i) seeks
damages in excess of $2,000,000, (ii) seeks injunctive relief,
(iii) is asserted or instituted against any Plan, its
fiduciaries or its assets, (iv) alleges criminal misconduct by
any Loan Party, (v) alleges the violation of any law
regarding, or seeks remedies in connection with, any
Environmental Laws; or (vi) involves any product recall;
(f) any Lien (other than Permitted Liens) or
claim made or asserted against any of the Collateral;
(g) its decision to change, (i) such Loan
Party's name or type of entity, (ii) such Loan Party's
articles or certificate of incorporation, partnership
agreement, certificate of partnership, articles or certificate
of organization, by-laws, or operating or other management
agreement, and (iii) the location where any Collateral is held
or maintained; provided that, in no event shall the Agent
receive notice of such change less than thirty days prior
thereto;
(h) commencement of any proceedings contesting
any tax, fee, assessment, or other governmental charge in
excess of $500,000;
(i) the opening of any new deposit account by
any Loan Party with any bank or other financial institution;
(j) any loss, damage, or destruction to the
Collateral in the amount of $500,000 or more, whether or not
covered by insurance;
(k) any and all default notices received under
or with respect to any leased location or public warehouse
where Collateral is located (which shall be delivered within
two Business Days after receipt thereof);
(l) all material amendments to real estate
leases, together with a copy of each such amendment;
(m) immediately after becoming aware of any
pending or threatened strike, work stoppage, unfair labor
practice claim, or other labor dispute affecting the Borrower
or any of its Subsidiaries in a manner;
(n) evidence of payment of monthly lease or
rental payments as to each leased or rented location for which
a landlord or bailee waiver has not been obtained (which shall
be delivered within three Business Days after payment
thereof);
(o) the fact that such Loan Party has entered
into a Rate Management Transaction or an amendment to a Rate
Management Transaction, together with copies of all agreements
evidencing such Rate Management Transactions or amendments
thereto (which shall be delivered within two Business Days);
(p) any notice provided to the trustee of the
Holders (as defined in the Indenture) of the Senior
Subordinated Notes under the Indenture, such notice to be
contemporaneously delivered by the Borrower Representative to
the Agent and the lenders; and
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62
(q) any other matter as the Agent may reasonably
request.
6.4. Conduct of Business. Each Loan Party will:
(a) carry on and conduct its business in
substantially the same manner and in substantially the same
fields of enterprise as it is presently conducted;
(b) do all things necessary to remain duly
incorporated or organized, validly existing and (to the extent
such concept applies to such entity) in good standing as a
domestic corporation, partnership or limited liability company
in its jurisdiction of incorporation or organization, as the
case may be, and maintain all requisite authority to conduct
its business in each jurisdiction in which its business is
conducted;
(c) keep adequate books and records with respect
to its business activities in which proper entries, reflecting
all financial transactions, are made in accordance with GAAP
and on a basis consistent with the Financial Statements
delivered to the Agent pursuant to Section 4.1(n) (unless
otherwise consented to by Agent in its discretion);
(d) at all times maintain, preserve and protect
all of its assets and properties used or useful in the conduct
of its business, and keep the same in good repair, working
order and condition in all material respects (taking into
consideration ordinary wear and tear) and from time to time
make, or cause to be made, all necessary or appropriate
repairs, replacements and improvements thereto consistent with
industry practices; and
(e) transact business only in such corporate and
trade names as are set forth in Schedule 5.12, unless such
Loan Party has provided Agent with thirty days' prior written
notice of a change to such corporate or trade names and
otherwise complied with the terms of Section 6.23.
6.5. Taxes. Each Loan Party will timely file complete and correct
U.S. federal and applicable foreign, state and local tax returns required by law
and pay when due all taxes, assessments and governmental charges and levies upon
it or its income, profits, Property or Collateral, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside in accordance with GAAP. At any time that
any Loan Party is organized as a limited liability company, each such limited
liability company that has elected to be taxed as a partnership will qualify for
partnership tax treatment under U.S. federal tax law.
6.6. Payment of Indebtedness and Other Liabilities. Each Loan Party
will pay or discharge when due all Material Indebtedness permitted by Section
6.17 owed by such Loan Party and all other liabilities and obligations due to
materialmen, mechanics, carriers, warehousemen, and landlords, except that the
Loan Parties may in good faith contest, by appropriate proceedings diligently
pursued, any such obligations; provided that, (a) adequate reserves have been
set aside for such liabilities in accordance with GAAP, (b) such liabilities
would not result in aggregate liabilities in excess of $1,000,000, (c) no Lien
shall be imposed to secure payment of such liabilities that is superior to the
Agent's Liens securing the Secured Obligations, (d) none of the Collateral
becomes subject to forfeiture or loss as a result of the contest and (e) such
Loan Party shall promptly pay or discharge such contested liabilities, if any,
and shall deliver to the Agent evidence reasonably acceptable to the Agent of
such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Loan Party or the conditions set forth in this
proviso are no longer met.
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63
6.7. Insurance.
(a) Except as set forth on Schedule 6.7, each
Loan Party shall at all times maintain, with financially sound
and reputable carriers having a Financial Strength rating of
at least A by A.M. Best Company, insurance against: (i) loss
or damage by fire and loss in transit; (ii) theft, burglary,
pilferage, larceny, embezzlement, and other criminal
activities; (iii) business interruption; (iv) general
liability and (v) and such other hazards, as is customary in
the business of such Loan Party. All such insurance shall be
in amounts, cover such assets and be under policies acceptable
to the Agent in its Permitted Discretion. In the event any
Collateral is located in any area that has been designated by
the Federal Emergency Management Agency as a "Special Flood
Hazard Area", the applicable Loan Party shall purchase and
maintain flood insurance on such Collateral (including any
personal Property which is located on any real Property leased
by such Loan Party within a "Special Flood Hazard Area"). The
amount of all insurance required by this Section shall at a
minimum comply with applicable law, including the Flood
Disaster Protection Act of 1973, as amended. All premiums on
such insurance shall be paid when due by the applicable Loan
Party, and copies of the policies delivered to the Agent. If
any Loan Party fails to obtain any insurance as required by
this Section, the Agent at the direction of the Required
Lenders may obtain such insurance at the Borrowers' expense.
By purchasing such insurance, the Agent shall not be deemed to
have waived any Default or Unmatured Default arising from any
Loan Party's failure to maintain such insurance or pay any
premiums therefor. No Loan Party will use or permit any
Property to be used in violation of applicable law or in any
manner which might render inapplicable any insurance coverage.
(b) All insurance policies required under
Section 6.7(a) shall name the Agent (for the benefit of the
Agent and the Lenders) as an additional insured or as loss
payee, as applicable, and shall provide that, or contain loss
payable clauses or mortgagee clauses, in form and substance
satisfactory to the Agent, which provide that:
(i) all proceeds thereunder with
respect to any Collateral shall be payable to the
Agent;
(ii) no such insurance shall be affected
by any act or neglect of the insured or owner of the
Property described in such policy; and
(iii) such policy and loss payable
clauses may be canceled, amended, or terminated only
upon at least thirty days prior written notice given
to the Agent.
(c) The Borrowers must give the Agent prior
written notice of any change in insurance carriers and any new
insurance policy shall comply with the provisions of this
Section 6.7 and otherwise be acceptable to the Agent. Without
in any way limiting the foregoing, in no event shall the
Borrowers change their insurance carrier without first
obtaining a loss payable endorsement in form and substance
satisfactory to the Agent.
(d) Notwithstanding the foregoing, any insurance
or condemnation proceeds received by the Loan Parties shall be
immediately forwarded to the Agent and the Agent may, at its
option, apply any such proceeds to the reduction of the
Obligations in accordance with Section 2.15(e), provided that
in the case of insurance proceeds pertaining to any Loan Party
other than the Borrowers, such insurance proceeds shall be
A&R CREDIT AGREEMENT
64
applied to the Loans owing by the Borrowers. The Agent may
permit or require any Loan Party to use such money, or any
part thereof, to replace, repair, restore or rebuild the
Collateral in a diligent and expeditious manner with materials
and workmanship of substantially the same quality as existed
before the loss, damage or destruction. Notwithstanding the
foregoing, if the casualty giving rise to such insurance
proceeds could not reasonably be expected to have a Material
Adverse Effect and such insurance proceeds do not exceed
$1,000,000 in the aggregate, upon the applicable Loan Party's
request, the Agent shall permit such Loan Party to replace,
restore, repair or rebuild the property; provided that, if
such Loan Party has not completed or entered into binding
agreements to complete such replacement, restoration, repair
or rebuilding within ninety days of such casualty, the Agent
may apply such insurance proceeds to the Obligations in
accordance with Section 2.15. All insurance proceeds that are
to be made available to the Borrowers to replace, repair,
restore or rebuild the Collateral shall be applied by the
Agent to reduce the outstanding principal balance of the
Revolving Loans (which application shall not result in a
permanent reduction of the Revolving Commitment) and upon such
application, the Agent shall establish a Reserve against the
Aggregate Borrowing Base in an amount equal to the amount of
such proceeds so applied. All insurance proceeds made
available to any Loan Party that is not a Borrower to replace,
repair, restore or rebuild Collateral shall be deposited in a
cash collateral account. In either case, thereafter, such
funds shall be made available to the applicable Loan Party to
provide funds to replace, repair, restore or rebuild the
Collateral as follows:
(i) the Borrower Representative, on
behalf of the applicable Borrower, shall request a
Revolving Loan or the Borrower Representative, on
behalf of the applicable Loan Party, shall request a
release from the cash collateral account be made in
the amount needed;
(ii) so long as the conditions set forth
in Section 4.2 have been met, the Revolving Lenders
shall make such Revolving Loan or the Agent shall
release funds from the cash collateral account; and
(iii) in the case of insurance proceeds
applied against the Revolving Loan, the Reserve
established with respect to such insurance proceeds
shall be reduced by the amount of such Revolving
Loan.
6.8. Compliance with Laws. Each Loan Party will comply with all
laws, rules, regulations, orders, writs, judgments, injunctions, decrees or
awards to which it may be subject including, without limitation, all
Environmental Laws.
6.9. Maintenance of Properties and Intellectual Property Rights.
Each Loan Party will do all things necessary to (a) maintain, preserve, protect
and keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times and
(b) obtain and maintain in effect at all times all material franchises,
governmental authorizations, Intellectual Property Rights, licenses and permits,
which are necessary for it to own its Property or conduct its business as
conducted on the Closing Date.
6.10. Inspection. Each Loan Party will permit the Agent and the
Lenders, by their respective employees, representatives and agents, from time to
time upon two Business Days' prior notice as frequently as the Agent reasonably
determines to be appropriate, to (a) inspect any of the Property, the
Collateral, and the books and financial records of such Loan Party, (b) examine,
audit and make extracts
A&R CREDIT AGREEMENT
65
or copies of the books of accounts and other financial records of such Loan
Party, (c) have access to its properties, facilities, the Collateral and its
advisors, officers, directors and employees to discuss the affairs, finances and
accounts of such Loan Party and (d) review, evaluate and make test verifications
and counts of the Accounts, Inventory and other Collateral of such Loan Party.
If a Default or an Unmatured Default has occurred and is continuing, each Loan
Party shall provide such access to the Agent and to each Lender at all times and
without advance notice. Furthermore, so long as any Default has occurred and is
continuing, each Loan Party shall provide the Agent and each Lender with access
to its suppliers. Each Loan Party shall promptly make available to the Agent and
its counsel originals or copies of all books and records that the Agent may
reasonably request. The Loan Parties acknowledge that from time to time the
Agent may prepare and may distribute to the Lenders certain audit reports
pertaining to the Loan Parties' assets for internal use by the Agent and the
Lenders from information furnished to it by or on behalf of the Loan Parties,
after the Agent has exercised its rights of inspection pursuant to this
Agreement.
6.11. Appraisals; Additional Real Property Requirements. Whenever a
Default or Unmatured Default exists, and at such other times (which shall occur
not less than once per calendar year) as the Agent requests, the Loan Parties
shall, at their sole expense, provide the Agent with appraisals or updates
thereof of their Inventory, Equipment and real Property from an appraiser
selected and engaged by the Agent, and prepared on a basis, satisfactory to the
Agent, such appraisals and updates to include, without limitation, information
required by applicable law and regulations and by the internal policies of the
Lenders. At the request of the Agent, the Loan Parties shall, at their sole
expense, deliver, with respect to each parcel of real Property, which is
required from time to time to be subject to a Lien in favor of the Agent, a
Mortgage on such real Property duly executed by the appropriate Loan Party in
recordable form, an ALTA or other mortgagee's title policy and a copy of a Phase
I Environmental Report or other similar report, each in form and substance
satisfactory to the Agent.
6.12. Communications with Accountants. Each Loan Party executing
this Agreement authorizes (a) the Agent and (b) so long as a Default has
occurred and is continuing, each Lender, to communicate directly with its
independent certified public accountants and authorizes and shall instruct those
accountants and advisors to communicate to the Agent and each Lender information
relating to any Loan Party with respect to the business, results of operations
and financial condition of any Loan Party.
6.13. Collateral Access Agreements and Real Estate Purchases. Each
Loan Party shall use commercially reasonable efforts to obtain a Collateral
Access Agreement, from the lessor of each leased property, mortgagee of owned
property or bailee or consignee with respect to any warehouse, processor or
converter facility or other location where Collateral is stored or located,
which agreement or letter shall provide access rights, contain a waiver or
subordination of all Liens or claims that the landlord, mortgagee or bailee or
consignee may assert against the Collateral at that location, and shall
otherwise be reasonably satisfactory in form and substance to the Agent. With
respect to such locations or warehouse space leased or owned as of the Closing
Date and thereafter, if the Agent has not received a Collateral Access Agreement
as of the Effective Date (or, if later, as of the date such location is acquired
or leased), the Borrowers' Eligible Inventory at that location shall be excluded
from the Aggregate Borrowing Base and the applicable Borrower's Borrowing Base.
After the Closing Date, no real property or warehouse space shall be leased by
any Loan Party and no Inventory shall be shipped to a processor or converter
under arrangements established after the Closing Date, unless and until a
satisfactory Collateral Access Agreement shall first have been obtained with
respect to such location and if it has not been obtained, Borrowers' Eligible
Inventory at that location shall be excluded from the Aggregate Borrowing Base
and the applicable Borrower's Borrowing Base. Each Loan Party shall timely and
fully pay and perform its obligations under all leases and other agreements with
respect to each leased location or third party warehouse where any Collateral is
or may be located. To the extent permitted hereunder, if any Loan Party proposes
to acquire a fee ownership interest in real Property after the Closing Date, it
shall first
A&R CREDIT AGREEMENT
66
provide the Agent with notice of such proposed acquisition and, if required by
the Agent, provide to the Agent a mortgage or deed of trust granting the Agent a
first priority Lien on such real Property, together with environmental audits,
mortgage title insurance commitment, real property survey, local counsel
opinion(s), and, if required by the Agent, supplemental casualty insurance and
flood insurance, and such other documents, instruments or agreements reasonably
requested by the Agent, in each case, in form and substance reasonably
satisfactory to the Agent.
6.14. Deposit Account Control Agreements. The Loan Parties will
provide to the Agent upon the Agent's request, a Deposit Account Control
Agreement duly executed on behalf of each financial institution holding a
deposit account of a Loan Party as set forth in the Security Agreement.
6.15. Additional Collateral; Further Assurances.
(a) Subject to applicable law, each Loan Party
shall, unless the Required Lenders otherwise consent, (i)
cause each of its Subsidiaries (excluding any Foreign
Subsidiary) to become or remain a Borrower (unless otherwise
permitted by Agent in its sole discretion) and (ii) cause each
of its Subsidiaries (excluding any Foreign Subsidiary) formed
or acquired after the Closing Date in accordance with the
terms of this Agreement to become a party to this Agreement by
executing the Joinder Agreement set forth as Exhibit F hereto
(the "Joinder Agreement").
(b) Upon the request of the Agent, each Loan
Party shall (i) grant Liens to the Agent, for the benefit of
the Agent and the Lenders, pursuant to such documents as the
Agent may reasonably deem necessary and deliver such property,
documents, and instruments as the Agent may request to perfect
the Liens of the Agent in any Property of such Loan Party
which constitutes Collateral, including any parcel of real
Property located in the U.S. owned by any Loan Party, and (ii)
in connection with the foregoing requirements, or either of
them, deliver to the Agent all items of the type required by
Section 4.1 (as applicable). Upon execution and delivery of
such Loan Documents and other instruments, certificates, and
agreements, each such Person shall automatically become a
Guarantor hereunder and thereupon shall have all of the
rights, benefits, duties, and obligations in such capacity
under the Loan Documents.
(c) Each Loan Party will cause (i) 100% of the
issued and outstanding Capital Stock of each of its Domestic
Subsidiaries and (ii) 65% (or such greater percentage that,
due to a change in an applicable law after the date hereof,
(1) could not reasonably be expected to cause the
undistributed earnings of such Foreign Subsidiary as
determined for U.S. federal income tax purposes to be treated
as a deemed dividend to such Foreign Subsidiary's U.S. parent
and (2) could not reasonably be expected to cause any material
adverse tax consequences) of the issued and outstanding
Capital Stock entitled to vote (within the meaning of Treas.
Reg. Section 1.956-2(c)(2)) and 100% of the issued and
outstanding Capital Stock not entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2)) in each Foreign
Subsidiary directly owned by such Loan Party or any Domestic
Subsidiary to be subject at all times to a first priority,
perfected Lien in favor of the Agent pursuant to the terms and
conditions of the Loan Documents or other security documents
as the Agent shall reasonably request.
(d) Without limiting the foregoing, each Loan
Party shall, and shall cause each of the Loan Parties'
Subsidiaries which is required to become a Loan Party pursuant
to the terms of this Agreement to, execute and deliver, or
cause to be executed and delivered, to the Agent such
documents and agreements, and shall take or cause to be
A&R CREDIT AGREEMENT
67
taken such actions as the Agent may, from time to time,
reasonably request to carry out the terms and conditions of
this Agreement and the other Loan Documents.
(e) Notwithstanding the foregoing, at any time
after a Default has occurred, each Loan Party shall, upon the
request of the Agent, cause each Foreign Subsidiary to become
a Loan Party and a Guarantor and to grant Liens to the Agent
on its assets and have the balance of its stock pledged to the
Agent.
6.16. Dividends.
(a) No Loan Party will declare or pay any
dividends or make any distributions on its Capital Stock
(other than dividends or distributions payable in its own
common stock) or redeem, repurchase or otherwise acquire or
retire any of its Capital Stock at any time outstanding, other
than with respect to the following:
(i) any Subsidiary may declare and pay
dividends or make distributions to the Borrowers or
to a Wholly-Owned Subsidiary of the Borrowers;
(ii) the Company may pay cash dividends
on its Existing Preferred Stock in an aggregate
amount not to exceed $1,000,000 per Fiscal Year,
provided that there is no Default or Unmatured
Default and none would result from such payment;
(iii) the Company may repurchase or
redeem its Capital Stock from time to time, not in
excess of an aggregate of $10,000,000 from the
Closing Date to the Facility Termination Date;
provided, however, that no repurchase or redemption
may be made unless (A) the Supplemental Term Loans
have been paid in full in cash, and (B) both before
and (on a pro-forma basis) after giving effect
thereto (1) the Borrowers' Fixed Charge Coverage
Ratio has been and will be equal to or greater than
1.5 to 1.0 for two consecutive Fiscal Quarters, (2)
the Borrowers' Availability is equal to or greater
than $15,000,000, and (3) there is no Default or
Unmatured Default and none would result from such
repurchase of redemption,
(iv) any Loan Party may retire Capital
Stock if the retirement (A) consists of a conversion
of any class of Capital Stock into another class of
common stock or (B) the sole consideration paid in
connection with such retirement is common stock; and
(v) each Borrower may pay dividends or
make distributions to its partners or members in an
aggregate amount not greater than the amount
necessary for such partners or members to pay their
actual state and United States federal income tax
liabilities in respect of income earned by such
Borrower.
(b) No Loan Party shall directly or indirectly
enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and
the other Loan Documents) that could directly or indirectly
restrict, prohibit or require the consent of any Person with
respect to the payment of dividends or distributions or the
making or repayment of intercompany loans by a Subsidiary of
the Borrowers to the Borrowers.
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6.17. Indebtedness. No Loan Party will create, incur or suffer to
exist any Indebtedness, except:
(a) the Obligations;
(b) Indebtedness existing on the date hereof and
described in Schedule 5.22;
(c) purchase money Indebtedness incurred in
connection with the purchase of any Equipment; provided that,
the amount of such purchase money Indebtedness shall be
limited to an amount not in excess of the purchase price of
such Equipment and the aggregate of all such purchase money
Indebtedness shall not exceed $5,000,000;
(d) Indebtedness which represents an extension,
refinancing, or renewal of any of the Indebtedness described
in clauses (b), (c), (g) and (i) hereof; provided that, (i)
the principal amount or interest rate of such Indebtedness is
not increased, (ii) any Liens securing such Indebtedness are
not extended to any additional Property of any Loan Party,
(iii) no Loan Party that is not obligated with respect to
repayment of such Indebtedness as of the Closing Date or as of
the date such Indebtedness was incurred, whichever is later,
is required to become obligated with respect thereto, (iv)
such extension, refinancing or renewal does not result in a
shortening of the average weighted maturity of the
Indebtedness so extended, refinanced, renewed, (v) the terms
of any such extension, refinancing, or renewal are not less
favorable to the obligor thereunder than the original terms of
such Indebtedness and (iv) if the Indebtedness that is
refinanced, renewed, or extended was subordinated in right of
payment to the Obligations, then the terms and conditions of
the refinancing, renewal, or extension Indebtedness must
include subordination terms and conditions that are at least
as favorable to the Agent and the Lenders as those that were
applicable to the refinanced, renewed, or extended
Indebtedness;
(e) Indebtedness owing by any Borrower to any
other Loan Party with respect to intercompany loans, provided
further, that:
(i) upon the request of the Agent, the
applicable Loan Parties shall have executed and
delivered to the other Borrower, on the Effective
Date, a demand note (collectively, the "Intercompany
Notes") to evidence any such intercompany
Indebtedness owing at any time by any Borrower to
another Loan Party, which Intercompany Notes shall be
in form and substance reasonably satisfactory to the
Agent and shall be pledged and delivered to the Agent
pursuant to the Security Agreement as additional
collateral security for the Secured Obligations;
(ii) the Loan Parties shall record all
intercompany transactions on their books and records
in a manner reasonably satisfactory to the Agent;
(iii) the obligations of the Borrowers
under any such Intercompany Notes shall be
subordinated to the Obligations of the Loan Parties
hereunder in a manner reasonably satisfactory to the
Agent;
(iv) at the time any such intercompany
loan or advance is made and after giving effect
thereto, each Loan Party thereto shall be Solvent;
and
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69
(v) no Default or Unmatured Default
would occur and be continuing after giving effect to
any such proposed intercompany loan.
(f) Contingent Obligations (i) by endorsement of
instruments for deposit or collection in the ordinary course
of business, (ii) consisting of the Reimbursements Obligations
and (iii) consisting of guarantees of Indebtedness incurred
for the benefit of any other Loan Party if the primary
obligation is expressly permitted elsewhere in this Section
6.17;
(g) Indebtedness arising under Rate Management
Transactions related to the Loans having a Net ▇▇▇▇-to-Market
Exposure not exceeding $1,000,000;
(h) Indebtedness under the Senior Subordinated
Notes, provided that such Indebtedness is subordinate and
junior in right of payment to the Obligations; and
(i) other unsecured Indebtedness in an amount
not in excess of $5,000,000.
6.18. Capital Structure. If all or any part of a Loan Party's
Capital Stock has been pledged to the Agent, that Loan Party shall not issue
additional Capital Stock. No Loan Party shall engage in any business other than
the businesses currently engaged in by it.
6.19. Merger. No Loan Party will merge or consolidate with or into
any other Person, except that (a) any Subsidiary of a Borrower may merge into
such Borrower or a Wholly-Owned Subsidiary of such Borrower is a Loan Party, (b)
any Loan Party (other than the Borrowers) may merge with any other Loan Party
and (c) in connection with a Permitted Acquisition, provided that the Loan Party
is the surviving entity.
6.20. Sale of Assets. No Loan Party will lease, sell or otherwise
dispose of its Property (including any Capital Stock owned by it) to any other
Person, except:
(a) sales of Inventory in the ordinary course of
business;
(b) the sale or other disposition of Equipment
that is obsolete or no longer useful in such Loan Party's
business and having a book value not exceeding $100,000 in the
aggregate in any Fiscal Year; and
(c) the sale or disposition of other assets
having a book value not exceeding $100,000 in the aggregate in
any Fiscal Year.
The Net Cash Proceeds of any sale or disposition (to the extent such Net Cash
Proceeds exceed $100,000) permitted pursuant to this Section (other than
pursuant to Section 6.20(a)) shall be delivered to the Agent as required by
Section 2.15 and applied to the Obligations as set forth therein; provided,
however, that the Company may retain up to $150,000 of un-reinvested Net Cash
Proceeds from any sale or disposition pursuant to this Section in any calendar
year.
6.21. Investments and Acquisitions. No Loan Party will (i) make or
suffer to exist any Investments (including without limitation, loans and
advances to, and other Investments in, Subsidiaries), or commitments therefor,
(ii) create any Subsidiary, (iii) become or remain a partner in any partnership
or joint venture, or (iv) make any Acquisition, except:
A&R CREDIT AGREEMENT
70
(a) Cash Equivalent Investments, subject to
control agreements in favor of the Agent for the benefit of
the Lenders or otherwise subject to a perfected security
interest in favor of the Agent for the benefit of the Lenders;
(b) Investments in existence on the Closing Date
and described in Schedule 6.21;
(c) Investments consisting of loans or advances
made to (i) the executive officers of such Loan Party on an
arms-length basis in the ordinary course of business
consistent with past practices for travel and entertainment
expenses and similar purposes up to a maximum of $25,000 to
any employee and up to a maximum of $75,000 in the aggregate
(for all Loan Parties) at any one time outstanding and (ii)
the executive officers of such Loan Party on an arms-length
basis in the ordinary course of business consistent with past
practices for relocation expenses and similar purposes up to a
maximum of $300,000 to any employee and up to a maximum of
$300,000 in the aggregate (for all Loan Parties) at any one
time outstanding;
(d) subject to Sections 4.2(a) and 4.4 of the
Security Agreement, Investments comprised of notes payable, or
stock or other securities issued by Account Debtors to such
Loan Party pursuant to negotiated agreements with respect to
settlement of such Account Debtor's Accounts in the ordinary
course of business, consistent with past practices;
(e) additional Investments in Wholly-Owned
Subsidiaries which are Loan Parties; and
(f) Permitted Acquisitions and the formation of
Wholly Owned Subsidiaries of the Borrowers in connection with
a Permitted Acquisition; and
(g) Investments in the form of loans and
advances to Wholly-Owned Foreign Subsidiaries, provided that:
(i) the applicable Foreign Subsidiary
shall have executed and delivered to the Loan Party a
demand note (collectively, the "Foreign Intercompany
Notes") to evidence any such intercompany
Indebtedness owing at any time by any Foreign
Subsidiary to a Loan Party, which Foreign
Intercompany Notes shall be in form and substance
reasonably satisfactory to the Agent (a copy of such
executed note shall be delivered to Agent);
(ii) all Foreign Subsidiaries and Loan
Parties shall record all intercompany transactions on
their books and records in a manner reasonably
satisfactory to the Agent;
(iii) at the time any such intercompany
loan or advance is made by a Loan Party and after
giving effect thereto, such Loan Party shall be
Solvent;
(iv) no Default or Unmatured Default
would occur and be continuing after giving effect to
any such proposed intercompany loan;
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71
(v) in the case of any such
intercompany loans made by any Borrower, the
Borrowers' Availability shall not be less than
$15,000,000 after giving effect to such intercompany
loan; and
(vi) the aggregate balance of all such
intercompany loans owing to the Borrowers by the
Foreign Subsidiaries shall not exceed $20,000,000 at
any time.
6.22. Liens.
(a) No Loan Party will create, incur, or suffer
to exist any Lien in, of, or on the Property of such Loan
Party, (including, without limitation, the real Property or
marine vessels of such Loan Party) except the following
(collectively, "Permitted Liens"):
(i) Liens for taxes, fees, assessments,
or other governmental charges or levies on the
Property of such Loan Party if such Liens (1) shall
not at the time be delinquent or (2) subject to the
provisions of Section 6.6, do not secure obligations
in excess of $250,000, are being contested in good
faith and by appropriate proceedings diligently
pursued, adequate reserves in accordance with GAAP
have been set aside on the books of such Loan Party,
and a stay of enforcement of such Lien is in effect;
(ii) Liens imposed by law, such as
carrier's, warehousemen's, and mechanic's Liens and
other similar Liens arising in the ordinary course of
business which secure payment of obligations not more
than ten days past due;
(iii) statutory Liens in favor of
landlords of real Property leased by such Loan Party;
provided that, such Loan Party is current with
respect to payment of all rent and other amounts due
to such landlord under any lease of such real
Property;
(iv) Liens arising out of pledges or
deposits under worker's compensation laws,
unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar
legislation or to secure the performance of bids,
tenders, or contracts (other than for the repayment
of Indebtedness) or to secure indemnity, performance,
or other similar bonds for the performance of bids,
tenders, or contracts (other than for the repayment
of Indebtedness) or to secure statutory obligations
(other than liens arising under ERISA or
Environmental Laws) or surety or appeal bonds, or to
secure indemnity, performance, or other similar
bonds;
(v) utility easements, building
restrictions, and such other encumbrances or charges
against real Property as are of a nature generally
existing with respect to properties of a similar
character and which do not in any material way affect
the marketability of such real Property or interfere
with the use thereof in the business of such Loan
Party;
(vi) Liens existing on the Closing Date
and described in Schedule 6.22;
A&R CREDIT AGREEMENT
72
(vii) Liens resulting from any extension,
refinancing, or renewal of the related Indebtedness
as permitted pursuant to Section 6.17(d); provided
that, the Liens evidenced thereby are not increased
to cover any additional Property not covered thereby
immediately prior to such extension, refinancing or
renewal;
(viii) Liens securing purchase money
Indebtedness of such Loan Party permitted pursuant to
Section 6.17(c); provided that, such Liens attach
only to the Property which was purchased with the
proceeds of such purchase money Indebtedness; and
(ix) Liens in favor of the Agent granted
pursuant to any Loan Document.
(b) Notwithstanding the foregoing, none of the
Liens permitted pursuant to this Section 6.22, other than (1)
clauses (i) and (ix) above, may at any time attach to any
Accounts of any Loan Party and (2) clauses (i) through (iii)
and (ix) above, may at any time attach to any Inventory of any
Loan Party.
(c) Other than as provided in the Loan Documents
or in connection with the creation or incurrence of any
Indebtedness under Section 6.17(c), no Loan Party will enter
into or become subject to any negative pledge or other
restriction on the right of such Loan Party to grant Liens to
the Agent and the Lenders on any of its Property; provided
that, any such negative pledge or other restriction entered
into in connection with the creation of Indebtedness under
Section 6.17(c) shall be limited to the Property securing such
purchase money Indebtedness.
6.23. Change of Name or Location; Change of Fiscal Year. No Loan
Party shall (a) change its name as it appears in official filings in the state
of its incorporation or organization, (b) change its chief executive office,
principal place of business, mailing address, corporate offices or warehouses or
locations at which Collateral is held or stored, or the location of its records
concerning the Collateral as set forth in the Security Agreement, (c) change the
type of entity that it is, (d) change its organization identification number, if
any, issued by its state of incorporation or other organization, or (e) change
its state of incorporation or organization, in each case, unless (1) the Agent
shall have received at least thirty days' prior written notice of such change
and (2) the Agent shall have acknowledged in writing that, either (i) such
change will not adversely affect the validity, perfection or priority of the
Agent's security interest in the Collateral, or (ii) any reasonable action
requested by the Agent in connection therewith has been completed or taken
(including any action to continue the perfection of any Liens in favor of the
Agent, on behalf of Lenders, in any Collateral), provided that, any new location
shall be in the continental U.S. No Loan Party shall change its Fiscal Year.
6.24. Affiliate Transactions. No Loan Party will enter into any
transaction (including, without limitation, the purchase or sale of any Property
or service) with, or make any payment or transfer (including, without
limitation, any payment or transfer with respect to any fees or expenses for
management services) to, any Affiliate except in the ordinary course of business
and pursuant to the reasonable requirements of such Loan Party's business and
upon fair and reasonable terms no less favorable to such Loan Party than such
Loan Party would obtain in a comparable arms-length transaction.
6.25. Amendments to Agreements. No Loan Party will, nor will any
Loan Party permit its Subsidiary to, amend or terminate its articles of
incorporation, charter, certificate of formation, by-laws, operating, management
or partnership agreement or other organizational document.
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73
6.26. Prepayment of Indebtedness; Subordinated Indebtedness.
(a) No Loan Party shall, directly or indirectly,
voluntarily purchase, redeem, defease or prepay any principal
of, premium, if any, interest or other amount payable in
respect of any Indebtedness prior to its scheduled maturity,
other than (i) the Obligations; (ii) Indebtedness secured by a
Permitted Lien if the asset securing such Indebtedness has
been sold or otherwise disposed of in accordance with Section
6.20; (iii) Indebtedness permitted by Section 6.17(d) upon any
refinancing thereof in accordance therewith; (iv) Indebtedness
permitted by Section 6.17(e); (v) Indebtedness under the
Senior Subordinated Notes repaid in connection with a
refinancing thereof, provided that such refinancing
constitutes Indebtedness permitted under Section 6.17(d); and
(vi) the purchase of Senior Subordinated Notes, provided that
(x) the Supplemental Term Loans have been paid in full in
cash, (y) both before and (on a pro-forma basis) after giving
effect thereto (1) the Borrowers' Fixed Charge Coverage Ratio
has been and will be equal to or greater than 1.5 to 1.0 for
two consecutive Fiscal Quarters (2) the Borrowers'
Availability is equal to or greater than $15,000,000, (3)
there is no Default or Unmatured Default and none would result
from such purchase, and (z) the purchase price paid for any
Senior Subordinated Note is not in excess of the outstanding
principal balance thereof, plus accrued and unpaid interest
thereon.
(b) No Loan Party shall make any amendment or
modification to the Indenture, or any note or other agreement
evidencing or governing any Subordinated Indebtedness, or
directly or indirectly voluntarily prepay, defease or in
substance defease, purchase, redeem, retire or otherwise
acquire any Indebtedness under the Indenture or any
Subordinated Indebtedness.
6.27. Financial Contracts. No Loan Party shall enter into or remain
liable upon any Financial Contract, except for (a) Rate Management Transactions
permitted by Section 6.17(g), and (b) Financial Contracts that constitute
currency swap transactions of Canadian Dollars provided that (i) they do not
exceed an aggregate notional amount of 100% of all Canadian Dollar loans
reasonably projected to be outstanding from the Company to Newpark Canada and
any other Canadian Subsidiaries, together with all Investments by the Company in
such entities during the term of such Financial Contract minus the aggregate
principal amount (stated in Canadian Dollars) of all Revolving Loans, reasonably
projected to be outstanding during the term of such Financial Contract, and (ii)
they are for a term of three years or less.
6.28. Capital Expenditures. No Loan Party shall expend, or be
committed to expend, in excess of (a) during the Fiscal Year 2004 $15,000,000
or, if the Bridge Period has terminated, $20,000,000, provided for each
expenditure during such year in excess of $15,000,000 in the aggregate, both
before and (on a pro-forma basis) after giving effect to such expenditure (i)
Borrowers' Fixed Charge Coverage Ratio shall be equal to or greater than 1.1 to
1.0, (ii) the Aggregate Borrowing Base less the Aggregate Revolving Exposure
shall be at least $15,000,000, and (iii) there is no Default or Unmatured
Default and none would result therefrom, and (b) $20,000,000 during any
subsequent Fiscal Year, for Capital Expenditures in the aggregate for the
Company and its Subsidiaries.
6.29. Financial Covenants.
6.29.1. Fixed Charge Coverage Ratio. The Company will not
permit the Fixed Charge Coverage Ratio, determined as of the end of
each of the Company's Fiscal Quarter for the applicable Test Period, to
be less than the corresponding ratio set forth below:
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74
-------------------------------------------------------------------------------------
MINIMUM FIXED CHARGE
DATE OF DETERMINATION COVERAGE RATIO
-------------------------------------------------------------------------------------
Through and including September 30, 2004 1.0 to 1.0
-------------------------------------------------------------------------------------
Thereafter 1.1 to 1.0
-------------------------------------------------------------------------------------
6.29.2. Minimum Tangible Net Worth. The Company will at all
times maintain Consolidated Tangible Net Worth of not less than the sum
of (a) $140,771,900 plus (b) 75% of positive Consolidated Net Income
earned in each Fiscal Quarter beginning with the Fiscal Quarter ending
March 31, 2004.
6.29.3. Minimum Excess Availability. Borrowers shall maintain
at all times during the period from May 16, 2004, through and including
June 16, 2004, Availability (with all of the Loan Parties'
indebtedness, liabilities and obligations current) in excess of
$5,000,000.
6.30. Depository Banks. Each Loan Party shall maintain the Agent as
such Loan Party's principal depository bank, including for the maintenance of
operating, administrative, cash management, collection activity, and other
deposit accounts for the conduct of its business.
6.31. Real Property Purchases. No Loan Party shall purchase a fee
simple ownership interest in real Property with an aggregate purchase price in
excess of $5,000,000
6.32. Sale of Accounts. No Loan Party will, nor will any Loan Party
permit its Subsidiary to, sell or otherwise dispose of any notes receivable or
accounts receivable, with or without recourse.
6.33. Canadian Subsidiaries Negative Pledge. No Loan Party will, nor
will any Loan Party permit any of its Subsidiaries that are organized under the
laws of a province of Canada ("Canadian Subsidiaries") to, create, incur or
suffer to exist, any Lien in, of, or on any Property of such Canadian Subsidiary
(including, without limitation, the real Property or marine vessels of such
Canadian Subsidiary).
ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a "Default" hereunder:
(a) any representation or warranty made or
deemed made by or on behalf of any Loan Party to any Lender or
the Agent under or in connection with this Agreement, any
other Loan Document, any Credit Extension, or any certificate
or information delivered in connection with any of the
foregoing shall be materially false on the date as of which
made;
(b) nonpayment, when due (whether upon demand or
otherwise), of any principal, interest, fee, Reimbursement
Obligation or any other obligation owing under any of the Loan
Document;
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75
(c) the breach by any Loan Party of any of the
terms or provisions of Section 6.2, 6.3(a), 6.16 through 6.23
or 6.25 through 6.33;
(d) the breach by any Loan Party (other than a
breach which constitutes a Default under another Section of
this Article VII) of any of the terms or provisions of (i)
Section 6.1, 6.3 (other than Section 6.3(a)), 6.4 through
6.15, or 6.24 of this Agreement which is not remedied within
five days from the earlier of (x) the date on which any Loan
Party had actual or constructive knowledge of such breach or
(y) the date on which such Loan Party receives written notice
from the Agent or any Lender or (ii) any other Section of this
Agreement which is not remedied within fifteen days after the
earlier of (x) the date on which any Loan Party had actual or
constructive knowledge of such breach or (y) the date on which
such Loan Party receives written notice from the Agent or any
Lender;
(e) failure of any Loan Party to pay when due
any Material Indebtedness or a default, breach or other event
occurs under any term, provision or condition contained in any
Material Indebtedness Agreement of any Loan Party, the effect
of which default, event or condition is to cause, or to permit
the holder(s) of such Material Indebtedness or the lender(s)
under any Material Indebtedness Agreement to cause, such
Material Indebtedness to become due prior to its stated
maturity or any commitment to lend under any Material
Indebtedness Agreement to be terminated prior to its stated
expiration date; any Material Indebtedness of any Loan Party
shall be declared to be due and payable or required to be
prepaid or repurchased (other than by a regularly scheduled
payment) prior to the stated maturity thereof; or any Loan
Party shall not pay, or admit in writing its inability to pay,
its debts generally as they become due;
(f) any Loan Party shall (i) have an order for
relief entered with respect to it under the Bankruptcy Code as
now or hereafter in effect, (ii) make an assignment for the
benefit of creditors, (iii) apply for, seek, consent to, or
acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or
any portion of its Property which constitutes a Substantial
Portion, (iv) institute any proceeding seeking an order for
relief under the Bankruptcy Code as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization,
arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer
or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate or
partnership action to authorize or effect any of the foregoing
actions set forth in this subsection (f) or (vi) fail to
contest in good faith any appointment or proceeding described
in subsection (g) below;
(g) a receiver, trustee, examiner, liquidator or
similar official shall be appointed for any Loan Party or any
portion of its Property which constitutes a Substantial
Portion, or a proceeding described in subsection (f)(iv) of
Article VII shall be instituted against any Loan Party and
such appointment continues undischarged or such proceeding
continues undismissed or unstayed for a period of sixty
consecutive days;
(h) any court, government or governmental agency
shall condemn, seize or otherwise appropriate, or take custody
or control of, all or any portion of the Property of any Loan
Party which, when taken together with all other Property of
any Loan Party so condemned, seized, appropriated, or taken
custody or control of, during the twelve-month period ending
with the month in which any such action occurs, constitutes a
Substantial Portion;
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76
(i) any loss, theft, damage or destruction of
any item or items of Collateral or other property of any Loan
Party occurs which could reasonably be expected to cause a
Material Adverse Effect and is not adequately covered by
insurance;
(j) any Loan Party shall fail within thirty days
to pay, bond or otherwise discharge one or more (i) judgments
or orders for the payment of money in excess of $1,000,000 (or
the equivalent thereof in currencies other than U.S. Dollars)
in the aggregate, or (ii) nonmonetary judgments or orders
which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgments or
orders, in any such case, are not stayed on appeal or
otherwise being appropriately contested in good faith by
proper proceedings diligently pursued;
(k) any Change in Control shall occur;
(l) the Unfunded Liabilities of all Single
Employer Plans shall exceed in the aggregate $1,000,000 or any
Reportable Event shall occur in connection with any Plan;
(m) any Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that it has incurred withdrawal liability
to such Multiemployer Plan in an amount which, when aggregated
with all other amounts required to be paid to Multiemployer
Plans by such Borrower or any other member of the Controlled
Group as withdrawal liability (determined as of the date of
such notification), exceeds $1,000,000 or requires payments
exceeding $1,000,000 per annum;
(n) a Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a
Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of
Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of such
Borrower and the other members of the Controlled Group (taken
as a whole) to all Multiemployer Plans which are then in
reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer
Plans for the respective plan years of each such Multiemployer
Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding
$1,000,000;
(o) any Loan Party shall (i) be the subject of
any proceeding or investigation pertaining to the release by
the any Loan Party or any other Person of any toxic or
hazardous waste or substance into the environment, or (ii)
violate any Environmental Law, which, in the case of an event
described in clause (i) or clause (ii), could reasonably be
expected to have a Material Adverse Effect (as determined by
Agent in its Permitted Discretion);
(p) the occurrence of any "default", as defined
in any Loan Document (other than this Agreement) or the breach
of any of the terms or provisions of any Loan Document (other
than this Agreement), which default or breach continues beyond
any period of grace therein provided;
(q) any Guaranty shall fail to remain in full
force or effect or any action shall be taken to discontinue or
to assert the invalidity or unenforceability of any Guaranty,
or any Guarantor shall fail to comply with any of the terms or
provisions of the Guaranty to
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77
which it is a party, or any Guarantor shall deny that it has
any further liability under any Guaranty to which it is a
party, or shall give notice to such effect;
(r) any Collateral Document shall for any reason
fail to create a valid and perfected first priority security
interest in any Collateral purported to be covered thereby,
except as permitted by the terms of any Collateral Document,
or any Collateral Document shall fail to remain in full force
or effect or any action shall be taken to discontinue or to
assert the invalidity or unenforceability of any Collateral
Document, or any Loan Party shall fail to comply with any of
the terms or provisions of any Collateral Document;
(s) any material provision of any Loan Document
for any reason ceases to be valid, binding and enforceable in
accordance with its terms (or any Loan Party shall challenge
the enforceability of any Loan Document or shall assert in
writing, or engage in any action or inaction based on any such
assertion, that any provision of any of the Loan Documents has
ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms);
(t) the representations and warranties set forth
in Section 5.17 (Plan Assets; Prohibited Transactions) shall
at any time not be true and correct;
(u) nonpayment by any Borrower or any of its
Subsidiaries of any Rate Management Obligation when due or the
breach by any Borrower or any of its Subsidiaries of any term,
provision or condition contained in any Rate Management
Transaction or any transaction of the type described in the
definition of "Rate Management Transactions," whether or not
any Lender or Affiliate of a Lender is a party thereto; or
(v) any Loan Party is criminally indicted or
convicted under any law that may reasonably be expected to
lead to a forfeiture of any Property of such Loan Party having
a fair market value in excess of $500,000.
ARTICLE VIII
REMEDIES; WAIVERS AND AMENDMENTS
8.1. Remedies.
(a) If any Default occurs, the Agent may in its
discretion (and at the written request of the Required
Lenders, shall) (i) reduce the Aggregate Commitment or the
Revolving Commitment, (ii) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the
obligation and power of the LC Issuer to issue Facility LCs,
(iii) declare all or any portion of the Obligations to be due
and payable, whereupon such Obligations shall become
immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which the Borrower
hereby expressly waives, (iv) upon notice to the Borrower
Representative and in addition to the continuing right to
demand payment of all amounts payable under this Agreement,
the Agent may either (1) make demand on the Borrowers to pay,
and the Borrowers will, forthwith upon such demand and without
any further notice or act, pay to the Agent an amount, in
immediately available funds (which funds shall be held in the
Facility LC Collateral Account), equal to 105% of the
Collateral Shortfall Amount or (2) deliver a Supporting
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78
Letter of Credit as required by Section 2.1.2(l), whichever
the Agent may specify in its sole discretion, (v) increase the
rate of interest applicable to the Loans and the LC Fees as
set forth in this Agreement and (vi) exercise any rights and
remedies provided to the Agent under the Loan Documents or at
law or equity, including all remedies provided under the UCC.
(b) If any Default described in subsections (f)
or (g) of Article VII occurs with respect to any Loan Party,
the obligations of the Lenders to make Loans hereunder and the
obligation and power of the LC Issuer to issue Facility LCs
shall automatically terminate and all Obligations shall
immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender
and the Loan Parties will be and become thereby
unconditionally obligated, without any further notice, act or
demand, to pay to the Agent an amount equal to 105% of the
Collateral Shortfall Amount, which funds shall be deposited in
the Facility LC Collateral Account.
(c) If, within thirty days after acceleration of
the maturity of the Obligations or termination of the
obligations of the Lenders to make Loans and the obligation
and power of the LC Issuer to issue Facility LCs hereunder as
a result of any Default (other than any Default as described
in subsections (f) or (g) of Article VII with respect to any
Borrower) and before any judgment or decree for the payment of
the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct,
the Agent shall, by notice to the Borrower Representative,
rescind and annul such acceleration and/or termination.
(d) If at any time while any Default is
continuing, the Agent determines that the Collateral Shortfall
Amount at such time is greater than zero, the Agent may make
demand on the Borrowers (upon notice to the Borrower
Representative) to pay, and the Borrowers will, forthwith upon
such demand and without any further notice or act, pay to the
Agent an amount equal to 105% of the Collateral Shortfall
Amount, which funds shall be deposited in the Facility LC
Collateral Account. The Borrowers hereby pledge, assign, and
grant to the Agent, on behalf of and for the benefit of the
Agent, the Lenders, and the LC Issuer, a security interest in
all of the Borrowers' right, title, and interest in and to all
funds which may from time to time be on deposit in the
Facility LC Collateral Account to secure the prompt and
complete payment and performance of the Obligations.
(e) The Agent may at any time or from time to
time after funds are deposited in the Facility LC Collateral
Account, apply such funds to the payment of the Obligations
and any other amounts as shall from time to time have become
due and payable by the Borrowers to the Lenders or the LC
Issuer under the Loan Documents.
(f) At any time while any Default is continuing,
neither the Borrowers nor any Person claiming on behalf of or
through the Borrowers shall have any right to withdraw any of
the funds held in the Facility LC Collateral Account. After
all of the Secured Obligations have been indefeasibly paid in
full and the Aggregate Commitment has been terminated, any
funds remaining in the Facility LC Collateral Account shall be
returned by the Agent to the Borrowers or paid to whomever may
be legally entitled thereto at such time.
8.2. Waivers by Loan Parties. Except as otherwise provided for in
this Agreement or by applicable law, each Loan Party waives: (a) presentment,
demand and protest and notice of presentment, dishonor, notice of intent to
accelerate, notice of acceleration, protest, default, nonpayment, maturity,
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79
release, compromise, settlement, extension or renewal of any or all commercial
paper, accounts, contract rights, documents, instruments, chattel paper and
guaranties at any time held by the Agent on which any Loan Party may in any way
be liable, and hereby ratifies and confirms whatever the Agent may do in this
regard, (b) all rights to notice and a hearing prior to the Agent's taking
possession or control of, or to the Agent's replevy, attachment or levy upon,
the Collateral or any bond or security that might be required by any court prior
to allowing the Agent to exercise any of its remedies, and (c) the benefit of
all valuation, appraisal, marshaling and exemption laws.
8.3. Amendments.
(a) Subject to the provisions of this Section
8.3, no amendment, waiver or modification of any provision of
this Agreement or any other Loan Document, and no consent with
respect to any departure by any Loan Party therefrom, shall be
effective unless the same shall be in writing and signed by
the Required Lenders (or the Agent with the consent in writing
of the Required Lenders) and the Loan Parties and then any
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(b) Notwithstanding subsection (a) above, no
such amendment, waiver or other modification with respect to
this Agreement shall, without the consent of all of the
Lenders:
(i) extend the final maturity of any
Loan to a date after the Facility Termination Date;
(ii) postpone any regularly scheduled
payment of principal of any Loan or reduce or forgive
all or any portion of the principal amount of any
Loan or any Reimbursement Obligation;
(iii) reduce the rate or extend the time
of payment of interest or fees payable to the Lenders
pursuant to any Loan Document;
(iv) reduce the percentage or number of
Lenders specified in the definition of Required
Lenders;
(v) extend the Facility Termination
Date;
(vi) increase the amount of the
Aggregate Commitment or the Commitment of any Lender
hereunder (other than pursuant to Section 12.3);
(vii) increase the advance rates set
forth in the definition of Borrowing Base;
(viii) permit any Loan Party to assign its
rights under this Agreement;
(ix) amend this Section 8.3;
(x) release any guarantor of any Credit
Extension, except as otherwise permitted herein or in
the other Loan Documents; or
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80
(xi) except as provided in Section 10.16
or any Collateral Document, release all or
substantially all of the Collateral.
(c) No amendment of any provision of this
Agreement relating to the Agent or to the Non-Ratable Loans,
the Overadvances or the Protective Advances shall be effective
without the written consent of the Agent. No amendment of any
provision relating to the LC Issuer shall be effective without
the written consent of the LC Issuer. The Agent may (i) amend
the Commitment Schedule to reflect assignments entered into
pursuant to Section 12.3, and (ii) waive payment of the fee
required under Section 12.3(c) without obtaining the consent
of any other party to this Agreement.
8.4. Preservation of Rights. No delay or omission of the Lenders,
the LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
existence of a Default or the inability of the Borrowers to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.3, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the LC Issuer and the Lenders until the Obligations have been paid
in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and
warranties of the Loan Parties contained in this Agreement and the other Loan
Documents shall survive the execution and delivery of the Loan Documents and the
making of the Credit Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement
to the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrowers in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire
agreement and understanding among the Loan Parties, the Agent, the LC Issuer and
the Lenders and supersede all prior agreements and understandings among the Loan
Parties, the Agent and the Lenders relating to the subject matter thereof other
than those contained in the Fee Letter which shall survive and remain in full
force and effect during the term of this Agreement. THIS WRITTEN 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.
9.5. Several Obligations; Benefits of this Agreement. The
respective obligations of the Lenders hereunder are several and not joint and no
Lender shall be the partner or agent of any other
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81
lender (except to the extent to which the Agent is authorized to act as
administrative agent for the Lenders hereunder). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns, provided however,, that
the parties hereto expressly agree that the Arranger shall enjoy the benefits of
the provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set
forth therein and shall have the right to enforce such provisions on its own
behalf and in its own name to the same extent as if it were a party to this
Agreement.
9.6. Expenses; Indemnification.
(a) Expenses. The Borrowers shall reimburse the
Agent and the Arranger for any costs, internal charges and
out-of-pocket expenses (including attorneys' fees and time
charges of attorneys for the Agent, which attorneys may be
employees of the Agent) paid or incurred by the Agent or the
Arranger in connection with the preparation, negotiation,
execution, delivery, syndication, distribution (including,
without limitation, via the internet or through a service such
as Intralinks), review, amendment, modification, and
administration of the Loan Documents. The Borrowers also agree
to reimburse the Agent, the Arranger, the LC Issuer and the
Lenders for any costs, internal charges and out-of-pocket
expenses (including attorneys' fees and time charges of
attorneys for the Agent, the Arranger, the LC Issuer and the
Lenders, which attorneys may be employees of the Agent, the
Arranger, the LC Issuer or the Lenders) paid or incurred by
the Agent, the Arranger, the LC Issuer or any Lender in
connection with the collection and enforcement of the Loan
Documents. Expenses being reimbursed by the Borrowers under
this Section include, without limitation, costs and expenses
incurred in connection with:
(i) appraisals of all or any portion of
the Collateral, including each parcel of real
Property or interest in real Property described in
any Collateral Document, if required, which
appraisals shall be in conformity with the applicable
requirements of any law or any governmental rule,
regulation, policy, guideline or directive (whether
or not having the force of law), or any
interpretation thereof, including, without
limitation, the provisions of Title XI of the
Financial Institutions Reform, Recovery and
Enforcement Act of 1989, as amended, reformed or
otherwise modified from time to time, and any rules
promulgated to implement such provisions (including
travel, lodging, meals and other out of pocket
expenses);
(ii) field examinations and audits and
the preparation of Reports at the Agent's then
customary charge (such charge is currently $800 per
day (or portion thereof) for each Person retained or
employed by the Agent with respect to each field
examination or audit) plus travel, lodging, meals and
other out of pocket expenses;
(iii) any amendment, modification,
supplement, consent, waiver or other documents
prepared with respect to any Loan Document and the
transactions contemplated thereby;
(iv) lien and title searches and title
insurance;
A&R CREDIT AGREEMENT
82
(v) taxes, fees and other charges for
recording the Mortgages, filing financing statements
and continuations, and other actions to perfect,
protect, and continue the Agent's Liens (including
costs and expenses paid or incurred by the Agent in
connection with the consummation of the Agreement);
(vi) sums paid or incurred to take any
action required of any Loan Party under the Loan
Documents that such Loan Party fails to pay or take;
(vii) any litigation, contest, dispute,
proceeding or action (whether instituted by Agent,
the LC Issuer, any Lender, any Loan Party or any
other Person and whether as to party, witness or
otherwise) in any way relating to the Collateral, the
Loan Documents or the transactions contemplated
thereby; and
(viii) costs and expenses of forwarding
loan proceeds, collecting checks and other items of
payment, and establishing and maintaining the Funding
Account and lock boxes, and costs and expenses of
preserving and protecting the Collateral
The foregoing shall not be construed to limit any other
provisions of the Loan Documents regarding costs and expenses to be
paid by the Borrowers. All of the foregoing costs and expenses may be
charged to the Borrower's Loan Account as Revolving Loans, or to
another deposit account, all as described in Section 2.17(b).
(b) Indemnification. The Borrowers hereby
further agree, jointly and severally, to indemnify the Agent,
the Arranger, the LC Issuer each Lender, their respective
Affiliates, and each of their directors, officers and
employees against all losses, claims, damages, penalties,
judgments, liabilities and expenses (including, without
limitation, all expenses of litigation or preparation therefor
whether or not the Agent, the Arranger, the LC Issuer any
Lender or any Affiliate is a party thereto) which any of them
may pay or incur arising out of or relating to this Agreement,
the other Loan Documents, the transactions contemplated hereby
or the direct or indirect application or proposed application
of the proceeds of any Credit Extension hereunder except to
the extent that they are determined in a final non-appealable
judgment by a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of the party
seeking indemnification. The obligations of the Borrowers
under this Section 9.6 shall survive the termination of this
Agreement. WITHOUT LIMITATION OF THE FOREGOING, IT IS THE
INTENTION OF THE BORROWERS AND THE BORROWERS AGREE THAT THE
FOREGOING INDEMNITIES SHALL APPLY TO EACH INDEMNIFIED PARTY
WITH RESPECT TO LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL
EXPENSES OF LITIGATION OR PREPARATION THEREFOR), WHICH IN
WHOLE OR IN PART ARE CAUSED BY OR ARISE OUT OF THE NEGLIGENCE
OF SUCH (AND/OR ANY OTHER) INDEMNIFIED PARTY.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP
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83
in a manner consistent with that used in preparing the financial statements
referred to in Section 5.5, except that any calculation or determination which
is to be made on a consolidated basis shall be made for the Company and all of
its Subsidiaries, including those Subsidiaries, if any, which are unconsolidated
on the Company's audited financial statements. If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in
any Loan Document, and the Borrowers (through the Borrower Representative), the
Agent or the Required Lenders shall so request the Agent, the Lenders and the
Loan Parties shall negotiate in good faith to amend such ratio or requirement to
preserve the original intent thereof in light of such change in GAAP (subject to
the approval of the Required Lenders), provided that, until so amended, such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and the Borrowers shall provide to the Agent and the
Lenders reconciliation statements showing the difference in such calculation,
together with the delivery of monthly, quarterly and annual financial statements
required hereunder.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between any Loan
Party on the one hand and the Lenders, the LC Issuer and the Agent on the other
hand shall be solely that of debtor and creditor. Neither the Agent, the
Arranger, the LC Issuer nor any Lender shall have any fiduciary responsibilities
to any Loan Party. Neither the Agent, the Arranger, the LC Issuer nor any Lender
undertakes any responsibility to any Loan Party to review or inform such Loan
Party of any matter in connection with any phase of any Loan Party's business or
operations. The Loan Parties agree that neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have liability to any Loan Party (whether sounding
in tort, contract or otherwise) for losses suffered by any Loan Party in
connection with, arising out of, or in any way related to, the transactions
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger, the LC Issuer
nor any Lender shall have any liability with respect to, and each Loan Party
hereby waives, releases and agrees not to ▇▇▇ for, any special, indirect,
consequential or punitive damages suffered by any Loan Party in connection with,
arising out of, or in any way related to the Loan Documents or the transactions
contemplated thereby.
9.11. Confidentiality. The Agent and each Lender agrees to hold any
confidential information which it may receive from the Borrower in connection
with this Agreement in confidence, except for disclosure (a) to its Affiliates
and to the Agent and any other Lender and their respective Affiliates, (b) to
legal counsel, accountants, and other professional advisors to such Lender or to
a Transferee, (c) to regulatory officials, (d) to any Person as requested
pursuant to or as required by law, regulation, or legal process, (e) to any
Person in connection with any legal proceeding to which it is a party, (f) to
its direct or indirect contractual counterparties in swap agreements or to legal
counsel, accountants and other professional advisors to such counterparties, (g)
permitted by Section 12.4, and (h) to rating agencies if requested or required
by such agencies in connection with a rating relating to the Credit Extensions
hereunder. Without limiting Section 9.4, the Borrowers agree that the terms of
this Section 9.11 shall set forth the entire agreement between the Borrowers and
each Lender (including the Agent) with respect to any confidential information
previously or hereafter received by such Lender in connection with this
Agreement, and this Section 9.11 shall supersede any and all prior
confidentiality agreements entered into by such Lender with respect to such
confidential information. Notwithstanding anything herein to the contrary,
confidential information shall not include, and each party to any of the Loan
Documents and
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84
their respective Affiliates (and the respective partners, directors, officers,
employees, advisors, representatives and other agents of each of the foregoing
and their Affiliates) may disclose to any and all Persons, without limitation of
any kind, (i) any information with respect to the U.S. federal and state income
tax treatment of the transactions contemplated hereby and any facts that may be
relevant to understanding such tax treatment, which facts shall not include for
this purpose the names of the parties or any other Person named herein, or
information that would permit identification of the parties or such other
Persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or facts, and (ii) all
materials of any kind (including opinions or other tax analyses) relating to
such tax treatment or facts that are provided to any of the Persons referred to
above, and it is hereby confirmed that each of the Persons referred to above has
been authorized to make such disclosures since the commencement of discussions
regarding the transactions contemplated hereby.
9.12. Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any Margin Stock for the repayment of the Credit
Extensions provided for herein.
9.13. Disclosure. Each Loan Party and each Lender hereby
acknowledges and agrees that Bank One and/or its Affiliates from time to time
may hold investments in, make other loans to or have other relationships with
any of the Loan Parties and their respective Affiliates.
9.14. PATRIOT ACT NOTICE. IMPORTANT INFORMATION ABOUT PROCEDURES FOR
OPENING A NEW ACCOUNT. TO HELP THE GOVERNMENT FIGHT THE FUNDING OF TERRORISM AND
MONEY LAUNDERING ACTIVITIES, FEDERAL LAW REQUIRES ALL FINANCIAL INSTITUTIONS TO
OBTAIN, VERIFY, AND RECORD INFORMATION THAT IDENTIFIES EACH PERSON OR ENTITY
THAT OPENS AN ACCOUNT, INCLUDING ANY DEPOSIT ACCOUNT, TREASURY MANAGEMENT
ACCOUNT, LOAN, OTHER EXTENSION OF CREDIT, OR OTHER FINANCIAL SERVICES PRODUCT.
WHAT THIS MEANS FOR THE BORROWERS: WHEN A BORROWER OPENS AN ACCOUNT, IF SUCH
BORROWER IS AN INDIVIDUAL, THE AGENT AND THE LENDERS WILL ASK FOR SUCH
BORROWER'S NAME, RESIDENTIAL ADDRESS, DATE OF BIRTH, AND OTHER INFORMATION THAT
WILL ALLOW AGENT AND THE LENDERS TO IDENTIFY SUCH BORROWER, AND, IF THE BORROWER
IS NOT AN INDIVIDUAL, THE AGENT AND THE LENDERS WILL ASK FOR SUCH BORROWER'S
NAME, EMPLOYER IDENTIFICATION NUMBER, BUSINESS ADDRESS, AND OTHER INFORMATION
THAT WILL ALLOW THE AGENT AND THE LENDERS TO IDENTIFY SUCH BORROWER. THE AGENT
AND THE LENDERS MAY ALSO ASK, IF A BORROWER IS AN INDIVIDUAL, TO SEE SUCH
BORROWER'S DRIVER'S LICENSE OR OTHER IDENTIFYING DOCUMENTS, AND, IF A BORROWER
IS NOT AN INDIVIDUAL, TO SEE SUCH BORROWER'S LEGAL ORGANIZATIONAL DOCUMENTS OR
OTHER IDENTIFYING DOCUMENTS.
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85
9.15. Amendment and Restatement. This Agreement is an amendment and
restatement of that certain Amended and Restated Credit Agreement, dated as of
January 31, 2002, among Newpark Resources, Inc., the lending institutions party
thereto as "Lenders", Bank One, NA, as administrative agent and LC Issuer, and
the other parties thereto, as amended (the "Amended Loan Agreement" and together
with the Original Loan Agreement and all interim amendments, restatements and
other modifications thereto, collectively, the "Prior Loan Agreements"). All
"Obligations" under the Prior Loan Agreements and all Liens securing payment of
"Obligations" under the Prior Loan Agreements shall in all respects be
continuing and this Agreement shall not be deemed to evidence or result in a
novation or repayment and re-borrowing of such "Obligations". This Agreement
shall supersede the Prior Loan Agreements. From and after the Effective Date,
this Agreement shall govern the terms of the "Obligations" under the Prior Loan
Agreements. To the extent not replaced by Loan Documents dated as of the Closing
Date, any "Loan Documents" (as defined in the Prior Loan Agreements) executed in
connection with the Prior Loan Agreements (other than any such Loan Document
that is specifically terminated by the parties thereto) shall continue to be
effective, and all references in those prior Loan Documents to the "Amended and
Restated Credit Agreement," the "Credit Agreement", the "Agreement" or similar
references, shall be deemed to refer to this Agreement without further amendment
thereof.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents. In its capacity as the Lenders'
contractual representative, the Agent (a) does not hereby assume any fiduciary
duties to any of the Lenders, (b) is a "representative" of the Lenders within
the meaning of the term "secured party" as defined in the Texas Uniform
Commercial Code and (c) is acting as an independent contractor, the rights and
duties of which are limited to those expressly set forth in this Agreement and
the other Loan Documents. Each of the Lenders hereby agrees to assert no claim
against the Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers
under the Loan Documents as are specifically delegated to the Agent by the terms
of each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
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86
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrowers, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Credit Extensions, Recitals, etc.
Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (a)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e) the
validity, enforceability, effectiveness, sufficiency or genuineness of any Loan
Document or any other instrument or writing furnished in connection therewith;
(f) the value, sufficiency, creation, perfection or priority of any Lien in any
Collateral; or (g) the financial condition of any Loan Party, any Guarantor or
any Affiliate of any Loan Party.
10.5. Action on Instructions of the Lenders. The Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder and
under any other Loan Document in accordance with written instructions signed by
the Required Lenders, and such instructions and any action taken or failure to
act pursuant thereto shall be binding on all of the Lenders. The Lenders hereby
acknowledge that the Agent shall be under no duty to take any discretionary
action permitted to be taken by it pursuant to the provisions of this Agreement
or any other Loan Document unless it shall be requested in writing to do so by
the Required Lenders. The Agent shall be fully justified in failing or refusing
to take any action hereunder and under any other Loan Document unless it shall
first be indemnified to its satisfaction by the Lenders pro rata against any and
all liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as the Agent hereunder and under any other Loan Document by or
through employees, agents, and attorneys-in-fact and shall not be answerable to
the Lenders, except as to money or securities received by the Agent or its
authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Agent shall be
entitled to advice of counsel concerning the contractual arrangement between the
Agent and the Lenders and all matters pertaining to the Agent's duties hereunder
and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex, electronic mail message, statement, paper or document believed
by it to be genuine and correct and to have been signed or sent by the proper
person or persons, and, in respect to legal matters, upon the opinion of counsel
selected by the Agent, which counsel may be employees of the Agent. For purposes
of determining compliance with the conditions specified in Sections 4.1 and 4.2,
each Lender that has signed this Agreement shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
required thereunder to be consented to or approved by or acceptable or
satisfactory to a Lender unless the Agent shall have received notice from such
Lender prior to the applicable date specifying its objection thereto.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree
to reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (a) for any
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87
amounts not reimbursed by the Borrowers for which the Agent is entitled to
reimbursement by the Borrowers under the Loan Documents, (b) for any other
expenses incurred by the Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the Agent
in connection with any dispute between the Agent and any Lender or between two
or more of the Lenders) and (c) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of the Loan
Documents or any other document delivered in connection therewith or the
transactions contemplated thereby (including, without limitation, for any such
amounts incurred by or asserted against the Agent in connection with any dispute
between the Agent and any Lender or between two or more of the Lenders), or the
enforcement of any of the terms of the Loan Documents or of any such other
documents, provided that, (i) no Lender shall be liable for any of the foregoing
to the extent any of the foregoing is found in a final non-appealable judgment
by a court of competent jurisdiction to have resulted from the gross negligence
or willful misconduct of the Agent and (ii) any indemnification required
pursuant to Section 3.5(g) shall, notwithstanding the provisions of this Section
10.8, be paid by the relevant Lender in accordance with the provisions thereof.
The obligations of the Lenders under this Section 10.8 shall survive payment of
the Obligations and termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender, any
Borrower or the Borrower Representative referring to this Agreement describing
such Default or Unmatured Default and stating that such notice is a "notice of
default." In the event that the Agent receives such a notice, the Agent shall
give prompt notice thereof to the Lenders; provided, that, the Agent shall not
be liable to any Lender for any failure to do so, except to the extent that such
failure is attributable to the Agent's gross negligence or willful misconduct.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Credit Extensions as any Lender
and may exercise the same as though it were not the Agent, and the term "Lender"
or "Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with any Loan Party
in which such Loan Party is not restricted hereby from engaging with any other
Person, all as if Bank One were not the Agent and without any duty to account
therefor to Lenders. Bank One and its Affiliates may accept fees and other
consideration from any Loan Party for services in connection with this Agreement
or otherwise without having to account for the same to Lenders. The Agent in its
individual capacity, is not obligated to remain a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by the Loan Parties and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, the Arranger or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents. Except for any notice, report, document,
credit information or other information expressly required to be furnished to
the Lenders by the Agent or Arranger hereunder, neither the Agent nor the
Arranger shall have any duty or responsibility (either initially or on a
continuing basis) to provide any Lender with any notice, report, document,
credit information or other information
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88
concerning the affairs, financial condition or business of the Borrowers or any
of their Affiliates that may come into the possession of the Agent or Arranger
(whether or not in their respective capacity as Agent or Arranger) or any of
their Affiliates.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower Representative, such
resignation to be effective upon the appointment of a successor Agent or, if no
successor Agent has been appointed, forty-five days after the retiring Agent
gives notice of its intention to resign. The Agent may be removed at any time
with or without cause by written notice received by the Agent from the Required
Lenders, such removal to be effective on the date specified by the Required
Lenders. Upon any such resignation or removal, the Required Lenders shall have
the right to appoint, on behalf of the Borrowers and the Lenders, a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Borrowers and the Lenders, a successor Agent. Notwithstanding the previous
sentence, the Agent may at any time without the consent of the Borrowers or any
Lender, appoint any of its Affiliates which is a commercial bank as a successor
Agent hereunder. If the Agent has resigned or been removed and no successor
Agent has been appointed, the Lenders may perform all the duties of the Agent
hereunder and the Borrowers shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $100,000,000. Upon the acceptance of any appointment as the Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning or removed Agent. Upon the effectiveness of the resignation or removal
of the Agent, the resigning or removed Agent shall be discharged from its duties
and obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation or removal of an Agent, the provisions of this Article X
shall continue in effect for the benefit of such Agent in respect of any actions
taken or omitted to be taken by it while it was acting as the Agent hereunder
and under the other Loan Documents. In the event that there is a successor to
the Agent by merger, or the Agent assigns its duties and obligations to an
Affiliate pursuant to this Section 10.12, then the term "Prime Rate" as used in
this Agreement shall mean the prime rate, base rate or other analogous rate of
the new Agent.
10.13. Delegation to Affiliates. The Borrowers and the Lenders agree
that the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.14. Execution of Loan Documents. The Lenders hereby empower and
authorize the Agent, on behalf of the Agent and the Lenders, to execute and
deliver to the Loan Parties the Loan Documents and all related agreements,
certificates, documents, or instruments as shall be necessary or appropriate to
effect the purposes of the Loan Documents. Each Lender agrees that any action
taken by the Agent or the Required Lenders in accordance with the terms of this
Agreement or the other Loan Documents, and the exercise by the Agent or the
Required Lenders of their respective powers set forth therein or herein,
together with such other powers that are reasonably incidental thereto, shall be
binding upon all of the Lenders. The Lenders acknowledge that all of the
Obligations hereunder constitute one debt, secured pari passu by all of the
Collateral.
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10.15. Collateral Matters.
(a) The Lenders hereby irrevocably authorize the
Agent, at its option and in its sole discretion, to release or
subordinate (as applicable) any Liens granted to the Agent by
the Loan Parties on any Collateral (i) upon the termination of
the Aggregate Commitment, payment and satisfaction in full in
cash of all Obligations (other than Unliquidated Secured
Obligations), and the cash collateralization of all
Unliquidated Secured Obligations in a manner satisfactory to
each affected Lender, (ii) constituting Property being sold or
disposed of if the Loan Party disposing of such Property
certifies to the Agent that the sale or disposition is made in
compliance with the terms of this Agreement (and the Agent may
rely conclusively on any such certificate, without further
inquiry), (iii) constituting Property in which no Loan Party
has at any time during the term of this Agreement owned any
interest, (iv) constituting property leased to a Loan Party
under a lease which has expired or been terminated in a
transaction permitted under this Agreement, (v) owned by or
leased to an Loan Party which is subject to a purchase money
security interest or which is the subject of a Capitalized
Lease, in either case, entered into by such Loan Party
pursuant to Section 6.17(c), or (vi) as required to effect any
sale or other disposition of such Collateral in connection
with any exercise of remedies of the Agent and the Lenders
pursuant to Section 8.1. Upon request by the Agent at any
time, the Lenders will confirm in writing the Agent's
authority to release any Liens upon particular types or items
of Collateral pursuant to this Section 10.15. Except as
provided in the preceding sentence, the Agent will not release
any Liens on Collateral without the prior written
authorization of the Required Lenders; provided that, the
Agent may in its discretion, release its Liens on Collateral
valued in the aggregate not in excess of $2,500,000 during any
calendar year without the prior written authorization of the
Lenders.
(b) Upon receipt by the Agent of any
authorization required pursuant to Section 10.15(a) from the
Required Lenders of the Agent's authority to release any Liens
upon particular types or items of Collateral, and upon at
least five Business Days prior written request by the Loan
Parties, the Agent shall (and is hereby irrevocably authorized
by the Lenders to) execute such documents as may be necessary
to evidence the release of its Liens upon such Collateral;
provided that, (i) the Agent shall not be required to execute
any such document on terms which, in the Agent's opinion,
would expose the Agent to liability or create any obligation
or entail any consequence other than the release of such Liens
without recourse or warranty and (ii) such release shall not
in any manner discharge, affect, or impair the Obligations or
any Liens (other than those expressly being released) upon (or
obligations of the Loan Parties in respect of) all interests
retained by the Loan Parties, including the proceeds of any
sale, all of which shall continue to constitute part of the
Collateral.
(c) The Agent shall have no obligation
whatsoever to any of the Lenders to assure that the Collateral
exists or is owned by the Loan Parties or is cared for,
protected, or insured or has been encumbered, or that the
Liens granted to the Agent therein have been properly or
sufficiently or lawfully created, perfected, protected, or
enforced or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty
of care, disclosure, or fidelity, or to continue exercising,
any of the rights, authorities, and powers granted or
available to the Agent pursuant to any of the Loan Documents,
it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto,
the Agent may act in any manner it may deem appropriate, in
its sole discretion given the Agent's own interest in the
Collateral in its
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90
capacity as one of the Lenders and that the Agent shall have
no other duty or liability whatsoever to any Lender as to any
of the foregoing.
(d) Each Lender hereby appoints each other
Lender as its agent for the purpose of perfecting Liens, for
the benefit of the Agent and the Lenders, in assets which, in
accordance with Article 9 of the UCC or any other applicable
law can be perfected only by possession. Should any Lender
(other than the Agent) obtain possession of any such
Collateral, such Lender shall notify the Agent thereof, and,
promptly upon the Agent's request therefor shall deliver such
Collateral to the Agent or otherwise deal with such Collateral
in accordance with the Agent's instructions.
(e) Each Lender hereby agrees as follows: (a)
such Lender is deemed to have requested that the Agent furnish
such Lender, promptly after it becomes available, a copy of
each Report prepared by or on behalf of the Agent; (b) such
Lender expressly agrees and acknowledges that neither Bank One
nor the Agent (i) makes any representation or warranty,
express or implied, as to the completeness or accuracy of any
Report or any of the information contained therein, or (ii)
shall be liable for any information contained in any Report;
(c) such Lender expressly agrees and acknowledges that the
Reports are not comprehensive audits or examinations, that the
Agent, Bank One, or any other party performing any audit or
examination will inspect only specific information regarding
the Loan Parties and will rely significantly upon the Loan
Parties' books and records, as well as on representations of
the Loan Parties' personnel and that Bank One undertakes no
obligation to update, correct or supplement the Reports; (d)
such Lender agrees to keep all Reports confidential and
strictly for its internal use, not share the Report with any
Loan Party and not to distribute any Report to any other
Person except as otherwise permitted pursuant to this
Agreement; and (e) without limiting the generality of any
other indemnification provision contained in this Agreement,
such Lender agrees (i) that neither Bank One nor the Agent
shall be liable to such Lender or any other Person receiving a
copy of the Report for any inaccuracy or omission contained in
or relating to a Report, (ii) to conduct its own due diligence
investigation and make credit decisions with respect to the
Loan Parties based on such documents as such Lender deems
appropriate without any reliance on the Reports or on the
Agent or Bank One, (iii) to hold the Agent and any such other
Person preparing a Report harmless from any action the
indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with
any Credit Extensions that the indemnifying Lender has made or
may make to the Loan Parties, or the indemnifying Lender's
participation in, or the indemnifying Lender's purchase of,
any Obligations and (iv) to pay and protect, and indemnify,
defend, and hold the Agent and any such other Person preparing
a Report harmless from and against, the claims, actions,
proceedings, damages, costs, expenses, and other amounts
(including reasonable attorney fees) incurred by the Agent and
any such other Person preparing a Report as the direct or
indirect result of any third parties who might obtain all or
part of any Report through the indemnifying Lender.
10.16. Co-Agents, Documentation Agent, Syndication Agent, etc.
Neither any of the Lenders identified in this Agreement as a "co-agent" nor the
Documentation Agent or the Syndication Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Agent in Section 10.11.
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91
ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights
of the Lenders under applicable law, if any Loan Party becomes insolvent,
however evidenced, or any Default occurs, any and all deposits (including all
account balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of any Borrower may
be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or
otherwise, has payment made to it upon its Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Credit Exposure held by the other Lenders so
that after such purchase each Lender will hold its Pro Rata Share of the
Aggregate Credit Exposure. If any Lender, whether in connection with setoff or
amounts which might be subject to setoff or otherwise, receives collateral or
other protection for its Secured Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to respective Pro Rata Share of the Aggregate Credit Exposure. In
case any such payment is disturbed by legal process, or otherwise, appropriate
further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Loan Parties and
the Lenders and their respective successors and assigns permitted hereby, except
that (a) the Loan Parties shall not have the right to assign their rights or
obligations under the Loan Documents without the prior written consent of each
Lender, (b) any assignment by any Lender must be made in compliance with Section
12.3, and (c) any transfer by Participation must be made in compliance with
Section 12.2. Any attempted assignment or transfer by any party not made in
compliance with this Section 12.1 shall be null and void, unless such attempted
assignment or transfer is treated as a participation in accordance with Section
12.2. The parties to this Agreement acknowledge that clause (b) of this Section
12.1 relates only to absolute assignments and this Section 12.1 does not
prohibit assignments creating security interests, including, without limitation,
(x) any pledge or assignment by any Lender of all or any portion of its rights
under this Agreement and any Note to a Federal Reserve Bank or (y) in the case
of a Lender which is a Fund, any pledge or assignment of all or any portion of
its rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Credit Extension or which holds any Note as the owner thereof for all purposes
hereof unless and until such Person complies with Section 12.3; provided
however, that the Agent may in its discretion (but shall not be required to)
follow instructions from the Person which made any Credit Extension or which
holds any Note to direct payments relating to such Credit Extension or Note to
another Person. Any assignee of the rights to any Credit Extension or any Note
agrees by acceptance of such assignment to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Credit
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92
Extension (whether or not a Note has been issued in evidence thereof), shall be
conclusive and binding on any subsequent holder or assignee of the rights to
such Credit Extension.
12.2. Participations.
(a) Permitted Participants; Effect. Any Lender
may at any time sell to one or more banks or other entities
("Participants") participating interests in any Credit
Exposure of such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender
under the Loan Documents. In the event of any such sale by a
Lender of participating interests to a Participant, such
Lender's obligations under the Loan Documents shall remain
unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations,
such Lender shall remain the owner of its Credit Exposure and
the holder of any Note issued to it in evidence thereof for
all purposes under the Loan Documents, all amounts payable by
the Borrowers under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the
Borrowers and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's
rights and obligations under the Loan Documents.
(b) Voting Rights. Each Lender shall retain the
sole right to approve, without the consent of any Participant,
any amendment, modification or waiver of any provision of the
Loan Documents other than any amendment, modification or
waiver with respect to any Credit Extension or Commitment in
which such Participant has an interest which would require
consent of all of the Lenders pursuant to the terms of Section
8.3 or of any other Loan Document.
(c) Benefit of Certain Provisions. Each Loan
Party agrees that each Participant shall be deemed to have the
right of setoff provided in Section 11.1 in respect of its
participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender
under the Loan Documents, provided that, each Lender shall
retain the right of setoff provided in Section 11.1 with
respect to the amount of participating interests sold to each
Participant. The Lenders agree to share with each Participant,
and each Participant, by exercising the right of setoff
provided in Section 11.1, agrees to share with each Lender,
any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section
11.2 as if each Participant were a Lender. The Borrowers
further agree that each Participant shall be entitled to the
benefits of Sections 3.1, 3.2, 3.4 and 3.5 to the same extent
as if it were a Lender and had acquired its interest by
assignment pursuant to Section 12.3, provided that, (i) a
Participant shall not be entitled to receive any greater
payment under Section 3.1, 3.2 or 3.5 than the Lender who sold
the participating interest to such Participant would have
received had it retained such interest for its own account,
unless the sale of such interest to such Participant is made
with the prior written consent of the Borrower Representative,
and (ii) any Participant not incorporated under the laws of
the U.S. or any state thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a
Lender.
12.3. Assignments.
(a) Permitted Assignments. Any Lender may at any
time assign to one or more banks or other entities
("Purchasers") all or any part of its rights and obligations
under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit
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G (an "Assignment Agreement"). Each such assignment with
respect to a Purchaser which is not a Lender or an Affiliate
of a Lender or an Approved Fund shall either be in an amount
equal to the entire applicable Commitment and Credit
Extensions of the assigning Lender or (unless each of the
Borrower Representative and the Agent otherwise consents) be
in an aggregate amount not less than $5,000,000 in the case of
any assignment of a Revolving Commitment and $1,000,000 in the
case of any assignment of a Term Loan or Term Loan Commitment.
The amount of the assignment shall be based on the Commitment
or outstanding Credit Extensions (if the Commitment has been
terminated) subject to the assignment, determined as of the
date of such assignment or as of the "Trade Date," if the
"Trade Date" is specified in the assignment.
(b) Consents. The consent of the Borrower
Representative shall be required prior to an assignment
becoming effective unless the Purchaser is a Lender, an
Affiliate of a Lender or an Approved Fund, provided that, the
consent of the Borrower Representative shall not be required
if a Default has occurred and is continuing. The consent of
the Agent shall be required prior to an assignment becoming
effective unless the Purchaser is a Lender with a Revolving
Commitment (in the case of an assignment of a Revolving
Commitment) or is a Lender, an Affiliate of a Lender or an
Approved Fund (in the case of an assignment of any other
Commitment or Loans). The consent of the LC Issuer shall be
required prior to an assignment of a Revolving Commitment
becoming effective unless the Purchaser is a Lender with a
Revolving Commitment. Any consent required under this Section
12.3(b) shall not be unreasonably withheld or delayed.
(c) Effect; Effective Date. Upon (i) delivery to
the Agent of a duly executed Assignment Agreement, together
with any consents required by Sections 12.3(a) and 12.3(b),
and (ii) payment of a $3,500 fee to the Agent for processing
such assignment effective on the effective date specified by
the Agent in such Assignment Agreement. The Assignment
Agreement shall contain a representation by the Purchaser to
the effect that none of the consideration used to make the
purchase of the Commitment and Credit Exposure under the
applicable Assignment Agreement constitutes "plan assets" as
defined under ERISA and that the rights and interests of the
Purchaser in and under the Loan Documents will not be "plan
assets" under ERISA. On and after the effective date of such
Assignment Agreement, such Purchaser shall for all purposes be
a Lender party to this Agreement and any other Loan Document
executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents,
to the same extent as if it were an original party thereto,
and the transferor Lender shall be released with respect to
the Commitment and Credit Exposure assigned to such Purchaser
without any further consent or action by the Borrowers, the
Lenders or the Agent. In the case of an Assignment Agreement
covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a Lender
hereunder but shall continue to be entitled to the benefits
of, and subject to, those provisions of this Agreement and the
other Loan Documents which survive payment of the Obligations
and termination of the applicable agreement. Any assignment or
transfer by a Lender of rights or obligations under this
Agreement that does not comply with this Section 12.3 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 Section 12.2. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3(c),
the transferor Lender, the Agent and the Borrowers shall, if
the transferor Lender or the Purchaser desires that its Loans
be evidenced by Notes, make appropriate arrangements so that
new Notes or, as appropriate, replacement Notes are issued to
such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such Purchaser, in each case
in principal
A&R CREDIT AGREEMENT
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amounts reflecting their respective Commitments, as adjusted
pursuant to such assignment.
(d) Register. The Agent, acting solely for this
purpose as an agent of the Borrowers, shall maintain at one of
its offices in the U.S. a copy of each Assignment Agreement
delivered to it and a register for the recordation of the
names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Credit Extensions 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 Borrowers, the Agent 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 Borrowers
and any Lender, at any reasonable time and from time to time
upon reasonable prior notice.
12.4. Dissemination of Information. Each Loan Party authorizes each
Lender to disclose to any Participant or Purchaser or any other Person acquiring
an interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Loan Parties, including without
limitation any information contained in any Reports; provided that, each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
U.S. or any state thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with the
provisions of Section 3.5(d).
12.6. Assignment by LC Issuer. Notwithstanding anything contained
herein, if at any time Bank One assigns all of its Revolving Commitment and
Revolving Loans pursuant to Section 12.3, Bank One may, upon thirty days' notice
to the Borrower Representative and the Lenders, resign as LC Issuer. In the
event of any such resignation as LC Issuer, the Borrower Representative shall be
entitled to appoint from among the Lenders a successor LC Issuer hereunder;
provided however, that no failure by the Borrower Representative to appoint any
such successor shall affect the resignation of Bank One as LC Issuer. If Bank
One resigns as LC Issuer, it shall retain all the rights and obligations of the
LC Issuer hereunder with respect to the Facility LCs outstanding as of the
effective date of its resignation as LC Issuer and all LC Obligations with
respect thereto (including the right to require the Lenders to make Revolving
Loans or fund risk participations in outstanding Reimbursement Obligations
pursuant to Section 2.1.2(d)).
ARTICLE XIII
NOTICES
13.1. Notices; Effectiveness; Electronic Communications.
(a) Notices Generally. Except in the case of
notices and other communications expressly permitted to be
given by telephone (and except as provided in paragraph (b)
below), all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered
mail or sent by telecopier as follows:
A&R CREDIT AGREEMENT
95
(i) if to any Loan Party, at its
address or telecopier number set forth on the
signature page hereof;
(ii) if to the Agent, at its address or
telecopier number set forth on the signature page
hereof;
(iii) if to the LC Issuer, at its address
or telecopier number set forth on the signature page
hereof;
(iv) if to a Lender, to it at its
address or telecopier number set forth in its
Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed
by certified or registered mail, shall be deemed to have been given
when received; notices sent by telecopier shall be deemed to have been
given when sent (except that, if not given during normal business hours
for the recipient, shall be deemed to have been given at the opening of
business on the next Business Day for the recipient). Notices delivered
through electronic communications to the extent provided in paragraph
(b) below, shall be effective as provided in said paragraph (b).
(b) Electronic Communications. Notices and other
communications to the Lenders and the LC Issuer hereunder may
be delivered or furnished by electronic communication
(including e-mail and internet or intranet websites) pursuant
to procedures approved by the Agent or as otherwise determined
by the Agent, provided that, the foregoing shall not apply to
notices to any Lender or the LC Issuer pursuant to Article II
if such Lender or the LC Issuer, as applicable, has notified
the Agent that it is incapable of receiving notices under such
Article by electronic communication. The Agent or any Loan
Party may, in its respective discretion, agree to accept
notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it or as it
otherwise determines, provided that such determination or
approval may be limited to particular notices or
communications. Notwithstanding the foregoing, in every
instance, the Borrower Representative shall be required to
provide paper copies of the Compliance Certificates required
by Section 6.1(e) to the Agent.
Unless the Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon
the sender's receipt of an acknowledgement from the intended recipient
(such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement), provided that if such
notice or other communication is not given during the normal business
hours of the recipient, such notice or communication shall be deemed to
have been given at the opening of business on the next Business Day for
the recipient, and (ii) notices or communications posted to an Internet
or intranet website shall be deemed received upon the deemed receipt by
the intended recipient at its e-mail address as described in the
foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor.
13.2. Change of Address, Etc. Any party hereto may change its
address or telecopier number for notices and other communications hereunder by
notice to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
A&R CREDIT AGREEMENT
96
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Loan Parties, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.
ARTICLE XV
GUARANTY
15.1. Guaranty. Each Guarantor (other than those that have delivered
a separate Guaranty; each to be referred to in this Article XV as a Guarantor
and collectively as the Guarantors) hereby agrees that it is jointly and
severally liable for, and, as primary obligor and not merely as surety,
absolutely and unconditionally guarantees to the Lenders the prompt payment when
due, whether at stated maturity, upon acceleration or otherwise, and at all
times thereafter, of the Secured Obligations and all costs and expenses
including, without limitation, all court costs and attorneys' and paralegals'
fees (including allocated costs of in-house counsel and paralegals) and expenses
paid or incurred by the Agent, the LC Issuer and the Lenders in endeavoring to
collect all or any part of the Secured Obligations from, or in prosecuting any
action against, any Borrower, any Guarantor or any other guarantor of all or any
part of the Secured Obligations (such costs and expenses, together with the
Secured Obligations, collectively the "Guaranteed Obligations"). Each Guarantor
further agrees that the Guaranteed Obligations may be extended or renewed in
whole or in part without notice to or further assent from it, and that it
remains bound upon its guarantee notwithstanding any such extension or renewal.
15.2. Guaranty of Payment. This Guaranty is a guaranty of payment
and not of collection. Each Guarantor waives any right to require the Agent, the
LC Issuer or any Lender to ▇▇▇ any Borrower, any Guarantor, any other guarantor,
or any other person obligated for all or any part of the Guaranteed Obligations,
or otherwise to enforce its payment against any collateral securing all or any
part of the Guaranteed Obligations.
15.3. No Discharge or Diminishment of Guaranty.
(a) Except as otherwise provided for herein and
to the extent provided for herein, the obligations of each
Guarantor hereunder are unconditional and absolute and not
subject to any reduction, limitation, impairment or
termination for any reason (other than the indefeasible
payment in full in cash of the Guaranteed Obligations),
including:
(i) any claim of waiver, release,
extension, renewal, settlement, surrender,
alteration, or compromise of any of the Guaranteed
Obligations, by operation of law or otherwise;
(ii) any change in the corporate
existence, structure or ownership of any Borrower or
any other guarantor of or other person liable for any
of the Guaranteed Obligations;
(iii) any insolvency, bankruptcy,
reorganization or other similar proceeding affecting
any Borrower, any Guarantor, or any other guarantor
of or other person liable for any of the Guaranteed
Obligations, or their assets or any resulting release
or discharge of any obligation of any Borrower, any
Guarantor,
A&R CREDIT AGREEMENT
97
or any other guarantor of or other person liable for
any of the Guaranteed Obligations; or
(iv) the existence of any claim, setoff
or other rights which any Guarantor may have at any
time against any Borrower, any Guarantor, any other
guarantor of the Guaranteed Obligations, the Agent,
the LC Issuer, any Lender, or any other person,
whether in connection herewith or in any unrelated
transactions.
(b) The obligations of each Guarantor hereunder
are not subject to any defense or setoff, counterclaim,
recoupment, or termination whatsoever by reason of the
invalidity, illegality, or unenforceability of any of the
Guaranteed Obligations or otherwise, or any provision of
applicable law or regulation purporting to prohibit payment by
any Borrower, any Guarantor or any other guarantor of or other
person liable for any of the Guaranteed Obligations, of the
Guaranteed Obligations or any part thereof.
(c) Further, the obligations of any Guarantor
hereunder are not discharged or impaired or otherwise affected
by:
(i) the failure of the Agent, the LC
Issuer or any Lender to assert any claim or demand or
to enforce any remedy with respect to all or any part
of the Guaranteed Obligations;
(ii) any waiver or modification of or
supplement to any provision of any agreement relating
to the Guaranteed Obligations;
(iii) any release, non-perfection, or
invalidity of any indirect or direct security for the
obligations of any Borrower for all or any part of
the Guaranteed Obligations or any obligations of any
other guarantor of or other person liable for any of
the Guaranteed Obligations;
(d) any action or failure to act by the Agent,
the LC Issuer or any Lender with respect to any collateral
securing any part of the Guaranteed Obligations; and
(e) any default, failure or delay, willful or
otherwise, in the payment or performance of any of the
Guaranteed Obligations, or any other circumstance, act,
omission or delay that might in any manner or to any extent
vary the risk of such Guarantor or that would otherwise
operate as a discharge of any Guarantor as a matter of law or
equity (other than the indefeasible payment in full in cash of
the Guaranteed Obligations).
15.4. Defenses Waived. To the fullest extent permitted by applicable
law, each Guarantor hereby waives any defense based on or arising out of any
defense of any Borrower or any Guarantor or the unenforceability of all or any
part of the Guaranteed Obligations from any cause, or the cessation from any
cause of the liability of any Borrower or any Guarantor, other than the
indefeasible payment in full in cash of the Guaranteed Obligations. Without
limiting the generality of the foregoing, each Guarantor irrevocably waives
acceptance hereof, presentment, demand, protest and, to the fullest extent
permitted by law, any notice not provided for herein, as well as any requirement
that at any time any action be taken by any person against any Borrower, any
Guarantor, any other guarantor of any of the Guaranteed Obligations, or any
other person. The Agent may, at its election, foreclose on any Collateral held
by it by one or more judicial or nonjudicial sales, accept an assignment of any
such Collateral in lieu of foreclosure or
A&R CREDIT AGREEMENT
98
otherwise act or fail to act with respect to any collateral securing all or a
part of the Guaranteed Obligations, compromise or adjust any part of the
Guaranteed Obligations, make any other accommodation with any Borrower, any
Guarantor, any other guarantor or any other person liable on any part of the
Guaranteed Obligations or exercise any other right or remedy available to it
against any Borrower, any Guarantor, any other guarantor or any other person
liable on any of the Guaranteed Obligations, without affecting or impairing in
any way the liability of such Guarantor under this Guaranty except to the extent
the Guaranteed Obligations have been fully and indefeasibly paid in cash. To the
fullest extent permitted by applicable law, each Guarantor waives any defense
arising out of any such election even though that election may operate, pursuant
to applicable law, to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of any Guarantor against any Borrower, any
other guarantor or any other person liable on any of the Guaranteed Obligations,
as the case may be, or any security.
15.5. Rights of Subrogation. No Guarantor will assert any right,
claim or cause of action, including, without limitation, a claim of subrogation,
contribution or indemnification that it has against any Borrower, any Guarantor,
any person liable on the Guaranteed Obligations, or any collateral, until the
Loan Parties and the Guarantors have fully performed all their obligations to
the Agent, the LC Issuer and the Lender.
15.6. Reinstatement; Stay of Acceleration. If at any time any
payment of any portion of the Guaranteed Obligations is rescinded or must
otherwise be restored or returned upon the insolvency, bankruptcy, or
reorganization of any Borrower or otherwise, each Guarantor's obligations under
this Guaranty with respect to that payment shall be reinstated at such time as
though the payment had not been made and whether or not the Agent, the LC Issuer
and the Lenders are in possession of this Guaranty. If acceleration of the time
for payment of any of the Guaranteed Obligations is stayed upon the insolvency,
bankruptcy or reorganization of any Borrower, all such amounts otherwise subject
to acceleration under the terms of any agreement relating to the Guaranteed
Obligations shall nonetheless be payable by the Guarantors forthwith on demand
by the Lender.
15.7. Information. Each Guarantor assumes all responsibility for
being and keeping itself informed of the Borrowers' financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks that
each Guarantor assumes and incurs under this Guaranty, and agrees that neither
the Agent, the LC Issuer nor any Lender shall have any duty to advise any
Guarantor of information known to it regarding those circumstances or risks.
15.8. Termination. The Lenders may continue to make loans or extend
credit to any Borrower based on this Guaranty until five days after the Agent
receives written notice of termination from any Guarantor. Notwithstanding
receipt of any such notice, each Guarantor will continue to be liable to the
Lender for any Guaranteed Obligations created, assumed or committed to prior to
the fifth day after receipt of the notice, and all subsequent renewals,
extensions, modifications and amendments with respect to, or substitutions for,
all or any part of that Guaranteed Obligations.
15.9. Taxes. All payments of the Guaranteed Obligations will be made
by each Guarantor free and clear of and without deduction for or on account of
any and all present or future taxes, levies, imposts, duties, charges,
deductions or withholdings of whatever nature imposed by any governmental
authority with respect to such payments, and any and all liabilities with
respect to the foregoing, but excluding franchise taxes and taxes imposed on
overall net income of the Lender by the U.S. or the jurisdiction in which the
Lender's applicable Lending Installation is located (collectively, "Taxes"). If
any Guarantor is required by law to deduct any Taxes from or in respect of any
sum payable to the Lenders under this Guaranty, (a) the sum payable must be
increased as necessary so that after making all
A&R CREDIT AGREEMENT
99
required deductions (including deductions applicable to additional sums payable
under this provision) the Lenders receive an amount equal to the sum it would
have received had no such deductions been made, (b) the Guarantors must then
make such deductions, and must pay the full amount deducted to the relevant
authority in accordance with applicable law, and (c) the Guarantors must furnish
to the Lender within forty-five days after their due date certified copies of
all official receipts evidencing payment thereof.
15.10. Severability. The provisions of this Guaranty are severable,
and in any action or proceeding involving any state corporate law, or any state,
federal or foreign bankruptcy, insolvency, reorganization or other law affecting
the rights of creditors generally, if the obligations of any Guarantor under
this Guaranty would otherwise be held or determined to be avoidable, invalid or
unenforceable on account of the amount of such Guarantor's liability under this
Guaranty, then, notwithstanding any other provision of this Guaranty to the
contrary, the amount of such liability shall, without any further action by the
Guarantors or the Lenders, be automatically limited and reduced to the highest
amount that is valid and enforceable as determined in such action or proceeding
(such highest amount determined hereunder being the relevant Guarantor's
"Maximum Liability". This Section with respect to the Maximum Liability of each
Guarantor is intended solely to preserve the rights of the Lenders to the
maximum extent not subject to avoidance under applicable law, and no Guarantor
nor any other person or entity shall have any right or claim under this Section
with respect to such Maximum Liability, except to the extent necessary so that
the obligations of any Guarantor hereunder shall not be rendered voidable under
applicable law. Each Guarantor agrees that the Guaranteed Obligations may at any
time and from time to time exceed the Maximum Liability of each Guarantor
without impairing this Guaranty or affecting the rights and remedies of the
Lenders hereunder, provided that, nothing in this sentence shall be construed to
increase any Guarantor's obligations hereunder beyond its Maximum Liability.
15.11. Contribution. In the event any Guarantor (a "Paying
Guarantor") shall make any payment or payments under this Guaranty or shall
suffer any loss as a result of any realization upon any collateral granted by it
to secure its obligations under this Guaranty, each other Guarantor (each a
"Non-Paying Guarantor") shall contribute to such Paying Guarantor an amount
equal to such Non-Paying Guarantor's "Pro Rata Share" of such payment or
payments made, or losses suffered, by such Paying Guarantor. For purposes of
this Article XV, each Non-Paying Guarantor's "Pro Rata Share" with respect to
any such payment or loss by a Paying Guarantor shall be determined as of the
date on which such payment or loss was made by reference to the ratio of (i)
such Non-Paying Guarantor's Maximum Liability as of such date (without giving
effect to any right to receive, or obligation to make, any contribution
hereunder) or, if such Non-Paying Guarantor's Maximum Liability has not been
determined, the aggregate amount of all monies received by such Non-Paying
Guarantor from the Borrowers after the date hereof (whether by loan, capital
infusion or by other means) to (ii) the aggregate Maximum Liability of all
Guarantors hereunder (including such Paying Guarantor) as of such date (without
giving effect to any right to receive, or obligation to make, any contribution
hereunder), or to the extent that a Maximum Liability has not been determined
for any Guarantor, the aggregate amount of all monies received by such
Guarantors from the Borrowers after the date hereof (whether by loan, capital
infusion or by other means). Nothing in this provision shall affect any
Guarantor's several liability for the entire amount of the Guaranteed
Obligations (up to such Guarantor's Maximum Liability). Each of the Guarantors
covenants and agrees that its right to receive any contribution under this
Guaranty from a Non-Paying Guarantor shall be subordinate and junior in right of
payment to the payment in full in cash of the Guaranteed Obligations. This
provision is for the benefit of both the Agent, the LC Issuer, the Lenders and
the Guarantors and may be enforced by any one, or more, or all of them in
accordance with the terms hereof.
A&R CREDIT AGREEMENT
100
15.12. Lending Installations. The Guaranteed Obligations may be
booked at any Lending Installation. All terms of this Guaranty apply to and may
be enforced by or on behalf of any Lending Installation.
15.13. Liability Cumulative. The liability of each Loan Party as a
Guarantor under this Article XV is in addition to and shall be cumulative with
all liabilities of each Loan Party to the Agent, the LC Issuer and the Lenders
under this Agreement and the other Loan Documents to which such Loan Party is a
party or in respect of any obligations of liabilities of the other Loan Parties,
without any limitation as to amount, unless the instrument or agreement
evidencing or creating such other liability specifically provides to the
contrary.
ARTICLE XVI
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
16.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE
TO NATIONAL BANKS.
16.2. CONSENT TO JURISDICTION. EACH LOAN PARTY HEREBY IRREVOCABLY
SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY U.S. FEDERAL OR TEXAS STATE
COURT SITTING IN DALLAS, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND EACH LOAN PARTY HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN
SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS
AGAINST ANY LOAN PARTY IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL
PROCEEDING BY ANY LOAN PARTY AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED
TO, OR CONNECTION WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN
DALLAS, TEXAS.
A&R CREDIT AGREEMENT
101
16.3. WAIVER OF JURY TRIAL. EACH LOAN PARTY, THE AGENT, THE LC
ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE XVII
THE BORROWER REPRESENTATIVE
17.1. Appointment; Nature of Relationship. The Company is hereby
appointed by each of the Borrowers as its contractual representative (herein
referred to as the "Borrower Representative") hereunder and under each other
Loan Document, and each of the Borrowers irrevocably authorizes the Borrower
Representative to act as the contractual representative of such Borrower with
the rights and duties expressly set forth herein and in the other Loan
Documents. The Borrower Representative agrees to act as such contractual
representative upon the express conditions contained in this Article XVI.
Additionally, the Borrowers hereby appoint the Borrower Representative as their
agent to receive all of the proceeds of the Loans in the Funding Account, at
which time the Borrower Representative shall promptly disburse such Loans to the
appropriate Borrower. The Agent and the Lenders, and their respective officers,
directors, agents or employees, shall not be liable to the Borrower
Representative or any Borrower for any action taken or omitted to be taken by
the Borrower Representative or the Borrowers pursuant to this Section 17.1.
17.2. Powers. The Borrower Representative shall have and may
exercise such powers under the Loan Documents as are specifically delegated to
the Borrower Representative by the terms of each thereof, together with such
powers as are reasonably incidental thereto. The Borrower Representative shall
have no implied duties to the Borrowers, or any obligation to the Lenders to
take any action thereunder except any action specifically provided by the Loan
Documents to be taken by the Borrower Representative.
17.3. Employment of Agents. The Borrower Representative may execute
any of its duties as the Borrower Representative hereunder and under any other
Loan Document by or through Authorized Officers.
17.4. Notices. Each Borrower shall immediately notify the Borrower
Representative of the occurrence of any Default or Unmatured Default hereunder
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default." In the event that the
Borrower Representative receives such a notice, the Borrower Representative
shall give prompt notice thereof to the Agent and the Lenders. Any notice
provided to the Borrower Representative hereunder shall constitute notice to
each Borrower on the date received by the Borrower Representative.
17.5. Successor Borrower Representative. Upon the prior written
consent of the Agent, the Borrower Representative may resign at any time, such
resignation to be effective upon the appointment of a successor Borrower
Representative. The Agent shall give prompt written notice of such resignation
to the Lenders.
17.6. Execution of Loan Documents; Aggregate Borrowing Base
Certificate. The Borrowers hereby empower and authorize the Borrower
Representative, on behalf of the Borrowers, to execute and deliver to the Agent
and the Lenders the Loan Documents and all related agreements, certificates,
A&R CREDIT AGREEMENT
102
documents, or instruments as shall be necessary or appropriate to effect the
purposes of the Loan Documents, including without limitation, the Aggregate
Borrowing Base Certificates and the Compliance Certificates. Each Borrower
agrees that any action taken by the Borrower Representative or the Borrowers in
accordance with the terms of this Agreement or the other Loan Documents, and the
exercise by the Borrower Representative of its powers set forth therein or
herein, together with such other powers that are reasonably incidental thereto,
shall be binding upon all of the Borrowers.
17.7. Reporting. Each Borrower hereby agrees that such Borrower
shall furnish promptly after each Fiscal Month to the Borrower Representative a
copy of its Borrowing Base Certificate and any other certificate or report
required hereunder or requested by the Borrower Representative on which the
Borrower Representative shall rely to prepare the Aggregate Borrowing Base
Certificates and Compliance Certificates required pursuant to the provisions of
this Agreement.
[SIGNATURE PAGES FOLLOW]
A&R CREDIT AGREEMENT
103
IN WITNESS WHEREOF, the Loan Parties, the Lenders, the LC Issuer and
the Agent have executed this Agreement as of the date first above written.
BORROWERS:
NEWPARK RESOURCES, INC.,
DURA-BASE NEVADA, INC.,
EXCALIBAR MINERALS, INC.,
EXCALIBUR MINERALS OF LA., L.L.C.,
NEWPARK DRILLING FLUIDS, L.L.C.,
NEWPARK ENVIRONMENTAL SERVICES, L.L.C.,
NEWPARK ENVIRONMENTAL MANAGEMENT COMPANY, L.L.C.,
NEWPARK HOLDINGS, INC.,
NEWPARK TEXAS L.L.C.,
OGS LABORATORY, INC.,
SOLOCO, L.L.C., AND
SUPREME CONTRACTORS, L.L.C.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Treasurer
▇▇▇▇▇▇-MILL, L.P.,
NES PERMIAN BASIN, L.P.,
NEWPARK ENVIRONMENTAL SERVICES OF TEXAS, L.P.,
NID, L.P., and
SOLOCO TEXAS, L.P.
By: Newpark Holdings, Inc., the general partner of such
entity
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Treasurer
LOAN PARTIES:
▇▇▇▇▇▇▇▇ CONSTRUCTION, INC.,
MALLARD & MALLARD OF LA., INC., AND
SHAMROCK DRILLING FLUIDS, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Treasurer
SCHEDULE 6.22 TO
A&R CREDIT AGREEMENT
DARCOM INTERNATIONAL, L.P.,
NEWPARK ENVIRONMENTAL SERVICES
MISSISSIPPI, L.P., AND
NEWPARK SHIPHOLDING TEXAS, L.P.
By: Newpark Holdings, Inc., the general partner of each
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------------------
Print Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Treasurer
NOTICE ADDRESS FOR ALL LOAN PARTIES:
c/o Newpark Resources, Inc.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇., Treasurer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 6.22 TO
A&R CREDIT AGREEMENT
LENDERS:
BANK ONE, NA
Individually, as Agent and LC Issuer
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇▇▇ III
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Name: ▇. ▇. ▇▇▇▇▇▇▇▇▇ III
Title: Director
Address:
Bank One, N.A.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇ ▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
SCHEDULE 6.22 TO
A&R CREDIT AGREEMENT
FLEET CAPITAL CORPORATION,
as Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice-President
SCHEDULE 6.22 TO
A&R CREDIT AGREEMENT
HIBERNIA NATIONAL BANK,
as Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: AVP
SCHEDULE 6.22 TO
A&R CREDIT AGREEMENT
WHITNEY NATIONAL BANK,
as Lender
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Senior Vice President
SCHEDULE 6.22 TO
A&R CREDIT AGREEMENT