AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of November 9, 1998
among
LANDCARE USA, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
BANKERS TRUST COMPANY,
as Documentation Agent
NATIONSBANK, N.A.,
as Administrative and Collateral Agent
and
THE BANK OF NOVA SCOTIA,
as Co-Agent
TABLE OF CONTENTS
SECTION PAGE
ARTICLE I: DEFINITIONS.................................................1
1.1 Certain Defined Terms.......................................1
1.2 References.................................................19
ARTICLE II: THE LOAN FACILITIES........................................19
2.1 Loans......................................................19
2.2 Rate Options for all Advances..............................21
2.3 Optional Payments; Mandatory Prepayments...................21
(a) Optional Payments....................................21
(b) Mandatory Prepayments................................21
2.4 Changes in Commitments.....................................21
2.5 Method of Borrowing........................................23
2.6 Method of Selecting Types and Interest Periods for Advances24
2.7 Minimum Amount of Each Advance.............................24
2.8 Method of Selecting Types and Interest Periods for
Conversion and Continuation of Advances...................24
(a) Right to Convert.....................................24
(b) Automatic Conversion and Continuation................24
(c) No Conversion Post-Default or Post-Unmatured Default.24
(d) Conversion/Continuation Notice.......................24
2.9 Default Rate...............................................25
2.10 Method of Payment..........................................25
2.11 Revolving Notes, Telephonic Notices........................25
2.12 Promise to Pay; Interest and Commitment Fees; Interest
Payment Dates; Interest and Fee Basis; Taxes; Loan
and Control Accounts......................................25
(a) Promise to Pay.......................................25
(b) Interest Payment Dates...............................25
(c) Commitment Fee.......................................26
(d) Interest and Fee Basis; Applicable Eurodollar Margin,
Applicable Floating Rate Margin and Applicable
Commitment Fee Percentage...........................26
(f) Loan Account.........................................30
(g) Control Account......................................30
(h) Entries Binding......................................30
2.13 Notification of Advances, Interest Rates, Prepayments and
Aggregate Commitment Reductions...........................30
2.14 Lending Installations......................................30
2.15 Non-Receipt of Funds by the Agent..........................30
2.16 Termination Date...........................................31
2.17 Replacement of Certain Lenders.............................31
ARTICLE III: THE LETTER OF CREDIT FACILITY..............................32
3.1 Obligation to Issue........................................32
3.2 Types and Amounts..........................................32
3.3 Conditions.................................................32
3.4 Procedure for Issuance of Letters of Credit................32
3.5 Letter of Credit Participation.............................33
3.6 Reimbursement Obligation...................................33
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SECTION PAGE
3.7 Letter of Credit Fees......................................34
3.8 Issuing Bank Reporting Requirements........................34
3.9 Indemnification; Exoneration...............................34
3.10 Cash Collateral............................................35
ARTICLE IV: CHANGE IN CIRCUMSTANCES....................................35
4.1 Yield Protection...........................................35
4.2 Changes in Capital Adequacy Regulations....................36
4.3 Availability of Types of Advances..........................37
4.4 Funding Indemnification....................................37
4.5 Lender Statements; Survival of Indemnity...................37
ARTICLE V: CONDITIONS PRECEDENT.......................................38
5.1 Initial Advances and Letters of Credit.....................38
5.2 Each Advance and Letter of Credit..........................39
ARTICLE VI: REPRESENTATIONS AND WARRANTIES.............................39
6.1 Organization; Corporate Powers.............................39
6.2 Authority..................................................39
6.3 No Conflict; Governmental Consents.........................40
6.4 Financial Statements.......................................40
6.5 No Material Adverse Change.................................40
6.6 Taxes......................................................40
(a) Tax Examinations.....................................40
(b) Payment of Taxes.....................................40
6.7 Litigation; Loss Contingencies and Violations..............41
6.8 Subsidiaries...............................................41
6.9 ERISA......................................................41
6.10 Accuracy of Information....................................42
6.11 Securities Activities......................................42
6.12 Material Agreements........................................42
6.13 Compliance with Laws.......................................43
6.14 Assets and Properties......................................43
6.15 Statutory Indebtedness Restrictions........................43
6.16 Insurance..................................................43
6.17 Labor Matters..............................................43
6.18 Environmental Matters......................................43
6.19 Benefits...................................................44
6.20 Year 2000 Problem..........................................44
ARTICLE VII: COVENANTS..................................................44
7.1 Reporting..................................................44
(a) Financial Reporting..................................44
(b) Notice of Default....................................45
(c) Lawsuits.............................................46
(d) ERISA Notices........................................46
(e) Labor Matters........................................47
(f) Other Indebtedness...................................47
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SECTION PAGE
(g) Other Reports........................................47
(h) Environmental Notices................................48
(i) Year 2000 Information................................48
(j) Other Information....................................48
7.2 Affirmative Covenants......................................48
(a) Corporate Existence, Etc.............................48
(b) Corporate Powers; Conduct of Business................48
(c) Compliance with Laws, Etc............................48
(d) Payment of Taxes and Claims; Tax Consolidation.......48
(e) Insurance............................................49
(f) Inspection of Property; Books and Records;
Discussions.........................................49
(g) ERISA Compliance.....................................49
(h) Maintenance of Property..............................49
(i) Environmental Compliance.............................50
(j) Use of Proceeds......................................50
(k) Addition of Guarantors; Addition of Pledged
Capital Stock.......................................50
(l) Year 2000 Problem....................................50
7.3 Negative Covenants.........................................50
(a) Indebtedness.........................................50
(b) Sales of Assets......................................52
(c) Liens................................................52
(d) Investments..........................................53
(e) Non-Guarantor Subsidiaries or Non-Pledged
Subsidiaries........................................54
(f) Restricted Payments..................................54
(g) Conduct of Business; Subsidiaries; Acquisitions......54
(h) Transactions with Shareholders and Affiliates........56
(i) Restriction on Fundamental Changes...................56
(j) Sales and Leasebacks.................................57
(k) Margin Regulations...................................57
(l) ERISA................................................57
(m) Issuance of Equity Interests.........................58
(n) Corporate Documents..................................58
(o) Fiscal Year..........................................58
(p) Subsidiary Covenants.................................58
(q) Hedging Obligations..................................58
7.4 Financial Covenants........................................58
(a) Fixed Charge Coverage Ratio..........................58
(b) Total Debt to EBITDA Ratio...........................58
(c) Senior Debt to EBITDA Ratio..........................59
(d) Minimum Consolidated Net Worth.......................59
(e) Capital Expenditures.................................59
ARTICLE VIII: DEFAULTS...................................................59
8.1 Defaults...................................................59
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS,
AMENDMENTS AND REMEDIES....................................62
9.1 Termination of Commitments; Acceleration...................62
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SECTION PAGE
9.2 Defaulting Lender..........................................62
9.3 Amendments.................................................63
9.4 Preservation of Rights.....................................64
ARTICLE X: GENERAL PROVISIONS.........................................64
10.1 Survival of Representations................................64
10.2 Governmental Regulation....................................64
10.3 Performance of Obligations.................................64
10.4 Headings...................................................65
10.5 Entire Agreement...........................................65
10.6 Several Obligations; Benefits of this Agreement............65
10.7 Expenses; Indemnification..................................65
(a) Expenses.............................................65
(b) Indemnity............................................65
(c) Waiver of Certain Claims; Settlement of Claims.......67
(d) Survival of Agreements...............................67
10.8 Numbers of Documents.......................................67
10.9 Accounting.................................................67
10.10 Severability of Provisions.................................67
10.11 Nonliability of Lenders....................................67
10.12 Governing Law..............................................67
10.13 Consent to Jurisdiction; Service of Process; Jury Trial....68
(a) Exclusive Jurisdiction...............................68
(b) Other Jurisdictions..................................68
(c) Service of Process...................................68
(d) Waiver of Jury Trial.................................68
(e) Waiver of Bond.......................................68
(f) Advice of Counsel....................................69
10.14 No Strict Construction.....................................69
10.15 Subordination of Intercompany Indebtedness.................69
10.16 Usury Not Intended.........................................70
10.17 Business Loans.............................................70
ARTICLE XI: THE AGENT..................................................70
11.1 Appointment of Agent; Nature of Relationship...............70
11.2 Powers.....................................................71
11.3 General Immunity...........................................71
11.4 No Responsibility for Loans, Creditworthiness,
Collateral, Recitals, Etc.................................71
11.5 Action on Instructions of Lenders..........................71
11.6 Employment of Agents and Counsel...........................72
11.7 Reliance on Documents; Counsel.............................72
11.8 The Agent's Reimbursement and Indemnification..............72
11.9 Rights as a Lender.........................................72
11.10 Lender Credit Decision.....................................72
11.11 Successor Agent............................................72
11.12 Collateral Documents.......................................73
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ARTICLE XII: SETOFF; RATABLE PAYMENTS...................................74
12.1 Setoff.....................................................74
12.2 Ratable Payments...........................................74
12.3 Application of Payments....................................74
12.4 Relations Among Lenders....................................75
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS..........75
13.1 Successors and Assigns.....................................75
13.2 Participations.............................................76
(a) Permitted Participants; Effect.......................76
(b) Benefit of Setoff....................................76
13.3 Assignments................................................76
(a) Permitted Assignments................................76
(b) Effect; Closing Date.................................77
(c) The Register.........................................77
13.4 Confidentiality............................................77
13.5 Dissemination of Information...............................78
ARTICLE XIV: NOTICES....................................................78
14.1 Giving Notice..............................................78
14.2 Change of Address..........................................78
ARTICLE XV: COUNTERPARTS...............................................78
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EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A -- Form of Assignment Agreement
(Definitions, Sections 2.17 and 13.3)
EXHIBIT B -- Commitments
(Definitions)
EXHIBIT C -- Form of Revolving Note
(Definitions)
EXHIBIT D -- Form of Swing Line Note
(Definitions)
EXHIBIT E -- Form of Borrowing Notice (Section 2.6)
EXHIBIT F -- Form of Request for Letter of Credit (Section 3.3)
EXHIBIT G -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT H -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT I -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT J -- Form of Guaranty Supplement
(Section 7.3(G)(ii))
EXHIBIT K -- Form of Opinion in respect of Increases in Aggregate
Commitment
(Section 2.4(b))
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SCHEDULES
Schedule 1.1.1 -- Founding Companies (Definitions)
Schedule 1.1.2 -- Initial Shareholders (Definitions)
Schedule 1.1.3 -- Permitted Existing Indebtedness (Definitions)
Schedule 1.1.4 -- Permitted Existing Investments (Definitions)
Schedule 1.1.5 -- Permitted Existing Liens (Definitions)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 7.3 -- Subordination Terms (Section 7.3(A))
vii
CREDIT AGREEMENT
This Amended and Restated Credit Agreement dated as of November 9, 1998 is
entered into among LandCARE USA, Inc., a Delaware corporation, the institutions
from time to time parties hereto as Lenders, whether by execution of this
Agreement or an Assignment Agreement pursuant to SECTION 13.3, NationsBank, N.A.
for itself and as Administrative and Collateral Agent for the other Lenders, and
Bankers Trust Company, as Documentation Agent.
RECITALS
WHEREAS, the Borrower, the Original Agent and the Original Lenders are
party to the Original Credit Agreement; and
WHEREAS, the Borrower has requested various modifications to the Original
Credit Agreement, including, without limitation, the replacement of the Original
Agent with the Agent and an increase in the amount of the available credit.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Borrower, the Lenders, the Agent,
and the Documentation Agent agree that the Original Credit Agreement is hereby
amended and restated in its entirety as follows:
ARTICLE I: DEFINITIONS
1.1 CERTAIN DEFINED TERMS. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the Closing Date, by which the Borrower or
any of its Subsidiaries (i) acquires any going business or all or substantially
all of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
equity interests of another Person.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount
of the several Revolving Loans made by the Lenders to the Borrower of the same
Type and, in the case of Eurodollar Rate Advances, for the same Interest Period.
"AFFECTED LENDER" is defined in SECTION 2.17 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests)
1
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 NationsBank, N.A. as Administrative and Collateral Agent for
the Lenders pursuant to ARTICLE XI hereof and any successor Agent appointed
pursuant to ARTICLE XI hereof.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all the
Lenders, as amended from time to time pursuant to the terms hereof. The initial
Aggregate Commitment is One Hundred Ten Million and 00/100 Dollars
($110,000,000.00).
"AGREEMENT" means this Amended and Restated Credit Agreement, as it may be
amended, restated or otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles in effect from time to time, applied in a manner consistent with that
used in preparing the financial statements referred to in SECTION 6.4(A) hereof,
PROVIDED, HOWEVER, that all PRO FORMA financial statements reflecting
Acquisitions shall be prepared in accordance with the requirements established
by the Commission for acquisition accounting for reporting acquisitions by
public companies (whether or not such Acquisitions are required to be publicly
reported).
"ALTERNATE BASE RATE" means, for any day, a fluctuating rate of interest
per annum equal to the higher of (i) the Corporate Base Rate for such day and
(ii) the sum of (a) the Federal Funds Effective Rate for such day and (b)
one-half of one percent (0.5%) per annum.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under SECTION 2.12(C)(I) hereof, determined in accordance with
the provisions of SECTION 2.12(D)(II) hereof.
"APPLICABLE EURODOLLAR MARGIN" means, as at any date of determination, the
rate per annum then applicable to Eurodollar Rate Loans, determined in
accordance with the provisions of SECTION 2.12(D)(II) hereof.
"APPLICABLE FLOATING RATE MARGIN" means, as at any date of determination,
the rate per annum then applicable to Floating Rate Loans, determined in
accordance with the provisions of SECTION 2.12(D)(II) hereof.
"APPLICABLE L/C FEE PERCENTAGE" means, with respect to any Letter of
Credit and as at any date of determination, a rate per annum equal to the
Applicable Eurodollar Margin in effect on such date.
"ARRANGER" means NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC, in its capacity as
the Arranger and Syndication Agent for the loan transaction evidenced by this
Agreement.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person).
"ASSIGNMENT AGREEMENT" means an assignment and acceptance agreement
entered into in connection with an assignment pursuant to SECTION 13.3 hereof in
substantially the form of EXHIBIT A.
2
"AUTHORIZED OFFICER" means any of the chief executive officer, president,
chief financial officer, treasurer, assistant treasurer or secretary of the
Borrower, acting singly.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any
other member of the Controlled Group is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" means LandCARE USA, Inc., a Delaware corporation, together with
its successors and assigns, including a debtor-in-possession on behalf of the
Borrower.
"BORROWING DATE" means a date on which an Advance or Swing Line Loan is
made hereunder.
"BORROWING NOTICE" is defined in SECTION 2.6 hereof.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Houston, Texas and
on which dealings in Dollars are carried on in the London interbank market and
(ii) for all other purposes a day (other than a Saturday or Sunday) on which
banks are open for business in Houston, Texas.
"BUYING LENDER(S)" is defined in SECTION 2.4(C) hereof.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities, including
Capitalized Leases and Permitted Purchase Money Indebtedness) (other than in
connection with Permitted Acquisitions) by the Borrower and its Subsidiaries
during that period that, in conformity with Agreement Accounting Principles, are
required to be included in or reflected by the property, plant, equipment or
similar fixed asset accounts reflected in the consolidated balance sheet of the
Borrower and its Subsidiaries.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CAPITALIZED LEASE" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state thereof, the District of
Columbia, any foreign bank, or its branches or agencies (fully protected against
currency fluctuations for any such deposits with a term of more than ten (10)
days); (iii) shares of money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are
3
limited to investment grade securities (i.e., securities rated at least Baa by
▇▇▇▇▇'▇ Investors Service, Inc. or at least BBB by Standard & Poor's Ratings
Group); (iv) commercial paper of United States and foreign banks and bank
holding companies and their subsidiaries and United States and foreign finance,
commercial industrial or utility companies which, at the time of acquisition,
are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better)
by ▇▇▇▇▇'▇ Investors Service, Inc.; (v) corporate bonds, mortgage-backed
securities and municipal bonds in each case of a domestic issuer rated at the
date of acquisition not less than Aaa by ▇▇▇▇▇'▇ Investors Service, Inc. or AAA
by Standard & Poor's Ratings Group with maturities of no more than two (2) years
from the date of acquisition; (vi) repurchase agreements secured by debt
securities of the type described in part (i) above, the market value of which,
including accrued interest, is not less than 100% of the amount of the
repurchase agreement, with maturities of no more than two years from the date of
acquisition, issued by or acquired from or through any Lender or any bank or
trust company organized under the laws of the United States or any state thereof
and having capital and surplus aggregating at least $100,000,000.00; and (vii)
money market funds with respect to which not less than 90% of such funds are
invested in the type of investments specified in clauses (i) through (v) above;
PROVIDED, unless the context otherwise requires, that the maturities of such
Cash Equivalents shall not exceed 365 days.
"CHANGE" is defined in SECTION 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(i) any "person" or "group" (as such terms are used in SECTIONS
13(D) and 14(D) of the Exchange Act), other than the Initial Shareholders,
is or becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of 30% or more of the combined
voting power of the Borrower's Capital Stock ordinarily having the right
to vote at an election of directors;
(ii) during any period of 24 consecutive calendar months,
individuals:
(a) who were directors of the Borrower on the first day of
such period, or
(b) whose election or nomination for election to the board
of directors of the Borrower was recommended or approved
by at least a majority of the directors then still in
office who were directors of the Borrower on the first
day of such period, or whose election or nomination for
election was so approved,
shall cease to constitute a majority of the board of directors of the
Borrower;
(iii) the Borrower consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of
its property to any Person, or any corporation consolidates with or merges
into the Borrower, in either event pursuant to a transaction in which the
outstanding Capital Stock of the Borrower is reclassified or changed into
or exchanged for cash, securities or other property; or
(iv) other than as a result of a transaction permitted under the
terms of this Agreement, the Borrower shall cease to own, of record and
beneficially, with sole voting and dispositive power, (a) 100% of the
outstanding shares of Capital Stock of each of the Founding Companies, (b)
80% of the outstanding shares of Capital Stock of each of the other
Guarantors or (c) shall cease to have
4
the power, directly or indirectly, to elect a majority of the members of
the board of directors of each of the Guarantors.
"CLOSING DATE" means November __, 1998.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, or any successor statute.
"COLLATERAL" means any property owned by the Borrower or any of its
Subsidiaries and pledged to the Agent pursuant to the Pledge Agreements to
secure the Secured Obligations.
"COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"COMMITMENT" means, for each Lender, the obligation of such Lender to make
Revolving Loans and to purchase participations in Letters of Credit not
exceeding the amount set forth on EXHIBIT B to this Agreement opposite its name
thereon under the heading "Commitment" or on Schedule 1 of the Assignment
Agreement by which it became a Lender or as set forth in the Commitment and
Acceptance pursuant to which it became a Lender, as such amount may be modified
from time to time pursuant to the terms of this Agreement or to give effect to
any applicable Assignment Agreement or Commitment and Acceptance.
"COMMITMENT INCREASE NOTICE" is defined in SECTION 2.4(B).
"CONSOLIDATED NET WORTH" means, at a particular date, all amounts which
would be included under shareholders' equity for the Borrower and its
consolidated Subsidiaries determined in accordance with Agreement Accounting
Principles.
"CONSOLIDATED REVENUES" means, as of any date of calculation, revenues of
the Borrower and its consolidated Subsidiaries for the twelve-month period ended
immediately prior to such calculation date; PROVIDED that the revenues for all
entities which are Subsidiaries as of such calculation date shall be included,
even though some of such revenues were earned prior to such entity becoming a
Subsidiary of the Borrower.
"CONSOLIDATED TANGIBLE ASSETS" means the total assets of the Borrower and
its Subsidiaries on a consolidated basis, but excluding therefrom all items that
are treated as intangibles under Agreement Accounting Principles.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans,
5
advances, stock purchases, capital contributions or otherwise), or to maintain
solvency, assets, level of income, or other financial condition, or to make
payment other than for value received.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any equity or debt securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument, in each case in writing, to which that
Person is a party or by which it or any of its properties is bound, or to which
it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower; and (iii) a member
of the same affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, any corporation described in CLAUSE (I) above or any
partnership or trade or business described in CLAUSE (II) above.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person
(i) 90% or more of the total Equity Interests or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more wholly-owned Subsidiaries of such Person and (ii)
of which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.
"CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.8(D) hereof.
"CORPORATE BASE RATE" means the per annum rate of interest established
from time to time by NationsBank as its prime rate, which rate may not be the
lowest rate of interest charged by NationsBank to its customers.
"CURE LOAN" is defined in SECTION 9.2(III) hereof.
"CURRENT FINANCIALS" means, initially, the consolidated balance sheet and
related consolidated statements of income and cash flows of the Borrower and its
Subsidiaries dated as of June 30, 1998, and, subsequently, the most recent
consolidated financial statements of the Borrower and its Subsidiaries delivered
under SECTION 7.1.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if
foreclosure, distraint, sale or other similar proceedings shall not have
been commenced) which are being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with Agreement Accounting Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens
imposed by law created in the ordinary course of business for amounts not
yet due or which are being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with Agreement Accounting Principles;
6
(iii) Liens incurred or deposits made, in each case, in the ordinary
course of business in connection with worker's compensation, unemployment
insurance or other types of social security benefits or to secure the
performance of bids, tenders, sales, contracts (other than for the
repayment of borrowed money), surety, appeal and performance bonds;
PROVIDED that (A) all such Liens do not in the aggregate materially
detract from the value of the Borrower's or such Subsidiary's assets or
property taken as a whole or materially impair the use thereof in the
operation of the businesses taken as a whole, and (B) with respect to
Liens securing bonds to stay judgments or in connection with appeals do
not secure at any time an aggregate amount which if paid at such time
would result in the occurrence or existence of a Default;
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of real property which do not in any case materially detract from the
value of the property subject thereto or interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against the Borrower or any
of its Subsidiaries which do not constitute a Default under SECTION 8.1(H)
hereof; and
(vi) any interest or title of the lessor in the property subject to
any operating lease entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business.
"DEFAULT" means an event described in ARTICLE VIII hereof.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the happening of any event, matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or redeemable at
the option of the holder thereof, in whole or in part, on or prior to the date
that is 91 days after the Termination Date.
"DOCUMENTATION AGENT" means Bankers Trust Company in its capacity as
Documentation Agent for the loan transaction evidenced by this Agreement.
"DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.
"DOLLAR" and "$" means dollars in the lawful currency of the United
States.
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:
(i) Net Income,
PLUS (ii) Interest Expense,
PLUS (iii) charges against income for foreign, federal, state and
local taxes, to the extent deducted in computing Net Income,
PLUS (iv) depreciation expense, to the extent deducted in computing Net
Income,
7
PLUS (v) amortization expense, including, without limitation,
amortization of goodwill, other intangible assets and the
fees, costs and expenses payable by the Borrower in connection
with the Original Credit Agreement, this Agreement, the Public
Offering and the consummation of the Initial Acquisitions, to
the extent deducted in computing Net Income,
PLUS (vi) other non-cash charges classified as long-term deferrals
in accordance with Agreement Accounting Principles, to the
extent deducted in computing Net Income,
MINUS (vii) Net Extraordinary Gains,
PLUS (viii)non-cash extraordinary losses (and any non-cash
nonrecurring unusual losses arising in or outside of the
ordinary course of business not included in extraordinary
losses determined in accordance with Agreement Accounting
Principles) but only to the extent such amounts were not
utilized to offset gains in calculating Net Extraordinary
Gains,
PLUS (ix) for the four fiscal quarters commencing with the quarter
in which the applicable charge is taken, all non-cash
compensation expenses of the Borrower associated with the
issuance of the Borrower's common stock to management of the
Borrower or the Founding Companies and consultants to the
Borrower pursuant to the Public Offering,
PLUS (x) the PRO FORMA adjustments which are consistent with the
Commission's regulations and practices as of the Closing Date
(whether or not applicable) to account for adjustments to
historical EBITDA for an acquired entity,
PLUS (xi) any PRO FORMA adjustments which are approved by the Agent
to account for adjustments to historical EBITDA for an
acquired entity.
As used herein "NET EXTRAORDINARY GAINS" means the sum of, but only if positive,
extraordinary gains (and any nonrecurring unusual gains arising in or outside of
the ordinary course of business not included in extraordinary gains determined
in accordance with Agreement Accounting Principles which have been included in
the determination of Net Income) MINUS extraordinary losses (and any
nonrecurring unusual losses arising in or outside of the ordinary course of
business not included in extraordinary losses determined in accordance with
Agreement Accounting Principles). EBITDA shall be calculated for any period by
including the actual amount for the applicable period ending on such day,
including the EBITDA attributable to Permitted Acquisitions occurring during
such period on a PRO FORMA basis for the period from the first day of the
applicable period through the date of the closing of each Permitted Acquisition,
utilizing (a) where available or required pursuant to the terms of this
Agreement, historical audited and/or reviewed unaudited financial statements
obtained from the seller, broken down by fiscal quarter in the Borrower's
reasonable judgment or (b) unaudited financial statements (where no audited or
reviewed financial statements are required pursuant to the terms of this
Agreement) reviewed internally by the Borrower, broken down by fiscal quarter in
the Borrower's reasonable judgment.
"EFFECTIVE COMMITMENT AMOUNTS" is defined in SECTION 2.4(B) hereof.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive
8
Environmental Response, Compensation and Liability Act, 42 U.S.C. ss. 9601 ET
SEQ., the Occupational Safety and Health Act of 1970, 29 U.S.C. ss. 651 ET SEQ.,
and the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss. 6901 ET
SEQ., in each case including any amendments thereto, any successor statutes, and
any regulations or guidance promulgated thereunder, and any state or local
equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Loan for
the relevant Interest Period, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in U.S. dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period. If for
any reason such rate is not available, the term "Eurodollar Base Rate" shall
mean, for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in U.S. dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period; PROVIDED,
HOWEVER, that if more than one rate is specified on Reuters Screen LIBO Page,
the applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100 of 1%).
"EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period PLUS the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such a
multiple.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.
"EURODOLLAR RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"FAIR VALUE" means (a) with respect to the Capital Stock of the Borrower,
the closing price for such Capital Stock on the trading date immediately
preceding the date of the applicable acquisition agreement; PROVIDED that such
amount may be discounted to the extent such discount is permitted by Agreement
Accounting Principles and (b) with respect to other assets, the value of the
relevant asset as of the date of acquisition or sale determined in an
arm's-length transaction conducted in good faith between an informed and willing
buyer and an informed and willing seller under no compulsion to buy.
9
"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. (Houston
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.
"FIXED CHARGE COVERAGE RATIO" is defined in SECTION 7.4(A) hereof.
"FLOATING RATE" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day PLUS the then Applicable Floating Rate
Margin, changing and as the Alternate Base Rate or Applicable Floating Rate
Margin changes.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Floating Rate.
"FOUNDING COMPANIES" means each of the Persons listed on SCHEDULE 1.1.1
hereto.
"GOVERNMENTAL ACTS" is defined in SECTION 3.9(A) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GROSS NEGLIGENCE" means recklessness, the absence of the slightest care
or the complete disregard of consequences. Gross Negligence does not mean the
absence of ordinary care or diligence, or an inadvertent act or inadvertent
failure to act. If the term "gross negligence" is used with respect to the Agent
or any Lender or any indemnitee in any of the other Loan Documents, it shall
have the meaning set forth herein.
"GUARANTORS" means all of the Borrower's Subsidiaries as of the Closing
Date and any other New Subsidiaries which have satisfied the provisions of
SECTION 7.3(G)(II) hereof, and their respective successors and assigns.
"GUARANTY" means that certain Subsidiary Guaranty dated as of the date of
this Agreement executed by the Guarantors in favor of the Agent, for the ratable
benefit of the Lenders, as it may be amended, modified, supplemented and/or
restated (including to add new Guarantors), and as in effect from time to time.
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
10
"INDEBTEDNESS" of any Person means, without duplication, such Person's (a)
obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than accounts payable arising in
the ordinary course of such Person's business payable on terms customary in the
trade), (c) obligations, whether or not assumed, secured by Liens or payable out
of the proceeds or production from property or assets now or hereafter owned or
acquired by such Person, (d) obligations which are evidenced by notes,
acceptances or other instruments, (e) Capitalized Lease Obligations, (f)
reimbursement obligations with respect to letters of credit (other than
commercial letters of credit) issued for the account of such Person, (g) Hedging
Obligations, (h) Off Balance Sheet Liabilities and (i) Contingent Obligations in
respect of obligations of another Person of the type described in the foregoing
clauses (a) through (h). The amount of Indebtedness of any Person at any date
shall be without duplication (i) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (ii) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
"INDEMNIFIED MATTERS" is defined in SECTION 10.7(B) hereof.
"INDEMNITEES" is defined in SECTION 10.7(B) hereof.
"INITIAL ACQUISITIONS" means the acquisition by the Borrower in separate
merger transactions, in exchange for cash and shares of its common stock, of the
Founding Companies.
"INITIAL SHAREHOLDERS" means the Persons set forth on SCHEDULE 1.1.2
hereto.
"INTEREST EXPENSE" means, for any period, the total interest expense of
the Borrower and its consolidated Subsidiaries, whether paid or accrued
(including the interest component of Capitalized Leases, facility and letter of
credit fees), but excluding interest expense not payable in cash (including
amortization of discount), all as determined in conformity with Agreement
Accounting Principles.
"INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a period
of one (1), two (2), three (3), or six (6) months commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest Period shall
end on (but exclude) the day which corresponds numerically to such date one,
two, three or six months thereafter; PROVIDED, HOWEVER, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, PROVIDED, HOWEVER, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses, accounts
receivable, advances to employees and similar items made or incurred in the
ordinary course of business) or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
11
"ISSUING BANKS" means NationsBank and any other Lender which, at the
Borrower's request, agrees, in each such Lender's sole discretion, to become an
Issuing Bank for the purpose of issuing Letters of Credit, and their respective
successors and assigns, in each case in such Lender's separate capacity as an
issuer of Letters of Credit pursuant to SECTION 3.1. The designation of any
Lender as an Issuing Bank after the date hereof shall be subject to the prior
written consent of the Agent.
"L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter of
Credit.
"LAWS" means all applicable statutes, laws, treaties, ordinances, rules,
regulations, permits, orders, writs, injunctions, decrees, judgments, opinions
and interpretations of any Governmental Authority.
"L/C INTEREST" is defined in SECTION 3.5 hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum
of (i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of all
Letters of Credit requested by the Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and each Proposed New Lender which becomes a Lender hereto
pursuant to the provisions of SECTION 2.4(B) and their respective successors and
assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LENDING PARTY" is defined in SECTION 13.4 hereof.
"LETTER OF CREDIT" means the standby letters of credit issued by the
Issuing Banks pursuant to SECTION 3.1 hereof.
"LEVERAGE RATIO" is defined in SECTION 7.4(B) hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, encumbrance or security agreement or preferential
arrangements of any kind or nature whatsoever (including, without limitation,
the interest of a vendor or lessor under any conditional sale, Capitalized Lease
or other title retention agreement).
"LOAN(S)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to SECTION 2.1(A) hereof (individually a "REVOLVING LOAN"
and collectively, the "REVOLVING LOANS"), and in the case of the Swing Line
Bank, any Swing Line Loan made pursuant to SECTION 2.1(B) hereof, and
collectively all such Revolving Loans and Swing Line Loans, whether made or
continued as or converted to Floating Rate Loans or Eurodollar Rate Loans.
"LOAN ACCOUNT" is defined in SECTION 2.12(F) hereof.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty, the Pledge
Agreements, and all other documents, instruments and agreements executed in
connection therewith or contemplated thereby, as the same may be amended,
restated or otherwise modified and in effect from time to time.
12
"MARGIN STOCK" is defined in Regulation U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance or
properties of the Borrower, or the Borrower and its Subsidiaries, taken as a
whole, (b) the ability of the Borrower or any of its Subsidiaries to perform
their respective obligations under the Loan Documents in any material respect or
(c) the ability of the Lenders or the Agent to enforce in any material respect
their rights with respect to the Collateral.
"MATERIAL SUBSIDIARY" means on any date of its determination (a) any
"Significant Subsidiary" as defined in Regulation S-X issued pursuant to the
Securities Act and the Exchange Act as of such date and (b) any other Subsidiary
of the Borrower which accounts for ten percent (10%) or more of the Borrower's
Consolidated Revenues as of the last day of the month ending immediately
preceding such date.
"MAXIMUM RATE" means the maximum nonusurious interest rate under
applicable law. The maximum lawful rate under Texas law for this Agreement shall
be the weekly indicated rate ceiling under FINANCE CODE ss. 1.001 ET SEQ. (West
1998), unless any other lawful rate ceiling exceeds the rate ceiling so
determined, and then the higher rate ceiling shall apply.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"NATIONSBANK" means NationsBank, N.A., in its individual capacity, and its
successors.
"NET INCOME" means, for any period, the net earnings (or loss) after taxes
of the Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with Agreement
Accounting Principles.
"NEW SUBSIDIARY" is defined in SECTION 7.3(G)(II).
"NON PRO RATA LOAN" is defined in SECTION 9.2 hereof.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3(B) hereof.
"NOTES" means the Revolving Notes and the Swing Line Note.
"OBLIGATIONS" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Agent, any Lender, the Swing
Line Bank, the Arranger, the Documentation Agent, any Affiliate of the Agent or
any Lender, or any Indemnitee, of any kind or nature, present or future, arising
under this Agreement, the Notes or any other Loan Document, whether or not
evidenced by any note, guaranty or other instrument, whether or not for the
payment of money, whether arising by reason of an extension of credit, loan,
guaranty, indemnification, or in any other manner, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees, attorneys'
fees and disbursements, paralegals' fees (in each case whether or not allowed),
and any other sum chargeable to the Borrower under this Agreement or any other
Loan Document.
"OFF BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
(b) any liability under any sale and leaseback Transactions which do not create
a liability
13
on the consolidated balance sheet of such Person, (c) any liability under any
financing lease or so-called "synthetic" lease transaction, or (d) any
obligations arising with respect to any other transaction which is the
functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheets of such Person and its
Subsidiaries.
"ORIGINAL CREDIT AGREEMENT" means that Credit Agreement dated as of June
9, 1998 (as amended prior to the date hereof) among Borrower, the First National
Bank of Chicago, as Agent (the "ORIGINAL AGENT"), the First National Bank of
Chicago, Bankers Trust Company and NationsBank, as Lenders (the "ORIGINAL
LENDERS").
"OTHER TAXES" is defined in SECTION 2.12(E)(II) hereof.
"PARTICIPANTS" is defined in SECTION 13.2(A) hereof.
"PAYMENT DATE" means the last Business Day of each March, June, September
and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in SECTION 7.3(G)(III) hereof.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.3 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.4 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.5 to this Agreement.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in SECTION 7.3(A)(IX)
hereof.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate principal amount (plus associated fees and
expenses) of the Indebtedness being replaced, renewed, refinanced or extended,
(ii) does not rank at the time of such replacement, renewal, refinancing or
extension senior to the Indebtedness being replaced, renewed, refinanced or
extended, and (iii) does not contain terms (including, without limitation, terms
relating to security, amortization, maturity, interest rate, premiums, fees,
covenants, event of default and remedies) materially less favorable to the
Borrower or to the Lenders than those applicable to the Indebtedness being
replaced, renewed, refinanced or extended.
"PERMITTED SUBORDINATED INDEBTEDNESS" is defined in SECTION 7.3(A)(III)
hereof.
"PERSON" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
14
"PLEDGE AGREEMENTS" means (a) the Pledge Agreement dated as of the Closing
Date executed by the Borrower in favor of the Agent, and (b) any pledge
agreement executed by any Subsidiary with respect to the Capital Stock of any
other Subsidiary executed as of the Closing Date or pursuant to the terms of
SECTION 7.2(K), in each case, as amended, modified, supplemented and/or restated
(including to add additional pledged Capital Stock of additional Subsidiaries).
"PRO RATA SHARE" means, with respect to any Lender, the percentage
obtained by dividing (A) such Lender's Commitment at such time (as adjusted from
time to time in accordance with the provisions of this Agreement) by (B) the sum
of the Aggregate Commitments at such time; PROVIDED, HOWEVER, if the Commitments
are terminated pursuant to the terms of this Agreement, then "Pro Rata Share"
means the percentage obtained by dividing (x) the sum of such Lender's L/C
Obligations and Revolving Loans, and in the case of the Swing Line Bank, Swing
Line Loans by (y) the aggregate amount of all Revolving Loans, Swing Line Loans
and L/C Obligations.
"PROPOSED NEW LENDER" is defined in SECTION 2.4(B).
"PURCHASERS" is defined in SECTION 13.3(A) hereof.
"RATE OPTION" means the Eurodollar Rate or the Floating Rate.
"REGISTER" is defined in SECTION 13.3(C) hereof.
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying Margin
Stock applicable to member banks of the Federal Reserve System.
"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in SECTION 3.6 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any lease of real or personal property but does not include any
amounts payable under Capitalized Leases of such Person.
"REPLACEMENT LENDER" is defined in SECTION 2.17 hereof.
15
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, PROVIDED, HOWEVER, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are equal to or greater than sixty-six and two-thirds percent (66-2/3%);
PROVIDED, HOWEVER, that, if any of the Lenders shall have failed to fund its Pro
Rata Share of any Revolving Loan requested by the Borrower, or any Swing Line
Loan as requested by the Agent, which such Lenders are obligated to fund under
the terms of this Agreement and any such failure has not been cured, then for so
long as such failure continues, "REQUIRED LENDERS" means Lenders (excluding all
Lenders whose failure to fund their respective Pro Rata Shares of such Revolving
Loans or Swing Line Loans has not been so cured) whose Pro Rata Shares represent
at least sixty-six and two-thirds percent (66-2/3%) of the aggregate Pro Rata
Shares of such Lenders; PROVIDED FURTHER, HOWEVER, that, if the Commitments have
been terminated pursuant to the terms of this Agreement, "REQUIRED LENDERS"
means Lenders (without regard to such Lenders' performance of their respective
obligations hereunder) whose aggregate ratable shares (stated as a percentage)
of the aggregate outstanding principal balance of all Loans and L/C Obligations
are equal to or greater than sixty-six and two-thirds percent (66- 2/3%).
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"RESERVES" means the maximum reserve requirement, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) with respect
to "Eurocurrency liabilities" or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Eurodollar
Rate Loans is determined or category of extensions of credit or other assets
which includes loans by a non-United States office of any Lender to United
States residents.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock, (ii) any redemption, retirement, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Borrower or any of its Subsidiaries now or hereafter outstanding, other than in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Borrower) of other Equity Interests of the
Borrower (other than Disqualified Stock), (iii) any redemption, purchase,
retirement, defeasance, prepayment or other acquisition for value, direct or
indirect, of any Permitted Subordinated Indebtedness, and (iv) any payment of a
claim for the rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of, any Permitted Subordinated Indebtedness or
any Equity Interests of the Borrower or any of the Borrower's Subsidiaries,
16
or of a claim for reimbursement, indemnification or contribution arising out of
or related to any such claim for damages or rescission.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the Aggregate Commitment at such time exceeds the Revolving Credit
Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Loans (including the Swing Line
Loans) at such time, PLUS (ii) the L/C Obligations at such time.
"REVOLVING LOAN" is defined in the definition of "Loans" above.
"REVOLVING NOTE" means a promissory note, in substantially the form of
EXHIBIT C hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Commitment, including any amendment, restatement,
modification, renewal or replacement of such Revolving Note.
"RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2 hereof.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii)
all Hedging Obligations owing to any Lender or any affiliate of any Lender under
agreements with respect thereto entered into with any Lender or any affiliate of
any Lender.
"SELLING LENDER(S)" is defined in SECTION 2.4(C) hereof.
"SENIOR DEBT" means, when determined, Total Debt, except for Indebtedness
which is contractually subordinated or junior in right of payment to the
Obligations.
"SENIOR LEVERAGE RATIO" is defined in SECTION 7.4(C) hereof.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"SWING LINE BANK" means NationsBank or any other Lender as a successor
Swing Line Bank.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum principal amount of $10,000,000 at any one
time outstanding.
"SWING LINE LOAN" means any Swing Line Loan made available to the Borrower
by the Swing Line Bank pursuant to SECTION 2.1(B) hereof.
"SWING LINE NOTE" means a promissory note, in substantially the form of
EXHIBIT D hereto, duly executed by the Borrower and payable to the order of the
Swing Line Bank in the amount of its Swing Line
17
Commitment, including any amendment, restatement, modification, renewal or
replacement of such Swing Line Note.
"TAXES" is defined in SECTION 2.12(E)(I) hereof.
"TERMINATION DATE" means the earlier of (a) November 9, 2001 and (b) the
date of termination of the Aggregate Commitment pursuant to SECTION 2.4 hereof
or the Commitments pursuant to SECTION 9.1 hereof.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the Termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"TOTAL DEBT" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of Indebtedness of the Borrower and its
Subsidiaries, other than Hedging Obligations.
"TRANSFEREE" is defined in SECTION 13.5 hereof.
"TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.
"UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability that would be incurred by the Controlled Group if all
members of the Controlled Group completely withdrew from all Multiemployer
Plans.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"U.S." means United States of America.
"YEAR 2000 COMPLIANT" is defined in SECTION 6.20 hereof.
"YEAR 2000 PROBLEM" is defined in SECTION 6.20 hereof.
Any accounting terms used in this Agreement which are not specifically
defined herein shall have the meanings customarily given them in accordance with
generally accepted accounting principles in existence as of the Closing Date
hereof.
18
1.2 REFERENCES. The existence throughout the Agreement of references to
the Borrower's Subsidiaries is for a matter of convenience only. Any references
to Subsidiaries of the Borrower set forth herein shall (i) with respect to
representations and warranties which deal with historical matters be deemed to
include each of the Founding Companies and their respective subsidiaries,
together with the businesses acquired pursuant to the Initial Acquisitions; and
(ii) shall not in any way be construed as consent by the Agent or any Lender to
the establishment, maintenance or acquisition of any Subsidiary, except as may
otherwise be permitted hereunder.
ARTICLE II: THE LOAN FACILITIES
2.1 LOANS.
(a) REVOLVING LOANS. Upon the satisfaction of the conditions
precedent set forth in SECTIONS 5.1 and 5.2, from and including the
Closing Date and prior to the Termination Date, each Lender severally and
not jointly agrees, on the terms and conditions set forth in this
Agreement, to make Revolving Loans to the Borrower from time to time, in
Dollars, in an amount not to exceed such Lender's Pro Rata Share of
Revolving Credit Availability at such time; PROVIDED, HOWEVER, that at no
time shall the Revolving Credit Obligations exceed the Aggregate
Commitment at such time. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Revolving Loans at any time prior
to the Termination Date. The Revolving Loans made on the Closing Date
shall initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Rate Loans in the manner
provided in SECTION 2.8 and subject to the other conditions and
limitations therein set forth and set forth in this ARTICLE II. On the
Termination Date, the Borrower shall repay in full the outstanding
principal balance of the Loans. Each Advance under this SECTION 2.1(A)
shall consist of Revolving Loans made by each Lender ratably in proportion
to such Lender's respective Pro Rata Share.
(b) SWING LINE LOANS.
(i) AMOUNT OF SWING LINE LOANS. Upon the satisfaction of the
conditions precedent set forth in SECTION 5.1 and 5.2, from and
including the Closing Date and prior to the Termination Date, the
Swing Line Bank agrees, on the terms and conditions set forth in
this Agreement, to make swing line loans to the Borrower from time
to time, in Dollars, in an amount not to exceed the Swing Line
Commitment (each, individually, a "SWING LINE LOAN" and
collectively, the "SWING LINE LOANS"); PROVIDED, HOWEVER, that at no
time shall the Revolving Credit Obligations exceed the Aggregate
Commitment; and PROVIDED, FURTHER, that at no time shall the sum of
(a) the outstanding amount of the Swing Line Loans, PLUS (b) the
outstanding amount of Revolving Loans made by the Swing Line Bank
pursuant to SECTION 2.1(A) (after giving effect to any concurrent
repayment of Loans), exceed the Swing Line Bank's Commitment at such
time. Subject to the terms of this Agreement, the Borrower may
borrow, repay and reborrow Swing Line Loans at any time prior to the
Termination Date.
(ii) BORROWING NOTICE. The Borrower shall deliver to the Agent
and the Swing Line Bank a Borrowing Notice, signed by it, not later
than 11:00 a.m. (Houston time) on the Borrowing Date of each Swing
Line Loan, specifying (A) the applicable Borrowing Date (which shall
be a Business Day), and (B) the aggregate amount of the requested
Swing Line Loan. The Swing Line Loans shall at all times be
Eurodollar Rate Loans, which shall be an amount not less than
$250,000 and increments of $100,000 in excess thereof. The Agent
shall promptly notify each Lender of such request.
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(iii) MAKING OF SWING LINE LOANS. Promptly after receipt of
the Borrowing Notice under SECTION 2.1(B)(II) in respect of Swing
Line Loans, the Agent shall notify each Lender by telex or telecopy,
or other similar form of transmission, of the requested Swing Line
Loan. Not later than 2:00 p.m. (Houston time) on the applicable
Borrowing Date, the Swing Line Bank shall make available its Swing
Line Loan, in funds immediately available in Houston to the Agent at
its address specified pursuant to ARTICLE XIV. The Agent will
promptly make the funds so received from the Swing Line Bank
available to the Borrower at the Agent's aforesaid address.
(iv) REPAYMENT OF SWING LINE LOANS. The Swing Line Loans shall
be evidenced by the Swing Line Note, and each Swing Line Loan shall
be paid in full by the Borrower on or before the seventh Business
Day after the Borrowing Date for such Swing Line Loan. The Borrower
may at any time pay, without penalty or premium, all outstanding
Swing Line Loans or, in a minimum amount and increments of $100,000,
any portion of the outstanding Swing Line Loans, upon notice to the
Agent and the Swing Line Bank. In addition, the Agent (i) may at any
time in its sole discretion with respect to any outstanding Swing
Line Loan, or (ii) shall on the seventh Business Day after the
Borrowing Date of any Swing Line Loan, require each Lender
(including the Swing Line Bank) to make a Revolving Loan in the
amount of such Lender's Pro Rata Share of such Swing Line Loan, for
the purpose of repaying such Swing Line Loan. Not later than 2:00
p.m. (Houston time) on the date of any notice received pursuant to
this SECTION 2.1(B)(IV), each Lender shall make available its
required Revolving Loan or Revolving Loans, in funds immediately
available in Houston to the Agent at its address specified pursuant
to ARTICLE XIV. Revolving Loans made pursuant to this SECTION
2.1(B)(IV) shall initially be Floating Rate Loans and thereafter may
be continued as Floating Rate Loans or converted into Eurodollar
Rate Loans in the manner provided in SECTION 2.8 and subject to the
other conditions and limitations therein set forth and set forth in
this ARTICLE II. Unless a Lender shall have notified the Swing Line
Bank, prior to its making any Swing Line Loan, that any applicable
condition precedent set forth in SECTIONS 5.1 and 5.2 had not then
been satisfied, such Lender's obligation to make Revolving Loans
pursuant to this SECTION 2.1(B)(IV) to repay Swing Line Loans shall
be unconditional, continuing, irrevocable and absolute and shall not
be affected by any circumstances, including, without limitation, (A)
any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the Agent, the Swing Line Bank or any
other Person, (B) the occurrence of continuance of a Default or
Unmatured Default, (C) any adverse change in the condition
(financial or otherwise) of the Borrower, or (D) any other
circumstances, happening or event whatsoever. In the event that any
Lender fails to make payment to the Agent of any amount due under
this SECTION 2.1(B)(IV), the Agent shall be entitled to receive,
retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until the Agent receives
such payment from such Lender or such obligation is otherwise fully
satisfied. In addition to the foregoing, if for any reason any
Lender fails to make payment to the Agent of any amount due under
this SECTION 2.1(B)(IV), such Lender shall be deemed, at the option
of the Agent, to have unconditionally and irrevocably purchased from
the Swing Line Bank, without recourse or warranty, an undivided
interest and participation in the applicable Swing Line Loan in the
amount of such Revolving Loan, and such interest and participation
may be recovered from such Lender together with interest thereon at
the Federal Funds Effective Rate for each day during the period
commencing on the date of demand and ending on the date such amount
is received. On the Termination Date, the Borrower shall repay in
full the outstanding principal balance of the Swing Line Loans.
20
2.2 RATE OPTIONS FOR ALL ADVANCES. The Revolving Loans may be Floating
Rate Advances or Eurodollar Rate Advances, or a combination thereof, selected by
the Borrower in accordance with SECTION 2.8. The Borrower may select, in
accordance with SECTION 2.8, Rate Options and Interest Periods applicable to
portions of the Revolving Loans; PROVIDED that there shall be no more than seven
(7) Interest Periods in effect with respect to all of the Revolving Loans at any
time. The Swing Line Loans shall bear interest at the lesser of (i) the Maximum
Rate, and (ii) the Swing Line Bank's cost of funds for such Swing Line Loan (as
determined by the Swing Line Bank from day-to-day in its sole discretion) PLUS
the Applicable Eurodollar Margin.
2.3 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS.
(a) OPTIONAL PAYMENTS. The Borrower may from time to time repay or
prepay, without penalty or premium all or any part of outstanding Floating
Rate Advances in a minimum amount of $1,000,000 and in increments of
$1,000,000 in excess thereof; PROVIDED, that the Borrower may not so
prepay Floating Rate Advances unless it shall have provided at least one
Business Day's written notice to the Agent of such prepayment. Eurodollar
Rate Advances may be voluntarily repaid or prepaid prior to the last day
of the applicable Interest Period in a minimum amount of $1,000,000 and in
increments of $1,000,000 in excess thereof, subject to the indemnification
provisions contained in SECTION 4.4, PROVIDED that the Borrower may not so
prepay Eurodollar Rate Advances unless it shall have provided at least two
(2) Business Days' written notice to the Agent of such prepayment.
(b) MANDATORY PREPAYMENTS. If at any time and for any reason the
Revolving Credit Obligations are greater than the Aggregate Commitment,
the Borrower shall immediately make a mandatory prepayment of the
Obligations in an amount equal to such excess. In addition, if Revolving
Credit Availability is at any time less than the amount of contingent L/C
Obligations outstanding at any time, the Borrower shall deposit cash
collateral with the Agent in an amount equal to the amount by which such
L/C Obligations exceed such Revolving Credit Availability. All of the
mandatory prepayments made under this SECTION 2.3(B) shall be applied
first to Floating Rate Loans and to any Eurodollar Rate Loans maturing on
such date and then to subsequently maturing Eurodollar Rate Loans in order
of maturity.
2.4 CHANGES IN COMMITMENTS.
(a) The Borrower may permanently reduce the Aggregate Commitment in
whole, or in part ratably among the Lenders, in an aggregate minimum
amount of $5,000,000 and integral multiples of $5,000,000 in excess of
that amount (unless the Aggregate Commitment is reduced in whole), upon at
least three (3) Business Days' written notice to the Agent, which notice
shall specify the amount of any such reduction; PROVIDED, HOWEVER, that
the amount of the Aggregate Commitment may not be reduced below the
aggregate principal amount of the outstanding Revolving Credit
Obligations. All accrued facility fees shall be payable on the effective
date of any partial or complete termination of the obligations of the
Lenders to make Revolving Loans hereunder.
(b) INCREASES OF COMMITMENTS. At any time, the Borrower may request
that the Aggregate Commitment be increased; PROVIDED that, without the
prior written consent of all of the Lenders, (i) the Aggregate Commitment
shall at no time exceed $125,000,000 MINUS the aggregate amount of all
reductions in the Aggregate Commitment previously made pursuant to SECTION
2.4(A) and (ii) the Borrower shall not make any such request during the
six month period following any reduction in the Aggregate Commitment
occurring under SECTION 2.4(A). Such request shall be made
21
in a written notice given to the Agent and the Lenders by the Borrower not
less than twenty (20) Business Days prior to the proposed effective date
of such increase, which notice (a "COMMITMENT INCREASE NOTICE") shall
specify the amount of the proposed increase in the Aggregate Commitment
and the proposed effective date of such increase. On or prior to the date
that is fifteen (15) Business Days after receipt of the Commitment
Increase Notice, each Lender shall submit to the Agent a notice indicating
the maximum amount by which it is willing to increase its Commitment in
connection with such Commitment Increase Notice (any such notice to the
Agent being herein a "LENDER INCREASE NOTICE"). Any Lender which does not
submit a Lender Increase Notice to the Agent prior to the expiration of
such fifteen (15) Business Day period shall be deemed to have denied any
increase in its Commitment. In the event that the increases of Commitments
set forth in the Lender Increase Notices exceed the amount requested by
the Borrower in the Commitment Increase Notice, the Agent and the Arranger
shall have the right, in consultation with the Borrower, to allocate the
amount of increases necessary to meet the Borrower's Commitment Increase
Notice. In the event that the Lender Increase Notices are less than the
amount requested by the Borrower, the Agent and the Arranger shall assist
the Borrower in attempting to identify financial institutions which may
have an interest in becoming Lenders under this Agreement. Not later than
3 Business Days prior to the proposed effective date the Borrower may
notify the Agent of any financial institution that shall have agreed to
become a "Lender" party hereto (a "PROPOSED NEW LENDER") in connection
with the Commitment Increase Notice. Any Proposed New Lender shall be
consented to by the Agent (which consent shall not be unreasonably
withheld). If the Borrower, the Agent and the Arranger shall not have
arranged any Proposed New Lender(s) to commit to the shortfall from the
Lender Increase Notices, then the Borrower shall be deemed to have reduced
the amount of its Commitment Increase Notice to the aggregate amount set
forth in the Lender Increase Notices. Based upon the Lender Increase
Notices, any allocations made in connection therewith and any notice
regarding any Proposed New Lender, if applicable, the Agent shall notify
the Borrower and the Lenders on or before the Business Day immediately
prior to the proposed effective date of the amount of each Lender's and
Proposed New Lenders' Commitment (such new amounts being the "EFFECTIVE
COMMITMENT AMOUNTS") and the amount of the Aggregate Commitment, which
amounts shall be effective on the following Business Day. Any increase in
the Aggregate Commitment shall be subject to the following conditions
precedent: (A) the Borrower shall have obtained the consent thereto of
each Guarantor and its reaffirmation of the Loan Document(s) executed by
it, which consent and reaffirmation shall be in writing and in form and
substance reasonably satisfactory to the Agent, (B) as of the date of the
Commitment Increase Notice and as of the proposed effective date of the
increase in the Aggregate Commitment, no event shall have occurred and
then be continuing which constitutes a Default or Unmatured Default, (C)
the Borrower, the Agent and each Proposed New Lender or Lender that shall
have agreed to provide a "Commitment" in support of such increase in the
Aggregate Commitment shall have executed and delivered a "COMMITMENT AND
ACCEPTANCE" substantially in form and substance satisfactory to the Agent
and the Borrower, (D) counsel for the Borrower and for the Guarantors
shall have provided to the Agent supplemental opinions substantially in
the form (and limited to the matters) set forth in EXHIBIT K hereto and
(E) the Borrower and the Proposed New Lender shall otherwise have executed
and delivered such other instruments and documents as may be required
under SECTION 2.12(E)(VI) or that the Agent shall have reasonably
requested in connection with such increase. If any fee shall be charged by
the Lenders in connection with any such increase, such fee shall be in
accordance with then prevailing market conditions, which market conditions
shall have been reasonably documented by the Agent to the Borrower. Upon
satisfaction of the conditions precedent to any increase in the Aggregate
Commitment, the Agent shall promptly advise the Borrower and each Lender
of the effective date of such increase. Upon the effective date of any
increase in the Aggregate Commitment that is supported by a Proposed New
Lender, such Proposed New Lender shall be a party hereto as a Lender and
shall have the rights and obligations of a Lender hereunder.
22
Nothing contained herein shall constitute, or otherwise be deemed to be, a
commitment on the part of any Lender to increase its Commitment hereunder
at any time. Upon the effective date of any increase in the Aggregate
Commitment, the Lenders (including Proposed New Lenders allocated a
Commitment) shall be bound by the terms of the following CLAUSE (C).
(c) MASTER ASSIGNMENT IN CONNECTION WITH COMMITMENT INCREASES. For
purposes of this SECTION 2.4(C), the term "BUYING LENDER(S)" shall mean
(1) each Lender the Effective Commitment Amount of which is greater than
its Commitment prior to the effective date of any increase in the
Aggregate Commitment and (2) each Proposed New Lender that is allocated an
Effective Commitment Amount in connection with any Commitment Increase
Notice and the term "SELLING LENDER(S)" shall mean each Lender whose
Commitment under this Agreement is not being increased from that in effect
prior to such increase in the Aggregate Commitment. Effective on the
effective date of any increase in the Aggregate Commitment pursuant to
CLAUSE (B) above, each Selling Lender hereby sells, grants, assigns and
conveys to each Buying Lender, without recourse, warranty, or
representation of any kind, except as specifically provided herein, an
undivided percentage in such Selling Lender's right, title and interest in
and to its outstanding Loans and L/C Obligations in the respective dollar
amounts and percentages necessary so that, from and after such sale, each
such Selling Lender's outstanding Loans and L/C Obligations shall equal
such Selling Lender's Pro Rata Share (calculated based upon the Effective
Commitment Amounts) of the outstanding Loans and L/C Obligations under
this Agreement. Effective on the effective date of the increase in the
Aggregate Commitment pursuant to CLAUSE (B) above, each Buying Lender
hereby purchases and accepts such grant, assignment and conveyance from
the Selling Lenders. Each Buying Lender hereby agrees that its respective
purchase price for the portion of the outstanding Loans and L/C
Obligations purchased hereby shall equal the respective dollar amount
necessary so that, from and after such payments, each Buying Lender's
outstanding Loans and L/C Obligations shall equal such Buying Lender's Pro
Rata Share (calculated based upon the Effective Commitment Amounts) of the
outstanding Loans and L/C Obligations under this Agreement. Such amount
shall be payable on the effective date of the increase in the Aggregate
Commitment by wire transfer of immediately available funds to the Agent.
The Agent, in turn, shall wire transfer any such funds received to the
Selling Lenders, in same day funds, for the sole account of the Selling
Lenders. Each Selling Lender hereby represents and warrants to each Buying
Lender that such Selling Lender owns the Loans and L/C Obligations being
sold and assigned hereby for its own account and has not sold, transferred
or encumbered any or all of its interest in such Loans or L/C Obligations,
except for participations which will be extinguished upon payment to
Selling Lender of an amount equal to the portion of the outstanding Loans
and L/C Obligations being sold by such Selling Lender. Each Buying Lender
hereby acknowledges and agrees that, except for each Selling Lender's
representations and warranties contained in the foregoing sentence, each
such Buying Lender has entered into its Commitment and Acceptance with
respect to such increase on the basis of its own independent investigation
and has not relied upon, and will not rely upon, any explicit or implicit
written or oral representation, warranty or other statement of the Lenders
or the Agent concerning the authorization, execution, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the other Loan Documents. The Borrower hereby agrees to
compensate each Selling Lender for all losses, expenses and liabilities
incurred by each Lender in connection with the sale and assignment of any
Eurodollar Rate Loans hereunder on the terms and in the manner as set
forth in SECTION 4.4.
2.5 METHOD OF BORROWING. Not later than 2:00 p.m. (Houston time) on each
Borrowing Date, each Lender shall make available its Revolving Loan, in funds
immediately available in Houston to the Agent at its address specified pursuant
to ARTICLE XIV. The Agent will promptly make the funds so received from the
Lenders available to the Borrower at the Agent's aforesaid address.
23
2.6 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent irrevocable notice in substantially the form
of EXHIBIT E hereto (a "BORROWING NOTICE") not later than 10:00 a.m. (Houston
time) (a) on the Borrowing Date of each Floating Rate Advance and (b) three
Business Days before the Borrowing Date for each Eurodollar Rate Advance,
specifying: (i) the Borrowing Date (which shall be a Business Day) of such
Advance; (ii) the aggregate amount of such Advance; (iii) the Type of Advance
selected; and (iv) in the case of each Eurodollar Rate Advance, the Interest
Period applicable thereto. Each Floating Rate Advance and all Obligations other
than Loans shall bear interest from and including the date of the making of such
Advance to (but not including) the date of repayment thereof at the Floating
Rate, changing when and as such Floating Rate changes. Changes in the rate of
interest on that portion of any Advance maintained as a Floating Rate Loan will
take effect simultaneously with each change in the Alternate Base Rate. Each
Eurodollar Rate Advance shall bear interest from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such
Eurodollar Rate Advance.
2.7 MINIMUM AMOUNT OF EACH ADVANCE. Each Advance (other than an Advance to
repay Swing Line Loans pursuant to SECTION 2.1(B)(IV) or a Reimbursement
Obligation pursuant to SECTION 3.6) shall be in the minimum amount of $1,000,000
(and in multiples of $1,000,000 if in excess thereof), PROVIDED, HOWEVER, that
any Floating Rate Advance may be in the amount of the unused Aggregate
Commitment.
2.8 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
CONTINUATION OF ADVANCES.
(a) RIGHT TO CONVERT. The Borrower may elect from time to time,
subject to the provisions of SECTION 2.2 and this SECTION 2.8, and, for
any conversion of a Eurodollar Rate Advance other than at the end of an
Interest Period, subject to payment of amounts payable under SECTION 4.4,
to convert all or any part of a Revolving Loan of any Type into any other
Type or Types of Loans.
(b) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans
are converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall
continue as Eurodollar Rate Loans until the end of the then applicable
Interest Period therefor, at which time such Eurodollar Rate Loans shall
be automatically converted into Floating Rate Loans unless the Borrower
shall have given the Agent notice in accordance with SECTION 2.8(D)
requesting that, at the end of such Interest Period, such Eurodollar Rate
Loans continue as a Eurodollar Rate Loan.
(c) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT.
Notwithstanding anything to the contrary contained in SECTION 2.8(A) or
SECTION 2.8(B), no Revolving Loan may be converted into or continued as a
Eurodollar Rate Loan (except with the consent of the Required Lenders)
when any Default or Unmatured Default has occurred and is continuing.
(d) CONVERSION/CONTINUATION NOTICE. The Borrower shall give the
Agent irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each
conversion of a Floating Rate Loan into a Eurodollar Rate Loan or
continuation of a Eurodollar Rate Loan not later than 11:00 a.m. (Houston
time) three (3) Business Days prior to the date of the requested
conversion or continuation, specifying: (1) the requested date (which
shall be a Business Day) of such conversion or continuation; (2) the
amount and Type of the Loan to be converted or continued; and (3) the
amount of Eurodollar Rate Loan(s) into which such Loan is to be converted
or continued and the duration of the Interest Period applicable thereto.
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2.9 DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest rate(s) applicable to the Obligations shall be equal to the
Floating Rate PLUS two percent (2.0%) per annum and fees payable under SECTION
3.7 with respect to standby Letters of Credit shall be increased by two percent
(2.0%) per annum.
2.10 METHOD OF PAYMENT. All principal, interest and other amounts to be
paid by Borrower under the Loan Documents shall be made to the office of Agent
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ in U.S. Dollars and in
immediately available funds, without setoff, deduction or counterclaim, or at
any other Lending Installation of the Agent specified in writing by the Agent to
the Borrower, by 2:00 p.m. (Houston time) on the date when due and shall be made
ratably among the Lenders (unless such amount is not to be shared ratably in
accordance with the terms hereof). Each payment delivered to the Agent for the
account of any Lender shall be delivered promptly by the Agent to such Lender in
the same type of funds which the Agent received at the foregoing address or at
any Lending Installation specified in a notice received by the Agent from such
Lender. The Borrower authorizes the Agent to charge the account of the Borrower
maintained with NationsBank for each payment of principal, interest, fees and
other amounts as it becomes due hereunder.
2.11 REVOLVING NOTES, TELEPHONIC NOTICES. Each Lender is authorized to
record the principal amount of each of its Revolving Loans and each repayment
with respect to its Revolving Loans on the schedule attached to its respective
Revolving Note; PROVIDED, HOWEVER, that the failure to so record shall not
affect the Borrower's obligations under any such Revolving Note. The Borrower
authorizes the Lenders and the Agent to extend Advances and Swing Line Loans,
effect selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Agent a written confirmation, signed by an Authorized Officer,
if such confirmation is requested by the Agent or any Lender, of each telephonic
notice. If the written confirmation differs in any material respect from the
action taken by the Agent and the Lenders, (i) the telephonic notice shall
govern absent manifest error and (ii) the Agent or the Lender, as applicable,
shall promptly notify the Authorized Officer who provided such confirmation of
such difference.
2.12 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST PAYMENT DATES;
INTEREST AND FEE BASIS; TAXES; LOAN AND CONTROL ACCOUNTS.
(a) PROMISE TO PAY. The Borrower unconditionally promises to pay
when due the principal amount of each Loan and all other Obligations
incurred by it, and to pay all unpaid interest accrued thereon and fees,
in accordance with the terms of this Agreement and the Notes.
(b) INTEREST PAYMENT DATES. Interest accrued on each Floating Rate
Loan shall be payable on each Payment Date, commencing with the first such
date to occur after the date hereof and at maturity (whether by
acceleration or otherwise). Interest accrued on each Eurodollar Rate Loan
shall be payable on the last day of its applicable Interest Period, on any
date on which the Eurodollar Rate Loan is prepaid, whether by acceleration
or otherwise, and at maturity; PROVIDED, HOWEVER, that interest accrued on
each Eurodollar Rate Loan having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval
during such Interest Period. Interest accrued on the principal balance of
all other Obligations shall be payable in arrears (i) on the last day of
each calendar month, commencing on the first such day following the
incurrence of such Obligation, (ii) upon repayment thereof in full or in
part, and (iii) if not theretofore paid in full, at the time such other
Obligation becomes due and payable (whether by acceleration or otherwise).
25
(c) COMMITMENT FEEs.
(i) The Borrower shall pay to the Agent, for the account of
the Lenders in accordance with their Pro Rata Shares, from and after
the Closing Date until the date on which the Aggregate Commitment
shall be terminated in whole, a commitment fee accruing at the rate
of the then Applicable Commitment Fee Percentage, on the aggregate
amount of the average daily unused portion of the Aggregate
Commitment in effect from time to time (without reducing such amount
for amounts borrowed under the Swing Line Commitment). All such
commitment fees payable under this SECTION 2.12(C) shall be payable
quarterly in arrears on each Payment Date occurring after the
Closing Date (with the first such payment being calculated for the
period from the Closing Date and ending on such Payment Date), and,
in addition, on the date on which the Aggregate Commitment shall be
terminated in whole.
(ii) The Borrower agrees to pay to (A) the Agent for the sole
account of the Agent (unless otherwise agreed between the Agent and
any Lender) the fees set forth in the letter agreement between the
Agent and the Borrower dated August 28, 1998, payable at the times
and in the amounts set forth therein, and (B) the Agent, for the
account of the Lenders, the facility fees set forth in the letter
agreement between the Agent and the Borrower dated September 30,
1998, payable at the times and in the amounts set forth therein.
(d) INTEREST AND FEE BASIS; APPLICABLE EURODOLLAR MARGIN, APPLICABLE
FLOATING RATE MARGIN AND APPLICABLE COMMITMENT FEE PERCENTAGE.
(i) Interest on Floating Rate Loans and fees (other than
Letter of Credit fees) shall be calculated for actual days elapsed
on the basis of a 365/366-day year. Interest on all other
Obligations and Letter of Credit fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be
payable for the day an Obligation is incurred but not for the day of
any payment on the amount paid if payment is received prior to 2:00
p.m. (Houston time) at the place of payment. If any payment of
principal of or interest on a Loan or any payment of any other
Obligations shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and,
in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
(ii) The Applicable Eurodollar Margin, Applicable Floating
Rate Margin and Applicable Commitment Fee Percentage shall be
determined from time to time by reference to the table set forth
below, on the basis of the then applicable Leverage Ratio as
described in this SECTION 2.12(D)(II); PROVIDED, HOWEVER, that for
the period from the Closing Date until receipt of Borrower's audited
financial statements for the period ended December 31, 1998, Level
II shall apply to the Applicable Eurodollar Margin, Applicable
Floating Rate Margin and Applicable Commitment Fee Percentage.
26
Level I Level II Level III Level IV Level V
------- -------- --------- -------- -------
Leverage Ratio ........................... >=2.50 to >=2.00 to >=1.5 >=1.00 to <1.00 to
1.00 1.00 . 1.00 1.00 1.00
and and and
< 2.50 to <2.00 to <1.50 to
1.00 1.00 1.00
Applicable Commitment
Fee Percentage ........................... 0.50% 0.40% 0.375% 0.30% 0.30%
Applicable Eurodollar
Rate Margin and .......................... 2.25% 1.75% 1.50% 1.375% 1.25%
Applicable L/C Fee
Percentage
Applicable Floating Rat
Margin ................................... .75% .50% .25% 0% 0%
For purposes of this SECTION 2.12(D)(II), the Leverage Ratio shall be
determined as of the last day of each fiscal quarter based upon (a) for
Total Debt, Total Debt as of the last day of each such fiscal quarter; and
(b) for EBITDA, EBITDA for the twelve-month period ending on such day
calculated as set forth in the definition thereof. Upon receipt of the
financial statements delivered pursuant to SECTIONS 7.1(A)(I) (subject to
adjustment upon receipt of the financial statements delivered pursuant to
SECTION 7.1(A)(II)), the Applicable Eurodollar Margin, Applicable Floating
Rate Margin and Applicable Facility Fee Percentage shall be adjusted, such
adjustment being effective five (5) Business Days following the Agent's
receipt of such financial statements and the compliance certificate
required to be delivered in connection therewith pursuant to SECTION
7.1(A)(III); PROVIDED that if the Borrower shall not have timely delivered
its financial statements in accordance with SECTION 7.1(A)(I) or (II), as
applicable, then commencing on the date upon which such financial
statements should have been delivered and continuing until such financial
statements are actually delivered, it shall be assumed for purposes of
determining the Applicable Eurodollar Margin, Applicable Floating Rate
Margin and Applicable Facility Fee Percentage that the Leverage Ratio was
greater than 2.50 to 1.0.
(e) TAXES.
(i) Any and all payments by the Borrower hereunder shall be
made free and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges or
withholdings or any liabilities with respect thereto including those
arising after the Closing Date hereof as a result of the adoption of
or any change in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the
interpretation or application thereof by a Governmental Authority
but excluding, in the case of each Lender and the Agent, such taxes
(including income taxes, franchise taxes and branch profit taxes) as
are imposed on or measured by such Lender's or Agent's, as the case
may be, income by the United States of America or any Governmental
Authority of the jurisdiction under the laws of which such Lender or
Agent, as the case may be, is organized (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings, and
liabilities which the Agent or a Lender determines to be applicable
to this Agreement, the other Loan Documents, the Commitments, the
Loans or the Letters of Credit being hereinafter referred to as
"TAXES"). If the Borrower shall be required by law to deduct
27
any Taxes from or in respect of any sum payable hereunder or under
the other Loan Documents to any Lender or the Agent (other than due
to a Lender's failure to comply with SECTION 2.12(E)(VII)), (i) the
sum payable shall be increased as may be necessary so that after
making all required deductions (including deductions applicable to
additional sums payable under this SECTION 2.12(E)) such Lender or
the Agent (as the case may be) receives an amount equal to the sum
it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions, and (iii) the Borrower shall
pay the full amount deducted to the relevant taxation authority or
other authority in accordance with applicable law. If a withholding
tax of the United States of America or any other Governmental
Authority shall be or become applicable (y) after the Closing Date,
to such payments by the Borrower made to the Lending Installation or
any other office that a Lender may claim as its Lending
Installation, or (z) after such Lender's selection and designation
of any other Lending Installation, to such payments made to such
other Lending Installation, such Lender shall use reasonable efforts
to make, fund and maintain its Loans through another Lending
Installation of such Lender in another jurisdiction so as to reduce
the Borrower's liability hereunder, if the making, funding or
maintenance of such Loans through such other Lending Installation of
such Lender does not, in the judgment of such Lender, otherwise
adversely affect such Loans, or obligations under the Commitments or
such Lender.
(ii) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges, or similar levies which arise from any payment made
hereunder, from the issuance of Letters of Credit hereunder, or from
the execution, delivery or registration of, or otherwise with
respect to, this Agreement, the other Loan Documents, the
Commitments, the Loans or the Letters of Credit (hereinafter
referred to as "OTHER TAXES").
(iii) The Borrower indemnifies each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any Governmental
Authority on amounts payable under this SECTION 2.12(E)) paid by
such Lender or the Agent (as the case may be) and any liability
(including penalties, interest, and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made
within thirty (30) days after the date such Lender or the Agent (as
the case may be) makes written demand therefor. A certificate as to
any additional amount payable to any Lender or the Agent under this
SECTION 2.12(E) submitted to the Borrower and the Agent (if a Lender
is so submitting) by such Lender or the Agent shall show in
reasonable detail the amount payable and the calculations used to
determine such amount and shall, absent manifest error, be final,
conclusive and binding upon all parties hereto. With respect to such
deduction or withholding for or on account of any Taxes and to
confirm that all such Taxes have been paid to the appropriate
Governmental Authorities, the Borrower shall promptly (and in any
event not later than thirty (30) days after receipt) furnish to each
Lender and the Agent such certificates, receipts and other documents
as may be required (in the judgment of such Lender or the Agent) to
establish any tax credit to which such Lender or the Agent may be
entitled.
(iv) Within thirty (30) days after the date of any payment of
Taxes or Other Taxes by the Borrower, the Borrower shall furnish to
the Agent the original or a certified copy of a receipt evidencing
payment thereof.
28
(v) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this SECTION 2.12(E) shall survive the payment
in full of principal and interest hereunder, the termination of the
Letters of Credit and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrower under
this SECTION 2.12(E), each Lender that is not created or organized
under the laws of the United States of America or a political
subdivision thereof shall deliver to the Borrower and the Agent on
or before the Closing Date, or, if later, the date on which such
Lender becomes a Lender pursuant to SECTION 13.3, a true and
accurate certificate executed in duplicate by a duly authorized
officer of such Lender, in a form satisfactory to the Borrower and
the Agent, to the effect that such Lender is capable under the
provisions of an applicable tax treaty concluded by the United
States of America (in which case the certificate shall be
accompanied by two executed copies of Form 1001 of the IRS) or under
Section 1442 of the Code (in which case the certificate shall be
accompanied by two copies of Form 4224 of the IRS) of receiving
payments of interest hereunder without deduction or withholding of
United States federal income tax. Each such Lender further agrees to
deliver to the Borrower and the Agent from time to time a true and
accurate certificate executed in duplicate by a duly authorized
officer of such Lender substantially in a form satisfactory to the
Borrower and the Agent, before or promptly upon the occurrence of
any event requiring a change in the most recent certificate
previously delivered by it to the Borrower and the Agent pursuant to
this SECTION 2.12(E)(VI). Further, each Lender which delivers a
certificate accompanied by Form 1001 of the IRS covenants and agrees
to deliver to the Borrower and the Agent within fifteen (15) days
prior to January 1, 1999, and every third (3rd) anniversary of such
date thereafter on which this Agreement is still in effect, another
such certificate and two accurate and complete original signed
copies of Form 1001 (or any successor form or forms required under
the Code or the applicable regulations promulgated thereunder), and
each Lender that delivers a certificate accompanied by Form 4224 of
the IRS covenants and agrees to deliver to the Borrower and the
Agent within fifteen (15) days prior to the beginning of each
subsequent taxable year of such Lender during which this Agreement
is still in effect, another such certificate and two accurate and
complete original signed copies of IRS Form 4224 (or any successor
form or forms required under the Code or the applicable regulations
promulgated thereunder). Each such certificate shall certify as to
one of the following:
(A) that such Lender is capable of receiving payments of
interest hereunder without deduction or withholding of United
States of America federal income tax;
(B) that such Lender is not capable of receiving
payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein but is capable of recovering the full amount
of any such deduction or withholding from a source other than
the Borrower and will not seek any such recovery from the
Borrower; or
(C) that, as a result of the adoption of or any change
in any law, treaty, rule, regulation, guideline or
determination of a Governmental Authority or any change in the
interpretation or application thereof by a Governmental
Authority after the date such Lender became a party hereto,
such Lender is not capable of receiving payments of interest
hereunder without deduction or withholding of United States of
America federal income tax as specified therein and that it is
not
29
capable of recovering the full amount of the same from a
source other than the Borrower.
Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or the
Agent to establish any exemption from or reduction of any Taxes or Other
Taxes required to be deducted or withheld and which may be obtained
without undue expense to such Lender.
(f) LOAN ACCOUNT. Each Lender shall maintain in accordance with its
usual practice an account or accounts (a "LOAN ACCOUNT") evidencing the
Obligations of the Borrower to such Lender owing to such Lender from time
to time, including the amount of principal and interest payable and paid
to such Lender from time to time hereunder and under the Notes.
(g) CONTROL ACCOUNT. The Register maintained by the Agent pursuant
to SECTION 13.3(C) shall include a control account, and a subsidiary
account for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Advance made hereunder, the type
of Loan comprising such Advance and any Interest Period applicable
thereto, (ii) the effective date and amount of each Assignment Agreement
delivered to and accepted by it and the parties thereto pursuant to
SECTION 13.3, (iii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender
hereunder or under the Notes, (iv) the amount of any sum received by the
Agent from the Borrower hereunder and each Lender's share thereof (v) the
amount of any increase of the Aggregate Commitment pursuant to SECTION
2.4(B) and the applicable Lenders with respect thereto and (vi) all other
appropriate debits and credits as provided in this Agreement, including,
without limitation, all fees, charges, expenses and interest.
(h) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest
error, unless the Borrower objects to information contained in the
Register and each Loan Account within thirty (30) days of the Borrower's
receipt of such information.
2.13 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Commitment Increase Notice, Borrowing Notice, Continuation/Conversion Notice,
and repayment notice received by it hereunder. The Agent will notify each Lender
of the interest rate applicable to each Eurodollar Rate Loan promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.14 LENDING INSTALLATIONS. Each Lender may book its Loans at any Lending
Installation selected by such Lender and may change its Lending Installation
from time to time. All terms of this Agreement shall apply to any such Lending
Installation and the Revolving Notes shall be deemed held by each Lender for the
benefit of such Lending Installation. Each Lender may, by written or facsimile
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.15 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the
30
Borrower, as the case may be, has not in fact made such payment to the Agent,
the recipient of such payment shall, on demand by the Agent, repay to the Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Agent until the date the Agent recovers such amount at a rate per annum
equal to (i) in the case of payment by a Lender, the Federal Funds Effective
Rate for such day or (ii) in the case of payment by the Borrower, the interest
rate applicable to the relevant Loan.
2.16 TERMINATION DATE. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Obligations (other than contingent indemnity
obligations) shall have been fully and indefeasibly paid and satisfied, all
financing arrangements among the Borrower and the Lenders in connection with
this Agreement shall have been terminated (other than under agreements with
respect to Hedging Obligations) and all of the Letters of Credit shall have
expired, been canceled or terminated, all of the rights and remedies under this
Agreement and the other Loan Documents shall survive and the Agent shall be
entitled to retain its security interest in and to all existing and future
Collateral.
2.17 REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, or to fund a Revolving Loan in order to repay Swing
Line Loans pursuant to SECTION 2.1(B)(IV), which such Lender is obligated to
fund under the terms of this Agreement and which failure has not been cured,
(ii) requested compensation from the Borrower under SECTIONS 2.12(E), 4.1 or 4.2
to recover Taxes, Other Taxes or other additional costs incurred by such Lender
which are not being incurred generally by the other Lenders, (iii) delivered a
notice pursuant to SECTION 4.3 claiming that such Lender is unable to extend
Eurodollar Rate Loans to the Borrower for reasons not generally applicable to
the other Lenders or (iv) has invoked SECTION 10.2, then, in any such case, the
Borrower or the Agent may make written demand on such Affected Lender (with a
copy to the Agent in the case of a demand by the Borrower and a copy to the
Borrower in the case of a demand by the Agent) for the Affected Lender to
assign, and such Affected Lender shall use its best efforts to assign pursuant
to one or more duly Assignment Agreements five (5) Business Days after the date
of such demand, to one or more financial institutions that comply with the
provisions of SECTION 13.3(A) which the Borrower or the Agent, as the case may
be, shall have engaged for such purpose ("REPLACEMENT LENDER"), all of such
Affected Lender's rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, its Commitment, all Loans owing to it,
all of its participation interests in existing Letters of Credit, and its
obligation to participate in additional Letters of Credit hereunder) in
accordance with SECTION 13.3. The Agent agrees, upon the occurrence of such
events with respect to an Affected Lender and upon the written request of the
Borrower, to use its reasonable efforts to obtain the Commitments from one or
more financial institutions to act as a Replacement Lender. The Agent is
authorized to execute one or more of such assignment agreements as
attorney-in-fact for any Affected Lender failing to execute and deliver the same
within ten (10) Business Days after the date of such demand. Further, with
respect to such assignment the Affected Lender shall have concurrently received,
in cash, all amounts due and owing to the Affected Lender hereunder or under any
other Loan Document, including, without limitation, the aggregate outstanding
principal amount of the Loans owed to such Lender, together with accrued
interest thereon through the date of such assignment, amounts payable under
SECTIONS 2.12(E), 4.1, and 4.2 with respect to such Affected Lender and
compensation payable under SECTION 2.12(C) in the event of any replacement of
any Affected Lender under CLAUSE (II) or CLAUSE (III) of this SECTION 2.17;
PROVIDED that upon such Affected Lender's replacement, such Affected Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of SECTIONS 2.12(E), 4.1, 4.2, 4.4, and 10.7, as well as to any fees
accrued for its account hereunder and not yet paid, and shall continue to be
obligated under SECTION 11.8. Upon the replacement of any Affected Lender
pursuant to this SECTION 2.17, the provisions of SECTION 9.2 shall continue to
apply with respect to Advances which are then outstanding with respect to which
the Affected Lender failed to fund its Pro Rata Share and which failure has not
been cured.
31
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 OBLIGATION TO ISSUE. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue for the
account of the Borrower through such Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit in accordance with
this ARTICLE III, from time to time during the period, commencing on the Closing
Date and ending five (5) Business Days prior to the Termination Date.
3.2 TYPES AND AMOUNTS. No Issuing Bank shall have any obligation to and no
Issuing Bank shall:
(i) issue any Letter of Credit if on the date of issuance, before or
after giving effect to the Letter of Credit requested hereunder, (a) the
Revolving Credit Obligations at such time would exceed the Aggregate
Commitment at such time, or (b) the aggregate outstanding amount of the
L/C Obligations would exceed $10,000,000;
(ii) issue any Letter of Credit which has an expiration date later
than the date which is the earlier of one (1) year after the date of
issuance thereof or five (5) Business Days immediately preceding the
Termination Date; or
(iii) issue any Letter of Credit in any currency other than Dollars,
and provides for drafts payable other than at sight.
3.3 CONDITIONS. In addition to being subject to the satisfaction of the
conditions contained in SECTIONS 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the applicable Issuing Bank
at such times and in such manner as such Issuing Bank may reasonably
prescribe, a request for issuance of such Letter of Credit in
substantially the form of EXHIBIT F hereto, duly executed applications for
such Letter of Credit, and such other documents, instructions and
agreements as may be reasonably required pursuant to the terms thereof,
and the proposed Letter of Credit shall be reasonably satisfactory to such
Issuing Bank as to form and content; and
(ii) as of the date of issuance no order, judgment or decree of any
court, arbitrator or Governmental Authority shall purport by its terms to
enjoin or restrain the applicable Issuing Bank from issuing such Letter of
Credit and no law, rule or regulation applicable to such Issuing Bank and
no request or directive (whether or not having the force of law) from a
Governmental Authority with jurisdiction over such Issuing Bank shall
prohibit or request that such Issuing Bank refrain from the issuance of
Letters of Credit generally or the issuance of that Letter of Credit.
If any provision in a letter of credit application delivered in connection with
the foregoing is inconsistent with or more restrictive than a provision
contained in this Agreement, the provisions contained in this Agreement shall
control.
3.4 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT.
(a) Subject to the terms and conditions of this ARTICLE III and
provided that the applicable conditions set forth in SECTIONS 5.1 and 5.2
hereof have been satisfied, the applicable
32
Issuing Bank shall, on the requested date, issue a Letter of Credit on
behalf of the Borrower in accordance with such Issuing Bank's usual and
customary business practices and, in this connection, such Issuing Bank
may assume that the applicable conditions set forth in SECTION 5.2 hereof
have been satisfied unless it shall have received notice to the contrary
from the Agent or a Lender or has knowledge that the applicable conditions
have not been met.
(b) The applicable Issuing Bank shall give the Agent written or
telex notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance of a Letter of Credit, PROVIDED, HOWEVER, that
the failure to provide such notice shall not result in any liability on
the part of such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit
unless the requirements of this SECTION 3.4 are met as though a new Letter
of Credit was being requested and issued.
3.5 LETTER OF CREDIT PARTICIPATION. Unless a Lender shall have notified
the Issuing Bank, prior to its issuance of a Letter of Credit, that any
applicable condition precedent set forth in SECTIONS 5.1 and 5.2 had not then
been satisfied, immediately upon the issuance of each other Letter of Credit
hereunder, each Lender shall be deemed to have automatically, irrevocably and
unconditionally purchased and received from the applicable Issuing Bank an
undivided interest and participation in and to such Letter of Credit, the
obligations of the Borrower in respect thereof, and the liability of such
Issuing Bank thereunder (collectively, an "L/C INTEREST") in an amount equal to
the amount available for drawing under such Letter of Credit multiplied by such
Lender's Pro Rata Share. Each Issuing Bank will notify each Lender promptly upon
presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit. On or before the Business Day on which an Issuing Bank makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit, on
demand by the Agent, each Lender shall make payment to the Agent, for the
account of the applicable Issuing Bank, in immediately available funds in an
amount equal to such Lender's Pro Rata Share of the amount of such payment or
draw. The obligation of each Lender to reimburse the Issuing Banks under this
SECTION 3.5 shall be unconditional, continuing, irrevocable and absolute;
PROVIDED, HOWEVER, that the obligation of each Lender shall not extend to
payments made under a Letter of Credit resulting from the Issuing Bank's Gross
Negligence or willful misconduct in honoring any L/C Draft. In the event that
any Lender fails to make payment to the Agent of any amount due under this
SECTION 3.5, the Agent shall be entitled to receive, retain and apply against
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Agent receives such payment from such Lender or such
obligation is otherwise fully satisfied; PROVIDED, HOWEVER, that nothing
contained in this sentence shall relieve such Lender of its obligation to
reimburse the applicable Issuing Bank for such amount in accordance with this
SECTION 3.5.
3.6 REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance which may be drawn under or pursuant to
a Letter of Credit or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Agent for an advance made under a Letter of Credit or
L/C Draft being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with
respect to such Letter of Credit or L/C Draft). If the Borrower at any time
fails to repay a Reimbursement Obligation pursuant to this SECTION 3.6, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of Revolving Loans. Such Revolving Loans shall constitute a
Floating Rate Advance, the proceeds of which Advance shall be used to repay such
Reimbursement Obligation. If, for any reason, the Borrower fails to repay a
Reimbursement Obligation on
33
the day such Reimbursement Obligation arises and, for any reason, the Lenders
are unable to make or have no obligation to make Revolving Loans, then such
Reimbursement Obligation shall bear interest from and after such day, until paid
in full, at the interest rate applicable to a Floating Rate Advance.
3.7 LETTER OF CREDIT FEES. The Borrower agrees to pay (i) quarterly, in
arrears, on each Payment Date to the Agent a letter of credit fee at a rate per
annum equal to the Applicable L/C Fee Percentage on the average daily
outstanding face amount available for drawing under all Letters of Credit , in
addition to 0.125% which shall be payable to the applicable Issuing Bank for
their sole account as a fronting fee and the balance of which shall be payable
to the Agent for the ratable benefit of the Lenders, except as set forth in
SECTION 9.2, and (ii) to the Agent for the benefit of each Issuing Bank, all
customary fees and other issuance, amendment, document examination, negotiation
and presentment expenses and related charges in connection with the issuance,
amendment, presentation of L/C Drafts, and the like customarily charged by the
Issuing Banks with respect to standby and commercial Letters of Credit,
including, without limitation, standard commissions with respect to commercial
Letters of Credit, payable at the time of invoice of such amounts.
3.8 ISSUING BANK REPORTING REQUIREMENTS. In addition to the notices
required by SECTION 3.4(C), each Issuing Bank shall, no later than the tenth
Business Day following the last day of each month, provide to the Agent, upon
the Agent's request, schedules, in form and substance reasonably satisfactory to
the Agent, showing the date of issue, account party, amount, expiration date and
the reference number of each Letter of Credit issued by it outstanding at any
time during such month and the aggregate amount payable by the Borrower during
such month. In addition, upon the request of the Agent, each Issuing Bank shall
furnish to the Agent copies of any Letter of Credit and any application for or
reimbursement agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Agent. Upon the request of any Lender, the Agent will provide to such Lender
information concerning such Letters of Credit.
3.9 INDEMNIFICATION; EXONERATION.
(a) In addition to amounts payable as elsewhere provided in this
ARTICLE III, the Borrower hereby agrees to protect, indemnify, pay and
save harmless the Agent, each Issuing Bank and each Lender from and
against any and all liabilities and costs which the Agent, such Issuing
Bank or such Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the
case of the applicable Issuing Bank, as a result of its Gross Negligence
or willful misconduct, as determined by the final judgment of a court of
competent jurisdiction, or (ii) the failure of the applicable Issuing Bank
to honor a drawing under a Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future DE JURE
or DE FACTO Governmental Authority (all such acts or omissions herein
called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Agent and the Issuing
Banks, the Borrower assumes all risks of the acts and omissions of, or
misuse of such Letter of Credit by, the beneficiary of any Letters of
Credit. In furtherance and not in limitation of the foregoing, subject to
the provisions of the Letter of Credit applications and Letter of Credit
reimbursement agreements executed by the Borrower at the time of request
for any Letter of Credit, neither the Agent, any Issuing Bank nor any
Lender shall be responsible (in the absence of Gross Negligence or willful
misconduct in connection therewith, as determined by the final judgment of
a court of competent jurisdiction): (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance
of the Letters of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii)
for the validity or sufficiency of any instrument transferring or
assigning
34
or purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may
prove to be invalid or ineffective for any reason; (iii) for failure of
the beneficiary of a Letter of Credit to comply duly with conditions
required in order to draw upon such Letter of Credit; (iv) for errors,
omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex, or other similar form of
teletransmission or otherwise; (v) for errors in interpretation of
technical trade terms; (vi) for any loss or delay in the transmission or
otherwise of any document required in order to make a drawing under any
Letter of Credit or of the proceeds thereof; (vii) for the misapplication
by the beneficiary of a Letter of Credit of the proceeds of any drawing
under such Letter of Credit; and (viii) for any consequences arising from
causes beyond the control of the Agent, the Issuing Banks and the Lenders,
including, without limitation, any Governmental Acts. None of the above
shall affect, impair, or prevent the vesting of any Issuing Bank's rights
or powers under this SECTION 3.9.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or omitted by
any Issuing Bank under or in connection with the Letters of Credit or any
related certificates shall not, in the absence of Gross Negligence or
willful misconduct, as determined by the final judgment of a court of
competent jurisdiction, put the applicable Issuing Bank, the Agent or any
Lender under any resulting liability to the Borrower or relieve the
Borrower of any of its obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this SECTION 3.9 shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of Credit
and the termination of this Agreement.
3.10 CASH COLLATERAL. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, after the occurrence and during the
continuance of Default, the Borrower shall, upon the Agent's demand, deliver to
the Agent for the benefit of the Lenders and the Issuing Banks, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding L/C Obligations.
In addition, if the Revolving Credit Availability is at any time less than the
amount of contingent L/C Obligations outstanding at any time, the Borrower shall
deposit cash collateral with the Agent in an amount equal to the amount by which
such L/C Obligations exceed such Revolving Credit Availability. Any such
collateral shall be held by the Agent in a separate account appropriately
designated as a cash collateral account in relation to this Agreement and the
Letters of Credit and retained by the Agent for the benefit of the Lenders and
the Issuing Banks as collateral security for the Borrower's obligations in
respect of this Agreement and each of the Letters of Credit and L/C Drafts. Such
amounts shall be applied to reimburse the Issuing Banks for drawings or payments
under or pursuant to Letters of Credit or L/C Drafts, or if no such
reimbursement is required, to payment of such of the other Obligations as the
Agent shall determine. If no Default shall be continuing, amounts remaining in
any cash collateral account established pursuant to this SECTION 3.10 which are
not to be applied to reimburse an Issuing Bank for amounts actually paid or to
be paid by such Issuing Bank in respect of a Letter of Credit or L/C Draft,
shall be returned to the Borrower (after deduction of the Agent's expenses
incurred in connection with such cash collateral account).
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 YIELD PROTECTION. If any law or any governmental or quasi-governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) adopted after the Closing Date and having general applicability to
all banks within the jurisdiction in which such Lender operates (excluding, for
the avoidance of doubt, the effect of and phasing in of capital requirements or
other regulations or
35
guidelines passed prior to the Closing Date), or any interpretation or
application thereof by any Governmental Authority charged with the
interpretation or application thereof, or the compliance of any Lender
therewith,
(i) to the extent not otherwise covered pursuant to the provisions
of SECTION 2.12(E), subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from payments
due from the Borrower (excluding, in the case of each Lender and the
Agent, such taxes (including income taxes, franchise taxes and branch
profit taxes) as are imposed on or measured by such Lender's or Agent's,
as the case may be, income by the United States of America or any
Governmental Authority of the jurisdiction under the laws of which such
Lender or Agent, as the case may be, is organized ), or changes the basis
of taxation of payments to any Lender in respect of its Loans, its L/C
Interests, the Letters of Credit or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to Eurodollar Rate Loans) with respect to its Loans, L/C
Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of making,
funding or maintaining the Loans, the L/C Interests or the Letters of
Credit or reduces any amount received by any Lender or any applicable
Lending Installation in connection with Loans or Letters of Credit, or
requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it or by reference to the Letters of Credit,
by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any amount received under this Agreement, then, within 15 days after
receipt by the Borrower of written demand by such Lender pursuant to SECTION
4.5, the Borrower shall pay such Lender that portion of such increased expense
incurred or reduction in an amount received which such Lender determines is
attributable to making, funding and maintaining its Loans, L/C Interests,
Letters of Credit and its Commitment.
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans hereunder, then, within 15 days after receipt by the Borrower of
written demand by such Lender pursuant to SECTION 4.5, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its L/C Interests, the Letters of
Credit or its obligation to make Loans hereunder (after taking into account such
Lender's policies as to capital adequacy). "CHANGE" means (i) any change after
the Closing Date of this Agreement in the "Risk-Based Capital Guidelines" (as
defined below) excluding, for the avoidance of doubt, the effect of any phasing
in of such Risk-Based Capital Guidelines or any other capital requirements
passed prior to the Closing Date hereof, or (ii) any adoption of or change in
any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the Closing Date and having general applicability to all banks and
financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be
36
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "RISK- BASED CAPITAL GUIDELINES" means (i) the
risk-based capital guidelines in effect in the United States on the Closing
Date, including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the Closing Date.
4.3 AVAILABILITY OF TYPES OF ADVANCES. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Agent shall suspend the availability of the affected Type of
Advance and, in the case of any occurrence set forth in clause (i) require any
Advances of the affected Type to be converted to Floating Rate Loans until the
circumstances giving rise to such suspension no longer exist.
4.4 FUNDING INDEMNIFICATION. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, or a Eurodollar Rate Advance is converted on a day
other than the last day of the applicable Interest Period, the Borrower
indemnifies each Lender for any loss or cost incurred by it resulting therefrom
(including loss of profit other than loss of profit represented by the
Applicable Eurodollar Margin which would have been payable for such Interest
Period), including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain the Eurodollar Rate Advance. In
connection with any assignment by any Lender of any portion of the loans made
pursuant to SECTION 2.4(C), the Borrower shall be deemed to have repaid all
outstanding Eurodollar Rate Advances as of the effective date of such assignment
and reborrowed such amount as a Floating Rate Advance and/or Eurodollar Rate
Advance (chosen in accordance with the provisions of SECTION 2.2) and the
indemnification provisions under this SECTION 4.4 shall apply.
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. If reasonably possible, each
Lender shall designate an alternate Lending Installation with respect to its
Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under SECTIONS 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under SECTION 4.3, so long as such designation is not disadvantageous to such
Lender. Each Lender requiring compensation pursuant to SECTION 2.12(E) or to
this ARTICLE IV shall use its reasonable efforts to notify the Borrower and the
Agent in writing of any Change, law, policy, rule, guideline or directive giving
rise to such demand for compensation not later than ninety (90) days following
the date upon which the responsible account officer of such Lender knows or
should have known of such Change, law, policy, rule, guideline or directive;
PROVIDED, HOWEVER, that the failure to so notify the Borrower shall not affect
the Borrower's obligations under this SECTION 4.5. Any demand for compensation
pursuant to this ARTICLE IV shall be in writing and shall state the amount due,
if any, under SECTION 4.1, 4.2 or 4.4 and shall set forth in reasonable detail
the calculations upon which such Lender determined such amount. Such written
demand shall be rebuttably presumed correct for all purposes. Determination of
amounts payable under such Sections in connection with a Eurodollar Rate Loan
shall be calculated as though each Lender funded its Eurodollar Rate Loan
through the purchase of a deposit of the type and maturity corresponding to the
deposit used as a reference in determining the Eurodollar Rate applicable to
such Loan, whether in fact that is the case or not. The obligations of the
Borrower under SECTIONS 4.1, 4.2 and 4.4 shall survive payment of the
Obligations and termination of this Agreement.
37
ARTICLE V: CONDITIONS PRECEDENT
5.1 INITIAL ADVANCES AND LETTERS OF CREDIT. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit or purchase
any participations therein unless (i) no law, regulation, order, judgment or
decree of any Governmental Authority shall, and the Agent shall not have
received any notice that litigation is pending or threatened which is likely to,
(A) enjoin, prohibit or restrain the making of the initial Loans on the Closing
Date or (B) impose or result in the imposition of a Material Adverse Effect;
(ii) there shall have occurred no material adverse change (A) in the primary and
secondary loan syndication markets or capital markets generally and (B) since
March 31, 1998, in the business, assets, operations, or financial condition of
the Borrower and its Subsidiaries or in the facts and information regarding such
entities as represented to date in this Agreement; (iii) there exists no Default
or Unmatured Default under the Original Credit Agreement; (iv) execution and
delivery of that certain Assignment Agreement whereby (A) the Original Agent
sells and assigns, and the Agent purchases and assumes the "Assumed Obligations"
(as defined therein), and (B) the Original Agent resigns as agent under the
Original Credit Agreement, (v) termination of all liens and security interests
in favor of the Original Agent pursuant to the Original Credit Agreement and the
related security documents thereto; and (vi) the Borrower has furnished to the
Agent each of the following, with sufficient copies for the Lenders, all in form
and substance satisfactory to the Agent and the Lenders:
(a) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and each Guarantor, of its articles or certificate of
incorporation (which copies for the Borrower shall be certified as of a
recent date by the appropriate governmental officer in its respective
jurisdiction of incorporation), its by-laws and of its Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed necessary
by counsel for any Lender) authorizing the execution of the Loan
Documents;
(b) An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower and each Guarantor, which shall
identify by name and title and bear the signature of the officers of the
Borrower and Guarantors authorized to sign the Loan Documents and, in the
case of the Borrower, to request Loans and Letters of Credit hereunder,
upon which certificate the Lenders shall be entitled to rely until
informed of any change in writing by the Borrower;
(c) A certificate, in form and substance satisfactory to the Agent,
signed by the chief financial officer or treasurer of the Borrower, (i)
stating that on the Closing Date no Default or Unmatured Default has
occurred and is continuing, and (ii) setting forth the PRO FORMA
calculation of the Leverage Ratio as of Closing Date;
(d) A written opinion of the Borrower's and Guarantors' counsel,
addressed to the Agent and the Lenders, in substantially the form attached
as EXHIBIT G hereto;
(e) Revolving Notes payable to the order of each of the applicable
Lenders;
(f) A Swing Line Note payable to the order of NationsBank;
(g) The Guaranty executed by each of the Guarantors;
(h) A Pledge Agreement executed by each of the Borrower and its
Subsidiaries, as applicable, in connection with which each of the Borrower
and such Subsidiaries, as applicable, shall have delivered stock
certificates, stock powers and UCC-1 financing statements;
38
(i) Copies of each environmental assessment report conducted by the
Borrower or any of its Subsidiaries with respect to their operations or
properties; and
(j) Such other documents as the Agent or any Lender or its counsel
may have reasonably requested.
5.2 EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall not be required
to make any Advance, issue any Letter of Credit or purchase any participation
therein, unless on the applicable Borrowing Date, or in the case of a Letter of
Credit, the date on which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in ARTICLE VI are
true and correct as of such Borrowing Date (unless such representation and
warranty expressly relates to an earlier date or is no longer true solely
as a result of transactions permitted by this Agreement).
Each Borrowing Notice with respect to each such Advance and the letter of
credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
SECTIONS 5.2(I) and (II) have been satisfied. If any Lender has a reasonable
basis for believing a Default or Unmatured Default may have occurred and is
continuing or that the Borrower is not able to make one or more of the
representations and warranties set forth in ARTICLE VI, such Lender may require
a duly completed officer's certificate in substantially the form of EXHIBIT H
hereto and/or a duly completed compliance certificate in substantially the form
of EXHIBIT I hereto as a condition to making an Advance or the issuance of any
Letter of Credit.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants as follows to each Lender and the
Agent as of the Closing Date, and thereafter on each date as required by SECTION
5.2:
6.1 ORGANIZATION; CORPORATE POWERS. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (ii) is duly
qualified to do business and is in good standing under the laws of each
jurisdiction in which failure to be so qualified and in good standing could not
reasonably be expected to have a Material Adverse Effect and (iii) has all
requisite corporate power and authority to own, operate and encumber its
property and to conduct its business as presently conducted and as proposed to
be conducted.
6.2 AUTHORITY.
(a) The Borrower and each of its Subsidiaries has the requisite
power and authority to execute, deliver and perform each of the Loan
Documents which are to be executed by it or which have been executed by it
as required by this Agreement on or prior to the Closing Date.
(b) The execution, delivery, performance and filing, as the case may
be, of each of the Loan Documents which must be executed or filed by the
Borrower or any of its Subsidiaries or which have been executed or filed
as required by this Agreement on or prior to the Closing Date and to which
the Borrower or any of its Subsidiaries is party, and the consummation of
the transactions contemplated thereby, have been duly approved by the
respective boards of directors and, if
39
necessary, the shareholders of the Borrower and its Subsidiaries, and such
approvals have not been rescinded. No other corporate action or
proceedings on the part of the Borrower or its Subsidiaries are necessary
to consummate such transactions.
(c) Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered or filed, as the
case may be, by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party do not and will not (i) conflict with the certificate or
articles of incorporation or by-laws of the Borrower or any such Subsidiary,
(ii) constitute a tortious interference with any Contractual Obligation of any
Person or conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under any Requirement of Law
(including, without limitation, any Environmental Property Transfer Act) or
Contractual Obligation of the Borrower or any such Subsidiary, or require
termination of any Contractual Obligation, except such interference, breach,
default or termination which individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, (iii) result in or
require the creation or imposition of any Lien whatsoever upon any of the
property or assets of the Borrower or any such Subsidiary, other than Liens
permitted by the Loan Documents, or (iv) require any approval of the Borrower's
or any such Subsidiary's shareholders except such as have been obtained. The
execution, delivery and performance of each of the Loan Documents to which the
Borrower or any of its Subsidiaries is a party do not and will not require any
registration with, consent or approval of, or notice to, or other action to,
with or by any Governmental Authority, including under any Environmental
Property Transfer Act, except filings, consents or notices which have been made,
obtained or given, or which, if not made, obtained or given, individually or in
the aggregate could not reasonably be expected to have a Material Adverse
Effect.
6.4 FINANCIAL STATEMENTS. The Current Financials were prepared in
accordance with Agreement Accounting Principles and fairly present, in all
material respects, the consolidated financial condition, results of operations,
and cash flows of the Borrower and such Subsidiaries as of the dates contained
therein, and for the portion of the fiscal year ending on the date or dates
thereof (subject only to normal year-end adjustments).
6.5 NO MATERIAL ADVERSE CHANGE. Since March 31, 1998, there has occurred
no event or circumstance which has had or could reasonably be expected to have a
Material Adverse Effect.
6.6 TAXES.
(a) TAX EXAMINATIONS. All material deficiencies which have been
asserted against the Borrower or any of the Borrower's Subsidiaries as a
result of any federal, state, local or foreign tax examination for each
taxable year in respect of which an examination has been conducted have
been fully paid or finally settled or are being contested in good faith,
and as of the Closing Date no issue has been raised by any taxing
authority in any such examination which, by application of similar
principles, reasonably can be expected to result in assertion by such
taxing authority of a material deficiency for any other year not so
examined which has not been reserved for in the Borrower's consolidated
financial statements to the extent, if any, required by Agreement
Accounting Principles.
(b) PAYMENT OF TAXES. All tax returns and reports of the Borrower
and its Subsidiaries required to be filed have been timely filed, and all
taxes, assessments, fees and other governmental charges thereupon and upon
their respective property, assets, income and franchises which are shown
in such returns or reports to be due and payable have been paid except
those items which are
40
being contested in good faith and have been reserved for in accordance
with Agreement Accounting
41
Principles or for which the failure to file could not reasonably be
expected to have a Material Adverse Effect. The Borrower has no knowledge
of any proposed tax assessment against the Borrower or any of its
Subsidiaries that will have or could reasonably be expected to have a
Material Adverse Effect.
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. There is no action,
suit, proceeding, arbitration or (to the Borrower's knowledge after diligent
inquiry) investigation before or by any Governmental Authority or private
arbitrator pending or, to the Borrower's knowledge after diligent inquiry,
threatened against the Borrower or any of its Subsidiaries or any property of
any of them (i) challenging the validity or the enforceability of any material
provision of the Loan Documents or (ii) which will have or could reasonably be
expected to have a Material Adverse Effect. There is no material loss
contingency within the meaning of Agreement Accounting Principles which has not
been reflected in the consolidated financial statements of the Borrower and its
Subsidiaries prepared and delivered pursuant to SECTION 7.1(A) for the fiscal
period during which such material loss contingency was incurred. Neither the
Borrower nor any of its Subsidiaries is (a) in violation of any applicable
Requirements of Law which violation will have or could reasonably be expected to
have a Material Adverse Effect, or (b) subject to or in default with respect to
any final judgment, writ, injunction, restraining order or order of any nature,
decree, rule or regulation of any court or Governmental Authority which will
have or could reasonably be expected to have a Material Adverse Effect.
6.8 SUBSIDIARIES. SCHEDULE 6.8 to this Agreement (i) contains a
description as of the Closing Date (or as of the date of any supplement thereto)
of the corporate structure of, the Borrower and its Subsidiaries and any other
Person in which the Borrower or any of its Subsidiaries holds an Equity
Interest; and (ii) accurately sets forth as of the Closing Date (or as of the
date of any supplement thereto) (A) the correct legal name, the jurisdiction of
incorporation and the jurisdictions in which each of the Borrower and the
Subsidiaries of the Borrower is qualified to transact business as a foreign
corporation, (B) for each Subsidiary of the Borrower which is not a wholly-owned
Subsidiary, the authorized, issued and outstanding shares of each class of
Capital Stock of such Subsidiaries and the owners of such shares (both as of the
Closing Date and on a fully-diluted basis), and (C) a summary of the direct and
indirect partnership, joint venture, or other Equity Interests, if any, of the
Borrower and each Subsidiary of the Borrower in any Person that is not a
corporation. After the formation or acquisition of any New Subsidiary permitted
under SECTION 7.3(G)(II), if requested by the Agent, the Borrower shall provide
a supplement to SCHEDULE 6.8 to this Agreement. None of the issued and
outstanding Capital Stock of the Borrower or any of its Subsidiaries is subject
to any redemption or repurchase agreement. The outstanding Capital Stock of the
Borrower and each of the Borrower's Subsidiaries is duly authorized, validly
issued, fully paid and nonassessable. The Borrower has no Subsidiaries other (i)
the Subsidiaries set forth on SCHEDULE 6.8 and (ii) any Subsidiaries acquired in
connection with a Permitted Acquisition, in connection with which the Borrower
shall have provided all of the documents, instruments and agreements as required
by this Agreement.
6.9 ERISA. No Benefit Plan has incurred any material accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither the Borrower nor any member of the Controlled
Group has incurred any material liability to the PBGC which remains outstanding
other than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report filed
with the IRS with respect to each Benefit Plan and, if so requested, furnished
to the Lenders, is complete and accurate. Since the date of each such Schedule
B, there has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither the Borrower
nor any member of the Controlled Group has (i) failed to make a required
contribution or payment to a Multiemployer Plan or (ii) made a complete or
partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan,
42
in either event which could result in any material liability. Neither the
Borrower nor any member of the Controlled Group has failed to make a required
installment or any other required payment under Section 412 of the Code, in
either case involving any material amount, on or before the due date for such
installment or other payment. Neither the Borrower nor any member of the
Controlled Group is required to provide security to a Benefit Plan under Section
401(a)(29) of the Code due to a Plan amendment that results in an increase in
current liability for the plan year. Neither the Borrower nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan
within the meaning of Section 3(1) of ERISA which provides benefits to employees
after termination of employment other than as required by Section 601 of ERISA.
Each Plan which is intended to be qualified under Section 401(a) of the Code as
currently in effect is so qualified, and each trust related to any such Plan is
exempt from federal income tax under Section 501(a) of the Code as currently in
effect. The Borrower and all Subsidiaries are in compliance in all material
respects with the responsibilities, obligations and duties imposed on them by
ERISA and the Code with respect to all Plans. Neither the Borrower nor any of
its Subsidiaries nor any fiduciary of any Plan has engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of the Code
which could reasonably be expected to subject the Borrower or any Guarantor to
material liability. Neither the Borrower nor any member of the Controlled Group
has taken or failed to take any action which would constitute or result in a
Termination Event, which action or inaction could reasonably be expected to
subject the Borrower to material liability. Neither the Borrower nor any
Subsidiary is subject to any liability under Sections 4063, 4064, 4069, 4204 or
4212(c) of ERISA and no other member of the Controlled Group is subject to any
liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA which could
reasonably be expected to subject the Borrower or any Guarantor to material
liability. Neither the Borrower nor any of its Subsidiaries has, by reason of
the transactions contemplated hereby, any obligation to make any payment to any
employee pursuant to any Plan or existing contract or arrangement. For purposes
of this SECTION 6.9 "material" means any noncompliance or basis for liability
which could reasonably be likely to subject the Borrower or any of its
Subsidiaries to liability individually or in the aggregate for all such matters
in excess of $5,000,000.
6.10 ACCURACY OF INFORMATION. The information, exhibits and reports
furnished by or on behalf of the Borrower and any of its Subsidiaries to the
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents, the representations and warranties of the Borrower and
its Subsidiaries contained in the Loan Documents, and all certificates and
documents delivered to the Agent and the Lenders pursuant to the terms thereof,
taken as a whole, do not contain as of the date furnished any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements contained herein or therein, taken as a whole, in light of the
circumstances under which they were made, not misleading.
6.11 SECURITIES ACTIVITIES. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 MATERIAL AGREEMENTS. Neither the Borrower nor any of its Subsidiaries
is a party to any Contractual Obligation or subject to any charter or other
corporate restriction which individually or in the aggregate will have or could
reasonably be expected to have a Material Adverse Effect. Neither the Borrower
nor any of its Subsidiaries has received notice or has knowledge that (i) it is
in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, or (ii) any condition exists which, with the giving of notice
or the lapse of time or both, would constitute a default with respect to any
such Contractual Obligation, in each case, except where such default or
defaults, if any, individually or in the aggregate will not have or could not
reasonably be expected to have a Material Adverse Effect.
43
6.13 COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect.
6.14 ASSETS AND PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any laws
or regulations of any Governmental Authority affecting such assets), except
where the failure to have any such title will not have or could not reasonably
be expected to have a Material Adverse Effect, and all such assets and property
are free and clear of all Liens, except Liens permitted under SECTION 7.3(C).
Substantially all of the assets and properties owned by, leased to or used by
the Borrower and/or each such Subsidiary of the Borrower are in adequate
operating condition and repair, ordinary wear and tear excepted. Neither this
Agreement nor any transaction contemplated under this Agreement, will affect any
right, title or interest of the Borrower or such Subsidiary in and to any of its
assets in a manner that will have or could reasonably be expected to have a
Material Adverse Effect.
6.15 STATUTORY INDEBTEDNESS RESTRICTIONS. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal, state or local statute,
ordinance or regulation which limits its ability to incur indebtedness or its
ability to consummate the transactions contemplated hereby.
6.16 INSURANCE. The Borrower's and its Subsidiaries' insurance policies
and programs reflect coverage that is reasonably consistent with prudent
industry practice.
6.17 LABOR MATTERS. As of the Closing Date, to the Borrower's and its
Subsidiaries' knowledge, there are no material labor disputes to which the
Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities.
6.18 ENVIRONMENTAL MATTERS.
(a) (i) The operations of the Borrower and its Subsidiaries comply
in all material respects with Environmental, Health or Safety
Requirements of Law;
(ii) the Borrower and its Subsidiaries have all material
permits, licenses or other authorizations required under
Environmental, Health or Safety Requirements of Law and are in
material compliance with such permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of
their respective present property or operations, or, to the best of,
the Borrower's or any of its Subsidiaries' knowledge, any of their
respective past property or operations, are subject to or the
subject of, any investigation known to the Borrower or any of its
Subsidiaries, any judicial or administrative proceeding, order,
judgment, decree, settlement or other agreement respecting: (A) any
material violation of Environmental, Health or Safety Requirements
of Law; (B) any material remedial action; or (C) any material claims
or liabilities arising from the Release or threatened Release of a
Contaminant into the environment;
(iv) there is not now, nor to the best of the Borrower's or
any of its Subsidiaries' knowledge has there ever been on or in the
property of the Borrower or any of its
44
Subsidiaries any landfill, waste pile, underground storage tanks,
aboveground storage tanks, surface impoundment or hazardous waste
storage facility of any kind, any polychlorinated biphenyls (PCBs)
used in hydraulic oils, electric transformers or other equipment, or
any asbestos containing material that in the case of any of the
foregoing could be reasonably expected to result in any material
claims or liabilities; and
(v) neither the Borrower nor any of its Subsidiaries has any
material Contingent Obligation in connection with any Release or
threatened Release of a Contaminant into the environment.
(b) For purposes of this SECTION 6.18, "material" means any
noncompliance or basis for liability which could reasonably be expected
individually or in the aggregate to have a Material Adverse Effect.
6.19 BENEFITS. Each of the Borrower and its Subsidiaries will benefit from
the financing arrangement established by this Agreement. The Agent and the
Lenders have stated and the Borrower acknowledges that, but for the agreement by
each of the Guarantors to execute and deliver the Guaranty, the Agent and the
Lenders would not have made available the credit facilities established hereby
on the terms set forth herein.
6.20 YEAR 2000 PROBLEM. The Borrower has: (a) initiated a review and
assessment of all areas within the Borrower's and each Subsidiary's business and
operations (including those affected by suppliers, vendors and customers) that
could be adversely affected by the "YEAR 2000 PROBLEM" (that is, the risk that
computer applications used by the Borrower or any Subsidiary (or suppliers,
vendors or customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to, and any date after,
December 31, 1999); (b) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis; and (c) to date, implemented that plan
materially in accordance with that timetable. Based on the foregoing, the
Borrower believes that all computer applications (including those of its
suppliers, vendors and customers) that are material to the Borrower or any
Subsidiary's business and operations are reasonably expected on a timely basis
to be able to perform properly date-sensitive functions for all dates before and
after January 1, 2000 (that is, "YEAR 2000 COMPLIANT"), except to the extent
that a failure to do so could not reasonably be expected to constitute a
Material Adverse Effect.
ARTICLE VII: COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders shall
otherwise give prior written consent:
7.1 REPORTING. The Borrower shall:
(a) FINANCIAL REPORTING. Furnish to the Lenders:
(i) QUARTERLY REPORTS. As soon as practicable, and in any
event within fifty (50) days after the end of each of the first
three quarters in each fiscal year, the consolidated balance sheet
of the Borrower and its Subsidiaries as at the end of such period
and the related consolidated statements of income and cash flows of
the Borrower and its Subsidiaries for such fiscal quarter and for
the period from the beginning of the then current fiscal year to the
end of such fiscal quarter, certified by the chief financial officer
of the Borrower on behalf of the Borrower as fairly presenting the
consolidated financial position
45
of the Borrower and its Subsidiaries as at the dates indicated and
the results of their operations and cash flows for the periods
indicated in accordance with Agreement Accounting Principles,
subject to normal year end adjustments. In addition, as soon as
practicable, and in any event within fifty (50) days after the end
of the fourth fiscal quarter in each fiscal year, such financial
statements and information as shall be reasonably acceptable to the
Agent as sufficient for the calculation of the Leverage Ratio as of
the end of such fiscal quarter, certified by the chief financial
officer of the Borrower.
(ii) ANNUAL REPORTS. As soon as practicable, and in any event
within ninety-five (95) days after the end of each fiscal year, (A)
the consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such fiscal year and the related consolidated
statements of income, stockholders' equity and cash flows of the
Borrower and its Subsidiaries for such fiscal year, and in
comparative form the corresponding figures for the previous fiscal
year and (B) an audit report on the items listed in CLAUSE (A)
hereof of independent certified public accountants of recognized
national standing, which audit report shall be unqualified and shall
state that such financial statements fairly present the consolidated
financial position of the Borrower and its Subsidiaries as at the
dates indicated and the results of their operations and cash flows
for the periods indicated in conformity with Agreement Accounting
Principles and that the examination by such accountants in
connection with such consolidated financial statements has been made
in accordance with generally accepted auditing standards. The
deliveries made pursuant to this CLAUSE (II) shall be accompanied by
any management letter prepared by the above-referenced accountants.
(iii) OFFICER'S CERTIFICATE. Together with each delivery of
any financial statement (A) pursuant to CLAUSES (I) and (II) of this
SECTION 7.1(A), an Officer's Certificate of the Borrower,
substantially in the form of EXHIBIT H attached hereto and made a
part hereof, stating that no Default or Unmatured Default exists, or
if any Default or Unmatured Default exists, stating the nature and
status thereof and (B) pursuant to CLAUSES (I) and (II) of this
SECTION 7.1(A), a compliance certificate, substantially in the form
of EXHIBIT I attached hereto and made a part hereof, signed by the
Borrower's chief financial officer or treasurer, setting forth
calculations for the period then ended, which demonstrate
compliance, when applicable, with the provisions of SECTION 7.4, and
which calculate the Leverage Ratio for purposes of determining the
then Applicable Eurodollar Margin, Applicable Floating Rate Margin
and Applicable Facility Fee Percentage.
(iv) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. Not less
frequently than once during each 12-month period following the
Closing Date, a copy of the plan and forecast (including a projected
balance sheet, income statement and statement of cash flow) of the
Borrower and its Subsidiaries for the upcoming 12-month period
prepared in such detail as shall be reasonably satisfactory to the
Agent.
(b) NOTICE OF DEFAULT. Promptly upon any of the chief executive
officer, chief operating officer, chief financial officer, treasurer or
controller of the Borrower obtaining knowledge (i) of any condition or
event which constitutes a Default or Unmatured Default, or becoming aware
that any Lender or Agent has given any written notice with respect to a
claimed Default or Unmatured Default under this Agreement, or (ii) that
any Person has given any written notice to the Borrower or any Subsidiary
of the Borrower or taken any other action with respect to a claimed
default or event or condition of the type referred to in SECTION 8.1(E),
deliver to the Agent and the Lenders a notice specifying (A) the nature
and period of existence of any such claimed default, Default, Unmatured
Default, condition or event, (B) the notice given or action taken by such
Person in
46
connection therewith, and (C) what action the Borrower has taken, is
taking and proposes to take with respect thereto.
(c) LAWSUITS. (i) Promptly upon the Borrower obtaining knowledge of
the institution of, or written threat of, any action, suit, proceeding,
governmental investigation or arbitration against or affecting the
Borrower or any of its Subsidiaries or any property of the Borrower or any
of its Subsidiaries, which action, suit, proceeding, governmental
investigation or arbitration exposes, or in the case of multiple actions,
suits, proceedings, governmental investigations or arbitrations arising
out of the same general allegations or circumstances which could
reasonably be expected to have a Material Adverse Effect, give written
notice thereof to the Agent and provide such other information as may be
reasonably available to enable each Lender and the Agent and its counsel
to evaluate such matters; and (ii) in addition to the requirements set
forth in CLAUSE (I) of this SECTION 7.1(C), upon request of the Agent or
the Required Lenders, promptly give written notice of the status of any
action, suit, proceeding, governmental investigation or arbitration
covered by a report delivered pursuant to CLAUSE (I) above or disclosed in
any filing with the Commission and provide such other information as may
be reasonably available to it that would not violate any attorney-client
privilege by disclosure to the Lenders to enable each Lender and the Agent
and its counsel to evaluate such matters.
(d) ERISA NOTICES. Deliver or cause to be delivered to the Agent and
the Lenders, at the Borrower's expense, the following information and
notices as soon as reasonably possible, and in any event:
(i) (A) within ten (10) Business Days after the Borrower
obtains knowledge that a Termination Event has occurred, a written
statement of the chief financial officer of the Borrower describing
such Termination Event and the action, if any, which the Borrower
has taken, is taking or proposes to take with respect thereto, and
when known, any action taken or threatened by the IRS, DOL or PBGC
with respect thereto and (B) within ten (10) Business Days after any
member of the Controlled Group obtains knowledge that a Termination
Event has occurred which could reasonably be expected to subject the
Borrower or any member of the Controlled Group to liability
individually or in the aggregate in excess of $1,000,000, a written
statement of the chief financial officer of the Borrower describing
such Termination Event and the action, if any, which the member of
the Controlled Group has taken, is taking or proposes to take with
respect thereto, and when known, any action taken or threatened by
the IRS, DOL or PBGC with respect thereto;
(ii) within ten (10) Business Days after the Borrower or any
of its Subsidiaries obtains knowledge that a prohibited transaction
(defined in Sections 406 of ERISA and Section 4975 of the Code) has
occurred which could result in material liability , a statement of
the chief financial officer of the Borrower describing such
transaction and the action which the Borrower or such Subsidiary has
taken, is taking or proposes to take with respect thereto;
(iii) within ten (10) Business Days after the Borrower or any
of its Subsidiaries receives notice of any unfavorable determination
letter from the IRS regarding the qualification of a Plan under
Section 401(a) of the Code, copies of each such letter;
(iv) within ten (10) Business Days after the filing thereof
with the IRS, a copy of each funding waiver request filed with
respect to any Benefit Plan and all
47
communications received by the Borrower or a member of the
Controlled Group with respect to such request;
(v) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of the PBGC's
intention to terminate a Benefit Plan or to have a trustee appointed
to administer a Benefit Plan, copies of each such notice;
(vi) within ten (10) Business Days after receipt by the
Borrower or any member of the Controlled Group of a notice from a
Multiemployer Plan regarding the imposition of withdrawal liability,
copies of each such notice;
(vii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group fails to make a required installment
or any other required payment under Section 412 of the Code on or
before the due date for such installment or payment, a notification
of such failure; and
(viii) within ten (10) Business Days after the Borrower or any
member of the Controlled Group knows or has reason to know that (A)
a Multiemployer Plan has been terminated, (B) the administrator or
plan sponsor of a Multiemployer Plan intends to terminate a
Multiemployer Plan, or (C) the PBGC has instituted or will institute
proceedings under Section 4042 of ERISA to terminate a Multiemployer
Plan.
For purposes of this SECTION 7.1(D), the Borrower, any of its Subsidiaries
and any member of the Controlled Group shall be deemed to know all facts
known by the Administrator of any Plan of which the Borrower or any member
of the Controlled Group or such Subsidiary is the plan sponsor.
(e) LABOR MATTERS. Notify the Agent and the Lenders in writing,
promptly upon the Borrower's learning thereof, of (i) any material labor
dispute to which the Borrower or any of its Subsidiaries may become a
party, including, without limitation, any strikes, lockouts or other
disputes relating to such Persons' plants and other facilities and (ii)
any material liability incurred under the Worker Adjustment and Retraining
Notification Act with respect to the closing of any plant or other
facility of the Borrower or any of its Subsidiaries.
(f) OTHER INDEBTEDNESS. Deliver to the Agent (i) a copy of each
notice or communication regarding potential or actual defaults (including
any accompanying officer's certificate) delivered by or on behalf of the
Borrower or any of its Subsidiaries to the holders of funded Indebtedness
pursuant to the terms of the agreements governing such Indebtedness, such
delivery to be made at the same time and by the same means as such notice
or other communication is delivered to such holders, and (ii) a copy of
each notice or other communication regarding potential or actual defaults
received by the Borrower or any of its Subsidiaries from the from the
holders of funded Indebtedness pursuant to the terms of such Indebtedness,
such delivery to be made promptly after such notice or other communication
is received by the Borrower or any such Subsidiary.
(g) OTHER REPORTS. Deliver or cause to be delivered to the Agent and
the Lenders copies of all financial statements, reports and notices, if
any, sent or made available generally by the Borrower to its securities
holders or filed with the Commission by the Borrower, all press releases
made available generally by the Borrower or any of the Borrower's
Subsidiaries to the public concerning material developments in the
business of the Borrower or any such Subsidiary and all notifications
received from the Commission by the Borrower or its Subsidiaries pursuant
to the
48
Securities Exchange Act of 1934 and the rules promulgated thereunder
(other than customary comment letters received in connection with
registration statements or other routine communications between the
Commission and the Borrower).
(h) ENVIRONMENTAL NOTICES. As soon as possible and in any event
within ten (10) days after receipt by the Borrower or any of its
Subsidiaries, a copy of (i) any notice or claim to the effect that the
Borrower or any of its Subsidiaries is or may be liable to any Person as a
result of the Release by the Borrower, any of its Subsidiaries, or any
other Person of any Contaminant into the environment, and (ii) any notice
alleging any violation of any Environmental, Health or Safety Requirements
of Law by the Borrower or any of its Subsidiaries if, in either case, such
notice or claim relates to an event which could reasonably be expected to
have a Material Adverse Effect.
(i) YEAR 2000 INFORMATION. The Borrower will provide to the Agent a
copy of the Year 2000 review and assessment when completed and, if
warranted as a result of such review and assessment, its program in
respect thereof for the Borrower and its Subsidiaries, including updates
and progress reports upon request of the Agent or any of the Lenders. The
Borrower will provide Agent notice, promptly after the Borrower or any
Subsidiary discovers or determines that any computer application
(including those of its suppliers, vendors and customers) that is material
to the Borrower's or such Subsidiary's business and operations will not be
Year 2000 Compliant, except to the extent such failure could not
reasonably be expected to constitute a Material Adverse Effect.
(j) OTHER INFORMATION. Promptly upon receiving a request therefor
from the Agent or any Lender, prepare and deliver to the Agent and the
Lenders such other information with respect to the Borrower, any of its
Subsidiaries or the Collateral as from time to time may be reasonably
requested by the Agent or any Lender.
7.2 AFFIRMATIVE COVENANTS.
(a) CORPORATE EXISTENCE, ETC. Except for mergers permitted pursuant
to SECTION 7.3(I), the Borrower shall, and shall cause each of the
Guarantors to, at all times maintain its corporate existence and preserve
and keep, or cause to be preserved and kept, in full force and effect its
rights and franchises material to its businesses.
(b) CORPORATE POWERS; CONDUCT OF BUSINESS. The Borrower shall, and
shall cause each of its Subsidiaries to, qualify and remain qualified to
do business in each jurisdiction in which the nature of its business
requires it to be so qualified and where the failure to be so qualified
will have or could reasonably be expected to have a Material Adverse
Effect. The Borrower will, and will cause each Subsidiary to, carry on and
conduct its business in substantially the same manner and in substantially
the same fields of enterprise as it is presently conducted.
(c) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause
its Subsidiaries to, (i) comply with all Requirements of Law and all
restrictive covenants affecting such Person or the business, properties,
assets or operations of such Person, and (ii) obtain as needed all Permits
necessary for its operations and maintain such Permits in good standing
unless failure to comply or obtain could not reasonably be expected to
have a Material Adverse Effect.
(d) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower
shall pay, and cause each of its Subsidiaries to pay, (i) all taxes,
assessments and other governmental charges imposed upon it or on any of
its properties or assets or in respect of any of its franchises, business,
income or property before any penalty or interest accrues thereon, and
(ii) all claims (including,
49
without limitation, claims for labor, services, materials and supplies)
for sums which have become due and payable and which by law have or may
become a Lien (other than a Lien permitted by SECTION 7.3(C)) upon any of
the Borrower's or such Subsidiary's property or assets, prior to the time
when any penalty or fine shall be incurred with respect thereto; PROVIDED,
HOWEVER, that no such taxes, assessments and governmental charges referred
to in CLAUSE (I) above or claims referred to in CLAUSE (II) above (and
interest, penalties or fines relating thereto) need be paid if being
contested in good faith by appropriate proceedings diligently instituted
and conducted and if such reserve or other appropriate provision, if any,
as shall be required in conformity with Agreement Accounting Principles
shall have been made therefor. The Borrower will not, nor will it permit
any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any other Person other than the
consolidated return of the Borrower.
(e) INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full
force and effect, insurance policies and programs reflecting coverage that
is reasonably consistent with prudent industry practice.
(f) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The
Borrower shall permit and cause each of the Borrower's Subsidiaries to
permit, any authorized representative(s) designated by either the Agent or
any Lender to visit and inspect any of the properties of the Borrower or
any of its Subsidiaries, to examine, audit, check and make copies of their
respective financial and accounting records, books, journals, orders,
receipts and any correspondence and other data relating to their
respective businesses or the transactions contemplated hereby (including,
without limitation, in connection with environmental compliance, hazard or
liability), and to discuss their affairs, finances and accounts with their
officers and independent certified public accountants, all upon reasonable
notice and at such reasonable times during normal business hours, as often
as may be reasonably requested; PROVIDED that while no Default or
Unmatured Default exists, all of the foregoing shall be at the expense of
the Agent or Lenders, as applicable; PROVIDED, FURTHER, that any of the
foregoing conducted while an Unmatured Default exists which Unmatured
Default is cured prior to its maturing into a Default shall be at the
expense of the Agent or Lenders, as applicable. The Borrower shall keep
and maintain, and cause each of the Borrower's Subsidiaries to keep and
maintain, in all material respects, proper books of record and account in
which entries in conformity with Agreement Accounting Principles shall be
made of all dealings and transactions in relation to their respective
businesses and activities. If a Default has occurred and is continuing,
the Borrower, upon the Agent's request, shall turn over any such records
to the Agent or its representatives.
(g) ERISA COMPLIANCE. The Borrower shall, and shall cause each of
the Borrower's Subsidiaries to, establish, maintain and operate all Plans
to comply in all material respects with the provisions of ERISA, the Code,
all other applicable laws, and the regulations and interpretations
thereunder and the respective requirements of the governing documents for
such Plans, except where the failure to comply will not or could not
reasonably be expected to subject the Borrower and its Subsidiaries to
liability individually or in the aggregate in excess of $5,000,000.
(h) MAINTENANCE OF PROPERTY. The Borrower shall cause all property
used or useful in the conduct of its business or the business of any
Subsidiary to be maintained and kept in good condition, repair and working
order and supplied with all necessary equipment and shall cause to be made
all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrower may be
necessary so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; PROVIDED, HOWEVER,
that nothing in this SECTION 7.2(H) shall prevent the Borrower from
discontinuing the operation or maintenance of any of such property if such
discontinuance is, in the judgment of the Borrower,
50
desirable in the conduct of its business or the business of any Subsidiary
and not disadvantageous in any material respect to the Agent or the
Lenders.
(i) ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries
shall comply with all Environmental, Health or Safety Requirements of Law,
except where noncompliance could not reasonably be expected to have a
Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries
shall be the subject of any proceeding or investigation pertaining to (i)
the Release by the Borrower or any of its Subsidiaries of any Contaminant
into the environment or (ii) the liability of the Borrower or any of its
Subsidiaries arising from the Release by any other Person of any
Contaminant into the environment, which, in either case, has or is
reasonably likely to have a Material Adverse Effect.
(j) USE OF PROCEEDS. The Borrower shall use the proceeds of the
Loans (i) to provide funds for working capital needs, capital expenditures
and other general corporate purposes of the Borrower and its Subsidiaries,
and (ii) to fund Permitted Acquisitions. The Borrower will not, nor will
it permit any Subsidiary to, use any of the proceeds of the Loans to
purchase or carry any "Margin Stock" or to make any Acquisition, other
than any Permitted Acquisition pursuant to SECTION 7.3(G).
(k) ADDITION OF GUARANTORS; ADDITION OF PLEDGED CAPITAL STOCK. The
Borrower shall cause (i) each Subsidiary that is, at any time, a Material
Subsidiary, and (ii) each other Subsidiary necessary for the Borrower to
comply with the requirements set forth in SECTION 7.3(E), to deliver to
the Agent an executed Guaranty Supplement to become a Guarantor under the
Guaranty in the form of EXHIBIT J attached hereto and appropriate
corporate resolutions, opinions and other documentation in form and
substance reasonably satisfactory to the Agent, such Guaranty Supplement
and other documentation to be delivered to the Agent as promptly as
possible but in any event within thirty (30) days of determination that a
Subsidiary is a Material Subsidiary or otherwise needs to be added as a
Guarantor. Simultaneously with any Subsidiary becoming a Guarantor, the
Borrower shall (or, if the Capital Stock of such Subsidiary is owned by
another Subsidiary, shall cause such other Subsidiary to) deliver to the
Agent an executed supplement to the Pledge Agreement or a Pledge
Agreement, together with appropriate corporate resolutions, opinions,
stock certificates, UCC filings or amendments and other documentation, in
each case in form and substance reasonably satisfactory to the Agent and
the Agent shall be reasonably satisfied that it has a first priority
perfected pledge of all of the Capital Stock of such Guarantor owned by
the Borrower and its Subsidiaries.
(l) YEAR 2000 PROBLEM. The Borrower shall and shall cause each of
its Subsidiaries to take all actions reasonably necessary to assure that
the Year 2000 Problem will not have a Material Adverse Effect.
7.3 NEGATIVE COVENANTS.
(a) INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries
shall directly or indirectly create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness,
except:
(i) the Obligations;
(ii) Permitted Existing Indebtedness and Permitted
Refinancing Indebtedness;
51
(iii) unsecured subordinated indebtedness (including in
connection with any Permitted Acquisition) that (x) does not have a
stated maturity before the Termination Date in effect as of the date
such indebtedness is incurred, (y) has terms that are no more
restrictive than the terms of this Agreement and the other Loan
Documents, and (z) is subordinated to the Obligations on terms at
least as favorable to the Lenders as the terms set forth on SCHEDULE
7.3 attached hereto (such Indebtedness being referred to herein as
"PERMITTED SUBORDINATED INDEBTEDNESS");
(iv) Indebtedness in respect of obligations secured by
Customary Permitted Liens;
(v) Indebtedness constituting Contingent Obligations in
respect of Indebtedness otherwise permitted hereunder;
(vi) Indebtedness arising from intercompany loans from the
Borrower to any Controlled Subsidiary or from any Subsidiary to the
Borrower or any Controlled Subsidiary; PROVIDED that in each case
such Indebtedness is subordinated upon terms satisfactory to the
Agent to the obligations of the Borrower and its Subsidiaries with
respect to the Obligations;
(vii) guaranties by the Borrower of Indebtedness permitted to
be incurred by any Subsidiary;
(viii) Indebtedness in respect of Hedging Obligations
permitted under SECTION 7.3(Q);
(ix) secured or unsecured purchase money Indebtedness
(including Capitalized Leases) incurred by the Borrower or any of
its Subsidiaries after the Closing Date (including, as a result of
the assumption of any such Indebtedness in connection with a
Permitted Acquisition) to finance the acquisition of fixed assets,
if (1) at the time of such incurrence, no Default or Unmatured
Default has occurred and is continuing or would result from such
incurrence, (2) such Indebtedness has a scheduled maturity and is
not due on demand, (3) such Indebtedness does not exceed the lower
of the fair market value or the cost of the applicable fixed assets
on the date acquired, (4) such Indebtedness does not exceed in the
aggregate at any time an amount equal to the sum of (a) $6,000,000
PLUS (b) an amount equal to 1.5% of Consolidated Revenues of the
Borrower and its Subsidiaries for each fiscal year, commencing with
the fiscal year ending December 31, 1998, and (5) any Lien securing
such Indebtedness is permitted under SECTION 7.3(C) (such
Indebtedness being referred to herein as "PERMITTED PURCHASE MONEY
INDEBTEDNESS");
(x) Indebtedness with respect to surety, appeal and
performance bonds obtained by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(xi) Indebtedness arising under the Guaranty;
(xii) Indebtedness of a Subsidiary consisting of
tax-advantaged industrial revenue bond, industrial development bond
or other similar financings assumed in connection with (but not
incurred in connection with or in anticipation of) a Permitted
Acquisition;
52
(xiii) other Indebtedness (other than working capital
financing) existing at a New Subsidiary at the time of the Permitted
Acquisition thereof (but not incurred in connection or in
anticipation of such Permitted Acquisition) the outstanding
principal balance of which does not exceed twenty-five percent (25%)
of the book value of the assets acquired as a result of such
Permitted Acquisition; and
(xiv) other Indebtedness in addition to that referred to
elsewhere in this SECTION 7.3(A) incurred by the Borrower or any of
its Subsidiaries; PROVIDED that (A) the aggregate amount of such
other Indebtedness shall not at any time exceed $25,000,000; and (B)
no Default or Unmatured Default shall have occurred and be
continuing at the date of such incurrence or would result therefrom.
(b) SALES OF ASSETS. Neither the Borrower nor any of its
Subsidiaries shall sell, assign, transfer, lease, convey or otherwise
dispose of any property (including the stock of any Subsidiary), whether
now owned or hereafter acquired, or any income or profits therefrom, or
enter into any agreement to do so, except:
(i) sales of inventory in the ordinary course of business;
(ii) the disposition in the ordinary course of business of
equipment that is obsolete, excess or no longer useful in the
Borrower's or its Subsidiaries' business; and
(iii) sales, assignments, transfers, leases, conveyances or
other dispositions of other assets (including sales of stock of a
Subsidiary) if such transaction:
(A) in the case of sales of a Material Subsidiary or
other assets representing 10% of Consolidated Tangible Assets,
is for consideration consisting of at least 70% of cash; and
(B) for all such transactions (1) is for not less than
Fair Value, and (2) when combined with all such other
transactions (each such transaction being valued at book
value) (a) during the immediately preceding twelve-month
period, represents the disposition of not greater than ten
percent (10%) of the Borrower's Consolidated Tangible Assets
at the end of the fiscal year immediately preceding that in
which such transaction is proposed to be entered into, and (b)
during the period from the Closing Date to the date of such
proposed transaction, represents the disposition of not
greater than twenty percent (20%) of the Borrower's
Consolidated Tangible Assets at the end of the fiscal year
immediately preceding that in which such transaction is
proposed to be entered into.
(c) LIENS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien
on or with respect to any of their respective property or assets except:
(i) Permitted Existing Liens;
(ii) Customary Permitted Liens;
(iii) purchase money Liens (including the interest of a lessor
under a Capitalized Lease and Liens to which any property is subject
at the time of the Borrower's or a
53
Subsidiary's acquisition thereof) securing Permitted Purchase Money
Indebtedness; PROVIDED that such Liens shall not apply to any
property of the Borrower or its Subsidiaries other than that
purchased or subject to such Capitalized Lease;
(iv) Liens securing Indebtedness assumed in connection with a
Permitted Acquisition and permitted pursuant to CLAUSE (XII) or
CLAUSE (XIII) of SECTION 7.3(A); PROVIDED that such Liens shall not
apply to any property of the Borrower or its Subsidiaries other than
that purchased or directly financed in connection with such
Indebtedness;
(v) Liens securing the Obligations or Secured Obligations;
and
(vi) Liens (other than on the stock of any Subsidiaries)
securing other obligations not exceeding $5,000,000 in the aggregate
at any time outstanding.
In addition, neither the Borrower nor any of its Subsidiaries shall become
a party to any agreement, note, indenture or other instrument, or take any
other action, which would prohibit the creation of a Lien on any of its
properties or other assets in favor of the Agent for the benefit of itself
and Lenders, as collateral for the Obligations; PROVIDED that any
agreement, note, indenture or other instrument in connection with Liens
permitted pursuant to CLAUSES (I), (III) and (IV) above may prohibit the
creation of a Lien in favor of the Agent for the benefit of itself and the
Lenders on the items of property subject to such Lien.
(d) INVESTMENTS. Except to the extent permitted pursuant to SECTION
7.3(G) below, neither the Borrower nor any of its Subsidiaries shall
directly or indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater
than the amount thereof on the Closing Date;
(iii) Investments in trade receivables or received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary
course of business;
(iv) Investments consisting of deposit accounts maintained by
the Borrower or its Subsidiaries in the ordinary course of business
in connection with its cash management system;
(v) Investments consisting of non-cash consideration from a
sale, assignment, transfer, lease, conveyance or other disposition
of property permitted by SECTION 7.3(B);
(vi) Investments consisting of intercompany loans from any
Subsidiary to the Borrower or any other Subsidiary permitted by
SECTION 7.3(A)(VI);
(vii) Investments in any Controlled Subsidiary of the
Borrower;
(viii) Investments constituting Permitted Acquisitions; and
54
(ix) Investments in addition to those referred to elsewhere in
this SECTION 7.3(D) in an amount not to exceed $1,000,000 in the
aggregate at any time outstanding;
PROVIDED, HOWEVER, that the Investments described in CLAUSES (V), (VIII)
and (IX) above shall not be permitted if either a Default or Unmatured
Default shall have occurred and be continuing on the date thereof or would
result therefrom.
(e) NON-GUARANTOR SUBSIDIARIES OR NON-PLEDGED SUBSIDIARIES. The
Borrower shall not permit the total revenues of the Subsidiaries which are
not Guarantors or the Capital Stock of which is not pledged (such revenues
to be calculated on a basis consistent with the calculation of
Consolidated Revenues) to be equal to or greater than ten percent (10%) of
Consolidated Revenues.
(f) RESTRICTED PAYMENTS. Neither the Borrower nor any of its
Subsidiaries shall declare or make any Restricted Payment, except:
(i) the defeasance, redemption, repurchase or prepayment of
any Permitted Subordinated Indebtedness with the net cash proceeds
of Permitted Refinancing Indebtedness;
(ii) the defeasance, redemption, repurchase or prepayment of
any Permitted Subordinated Indebtedness; PROVIDED that the aggregate
amount so defeased, redeemed, repurchased or prepaid after the
Closing Date shall not exceed an amount equal to ten percent (10%)
of the Aggregate Commitment;
(iii) in connection with the repurchase, redemption or other
acquisition or retirement for value of any Equity Interests;
PROVIDED that the aggregate purchase price of all such repurchased,
redeemed, acquired or retired Equity Interests shall not exceed
$1,000,000 in the aggregate since the Closing Date or such larger
amount as may be agreed to by the Required Lenders; and
(iv) where the consideration therefor consists solely of
Equity Interests (but excluding Disqualified Stock) of the Borrower
or its Subsidiaries provided no Change of Control would occur as a
result thereof;
PROVIDED, HOWEVER, that the Restricted Payments described in CLAUSES(I),
(II) and (III) above shall not be permitted if either a Default shall have
occurred and be continuing at the date of declaration or payment thereof
or would result therefrom.
(g) CONDUCT OF BUSINESS; SUBSIDIARIES; ACQUISITIONS.
(i) Neither the Borrower nor any of its Subsidiaries shall
engage in any business other than the businesses engaged in by the
Borrower on the Closing Date and any business or activities which
are substantially similar, related or incidental thereto.
(ii) The Borrower may create, acquire and/or capitalize any
Subsidiary (a "NEW SUBSIDIARY") after the date hereof pursuant to
any transaction that is permitted by or not otherwise prohibited by
this Agreement; PROVIDED that upon the creation or acquisition of
each New Subsidiary, the Borrower shall cause each New Subsidiary
that is a Material Subsidiary to promptly deliver to the Agent an
executed counterpart of a Guaranty Supplemental to become a
Guarantor under the Guaranty in the form of EXHIBIT J attached
55
hereto and appropriate corporate resolutions, opinions and other
documentation in form and substance satisfactory to the Agent, and
all New Subsidiaries that are Material Subsidiaries shall be
Controlled Subsidiaries.
(iii) The Borrower shall not make any Acquisitions, other than
Acquisitions meeting the following requirements (each such
Acquisition constituting a "PERMITTED ACQUISITION"):
(A) no Default or Unmatured Default shall have occurred
and be continuing or would result from such Acquisition or the
incurrence of any Indebtedness in connection therewith;
(B) in the case of an Acquisition of Equity Interests of
an entity, such Acquisition shall be of at least ninety
percent (90%) of the Equity Interests of such entity;
(C) the businesses being acquired shall be substantially
similar, related or incidental to the businesses or activities
engaged in by the Borrower and its Subsidiaries on the Closing
Date;
(D) the Indebtedness incurred by the Borrower to the
Seller as part of the consideration therefor (other than
Indebtedness assumed in connection therewith and permitted
pursuant to CLAUSES (IX), (XII) or (XIII) of SECTION 7.3(A))
shall be Permitted Subordinated Indebtedness under SECTION
7.3(A);
(E) prior to each such Acquisition, the Borrower shall
deliver to the Agent and the Lenders a certificate from one of
the Authorized Officers, (1) calculating the purchase price
and EBITDA for purposes of CLAUSE (H) below; and (2)
certifying that after giving effect to such Acquisition and
the incurrence of any Indebtedness hereunder and permitted by
SECTION 7.3(A) in connection therewith, on a PRO FORMA basis,
as if the Acquisition and such incurrence of Indebtedness had
occurred on the first day of the twelve-month period ending on
the last day of the Borrower's most recently completed fiscal
quarter, the Borrower would have been in compliance with all
of the covenants contained in this Agreement, including,
without limitation, the financial covenants set forth in
SECTION 7.4;
(F) the purchase is consummated pursuant to a negotiated
acquisition agreement on a non-hostile basis;
(G) after giving effect to such Acquisition, the
representations and warranties set forth in ARTICLE VI hereof
shall be true and correct in all material re spects on and as
of the date of such Acquisition with the same effect as though
made on and as of such date; and
(H) the written consent of the Required Lenders shall
have been obtained in connection with any Acquisition if:
(1) the aggregate, without duplication, of (a) the
cash portion of the purchase price, PLUS (b) the
difference (if positive) of (i) Indebtedness incurred or
assumed in connection with such Acquisition
56
MINUS (ii) cash acquired in such Acquisition is greater
than $15,000,000; or
(2) the cash portion of the purchase price for
such Acquisition, together with the aggregate cash
portions of the purchase price for all other Permitted
Acquisitions for the then fiscal year exceeds
$40,000,000; or
(3) (a) the aggregate purchase price (including,
without limitation or duplication, cash, stock,
Indebtedness assumed (net of any cash acquired), and
transaction related contractual payments, including
amounts payable under non-compete, consulting or similar
agreements)(valuing all non-cash consideration at Fair
Value) (the "PURCHASE PRICE") is equal to or greater
than $5,000,000; and (b) the Purchase Price is equal to
or greater than seven (7) times the EBITDA of the target
entity for the last 12-month period preceding such
Acquisition for which financial statements are
available.
With respect to any Acquisition where the target entity's revenues
for the 12-month period ended immediately preceding such Acquisition
are equal to or greater than ten percent (10%) of the Borrower's and
its Subsidiaries' Consolidated Revenues, the Borrower shall (a) have
obtained (and shall have based the calculations set forth above on)
historical audited financial statements for the target and/or
reviewed unaudited financial statements for the target for a period
of not less than two years, obtained from the seller or provided by
independent certified public accountants retained for the purposes
of such Acquisition, broken down by fiscal quarter in the Borrower's
reasonable judgment, copies of which shall be provided to the Agent
and the Lenders and (b) at the request of the Required Lenders (such
request not to be made more frequently than once in any fiscal
quarter) provide such financial information as shall be reasonably
acceptable to the Agent and the Required Lenders demonstrating the
Borrower's PRO FORMA compliance with the covenants after taking into
account such Acquisition and the incurrence of any Indebtedness in
connection therewith.
(h) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Neither the
Borrower nor any of its Subsidiaries shall directly or indirectly enter
into or permit to exist any transaction (including, without limitation,
the purchase, sale, lease or exchange of any property or the rendering of
any service) with any holder or holders of any of the Equity Interests of
the Borrower, or with any Affiliate of the Borrower which is not its
Subsidiary, on terms that are less favorable to the Borrower or any of its
Subsidiaries, as applicable, than those that might be obtained in an arm's
length transaction at the time from Persons who are not such a holder or
Affiliate, except for Restricted Payments permitted by SECTION 7.3(F).
(i) RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Borrower nor any
of its Subsidiaries shall enter into any merger or consolidation, or
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution),
or convey, lease, sell, transfer or otherwise dispose of, in one
transaction or series of transactions, all or substantially all of the
Borrower's or any such Subsidiary's business or property, whether now or
hereafter acquired, except (i) transactions permitted under SECTIONS
7.3(B) or 7.3(G) (ii) the merger of a Subsidiary of the Borrower into a
Person acquired in connection with a Permitted Acquisition; (iii) the
merger of a wholly-owned Subsidiary of the Borrower with and into the
Borrower; and (iv) the merger of a Subsidiary of the Borrower with another
Subsidiary of the Borrower; PROVIDED, HOWEVER, that (i) with respect to
any
57
such permitted mergers involving any Guarantor, the surviving corporation
in the merger shall also be or become a Guarantor; and (ii) after the
consummation of any such transaction, the Borrower shall be in compliance
with the provisions of SECTIONS 7.2(K) and 7.3(E).
(j) SALES AND LEASEBACKS. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed) (i)
which it or one of its Subsidiaries sold or transferred or is to sell or
transfer to any other Person, or (ii) which it or one of its Subsidiaries
intends to use for substantially the same purposes as any other property
which has been or is to be sold or transferred by it or one of its
Subsidiaries to any other Person in connection with such lease, unless (i)
the sale involved is not prohibited under SECTION 7.3(B), (ii) the lease
does not involve Indebtedness prohibited under SECTION 7.3(A) and (iii)
the aggregate amount of all obligations incurred by the Borrower and its
Subsidiaries in connection therewith does not exceed $5,000,000
outstanding at any time.
(k) MARGIN REGULATIONS. Neither the Borrower nor any of its
Subsidiaries, shall use all or any portion of the proceeds of any credit
extended under this Agreement to purchase or carry Margin Stock.
(l) ERISA. The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in
any prohibited transaction described in Sections 406 of ERISA or
4975 of the Code for which a statutory or class exemption is not
available or a private exemption has not been previously obtained
from the DOL;
(ii) permit to exist any accumulated funding deficiency (as
defined in Sections 302 of ERISA and 412 of the Code), with respect
to any Benefit Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail, to
pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to
terminate, any Benefit Plan which would result in any liability of
the Borrower or any Controlled Group member under Title IV of ERISA;
(v) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any Controlled Group member
may be required to make under any agreement relating to such
Multiemployer Plan, or any law pertaining thereto;
(vi) fail, or permit any Controlled Group member to fail, to
pay any required installment or any other payment required under
Section 412 of the Code on or before the due date for such
installment or other payment; or
(vii) amend, or permit any Controlled Group member to amend, a
Plan resulting in an increase in current liability for the plan year
such that the Borrower or any Controlled Group member is required to
provide security to such Plan under Section 401(a)(29) of the Code,
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except where such transactions, events, circumstances, or failures will
not have or is not reasonably likely to subject the Borrower and its
Subsidiaries to liability individually or in the aggregate in excess of
$5,000,000.
(m) ISSUANCE OF EQUITY INTERESTS. The Borrower shall not issue any
Equity Interests if as a result of such issuance a Change of Control shall
occur. None of the Borrower's Subsidiaries shall issue any Equity
Interests other than to the Borrower.
(n) CORPORATE DOCUMENTS. Neither the Borrower nor any of its
Subsidiaries shall amend, modify or otherwise change any of the terms or
provisions in any of their respective constituent documents as in effect
on the Closing Date hereof in any manner adverse in any material respect
to the interests of the Lenders, without the prior written consent of the
Required Lenders.
(o) FISCAL YEAR. Neither the Borrower nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes
from a period consisting of the 12-month period ending on December 31 of
each calendar year.
(p) SUBSIDIARY COVENANTS. The Borrower will not, and will not permit
any Subsidiary to, create or otherwise cause to become effective any
consensual encumbrance or restriction of any kind on the ability of any
Subsidiary to pay dividends or make any other distribution on its stock,
or make any other Restricted Payment, pay any Indebtedness or other
Obligation owed to the Borrower or any other Subsidiary, make loans or
advances or other Investments in the Borrower or any other Subsidiary, or
sell, transfer or otherwise convey any of its property to the Borrower or
any other Subsidiary.
(q) HEDGING OBLIGATIONS. The Borrower shall not and shall not permit
any of its Subsidiaries to enter into any interest rate, commodity or
foreign currency exchange, swap, collar, cap or similar agreements
evidencing Hedging Obligations, other than interest rate, foreign currency
or commodity exchange, swap, collar, cap or similar agreements entered
into by the Borrower or a Subsidiary pursuant to which the Borrower or
such Subsidiary has hedged its actual interest rate, foreign currency or
commodity exposure.
7.4 FINANCIAL COVENANTS. The Borrower shall comply with the following:
(a) FIXED CHARGE COVERAGE RATIO. The Borrower shall maintain a ratio
("FIXED CHARGE COVERAGE RATIO") of (i) the sum of EBITDA MINUS cash Taxes
paid to (ii) the sum of Interest Expense PLUS twenty percent (20%) of
Indebtedness for borrowed money, of 1.40 to 1.00 for each fiscal quarter
commencing with the fiscal quarter ending December 31, 1998 and each
fiscal quarter thereafter. In each case, the Fixed Charge Coverage Ratio
shall be determined as of the last day of each fiscal quarter based upon
(A) for Indebtedness for borrowed money, the outstanding principal amount
of such Indebtedness on such day, and (B) for EBITDA, Interest Expense
PLUS Taxes for the four-quarter period ending on such day.
(b) TOTAL DEBT TO EBITDA RATIO. The Borrower shall not at any time
permit the ratio (the "LEVERAGE RATIO") of (i) Total Debt of the Borrower
and its consolidated Subsidiaries to (ii) EBITDA of the Borrower and its
consolidated Subsidiaries, to be greater than 3.00 to 1.00. The Leverage
Ratio shall be calculated, in each case, determined as of the last day of
each fiscal quarter (commencing with the fiscal quarter ending December
31, 1998 and each fiscal quarter thereafter) based upon (A) for Total
Debt, outstanding principal amount of Total Debt as of the last day of
each
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such fiscal quarter; and (B) for EBITDA, EBITDA for the four-quarter
period ending on such day, calculated as set forth in the definition
thereof.
(c) SENIOR DEBT TO EBITDA RATIO. The Borrower shall not at any time
permit the ratio (the "SENIOR LEVERAGE RATIO") of (i) Senior Debt of the
Borrower and its consolidated Subsidiaries to (ii) EBITDA of the Borrower
and its consolidated Subsidiaries to be greater than 2.50 to 1.00. The
Senior Leverage Ratio shall be calculated, in each case, as of the last
day of each fiscal quarter (commencing with the fiscal quarter ending
December 31, 1998 and each fiscal quarter thereafter) based upon (A) for
Senior Debt, the Senior Debt as of the last day of each such fiscal
quarter; and (B) for EBITDA, EBITDA for the four-quarter period ending on
such day; calculated as set forth in the definition thereof.
(d) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not permit
its Consolidated Net Worth at any time to be less than the sum of (i)
$75,000,000 PLUS (ii) seventy-five percent (75%) of Net Income (if
positive) calculated separately for each fiscal quarter ending after June
30, 1998, PLUS (iii) seventy-five percent (75%) of the adjustment to
stockholders' equity made in connection with the issuance of any Capital
Stock.
(e) CAPITAL EXPENDITURES. The Borrower will not, nor will it permit
any Subsidiary to, expend, or be committed to expend, for Capital
Expenditures in the acquisition of fixed assets, for each of the following
periods, individually or in the aggregate, in excess of the following
amounts: (i) $10,000,000 from October 1, 1998 through December 31, 1998,
(ii) $30,000,000 from January 1, 1999 through December 31, 1999, (iii)
$40,000,000 from January 1, 2000 through December 31, 2000, and (iv)
$45,000,000 from January 1, 2001 through December 31, 2001 or the
Termination Date, whichever date occurs earlier.
ARTICLE VIII: DEFAULTS
8.1 DEFAULTS. Each of the following occurrences shall constitute a Default
under this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower shall (i) fail
to pay when due any of the Obligations consisting of principal with
respect to the Loans or (ii) shall fail to pay within three (3) Business
Days of the date when due any of the other Obligations under this
Agreement or the other Loan Documents.
(b) BREACH OF CERTAIN COVENANTS. The Borrower shall fail duly and
punctually to perform or observe any agreement, covenant or obligation
binding on the Borrower under:
(i) SECTION 7.1(J) or 7.2(B) and such failure shall continue
unremedied for ten (10) Business Days;
(ii) SECTIONS 7.1(A), 7.2(C), 7.2(D), 7.2(E), 7.2(G) and
including 7.2(I) and such failure shall continue unremedied for five
(5) Business Days; or
(iii) SECTIONS 7.1(B),7.2(A), 7.2(F), 7.2(J), 7.3 or 7.4.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or
warranty made or deemed made by the Borrower to the Agent or any Lender
herein or by the Borrower or any of its Subsidiaries in any of the other
Loan Documents or in any written statement or certificate at any
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time given by any such Person pursuant to any of the Loan Documents shall
be false or misleading in any material respect on the date as of which
made (or deemed made).
(d) OTHER DEFAULTS. The Borrower shall default in the performance of
or compliance with any term contained in this Agreement (other than as
covered by PARAGRAPHS (A), (B) or (C) of this SECTION 8.1), or the
Borrower or any of its Subsidiaries shall default in the performance of or
compliance with any term contained in any of the other Loan Documents, and
such default shall continue for thirty (30) days after the occurrence
thereof.
(e) DEFAULT AS TO OTHER INDEBTEDNESS. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with
respect to any Indebtedness the outstanding principal amount of which
Indebtedness is in excess of $5,000,000; or any breach, default or event
of default shall occur, or any other condition shall exist under any
instrument, agreement, or any other indenture pertaining to any such
Indebtedness, if the effect thereof is to cause an acceleration, mandatory
redemption, a requirement that the Borrower offer to purchase such
Indebtedness or other required repurchase of such Indebtedness, or permit
the holder(s) of such Indebtedness to accelerate the maturity of any such
Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to be
due and payable (by acceleration or otherwise) or required to be prepaid,
redeemed or otherwise repurchased by the Borrower or any of its
Subsidiaries (other than by a regularly scheduled required prepayment)
prior to the stated maturity thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against the
Borrower or any of the Borrower's Subsidiaries and the petition
shall not be dismissed, stayed, bonded or discharged within sixty
(60) days after commencement of the case; or a court having
jurisdiction in the premises shall enter a decree or order for
relief in respect of the Borrower or any of the Borrower's
Subsidiaries in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in
effect; or any other similar relief shall be granted under any
applicable federal, state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar
powers over the Borrower or any of the Borrower's Subsidiaries or
over all or a substantial part of the property of the Borrower or
any of the Borrower's Subsidiaries shall be entered; or an interim
receiver, trustee or other custodian of the Borrower or any of the
Borrower's Subsidiaries or of all or a substantial part of the
property of the Borrower or any of the Borrower's Subsidiaries shall
be appointed or a warrant of attachment, execution or similar
process against any substantial part of the property of the Borrower
or any of the Borrower's Subsidiaries shall be issued and any such
event shall not be stayed, dismissed, bonded or discharged within
sixty (60) days after entry, appointment or issuance.
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower
or any of the Borrower's Subsidiaries shall (i) commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, (ii) consent to the entry of an order for relief in
an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, (iii) consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property, (iv) make any assignment for the benefit
of creditors or (v) take any corporate action to authorize any of the
foregoing.
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(h) JUDGMENTS AND ATTACHMENTS. Any money judgment(s), writ or
warrant of attachment, or similar process against the Borrower or any of
its Subsidiaries or any of their respective assets involving in any single
case or in the aggregate an amount in excess of $2,500,000 is or are
entered and shall remain undischarged, unvacated, unbonded or unstayed for
a period of sixty (60) days or in any event later than fifteen (15) days
prior to the date of any proposed sale thereunder.
(i) DISSOLUTION. Any order, judgment or decree shall be entered
against the Borrower or any of its Subsidiaries decreeing its involuntary
dissolution or split up and such order shall remain undischarged and
unstayed for a period in excess of sixty (60) days; or the Borrower or any
of its Subsidiaries shall otherwise dissolve or cease to exist except as
specifically permitted by this Agreement.
(j) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any
reason, (i) any Loan Document as a whole that materially affects the
ability of the Agent, or any of the Lenders to enforce the Obligations or
enforce their rights against the Collateral ceases to be in full force and
effect or the Borrower or any of the Borrower's Subsidiaries party thereto
seeks to repudiate its obligations thereunder or the Liens intended to be
created thereby are, or the Borrower or any such Subsidiary seeks to
render such Liens, invalid or unperfected, or (ii) any Lien on the Capital
Stock of any Material Subsidiary shall, at any time, for any reason, be
invalidated or otherwise cease to be in full force and effect, or such
Lien shall not have the priority contemplated by this Agreement or the
Loan Documents.
(k) TERMINATION EVENT. Any Termination Event occurs which is
reasonably likely to subject the Borrower or any of its Subsidiaries to
liability individually or in the aggregate in excess of $5,000,000.
(l) WAIVER OF MINIMUM FUNDING STANDARD. If the plan administrator of
any Plan applies under Section 412(d) of the Code for a waiver of the
minimum funding standards of Section 412(a) of the Code and any Lender
believes the substantial business hardship upon which the application for
the waiver is based could reasonably be expected to subject either the
Borrower or any Controlled Group member to liability individually or in
the aggregate in excess of $1,000,000.
(m) CHANGE OF CONTROL. A Change of Control shall occur.
(n) HEDGING AGREEMENTS. Nonpayment by the Borrower or any Subsidiary
of any obligation under any contract with respect to Hedging Obligations
entered into by the Borrower or such Subsidiary with any Lender (or
Affiliate thereof) or the breach by the Borrower or Subsidiary of any
other term, provision or condition contained in any agreement and such
nonpayment or breach shall continue for ten (10) days after the occurrence
thereof.
(o) GUARANTOR DEFAULT OR REVOCATION. Any Guaranty shall fail to
remain in full force or effect or any action shall be taken by the
Borrower or any Subsidiary to discontinue or to assert the invalidity or
unenforceability of any Guaranty, or any Guarantor shall fail to comply
with any of the terms or provisions of any Guaranty to which it is a
party, or any Guarantor denies that it has any further liability under any
Guaranty to which it is a party, or gives notice to such effect.
(p) FAILURE OF SUBORDINATION. The subordination provisions of the
documents and instruments evidencing any Permitted Subordinated
Indebtedness in an individual or aggregate
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principal amount outstanding in excess of $5,000,000 shall, at any time,
be invalidated or otherwise cease to be in full force and effect.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS
AND REMEDIES
9.1 TERMINATION OF COMMITMENTS; ACCELERATION. If any Default described in
SECTION 8.1(F) or 8.1(G) occurs with respect to the Borrower, the obligations of
the Lenders to make Loans hereunder and the obligation of the Agent to issue
Letters of Credit hereunder shall automatically terminate and the Obligations
shall immediately become due and payable without any election or action on the
part of the Agent or any Lender. If any other Default occurs, the Required
Lenders may terminate or suspend the obligations of the Lenders to make Loans
hereunder and the obligation of the Issuing Banks to issue Letters of Credit
hereunder, or declare the Obligations to be due and payable, or both, whereupon,
after written notice to the Borrower, the Obligations shall become immediately
due and payable, without presentment, demand, protest or other notice of any
kind, all of which the Borrower expressly waives.
9.2 DEFAULTING LENDER. In the event that any Lender fails to fund its Pro
Rata Share of any Advance requested or deemed requested by the Borrower, which
such Lender is obligated to fund under the terms of this Agreement (the funded
portion of such Advance being hereinafter referred to as a "NON PRO RATA LOAN"),
until the earlier of such Lender's cure of such failure and the termination of
the Commitments, the proceeds of all amounts thereafter repaid to the Agent by
the Borrower and otherwise required to be applied to such Lender's share of all
other Obligations pursuant to the terms of this Agreement shall be advanced to
the Borrower by the Agent on behalf of such Lender to cure, in full or in part,
such failure by such Lender, but shall nevertheless be deemed to have been paid
to such Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:
(i) the foregoing provisions of this SECTION 9.2 shall apply only
with respect to the proceeds of payments of Obligations and shall not
affect the conversion or continuation of Loans pursuant to SECTION 2.8;
(ii) any such Lender shall be deemed to have cured its failure to
fund its Pro Rata Share of any Advance at such time as an amount equal to
such Lender's original Pro Rata Share of the requested principal portion
of such Advance is fully funded to the Borrower, whether made by such
Lender itself or by operation of the terms of this SECTION 9.2, and
whether or not the Non Pro Rata Loan with respect thereto has been repaid,
converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in part,
any such Lender's failure to fund its Pro Rata Share of any Advance ("CURE
LOANS") shall bear interest at the rate applicable to Floating Rate Loans
in effect from time to time, and for all other purposes of this Agreement
shall be treated as if they were Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to its
desired application, all repayments of principal which, in accordance with
the other terms of this Agreement, would be applied to the outstanding
Floating Rate Loans shall be applied FIRST, ratably to all Floating Rate
Loans constituting Non Pro Rata Loans, SECOND, ratably to Floating Rate
Loans other than those constituting Non Pro Rata Loans or Cure Loans and,
THIRD, ratably to Floating Rate Loans constituting Cure Loans;
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(v) for so long as and until the earlier of any such Lender's cure
of the failure to fund its Pro Rata Share of any Advance and the
termination of the Commitments, the term "Required Lenders" for purposes
of this Agreement shall mean Lenders (excluding all Lenders whose failure
to fund their respective Pro Rata Shares of such Advance have not been so
cured) whose Pro Rata Shares represent at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate Pro Rata Shares of such Lenders; and
(vi) for so long as and until any such Lender's failure to fund its
Pro Rata Share of any Advance is cured in accordance with SECTION 9.2(II),
(A) such Lender shall not be entitled to any facility fees with respect to
its Commitment and (B) such Lender shall not be entitled to any letter of
credit fees, which facility fees and letter of credit fees shall accrue in
favor of the Lenders which have funded their respective Pro Rata Share of
such requested Advance, shall be allocated among such performing Lenders
ratably based upon their relative Commitments, and shall be calculated
based upon the average amount by which the aggregate Commitments of such
performing Lenders exceeds the sum of (I) the outstanding principal amount
of the Loans owing to such performing Lenders, PLUS (II) the outstanding
Reimbursement Obligations owing to such performing Lenders, PLUS (III) the
aggregate participation interests of such performing Lenders arising
pursuant to SECTION 3.5 with respect to undrawn and outstanding Letters of
Credit.
9.3 AMENDMENTS. Subject to the provisions of this ARTICLE IX, the Required
Lenders (or the Agent with the consent in writing of the Required Lenders) and
the Borrower may enter into agreements supplemental hereto for the purpose of
adding or modifying any provisions to the Loan Documents or changing in any
manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder or any provision in any Loan Document; PROVIDED, HOWEVER, that
no such supplemental agreement shall, without the consent of each Lender
affected thereby:
(i) Postpone or extend the Termination Date or any other date fixed
for any payment of principal of, or interest on, the Loans, the
Reimbursement Obligations or any fees or other amounts payable to such
Lender (except with respect to (a) any modifications of the provisions
relating to prepayments of Loans and other Obligations and (b) a waiver of
the application of the default rate of interest pursuant to SECTION 2.9
hereof);
(ii) Reduce the principal amount of any Loans or L/C Obligations, or
reduce the rate or extend the time of payment of interest or fees thereon;
(iii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters;
(iv) Other than pursuant to the provisions of SECTION 2.4(B),
increase the amount of the Commitment of any Lender hereunder;
(v) Permit the Borrower to assign its rights under this Agreement;
(vi) Amend this SECTION 9.3;
(vii) Other than in connection with a transaction permitted under
the terms of the Agreement release any guarantor of the Obligations;
64
(viii) Other than in connection with a transaction permitted under
the terms of the Agreement, release all or substantially all of the
Collateral; or
(ix) Amend the terms of SECTION 12.2.
No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent, (b) Swing Line Loans
shall be effective without the written consent of the Swing Line Bank and (c)
Letters of Credit shall be effective without the written consent of the Issuing
Banks. The Agent may waive payment of the fee required under SECTION 13.3(B)
without obtaining the consent of any of the Lenders.
9.4 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to SECTION 9.3, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE X: GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
10.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the Agent may,
but shall have no obligation to (i) at any time, pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against any Collateral and (ii) after the occurrence and during the continuance
of a Default, make any other payment or perform any act required of the Borrower
under any Loan Document or take any other action which the Agent in its
discretion deems necessary or desirable to protect or preserve the Collateral or
enhance the likelihood of repayment of the Obligations. The Agent shall use its
reasonable efforts to give the Borrower and the Lenders notice of any action
taken under this SECTION 10.3 prior to the taking of such action or promptly
thereafter provided the failure to give such notice shall not affect the
Borrower's or Lenders' obligations in respect thereof. The Borrower agrees to
pay the Agent, upon demand, the principal amount of all funds advanced by the
Agent under this SECTION 10.3, together with interest thereon at the rate from
time to time applicable to Floating Rate Loans from the date of such advance
until the outstanding principal balance thereof is paid in full. If the Borrower
fails to make payment in respect of any such advance under this SECTION 10.3
within one (1) Business Day after the date the Borrower receives written demand
therefor from the Agent, the Agent shall promptly notify each Lender and each
Lender agrees that it shall thereupon make available to the Agent, in Dollars in
immediately available funds, the amount equal to such Lender's Pro Rata Share of
such advance. If such funds are not made available to the Agent by such Lender
within one (1) Business Day after the Agent's demand therefor, the Agent will be
entitled to recover any such amount from such Lender together with interest
thereon at the Federal Funds
65
Effective Rate for each day during the period commencing on the date of such
demand and ending on the date such amount is received. The failure of any Lender
to make available to the Agent its Pro Rata Share of any such unreimbursed
advance under this SECTION 10.3 shall neither relieve any other Lender of its
obligation hereunder to make available to the Agent such other Lender's Pro Rata
Share of such advance on the date such payment is to be made nor increase the
obligation of any other Lender to make such payment to the Agent. All
outstanding principal of, and interest on, advances made under this SECTION 10.3
shall constitute Obligations for purposes hereof.
10.4 HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 ENTIRE AGREEMENT. The Loan Documents embody the entire agreement and
understanding among the Borrower, the Agent and the Lenders and supersede all
prior agreements and understandings among the Borrower, the Agent and the
Lenders relating to the subject matter thereof.
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to confer
any right or benefit upon any Person other than the parties to this Agreement
and their respective successors and assigns.
10.7 EXPENSES; INDEMNIFICATION.
(a) EXPENSES. The Borrower shall reimburse the Agent for any
reasonable costs, internal charges and out-of-pocket expenses (including
reasonable attorneys' and paralegals' fees and time charges of attorneys
and paralegals for the Agent, which attorneys and paralegals may be
employees of the Agent) paid or incurred by the Agent in connection with
the preparation, negotiation, execution, delivery, syndication, review,
amendment, modification, and administration of the Loan Documents. The
Borrower also agrees to reimburse the Agent and the Lenders for any costs,
internal charges and out-of-pocket expenses (including attorneys' and
paralegals' fees and time charges of attorneys and paralegals for the
Agent and the Lenders, which attorneys and paralegals may be employees of
the Agent or the Lenders) paid or incurred by the Agent or any Lender in
connection with the collection of the Obligations and enforcement of the
Loan Documents. In addition to expenses set forth above, the Borrower
agrees to reimburse the Agent, promptly after the Agent's request
therefor, for each audit or other business analysis performed by or for
the benefit of the Lenders in connection with this Agreement or the other
Loan Documents at a time when a Default exists in an amount equal to the
Agent's then reasonable and customary charges for each person employed to
perform such audit or analysis, plus all costs and expenses (including
without limitation, travel expenses) incurred by the Agent in the
performance of such audit or analysis. Agent shall provide the Borrower
with a detailed statement of all reimbursements requested under this
SECTION 10.7(A).
(b) INDEMNITY. THE BORROWER FURTHER AGREES TO DEFEND, PROTECT,
INDEMNIFY, AND HOLD HARMLESS THE AGENT AND EACH AND ALL OF THE LENDERS AND
EACH OF THEIR RESPECTIVE AFFILIATES, AND EACH OF SUCH AGENT'S, LENDER'S,
OR AFFILIATE'S RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS AND
AGENTS (INCLUDING, WITHOUT LIMITATION, THOSE RETAINED IN CONNECTION WITH
THE SATISFACTION OR ATTEMPTED SATISFACTION OF ANY OF THE CONDITIONS SET
FORTH IN ARTICLE V)
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(COLLECTIVELY, THE "INDEMNITEES") FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, CLAIMS, COSTS, EXPENSES OF ANY KIND OR NATURE WHATSOEVER
(INCLUDING, WITHOUT LIMITATION, THE FEES AND DISBURSEMENTS OF COUNSEL FOR
SUCH INDEMNITEES IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR
JUDICIAL PROCEEDING, WHETHER OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A
PARTY THERETO), IMPOSED ON, INCURRED BY, OR ASSERTED AGAINST SUCH
INDEMNITEES IN ANY MANNER RELATING TO OR ARISING OUT OF:
(I) ANY LOAN DOCUMENT, OR ANY ACT, EVENT OR TRANSACTION
RELATED OR ATTENDANT THERETO OR TO ANY PERMITTED ACQUISITION, THE
MAKING OF THE LOANS, AND THE ISSUANCE OF AND PARTICIPATION IN
LETTERS OF CREDIT HEREUNDER, THE MANAGEMENT OF SUCH LOANS OR LETTERS
OF CREDIT, THE USE OR INTENDED USE OF THE PROCEEDS OF THE LOANS OR
LETTERS OF CREDIT HEREUNDER, OR ANY OF THE OTHER TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS; OR
(II) ANY LIABILITIES, OBLIGATIONS, RESPONSIBILITIES, LOSSES,
DAMAGES, PERSONAL INJURY, DEATH, PUNITIVE DAMAGES, ECONOMIC DAMAGES,
CONSEQUENTIAL DAMAGES, TREBLE DAMAGES, INTENTIONAL, WILLFUL OR
WANTON INJURY, DAMAGE OR THREAT TO THE ENVIRONMENT, NATURAL
RESOURCES OR PUBLIC HEALTH OR WELFARE, COSTS AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, ATTORNEY, EXPERT AND CONSULTING FEES
AND COSTS OF INVESTIGATION, FEASIBILITY OR REMEDIAL ACTION STUDIES),
FINES, PENALTIES AND MONETARY SANCTIONS, INTEREST, DIRECT OR
INDIRECT, KNOWN OR UNKNOWN, ABSOLUTE OR CONTINGENT, PAST, PRESENT OR
FUTURE RELATING TO VIOLATION OF ANY ENVIRONMENTAL, HEALTH OR SAFETY
REQUIREMENTS OF LAW ARISING FROM OR IN CONNECTION WITH THE PAST,
PRESENT OR FUTURE OPERATIONS OF THE BORROWER, ITS SUBSIDIARIES OR
ANY OF THEIR RESPECTIVE PREDECESSORS IN INTEREST, OR, THE PAST,
PRESENT OR FUTURE ENVIRONMENTAL, HEALTH OR SAFETY CONDITION OF ANY
RESPECTIVE PROPERTY OF THE BORROWER OR ITS SUBSIDIARIES, THE
PRESENCE OF ASBESTOS-CONTAINING MATERIALS AT ANY RESPECTIVE PROPERTY
OF THE BORROWER OR ITS SUBSIDIARIES OR THE RELEASE OR THREATENED
RELEASE OF ANY CONTAMINANT INTO THE ENVIRONMENT (COLLECTIVELY, THE
"INDEMNIFIED MATTERS");
(INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF ANY
INDEMNITEE), PROVIDED, HOWEVER, THAT THE BORROWER SHALL HAVE NO
OBLIGATION TO AN INDEMNITEE HEREUNDER WITH RESPECT TO INDEMNIFIED
MATTERS CAUSED BY OR RESULTING FROM (Y) A DISPUTE AMONG THE
LENDERS OR A DISPUTE BETWEEN ANY LENDER AND THE AGENT, OR (Z) THE
WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF SUCH INDEMNITEE OR
BREACH OF CONTRACT BY SUCH INDEMNITEE WITH RESPECT TO THE LOAN
DOCUMENTS, IN EACH CASE, AS DETERMINED BY THE FINAL NON-APPEALED
JUDGMENT OF A COURT OF COMPETENT JURISDICTION. IF THE UNDERTAKING
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TO INDEMNIFY, PAY AND HOLD HARMLESS SET FORTH IN THE PRECEDING SENTENCE
MAY BE UNENFORCEABLE BECAUSE IT IS VIOLATIVE OF ANY LAW OR PUBLIC POLICY,
THE BORROWER SHALL CONTRIBUTE THE MAXIMUM PORTION WHICH IT IS PERMITTED TO
PAY AND SATISFY UNDER APPLICABLE LAW, TO THE PAYMENT AND SATISFACTION OF
ALL INDEMNIFIED MATTERS INCURRED BY THE INDEMNITEES.
(c) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS. THE BORROWER
FURTHER AGREES TO ASSERT NO CLAIM AGAINST ANY OF THE INDEMNITEES ON ANY
THEORY OF LIABILITY FOR CONSEQUENTIAL, SPECIAL, INDIRECT, EXEMPLARY OR
PUNITIVE DAMAGES. NO SETTLEMENT SHALL BE ENTERED INTO BY THE BORROWER OR
ANY IF ITS SUBSIDIARIES WITH RESPECT TO ANY CLAIM, LITIGATION, ARBITRATION
OR OTHER PROCEEDING RELATING TO OR ARISING OUT OF THE TRANSACTIONS
EVIDENCED BY THE LOAN DOCUMENTS OR IN CONNECTION WITH ANY PERMITTED
ACQUISITION OR RELATED TRANSACTIONS (WHETHER OR NOT THE AGENT OR ANY
LENDER OR ANY INDEMNITEE IS A PARTY THERETO) UNLESS SUCH SETTLEMENT
RELEASES ALL INDEMNITEES FROM ANY AND ALL LIABILITY WITH RESPECT THERETO.
(d) SURVIVAL OF AGREEMENTS. The obligations and agreements of the
Borrower under this SECTION 10.7 shall survive the termination of this
Agreement.
10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing documents, and
requests hereunder shall be furnished to the Agent with sufficient counterparts
so that the Agent may furnish one to each of the Lenders.
10.9 ACCOUNTING. Except as provided to the contrary herein, all accounting
terms used herein shall be interpreted and all accounting determinations
hereunder shall be made in accordance with Agreement Accounting Principles.
10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.
10.12 GOVERNING LAW. ANY DISPUTE BETWEEN THE BORROWER AND THE AGENT, ANY
LENDER, OR ANY INDEMNITEE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN CONNECTION WITH, THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN ACCORDANCE WITH THE INTERNAL
LAWS (WITHOUT REGARD TO THE CONFLICTS OF LAWS PROVISIONS) OF THE STATE OF TEXAS.
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10.13 CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (B),
EACH OF THE PARTIES HERETO AGREES THAT ALL DISPUTES AMONG THEM ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR
OTHERWISE, SHALL BE RESOLVED EXCLUSIVELY BY STATE OR FEDERAL COURTS
LOCATED IN HOUSTON, TEXAS, BUT THE PARTIES HERETO ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE
OF HOUSTON, TEXAS. EACH OF THE PARTIES HERETO WAIVES IN ALL DISPUTES
BROUGHT PURSUANT TO THIS SUBSECTION (A) ANY OBJECTION THAT IT MAY HAVE TO
THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(b) OTHER JURISDICTIONS. THE BORROWER AGREES THAT THE AGENT, ANY
LENDER OR ANY INDEMNITEE SHALL HAVE THE RIGHT TO PROCEED AGAINST THE
BORROWER OR ITS PROPERTY IN A COURT IN ANY LOCATION TO ENABLE SUCH PERSON
TO (1) OBTAIN PERSONAL JURISDICTION OVER THE BORROWER OR (2) ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PERSON. THE
BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE
COURT IN WHICH SUCH PERSON HAS COMMENCED A PROCEEDING DESCRIBED IN THIS
SUBSECTION (B).
(c) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
PROCESS UPON IT AND IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY
WRITS, PROCESS OR SUMMONSES IN ANY SUIT, ACTION OR PROCEEDING BY THE
MAILING THEREOF BY THE AGENT OR THE LENDERS BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO THE BORROWER ADDRESSED AS PROVIDED HEREIN.
NOTHING HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF A PARTY
TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR
BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR
HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT
EXECUTED OR DELIVERED IN CONNECTION HEREWITH IN ANY JURISDICTION SET FORTH
ABOVE.
(d) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,
WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH. EACH
OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY
AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF
THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(e) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND
OTHERWISE REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL
PROCESS OR PROCEEDING TO REALIZE ON THE COLLATERAL ENFORCE ANY JUDGMENT OR
OTHER COURT ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY
SPECIFIC PERFORMANCE, TEMPORARY RESTRAINING
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ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT.
(f) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER
PARTY HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE
PROVISIONS OF THIS SECTION 10.13, WITH ITS COUNSEL.
10.14 NO STRICT CONSTRUCTION. The parties hereto have participated jointly
in the negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any provisions of this Agreement.
10.15 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees that
any and all claims of the Borrower against any Guarantor, any endorser or any
other guarantor of all or any part of the Obligations, or against any of its
properties, including, without limitation, pursuant to the any intercompany
Indebtedness permitted under SECTION 7.3(A)(VI), shall be subordinate and
subject in right of payment to the prior payment, in full and in cash, of all
Obligations. Notwithstanding any right of the Borrower to ask, demand, ▇▇▇ for,
take or receive any payment from any Guarantor, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Guarantor shall be and are subordinated to the
rights, if any, of the Lenders and the Agent in those assets. The Borrower shall
have no right to possession of any such asset or to foreclose upon any such
asset, whether by judicial action or otherwise, unless and until all of the
Obligations shall have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Agent and the Lenders have been terminated. If, during the
continuance of a Default, all or any part of the assets of any Guarantor, or the
proceeds thereof, are subject to any distribution, division or application to
the creditors of any Guarantor, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, then, and in any such event, any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any Guarantor
to the Borrower, including, without limitation, pursuant to the any intercompany
Indebtedness permitted under SECTION 7.3(A)(VI) ("INTERCOMPANY INDEBTEDNESS")
shall be paid or delivered directly to the Agent for application on any of the
Obligations, due or to become due, until such Obligations shall have first been
paid in full in cash and satisfied; PROVIDED, HOWEVER, that ordinary course
payments or distributions made by any Guarantor to the Borrower shall be
required to be paid or delivered to the Agent only upon the Agent's request. The
Borrower irrevocably authorizes and empowers the Agent to demand, ▇▇▇ for,
collect and receive every such payment or distribution and give acquittance
therefor and to make and present for and on behalf of the Borrower such proofs
of claim and take such other action, in the Agent's own name or in the name of
the Borrower or otherwise, as the Agent may deem necessary or advisable for the
enforcement of this SECTION 10.15. The Agent may vote such proofs of claim in
any such proceeding, receive and collect any and all dividends or other payments
or disbursements made thereon in whatever form the same may be paid or issued
and apply the same on account of any of the Obligations. Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Borrower upon or with respect to the Intercompany Indebtedness during the
continuance of a Default and prior to the satisfaction of all of the Obligations
and the termination of all financing arrangements under this Agreement and the
other Loan Documents between the Borrower and the Agent and the Lenders, the
Borrower shall receive and hold the same in trust, as trustee, for the benefit
of the Agent and the Lenders and shall forthwith deliver the same to the Agent,
for the benefit of the Agent and the Lenders, in precisely the form received
(except for the endorsement or assignment of the Borrower where necessary), for
application to any of the Obligations, due or not due, and, until so delivered,
the same shall be held in trust by the
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Borrower as the property of the Agent and the Lenders; PROVIDED, HOWEVER, that
ordinary course payments or distributions made by any Guarantor to the Borrower
shall be required to be paid or delivered to the Agent only upon the Agent's
request. If the Borrower fails to make any such endorsement or assignment to the
Agent, the Agent or any of its officers or employees are irrevocably authorized
to make the same. The Borrower agrees that until the Obligations have been paid
in full in cash and satisfied and all financing arrangements under this
Agreement and the other Loan Documents between the Borrower and the Agent and
the Lenders have been terminated, the Borrower will not assign or transfer to
any Person (other than the Agent) any claim the Borrower has or may have against
any Guarantor.
10.16 USURY NOT INTENDED. It is the intent of the Borrower and each Lender
in the execution and performance of this Agreement and the other Loan Documents
to contract in strict compliance with applicable usury laws, including conflicts
of law concepts, governing the Advances of each Lender including such applicable
laws of the State of Texas and the United States of America from time-to-time in
effect. In furtherance thereof, the Lenders and the Borrower stipulate and agree
that none of the terms and provisions contained in this Agreement or the other
Loan Documents shall ever be construed to create a contract to pay, as
consideration for the use, forbearance or detention of money, interest at a rate
in excess of the Maximum Rate and that for purposes hereof "interest" shall
include the aggregate of all charges which constitute interest under such laws
that are contracted for, charged or received under this Agreement; and in the
event that, notwithstanding the foregoing, under any circumstances the aggregate
amounts taken, reserved, charged, received or paid on the Advances, include
amounts which by applicable law are deemed interest which would exceed the
Maximum Rate, then such excess shall be deemed to be a mistake and each Lender
receiving same shall credit the same on the principal of its Notes (or if such
Notes shall have been paid in full, refund said excess to the Borrower). In the
event that the maturity of the Notes are accelerated by reason of any election
of the holder thereof resulting from any Default under this Agreement or
otherwise, or in the event of any required or permitted prepayment, then such
consideration that constitutes interest may never include more than the Maximum
Rate and excess interest, if any, provided for in this Agreement or otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be credited on the applicable Notes
(or, if the applicable Notes shall have been paid in full, refunded to the
Borrower of such interest). In determining whether or not the interest paid or
payable under any specific contingencies exceeds the Maximum Rate, the Borrower
and the Lenders shall to the maximum extent permitted under applicable law
amortize, prorate, allocate and spread in equal parts during the period of the
full stated term of the Notes all amounts considered to be interest under
applicable law at any time contracted for, charged, received or reserved in
connection with the Obligations. The provisions of this Section shall control
over all other provisions of this Agreement or the other Loan Documents which
may be in apparent conflict herewith. Borrower agrees that V.T.C.A., FINANCE
CODE CHAPTER 346 (which regulates certain revolving credit loan accounts and
revolving tri-party accounts), does not apply to the Obligations, other than ss.
346.004.
10.17 BUSINESS LOANS. The Borrower warrants and represents that the Loans
evidenced by the Notes are and shall be for business, commercial, investment or
other similar purposes and not primarily for personal, family, household or
agricultural use, as such terms are used in Chapter One ("Chapter One") of the
Texas Credit Code. At all such times, if any, as Chapter One shall establish a
Maximum Rate, the Maximum Rate shall be the "indicated rate ceiling" (as such
term is defined in Chapter One) from time to time in effect.
ARTICLE XI: THE AGENT
11.1 APPOINTMENT OF AGENT; NATURE OF RELATIONSHIP. NationsBank, N.A. is
appointed by the Lenders as the Agent hereunder and under each other Loan
Document, and each of the Lenders irrevocably
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authorizes the Agent (for so long as the Agent remains in such capacity under
this Agreement) to act as the contractual representative of such Lender with
only the rights and duties expressly set forth herein and in the other Loan
Documents. The Agent agrees to act as such contractual representative upon the
express conditions contained in this ARTICLE XI. Notwithstanding the use of the
defined term "Agent," it is expressly understood and agreed that the Agent shall
not have any fiduciary responsibilities to any Lender by reason of this
Agreement and that the Agent is merely acting as the representative of the
Lenders with only those duties as are expressly set forth in this Agreement and
the other Loan Documents. In its capacity as the Lenders' contractual
representative, the Agent (i) does not assume any fiduciary duties to any of the
Lenders, (ii) is a "representative" of the Lenders within the meaning of Section
9-105 of the Uniform Commercial Code and (iii) is acting as an independent
contractor, the rights and duties of which are limited to those expressly set
forth in this Agreement and the other Loan Documents. Each of the Lenders agrees
to assert no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender waives.
11.2 POWERS. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or under any of the other
Loan Documents except any action specifically provided by the Loan Documents
required to be taken by the Agent.
11.3 GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from (i) the Gross Negligence or
willful misconduct of such Person or (ii) breach of contract by such Person with
respect to the Loan Documents.
11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL, RECITALS,
ETC. Neither the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in ARTICLE V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or (v) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any of the other Loan
Documents, for the perfection or priority of any of the Liens on any of the
Collateral, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or for
the financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.
11.5 ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders (or any other percentage of Lenders specified to be the
applicable percentage in this Agreement or any other Loan Document to act on
specified matters), and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
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11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
11.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
11.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
solely from the Gross Negligence or willful misconduct of the Agent.
11.9 RIGHTS AS A LENDER. With respect to its Commitment, Loans made by it
and the Notes issued to it, the Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as through it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which such Person is not prohibited
hereby from engaging with any other Person.
11.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
11.11 SUCCESSOR AGENT. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, and the Agent may be removed at
any time with or without cause by written notice received by the Agent from the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty days
after the retiring Agent's giving notice of resignation, then the retiring Agent
may appoint, on behalf of the Borrower and the Lenders, a successor Agent.
Notwithstanding
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anything herein to the contrary, so long as no Default has occurred and is
continuing, each such successor Agent shall be subject to approval by the
Borrower, which approval shall not be unreasonably withheld. Such successor
Agent shall be a commercial bank having capital and retained earnings of at
least $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
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any retiring
Agent's resignation hereunder as Agent, the provisions of this ARTICLE XI shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent hereunder and under the other
Loan Documents.
11.12 COLLATERAL DOCUMENTS.
(a) Each Lender authorizes the Agent to enter into the Pledge
Agreements and each of the other Collateral documents contemplated thereby
(collectively, the "Collateral Documents") to which it is a party and to
take all action contemplated by such documents. Each Lender agrees that no
Holder of Secured Obligations (other than the Agent) shall have the right
individually to seek to realize upon the security granted by any
Collateral Document, it being understood and agreed that such rights and
remedies may be exercised solely by the Agent for the benefit of the
Holders of Secured Obligations upon the terms of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by any
Person as collateral security for the Obligations, the Agent is hereby
authorized to execute and deliver on behalf of the Holders of Secured
Obligations any Loan Documents necessary or appropriate to grant and
perfect a Lien on such Collateral in favor of the Agent on behalf of the
Holders of Secured Obligations.
(c) The Lenders hereby authorize the Agent, at its option and in its
discretion, to (y) release any Lien granted to or held by the Agent upon
any Collateral and/or (z) release any Guarantor from its obligations under
the Guaranty (i) upon termination of the Commitments and payment and
satisfaction of all of the Obligations at any time arising under or in
respect of this Agreement or the Loan Documents or the transactions
contemplated hereby or thereby; (ii) in connection with any transaction
permitted by, but only in accordance with, the terms of the applicable
Loan Document; or (iii) in connection with any transaction approved,
authorized or ratified in writing by the Required Lenders, unless such
release is required to be approved by all of the Lenders hereunder. Upon
request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral
pursuant to this SECTION 11.12(C).
(d) Upon any sale or transfer of assets constituting Collateral
which is permitted pursuant to the terms of any Loan Document, or
consented to in writing by the Required Lenders or all of the Lenders, as
applicable, or consummation of any transaction involving the sale of all
or substantially all of the assets of a Guarantor and upon at least five
Business Days' prior written request by the Borrower, the Agent shall (and
is hereby irrevocably authorized by the Lenders to) execute such documents
as may be necessary to evidence the release of the Liens granted to the
Agent for the benefit of the Holders of Secured Obligations herein or
pursuant hereto upon the Collateral that was sold or transferred or
evidence the release of the applicable Guarantor from its obligations
under the Guaranty; PROVIDED, HOWEVER, that (i) the Agent shall not be
required to execute any such document on terms which, in the Agent's
opinion, would expose the Agent to liability or create any obligation or
entail any consequence other than the release of such Liens without
recourse or warranty, and (ii) such release shall not in any manner
discharge, affect or impair the Secured Obligations any other Guarantor's
obligations under the Guaranty or any Liens
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upon (or obligations of the Borrower or any Subsidiary in respect of) all
interests retained by the Borrower or any Subsidiary, including (without
limitation) the proceeds of the sale, all of which shall continue to
constitute part of the Collateral.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due and
regardless of the adequacy of any collateral thereof.
12.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTIONS 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 APPLICATION OF PAYMENTS. Subject to the provisions of SECTION 9.2,
(i) prior to the occurrence of a Default, the Agent shall apply all payments and
prepayments in respect of the Obligations in such order as shall be specified by
the Borrower and (ii) after the occurrence of a Default, the Agent shall, unless
otherwise specified at the direction of the Required Lenders which direction
shall be consistent with the last sentence of this SECTION 12.3, apply all
payments and prepayments in respect of any Obligations and all proceeds of
Collateral in the following order:
(A) first, to pay interest on and then principal of any portion of
the Loans which the Agent may have advanced on behalf of any Lender for
which the Agent has not then been reimbursed by such Lender or the
Borrower;
(B) second, to pay interest on and then principal of any advance
made under SECTION 10.3 for which the Agent has not then been paid by the
Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the Issuing
Banks;
(E) fifth, to pay interest due in respect of Swing Line Loans;
(F) sixth, to pay interest due in respect of Loans (other than Swing
Line Loans) and L/C Obligations;
(G) seventh, to the ratable payment or prepayment of principal
outstanding on Swing Line Loans;
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(H) eighth, to the ratable payment or prepayment of principal
outstanding on Loans (other than Swing Line Loans) and Reimbursement
Obligations in such order as the Agent may determine in its sole
discretion;
(I) ninth, to provide required cash collateral, if required pursuant
to SECTION 3.10 and
(J) tenth, to the ratable payment of all other Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans (other than Swing Line Loans) shall be applied FIRST, to repay
outstanding Floating Rate Loans, and THEN to repay outstanding Eurodollar Rate
Loans with those Eurodollar Rate Loans which have earlier expiring Interest
Periods being repaid prior to those which have later expiring Interest Periods.
The order of priority set forth in CLAUSE (II) of this SECTION 12.3 and the
related provisions of this Agreement are set forth solely to determine the
rights and priorities of the Agent, the Swing Line Bank, and the Issuing Banks
as among themselves. The order of priority set forth in SUBCLAUSES (D) through
(J) of CLAUSE (II) of this SECTION 12.3 may at any time and from time to time be
changed by the Required Lenders without necessity of notice to or consent of or
approval by the Borrower, or any other Person; PROVIDED, that the order of
priority of payments in respect of Swing Line Loans may be changed only with the
prior written consent of the Swing Line Bank. The order of priority set forth in
SUBCLAUSES (A) through (C) of CLAUSE (II) of this SECTION 12.3 may be changed
only with the prior written consent of the Agent.
12.4 RELATIONS AMONG LENDERS.
(a) Except with respect to the exercise of set-off rights of any
Lender in accordance with SECTION 12.1, the proceeds of which are applied
in accordance with this Agreement, and except as set forth in the second
sentence of CLAUSE (B) below, each Lender agrees that it will not take any
action, nor institute any actions or proceedings, against the Borrower or
any other obligor hereunder or with respect to any Collateral or any Loan
Document, without the prior written consent of the Required Lenders or, as
may be provided in this Agreement or the other Loan Documents, at the
direction of the Agent.
(b) The Lenders are not partners or co-venturers, and no Lender
shall be liable for the acts or omissions of, or (except as otherwise set
forth herein in case of the Agent) authorized to act for, any other
Lender. Notwithstanding the foregoing, and subject to SECTION 12.2, any
Lender shall have the right to enforce on an unsecured basis the payment
of the principal of and interest on any Loan made by it after the date
such principal or interest has become due and payable pursuant to the
terms of this Agreement.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with SECTION 13.3 hereof. Notwithstanding clause (ii) of this SECTION 13.1, any
Lender may at any time, without the consent of the Borrower or the Agent, assign
all or any portion of its rights under this Agreement and its Notes to a Federal
Reserve Bank; PROVIDED, HOWEVER, that no such assignment shall release the
transferor Lender from its obligations hereunder. The Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until such
payee complies with SECTION 13.3 hereof in the case of an assignment thereof
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or, in the case of any other transfer, a written notice of the transfer is filed
with the Agent. Any assignee or transferee of a Note agrees by acceptance
thereof to be bound by all the terms and provisions of the Loan Documents. Any
request, authority or consent of any Person, who at the time of making such
request or giving such authority or consent is the holder of any Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.
13.2 PARTICIPATIONS.
(a) PERMITTED PARTICIPANTS; EFFECT. Subject to the terms set forth
in this SECTION 13.2, any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time sell to one or
more banks or other entities ("PARTICIPANTS") participations in all or a
portion of its rights, obligations or rights and obligations under this
Agreement (including all or a portion of its Commitments or its Loans);
PROVIDED, HOWEVER, that (i) such Lender's obligations under this Agreement
shall remain unchanged, (ii) such Lender shall remain solely responsible
to the other parties hereto for the performance of such obligations, (iii)
the Participant shall be entitled to the benefit of the provisions
contained in SECTIONS 4.1 through 4.5, and (iv) the Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement, and such
Lender shall retain the sole right to enforce the obligations of the
Borrower relating to its Loans and its Notes and to approve any amendment,
modification, or waiver of any provision of this Agreement (other than
amendments, modifications, or waivers decreasing the amount of principal
of or the rate at which interest is payable on such Loans or Notes,
extending any scheduled principal payment date or date fixed for the
payment of interest on such Loans or Notes, or extending its Commitment).
(b) BENEFIT OF SETOFF. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in SECTION 12.1
hereof in respect to its participating interest in amounts owing under the
Loan Documents to the same extent as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents,
PROVIDED that each Lender shall retain the right of setoff provided in
SECTION 12.1 hereof with respect to the amount of participating interests
sold to each Participant except to the extent such Participant exercises
its right of setoff. The Lenders agree to share with each Participant, and
each Participant, by exercising the right of setoff provided in SECTION
12.1 hereof, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared
in accordance with SECTION 12.2 as if each Participant were a Lender.
13.3 ASSIGNMENTS.
(a) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of
its business and in accordance with applicable law, at any time assign to
one or more banks or other entities ("PURCHASERS") all or a portion of its
rights and obligations under this Agreement (including, without
limitation, its Commitment, all Loans owing to it, all of its
participation interests in existing Letters of Credit, and its obligation
to participate in additional Letters of Credit hereunder) in accordance
with the provisions of this SECTION 13.3. Each assignment shall be of a
constant, and not a varying, ratable percentage of all of the assigning
Lender's rights and obligations under this Agreement. Such assignment
shall be effected through an Assignment Agreement substantially in the
form of EXHIBIT A hereto and shall not be permitted hereunder unless such
assignment is either for all of such Lender's rights and obligations under
the Loan Documents or, without the prior written consent of the Agent,
involves Loans and Commitments in an aggregate amount of at least
$5,000,000. The consent of the Agent and, prior to the occurrence of a
Default or Unmatured Default, the Borrower (which consent, in each such
case, shall not be unreasonably withheld), shall
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be required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof. Notwithstanding
the foregoing, any Lender may at any time, without the consent of the
Borrower or the Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; PROVIDED, HOWEVER, that
no such assignment shall release the transferor Lender from its
obligations hereunder.
(b) EFFECT; CLOSING DATE. Upon (i) delivery to the Agent of a notice
of assignment, substantially in the form attached as APPENDIX I to EXHIBIT
A hereto (a "NOTICE OF ASSIGNMENT"), together with any consent required by
SECTION 13.3(A) hereof, and (ii) payment of a $3,500 fee to the Agent for
processing such assignment, such assignment shall become effective on the
effective date specified in such Notice of Assignment. The Notice of
Assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the
Commitment, Loans and L/C Obligations under the applicable Assignment
Agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be
"plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser, if not already a Lender, shall for all
purposes be a Lender party to this Agreement and any other Loan Documents
executed by the Lenders and shall have all the rights and obligations of a
Lender under the Loan Documents, to the same extent as if it were an
original party hereto, and no further consent or action by the Borrower,
the Lenders or the Agent shall be required to release the transferor
Lender with respect to the percentage of the Aggregate Commitment, Loans
and Letter of Credit participations assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this SECTION
13.3(B), the transferor Lender, the Agent and the Borrower shall make
appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are
issued to such Purchaser, in each case in principal amounts reflecting
their Commitments, as adjusted pursuant to such assignment.
(c) THE REGISTER. The Agent shall maintain at its address referred
to in SECTION 14.1 a copy of each Commitment and Acceptance delivered
pursuant to SECTION 2.4(B) and each Assignment Agreement delivered to and
accepted by it pursuant to this SECTION 13.3 and a register (the
"REGISTER") for the recordation of the names and addresses of the Lenders
and the Commitment of and principal amount of the Loans owing to, each
Lender from time to time and whether such Lender is an original Lender,
became a Lender pursuant to SECTION 2.4(B) or the assignee of another
Lender pursuant to an assignment under this SECTION 13.3. The entries in
the Register shall be conclusive and binding for all purposes, absent
manifest error, and the Borrower and each of its Subsidiaries, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Lender
at any reasonable time and from time to time upon reasonable prior notice.
13.4 CONFIDENTIALITY. Subject to SECTION 13.5, the Agent and the Lenders
(each, a "LENDING PARTY") agree to keep confidential any information furnished
or made available to it by the Borrower pursuant to this Agreement that is
marked confidential; PROVIDED, that nothing herein shall prevent any Lending
Party from disclosing such information (a) to any other Lending Party or any
Affiliate of any Lending Party, or any officer, director, employee, agent, or
advisor of any Lending Party or Affiliate of any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the credit facility
provided herein, (c) as required by any Law, (d) upon the order, request or
demand of any Governmental Authority, (e) that is or becomes available to the
public or that is or becomes available to any Lending Party other than as a
result of a disclosure by any Lending Party prohibited by this Agreement, (f) in
connection
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with any litigation to which such Lending Party or any of its Affiliates may be
a party, and (g) to the extent necessary in connection with the exercise of any
remedy under this Agreement or any other Loan Document.
13.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries and the Collateral; PROVIDED that
prior to any such disclosure, such prospective Transferee shall agree to
preserve in accordance with SECTION 13.4 the confidentiality of any confidential
information described therein.
ARTICLE XIV: NOTICES
14.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.11 with
respect to Borrowing Notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
14.2 CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by telex or telephone, that it has taken
such action.
[SIGNATURES APPEAR ON THE FOLLOWING PAGES.]
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IN WITNESS WHEREOF, the Borrower, the Lenders, the Agent, and the
Documentation Agent have executed this Agreement as of the Closing Date.
LANDCARE USA, INC., as the Borrower
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Senior Vice President and Chief
Financial Officer
Address:
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
NATIONSBANK, N.A., as Agent and as a Lender
By:/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Vice President
Address:
NationsBank, N.A.
Corporate Finance Group
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
BANKERS TRUST COMPANY,
as Documentation Agent and as a Lender
By:/s/ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Name: ▇▇▇▇ ▇▇ ▇▇▇▇▇
Title: Assistant Vice President
THE BANK OF NOVA SCOTIA,
as Co Agent and as a Lender
By: /s/ A.S. ▇▇▇▇▇▇▇▇▇▇
Name: A.S. ▇▇▇▇▇▇▇▇▇▇
Title: Sr. Team Leader-Loan Operations
CITIZENS BANK OF MASSACHUSETTS,
as a Lender
By:/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇
Vice President
COMERICA BANK,
as a Lender
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
Name:▇▇▇▇ ▇. ▇▇▇▇▇
Title: Vice President
UNION BANK OF CALIFORNIA, N.A.
as a Lender
By:/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇
J. ▇▇▇▇▇ ▇▇▇▇▇▇
Vice President
CENTURA BANKS, INC.,
as a Lender
By:/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title:Corporate Banking Officer