EXHIBIT 10.89
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EZCORP, INC.
THIRD AMENDED AND RESTATED
CREDIT AGREEMENT
DATED AS OF APRIL 8, 2004
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION,
AS AGENT
AND
ISSUING BANK
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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ARTICLE I Definitions...........................................................................31
Section 1.1 Definitions...........................................................................31
Section 1.2 Other Definitional Provisions.........................................................43
ARTICLE II Revolving Credit Loan and Swing Loan..................................................44
Section 2.1 Revolving Credit Commitments..........................................................44
Section 2.2 Revolving Credit Notes................................................................44
Section 2.3 Repayment of Revolving Credit Loan....................................................44
Section 2.4 Interest..............................................................................44
Section 2.5 Revolving Credit Loan Borrowing Procedure.............................................44
Section 2.6 Conversions and Continuations.........................................................45
Section 2.7 Swing Loans...........................................................................45
Section 2.8 Use of Proceeds.......................................................................46
Section 2.9 Fees..................................................................................46
Section 2.10 Determination of Eurodollar Margin and Base Rate Margin...............................46
Section 2.11 Reduction or Termination of Commitments...............................................47
ARTICLE III Letters of Credit.....................................................................47
Section 3.1 Letters of Credit.....................................................................47
Section 3.2 Procedure for Issuing Letters of Credit...............................................48
Section 3.3 Presentment and Reimbursement.........................................................48
Section 3.4 Payment...............................................................................49
Section 3.5 Letter of Credit Fee..................................................................49
Section 3.6 Obligations Absolute..................................................................49
Section 3.7 Limitation of Liability...............................................................50
ARTICLE IV Payments..............................................................................50
Section 4.1 Method of Payment.....................................................................50
Section 4.2 Voluntary Prepayment..................................................................50
Section 4.3 Mandatory Prepayments.................................................................51
Section 4.4 Pro Rata Treatment....................................................................51
Section 4.5 Non-Receipt of Funds by the Agent.....................................................51
Section 4.6 Taxes.................................................................................52
Section 4.7 Tax Forms.............................................................................52
Section 4.8 Computation of Interest...............................................................53
Section 4.9 Proceeds of Collateral and Collections under the Guaranty.............................54
ARTICLE V Yield Protection; Limitations on Advances; Capital Adequacy...........................54
Section 5.1 Additional Costs......................................................................54
Section 5.2 Limitation on Types of Advances.......................................................55
Section 5.3 Illegality............................................................................55
Section 5.4 Treatment of Affected Advances........................................................56
Section 5.5 Compensation..........................................................................56
Section 5.6 Capital Adequacy......................................................................56
Section 5.7 Additional Costs in Respect of Letters of Credit......................................56
ARTICLE VI Conditions Precedent..................................................................57
Section 6.1 Initial Extension of Credit...........................................................57
Section 6.2 All Extensions of Credit..............................................................58
TABLE OF CONTENTS
(CONTINUED)
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ARTICLE VII Representations and Warranties........................................................58
Section 7.1 Existence.............................................................................58
Section 7.2 Financial Statements..................................................................58
Section 7.3 Action; No Breach.....................................................................58
Section 7.4 Operation of Business.................................................................59
Section 7.5 Litigation and Judgments..............................................................59
Section 7.6 Rights in Properties; Liens...........................................................59
Section 7.7 Enforceability........................................................................59
Section 7.8 Approvals.............................................................................59
Section 7.9 Debt..................................................................................59
Section 7.10 Taxes.................................................................................59
Section 7.11 Use of Proceeds; Margin Securities....................................................59
Section 7.12 ERISA.................................................................................59
Section 7.13 Disclosure............................................................................60
Section 7.14 Subsidiaries..........................................................................60
Section 7.15 Agreements............................................................................60
Section 7.16 Compliance with Laws..................................................................60
Section 7.17 Investment Company Act................................................................60
Section 7.18 Public Utility Holding Company Act....................................................60
Section 7.19 Environmental Matters.................................................................60
ARTICLE VIII Positive Covenants....................................................................61
Section 8.1 Reporting Requirements................................................................61
Section 8.2 Maintenance of Existence; Conduct of Business.........................................63
Section 8.3 Maintenance of Properties.............................................................63
Section 8.4 Taxes and Claims......................................................................63
Section 8.5 Insurance.............................................................................63
Section 8.6 Inspection Rights; Audits.............................................................63
Section 8.7 Keeping Books and Records.............................................................63
Section 8.8 Compliance with Laws..................................................................63
Section 8.9 Compliance with Agreements............................................................63
Section 8.10 Further Assurances....................................................................63
Section 8.11 ERISA.................................................................................64
Section 8.12 Landlord's Waivers or Subordinations..................................................64
ARTICLE IX Negative Covenants....................................................................64
Section 9.1 Debt..................................................................................64
Section 9.2 Limitation on Liens...................................................................65
Section 9.3 Mergers, Etc..........................................................................65
Section 9.4 Restricted Payments...................................................................66
Section 9.5 Investments...........................................................................66
Section 9.6 Limitation on Issuance of Capital Stock...............................................66
Section 9.7 Transactions With Affiliates..........................................................66
Section 9.8 Disposition of Assets.................................................................66
Section 9.9 Nature of Business....................................................................67
Section 9.10 Environmental Protection..............................................................67
Section 9.11 Accounting............................................................................67
Section 9.12 Prepayment of Debt....................................................................67
Section 9.13 Pay-Day Advance Loans.................................................................67
ARTICLE X Financial Covenants...................................................................67
Section 10.1 Consolidated Net Worth................................................................67
TABLE OF CONTENTS
(CONTINUED)
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Section 10.2 Senior Leverage Ratio.................................................................67
Section 10.3 Total Leverage Ratio..................................................................67
Section 10.4 Capital Expenditures..................................................................68
Section 10.5 Inventory Turnover....................................................................68
Section 10.6 Fixed Charge Coverage Ratio...........................................................68
ARTICLE XI Default...............................................................................68
Section 11.1 Events of Default.....................................................................68
Section 11.2 Remedies..............................................................................69
Section 11.3 Cash Collateral.......................................................................70
Section 11.4 Performance by the Agent..............................................................70
ARTICLE XII The Agent.............................................................................70
Section 12.1 Appointment, Powers and Immunities....................................................70
Section 12.2 Rights of Agent as a Lender...........................................................71
Section 12.3 Sharing of Payments, Etc..............................................................72
Section 12.4 Indemnification.......................................................................72
Section 12.5 Independent Credit Decisions..........................................................72
Section 12.6 Several Commitments...................................................................73
Section 12.7 Successor Agent.......................................................................73
Section 12.8 Agent May File Proofs of Claim........................................................73
Section 12.9 Collateral and Guaranty Matters.......................................................74
ARTICLE XIII Miscellaneous.........................................................................74
Section 13.1 Expenses..............................................................................74
Section 13.2 INDEMNIFICATION.......................................................................74
Section 13.3 Limitation of Liability...............................................................75
Section 13.4 No Duty...............................................................................75
Section 13.5 No Fiduciary Relationship.............................................................75
Section 13.6 Equitable Relief......................................................................75
Section 13.7 No Waiver; Cumulative Remedies........................................................75
Section 13.8 Successors and Assigns................................................................75
Section 13.9 Survival..............................................................................77
Section 13.10 Amendments, Etc.......................................................................77
Section 13.11 Maximum Interest Rate.................................................................77
Section 13.12 Notices...............................................................................78
Section 13.13 Governing Law; Venue; Service of Process..............................................78
Section 13.14 Binding Arbitration...................................................................78
Section 13.15 Counterparts..........................................................................80
Section 13.16 Severability..........................................................................80
Section 13.17 Headings..............................................................................80
Section 13.18 Non-Application of Chapter 346 of Texas Finance Code..................................80
Section 13.19 Construction..........................................................................80
Section 13.20 Independence of Covenants.............................................................80
Section 13.21 Confidentiality.......................................................................80
Section 13.22 USA Patriot Act Notice................................................................80
Section 13.23 WAIVER OF JURY TRIAL..................................................................80
Section 13.24 ENTIRE AGREEMENT......................................................................80
Section 13.25 Amendment and Restatement.............................................................81
INDEX TO EXHIBITS
Exhibit Description of Exhibit
A Form of Revolving Credit Note
B Form of Swing Note
C Advance Request Form
D Letter of Credit Request Form
E Form of Assignment and Acceptance
F Form of Collateral Report
INDEX TO SCHEDULES
Schedule Description of Schedule
1.1(a) Commitments
1.1(c) Pay-Day Advance Loan Documents
1.1(d) Real Property
7.14 List of Subsidiaries
9.1 Existing Debt
9.2 Existing Liens
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT (the "Agreement"), dated
as of April 8, 2004, is among EZCORP, INC., a Delaware corporation (the
"Borrower"), each of the banks or other lending institutions which is or which
may from time to time become a signatory hereto or any successor or assignee
thereof (individually, a "Lender" and, collectively, the "Lenders"), and ▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION, a national banking association (successor by
merger to ▇▇▇▇▇ Fargo Bank Texas, National Association), as agent for itself and
the other Lenders (in such capacity, together with its successors in such
capacity, the "Agent") and as the Issuing Bank (hereinafter defined).
R E C I T A L S
A. The Borrower, the Agent, the Issuing Bank and certain banks or other
lending institutions party thereto have entered into that certain Second Amended
and Restated Credit Agreement dated as of October 30, 2002, as amended through
the date hereof (as amended, the "Existing Credit Agreement").
B. The Borrower has requested and the Agent, the Issuing Bank and the
Lenders have agreed to restructure the existing revolving credit facility,
standby letter of credit subfacility and swing-line subfacility, and to amend
and modify the Existing Credit Agreement upon the terms and conditions
hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
Definitions
Definitions. As used in this Agreement, the following terms have the following
meanings:
"AAA" is defined in Section 13.14(b).
"Accumulated Other Comprehensive Income" means, at any particular
time, the amount shown in the equity section of the Borrower's
consolidated balance sheet.
"Act" is defined in Section 13.22.
"Additional Costs" is defined in Section 5.1.
"Adjusted Eurodollar Rate" means, for any Eurodollar Advance for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16 of 1%) determined by the Agent to be equal
to the Eurodollar Rate for such Eurodollar Advance for such Interest
Period.
"Adjustment Date" is defined in Section 2.10.
"Advance" means an advance of funds by the Lenders or any of them to
the Borrower pursuant to Article II (inclusive of the Revolving Credit
Loan and the Swing Loan) and the Continuation or Conversion thereof
pursuant to Section 2.6 and Article V hereof.
"Advance Request Form" means a certificate, in substantially the
form of Exhibit C hereto, properly completed and signed by the Borrower
requesting an Advance.
"Affiliate" means, as to any Person, any other Person (a) that
directly or indirectly, through one or more intermediaries, controls or is
controlled by, or is under common control with, such Person; (b) that
directly or indirectly beneficially owns or holds 5% or more of any class
of voting stock of such Person; or (c) 5% or more of the voting stock of
which is directly or indirectly beneficially owned or held by the Person
in question. The term "control" means the possession, directly or
indirectly, of the power to direct or cause direction of the management
and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise; provided, however, in no event
shall the Agent or any Lender be deemed an Affiliate of the Borrower or
any of its Subsidiaries.
"Agent" has the meaning set forth in the introductory paragraph of
this Agreement.
"Agreement" has the meaning set forth in the introductory paragraph
of this Agreement, as the same may from time to time be amended, restated,
supplemented or modified.
"Applicable Lending Office" means for each Lender and each Type of
Advance, the lending office of such Lender (or of an Affiliate of such
Lender) designated for such Type of Advance below its name on the
signature pages hereof or such other office of such Lender (or of an
Affiliate of such Lender) as such Lender may from time to time specify to
the Borrower and the Agent as the office by which its Advances of such
Type are to be made and maintained.
"Applicable Rate" means: (a) during the period that an Advance is a
Base Rate Advance, the Base Rate, plus the Base Rate Margin, and (b)
during the period that an Advance is a Eurodollar Advance, the Adjusted
Eurodollar Rate, plus the Eurodollar Margin.
"Approved Fund" means any Fund that is administered or managed by
(a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.
"Assigning Lender" is defined in Section 13.8(b).
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and its assignee and accepted by the Agent
pursuant to Section 13.8, in substantially the form of Exhibit E hereto.
"Average Inventory" means Inventory calculated by dividing the total
of all ending Inventory for each month for the most recent 13 months by
13.
"Base Rate" means as of any date of determination, a rate per annum
equal to the greater of (a) the Prime Rate in effect on such day, or (b)
the sum of the Federal Funds Rate in effect on such day plus 0.5%. Any
change in the Base Rate due to a change in the Prime Rate or the Federal
Funds Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Rate, respectively, without notice to the
Borrower.
"Base Rate Advances" means Advances that bear interest at rates
based upon the Base Rate.
"Base Rate Margin" has the meaning set forth in Section 2.10.
"Borrower" is defined in the introductory paragraph of this
Agreement.
"Borrower Security Agreement" means that certain Second Amended and
Restated Borrower Security Agreement dated as of the date hereof, executed
by the Borrower in favor of the Agent for the benefit of the Lenders, in
form and substance satisfactory to the Agent and Lenders, as the same may
be amended, restated, supplemented, or modified from time to time.
"▇▇▇▇▇ Law" means the ▇▇▇▇▇ Handgun Violence Prevention Act Section
102(s)(1), 18 U.S.C.A. Section 922(s)(1) (West Supp. 2003).
"Business Day" means (a) any day on which commercial banks are not
authorized or required to close in Austin, Texas and (b) with respect to
all borrowings, payments, Conversions, Continuations, Interest Periods,
and notices in connection with Eurodollar Advances, any day on which
dealings in Dollar deposits are carried out in the London interbank
market.
"Capital Expenditures" means, for any period, all expenditures of
the Borrower and its Subsidiaries which are classified as additions to
property, plant and equipment on the consolidated statement of cash flows
of the Borrower in accordance with GAAP, including all such expenditures
so classified as "recurring capital expenditures" and all such
expenditures associated with Capital Lease Obligations, but excluding all
such expenditures used to acquire fixed assets from a Target in connection
with a Permitted Acquisition.
"Capital Lease Obligation" means, as to any Person, the obligations
of such Person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) real and/or personal property, which
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such Person under GAAP. For purposes of this
Agreement, the amount of such Capital Lease Obligations shall be the
capitalized amount thereof, determined in accordance with GAAP.
"Cash Equivalent Investment" means, as to any Person, (a) securities
issued or directly and fully guaranteed or insured by the United States or
any agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (b)
time deposits and certificates of deposit of any commercial bank having,
or which is the principal banking subsidiary of a bank holding company
having, a long-term unsecured debt rating of at least "AAA" or the
equivalent thereof from Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc. or "Aaa" or the equivalent thereof from ▇▇▇▇▇'▇ Investors
Service, Inc. with maturities of not more than six months from the date of
acquisition by such Person, (c) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in
clause (a) above entered into with any bank meeting the qualifications
specified in clause (b) above, (d) commercial paper issued by any Person
incorporated in the United States rated at least A-1 or the equivalent
thereof by Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies,
Inc. or at least P-1 or the equivalent thereof by ▇▇▇▇▇'▇ Investors
Service, Inc. and in each case maturing not more than six months after the
date of acquisition by such Person and (e) investments in money market
funds substantially all of whose assets are comprised of securities of the
types described in clauses (a) through (d) above.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings and decisions issued thereunder.
"Collateral" means the property in which Liens have been granted to
the Agent for the benefit of the Lenders pursuant to the Borrower Security
Agreement, the Subsidiary Security Agreement, the Real Property Security
Documents, or any other agreement, document, or instrument executed by the
Borrower or a Guarantor in accordance with Section 8.10, whether such
Liens are now existing or hereafter arise.
"Commitment" means, as to each Lender, the obligation of such Lender
to purchase participations (or with respect to the Swing Lender or the
Issuing Bank, hold other interests in) the Swing Loan and in Letters of
Credit as described in Articles II and III hereunder, and the Revolving
Credit Commitment.
"Commitment Fee" is defined in Section 2.9.
"Commitment Fee Rate" means 0.375% per annum.
"Compliance Certificate" is defined in Section 8.1(c).
"Consolidated Net Income" means, at any particular time, the
aggregate net income or loss of the Borrower and its consolidated
Subsidiaries determined on a consolidated basis as determined in
accordance with GAAP.
"Consolidated Net Worth" means, at any particular time, all amounts
which, in conformity with GAAP, would be included as stockholders' equity
on a consolidated balance sheet of the Borrower and the Subsidiaries;
provided, however, there shall be excluded therefrom (a) any amount at
which shares of
capital stock of the Borrower appear as an asset on the Borrower's balance
sheet, and (b) the Accumulated Other Comprehensive Income.
"Continue," "Continuation," and "Continued" shall refer to the
continuation pursuant to Section 2.6 of a Eurodollar Advance as a
Eurodollar Advance from one Interest Period to the next Interest Period.
"Contribution and Indemnification Agreement" means that certain
Second Amended and Restated Contribution and Indemnification Agreement
dated as of the date hereof executed by the Borrower and the Guarantors,
in form and substance satisfactory to the Agent and the Lenders, as the
same may be amended, restated, supplemented or modified from time to time.
"Convert," "Conversion," and "Converted" shall refer to a conversion
pursuant to Section 2.6 or Article V of one Type of Advance into another
Type of Advance.
"Debt" means as to any Person at any time (without duplication): (a)
all obligations of such Person for borrowed money, (b) all obligations of
such Person evidenced by bonds, notes, debentures, or other similar
instruments, (c) all obligations of such Person to pay the deferred
purchase price of property or services, except trade accounts payable of
such Person arising in the ordinary course of business that are not past
due by more than 90 days, (d) all Capital Lease Obligations of such
Person, (e) all Debt or other obligations of others Guaranteed by such
Person, (f) all obligations secured by a Lien existing on property owned
by such Person, whether or not the obligations secured thereby have been
assumed by such Person or are non-recourse to the credit of such Person,
(g) all reimbursement obligations of such Person (whether contingent or
otherwise) in respect of letters of credit, bankers' acceptances, surety
or other bonds and similar instruments, and (h) all liabilities of such
Person in respect of unfunded vested benefits under any Plan.
"Default" means an Event of Default or the occurrence of an event or
condition which with notice or lapse of time or both would become an Event
of Default.
"Default Rate" means the lesser of (a) the Maximum Rate or, (b) the
sum of the Base Rate in effect from day to day plus 5% per annum.
"Deposit and Cash Management Services" means the deposit and/or cash
management products and services provided by a Lender in connection with
any deposit or other accounts of the Borrower or any of its Subsidiaries,
including without limitation, the extensions of credit made by a Lender to
or for the account of the Borrower or any of its Subsidiaries in the
ordinary course of business in connection therewith.
"Disposition" is defined in Section 9.8.
"Dollars" and "$" mean lawful money of the United States of America.
"EBITDA" means, for any period of determination, Consolidated Net
Income, plus, to the extent that any of the following were deducted in
calculating such Consolidated Net Income, interest expense, tax expenses,
and depreciation and amortization. EBITDA will exclude all extraordinary
items of income and loss and any gain or loss on the sale of assets. In
the event a Permitted Acquisition shall have been consummated prior to the
end of the period for which EBITDA is calculated, but during the period
covered by the calculation, the Borrower shall include the historical
EBITDA (as calculated in accordance with this definition) of the Target in
connection with a Permitted Acquisition for the time period covered by the
calculation.
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a
Lender, (c) an Approved Fund, and (d) any other Person (other than a
natural person) approved by the Agent, and, unless a Default has occurred
and is continuing at the time any assignment is effected, in accordance
with Section 13.8, the
Borrower, such approval not to be unreasonably withheld or delayed by the
Borrower; provided, however, that neither the Borrower nor an Affiliate of
the Borrower shall qualify as an Eligible Assignee.
"Environmental Laws" means any and all federal, state, and local
laws, regulations, and requirements pertaining to health, safety, or the
environment, as such laws, regulations, and requirements may be amended or
supplemented from time to time.
"Environmental Liabilities" means, as to any Person, all
liabilities, obligations, responsibilities, Remedial Actions, losses,
damages, punitive damages, consequential damages, treble damages, costs,
and expenses, (including, without limitation, all reasonable fees,
disbursements and expenses of counsel, expert and consulting fees and
costs of investigation and feasibility studies), fines, penalties,
sanctions, and interest incurred as a result of any claim or demand, by
any Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any Environmental
Law, permit, order or agreement with any Governmental Authority or other
Person, arising from environmental, health or safety conditions or the
Release or threatened Release of a Hazardous Material into the
environment.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations and published
interpretations thereunder.
"ERISA Affiliate" means any corporation or trade or business which
is a member of the same controlled group of corporations (within the
meaning of Section 414(b) of the Code) as the Borrower, which is under
common control (within the meaning of Section 414(c) of the Code) with the
Borrower, or which is otherwise affiliated with the Borrower (within the
meaning of Section 414(m) or Section 414(o) of the Code).
"Eurodollar Advances" means Advances the interest rates on which are
determined on the basis of the rates referred to in the definition of
"Adjusted Eurodollar Rate" in this Section 1.1.
"Eurodollar Margin" is defined in Section 2.10.
"Eurodollar Rate" means, for any Eurodollar Advance for any Interest
Period, the rate per annum obtained by dividing (a) the rate per annum
determined by the Agent at approximately 11:00 a.m. (London time) on the
date which is two Business Days prior to the beginning of such Interest
Period by reference to the British Bankers' Association Interest
Settlement Rates for deposits in Dollars (as set forth by any service
selected by the Agent which has been nominated by the British Bankers'
Association as an authorized information vendor for the purpose of
displaying such rates) for a period equal to such Interest Period;
provided that, to the extent that an interest rate is not ascertainable
pursuant to the foregoing provisions of this definition, the "Eurodollar
Rate" shall be the interest rate per annum determined by the Agent to be
the average of the rates per annum at which deposits in Dollars are
offered for such Interest Period to major banks in the London interbank
market in London, England at approximately 11:00 a.m. (London time) on the
date which is two Business Days prior to the beginning of such Interest
Period by (b) a percentage equal to 100% minus the stated maximum rate of
all reserve requirements (including any marginal, emergency, supplemental,
special or other reserves) applicable to any member bank of the Federal
Reserve System in respect of "Eurocurrency liabilities" as defined in
Regulation D (or any successor category of liabilities under Regulation
D). Each determination by the Agent pursuant to this definition shall be
conclusive absent manifest error.
"Event of Default" is defined in Section 11.1.
"Exchange Act" means the Securities and Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Existing Credit Agreement" is defined in the recitals of this
Agreement.
"Existing Debt" means the Debt listed on Schedule 9.1.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members
of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (a) if the day for which such
rate is to be determined is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b)
if such rate is not so published on such next succeeding Business Day, the
Federal Funds Rate for any day shall be the average rate charged to ▇▇▇▇▇
Fargo Bank, National Association on such day on such transactions as
determined by the Agent.
"Fiscal Quarter" means any three-month period ending December 31,
March 31, June 30, or September 30.
"Fiscal Year" means each 12-month period ending September 30 of each
year.
"Fixed Charge Coverage Ratio" means, for each Fiscal Quarter, the
quotient determined by dividing (a) the sum of EBITDA, plus Rental
Expense, minus Capital Expenditures, minus dividends paid in cash by the
Borrower, minus taxes paid in cash by the Borrower and its consolidated
Subsidiaries, in each case for the period of such Fiscal Quarter, plus the
three prior Fiscal Quarters, by (b) the sum of the aggregate interest
expense, the current portion of long-term Debt (excluding the current
portion of the outstanding balance under the Revolving Credit Commitments)
and Rental Expense of the Borrower and its consolidated Subsidiaries, in
each case for the period of such Fiscal Quarter plus the three prior
Fiscal Quarters.
"Foreign Lender" is defined in Section 4.7.
"Fund" means any Person (other than a natural person) that is (or
will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course
of its business.
"Funded Debt" means, at any particular time, the sum of the
following, calculated on a consolidated basis for the Borrower and the
Subsidiaries in accordance with GAAP: (a) all obligations for borrowed
money, including but not limited to senior bank debt, senior notes and
subordinated debt, (b) all obligations relating to the deferred purchase
price of property and services, (c) all Capital Lease Obligations, (d) all
obligations as a reimbursement obligor with respect to an issued letter of
credit or similar instrument (whether drawn or undrawn), and (e) all
obligations under a Guarantee of borrowed money, or any other type of
direct or contingent obligation.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of
the date in question. Accounting principles are applied on a "consistent
basis" when the accounting principles applied in a current period are
comparable in all material respects to those accounting principles applied
in a preceding period.
"Governmental Authority" means any nation or government, any state
or political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory, or administrative functions of or
pertaining to government.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or
other obligation of any other Person and, without limiting the generality
of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply
funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to
keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise)
or
(b) entered into for the purpose of assuring in any other manner the
obligee of such Debt or other obligation of the payment thereof or to
protect the obligee against loss in respect thereof (in whole or in part),
provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business. The term
"Guarantee" used as a verb has a corresponding meaning.
"Guarantor" means each and every domestic Subsidiary of the Borrower
whether now in existence or hereafter created which include but are not
limited to those Subsidiaries listed on Schedule 7.14.
"Guaranty" means that certain Second Amended and Restated Guaranty
Agreement dated as of the date hereof, executed by the Guarantors in favor
of the Agent and the Lenders, in form and substance satisfactory to the
Agent and the Lenders, as the same has been or may be amended, restated,
supplemented, or otherwise modified from time to time.
"Hazardous Material" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is
or becomes listed, regulated, or addressed under any Environmental Law.
"Indemnity Accounts" means collectively, any and all indemnity
accounts established and maintained by the Borrower or any Subsidiary to
secure the Borrower's and/or its Subsidiaries' obligations to be incurred
with County Bank of Rehoboth Beach, Delaware in connection with Pay-Day
Advance Loans, such obligations to be established and governed by the
Pay-Day Advance Loan Documents.
"Interest Period" means the period commencing, with respect to any
Eurodollar Advances, on the date such Eurodollar Advances are made or
Converted from Advances of another Type or, in the case of each
subsequent, successive Interest Period applicable to a Eurodollar Advance,
the last day of the next preceding Interest Period with respect to such
Advance, and ending on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter, as the Borrower may
select as provided in Section 2.5 or 2.6 hereof, except that each such
Interest Period which commences on the last Business Day of a calendar
month (or on any day for which there is no numerically corresponding day
in the appropriate subsequent calendar month) shall end on the last
Business Day of the first, second, third or sixth calendar month
thereafter, as the case may be. Notwithstanding the foregoing: (a) each
Interest Period which would otherwise end on a day which is not a Business
Day shall end on the next succeeding Business Day or, if such succeeding
Business Day falls in the next succeeding calendar month, on the next
preceding Business Day; (b) any Interest Period for Eurodollar Advances
under the Revolving Credit Loan which would otherwise extend beyond the
Termination Date shall end on the Termination Date and the provisions of
Section 5.5 shall apply; and (c) no Interest Period for any Eurodollar
Advances shall have a duration of less than one month, and, if the
Interest Period for any Eurodollar Advances would otherwise be a shorter
period, such Advances shall not be available hereunder.
"Inventory" means at any particular time, inventory (as defined in
the UCC) of the Borrower or any of the Subsidiaries including, without
limitation, all materials and goods held by or for the benefit of the
Borrower or any of the Subsidiaries for sale, lease or consumption.
"Inventory Turnover" means, for each Fiscal Quarter, the quotient
determined by dividing the cost of Inventory items sold during the most
recent 12 month period by the Average Inventory for such period.
"Issuing Bank" means, with respect to any Letter of Credit, ▇▇▇▇▇
Fargo Bank, National Association.
"Landlord Change" means any change in the landlord for a Leased
Location.
"LC Participation" means, with respect to any Lender, at any time,
the amount of participating interest held by such Lender (or in the case
of the Issuing Bank, other interests) in respect of a Letter of Credit.
"Leased Location" means any location which is leased by the Borrower
or any Subsidiary and at which the Borrower or the applicable Subsidiary
maintains Collateral.
"Lender" is defined in the introductory paragraph of this Agreement.
"Lending Party" is defined in Section 13.21.
"Letter of Credit" means, any standby letter of credit issued by the
Issuing Bank for the account of the Borrower pursuant to Article III.
"Letter of Credit Disbursement" means a disbursement by the Issuing
Bank to the beneficiary of a Letter of Credit in connection with a drawing
thereunder.
"Letter of Credit Liabilities" means, at any time, the sum of (a)
the aggregate amounts available to be drawn of all outstanding Letters of
Credits and (b) the aggregate amount of all Letter of Credit Disbursements
for which the Issuing Bank has not been reimbursed by the Borrower.
"Letter of Credit Request Form" means, a certificate, in
substantially the form of Exhibit D hereto, properly completed and signed
by the Borrower requesting issuance of a Letter of Credit.
"Lien" means any lien, mortgage, security interest, tax lien,
financing statement, pledge, charge, hypothecation, assignment,
preference, priority, or other encumbrance of any kind or nature
whatsoever (including, without limitation, any conditional sale or title
retention agreement), whether arising by contract, operation of law, or
otherwise.
"Litigation Fund Accounts" means collectively, any and all
litigation fund accounts established and maintained by the Borrower or any
Subsidiary to secure the Borrower's and/or its Subsidiaries' obligations
to be incurred with County Bank of Rehoboth Beach, Delaware in connection
with Pay-Day Advance Loans, such obligations to be established and
governed by the Pay-Day Advance Loan Documents.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
Contribution and Indemnification Agreement, the Borrower Security
Agreement, the Subsidiary Security Agreement, the Real Property Security
Documents and all other promissory notes, security agreements,
assignments, deeds of trust, guaranties, and other instruments, documents,
and agreements now or hereafter executed and delivered pursuant to or in
connection with this Agreement, as such instruments, documents, and
agreements may be amended, modified, renewed, extended, or supplemented
from time to time.
"Loans" means, collectively, the Revolving Credit Loan and the Swing
Loan.
"Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, prospects, or
properties of the Borrower and the Subsidiaries taken as a whole, or (b)
the validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Agent or the Lenders hereunder
or thereunder. In determining whether any individual event could
reasonably be expected to result in a Material Adverse Effect,
notwithstanding that such event does not itself have such effect, a
Material Adverse Effect shall be deemed to have occurred if the cumulative
effect of such event and all other then existing events could reasonably
be expected to result in a Material Adverse Effect.
"Material Debt" is defined in Section 11.1(h).
"Maximum Rate" means, at any time and with respect to any Lender,
the maximum rate of interest under applicable law that such Lender may
charge the Borrower. The Maximum Rate shall be calculated in a manner that
takes into account any and all fees, payments, and other charges in
respect of the Loan Documents that constitute interest under applicable
law. Each change in any interest rate provided for
herein based upon the Maximum Rate resulting from a change in the Maximum
Rate shall take effect without notice to the Borrower at the time of such
change in the Maximum Rate. For purposes of determining the Maximum Rate
under Texas law, the applicable rate ceiling shall be the applicable
weekly ceiling described in, and computed in accordance with, Chapter 303
of the Texas Finance Code.
"Monthly Payment Date" means the third day of each calendar month of
each year, the first of which shall be May 3, 2004.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the
Borrower or any ERISA Affiliate and which is covered by Title IV of ERISA.
"Net Proceeds" from any issuance, sale or disposition of any shares
of equity securities (or any securities convertible or exchangeable for
any such shares, or any rights, warrants, or options to subscribe for or
purchase any such shares) means the amount equal to (a) the aggregate
gross proceeds of such issuance, sale or other disposition, less (b) the
following: (i) placement agent fees, (ii) underwriting discounts and
commissions, (iii) bank and other lender fees, and (iv) reasonable legal
fees and other reasonable expenses payable by the issuer in connection
with such issuance, sale or other disposition. "Net Proceeds" from any
disposition of assets means the amount equal to (a) the aggregate gross
proceeds of such disposition, less (b) the following: (i) sales or other
similar taxes paid or payable by the seller in connection with such
disposition, (ii) reasonable broker fees in connection with such
disposition, (iii) reasonable legal fees and other reasonable expenses
payable by the seller in connection with such disposition and (iv) the
amount of any Debt secured by the assets that must be repaid in connection
with such disposition so long as it is a Debt permitted under this
Agreement.
"Notes" means, collectively, the Revolving Credit Notes and the
Swing Note.
"Obligated Party" means each Guarantor and any other Person who is
or becomes party to any written agreement that guarantees or secures
payment and performance of the Obligations or any part thereof.
"Obligations" means, collectively, the Primary Obligations and the
Secondary Obligations.
"Other Taxes" is defined in Section 4.6(b).
"Pay-Day Advance Loan Documents" means the documents, instruments
and agreements which are acceptable to the Agent and the Lenders and are
more specifically described on Schedule 1.1(c) attached hereto, and all
amendments, modifications, renewals, extensions, restatements and
supplements thereto, copies of which have been provided to the Agent and
the Lenders and are satisfactory in form and substance to the Agent and
the Lenders; provided that if such amendments, modifications, renewals,
extensions, restatements and supplements are non-substantive from the
perspective of the economics of the transactions evidenced by such
documents, instruments and agreements described on Schedule 1.1(c), prior
approval by the Agent and the Lenders is not required.
"Pay-Day Advance Loans" means loans which are anticipated to be
repaid by the proceeds of deferred presentment checks or through an ACH
debit from the account of the borrower of the Pay-Day Advance Loan.
"Pay-Day Only Store" means any location of the Borrower or any of
its Subsidiaries where the only business conducted at such location is the
origination and/or processing of Pay-Day Advance Loans and/or other
unsecured consumer loans (including without limitation, the processing of
Pay-Day Advance Loans and/or other unsecured consumer loans originated by
a Person other than the Borrower or any Subsidiary) and other services
incident to the foregoing.
"Payment Office" means the operational office of the Agent in
Denver, Colorado, presently located at ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇
#▇▇▇▇▇-▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Payor" is defined in Section 4.5.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permitted Acquisitions" means those acquisitions by the Borrower or
any of its Subsidiaries of all or substantially all of either the assets
of, or equity interests in, a Person (such Person hereinafter referred to
as the "Target") so long as (a) the purchase price (whether in cash or
other consideration) of all such acquisitions shall not exceed either
$5,000,000 individually or $20,000,000 in the aggregate during the term of
this Agreement, (b) such acquisitions shall be of either the assets of a
Target used in, or equity interests in a Target engaged in, the same or
substantially similar businesses as the Borrower and its Subsidiaries as
of the date hereof, (c) no Default or Event of Default has occurred and is
continuing or would result therefrom, (d) such Target has a positive
EBITDA (as calculated in accordance with the definition of "EBITDA") over
the most recent 12-month period then ended, and (e) the Borrower has
furnished to the Agent a Compliance Certificate setting forth (i)
recalculations of compliance with the covenants contained in Article X for
the prior four Fiscal Quarters then most recently ended prior to the date
of such Permitted Acquisition, on a pro forma basis as if such Permitted
Acquisition had occurred on the first day of such period, and such
recalculations shall show that such covenants would have been complied
with if the Permitted Acquisition had occurred on the first day of such
period and (ii) the Borrower in good faith believes that after giving
effect to such Permitted Acquisition the covenants contained in Article X
will continue to be met for the one year period following the consummation
of such Permitted Acquisition.
"Permitted Debt" means (a) the Obligations, (b) Existing Debt and
(c) other Debt permitted by Section 9.1.
"Permitted Liens" means Liens permitted by Section 9.2.
"Permitted Withdrawals" means, other than in connection with
litigation, arbitration or regulatory proceedings, authorized withdrawals,
if any, by County Bank of Rehoboth Beach, Delaware ("County Bank") from
the Indemnity Accounts only, pursuant to the provisions of section 7.(a)
of those certain Nonexclusive Master Sale, Participation, Servicing and
Indemnification Agreements constituting a part of the Pay-Day Advance Loan
Documents, for administrative, overhead, and operating expenses and legal
expenses related to the content, development and structure of County
Bank's pay-day advance loan program including, by way of example,
expansion of the Borrower's or Subsidiaries' pay-day advance loan business
into new markets or operational changes. Such administrative, overhead and
operating expenses include, by way of example, audit fees and expenses,
delivery fees, wire fees, inspection fees, background checks, and
insurance.
"Person" means any individual, corporation, business trust,
association, company, partnership, joint venture, Governmental Authority,
or other entity.
"Plan" means any employee benefit plan (within the meaning of
Section 3(3) of ERISA) established or maintained by the Borrower or any
ERISA Affiliate, which plan is subject to the provisions of ERISA.
"Primary Obligations" means all obligations, indebtedness, and
liabilities of the Borrower to the Agent, the Issuing Bank, and the
Lenders, or any of them, arising pursuant to any of the Loan Documents,
now existing or hereafter arising, whether direct, indirect, related,
unrelated, fixed, contingent, liquidated, unliquidated, joint, several, or
joint and several, including, without limitation, the obligations,
indebtedness, and liabilities of the Borrower under this Agreement, the
Notes and the other Loan Documents (including without limitation, all of
the Borrower's contingent reimbursement obligations in respect of Letters
of
Credit), and all interest accruing thereon and all attorneys' fees and
other expenses incurred in the enforcement or collection thereof.
"Prime Rate" means, at any time, the rate of interest per annum then
most recently announced by ▇▇▇▇▇ Fargo Bank, National Association at its
principal office in San Francisco as its prime rate, which rate may not be
the lowest rate of interest charged by ▇▇▇▇▇ Fargo Bank, National
Association to its borrowers. Each change in any interest rate provided
for herein based upon the Prime Rate resulting from a change in the Prime
Rate shall take effect on the date the change is announced by ▇▇▇▇▇ Fargo
Bank, National Association without notice to the Borrower at the time of
such change in the Prime Rate.
"Principal Office" means the principal office of the Agent in
Austin, Texas, presently located at ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
"Prohibited Transaction" means any transaction set forth in Section
406 or 407 of ERISA or Section 4975(c)(1) of the Code for which there does
not exist a statutory or administrative exemption.
"Quarterly Payment Date" means the third day of each January, April,
July and October of each year, the first of which shall be July 3, 2004.
"Real Property" means the fee owned real property and interests in
fee owned real property of the Borrower and the Subsidiaries, including
without limitation, that fee owned real property identified on Schedule
1.1(d) attached hereto, and all improvements and fixtures thereon and all
appurtenances thereto, whether now existing or hereinafter arising.
"Real Property Security Documents" means all deeds of trust,
mortgages and other instruments, documents and agreements executed and
delivered by the Borrower or any Guarantor in favor of the Agent for the
benefit of the Lenders, which creates a Lien on such Person's interests in
the Real Property, as the same may be amended, supplemented or modified.
"Register" is defined in Section 13.8(d).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as the same may be amended or supplemented from
time to time.
"Regulatory Change" means, with respect to any Lender, any change
after the date of this Agreement in United States federal, state, or
foreign laws or regulations (including Regulation D) or the adoption or
making after such date of any interpretations, directives, or requests
applying to a class of lenders including such Lender of or under any
United States federal or state, or any foreign, laws or regulations
(whether or not having the force of law) by any court or governmental or
monetary authority charged with the interpretation or administration
thereof.
"Release" means, as to any Person, any release, spill, emission,
leaking, pumping, injection, deposit, disposal, disbursement, leaching, or
migration of Hazardous Materials into the indoor or outdoor environment or
into or out of property owned by such Person, including, without
limitation, the movement of Hazardous Materials through or in the air,
soil, surface water, ground water, or property in violation of
Environmental Laws.
"Remedial Action" means all actions required to (a) clean up,
remove, treat, or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or
minimize the further Release of Hazardous Materials so that they do not
migrate or endanger or threaten to endanger public health or welfare or
the indoor or outdoor environment, or (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care.
"Rental Expense" means the amounts paid by the Borrower and each
Subsidiary to lease facilities for business operations.
"Reportable Event" means any of the events set forth in Section 4043
of ERISA.
"Required Lenders" means at any time while no Advances or Letters of
Credit Liabilities are outstanding, two or more Lenders having at least 66
2/3% of the aggregate amount of the Commitments and, at any time while
Advances or Letter of Credit Liabilities are outstanding, two or more
Lenders holding at least 66 2/3% of the outstanding aggregate principal
amount of the Revolving Credit Advances, the LC Participations, and the SL
Participations.
"Required Payment" is defined in Section 4.5.
"Reserve Requirement" means, for any Eurodollar Advance for any
Interest Period therefor, the average maximum rate at which reserves
(including any marginal, supplemental or emergency reserves) are required
to be maintained during such Interest Period under Regulation D by member
banks of the Federal Reserve System in New York City with deposits
exceeding one billion Dollars against "Eurocurrency Liabilities" as such
term is used in Regulation D. Without limiting the effect of the
foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (i) any category of liabilities which includes deposits by
reference to which the Adjusted Eurodollar Rate is to be determined, or
(ii) any category of extensions of credit or other assets which include
Eurodollar Advances.
"Revolving Credit Commitment" means, as to each Lender, the
obligation of such Lender to make the Revolving Credit Loan as described
in Article II hereunder in the principal amount up to but not exceeding
the amount set forth opposite the name of such Lender on Schedule 1.1(a)
hereto under the heading "Revolving Credit Commitment", as the same may be
reduced pursuant to Section 2.11 or terminated pursuant to Section 2.11 or
11.2. As of the date hereof, the aggregate amount of the Revolving Credit
Commitments of all Lenders equals $40,000,000.
"Revolving Credit Loan" means the revolving credit loan made or to
be made hereunder to Borrower pursuant to Section 2.1.
"Revolving Credit Loan Advance" means an Advance under the Revolving
Credit Loan.
"Revolving Credit Notes" means the promissory notes of the Borrower
payable to the order of the Lenders in the aggregate principal amount of
the Revolving Credit Loan, in substantially the form of Exhibit A hereto,
and all extensions, renewals, and modifications thereof.
"Rules" is defined in Section 13.14(b).
"Secondary Obligations" means all obligations, indebtedness, and
liabilities of the Borrower to the Lenders or any of them, arising
pursuant to or in connection with the Deposit and Cash Management
Services, now existing or hereafter arising, whether direct, indirect,
related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, including without limitation, the
obligations of the Borrower to pay all fees, costs and expenses (including
without limitation, reasonable attorneys' fees) provided for in connection
with the documentation governing the Deposit and Cash Management Services.
"Senior Funded Debt" means, at any particular time, the sum of the
following, calculated on a consolidated basis for the Borrower and the
Subsidiaries in accordance with GAAP: (a) all obligations for borrowed
money, including but not limited to senior bank debt, senior notes and
subordinated debt, but excluding any subordinated debt permitted by
Section 9.1(e), (b) all obligations relating to the deferred purchase
price of property and services, (c) all Capital Lease Obligations, (d) all
obligations as a reimbursement obligor with respect to an issued letter of
credit or similar instrument (whether drawn or undrawn), and (e) all
obligations under a Guarantee of borrowed money, or any other type of
direct or contingent obligations.
"Senior Leverage Ratio" means, as of any Fiscal Quarter end, the
ratio of Senior Funded Debt to EBITDA, in each case for such Fiscal
Quarter and the prior three Fiscal Quarters.
"SL Participation" means, with respect to any Lender, at any time,
the amount of participating interest held by such Lender (or in the case
of the Swing Lender, other interests) in respect of the Swing Loan.
"Subsidiary" means any corporation (or other entity) of which at
least a majority of the outstanding shares of stock (or other ownership
interests) having by the terms thereof ordinary voting power to elect a
majority of the board of directors (or similar governing body) of such
corporation (or other entity) (irrespective of whether or not at the time
stock (or other ownership interests) of any other class or classes of such
corporation (or other entity) shall have or might have voting power by
reason of the happening of any contingency) is at the time directly or
indirectly owned or controlled by the Borrower or one or more of the
Subsidiaries or by the Borrower and one or more of the Subsidiaries.
"Subsidiary Security Agreement" means collectively, those certain
Second Amended and Restated Subsidiary Security Agreements dated as of the
date hereof executed by the Guarantors in favor of the Agent for the
benefit of the Lenders, in form and substance satisfactory to the Agent
and the Lenders, as the same may be amended, restated, supplemented, or
modified from time to time.
"Swing Commitment" means an amount (subject to reduction or
cancellation as herein provided) equal to $3,000,000.
"Swing Lender" means ▇▇▇▇▇ Fargo Bank, National Association.
"Swing Loan" means the swing loan made or to be made hereunder to
the Borrower pursuant to Section 2.7.
"Swing Loan Advance" means an Advance under the Swing Loan.
"Swing Note" means the promissory note of the Borrower payable to
the order of the Swing Lender in the principal amount of the Swing
Commitment in substantially the form of Exhibit B hereto, and all
extensions, renewals, and modifications thereof.
"Target" is defined in the definition of "Permitted Acquisition".
"Taxes" is defined in Section 4.6(a).
"Termination Date" means 10:00 a.m. (Austin, Texas time) on April 1,
2007 or such earlier date and time on which the Revolving Credit
Commitments and Swing Commitment terminate as provided in this Agreement.
"Total Leverage Ratio" means, as of any Fiscal Quarter end, the
ratio of Funded Debt to EBITDA, in each case for such Fiscal Quarter and
the prior three Fiscal Quarters.
"Type" means any type of Advance (i.e., Base Rate Advance or
Eurodollar Advance).
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas from time to time.
"Waiver" is defined in Section 8.12.
Other Definitional Provisions. All definitions contained in this Agreement are
equally applicable to the singular and plural forms of the terms defined. The
words "hereof", "herein", and "hereunder" and words of similar import referring
to this Agreement refer to this Agreement as a whole and not to any particular
provision of this Agreement. Unless otherwise specified, all Article and Section
references pertain to this Agreement. All accounting terms not
specifically defined herein shall be construed in accordance with GAAP. Terms
used herein that are defined in the UCC, unless otherwise defined herein, shall
have the meanings specified in the UCC. In the event of any changes in
accounting principles required by GAAP or recommended by the Borrower's
certified public accountants and implemented by the Borrower occur and such
changes result in a change in the method of the calculation of financial
covenants, standards, or terms under this Agreement, then the Borrower, the
Agent, and the Lenders agree to enter into negotiations in order to amend such
provisions of this Agreement so as to equitably reflect such changes with the
desired result that the criteria for evaluating such covenants, standards, or
terms shall be the same after such changes as if such changes had not been made.
Until such time as such an amendment shall have been executed and delivered by
the Agent, the Borrower and the Required Lenders, all financial covenants,
standards, and terms in this Agreement shall continue to be calculated or
construed as if such changes had not occurred.
Revolving Credit Loan and Swing Loan
Revolving Credit Commitments. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make one or more Revolving Credit
Loan Advances to the Borrower from time to time from the date hereof to but
excluding the Termination Date in an aggregate principal amount at any time
outstanding up to but not exceeding the amount of such Lender's Revolving Credit
Commitment as then in effect, provided that the aggregate amount of all
Revolving Credit Loan Advances at any time outstanding shall not exceed (a) the
Revolving Credit Commitments, minus (b) the sum of the outstanding Swing Loan
Advances and the Letter of Credit Liabilities. Subject to the foregoing
limitations, and the other terms and provisions of this Agreement, the Borrower
may borrow, repay, and reborrow hereunder the amount of the Revolving Credit
Commitments by means of Base Rate Advances and Eurodollar Advances and, until
the Termination Date, the Borrower may Convert Revolving Credit Loan Advances of
one Type into Revolving Credit Loan Advances of another Type. Revolving Credit
Loan Advances of each Type made by each Lender shall be made and maintained at
such Lender's Applicable Lending Office for Advances of such Type.
Revolving Credit Notes. The obligation of the Borrower to repay each Lender for
Revolving Credit Loan Advances made by such Lender and interest thereon shall be
evidenced by a Revolving Credit Note executed by the Borrower, payable to the
order of such Lender, in the principal amount of such Lender's Revolving Credit
Commitment dated the date hereof.
Repayment of Revolving Credit Loan. The Borrower shall repay the outstanding
principal amount of the Revolving Credit Loan and the Swing Loan on the
Termination Date.
Interest. The unpaid principal amount of the Revolving Credit Loan shall bear
interest at a varying rate per annum equal from day to day to the lesser of (a)
the Maximum Rate or (b) the Applicable Rate. If at any time the Applicable Rate
for any Advance shall exceed the Maximum Rate, thereby causing the interest
accruing on such Advance to be limited to the Maximum Rate, then any subsequent
reduction in the Applicable Rate for such Advance shall not reduce the rate of
interest on such Advance below the Maximum Rate until the aggregate amount of
interest accrued on such Advance equals the aggregate amount of interest which
would have accrued on such Advance if the Applicable Rate had at all times been
in effect. Accrued and unpaid interest on the Revolving Credit Loan Advances
shall be due and payable as follows:
in the case of all Base Rate Advances, on each Monthly Payment Date;
in the case of all Eurodollar Advances, on the last day of the Interest Period
with respect thereto and, in the case of an Interest Period with a duration
greater than three months, at three-month intervals after the first day of such
Interest Period; upon the payment or prepayment of any Eurodollar Advance or the
Conversion of any Eurodollar Advance to an Advance of another Type (but only on
the principal amount so paid, prepaid, or Converted); and
with respect to Revolving Credit Loan Advances and Swing Loan Advances, on the
Termination Date.
Notwithstanding the foregoing, upon the occurrence and during the continuance of
an Event of Default, the outstanding principal amounts of all Advances and (to
the fullest extent permitted by law) any other amounts payable by the Borrower
under any Loan Document shall bear interest at the Default Rate at the Required
Lenders' option beginning upon the occurrence of such Event of Default or such
later date as selected by the Required Lenders. Interest payable at the Default
Rate shall be payable from time to time on demand.
Revolving Credit Loan Borrowing Procedure. The Borrower shall give the Agent
notice by means of an Advance Request Form of each requested Revolving Credit
Loan Advance at least one Business Day before the requested date of each Base
Rate Advance, and at least three Business Days before the requested date of each
Eurodollar
Advance, specifying: (a) the requested date of such Revolving Credit Loan
Advance (which shall be a Business Day), (b) the amount of such Revolving Credit
Loan Advance, (c) the Type of Revolving Credit Loan Advance, and (d) in the case
of a Eurodollar Advance, the duration of the Interest Period for such Revolving
Credit Loan Advance. Each Eurodollar Advance under the Revolving Credit Loan
shall be in a minimum principal amount of $1,000,000 or an integral multiple of
$500,000. Each Base Rate Advance under the Revolving Credit Loan shall be in a
minimum principal amount of $500,000 or in greater increments of $100,000. The
Agent shall notify each Lender of the contents of each such notice promptly. Not
later than 1:00 p.m. (Austin, Texas time) on the date specified for each
Revolving Credit Loan Advance hereunder, each Lender will make available to the
Agent at the Principal Office in immediately available funds, for the account of
the Borrower, its pro rata share of each Revolving Credit Loan Advance. After
the Agent's receipt of such funds and subject to the other terms and conditions
of this Agreement, the Agent will make each Revolving Credit Loan Advance
available to the Borrower by depositing the same, in immediately available
funds, in an account of the Borrower (designated by the Borrower) maintained
with the Agent at the Principal Office. All notices by the Borrower under this
Section shall be irrevocable and shall be given not later than 11:00 a.m.
(Austin, Texas time) on the day which is not less than the number of Business
Days specified above for such notice.
Conversions and Continuations. The Borrower shall have the right from time to
time to Convert all or part of a Revolving Credit Loan Advance of one Type into
an Advance of another Type or to Continue Eurodollar Advances as Eurodollar
Advances by giving the Agent written notice at least one Business Day before
Conversion into a Base Rate Advance, and at least three Business Days before
Conversion into or Continuation of a Eurodollar Advance, specifying: (a) the
Conversion or Continuation date, (b) the amount of the Advance to be Converted
or Continued, (c) in the case of Conversions, the Type of Advance to be
Converted into, and (d) in the case of a Continuation of or Conversion into a
Eurodollar Advance, the duration of the Interest Period applicable thereto;
provided that (i) Eurodollar Advances may only be Converted on the last day of
the Interest Period, (ii) except for Conversions into Base Rate Advances, no
Conversions shall be made while a Default has occurred and is continuing, and
(iii) no more than five Interest Periods shall be in effect at the same time.
The Agent shall notify each Lender of the contents of each such notice promptly
and in any event not later than one Business Day after receipt thereof. All
notices by the Borrower under this Section shall be irrevocable and shall be
given not later than 11:00 a.m. (Austin, Texas time) on the day which is not
less than the number of Business Days specified above for such notice. If the
Borrower shall fail to give the Agent the notice as specified above for
Continuation or Conversion of a Eurodollar Advance prior to the end of the
Interest Period with respect thereto, such Eurodollar Advance shall be Converted
automatically into a Base Rate Advance on the last day of the then current
Interest Period for such Eurodollar Advance.
Swing Loans.
Making Swing Loans; Interest Rate. For the convenience of the parties and as an
integral part of the transactions contemplated by the Loan Documents, the Swing
Lender, solely for its own account, agrees, on the terms and conditions
hereinafter set forth, to make Swing Loans to the Borrower (which the Borrower
may repay and reborrow from time to time in accordance with the terms and
provisions hereof) from time to time on any Business Day during the period from
the date hereof to but excluding the Termination Date in an aggregate principal
amount at any one time outstanding which shall not exceed the Swing Commitment;
provided that, the Swing Lender shall not be obligated to make any Swing Loan
(i) which when added to the then outstanding Revolving Credit Loan Advances plus
the outstanding Letter of Credit Liabilities plus the outstanding Swing Loan
Advances would exceed the Revolving Credit Commitments, and (ii) at any time
after any Lender has refused to purchase a participation in any Swing Loan as
provided in Section 2.7(d). All Swing Loans shall bear interest at the lesser of
(A) the Maximum Rate and (B) the Applicable Rate for Base Rate Advances (subject
to Section 2.4) and shall be included within the Primary Obligations hereunder.
Each Swing Loan shall be subject to all the terms and conditions applicable to
the Revolving Credit Loan; provided that, (i) there shall be no minimum Swing
Loan Advance amount or repayment for a Swing Loan except as provided in Section
2.7(c), and (ii) each Swing Loan shall be available and may be prepaid on same
day telephonic notice to be followed promptly with an Advance Request Form
(except for telephonic notices of prepayment) from the Borrower to the Swing
Lender, so long as such notice is received by the Swing Lender prior to 3:00
p.m. (Austin, Texas time).
Swing Note. The Swing Loans made by the Swing Lender shall be evidenced by a
single promissory note of the Borrower in substantially the form of Exhibit B
hereto, payable to the order of the Swing Lender in a principal amount equal to
the Swing Commitment as originally in effect and otherwise duly completed.
Repayment of Swing Loans. Upon the earlier to occur of (i) the date 10 Business
Days after each Swing Loan Advance, and (ii) demand by the Swing Lender, the
Borrower shall promptly borrow Revolving Credit Loans from the Lenders, pursuant
to Section 2.1 hereof and apply the proceeds of such Revolving Credit Loans to
the repayment of such Swing Loan Advance then due.
Participation of Lenders. In the event the Borrower shall fail to repay when due
any Swing Loan, each Lender with a Revolving Credit Commitment shall irrevocably
and unconditionally purchase from the Swing Lender an SL Participation in such
Swing Loan in lawful money of the United States and in the same day funds, in an
amount equal to such Lender's pro rata share (based on the Revolving Credit
Commitments) of the principal amount of such Swing Loans then due. If such
amount is not in fact made available to the Swing Lender by any Lender with a
Revolving Credit Commitment, the Swing Lender shall be entitled to recover such
amount on demand from such Lender together with accrued interest thereon, for
each day from the date of demand therefor, if made prior to 1:00 p.m. (Austin,
Texas time) on any Business Day, or, if made at any other time, from the next
Business Day following the date of such demand, until the date such amount is
paid to the Swing Lender by such Lender at the Federal Funds Rate. If such
Lender does not pay such amount forthwith upon the Swing Lender's demand
therefor, and until such time as such Lender makes the required payment, the
Swing Lender shall be deemed to continue to have outstanding a Swing Loan in the
amount of such unpaid participation obligation for all purposes under the Loan
Documents other than those provisions requiring the other Lenders with a
Revolving Credit Commitment to purchase a participation therein. Thereafter,
each payment of all or any part of the Primary Obligations evidenced by the
Swing Note shall be paid to the Swing Lender for the ratable benefit of the
Swing Lender and the Lenders who are participants in the Swing Loan; provided
that, with respect to any participation hereunder, all interest accruing on the
Swing Loan (or any portion thereof) to which such participation relates prior to
the date of purchase of any participation hereunder shall be payable solely to
the Swing Lender for its own account.
Use of Proceeds. The proceeds of Advances shall be used by the Borrower to
refinance Debt of the Borrower under the Existing Credit Agreement, for working
capital in the ordinary course of business and other general corporate purposes.
Fees. (a) On or prior to each October 30 during the term hereof, beginning
October 30, 2004, the Borrower agrees to pay to the Agent for the account of the
Agent an annual agent fee in an amount to be agreed to by the Borrower and the
Agent pursuant to a side letter agreement, and (b) the Borrower agrees to pay to
the Agent for the account of each Lender a Commitment Fee (herein so called) on
the average daily unused amount of such Lender's Revolving Credit Commitment for
the period from and including the date of this Agreement to and including the
Termination Date at the Commitment Fee Rate, based on a 360 day year and the
actual number of days elapsed. The accrued Commitment Fee shall be payable in
arrears on each Quarterly Payment Date and on the Termination Date. For the
purpose of calculating the Commitment Fee hereunder, the Revolving Credit
Commitments shall be deemed utilized by the amount of all Revolving Credit Loan
Advances and all Letter of Credit Liabilities and without giving effect to any
Swing Loan Advances or SL Participations.
Determination of Eurodollar Margin and Base Rate Margin. The Eurodollar Margin
and the Base Rate Margin shall be defined and determined as follows:
"Base Rate Margin" shall mean (i) during the period commencing on
the date hereof and ending on but not including the first Adjustment Date,
0.50% per annum, and (ii) during each period, from and including one
Adjustment Date to but excluding the next Adjustment Date (herein a
"Calculation Period"), the percent per annum set forth in the table below
in this Section 2.10 under the heading "Base Rate Margin" opposite the
Total Leverage Ratio calculated for the completed four Fiscal Quarters
which immediately preceded the beginning of the applicable Calculation
Period.
"Eurodollar Margin" shall mean (i) during the period commencing on
the date hereof and ending on but not including the first Adjustment Date,
2.00% per annum, and (ii) during each Calculation Period, the percent per
annum set forth in the table below in this Section 2.10 under the heading
"Eurodollar
Margin" opposite the Total Leverage Ratio calculated for the completed
four Fiscal Quarters which immediately preceded the beginning of the
applicable Calculation Period.
TOTAL LEVERAGE RATIO BASE RATE MARGIN EURODOLLAR MARGIN
-------------------- ---------------- -----------------
Greater than 2.75:1.00 1.25% 2.75%
Equal to or less than 2.75:1.00, but
greater than 2.25:1.00 1.00% 2.50%
Equal to or less than 2.25:1.00, but
greater than 1.75:1.00 0.75% 2.25%
Equal to or less than 1.75:1.00, but
greater than 1.25:1.00 0.50% 2.00%
Equal to or less than 1.25:1.00, but
greater than 0.75:1.00 0.25% 1.75%
Equal to or less than 0.75:1.00 0.00% 1.50%
Upon delivery of the Compliance Certificate pursuant to Section
8.1(c) in connection with the financial statements required to be
delivered pursuant to Section 8.1(b) at the end of each Fiscal Quarter
commencing with such Compliance Certificate delivered with respect to the
Fiscal Quarter ending on June 30, 2004, the Eurodollar Margin and the Base
Rate Margin shall automatically be adjusted as set forth in the table
above, such automatic adjustment to take effect as of the first Business
Day after the receipt by the Agent of the related Compliance Certificate
(each such Business Day when the Eurodollar Margin or Base Rate Margin is
adjusted pursuant to this sentence or below, herein an "Adjustment Date").
If the Borrower fails to deliver such Compliance Certificate which so sets
forth the Total Leverage Ratio within the period of time required by
Section 8.1(c), the Eurodollar Margin and the Base Rate Margin shall
automatically be adjusted to highest applicable percentage set forth in
the grid above, such automatic adjustment to take effect as of the first
Business Day after the last day on which the Borrower was required to
deliver the applicable Compliance Certificate in accordance with Section
8.1(c) and to remain in effect until subsequently adjusted in accordance
herewith upon the delivery of a Compliance Certificate.
Reduction or Termination of Commitments.
Optional. The Borrower shall have the right to terminate in whole or reduce in
part the unused portion of the Commitments (including the Swing Commitment) upon
at least three Business Days prior notice (which notice shall be irrevocable) to
the Agent and each Lender specifying the effective date thereof, whether a
termination or reduction is being made, and the amount of any partial reduction,
provided that each partial reduction shall be in the amount of $5,000,000 (or in
the case of the Swing Commitment, $1,000,000) or an integral multiple thereof
and the Revolving Credit Commitments (other than the Swing Commitment) shall not
be reduced below the outstanding Letter of Credit Liabilities, and the Borrower
shall simultaneously prepay the amount by which the unpaid principal amount of
the Revolving Credit Loan Advances, the Swing Loan Advances and outstanding
Letter of Credit Liabilities exceeds the Revolving Credit Commitments (after
giving effect to such notice) plus accrued and unpaid interest on the principal
amount so prepaid. The Commitments may not be reinstated after they have been
terminated or reduced. In addition the Swing Commitment may never be more than
the Revolving Credit Commitments (exclusive of the amount of the Swing
Commitment).
Mandatory. Upon the occurrence of any event requiring a mandatory prepayment
under Section 4.3(c), (i) the Revolving Credit Commitments shall automatically
reduce by the amount equal to 100% of the Net Proceeds from the sale of assets
occurring on such date to the extent such amount exceeds either (A) $1,000,000
per Disposition or (B) $3,000,000 in the aggregate for all Dispositions which
have occurred since the date hereof, and (ii) the Borrower shall simultaneously
prepay the amount by which the unpaid principal amount of the Advances plus the
Letter of Credit Liabilities exceeds the Revolving Credit Commitments (after
giving effect to such reduction) plus accrued and unpaid interest on the
principal amount so prepaid.
Letters of Credit
Letters of Credit.
Subject to the terms and conditions of this Agreement, the Issuing Bank agrees
to issue one or more Letters of Credit for the account of the Borrower or any
Guarantor from time to time from the date hereof to but excluding the date 30
days prior to the Termination Date; provided, however, that the outstanding
Letter of Credit Liabilities shall not at any time exceed the lesser of (i)
$4,000,000, and (ii) an amount equal to (A) the Revolving Credit Commitments,
minus (B) the sum of the outstanding Revolving Credit Loan Advances and Swing
Loan Advances. Each Letter of Credit shall have an expiration date not beyond
five Business Days prior to the Termination Date, shall be payable in Dollars,
must support a transaction that is entered into in the ordinary course of the
Borrower's business, must be satisfactory in form and substance to the Issuing
Bank, and shall be issued pursuant to such documents and instruments (including,
without limitation, the Issuing Bank's standard application for issuance of
letters of credit as then in effect) as the Issuing Bank may require. No Letter
of Credit shall require any payment by the Issuing Bank to the beneficiary
thereunder pursuant to a drawing prior to the third Business Day following
presentment of a draft and any related documents to the Issuing Bank.
By the issuance of each Letter of Credit and without any further action on the
part of the Issuing Bank or any of the Lenders in respect thereof, the Issuing
Bank hereby grants to each Lender and each Lender hereby agrees to acquire from
the Issuing Bank a participation in each Letter of Credit and the related Letter
of Credit Liabilities, effective upon the issuance thereof without recourse or
warranty, equal to such Lender's pro rata share (based on the Revolving Credit
Commitments) of such Letter of Credit and Letter of Credit Liabilities. In
furtherance of the foregoing, each Lender hereby absolutely and unconditionally
agrees to pay to the Issuing Bank, as and when required by Section 3.4, such
Lender's pro rata share of each Letter of Credit Disbursement. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this Section 3.1(b) in respect of each Letter of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including without limitation the occurrence and continuance of any Default, and
that each such payment shall be made without any offset, abatement, withholding,
or reduction whatsoever. This agreement to grant and acquire participations is
an agreement between the Issuing Bank and the Lenders, and neither the Borrower
nor any beneficiary of a Letter of Credit shall be entitled to rely thereon. The
Borrower agrees that each Lender purchasing a participation from the Issuing
Bank pursuant to this Section 3.1(b) may exercise all its rights to payment
against the Borrower including the right of setoff, with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
The Issuing Bank agrees with each Lender that it shall transfer to such Lender,
without any offset, abatement, withholding, or reduction whatsoever, such
Lender's proportionate share of any payment of a reimbursement obligation of the
Borrower with respect to a Letter of Credit Disbursement, including interest
payments made to the Issuing Bank on such Letter of Credit Disbursement, based
on the proportion that the payment made by such Lender to the Issuing Bank in
respect of the principal amount of such Letter of Credit Disbursement bears to
the outstanding principal amount of such Letter of Credit Disbursement.
Procedure for Issuing Letters of Credit. Each Letter of Credit shall be issued
on at least three Business Days prior notice from the Borrower to the Issuing
Bank by means of a Letter of Credit Request Form describing the transaction
proposed to be supported thereby and specifying (a) the date on which such
Letter of Credit is to be issued (which shall be a Business Day) and the face
amount thereof, (b) the name and address of the beneficiary, (c) whether such
Letter of Credit shall permit a single drawing or multiple drawings, (d) the
conditions permitting the drawing or drawings thereunder, (e) whether the draft
thereunder shall be a sight or time draft and, if the latter, the date when the
draft shall be payable, (f) the form of the draft and any other documents
required to be presented at the time of any drawing (such notice to set forth
the exact wording of such documents or to attach copies thereof), and (g) the
expiration date of such Letter of Credit. Upon fulfillment of the applicable
conditions precedent in Article VI, the Issuing Bank shall make the applicable
Letter of Credit available to the Borrower or, if so requested by the Borrower,
to the beneficiary of the Letter of Credit.
Presentment and Reimbursement. (a) Promptly upon receipt of any documents
purporting to represent a demand for payment under a Letter of Credit, the
Issuing Bank shall give notice to the Borrower of the receipt thereof, which
notice may be telephonic to be followed by written notice (which notice may be
made by electronic mail or other electronic media) to the Borrower's general
counsel and chief financial officer. If the Issuing Bank shall have determined
that a demand for payment under a Letter of Credit appears on its face to be in
conformity with the terms and conditions of such Letter of Credit, the Issuing
Bank shall give notice to the Borrower, which notice may be telephonic, of the
receipt and amount of such drawing and the date on which payment thereon will be
made. If the Borrower shall not have discharged in full by 10:00 a.m. (Austin,
Texas time) on the date of such payment, its obligation to reimburse the Issuing
Bank in the amount of such drawing under such Letter of Credit, then the amount
of such drawing for which the Issuing Bank shall not have been reimbursed by the
Borrower shall be paid by the Borrower to the Issuing Bank or, to the extent the
Issuing Bank shall have received payments with respect to such drawing from the
Lenders, to the Issuing Bank for the account of the Lenders, within three
Business Days after the date of such drawing (but in any event before the
Termination Date), together with interest on such amount at the Default Rate
from the date of payment by the Issuing Bank to the beneficiary under the Letter
of Credit (each such payment made after 10:00 a.m. (Austin, Texas time) on such
due date to be deemed to be made on the next succeeding Business Day). The
obligations of the Borrower under this Section 3.3 shall be unconditional,
absolute, and irrevocable in all respects.
Payment. If the Issuing Bank shall pay any draft presented under a Letter of
Credit issued by it and if the Borrower shall not have discharged in full its
reimbursement obligation by 10:00 a.m. (Austin, Texas time) on the date of such
Letter of Credit Disbursement, then the Issuing Bank shall as promptly as
practicable give telephonic (which shall be promptly confirmed in writing) or
facsimile notice to each Lender of the date of such payment and the amount of
such payment and each Lender shall pay to the Issuing Bank, in immediately
available funds, not later than 3:00 p.m. (Austin, Texas time) on the date of
such payment (or, if Issuing Bank shall notify the Lenders of such payment after
11:00 a.m. (Austin, Texas time) then not later than 12:00 p.m. (Austin, Texas
time) on the next succeeding Business Day), an amount equal to such Lender's pro
rata share of such drawing; provided that, if any Lender shall for any reason
fail to pay the Issuing Bank its pro rata share of the drawing on the date of
such payment, the Issuing Bank shall itself fund such Lender's pro rata share
while retaining the right to proceed against such Lender for reimbursement
therefor. In the event that the Issuing Bank shall fund a Lender's pro rata
share of a drawing, the amount so funded shall bear interest at a rate per annum
equal to the Federal Funds Rate and shall be payable by such Lender when it
reimburses the Issuing Bank for funding its pro rata part (with interest to
accrue from and including the date of such funding to and excluding the date of
reimbursement). In the event that a Lender, after notice, pays its pro rata
share of a drawing hereunder and such payment is not required to fund a Letter
of Credit Disbursement, the Issuing Bank shall return such payment to the Lender
with interest calculated at a rate per annum equal to the Federal Funds Rate
(with interest to accrue from and including the date of such funding to and
excluding the date of return). The obligation of each Lender to pay to the
Issuing Bank such Lender's pro rata part of any drawing under a Letter of Credit
shall be absolute and unconditional under any and all circumstances (including
without limitation the passage of the Termination Date), and such obligations
shall be several and not joint.
Letter of Credit Fee. The Borrower shall pay to the Agent, for the account of
the Lenders, a nonrefundable letter of credit fee for each Letter of Credit
payable in arrears on each Quarterly Payment Date in an amount equal to the
applicable Eurodollar Margin multiplied by the undrawn amount of such Letter of
Credit, based on a 360 day year and the actual number of days in the stated term
of such Letter of Credit. In addition, the Borrower shall pay to the Issuing
Bank, solely for its own account as issuer of Letters of Credit, nonrefundable
fronting, amendment, transfer, negotiation and other fees as determined in
accordance with the Issuing Bank's then current fee policy.
Obligations Absolute. The obligations of the Borrower under this Agreement and
the other Loan Documents (including without limitation the obligation of the
Borrower to reimburse the Issuing Bank for draws under any Letter of Credit)
shall be absolute, unconditional, and irrevocable, and shall be performed
strictly in accordance with the terms of this Agreement and the other Loan
Documents under all circumstances whatsoever, including without limitation the
following circumstances:
Any lack of validity or enforceability of any Letter of Credit or any other Loan
Document;
Any amendment or waiver of or any consent to departure from any Loan Document;
The existence of any claim, set-off, counterclaim, defense or other rights which
the Borrower, any Obligated Party, or any other Person may have at any time
against any beneficiary of any Letter of Credit, the Issuing Bank, any Lender,
the Agent, or any other Person, whether in connection with this Agreement or any
other Loan Document or any unrelated transaction;
Any statement, draft, or other document presented under any Letter of Credit
proving to be forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect whatsoever;
Payment by the Issuing Bank under any Letter of Credit against presentation of a
draft or other document which does not comply with the terms of such Letter of
Credit; or
Any other circumstance or happening whatsoever, whether or not similar to any of
the foregoing.
Limitation of Liability. The Borrower assumes all risks of the acts or omissions
of any beneficiary of any Letter of Credit with respect to its use of such
Letter of Credit. Neither the Issuing Bank, the Lenders, the Agent, nor any of
their officers or directors shall have any responsibility or liability to the
Borrower or any other Person for: (a) the failure of any draft to bear any
reference or adequate reference to any Letter of Credit, or the failure of any
documents to accompany any draft at negotiation, or the failure of any Person to
surrender or to take up any Letter of Credit or to send documents apart from
drafts as required by the terms of any Letter of Credit, or the failure of any
Person to note the amount of any instrument on any Letter of Credit, each of
which requirements, if contained in any Letter of Credit itself, it is agreed
may be waived by the Issuing Bank, (b) errors, omissions, interruptions, or
delays in transmission or delivery of any messages, (c) the validity,
sufficiency, or genuineness of any draft or other document, or any
endorsement(s) thereon, even if any such draft, document or endorsement should
in fact prove to be in any and all respects invalid, insufficient, fraudulent,
or forged or any statement therein is untrue or inaccurate in any respect, (d)
the payment by the Issuing Bank to the beneficiary of any Letter of Credit
against presentation of any draft or other document that does not comply with
the terms of the Letter of Credit, or (e) any other circumstance whatsoever in
making or failing to make any payment under a Letter of Credit. The Borrower
shall have a claim against the Issuing Bank, and the Issuing Bank shall be
liable to the Borrower, to the extent of any direct, but not consequential,
damages suffered by the Borrower which the Borrower proves in a final
nonappealable judgment were caused by (i) the Issuing Bank's willful misconduct
or gross negligence in determining whether documents presented under any Letter
of Credit complied with the terms thereof or (ii) the Issuing Bank's willful
failure to pay under any Letter of Credit after presentation to it of documents
strictly complying with the terms and conditions of such Letter of Credit. The
Issuing Bank may accept documents that appear on their face to be in order,
without responsibility for further investigation, regardless of any notice or
information to the contrary.
Payments
Method of Payment. Except as provided in Article III, all payments of principal,
interest, and other amounts to be made by the Borrower under this Agreement and
the other Loan Documents shall be made to the Agent at the Payment Office for
the account of each Lender's Applicable Lending Office in Dollars and in
immediately available funds by credit to Account Number 4518-151436, without
setoff, deduction, or counterclaim, not later than 1:00 p.m. (Austin, Texas
time) on the date on which such payment shall become due (each such payment made
after such time on such due date to be deemed to have been made on the next
succeeding Business Day). The Borrower shall, at the time of making each such
payment, specify to the Agent the sums payable by the Borrower under this
Agreement and the other Loan Documents to which such payment is to be applied
(and in the event that the Borrower fails to so specify, or if an Event of
Default has occurred and is continuing, the Agent may apply such payment to the
Obligations in such order and manner as it may elect in its sole discretion,
subject to Section 4.4 hereof). Each payment received by the Agent under this
Agreement or any other Loan Document for the account of a Lender shall be paid
by the Agent to such Lender, in immediately available funds, for the account of
such Lender's Applicable Lending Office within one Business Day following
receipt thereof. Whenever any payment under this Agreement or any other Loan
Document shall be stated to be due on a day that is not a Business Day, such
payment may be made on the next succeeding Business Day, and such extension of
time shall in such case be included in the computation of the payment of
interest, the Commitment Fee and any other fees, as the case may be.
Voluntary Prepayment. The Borrower may, upon at least one Business Day prior
notice to the Agent in the case of Base Rate Advances (except as otherwise
provided for under Section 2.7(a) for Swing Loan Advances), and at least three
Business Days prior notice to the Agent in the case of Eurodollar Advances,
voluntarily prepay the Advances in whole at any time or from time to time in
part without premium or penalty but with accrued interest to the date of
prepayment on the amount so prepaid, provided that (a) Eurodollar Advances may
be prepaid only on the last day of the Interest Period for such Advances, and
(b) each partial prepayment shall be in the principal amount of $500,000 or an
integral multiples of $100,000. All notices under this Section shall be
irrevocable and shall be given not later than 11:00 a.m. (Austin, Texas time) on
the day which is not less than the number of Business Days specified above for
such notice. Any such voluntary prepayments shall be applied first to the Swing
Loan Advances, then to Letter of Credit Disbursements for which the Issuing Bank
has not been reimbursed by the Borrower, then to Base Rate Advances under the
Revolving Credit Loan, then to Eurodollar Advances under the Revolving Credit
Loan and then to the remaining Letter of Credit Liabilities. Any prepayments
hereunder shall be accompanied with accrued and unpaid interest on the amount
prepaid to the date of prepayment.
Mandatory Prepayments.
If at any time the amount equal to the sum of (i) the outstanding principal
amount of all Revolving Credit Loan Advances and the Swing Loan Advances, plus
(ii) the Letter of Credit Liabilities, exceeds the aggregate amount of the
Revolving Credit Commitments, the Borrower shall promptly prepay Revolving
Credit Loan Advances, Swing Loan Advances and the Letter of Credit Disbursements
by the amount of the excess or, if no Revolving Credit Loan Advances, Swing Loan
Advances or Letter of Credit Disbursements are outstanding, the Borrower shall
immediately pledge to the Agent cash or Cash Equivalent Investments (subject to
no other Liens) in an amount equal to the excess as security for the
Obligations. Any such mandatory prepayments shall be applied first to Swing Loan
Advances, then to Letter of Credit Disbursements for which the Issuing Bank has
not been reimbursed by the Borrower, then to Base Rate Advances under the
Revolving Credit Loan, then to Eurodollar Advances under the Revolving Credit
Loan, and then to the remaining Letter of Credit Liabilities. Any prepayments
hereunder shall be accompanied with accrued and unpaid interest on the amount
prepaid to the date of prepayment.
After any reduction in the Commitments pursuant to Section 2.11, the Borrower
shall promptly prepay the outstanding Revolving Credit Loan Advances and Swing
Loan Advances by the amount which the sum of the outstanding principal amount of
the Advances under the Revolving Credit Loan and the Swing Loan plus the Letter
of Credit Liabilities exceeds the aggregate amount of the Revolving Credit
Commitments, as reduced.
Upon the Disposition of any assets (other than Dispositions of assets permitted
under Sections 9.8(a) and (c)), the Borrower shall promptly prepay the Advances
by an amount equal to the Net Proceeds of such Disposition; provided however,
with respect to any Dispositions permitted under Sections 9.8(b) and (d), the
Borrower shall promptly prepay the Advances by an amount equal to the Net
Proceeds of such Disposition to the extent such amount exceeds either (i)
$1,000,000 per Disposition or (ii) $3,000,000 in the aggregate for all
Dispositions which have occurred since the date hereof. Any such mandatory
prepayments shall be applied first to Swing Loan Advances, then to Letter of
Credit Disbursements for which the Issuing Bank has not been reimbursed by the
Borrower, then to the Base Rate Advances under the Revolving Credit Loan, then
to Eurodollar Advances under the Revolving Credit Loan, and then to the
remaining Letter of Credit Liabilities. Any prepayments hereunder shall be
accompanied with accrued and unpaid interest on the amount prepaid to the date
of prepayment.
Pro Rata Treatment. Except to the extent otherwise provided herein: (a) each
Advance shall be made by the Lenders under Section 2.1, each payment of the
Commitment Fee under Section 2.9, each payment of the Letter of Credit fee under
Section 3.5 (except as provided therein) shall be made for the account of the
Lenders, pro rata according to their respective Revolving Credit Commitments;
(b) each termination or reduction of the Commitments under Section 2.11 shall be
applied to the Revolving Credit Commitments of the Lenders, pro rata according
to the respective Revolving Credit Commitments; (c) the making, Conversion, and
Continuation of Advances of a particular Type (other than Conversions provided
for by Section 5.4) shall be made pro rata among the Lenders holding Advances of
such Type according to the amounts of their respective Revolving Credit
Commitments; (d) each payment and prepayment of principal of or interest on
Advances by the Borrower or any Obligated Party of a particular Type of Loan
shall be made to the Agent for the account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of such Advances of such Revolving
Credit Loan held by such Lenders; (e) any and all other monies received by the
Agent from any source other than pursuant to any of clauses (a) through (d)
hereinabove (including, without limitation, from the Borrower or any Guarantor)
to be applied first against the Primary Obligations and shall be for the pro
rata benefit and account of the Lenders based upon each Lender's aggregate
outstanding Advances of all Types and LC Participations and SL Participations to
the aggregate outstanding Advances of all Types and LC Participations and SL
Participations of all Lenders and then against the Secondary Obligations and
shall be for the pro rata benefit and account of the Lenders based upon their
respective unpaid amounts of the Secondary Obligations; and (f) the Lenders
shall purchase from the Issuing Bank and the Swing Lender pursuant to Section
3.1 and Section 2.7 respectively, participations in the Letters of Credit and
the related Letter of Credit Liabilities and the Swing Loans respectively, pro
rata in accordance with their Revolving Credit Commitments.
Non-Receipt of Funds by the Agent. Unless the Agent shall have been notified by
a Lender or the Borrower (the "Payor") prior to the date on which such Lender is
to make payment to the Agent hereunder or the Borrower is to make a payment to
the Agent for the account of one or more of the Lenders, as the case may be
(such payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the
intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, (a) the recipient of such payment shall, on
demand, pay to the Agent the amount made available to it together with interest
thereon in respect of the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to (i) if recovered from a Lender, at the Federal Funds Rate for
such period and (ii) if recovered from the Borrower, the rate of interest
applicable to the Swing Loan, and (b) Agent shall be entitled to offset against
any and all sums to be paid to such recipient, the amount calculated in
accordance with the foregoing clause (a).
Taxes.
Any and all payments by the Borrower to or for the account of the Agent or any
Lender under any Loan Document shall be made free and clear of and without
deduction for any and all present or future taxes, duties, levies, imposts,
deductions, assessments, fees, withholdings or similar charges, and all
liabilities with respect thereto, excluding, in the case of the Agent and each
Lender, taxes imposed on or measured by its overall net income, and franchise
taxes imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which the Agent or such Lender,
as the case may be, is organized or maintains a lending office (all such
non-excluded taxes, duties, levies, imposts, deductions, assessments, fees,
withholdings or similar charges, and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by any laws to deduct any Taxes
from or in respect of any sum payable under any Loan Document to the Agent or
any Lender, (i) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable to additional
sums payable under this Section), each of the Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable laws, and (iv) within 30 days after the date of such
payment, the Borrower shall furnish to the Agent (which shall forward the same
to such Lender) the original or a certified copy of a receipt evidencing payment
thereof. In addition, the Borrower agrees to pay any and all present or future
stamp, court or documentary taxes and any other excise or property taxes or
charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "Other Taxes").
If the Borrower shall be required to deduct or pay any Taxes or Other Taxes from
or in respect of any sum payable under any Loan Document to the Agent or any
Lender, the Borrower shall also pay to the Agent or to such Lender, as the case
may be, at the time interest is paid, such additional amount that the Agent or
such Lender specifies is necessary to preserve the after-tax yield (after
factoring in all taxes, including taxes imposed on or measured by net income)
that the Agent or such Lender would have received if such Taxes or Other Taxes
had not been imposed. The Borrower agrees to indemnify the Agent and each Lender
for (i) the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed or asserted by any jurisdiction on amounts payable under this
Section) paid by the Agent and such Lender, (ii) amounts payable under Section
4.6(c) and (iii) any liability (including additions to tax, penalties, interest
and expenses) arising therefrom or with respect thereto paid by the Agent and
such Lender, in each case whether or not such Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
Payment under this clause (d) shall be made within 30 days after the date the
Lender or the Agent makes a demand therefor.
Tax Forms.
i) Each Lender that is not a "United States person" within the
meaning of Section 7701(a)(30) of the Code (a "Foreign Lender")
shall deliver to the Agent, prior to receipt of any payment subject
to withholding under the Code (or upon accepting an assignment of an
interest herein), two duly signed completed copies of either IRS
Form W-8BEN or any successor thereto (relating to such Foreign
Lender and entitling it to an exemption from, or reduction of,
withholding tax on all payments to be made to such Foreign Lender by
the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any
successor thereto (relating to all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement) or such
other evidence satisfactory to the Borrower and the Agent that such
Foreign Lender is entitled to an exemption from, or reduction of,
U.S. withholding tax, including any exemption pursuant to Section
881(c) of the Code. Thereafter and from time to time, each such
Foreign Lender shall (A) promptly submit to the Agent such
additional duly completed and signed copies of one of such forms (or
such successor forms as shall be adopted from time to time by the
relevant United States taxing authorities) as may then be available
under then current United States laws and regulations to
avoid, or such evidence as is satisfactory to the Borrower and the
Agent of any available exemption from or reduction of, United States
withholding taxes in respect of all payments to be made to such
Foreign Lender by the Borrower pursuant to this Agreement, (B)
promptly notify the Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction, and (C)
take such steps as shall not be materially disadvantageous to it, in
the reasonable judgment of such Lender, and as may be reasonably
necessary (including the re-designation of its Applicable Lending
Office) to avoid any requirement of applicable laws that the
Borrower make any deduction or withholding for taxes from amounts
payable to such Foreign Lender.
Each Foreign Lender, to the extent it does not act or ceases to act for its own
account with respect to any portion of any sums paid or payable to such Lender
under any of the Loan Documents (for example, in the case of a typical
participation by such Lender), shall deliver to the Agent on the date when such
Foreign Lender ceases to act for its own account with respect to any portion of
any such sums paid or payable, and at such other times as may be necessary in
the determination of the Agent (in the reasonable exercise of its discretion),
(A) two duly signed completed copies of the forms or statements required to be
provided by such Lender as set forth above, to establish the portion of any such
sums paid or payable with respect to which such Lender acts for its own account
that is not subject to U.S. withholding tax, and (B) two duly signed completed
copies of IRS Form W-8IMY (or any successor thereto), together with any
information such Lender chooses to transmit with such form, and any other
certificate or statement of exemption required under the Code, to establish that
such Lender is not acting for its own account with respect to a portion of any
such sums payable to such Lender.
The Borrower shall not be required to pay any additional amount to any Foreign
Lender under Section 4.6 (A) with respect to any Taxes required to be deducted
or withheld on the basis of the information, certificates or statements of
exemption such Lender transmits with an IRS Form W-8IMY pursuant to this Section
4.7 or (B) if such Lender shall have failed to satisfy the foregoing provisions
of this Section 4.7(a); provided that if such Lender shall have satisfied the
requirement of this Section 4.7(a) on the date such Lender became a Lender or
ceased to act for its own account with respect to any payment under any of the
Loan Documents, nothing in this Section 4.7(a) shall relieve the Borrower of its
obligation to pay any amounts pursuant to Section 4.6 in the event that, as a
result of any change in any applicable law, treaty or governmental rule,
regulation or order, or any change in the interpretation, administration or
application thereof, such Lender is no longer properly entitled to deliver
forms, certificates or other evidence at a subsequent date establishing the fact
that such Lender or other Person for the account of which such Lender receives
any sums payable under any of the Loan Documents is not subject to withholding
or is subject to withholding at a reduced rate.
The Agent may, without reduction, withhold any Taxes required to be deducted and
withheld from any payment under any of the Loan Documents with respect to which
the Borrower is not required to pay additional amounts under this Section
4.7(a).
Upon the request of the Agent, each Lender that is a "United States person"
within the meaning of Section 7701(a)(30) of the Code shall deliver to the Agent
two duly signed completed copies of IRS Form W-9. If such Lender fails to
deliver such forms, then the Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable back-up withholding tax
imposed by the Code, without reduction.
If any Governmental Authority asserts that the Agent did not properly withhold
or backup withhold, as the case may be, any tax or other amount from payments
made to or for the account of any Lender, such Lender shall indemnify the Agent
therefor, including all penalties and interest, any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section, and costs
and expenses (including attorney's fees and expenses) of the Agent. The
obligation of the Lenders under this Section shall survive the termination of
the Commitments, repayment of all other Obligations hereunder and the
resignation of the Agent.
Computation of Interest. Interest on the Advances and all other amounts payable
by the Borrower hereunder shall be computed on the basis of a year of 360 days
and the actual number of days elapsed (including the first day but excluding the
last day) unless such calculation would result in a usurious rate, in which case
interest shall be calculated on the basis of a year of 365 or 366 days, as the
case may be.
Proceeds of Collateral and Collections under the Guaranty.
Proceeds. Except as otherwise permitted by Section 4.3, any proceeds received by
the Agent from the sale or other liquidation of the Collateral and from
collections under the Guaranty shall first be applied as payment of the accrued
and unpaid fees of the Agent hereunder and then to all other unpaid or
unreimbursed Obligations (including reasonable attorneys' fees and expenses)
owing to the Agent in its capacity as Agent only. Any amount of such proceeds
remaining after the applications described in the preceding sentence shall be
distributed:
first, to the Lenders, pro rata, in accordance with the respective unpaid
amounts of the Primary Obligations (including in such Primary Obligations for
purposes of this calculation all Letter of Credit Liabilities) until all Primary
Obligations are paid in full and provided that each Lender's pro rata portion of
such proceeds applicable to Letter of Credit Liabilities shall be held by the
Agent (and not disbursed to the Lenders) as collateral for the Letter of Credit
Liabilities relating thereto;
then to the Lenders, pro rata, in accordance with the respective unpaid amounts
of the Secondary Obligations; and
after all Primary Obligations are paid in full, and all Letter of Credit
Liabilities have terminated or are otherwise satisfied, all remaining portions
of the proceeds of the Collateral then held by the Agent or such Lender as
collateral for the Letter of Credit Liabilities shall be distributed to the
Lenders, pro rata, in accordance with their respective unpaid amounts of the
Secondary Obligations.
Noncash Proceeds. Notwithstanding anything to the contrary contained herein, if
the Agent shall ever acquire any Collateral through foreclosure or by a
conveyance in lieu of foreclosure or by retaining any of the Collateral in
satisfaction of all or part of the Obligations or if any proceeds of Collateral
received by the Agent to be distributed and shared pursuant to this Section 4.9
are in a form other than immediately available funds, the Agent shall not be
required to remit any share thereof under the terms hereof and the Lenders shall
only be entitled to their undivided interests in the Collateral or noncash
proceeds as determined hereby. The Lenders shall receive the applicable portions
(as determined in accordance with Section 4.9(a)) of any immediately available
funds consisting of proceeds from such Collateral or proceeds of such noncash
proceeds so acquired only if any when paid in connection with the subsequent
disposition thereof. While any Collateral or other property to be shared
pursuant to this Section 4.9 is held by the Agent pursuant to this clause (b),
the Agent shall hold such Collateral or other property for the benefit of the
Lenders and all matters relating to the management, operation, further
disposition or any other aspect of such Collateral or other property shall be
resolved by the agreement of the Required Lenders.
Payments Set Aside. To the extent that any payment by or on behalf of the
Borrower is made to the Agent or any Lender, or the Agent or any Lender
exercises its right of set-off, and such payment or the proceeds of such set-off
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by the Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
the Bankruptcy Code of the United States of America, or any other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization or similar
laws of the applicable jurisdictions or otherwise, then (i) to the extent of
such recovery, the obligation or part thereof originally intended to be
satisfied shall be revived and continued in full force and effect as if such
payment had not been made or such set-off had not occurred, and (ii) each Lender
severally agrees to pay to the Agent upon demand its applicable share of any
amount so recovered from or repaid by the Agent, plus interest thereon from the
date of such demand to the date such payment is made at a rate per annum equal
to the Federal Funds Rate from time to time in effect.
Yield Protection; Limitations on Advances; Capital Adequacy
Additional Costs.
The Borrower shall pay directly to each Lender from time to time such amounts as
such Lender may determine to be necessary to compensate it for any costs
incurred by such Lender which such Lender determines are attributable to its
making or maintaining of any Eurodollar Advances hereunder or its obligation to
make any of such Advances hereunder, or any reduction in any amount receivable
by such Lender hereunder in respect of any such Advances or such obligation
(such increases in costs and reductions in amounts receivable being herein
called "Additional Costs"), resulting from any Regulatory Change which:
changes the basis of taxation of any amounts payable to such Lender under this
Agreement or its Note (or Notes) in respect of any of such Advances (other than
taxes imposed on the overall net income of such Lender or its Applicable Lending
Office for any of such Advances by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office);
imposes or modifies any reserve, special deposit, minimum capital, capital
ratio, or similar requirement relating to any extensions of credit or other
assets of, or any deposits with or other liabilities or commitments of, such
Lender (including any of such Advances or any deposits referred to in the
definition of "Eurodollar Rate" in Section 1.1 hereof); or imposes any other
condition affecting this Agreement or the Notes or any of such extensions of
credit or liabilities or commitments.
Each Lender will notify the Borrower of any event occurring after the date of
this Agreement which will entitle such Lender to compensation pursuant to this
Section 5.1(a) as promptly as practicable after it obtains knowledge thereof and
determines to request such compensation, and will designate a different
Applicable Lending Office for the Advances affected by such event if such
designation will avoid the need for, or reduce the amount of, such compensation
and will not, in the sole opinion of such Lender, violate any law, rule, or
regulation or be in any way disadvantageous to such Lender, provided that such
Lender shall have no obligation to so designate an Applicable Lending Office
located in the United States of America. Each Lender will furnish the Borrower
with a certificate setting forth the basis and the amount of each request of
such Lender for compensation under this Section 5.1(a). If any Lender requests
compensation from the Borrower under this Section 5.1(a), the Borrower may, by
notice to such Lender (with a copy to the Agent) suspend the obligation of such
Lender to make or Continue making, or Convert Advances into, Advances of the
Type with respect to which such compensation is requested until the Regulatory
Change giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.4 hereof shall be applicable).
Without limiting the effect of the foregoing provisions of this Section 5.1, in
the event that, by reason of any Regulatory Change, any Lender either (i) incurs
Additional Costs based on or measured by the excess above a specified level of
the amount of a category of deposits or other liabilities of such Lender which
includes deposits by reference to which the interest rate on Eurodollar Advances
is determined as provided in this Agreement or a category of extensions of
credit or other assets of such Lender which includes Eurodollar Advances or (ii)
becomes subject to restrictions on the amount of such a category of liabilities
or assets which it may hold, then, if such Lender so elects by notice to the
Borrower (with a copy to the Agent), the obligation of such Lender to make or
Continue making, or Convert Advances into, Eurodollar Advances hereunder shall
be suspended until such Regulatory Change ceases to be in effect (in which case
the provisions of Section 5.4 hereof shall be applicable).Determinations and
allocations by any Lender for purposes of this Section 5.1 of the effect of any
Regulatory Change on its costs of maintaining its obligations to make Eurodollar
Advances or of making or maintaining Eurodollar Advances or on amounts
receivable by it in respect of Eurodollar Advances, and of the additional
amounts required to compensate such Lender in respect of any Additional Costs,
shall be conclusive, provided that such determinations and allocations are made
on a reasonable basis.
Limitation on Types of Advances. Anything herein to the contrary
notwithstanding, if with respect to any Eurodollar Advances for any Interest
Period therefor:
The Agent determines (which determination shall be conclusive) that quotations
of interest rates for the relevant deposits referred to in the definition of
"Eurodollar Rate" in Section 1.1 hereof are not being provided in the relative
amounts or for the relative maturities for purposes of determining the rate of
interest for such Advances as provided in this Agreement; or
Required Lenders determine (which determination shall be conclusive absent
manifest error) and notify the Agent that the relevant rates of interest
referred to in the definition of "Eurodollar Rate" in Section 1.1 hereof on the
basis of which the rate of interest for such Advances for such Interest Period
is to be determined do not accurately reflect the cost to the Lenders of making
or maintaining such Advances for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof specifying the
relevant amounts or periods, and so long as such condition remains in effect,
the Lenders shall be under no obligation to make additional Eurodollar Advances
or to Convert Base Rate Advances into Eurodollar Advances and the Borrower
shall, on the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Advances, either prepay such Eurodollar Advances or
Convert such Eurodollar Advances into Base Rate Advances in accordance with the
terms of this Agreement.
Illegality. Notwithstanding any other provision of this Agreement, in the event
that it becomes unlawful for any Lender or its Applicable Lending Office to (a)
honor its obligation to make Eurodollar Advances hereunder or (b) maintain
Eurodollar Advances hereunder, then such Lender shall promptly notify the
Borrower (with a copy to the Agent) thereof and such Lender's obligation to make
or maintain Eurodollar Advances and to Convert Base Rate
Advances into Eurodollar Advances hereunder shall be suspended until such time
as such Lender may again make and maintain Eurodollar Advances (in which case
the provisions of Section 5.4 hereof shall be applicable).
Treatment of Affected Advances. If the Eurodollar Advances of any Lender (such
Eurodollar Advances being hereinafter called "Affected Advances") are to be
Converted pursuant to Section 5.1 or 5.3 hereof, such Lender's Affected Advances
shall be automatically Converted into Base Rate Advances on the last day(s) of
the then current Interest Period(s) for the Affected Advances (or, in the case
of a Conversion required by Section 5.1(b) or 5.3 hereof, on such earlier date
as such Lender may specify to the Borrower with a copy to the Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 5.1 or 5.3 hereof which gave rise to such Conversion no
longer exist:
To the extent that such Lender's Affected Advances have been so Converted, all
payments and prepayments of principal which would otherwise be applied to such
Lender's Affected Advances shall be applied instead to its Base Rate Advances;
and
All Affected Advances which would otherwise be made or Continued by such Lender
as Eurodollar Advances shall be made as or Converted into Base Rate Advances and
all Affected Advances of such Lender which would otherwise be Converted into
Eurodollar Advances shall be Converted instead into (or shall remain as) Base
Rate Advances.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.1 or 5.3 hereof which gave rise to the
Conversion of such Lender's Affected Advances pursuant to this Section 5.4 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Affected Advances are outstanding, such
Lender's Base Rate Advances shall be automatically Converted, on the first
day(s) of the next succeeding Interest Period(s) for such outstanding Affected
Advances to the extent necessary so that, after giving effect thereto, all
Eurodollar Advances held by the Lenders holding Eurodollar Advances and by such
Lender are held pro rata (as to principal amounts, and Interest Periods) in
accordance with their respective Revolving Credit Commitments.
Compensation. The Borrower shall pay to the Agent for the account of each
Lender, upon the request of such Lender through the Agent, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Lender) to
compensate it for any loss, cost, or expense incurred by it as a result of:
Any payment, prepayment or Conversion of a Eurodollar Advance for any reason
(including, without limitation, the acceleration of the outstanding Advances
pursuant to Section 11.2) on a date other than the last day of an Interest
Period for such Eurodollar Advance; or
Any failure by the Borrower for any reason (including, without limitation, the
failure of any conditions precedent specified in Article VI to be satisfied) to
borrow, Convert, or prepay a Eurodollar Advance on the date for such borrowing,
Conversion, or prepayment, specified in the relevant notice of borrowing,
prepayment, or Conversion under this Agreement.
Capital Adequacy. If after the date hereof, any Lender shall have determined
that the adoption or implementation of any applicable law, rule, or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Lender (or its parent) with any guideline,
request, or directive regarding capital adequacy (whether or not having the
force of law) of any central bank or other Governmental Authority, has or would
have the effect of reducing the rate of return on such Lender's (or its
parent's) capital as a consequence of its obligations hereunder or the
transactions contemplated hereby to a level below that which such Lender (or its
parent) could have achieved but for such adoption, implementation, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, within 10 Business Days after demand by such Lender (with a copy
to the Agent), the Borrower shall pay to such Lender such additional amount or
amounts as will compensate such Lender (or its parent) for such reduction. A
certificate of such Lender claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive, provided that the determination thereof is made on a reasonable
basis. In determining such amount or amounts, such Lender may use any reasonable
averaging and attribution methods.
Additional Costs in Respect of Letters of Credit. If as a result of any
Regulatory Change there shall be imposed, modified, or deemed applicable any
tax, reserve, special deposit, or similar requirement against or with respect to
or
measured by reference to Letters of Credit issued or to be issued hereunder or
the Issuing Bank's commitment to issue Letters of Credit hereunder, and the
result shall be to increase the cost to the Issuing Bank of issuing or
maintaining any Letter of Credit or its commitment to issue Letters of Credit
hereunder or reduce any amount receivable by the Issuing Bank hereunder in
respect of any Letter of Credit (which increase in cost, or reduction in amount
receivable, shall be the result of the Issuing Bank's reasonable allocation of
the aggregate of such increases or reductions resulting from such event), then,
upon demand by the Issuing Bank, the Borrower agrees to pay the Issuing Bank,
from time to time as specified by the Issuing Bank, such additional amounts as
shall be sufficient to compensate the Issuing Bank for such increased costs or
reductions in amount. A statement as to such increased costs or reductions in
amount incurred by the Issuing Bank, submitted by the Issuing Bank to the
Borrower, shall be conclusive as to the amount thereof, provided that the
determination thereof is made on a reasonable basis.
Conditions Precedent
Initial Extension of Credit. The obligation of each Lender to make its initial
Advance is subject to the condition precedent that the Agent shall have received
on or before the day of such Advance all of the following, each dated (unless
otherwise indicated) the date hereof, in form and substance satisfactory to the
Agent:
Resolutions. Resolutions of the Board of Directors of the Borrower and each
Guarantor certified by its Secretary or an Assistant Secretary which authorize
the execution, delivery, and performance of the Loan Documents to which it is or
is to be a party;
Incumbency Certificate. A certificate of incumbency certified by the Secretary
or an Assistant Secretary of the Borrower and each Guarantor certifying the
names of each of its officers authorized to sign the Loan Documents to which it
is or is to be a party (including the certificates contemplated herein) together
with specimen signatures of such officers;
Certificate or Articles of Incorporation and Certificate of Limited Partnership.
The certificate or articles of incorporation or certificate of limited
partnership, as applicable, of the Borrower and each Guarantor certified by the
Secretary of State of the State of its organization;
Bylaws and Limited Partnership Agreement. The bylaws or limited partnership
agreement, as applicable, of the Borrower and each Guarantor certified by the
Secretary or an Assistant Secretary of such Person;
Existence and Good Standing. Certificates of the appropriate government
officials of the state of organization of the Borrower and each Guarantor as to
its existence and good standing and certificates of appropriate government
officials of each state in which the Borrower and each Guarantor is required to
qualify to do business and where failure to so qualify could reasonably be
expected to have a Material Adverse Effect, as to the Borrower's and each
Guarantor's qualification to do business and good standing in such state, all
dated a current date;
Notes. The Notes executed by the Borrower;
Guaranty. The Guaranty executed by the Guarantors;
Contribution and Indemnification Agreement. The Contribution and Indemnification
Agreement executed by the Borrower and the Guarantors;
Borrower Security Agreement. The Borrower Security Agreement executed by the
Borrower;
Subsidiary Security Agreement. The Subsidiary Security Agreement executed by
each Guarantor, as applicable; [Intentionally Left Blank];
Opinion of Counsel. A favorable opinion of legal counsel to the Borrower and
each Guarantor satisfactory to the Agent, as to such matters as the Agent may
reasonably request;
Fees of Lenders. Evidence that all fees of the Agent and the Lenders payable
pursuant to side letter agreements shall have been paid in full by the Borrower;
and
Attorneys' Fees and Expenses. Evidence that the costs and expenses (including
attorneys' fees) referred to in Section 13.1, to the extent incurred, shall have
been paid in full by the Borrower.
All Extensions of Credit. The obligation of each Lender to make any Advance and
of the Issuing Bank to issue any Letter of Credit (including the initial Advance
and the initial Letter of Credit) is subject to the following additional
conditions precedent:
Advance Request Form, Telephonic Request, or Letter of Credit Request Form. The
Agent in respect of Revolving Credit Loan Advances, the Swing Lender in respect
of Swing Loan Advances, and the Issuing Bank in respect of Letters of Credit
shall have received, in accordance with Section 2.5, 2.7 or 3.2, as the case may
be, an Advance Request Form, a telephonic request, or Letter of Credit Request
Form, as applicable, executed by an authorized officer of the Borrower;
No Default. No Default shall have occurred and be continuing, or would result
from such Advance or Letter of Credit;
Representations and Warranties. All of the representations and warranties
contained in Article VII hereof and in the other Loan Documents shall be true
and correct in all material respects on and as of the date of such Advance or
issuance of Letter of Credit with the same force and effect as if such
representations and warranties had been made on and as of such date except to
the extent such representations and warranties speak to a specific date;
No Material Adverse Effect. Neither any Material Adverse Effect or any material
adverse change in the financial or capital markets shall have occurred since the
date of the most recent financial statements delivered to the Agent and the
Lenders pursuant to Section 8.1 hereof; and
Additional Documentation. The Agent shall have received such additional
approvals, opinions, or documents as the Agent or its legal counsel, ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C., may reasonably request.
Representations and Warranties
To induce the Agent, the Issuing Bank, and the Lenders to enter into this
Agreement, the Borrower represents and warrants to the Agent, the Issuing Bank,
and the Lenders that:
Existence. The Borrower and each Subsidiary (a) is a corporation (or other
entity as set forth on Schedule 7.14) duly organized, validly existing, and in
good standing under the laws of the jurisdiction of its incorporation or
organization; (b) has all requisite power and authority to own its assets and
carry on its business as now being or as proposed to be conducted; and (c) is
qualified to do business in all jurisdictions in which the nature of its
business makes such qualification necessary and where failure to so qualify
would have a Material Adverse Effect. Each of the Borrower and the Guarantors
has the power and authority to execute, deliver, and perform its obligations
under the Loan Documents to which it is or may become a party.
Financial Statements. The Borrower has delivered to the Agent audited
consolidated financial statements of the Borrower and its Subsidiaries as at and
for the fiscal year ended September 30, 2003, and unaudited consolidated
financial statements of the Borrower and its Subsidiaries for the five-month
period ended February 29, 2004. Such financial statements are true and correct,
have been prepared in accordance with GAAP, and fairly and accurately present,
on a consolidated basis, the financial condition of the Borrower and its
Subsidiaries as of the respective dates indicated therein and the results of
operations for the respective periods indicated therein. As of the date hereof,
neither the Borrower nor any of its Subsidiaries has any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments, or
unrealized or anticipated losses from any unfavorable commitments except as
referred to or reflected in such financial statements, and there has been no
Material Adverse Effect since the effective date of the most recent financial
statements referred to in this Section.
Action; No Breach. The execution, delivery, and performance by the Borrower and
each Guarantor of the Loan Documents to which it is or may become a party, and
compliance with the terms and provisions hereof and thereof have been duly
authorized by all requisite action on the part of the Borrower and each
Guarantor and do not and will not (a) violate or conflict with, or result in a
breach of, or require any consent, other than such consents which have
been obtained and copies of which have been provided to the Agent, under (i) the
articles of incorporation or bylaws or the applicable organizational documents
of the Borrower or any Guarantor, (ii) any applicable law, rule, or regulation
or any order, writ, injunction, or decree of any Governmental Authority or
arbitrator, including without limitation, the provisions of the Texas Pawnshop
Act (Chapter 371 of the Texas Finance Code) and the consumer loan provisions of
the Texas Finance Code, or (iii) any agreement or instrument to which the
Borrower or any of the Guarantors is a party or by which any of them or any of
their property is bound or subject, or (b) constitute a default under any such
agreement or instrument, or result in the creation or imposition of any Lien
upon any of the revenues or assets of the Borrower or any Guarantor (except for
Liens in favor of the Agent for the benefit of the Lenders).
Operation of Business. The Borrower and each of its Subsidiaries possess all
licenses, permits, franchises, patents, copyrights, trademarks, and tradenames,
or rights thereto, necessary to conduct their respective businesses
substantially as now conducted and as presently proposed to be conducted, and
the Borrower and each of its Subsidiaries are not in violation of any valid
rights of others with respect to any of the forgoing except where such violation
individually or in combination with all other such violations could not
reasonably be expected to have a Material Adverse Effect.
Litigation and Judgments. There is no action, suit, investigation, or proceeding
before or by any Governmental Authority or arbitrator pending, or to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary, that could, if adversely determined, reasonably be expected to have
a Material Adverse Effect. As of the date hereof, there are no outstanding
judgments against the Borrower or any Subsidiary, except for those certain
default judgments in an aggregate amount not exceeding $15,000 outstanding on
the date hereof.
Rights in Properties; Liens. The Borrower and each Subsidiary have good and
indefeasible title to or valid leasehold interests in their respective
properties and assets, real and personal, including the properties, assets, and
leasehold interests reflected in the financial statements described in Section
7.2, and none of the properties, assets, or leasehold interests of the Borrower
or any Subsidiary is subject to any Lien, except as permitted by Section 9.2.
Enforceability. The Loan Documents to which the Borrower or a Guarantor is a
party, when delivered, shall constitute the legal, valid, and binding
obligations of the Borrower or such Guarantor, as applicable, enforceable
against the Borrower or such Guarantor, as applicable, in accordance with their
respective terms, except as limited by bankruptcy, insolvency, or other laws of
general application relating to the enforcement of creditors' rights and general
principles of equity.
Approvals. No authorization, approval, or consent of, and no filing or
registration with, any Governmental Authority or third party is or will be
necessary for the execution, delivery, or performance by the Borrower of this
Agreement and by the Borrower or any Guarantor of the other Loan Documents to
which the Borrower or such Guarantor, as applicable, is or may become a party or
for the validity or enforceability thereof.
Debt. The Borrower and the Subsidiaries have no Debt, except as permitted by
Section 9.1.
Taxes. The Borrower and each Subsidiary have filed all tax returns (federal,
state, and local) required to be filed, including all income, franchise,
employment, property, and sales tax returns, and have paid all of their
respective liabilities for taxes, assessments, governmental charges, and other
levies that are due and payable other than those being contested in good faith
by appropriate proceedings diligently pursued for which adequate reserves have
been established. The Borrower knows of no pending investigation of the Borrower
or any Subsidiary by any taxing authority or of any pending but unassessed tax
liability of the Borrower or any Subsidiary.
Use of Proceeds; Margin Securities. Neither the Borrower nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock (within
the meaning of Regulations T, U, or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Advance will be used to
purchase or carry any margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock.
ERISA. As of the date hereof, the Borrower, each Subsidiary, each ERISA
Affiliate, and each Plan are in compliance in all material respects with all
applicable provisions of ERISA and the Code except for events of noncompliance
that will not have a Material Adverse Effect. Neither a Reportable Event nor a
Prohibited
Transaction has occurred and is continuing with respect to any Plan. No notice
of intent to terminate a Plan has been filed, nor has any Plan been terminated.
No circumstances exist which constitute grounds entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Plan, nor has
the PBGC instituted any such proceedings. Neither the Borrower nor any ERISA
Affiliate has completely or partially withdrawn from a Multiemployer Plan. With
respect to any Plan that is subject to Title IV or Section 302 of ERISA or
Section 412 or 4971 of the Code (a) no circumstances exist which constitute
grounds entitling the PBGC to institute proceedings to terminate, or appoint a
trustee to administer, a Plan, nor has the PBGC instituted any such proceedings,
(b) the Borrower and each ERISA Affiliate have met their minimum funding
requirements under ERISA, and no "accumulated funding deficiency" (for which an
excise tax is due or would be due in the absence of a waiver) as defined in
Section 412 of the Code or Section 302(a)(2) of ERISA, whichever may apply, has
been incurred with respect to any Plan, whether or not waived, (c) the present
value of all vested benefits under each Plan do not exceed the fair market value
of all Plan assets allocable to such benefits, determined on a termination basis
as of the most recent valuation date of the Plan and in accordance with ERISA,
and (d) neither the Borrower nor any ERISA Affiliate (i) has incurred any
liability to the PBGC under ERISA, (ii) is subject to any lien imposed under
Section 412(n) of the Code or Section 302(f) or 4068 of ERISA, whichever may
apply, with respect to any Plan or (iii) is required to provide security to a
Plan under Section 401(a)(29) of the Code.
Disclosure. All factual information (taken as a whole) furnished by or on behalf
of the Borrower in writing to the Agent or any Lender (including, without
limitation, all information contained in the Loan Documents) for purposes of or
in connection with this Agreement, the other Loan Documents or any transaction
contemplated herein or therein is, and all other such factual information (taken
as a whole) hereafter furnished by or on behalf of the Borrower to the Agent or
any Lender, will be true and accurate in all material respects on the date as of
which such information is dated or certified and not incomplete by omitting to
state any fact necessary to make such information (taken as a whole) not
misleading in any material respect at such time in light of the circumstances
under which such information was provided.
Subsidiaries. As of the date hereof, the Borrower has no Subsidiaries other than
those listed on Schedule 7.14 hereto, and Schedule 7.14 (a) sets forth the type
of each Subsidiary listed thereon, (b) sets forth the jurisdiction of
incorporation or organization of each Subsidiary, and the percentage of the
Borrower's (or intervening Subsidiary's) ownership of the outstanding voting
stock or other ownership interests of each Subsidiary. All of the outstanding
capital stock of each corporate Subsidiary has been validly issued, is fully
paid, and is nonassessable. There are no outstanding subscriptions, options,
warrants, calls, or rights to acquire, and no outstanding securities or
instruments convertible into, capital stock of any Subsidiary except as listed
on Schedule 7.14.
Agreements. Neither the Borrower nor any Subsidiary is a party to any indenture,
loan, or credit agreement, or to any lease or other agreement or instrument, or
subject to any charter or corporate restriction which could reasonably be
expected to have a Material Adverse Effect. Neither the Borrower nor any
Subsidiary is in default in any material respect in the performance, observance,
or fulfillment of any of the obligations, covenants, or conditions contained in
any agreement or instrument material to its business to which it is a party
other than defaults which could not reasonably be expected to have a Material
Adverse Effect.
Compliance with Laws. Neither the Borrower nor any Subsidiary is in violation of
any law, rule, regulation, order, or decree of any Governmental Authority or
arbitrator, including without limitation, the provisions of the Texas Pawnshop
Act (Chapter 371 of the Texas Finance Code), the consumer loan provisions of the
Texas Finance Code and provisions of the ▇▇▇▇▇ Law and other laws, rules and
regulations related to the regulation of firearms, other than violations which
could not reasonably be expected to have a Material Adverse Effect.
Investment Company Act. Neither the Borrower nor any Subsidiary is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Public Utility Holding Company Act. Neither the Borrower nor any Subsidiary is a
"holding company"' or a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company" or a "public utility" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Environmental Matters. Except for those matters which will not individually or
collectively have a Material Adverse Effect:
The Borrower, each Subsidiary, and all of their respective properties, assets,
and operations are in full compliance with all Environmental Laws. The Borrower
is not aware of, nor has the Borrower received notice of, any past, present, or
future conditions, events, activities, practices, or incidents which may
interfere with or prevent the compliance or continued compliance of the Borrower
and the Subsidiaries with all Environmental Laws;
The Borrower and each Subsidiary have obtained all permits, licenses, and
authorizations that are required under applicable Environmental Laws, and all
such permits are in good standing and the Borrower and its Subsidiaries are in
compliance with all of the terms and conditions of such permits;
No Hazardous Materials exist on, about, or within or have been used, generated,
stored, transported, disposed of on, or Released from any of the properties or
assets of the Borrower or any Subsidiary. The use which the Borrower and the
Subsidiaries make and intend to make of their respective properties and assets
will not result in the use, generation, storage, transportation, accumulation,
disposal, or Release of any Hazardous Material on, in, or from any of their
properties or assets except in compliance with Environmental Laws;
Neither the Borrower nor any of its Subsidiaries nor any of their respective
currently or previously owned or leased properties or operations is subject to
any outstanding or, to the best of its knowledge, threatened order from or
agreement with any Governmental Authority or other Person or subject to any
judicial or docketed administrative proceeding with respect to (i) failure to
comply with Environmental Laws, (ii) Remedial Action, or (iii) any Environmental
Liabilities arising from a Release or threatened Release;
There are no conditions or circumstances associated with the currently or
previously owned or leased properties or operations of the Borrower or any of
its Subsidiaries that could reasonably be expected to give rise to any
Environmental Liabilities;
Neither the Borrower nor any of its Subsidiaries is a treatment, storage, or
disposal facility requiring a permit under the Resource Conservation and
Recovery Act, 42 U.S.C. SECTION 6901 et seq., regulations thereunder or any
comparable provision of state law. The Borrower and its Subsidiaries are in
compliance with all applicable financial responsibility requirements of all
Environmental Laws;
Neither the Borrower nor any of its Subsidiaries has filed or failed to file any
notice required under applicable Environmental Law reporting a Release; and
No Lien arising under any Environmental Law has attached to any property or
revenues of the Borrower or its Subsidiaries.
Positive Covenants
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Lender has any Commitment hereunder, or the
Issuing Bank has any obligation to issue Letters of Credit hereunder, the
Borrower will perform and observe the following positive covenants:
Reporting Requirements. The Borrower will furnish to the Agent, the
Issuing Bank, and each Lender:
Annual Audited Financial Statements. As soon as available, and in any event
within 90 days after the end of each Fiscal Year of the Borrower and the
Subsidiaries, beginning with the Fiscal Year ending September 30, 2004, a copy
of the annual audited financial statements of the Borrower and the Subsidiaries
for such Fiscal Year containing, on a consolidated basis, balance sheets and
statements of income, retained earnings, and cash flow as at the end of such
Fiscal Year and for the 12-month period then ended, in each case setting forth
in comparative form the figures for the preceding Fiscal Year, all in reasonable
detail and audited and certified by Ernst & Young, or other independent
certified public accountants of recognized standing acceptable to the Agent, to
the effect that such report has been prepared in accordance with GAAP;
Quarterly Financial Statements. As soon as available and in any event within 45
days after the end of each Fiscal Quarter in each Fiscal Year of the Borrower
(for the first three Fiscal Quarters in each Fiscal Year), a copy of an
unaudited financial report of the Borrower and the Subsidiaries as of the end of
such Fiscal Quarter and for the portion of the Fiscal Year then ended,
containing, on a consolidated basis (and, at the request of the Agent, on a
consolidating basis), balance sheets and statements of income, retained
earnings, and cash flow in each case setting forth in comparative form the
figures for the corresponding period of the preceding Fiscal Year, all in
reasonable detail certified by the chief financial officer of the Borrower to
have been prepared in accordance with GAAP and to fairly and accurately present
(subject to year-end audit adjustments) the financial condition and results of
operations of the Borrower and the Subsidiaries, on a consolidated basis (and,
at the request of the Agent, on a consolidating basis), at the date and for the
periods indicated therein;
Compliance Certificate. As soon as available, and in any event within 45 days
after the end of each Fiscal Quarter of each Fiscal Year of the Borrower for the
first three Fiscal Quarters of each Fiscal Year and within 90 days after the end
of the fourth Fiscal Quarter of each Fiscal Year, a certificate (the "Compliance
Certificate") of the chief financial officer of the Borrower (i) stating that to
the best of such officer's knowledge, no Default has occurred and is continuing,
or if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that is proposed to be taken with respect thereto, and
(ii) showing in reasonable detail the most recent Fiscal Quarter calculations
demonstrating compliance with Article X;
Projections. As soon as available and in any event not later than the end of
each Fiscal Year, projections of consolidated financial statements of the
Borrower and its Subsidiaries for the upcoming Fiscal Year;
Quarterly Collateral Reports. As soon as available and in any event within 45
days after the end of each Fiscal Quarter in each Fiscal Year of the Borrower, a
report of the Borrower's and its Subsidiaries' Accounts (as defined in the
Borrower Security Agreement and the Subsidiary Security Agreement) and
Inventory, in form of Exhibit F attached hereto;
Management Letters. Promptly upon receipt thereof, a copy of any management
letter or written report submitted to the Borrower or any Subsidiary by
independent certified public accountants with respect to the business, condition
(financial or otherwise), operations, prospects, or properties of the Borrower
or any Subsidiary;
Notice of Litigation. Promptly after the commencement thereof, notice of all
actions, suits, and proceedings before any Governmental Authority or arbitrator
affecting the Borrower or any Subsidiary which, if determined adversely to the
Borrower or such Subsidiary, could reasonably be expected to have a Material
Adverse Effect;
Notice of Default. As soon as possible and in any event within 10 days after the
Borrower knows of the occurrence of each Default, a written notice setting forth
the details of such Default and the action that the Borrower has taken and
proposes to take with respect thereto;
ERISA Reports. Promptly after the filing or receipt thereof, copies of all
reports, including annual reports or informational returns, notices which the
Borrower or any ERISA Affiliate files with or receives from the PBGC or the U.S.
Department of Labor under ERISA, and any tax returns the Borrower or any ERISA
Affiliate file with the Internal Revenue Service related to any Plan; and as
soon as possible and in any event within five days after the Borrower or any
ERISA Affiliate knows or has reason to know that any Reportable Event (as to
which the thirty day notice requirement to the PBGC has not been waived) or
Prohibited Transaction has occurred with respect to any Plan or that the PBGC or
the Borrower or any Subsidiary or any ERISA Affiliate has instituted or will
institute proceedings under Title IV of ERISA to terminate any Plan, a
certificate of the chief financial officer of the Borrower setting forth the
details as to such Reportable Event or Prohibited Transaction or Plan
termination and the action that the Borrower proposes to take with respect
thereto;
Notice of Material Adverse Effect. As soon as possible and in any event within
10 days after the Borrower knows of the occurrence thereof, written notice of
any matter that could reasonably be expected to have a Material Adverse Effect;
Proxy Statements, Etc. As soon as available, one copy of each financial
statement, report, notice or proxy statement sent by the Borrower or any
Subsidiary to its stockholders generally and one copy of each regular, periodic
or
special report, registration statement, or prospectus filed by the Borrower
or any Subsidiary with any securities exchange or the Securities and Exchange
Commission or any successor agency;
General Information. Promptly, such other information concerning the Borrower or
any Subsidiary as the Agent or any Lender may from time to time reasonably
request.
Maintenance of Existence; Conduct of Business. The Borrower will preserve and
maintain, and will cause each Subsidiary to preserve and maintain, its corporate
(or partnership, limited liability company or other entity) existence and all of
its leases, privileges, licenses, permits, franchises, qualifications, and
rights that are necessary or desirable in the ordinary conduct of its business.
The Borrower will conduct, and will cause each Subsidiary to conduct, its
business in an orderly and efficient manner in accordance with good business
practices customary in the industry in which the Borrower and the Subsidiaries
are engaged.
Maintenance of Properties. The Borrower will maintain, keep, and preserve, and
cause each Subsidiary to maintain, keep, and preserve, all of its properties
(tangible and intangible) necessary or useful in the proper conduct of its
business in good working order and condition (ordinary wear and tear excepted).
Taxes and Claims. The Borrower will pay or discharge, and will cause each
Subsidiary to pay or discharge, at or before maturity or before becoming
delinquent (a) all taxes, levies, assessments, and governmental charges imposed
on it or its income or profits or any of its property, and (b) all lawful claims
for labor, material, and supplies, which, if unpaid, might become a Lien upon
any of its property; provided, however, that neither the Borrower nor any
Subsidiary shall be required to pay or discharge any tax, levy, assessment, or
governmental charge which is being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves have been
established.
Insurance. The Borrower will maintain, and will cause each Subsidiary to
maintain, insurance with financially sound and reputable insurance companies in
such amounts and covering such risks as is usually carried by corporations
engaged in similar businesses and owning similar properties in the same general
areas in which the Borrower and the Subsidiaries operate, provided that in any
event the Borrower will maintain and cause each Subsidiary to maintain workmen's
compensation insurance, property insurance, comprehensive general liability
insurance, reasonably satisfactory to the Agent.
Inspection Rights; Audits. At any reasonable time and from time to time, the
Borrower will permit, and will cause each Subsidiary to permit, representatives
of the Agent and each Lender to examine, copy, and make extracts from its books
and records, to visit and inspect its properties, and to discuss its business,
operations, and financial condition with its officers, employees, and
independent certified public accountants.
Keeping Books and Records. The Borrower will maintain, and will cause each
Subsidiary to maintain, proper books of record and account in which full, true,
and correct entries in conformity with GAAP shall be made of all dealings and
transactions in relation to its business and activities.
Compliance with Laws. The Borrower will comply, and will cause each Subsidiary
to comply, in all respects with all applicable laws, rules, regulations, orders,
and decrees of any Governmental Authority or arbitrator, including without
limitation, the provisions of the Texas Pawnshop Act (Chapter 371 of the Texas
Finance Code), the consumer loan provisions of the Texas Finance Code and the
provisions of the ▇▇▇▇▇ Law and other laws, rules and regulations related to the
regulation of firearms, other than such non-compliance which could not
reasonably be expected to have a Material Adverse Effect.
Compliance with Agreements. The Borrower will comply, and will cause each
Subsidiary to comply, in all respects with all agreements, contracts, and
instruments binding on it or affecting its properties or business other than
such non-compliance which could not reasonably be expected to have a Material
Adverse Effect.
Further Assurances. The Borrower will, and will cause each Subsidiary to,
execute and deliver such further agreements and instruments and take such
further action as may be reasonably requested by the Agent to carry out the
provisions and purposes of this Agreement and the other Loan Documents. Without
limiting the foregoing, upon the creation or acquisition of any Subsidiary or a
new store by a new Subsidiary or by an existing Subsidiary in a
new state, the Borrower shall (a) provide written notice of such event to the
Agent within five Business Days following the date the Borrower has knowledge
thereof, and (b) cause each such domestic Subsidiary to execute and deliver a
supplement to the Guaranty, a supplement to the Contribution and Indemnification
Agreement, a supplement to the Subsidiary Security Agreement, Real Property
Security Documents, Uniform Commercial Code financing statements (delivery
only), and if required by Section 8.12, to provide to the Agent a Waiver for
each Leased Location (subject in all respects to a best efforts standard of
performance), title insurance commitments, surveys of Real Property, appraisals
of Real Property, lender's title insurance policy with any required
endorsements, and a legal opinion of the Borrower's and Guarantors' counsel
(which may in the Agent's discretion be a legal opinion of the Borrower's
in-house counsel), each in form and substance satisfactory to the Agent, within
30 calendar days following the date the Borrower has knowledge thereof. If any
Subsidiary is created or acquired after the date hereof, the Borrower shall
execute and deliver to the Agent (i) an amendment to this Agreement to amend
Schedule 7.14 to this Agreement (which only needs the signature of the Agent to
be effective if the only change is the addition of the new Subsidiary) and (ii)
any other documents which would have otherwise been required to be delivered to
the Agent and the Lenders if such Subsidiary had been a Subsidiary as of the
date hereof.
ERISA. With respect to any Plan that is subject to Title IV or Section 302 of
ERISA or Section 412 or 4971 of the Code, the Borrower will comply, and will
cause each Subsidiary to comply, with all minimum funding requirements, and all
other material requirements of ERISA, if applicable, so as not to give rise to
any liability thereunder which could reasonably be expected to have a Material
Adverse Effect.
Landlord's Waivers or Subordinations.
ii) If a Leased Location is a Pay-Day Only Store, and if any of the Borrower or
its Subsidiaries originates (as a lender) any Pay-Day Advance Loans and/or other
unsecured consumer loans at such Pay-Day Only Store, then the Borrower will, and
will cause each applicable Subsidiary to, deliver promptly a waiver or
subordination of the landlord's lien in the Collateral (a "Waiver") by the
landlord of such Pay-Day Only Store (subject in all respects to a best efforts
standard of performance), the Waiver to be in form and substance reasonably
satisfactory to the Agent.
(ii) If at any time any Leased Location is not, or
ceases to be a Pay-Day Only Store as a result of, among other things,
providing other consumer products or services such as pawn loans, then
(A) the Borrower will provide to the Agent written notice of such event
within 30 days after the occurrence of such event and (B) at the
request of the Agent, the Borrower will, and will cause each applicable
Subsidiary to, deliver a Waiver for such Leased Location (subject in
all respects to a best efforts standard of performance) in form and
substance reasonably satisfactory to the Agent.
Within 45 days after a Landlord Change, the Borrower will, and will cause each
Subsidiary to, deliver (subject in all respects to a best efforts standard of
performance) to the Agent (i) to the extent any Waiver is required under clause
(a) above, an updated Waiver or (ii) an acknowledgment from the new landlord of
the effectiveness of the Waiver, if any, received from the previous landlord,
the Waiver or acknowledgment to be in form and substance reasonably satisfactory
to the Agent.
Negative Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder or
the Issuing Bank has any obligation to issue Letters of Credit hereunder, the
Borrower will perform and observe the following negative covenants:
Debt. The Borrower will not incur, create, assume, or permit to exist, and will
not permit any Subsidiary to incur, create, assume, or permit to exist, any
Debt, except:
Debt to the Lenders and the Issuing Bank pursuant to the Loan Documents; Debt
listed on Schedule 9.1;
unsecured Debt owed by a Guarantor to another Guarantor evidenced by a
promissory note which is issued to satisfy any applicable state regulatory
requirement for the issuance of a license for consumer loan activity, such
promissory note being pledged to and held by the Agent as Collateral;
Guarantee by the Borrower of real estate lease obligations of a Guarantor;
subordinated Debt which is fully subordinated to the Obligations and is as
evidenced by and subject to documentation, all in form and substance
satisfactory to the Agent and the Required Lenders; and
Debt (other than the Debt described in clauses (a) through and including (e)
above) in an aggregate amount not to exceed $500,000 at any one time
outstanding.
Limitation on Liens. The Borrower will not incur, create, assume, or permit to
exist, and will not permit any Subsidiary to incur, create, assume, or permit to
exist, any Lien upon any of its property, assets, or revenues, whether now owned
or hereafter acquired, except:
Liens disclosed on Schedule 9.2 hereto and Liens in favor of the Agent for the
benefit of the Lenders; Liens for taxes, assessments, or other governmental
charges which are not delinquent or which are being diligently contested in good
faith and for which adequate reserves have been established; Liens of mechanics,
materialmen, warehousemen, carriers, landlords or other similar statutory Liens
securing obligations that are not yet due and are incurred in the ordinary
course of business; Liens resulting from good faith deposits to secure payments
of workmen's compensation or other social security programs or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
contracts (other than for payment of Debt), or leases made in the ordinary
course of business;
purchase money Liens securing Permitted Debt described in Section 9.1(f),
provided that the Debt secured by any such Lien encumbers only the asset so
purchased;
Liens on the Indemnity Accounts and the Litigation Fund Accounts in favor of
County Bank of Rehoboth Beach, Delaware;
financing statements filed in connection with operating lease transactions for
computers; and Liens in favor of a landlord of a Leased Location on only the
assets of the Borrower or any Subsidiary located at such Lease Location so long
as no financing statement will be filed in connection with such Lien unless (i)
the collateral description listed on such financing statement is limited to the
assets of the Borrower or applicable Subsidiary located at such Leased Location,
and (ii) the Borrower or applicable Subsidiary has obtained a Waiver for such
Leased Location from such landlord, such Waiver to be in form and substance
satisfactory to the Agent.
Neither the Borrower nor any Subsidiary shall enter into or assume any
agreement (other than the Loan Documents) prohibiting the creation or assumption
of any Lien upon its properties or assets whether now owned or hereafter
acquired; provided that in connection with the creation of purchase money Liens
permitted hereby, the Borrower or the Subsidiary may agree that it will not
permit any other Liens (other than the Liens in favor of the Agent for the
benefit of the Lenders) to encumber the assets subject to such purchase money
Lien. Further, the Borrower will not and will not permit any Subsidiaries
directly or indirectly to create or otherwise cause or suffer to exist to become
effective any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to: (i) pay dividends or make any other distribution on any of
such Subsidiaries' capital stock owned by the Borrower or any Subsidiary of the
Borrower; (ii) subject to subordination provisions pay any Debt owed to the
Borrower or any other Subsidiary; (iii) make loans or advances to the Borrower
or any other Subsidiary; or (iv) transfer any of its properties or assets to the
Borrower or any other Subsidiary not restricted hereby.
Mergers, Etc. The Borrower will not, and will not permit any Subsidiary to
become a party to a merger or consolidation, or to purchase or otherwise acquire
all or a substantial part of the business or assets of any Person or any shares
or other equity interest of any Person (whether or not certificated), or
wind-up, dissolve, or liquidate itself; provided that, (i) a domestic Subsidiary
may wind-up, dissolve or liquidate if no Default exists or would result
therefrom and its assets are transferred to the Borrower or another domestic
Subsidiary; (ii) a foreign Subsidiary may wind-up, dissolve or liquidate if no
Default exists or would result therefrom; (iii) any Subsidiary may merge with
and into the Borrower if the Borrower is the surviving entity and no Default
exists or would result therefrom; (iv) any Subsidiary may merge with and into
any other domestic Subsidiary if the domestic Subsidiary is the surviving
entity, no Default exists or would result therefrom and Section 8.10 is complied
with; (v) any foreign Subsidiary may merge with any other foreign Subsidiary if
no Default exists or would result therefrom; (vi) the Borrower or a Subsidiary
may make investments permitted under Section 9.5 hereof; and (vii) the Borrower
or a Subsidiary may make Permitted Acquisitions.
Restricted Payments. The Borrower will not declare or pay any dividends or make
any other payment or distribution (whether in cash, property, or obligations) on
account of its capital stock, or redeem, purchase, retire, or otherwise acquire
any of its capital stock, or permit any of its Subsidiaries to purchase or
otherwise acquire any capital stock of the Borrower or another Subsidiary, or
set apart any money for a sinking or other analogous fund for any dividend or
other distribution on its capital stock or for any redemption, purchase,
retirement, or other acquisition of any of its capital stock; provided however,
the Borrower may declare or pay any dividends or make any other payment or
distribution on account of its capital stock during any Fiscal Year in an amount
not to exceed 25% of the Borrower's Consolidated Net Income for such Fiscal
Year.
Investments. Other than pawn loans, Pay-Day Advance Loans (and participations
therein) and other consumer loans (and participations therein) extended in the
ordinary course of business, the Borrower will not make, and will not permit any
Subsidiary to make, any advance, loan, extension of credit, or capital
contribution to or investment in, or purchase to own, or permit any Subsidiary
to purchase or own, any stock, bonds, notes, debentures, or other securities of
any Person, except:
readily marketable direct obligations of the United States of America or any
agency thereof with maturities of 18 months or less from the date of
acquisition;
fully insured certificates of deposit with maturities of one year or less from
the date of acquisition issued by any commercial bank operating in the United
States of America having capital and surplus in excess of $50,000,000;
commercial paper of a domestic issuer if at the time of purchase such paper is
rated in one of the two highest rating categories of Standard and Poor's, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or ▇▇▇▇▇'▇ Investors Service, Inc.;
auction rate preferred stock and municipal bonds that at the time of purchase
are rated in one of the two highest rating categories of Standard & Poor's, a
division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc., or ▇▇▇▇▇'▇ Investment Services,
Inc.;
money market funds and mutual funds that invest in securities deemed acceptable
for outright purchase; investments in Subsidiaries existing on the date of this
Agreement and investments in subsequently created domestic Subsidiaries so long
as the Borrower and the Subsidiaries have complied with the terms and conditions
of Section 8.10;
any loans or investments not covered in the previous sections of this Section
9.5 not to exceed $2,000,000 in the aggregate; and
Permitted Acquisitions.
Notwithstanding anything to the contrary contained herein, neither the Borrower
nor any Subsidiary will make any advance, loan, extension of credit, or capital
contribution to or investment in, or purchase to own, any stock, bonds, notes,
debentures, or other securities of Albemarle & Bond Holdings plc except for
those certain investments in Albemarle & Bond Holdings plc existing on the date
of this Agreement.
Limitation on Issuance of Capital Stock. The Borrower will not permit any of its
Subsidiaries to, at any time issue, sell, assign, or otherwise dispose of (a)
any of its capital stock (or any equivalent interest therein), (b) any
securities exchangeable for or convertible into or carrying any rights to
acquire any of its capital stock (or any equivalent interest therein), or (c)
any option, warrant, or other right to acquire any of its capital stock (or any
equivalent interest therein).
Transactions With Affiliates. The Borrower will not enter into, and will not
permit any Subsidiary to enter into, any transaction, including, without
limitation, the purchase, sale, or exchange of property or the rendering of any
service, with any Affiliate of the Borrower or such Subsidiary, except (a) in
the ordinary course of and pursuant to the reasonable requirements of the
Borrower's or such Subsidiary's business, (b) upon fair and reasonable terms no
less favorable to the Borrower or such Subsidiary than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate of the
Borrower or such Subsidiary and (c) so long as no Default has occurred and is
continuing or would result therefrom.
Disposition of Assets. The Borrower will not sell, lease, assign, transfer, or
otherwise dispose (collectively "Dispositions") of any of its assets, or permit
any Subsidiary to do so with any of its assets, except:
Dispositions of Inventory in the ordinary course of business;
Dispositions of obsolete, worn or used equipment;
Dispositions to a Guarantor as to which Agent has in its possession an executed
Guaranty, Contribution and Indemnification Agreement, Subsidiary Security
Agreement and Real Estate Security Documents, if applicable; and Dispositions of
certain store locations (including sales of Real Property and operating business
(which may include the sale of Inventory and pawn loans and interests in Pay-Day
Advance Loans of the Borrower or any Subsidiary in connection with the sale of
such location), but excluding liquidating sales of Inventory and pawn loans and
interests in Pay-Day Advance Loans of the Borrower or any Subsidiary, which do
not occur in connection with the sale of any Real Property or operating
business) owned by the Borrower or any of its Subsidiaries as of the date hereof
so long as the Net Proceeds of such Disposition are promptly paid to the Agent
in accordance with Section 4.3.
Nature of Business. The Borrower will not, and will not permit any Subsidiary
to, engage in any business other than the businesses in which they are engaged
on the date hereof and similar businesses thereto in connection with the
providing of consumer loan products, directly and indirectly. Without in any way
limiting the foregoing, such businesses shall include, but not be limited to,
the following: pawn loans, check-cashing, money wires, Pay-Day Advance Loans,
other consumer loans, directly (as a lender) and indirectly (as a participant),
jewelry and merchandise sales and other services incidental to the foregoing.
Environmental Protection. The Borrower will not, and will not permit any of its
Subsidiaries to, (a) use (or permit any tenant to use) any of their respective
properties or assets for the handling, processing, storage, transportation, or
disposal of any Hazardous Material, (b) generate any Hazardous Material, (c)
conduct any activity that is likely to cause a Release or threatened Release of
any Hazardous Material, or (d) otherwise conduct any activity or use any of
their respective properties or assets in any manner that is likely to violate
any Environmental Law or create any Environmental Liabilities for which the
Borrower or any of its Subsidiaries would be responsible.
Accounting. The Borrower will not, and will not permit any of its Subsidiaries
to, change its Fiscal Year or make any change in accounting treatment or
reporting practices, except as permitted by GAAP and disclosed to the Agent.
Prepayment of Debt. The Borrower will not, and will not permit any Subsidiary
to, prepay any Debt except (i) the Obligations and (ii) intercompany Debt among
Guarantors permitted pursuant to Section 9.1(c).
Pay-Day Advance Loans. The Borrower will not, and will not permit any of its
Subsidiaries to, purchase participation or other interests in any Pay-Day
Advance Loans, or other consumer loans, the applications for which were
originated and processed by a Person other than the Borrower or any Subsidiary
or a Person acquired by the Borrower or any Subsidiary.
Financial Covenants
The Borrower covenants and agrees that, as long as the Obligations or
any part thereof are outstanding or any Lender has any Commitment hereunder or
the Issuing Bank has any obligation to issue Letters of Credit hereunder, the
Borrower will perform and observe the following financial covenants:
Consolidated Net Worth. Beginning with the Fiscal Quarter ending December 31,
2003, the Borrower will maintain at all times Consolidated Net Worth in an
amount not less than (a) $106,400,000.00, plus (b) an amount equal to 100% of
Consolidated Net Income (not less than zero dollars [$0.00]) for all periods
subsequent to the Fiscal Quarter ending December 31, 2003, plus (c) an amount
equal to 100% of the Net Proceeds of all equity offerings (including conversions
of debt securities into common stock) of the Borrower subsequent to December 31,
2003, minus (d) an amount equal to any dividends declared by the Borrower for
all periods subsequent to the Fiscal Quarter ending December 31, 2003 and only
to the extent permitted to be made under Section 9.4.
Senior Leverage Ratio. The Borrower will maintain a Senior Leverage Ratio at the
end of each Fiscal Quarter of not greater than 2.00 to 1.00.
Total Leverage Ratio. The Borrower will maintain a Total Leverage Ratio at the
end of each Fiscal Quarter of not greater than 3.25 to 1.00.
Capital Expenditures. The Borrower will not permit the aggregate amount of
Capital Expenditures of the Borrower and the Subsidiaries to exceed $8,000,000
during any Fiscal Year.
Inventory Turnover. The Borrower on a consolidated basis will at all times
maintain an Inventory Turnover at the end of each Fiscal Quarter of not less
than 2.00 to 1.00.
Fixed Charge Coverage Ratio. The Borrower will maintain a Fixed Charge Coverage
Ratio at the end of each Fiscal Quarter of not less than 1.25 to 1.00.
Default
Events of Default. Each of the following shall be deemed an "Event of Default":
The Borrower shall fail to pay when due the Obligations or any part thereof.
Any representation or warranty made or deemed made by the Borrower or any
Obligated Party (or any of their respective officers) in any Loan Document or in
any certificate, report, notice, or financial statement furnished at any time in
connection with this Agreement shall be false, misleading, or erroneous in any
material respect when made or deemed to have been made.
The Borrower shall fail to perform, observe, or comply with any covenant,
agreement, or term contained in Section 8.1, Article IX, or Article X of this
Agreement; or the Borrower or any Obligated Party shall fail to perform,
observe, or comply with any other covenant, agreement, or term contained in this
Agreement or any other Loan Document (other than covenants to pay the
Obligations) and such failure shall continue for a period of 15 days. The
Borrower, any Subsidiary, or any Obligated Party shall commence a voluntary
proceeding seeking liquidation, reorganization, or other relief with respect to
itself or its debts under any bankruptcy, insolvency, or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or a substantial part of
its property or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for the
benefit of creditors or shall generally fail to pay its debts as they become due
or shall take any corporate action to authorize any of the foregoing.
An involuntary proceeding shall be commenced against the Borrower, any
Subsidiary, or any Obligated Party seeking liquidation, reorganization, or other
relief with respect to it or its debts under any bankruptcy, insolvency, or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official for it or a
substantial part of its property, and such involuntary proceeding shall remain
undismissed and unstayed for a period of 30 days.
The Borrower, any Subsidiary, or any Obligated Party shall fail to discharge
within a period of 45 days after the commencement thereof any attachment,
sequestration, or similar proceeding or proceedings involving an aggregate
amount in excess of $250,000 against any of its assets or properties.
A final judgment or judgments for the payment of money in excess of $250,000 in
the aggregate shall be rendered by a court or courts against the Borrower, any
of its Subsidiaries, or any Obligated Party and the same shall not be discharged
(or provision shall not be made for such discharge), or a stay of execution
thereof shall not be procured, within 45 days from the date of entry thereof and
the Borrower or the relevant Subsidiary or Obligated Party shall not, within
said period of 45 days, or such longer period during which execution of the same
shall have been stayed, appeal therefrom and cause the execution thereof to be
stayed during such appeal.
The Borrower, any Subsidiary, or any Obligated Party shall fail to pay when due
any principal of or interest on any Material Debt (hereinafter defined) (other
than the Obligations), or the maturity of any such Debt shall have been
accelerated, or any such Debt shall have been required to be prepaid prior to
the stated maturity thereof, or any event shall have occurred that permits any
holder or holders of such Debt or any Person acting on behalf of such holder or
holders to accelerate the maturity thereof or require any such prepayment. For
purposes of this clause (h), the term "Material Debt" means Debt owed by the
Borrower or any Subsidiary the principal amount of which exceeds $250,000.
This Agreement or any other Loan Document shall cease to be in full force and
effect or shall be declared null and void or the validity or enforceability
thereof shall be contested or challenged by the Borrower, any Subsidiary, any
Obligated Party or any of their respective shareholders, or the Borrower or any
Obligated Party shall deny that it has any further liability or obligation under
any of the Loan Documents.
Any of the following events shall occur or exist with respect to the Borrower or
any ERISA Affiliate: (i) any Prohibited Transaction involving any Plan; (ii) any
Reportable Event with respect to any Plan; (iii) the filing under Section 4041
of ERISA of a notice of intent to terminate any Plan or the termination of any
Plan; (iv) any event or circumstance that might constitute grounds entitling the
PBGC to institute proceedings under Section 4042 of ERISA for the termination
of, or for the appointment of a trustee to administer, any Plan, or the
institution by the PBGC of any such proceedings; or (v) complete or partial
withdrawal under Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan; and in
each case above, such event or condition, together with all other events or
conditions, if any, have subjected or could in the reasonable opinion of
Required Banks subject the Borrower to any tax, penalty, or other liability to a
Plan, a Multiemployer Plan, the PBGC, or otherwise (or any combination thereof)
which in the aggregate exceed or could reasonably be expected to exceed
$250,000.
Any Person or group of related Persons for purposes of Section 13(d) of the
Exchange Act sells or acquires after the date hereof "beneficial ownership"
(within the meaning of Section 13(d) of the Exchange Act) in excess of 33% of
the total voting power of all classes of capital stock then outstanding of the
Borrower entitled (without regard to the occurrence of any contingency) to vote
in elections of directors of the Borrower.
The Borrower or any of its Subsidiaries, or any of their properties, revenues,
or assets, shall become the subject of an order of forfeiture, seizure, or
divestiture and the same shall not have been discharged (or provisions shall not
be made for such discharge) within 30 days from the date of entry thereof.
Any Material Adverse Effect shall occur.
County Bank of Rehoboth Beach, Delaware during any consecutive 12-month period
shall draw down or withdraw (other than Permitted Withdrawals) an amount equal
to or greater than $300,000 in the aggregate from either (i) any Indemnity
Accounts or any Litigation Fund Accounts (or any combination thereof), (ii) any
letter of credit issued for the account of the Borrower or any of its
Subsidiaries to County Bank of Rehoboth Beach, Delaware, or (iii) any
combination of clauses (i) or (ii) hereof.
Remedies.
If any Event of Default shall occur and be continuing, the Agent may (and if
directed by Required Lenders, shall) do any one or more of the following:
Acceleration. Declare all outstanding principal of and accrued and unpaid
interest on the Notes, all outstanding Letter of Credit Disbursements, and all
other obligations of the Borrower under the Loan Documents immediately due and
payable, and the same shall thereupon become immediately due and payable,
without notice, demand, presentment, notice of dishonor, notice of acceleration,
notice of intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by the Borrower.
Termination of Revolving Credit Commitments. Terminate the Revolving Credit
Commitments and the obligation of the Issuing Bank to issue Letters of Credit
without notice to the Borrower.
Judgment. Reduce any claim to judgment.
Foreclosure. Foreclose or otherwise enforce any Lien granted to the Agent for
the benefit of itself and the Lenders to secure payment and performance of the
Obligations in accordance with the terms of the Loan Documents.
Rights. Exercise any and all rights and remedies afforded by the laws of the
State of Texas or any other jurisdiction, by any of the Loan Documents, by
equity, or otherwise.
Provided, however, that upon the occurrence of an Event of Default
under subsection (d) or (e) of Section 11.1, the Revolving Credit
Commitments of all of the Lenders and the obligation of the Issuing
Bank to issue Letters of Credit shall automatically terminate, and the
outstanding principal of and accrued and unpaid interest on the Notes
and all other obligations of the Borrower under the Loan Documents
shall thereupon become immediately due and payable without notice,
demand, presentment, notice of dishonor, notice of acceleration, notice
of intent to accelerate, protest, or other formalities of any kind, all
of which are hereby expressly waived by the Borrower.
If an Event of Default shall have occurred and be continuing, each Lender is
hereby authorized at any time and from time to time, without notice to the
Borrower (any such notice being hereby expressly waived by the Borrower), to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing under this
Agreement, such Lender's Note (or Notes), or any other Loan Document,
irrespective of whether or not the Agent or such Lender shall have made any
demand under this Agreement or such Lender's Note (or Notes) or such other Loan
Document and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower (with a copy to the Agent and to each Lender)
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
and remedies of each Lender hereunder are in addition to other rights and
remedies (including, without limitation, other rights of setoff) which such
Lender may have.
Cash Collateral. If an Event of Default shall have occurred and be continuing
the Borrower shall, if requested by the Agent or Required Lenders, pledge to the
Agent as security for the Obligations an amount in immediately available funds
equal to the then outstanding Letter of Credit Liabilities, such funds to be
held in a cash collateral account at the Agent without any right of withdrawal
by the Borrower.
Performance by the Agent. If the Borrower shall fail to perform any covenant or
agreement in accordance with the terms of the Loan Documents, the Agent may, at
the direction of Required Lenders, perform or attempt to perform such covenant
or agreement on behalf of the Borrower. In such event, the Borrower shall, at
the request of the Agent, promptly pay any amount reasonably expended by the
Agent or the Lenders in connection with such performance or attempted
performance to the Agent at the Principal Office, together with interest thereon
at the Default Rate from and including the date of such expenditure to but
excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Agent nor any Lender shall
have any liability or responsibility for the performance of any obligation of
the Borrower under this Agreement or any of the other Loan Documents.
The Agent
Appointment, Powers and Immunities. In order to expedite the various
transactions contemplated by this Agreement, the Lenders and the Issuing Bank
hereby irrevocably appoint and authorize ▇▇▇▇▇ Fargo Bank, National Association
to act as their Agent hereunder and under each of the other Loan Documents.
▇▇▇▇▇ Fargo Bank, National Association consents to such appointment and agrees
to perform the duties of the Agent as specified herein. The Lenders and the
Issuing Bank authorize and direct the Agent to take such action in their name
and on their behalf under the terms and provisions of the Loan Documents and to
exercise such rights and powers thereunder as are specifically delegated to or
required of the Agent for the Lenders and/or the Issuing Bank, together with
such rights and powers as are reasonably incidental thereto. The Agent is hereby
expressly authorized to act as the Agent on behalf of itself, the other Lenders
and the Issuing Bank:
To receive on behalf of each of the Lenders and the Issuing Bank any payment of
principal, interest, fees (except for the annual agent fee described in Section
2.9(a)) or other amounts paid pursuant to this Agreement and the Notes and to
distribute to each Lender and/or the Issuing Bank its share of all payments so
received as provided in this Agreement;
To receive all documents and items to be furnished under the Loan Documents;
To act as nominee for and on behalf of the Lenders and the Issuing Bank in and
under the Loan Documents;
To arrange for the means whereby the Advances are to be made available to the
Borrower;
To distribute to the Lenders and the Issuing Bank information, requests,
notices, payments, prepayments, documents and other items received from the
Borrower, the Obligated Parties, and other Persons;
To execute and deliver to the Borrower, the Obligated Parties, and other
Persons, all requests, demands, approvals, notices, and consents received from
the Lenders and the Issuing Bank;
To the extent permitted by the Loan Documents, to exercise on behalf of each
Lender and the Issuing Bank all rights and remedies of Lenders and the Issuing
Bank upon the occurrence of any Event of Default;
To serve as liaison between the Lenders, the Issuing Bank and the Borrower with
respect to future negotiations, amendments and waivers of the terms of this
Agreement and transmittal of copies of such amendments and waivers for signature
to each Lender and the Issuing Bank;
To receive signed copies of this Agreement, future amendments hereto, waivers of
any terms hereof, and related documents comprising the Loan Documents, and
provide appropriate signed or reproduction copies thereof to each Lender, the
Issuing Bank and the Borrower;
To forward to each Lender and the Issuing Bank copies of all Loan Documents and
opinions furnished to Agent under this Agreement or any of the other Loan
Documents;
To receive notices of Defaults, copies of which shall be forwarded to all
Lenders and the Issuing Bank, and any waivers of Defaults under this Agreement
and forward copies thereof to all Lenders and the Issuing Bank;
To advise each Lender and the Issuing Bank of all notices received or furnished
by Agent hereunder;
To take such other actions as may be requested by Required Lenders; and
To accept, execute, and deliver any and all security documents as the secured
party.
Neither the Agent nor any of its Affiliates, officers, directors,
employees, attorneys, or agents shall be liable to the Lenders for any action
taken or omitted to be taken by any of them hereunder or otherwise in connection
with this Agreement or any of the other Loan Documents except for its or their
own gross negligence or willful misconduct. Without limiting the generality of
the preceding sentence, the Agent (i) may treat the payee of any Note as the
holder thereof until the Agent receives written notice of the assignment or
transfer thereof signed by such payee and in form satisfactory to the Agent;
(ii) shall have no duties or responsibilities except those expressly set forth
in this Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee or fiduciary for any Lender or
the Issuing Bank; (iii) shall not be required to initiate any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by Required Lenders; (iv) shall not be responsible to the
Lenders or the Issuing Bank for any recitals, statements, representations or
warranties contained in this Agreement or any other Loan Document, or any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, enforceability, or sufficiency of this Agreement or any
other Loan Document or any other document referred to or provided for herein or
therein or for any failure by any Person to perform any of its obligations
hereunder or thereunder; (v) may consult with legal counsel (including counsel
for the Borrower), independent public accountants, and other experts selected by
it and shall not be liable for any action taken or omitted to be taken in good
faith by it in accordance with the advice of such counsel, accountants, or
experts; and (vi) shall incur no liability under or in respect of any Loan
Document by acting upon any notice, consent, certificate, or other instrument or
writing believed by it to be genuine and signed or sent by the proper party or
parties. As to any matters not expressly provided for by this Agreement, the
Agent shall in all cases be fully protected in acting, or in refraining from
acting, hereunder in accordance with instructions signed by Required Lenders,
and such instructions of Required Lenders and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders; provided, however, that
the Agent shall not be required to take any action which exposes the Agent to
personal liability or which is contrary to this Agreement or any other Loan
Document or applicable law.
Rights of Agent as a Lender. With respect to its Revolving Credit Commitment,
the Advances made by it and the Notes issued to it, ▇▇▇▇▇ Fargo Bank, National
Association in its capacity as a Lender hereunder shall have the same rights and
powers hereunder as any other Lender and may exercise the same as though it were
not acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. The
Agent and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to, act as trustee under indentures of, provide
merchant banking services to, and generally engage in any kind of business with
the Borrower, any of its Subsidiaries, any Obligated Party, and any other Person
who may do business with or own securities of the Borrower, any Subsidiary, or
any Obligated Party, all as if it were not acting as the Agent and without any
duty to account therefor to the Lenders.
Sharing of Payments, Etc. If any Lender shall obtain any payment of any
principal of or interest on any Advance made by it under this Agreement or
payment of any other obligation under the Loan Documents then owed by the
Borrower or any Obligated Party to such Lender, whether voluntary, involuntary,
through the exercise of any right of set-off, banker's lien, counterclaim or
similar right, or otherwise, in excess of its pro rata share (calculated (i)
pursuant to Section 3.5 in respect of letter of credit fees, and (ii) for all
other of the Primary Obligations on the basis of the unpaid principal of and
interest on the Revolving Credit Loan, the Swing Loan, LC Participations and SL
Participations held by it), such Lender shall promptly purchase from the other
Lenders participations in the Primary Obligations owed to them hereunder in such
amounts, and make such other adjustments from time to time as shall be necessary
to cause such purchasing Lender to share the excess payment ratably with each of
the other Lenders in accordance with its pro rata portion thereof. To such end,
all of the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if all or any portion of such excess
payment is thereafter rescinded or must otherwise be restored. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any Lender so purchasing a participation in the Advances and LC
Participations made by the other Lenders may exercise all rights of set-off,
banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Advances to, or
Letter of Credit Disbursements for the account of, the Borrower in the amount of
such participation. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower.
Indemnification. THE LENDERS HEREBY AGREE TO INDEMNIFY THE AGENT AND THE ISSUING
BANK FROM AND HOLD THE AGENT AND THE ISSUING BANK HARMLESS AGAINST (TO THE
EXTENT NOT REIMBURSED UNDER SECTIONS 13.1 AND 13.2, BUT WITHOUT LIMITING THE
OBLIGATIONS OF THE BORROWER UNDER SECTIONS 13.1 AND 13.2), RATABLY IN ACCORDANCE
WITH THEIR RESPECTIVE REVOLVING CREDIT COMMITMENTS, ANY AND ALL LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES,
SUITS, COSTS, EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES), AND DISBURSEMENTS
OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, INCURRED BY, OR
ASSERTED AGAINST THE AGENT AND THE ISSUING BANK IN ANY WAY RELATING TO OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN BY THE AGENT AND THE ISSUING BANK UNDER OR IN RESPECT OF ANY OF THE LOAN
DOCUMENTS; PROVIDED, FURTHER, THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF
THE FOREGOING TO THE EXTENT CAUSED BY THE AGENT'S OR THE ISSUING BANK'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT LIMITING ANY OTHER PROVISION OF THIS
SECTION, EACH LENDER AGREES TO REIMBURSE THE AGENT AND THE ISSUING BANK PROMPTLY
UPON DEMAND FOR ITS PRO RATA SHARE (CALCULATED ON THE BASIS OF THE REVOLVING
CREDIT COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET EXPENSES (INCLUDING REASONABLE
ATTORNEYS' FEES) INCURRED BY THE AGENT AND THE ISSUING BANK IN CONNECTION WITH
THE PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT OR
ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF,
OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN
DOCUMENTS, TO THE EXTENT THAT THE AGENT OR THE ISSUING BANK IS NOT REIMBURSED
FOR SUCH EXPENSES BY THE BORROWER.
Independent Credit Decisions. Each Lender agrees that it has independently and
without reliance on the Agent, the Issuing Bank or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
credit analysis of the Borrower and decision to enter into this Agreement and
that it will, independently and without reliance upon the Agent, the Issuing
Bank or any other Lender, and based upon such documents and information as it
shall deem appropriate at the time, continue to make its own analysis and
decisions in taking or not taking action under this Agreement or any of the
other Loan Documents. The Agent shall not be required to keep itself informed as
to the performance or observance by the Borrower or any Obligated Party of this
Agreement or any other Loan Document or to inspect the properties or books of
the Borrower or any Obligated Party. Except for notices, reports and other
documents and information expressly required to be furnished to the Lenders and
the Issuing Bank by the Agent hereunder or under the other Loan Documents,
neither the Agent nor the Issuing Bank
shall have any duty or responsibility to provide any Lender with any credit or
other financial information concerning the affairs, financial condition or
business of the Borrower or any Obligated Party (or any of their Affiliates)
which may come into the possession of the Agent, the Issuing Bank or any of
their Affiliates.
Several Commitments. The Commitments and other obligations of the Lenders under
this Agreement are several. The default by any Lender in making an Advance in
accordance with its Commitment shall not relieve the other Lenders of their
obligations under this Agreement. In the event of any default by any Lender in
making any Advance, each nondefaulting Lender shall be obligated to make its
Advance but shall not be obligated to advance the amount which the defaulting
Lender was required to advance hereunder. In no event shall any Lender be
required to advance an amount or amounts to the Borrower which shall in the
aggregate exceed such Lender's Revolving Credit Commitment. No Lender shall be
responsible for any act or omission of any other Lender.
Successor Agent. Subject to the appointment and acceptance of a successor Agent
as provided below, the Agent may resign at any time by giving notice thereof to
the Lenders, the Issuing Bank and the Borrower and the Agent may be removed at
any time with or without cause by Required Lenders. Upon any such resignation or
removal, the Required Lenders will have the right to appoint a successor Agent.
If no successor Agent shall have been so appointed by the Required Lenders and
shall have accepted such appointment within 30 days after the retiring Agent's
giving of notice of resignation or the Required Lenders' removal of the retiring
Agent, then the retiring Agent may, on behalf of the Lenders and the Issuing
Bank, appoint a successor Agent, which shall be a commercial bank organized
under the laws of the United States of America or any State thereof and having
combined capital and surplus of at least One $100,000,000. Upon the acceptance
of its appointment as successor Agent, such successor Agent shall thereupon
succeed to and become vested with all rights, powers, privileges, immunities,
and duties of the resigning or removed Agent, and the resigning or removed Agent
shall be discharged from its duties and obligations under this Agreement and the
other Loan Documents. After any Agent's resignation or removal as Agent, the
provisions of this Article XII shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was the
Agent. After the retiring Agent's resignation or removal hereunder as Agent,
each reference herein to a place of giving of notice or delivery to the Agent
shall be deemed to refer to the principal office of the successor Agent as it
may specify to each party hereto.
In the event that the Agent, for the benefit of itself and the Lenders,
elects or is required to proceed with a foreclosure or other enforcement of any
Lien granted to the Agent for the benefit of itself and the Lenders, the Agent
may, without in any manner limiting its available remedies, and at the request
of the Required Lenders shall, submit a bid for all Lenders (including itself)
in the form of a credit against the Obligations, and the Agent or its designee,
in the event that the Agent or its designee is the successful bidder at any such
foreclosure sale, shall accept title, for the benefit of itself and the Lenders,
to the Collateral sold at such foreclosure sale. The Collateral purchased at any
such sale held shall be owned by the Agent, or its designee, for the benefit of
the Lenders. All monies received or collected by the Agent in respect of the
Collateral in connection with a foreclosure sale, or any other disposition of
the Collateral, shall be paid to the Lenders pro-rata consistent with Section
4.4 hereof.
Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceeding relative to the Borrower or
any Obligated Party, the Agent (irrespective of whether the principal of any
Advance or Letter of Credit Liabilities shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the Agent
shall have made any demand on the Borrower) shall be entitled and empowered, by
intervention in such proceeding or otherwise to file and prove a claim for the
whole amount of the principal and interest owing and unpaid in respect of the
Advances, Letter of Credit Liabilities and all other Obligations that are owing
and unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Agent (including any claim for
the reasonable compensation, expenses, disbursements and advances of the Lenders
and the Agent and their respective agents and counsel and all other amounts due
the Lenders and the Agent under Sections 2.9 and 13.1) allowed in such judicial
proceeding; and to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make such
payments to the Agent and, in the event that the Agent shall consent to the
making of such payments directly to the Lenders, to pay to the Agent any amount
due for the reasonable compensation, expenses, disbursements and advances of the
Agent and its agents and counsel, and any other amounts due the Agent under
Sections 2.9 and 13.1.
Nothing contained herein shall be deemed to authorize the Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize the Agent to vote in respect of the
claim of any Lender in any such proceeding.
Collateral and Guaranty Matters. The Lenders irrevocably authorize the
Agent, at its option and in its discretion:
to release any Lien on any property granted to or held by the Agent under any
Loan Document (i) upon termination of the Revolving Credit Commitments and
payment in full of all Obligations (other than contingent indemnification
obligations) and the expiration or termination of all Letters of Credit, (ii)
that is sold or to be sold as part of or in connection with any sale permitted
hereunder or under any other Loan Document, or (iii) subject to Section 13.10,
if approved, authorized or ratified in writing by the Required Lenders; and
to release any Guarantor from its obligations under the Guaranty if such Person
ceases to be a Subsidiary as a result of a transaction permitted hereunder.
Upon request by the Agent at any time, the Required Lenders will
confirm in writing the Agent's authority to release its interest in particular
types or items of property, or to release any Guarantor from its obligations
under the Guaranty pursuant to this Section 12.9.
Miscellaneous
Expenses. The Borrower hereby agrees to pay on demand: (a) all reasonable costs
and expenses of the Agent and the Issuing Bank in connection with the
preparation, negotiation, execution, and delivery of this Agreement and the
other Loan Documents and any and all amendments, modifications, renewals,
extensions, and supplements thereof and thereto, including, without limitation,
the reasonable fees and expenses of legal counsel for the Agent and the Issuing
Bank (including the allocated cost of internal counsel of the Agent and the
Issuing Bank), (b) all costs and expenses of the Agent, the Issuing Bank and the
Lenders in connection with any Default and the enforcement of this Agreement or
any other Loan Document, including, without limitation, the fees and expenses of
legal counsel for the Agent, the Issuing Bank and the Lenders, (c) all transfer,
stamp, documentary, or other similar taxes, assessments, or charges levied by
any Governmental Authority in respect of this Agreement or any of the other Loan
Documents, (d) all costs, expenses, assessments, and other charges incurred in
connection with any filing, registration, recording, or perfection of any
security interest or Lien contemplated by this Agreement or any other Loan
Document, and (e) all other costs and expenses incurred by the Agent and the
Issuing Bank in connection with this Agreement or any other Loan Document,
including without limitation all reasonable costs and expenses associated with
appraisals, environmental reports and any other collateral reviews performed in
connection with this Agreement, any other Loan Document or the transactions
contemplated therein.
INDEMNIFICATION. THE BORROWER HEREBY AGREES TO INDEMNIFY THE AGENT, THE ISSUING
BANK AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE OFFICERS,
DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF THEM HARMLESS
AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) TO
WHICH ANY OF THEM MAY BECOME SUBJECT WHICH DIRECTLY OR INDIRECTLY ARISE FROM OR
RELATE TO (a) THE NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION,
OR ENFORCEMENT OF ANY OF THE LOAN DOCUMENTS, (b) ANY OF THE TRANSACTIONS
CONTEMPLATED BY THE LOAN DOCUMENTS, (c) ANY BREACH BY THE BORROWER OR ANY
SUBSIDIARY OF ANY REPRESENTATION, WARRANTY, COVENANT, OR OTHER AGREEMENT
CONTAINED IN ANY OF THE LOAN DOCUMENTS, (d) THE PRESENCE, RELEASE, THREATENED
RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN, OR AFFECTING ANY OF THE PROPERTIES OR ASSETS OF THE BORROWER OR
ANY SUBSIDIARY, (e) THE USE OR PROPOSED USE OF ANY LETTER OF CREDIT, (f) ANY AND
ALL TAXES, LEVIES, DEDUCTIONS, AND CHARGES IMPOSED ON THE ISSUING BANK OR ANY OF
THE ISSUING BANK'S CORRESPONDENTS IN RESPECT OF ANY LETTER OF CREDIT, OR (g) ANY
INVESTIGATION, LITIGATION, OR OTHER PROCEEDING, INCLUDING, WITHOUT LIMITATION,
ANY THREATENED INVESTIGATION, LITIGATION, OR OTHER PROCEEDING
RELATING TO ANY OF THE FOREGOING AND ANY LEGAL PROCEEDING RELATING TO ANY COURT
ORDER, INJUNCTION OR OTHER PROCESS OR DECREE RESTRAINING OR SEEKING TO RESTRAIN
THE ISSUING BANK FROM PAYING ANY AMOUNT UNDER ANY LETTER OF CREDIT. WITHOUT
LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS
THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED
UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND
ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS,
COSTS, AND EXPENSES (INCLUDING REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON; PROVIDED
HOWEVER, NO PERSON SHALL BE INDEMNIFIED HEREUNDER FOR ITS OWN GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
Limitation of Liability. None of the Agent, the Issuing Bank, any Lender, or any
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and the Borrower hereby waives, releases, and
agrees not to ▇▇▇ any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by the Borrower in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents, including without limitation, any
damages suffered or incurred by the Borrower in connection with Swing Loan
Advances made by telephonic notice pursuant to Section 2.7(a) hereto, except for
such Person's gross negligence or willful misconduct.
No Duty. All attorneys, accountants, appraisers, and other professional Persons
and consultants retained by the Agent, the Issuing Bank and the Lenders shall
have the right to act exclusively in the interest of the Agent, the Issuing Bank
and the Lenders and shall have no duty of disclosure, duty of loyalty, duty of
care, or other duty or obligation of any type or nature whatsoever to the
Borrower or any of the Borrower's shareholders or any other Person.
No Fiduciary Relationship. The relationship between the Borrower and each of the
Agent, the Issuing Bank and the Lenders is solely that of debtor and creditor,
and neither the Agent, the Issuing Bank nor any Lender has any fiduciary or
other special relationship with the Borrower, and no term or condition of any of
the Loan Documents shall be construed so as to deem the relationship between the
Borrower and any of the Agent, the Issuing Bank and the Lenders to be other than
that of debtor and creditor.
Equitable Relief. The Borrower recognizes that in the event the Borrower fails
to pay, perform, observe, or discharge any or all of the Obligations, any remedy
at law may prove to be inadequate relief to the Agent, the Issuing Bank and the
Lenders. The Borrower therefore agrees that the Agent, the Issuing Bank and the
Lenders, if the Agent, the Issuing Bank or the Lenders so request, shall be
entitled to temporary and permanent injunctive relief in any such case without
the necessity of proving actual damages.
No Waiver; Cumulative Remedies. No failure on the part of the Agent, the Issuing
Bank or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, power, or privilege under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, or
privilege. The rights and remedies provided for in this Agreement and the other
Loan Documents are cumulative and not exclusive of any rights and remedies
provided by law.
Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns. The Borrower may not assign
or transfer any of its rights or obligations hereunder without the prior written
consent of the Agent, the Issuing Bank and all of the Lenders. Any Lender may
sell participations to one or more banks or other institutions in or to all or a
portion of its rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of its Commitments
and the Advances owing to it and the LC Participations held by it); provided,
however, that (i) such Lender's obligations under this Agreement and the other
Loan Documents (including, without limitation, its Commitments) shall remain
unchanged, (ii) such Lender shall remain solely responsible for the performance
of such obligations, (iii) such Lender shall remain the holder of its Note (or
Notes) and LC Participations for all purposes of this Agreement, (iv) the
Borrower
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other Loan
Documents, and (v) such Lender shall not sell a participation that conveys to
the participant the right to vote or give or withhold consents under this
Agreement or any other Loan Document, other than the right to vote upon or
consent to (A) any increase of such Lender's Commitments, (B) any reduction of
the principal amount of, or interest to be paid on, the Advances and LC
Participations of such Lender, (C) any reduction of any commitment fee or other
amount payable to such Lender under any Loan Document, or (D) any postponement
of any date for the payment of any amount payable in respect of the Advances or
LC Participations of such Lender.
The Borrower and each of the Issuing Bank and the Lenders agree that any Lender
(the "Assigning Lender") may at any time assign to one or more Eligible
Assignees all, or a proportionate part of all, of its rights and obligations
under this Agreement and the other Loan Documents (including, without
limitation, its Commitments, Advances and LC Participations); provided, however,
that (i) each such assignment shall be of a consistent, and not a varying,
percentage of all of the Assigning Lender's rights and obligations under this
Agreement and the other Loan Documents, (ii) except in the case of an assignment
of all of a Lender's rights and obligations under this Agreement and the other
Loan Documents, the amount of the Revolving Credit Commitments of the Assigning
Lender being assigned pursuant to each assignment (determined as of the date of
the Assignment and Acceptance with respect to such assignment) shall in no event
be less than $2,500,000, and (iii) the parties to each such assignment shall
execute and deliver to the Agent for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance, together with the
Note subject to such assignment, and a processing and recordation fee of $3,000.
Upon such execution, delivery, acceptance, and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five Business Days after the execution thereof, or, if so
specified in such Assignment and Acceptance, the date of acceptance thereof by
the Agent, (x) the Eligible Assignee thereunder shall be a party hereto as a
"Lender" and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and under the Loan Documents and (y) the
Assigning Lender shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement and the other
Loan Documents (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an Assigning Lender's rights and obligations under the
Loan Documents, such Assigning Lender shall cease to be a party thereto). By
executing and delivering an Assignment and Acceptance, the Assigning Lender and
the Eligible Assignee thereunder confirm to and agree with each other and the
other parties hereto as follows: (i) other than as provided in such Assignment
and Acceptance, such Assigning Lender makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties, or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, and enforceability, genuineness, sufficiency, or
value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (ii) such Assigning Lender makes no representation or warranty
and assures no responsibility with respect to the financial condition of the
Borrower or any Obligated Party or the performance or observance by the Borrower
or any Obligated Party of its obligations under the Loan Documents; (iii) such
Eligible Assignee confirms that it has received a copy of the Loan Documents,
together with copies of the financial statements referred to in Section 7.2 and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into such Assignment and Acceptance;
(iv) such Eligible Assignee will, independently and without reliance upon the
Agent, the Issuing Bank or any 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; (v) such Eligible Assignee confirms that it is an Eligible
Assignee; (vi) such Eligible Assignee appoints and authorizes the Agent to take
such action as agent on its behalf and exercise such powers under the Loan
Documents are as delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; and (vii) such Eligible Assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.
The Agent shall maintain at its Principal Office a copy of each Assignment and
Acceptance delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Revolving Credit Commitments of,
and principal amount of the Advances owing to, and LC Participations held by,
each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent, the Issuing Bank and the Lenders may treat each Person
whose name is recorded in the Register as a Lender hereunder for all purposes
under the Loan Documents. The Register shall be
available for inspection by the Borrower, any Lender or the Issuing Bank at any
reasonable time and from time to time upon reasonable prior notice.
Upon its receipt of an Assignment and Acceptance executed by an Assigning Lender
and Eligible Assignee representing that it is an Eligible Assignee, together
with any Note subject to such assignment, the Agent shall, if such Assignment
and Acceptance has been completed and is in substantially the form of Exhibit E
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register, and (iii) give prompt written notice thereof
to the Borrower. Within five Business Days after its receipt of such notice, the
Borrower, at its expense, shall execute and deliver to the Agent in exchange for
the surrendered Note a new Note to the order of such Eligible Assignee in an
amount equal to the Revolving Credit Commitment assumed by it pursuant to such
Assignment and Acceptance and, if the Assigning Lender has retained a Revolving
Credit Commitment, a new Note to the order of the Assigning Lender in an amount
equal to the Revolving Credit Commitment retained by it hereunder (each such
promissory note shall constitute a "Note" for purposes of the Loan Documents).
Such new Notes shall be in an aggregate principal amount of the surrendered
Note, shall be dated the effective date of such Assignment and Acceptance, and
shall otherwise be in substantially the form of Exhibit A or B, as applicable.
Any Lender may, in connection with any assignment or participation or proposed
assignment or participation pursuant to this Section, disclose to the Eligible
Assignee or participant or proposed Eligible Assignee or participant, any
information relating to the Borrower or its Subsidiaries furnished to such
Lender by or on behalf of the Borrower or its Subsidiaries.
Survival. All representations and warranties made in this Agreement or any other
Loan Document or in any document, statement, or certificate furnished in
connection with this Agreement shall survive the execution and delivery of this
Agreement and the other Loan Documents, and no investigation by the Agent, the
Issuing Bank or any Lender or any closing shall affect the representations and
warranties or the right of the Agent, the Issuing Bank or any Lender to rely
upon them. Without prejudice to the survival of any other obligation of the
Borrower hereunder, the obligations of the Borrower under Article V and Sections
13.1 and 13.2 shall survive repayment of the Notes and termination of the
Revolving Credit Commitments and the Letters of Credit.
Amendments, Etc. No amendment or waiver of any provision of this Agreement, the
Notes, or any other Loan Document to which the Borrower or any Obligated Party
is a party, nor any consent to any departure by the Borrower or any Obligated
Party therefrom, shall in any event be effective unless the same shall be agreed
or consented to by Required Lenders and the Borrower or the Obligated Party, as
applicable, and each such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided, that
no amendment, waiver, or consent shall: (a) increase the Commitment of any
Lender or subject any Lender to any additional obligations without the written
consent of such Lender; (b) reduce the principal of, or interest on, the Notes
or any fees or other amounts due to the Lenders (or any of them) hereunder or
under any other Loan Document without the written consent of each Lender
directly affected thereby; (c) postpone any date fixed for any payment of
principal of, or interest on, the Notes or Letter of Credit Disbursements or any
fees or other amounts due to the Lenders (or any of them) hereunder or under any
other Loan Document without the written consent of each Lender directly affected
thereby; (d) waive any of the conditions specified in Article VI without the
written consent of each Lender; (e) change the percentage of the Revolving
Credit Commitments or of the aggregate unpaid principal amount of the Notes or
Letter of Credit Liabilities or the number of Lenders which shall be required
for the Lenders or any of them to take any action under this Agreement without
the written consent of each Lender; (f) change any provision contained in this
Section 13.10 without the written consent of each Lender; (g) release the
Borrower from any of its obligations under this Agreement or the other Loan
Documents or, except as provided in Section 12.9, release any Guarantor from its
obligations under its Guaranty without the written consent of each Lender; and
(h) release any Collateral securing the Guaranty, or the Obligations except in
accordance with and as contemplated by the Loan Documents without the written
consent of each Lender. Notwithstanding anything to the contrary contained in
this Section, no amendment, waiver, or consent shall be made (i) with respect to
Article XII hereof without the prior written consent of the Agent, (ii) with
respect to Section 2.7 hereof without the prior written consent of the Swing
Lender, or (iii) with respect to Article III hereof without the prior written
consent of the Issuing Bank.
Maximum Interest Rate. No provision of this Agreement or of any other Loan
Document shall require the payment or the collection of interest in excess of
the maximum amount permitted by applicable law. If any excess of interest in
such respect is hereby provided for, or shall be adjudicated to be so provided,
in any Loan Document or otherwise
in connection with this loan transaction, the provisions of this Section shall
govern and prevail and neither the Borrower nor the sureties, guarantors,
successors, or assigns of the Borrower shall be obligated to pay the excess
amount of such interest or any other excess sum paid for the use, forbearance,
or detention of sums loaned pursuant hereto. In the event any Lender ever
receives, collects, or applies as interest any such sum, such amount which would
be in excess of the maximum amount permitted by applicable law shall be applied
as a payment and reduction of the principal of the indebtedness evidenced by the
Notes and the LC Participations; and, if the principal of the Notes and the LC
Participations has been paid in full, any remaining excess shall forthwith be
paid to the Borrower. In determining whether or not the interest paid or payable
exceeds the Maximum Rate, the Borrower and each Lender shall, to the extent
permitted by applicable law, (a) characterize any non-principal payment as an
expense, fee, or premium rather than as interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread the total amount of interest throughout the entire contemplated term of
the indebtedness evidenced by the Notes and LC Participations so that interest
for the entire term does not exceed the Maximum Rate. Notices. Except as
provided in Sections 2.7 and 8.1(m), all notices and other communications
provided for in this Agreement and the other Loan Documents to which the
Borrower or any Guarantor is a party shall be given or made by telex, telegraph,
telecopy, cable, electronic mail or other electronic media or in writing and
telexed, telecopied, telegraphed, cabled, mailed by certified mail return
receipt requested, or delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages hereof or any other
Loan Document, or, as to any party at such other address as shall be designated
by such party in a notice to each other party given in accordance with this
Section. Except as otherwise provided in this Agreement, all such communications
shall be deemed to have been duly given when transmitted by telex or telecopy or
electronic mail or other electronic media, subject to telephone confirmation of
receipt, or delivered to the electronic mail address, subject to telephone
confirmation of receipt, or when personally delivered or, in the case of a
mailed notice, when duly deposited in the mails, in each case given or addressed
as aforesaid; provided, however, notices to the Agent pursuant to Article II and
to the Issuing Bank pursuant to Article III shall not be effective until
received by the Agent or the Issuing Bank, as applicable.
Governing Law; Venue; Service of Process. This Agreement shall be governed by
and construed in accordance with the laws of the State of Texas and the
applicable laws of the United States of America. This Agreement has been entered
into in ▇▇▇▇▇▇ County, Texas, and it shall be performable for all purposes in
▇▇▇▇▇▇ County, Texas. Subject to Section 13.14 of this Agreement, any action or
proceeding against the Borrower under or in connection with any of the Loan
Documents may be brought in any state or federal court in ▇▇▇▇▇▇ County, Texas.
The Borrower hereby irrevocably (a) submits to the nonexclusive jurisdiction of
such courts, and (b) waives any objection it may now or hereafter have as to the
venue of any such action or proceeding brought in any such court or that any
such court is an inconvenient forum. The Borrower agrees that service of process
upon it may be made by certified or registered mail, return receipt requested,
at its address specified or determined in accordance with the provisions of
Section 13.12. Nothing herein or in any of the other Loan Documents shall affect
the right of the Agent, the Issuing Bank or any Lender to serve process in any
other manner permitted by law or shall limit the right of the Agent, the Issuing
Bank or any Lender to bring any action or proceeding against the Borrower or
with respect to any of its property in courts in other jurisdictions. Subject to
Section 13.14 of this Agreement, any action or proceeding by the Borrower
against the Agent, the Issuing Bank or any Lender shall be brought only in a
court located in ▇▇▇▇▇▇ County, Texas.
Binding Arbitration.
Arbitration. The parties hereto agree, upon demand by any party, to submit to
binding arbitration all claims, disputes and controversies between or among them
(and their respective employees, officers, directors, attorneys, and other
agents), whether in tort, contract or otherwise arising out of or relating to in
any way (i) the loan and related Loan Documents which are the subject of this
Agreement and its negotiation, execution, collateralization, administration,
repayment, modification, extension, substitution, formation, inducement,
enforcement, default or termination; or (ii) requests for additional credit.
Governing Rules. Any arbitration proceeding will (i) proceed in a location in
Texas selected by the American Arbitration Association ("AAA"); (ii) be governed
by the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the documents
between the parties; and (iii) be conducted by the AAA, or such other
administrator as the parties shall mutually agree upon, in accordance with the
AAA's commercial dispute resolution procedures, unless the claim or counterclaim
is at least $1,000,000.00 exclusive of claimed interest, arbitration fees and
costs in which case the arbitration shall be conducted in
accordance with the AAA's optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to, as
applicable, as the "Rules"). If there is any inconsistency between the terms
hereof and the Rules, the terms and procedures set forth herein shall control.
Any party who fails or refuses to submit to arbitration following a demand by
any other party shall bear all costs and expenses incurred by such other party
in compelling arbitration of any dispute. Nothing contained herein shall be
deemed to be a waiver by any party that is a bank of the protections afforded to
it under 12 U.S.C. Section91 or any similar applicable state law.
No Waiver of Provisional Remedies, Self-Help and Foreclosure. The arbitration
requirement does not limit the right of any party to (i) foreclose against real
or personal property collateral; (ii) exercise self-help remedies relating to
collateral or proceeds of collateral such as setoff or repossession; or (iii)
obtain provisional or ancillary remedies such as replevin, injunctive relief,
attachment or the appointment of a receiver, before during or after the pendency
of any arbitration proceeding. This exclusion does not constitute a waiver of
the right or obligation of any party to submit any dispute to arbitration or
reference hereunder, including those arising from the exercise of the actions
detailed in clauses (i), (ii) and (iii) of this Section 13.14(c).
Arbitrator Qualifications and Powers. Any arbitration proceeding in which the
amount in controversy is $5,000,000.00 or less will be decided by a single
arbitrator selected according to the Rules, and who shall not render an award of
greater than $5,000,000.00. Any dispute in which the amount in controversy
exceeds $5,000,000.00 shall be decided by majority vote of a panel of three
arbitrators; provided however, that all three arbitrators must actively
participate in all hearings and deliberations. The arbitrator will be a neutral
attorney licensed in the State of Texas with a minimum of ten years experience
in the substantive law applicable to the subject matter of the dispute to be
arbitrated. The arbitrator will determine whether or not an issue is
arbitratable and will give effect to the statutes of limitation in determining
any claim. In any arbitration proceeding the arbitrator will decide (by
documents only or with a hearing at the arbitrator's discretion) any pre-hearing
motions which are similar to motions to dismiss for failure to state a claim or
motions for summary adjudication. The arbitrator shall resolve all disputes in
accordance with the substantive law of Texas and may grant any remedy or relief
that a court of such state could order or grant within the scope hereof and such
ancillary relief as is necessary to make effective any award. The arbitrator
shall also have the power to award recovery of all costs and fees, to impose
sanctions and to take such other action as the arbitrator deems necessary to the
same extent a judge could pursuant to the Federal Rules of Civil Procedure, the
Texas Rules of Civil Procedure or other applicable law. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction. The
institution and maintenance of an action for judicial relief or pursuit of a
provisional or ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
Discovery. In any arbitration proceeding discovery will be permitted in
accordance with the Rules. All discovery shall be expressly limited to matters
directly relevant to the dispute being arbitrated and must be completed no later
than 20 days before the hearing date and within 180 days of the filing of the
dispute with the AAA. Any requests for an extension of the discovery periods, or
any discovery disputes, will be subject to final determination by the arbitrator
upon a showing that the request for discovery is essential for the party's
presentation and that no alternative means for obtaining information is
available.
Class Proceedings and Consolidations. The resolution of any dispute arising
pursuant to the terms of this Agreement shall be determined by a separate
arbitration proceeding and such dispute shall not be consolidated with other
disputes or included in any class proceeding.
Payment Of Arbitration Costs And Fees. The arbitrator shall award all costs and
expenses of the arbitration proceeding.
Miscellaneous. To the maximum extent practicable, the AAA, the arbitrators and
the parties shall take all action required to conclude any arbitration
proceeding within 180 days of the filing of the dispute with the AAA. No
arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control.
This arbitration provision shall survive termination, amendment or expiration of
any of the Loan Documents or any relationship between the parties.
Counterparts. This Agreement may be executed in one or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. Signatures hereby transmitted by facsimile or other
electronic means shall be effective as originals.
Severability. Any provision of this Agreement held by a court of competent
jurisdiction to be invalid or unenforceable shall not impair or invalidate the
remainder of this Agreement and the effect thereof shall be confined to the
provision held to be invalid or illegal.
Headings. The headings, captions, and arrangements used in this Agreement are
for convenience only and shall not affect the interpretation of this Agreement.
Non-Application of Chapter 346 of Texas Finance Code. The provisions of Chapter
346 of the Texas Finance Code are specifically declared by the parties hereto
not to be applicable to this Agreement or any of the other Loan Documents or to
the transactions contemplated hereby.
Construction. The Borrower, the Agent, the Issuing Bank and each Lender
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement and the
other Loan Documents with its legal counsel and that this Agreement and the
other Loan Documents shall be construed as if jointly drafted by the parties
hereto.
Independence of Covenants. All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by any of
such covenants, the fact that it would be permitted by an exception to, or be
otherwise within the limitations of, another covenant shall not avoid the
occurrence of a Default if such action is taken or such condition exists.
Confidentiality. The Agent and each Lender (each, a "Lending Party") agrees 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, rule, or regulation, (d) upon the order of any court or administrative
agency, (e) upon the request or demand of any regulatory agency or authority,
(f) 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, (g) in connection with any litigation to which
such Lending Party or any of its affiliates may be a party, (h) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Loan Document, and (i) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed participant or
assignee.
USA Patriot Act Notice. Each Lender, the Issuing Bank and the Agent (for itself
and not on behalf of any Lender) hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub.L.107.56 (signed into
law October 26, 2001)) (the "Act"), it is required to obtain, verify and record
information that identifies the Borrower, which information includes the name
and address of the Borrower and other information that will allow such Lender,
the Issuing Bank or the Agent, as applicable, to identify the Borrower in
accordance with the Act.
WAIVER OF JURY TRIAL. TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY WAIVES ALL RIGHT TO A TRIAL
BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT,
TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED THEREBY OR THE ACTIONS OF THE AGENT, THE ISSUING
BANK, OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, OR ENFORCEMENT THEREOF.
ENTIRE AGREEMENT. THIS AGREEMENT, THE NOTES, AND THE OTHER LOAN DOCUMENTS
REFERRED TO HEREIN REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES HERETO AND
MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE PARTIES HERETO. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES HERETO.
Amendment and Restatement. This Agreement amends and restates in its entirety
the Existing Credit Agreement. The execution of this Agreement and the other
Loan Documents executed in connection herewith does not extinguish the
indebtedness outstanding in connection with the Existing Credit Agreement nor
does it constitute a novation with respect to such indebtedness. THE BORROWER
REPRESENTS AND WARRANTS THAT AS OF THE DATE HEREOF THERE ARE NO CLAIMS OR
OFFSETS AGAINST OR DEFENSES OR COUNTERCLAIMS TO ITS OR ANY OBLIGATED PARTIES'
OBLIGATIONS UNDER THE EXISTING CREDIT AGREEMENT, THE OTHER LOAN DOCUMENTS AND
THE DOCUMENTATION RELATING TO THE DEPOSIT AND CASH MANAGEMENT SERVICES.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year first above written.
BORROWER:
EZCORP, INC.
By: ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Senior Vice President
Address for Notices:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Financial Officer
AGENT, ISSUING BANK AND LENDERS:
▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, as
Agent, Issuing Bank
and a Lender
By: ______________________________________
▇▇▇▇▇▇▇ ▇▇▇
Vice President
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇
Address for Operational Notices:
▇▇▇▇▇ Fargo Bank, N.A.
1700 Lincoln, ▇▇▇ ▇▇▇▇▇
▇▇▇ # ▇▇▇▇▇-▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇.▇.▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ P.C.
5400 Renaissance Tower
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Email: ▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇.▇▇▇
Attention: T. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Lending Office for Base Rate Advances and
Eurodollar Advances:
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
GUARANTY BANK,
as a Lender
By: ______________________________________
Name:
Title:
Address for Notices and Applicable Lending
Office: ▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇
Lending Office for Base Rate Advances and
Eurodollar Advances:
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Loan Support