EXHIBIT 4
EXECUTION COPY
AMENDED AND RESTATED
REVOLVING AND TERM LOAN CREDIT AGREEMENT
among
AZZ INCORPORATED,
Borrower
BANC OF AMERICA SECURITIES LLC,
Sole Lead Arranger and Book Manager
BANK OF AMERICA, N.A.,
Administrative Agent and Collateral Agent
COMERICA BANK-TEXAS
and
▇▇▇▇▇ FARGO BANK TEXAS, NATIONAL ASSOCIATION,
Co-Documentation Agents
and
THE LENDERS NAMED HEREIN,
Lenders
$85,000,000
Dated as of November 1, 2001
TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS AND TERMS...................................................................... 1
1.1 Definitions................................................................................ 1
1.2 Number and Gender of Words; Other References............................................... 26
1.3 Accounting Principles...................................................................... 26
SECTION 2 BORROWING PROVISIONS....................................................................... 26
2.1 Revolver Facility.......................................................................... 26
2.2 Term Facility.............................................................................. 26
2.3 LC Subfacility............................................................................. 27
2.4 Swing Line Subfacility..................................................................... 30
2.5 Terminations or Reductions of Commitments.................................................. 32
2.6 Borrowing Procedure........................................................................ 32
2.7 Optional Renewal of Revolver Commitment.................................................... 33
SECTION 3 TERMS OF PAYMENT........................................................................... 34
3.1 Notes, Loan Accounts, and Payments......................................................... 34
3.2 Interest and Principal Payments............................................................ 35
3.3 Prepayments................................................................................ 36
3.4 Interest Options........................................................................... 38
3.5 Quotation of Rates......................................................................... 38
3.6 Default Rate............................................................................... 38
3.7 Interest Recapture......................................................................... 38
3.8 Interest Calculations...................................................................... 38
3.9 Maximum Rate............................................................................... 38
3.10 Interest Periods........................................................................... 39
3.11 Conversions................................................................................ 39
3.12 Order of Application....................................................................... 40
3.13 Sharing of Payments, Etc................................................................... 40
3.14 Offset..................................................................................... 41
3.15 Booking Borrowings......................................................................... 41
SECTION 4 CHANGE IN CIRCUMSTANCES.................................................................... 41
4.1 Increased Cost and Reduced Return.......................................................... 41
4.2 Limitation on Types of Loans............................................................... 42
4.3 Illegality................................................................................. 43
4.4 Treatment of Affected Loans................................................................ 43
4.5 Compensation............................................................................... 43
4.6 Taxes...................................................................................... 44
SECTION 5 FEES....................................................................................... 45
5.1 Treatment of Fees.......................................................................... 45
5.2 Fees of Administrative Agent and Arranger.................................................. 46
5.3 Revolver Facility Commitment Fees.......................................................... 46
5.4 LC Fees.................................................................................... 46
SECTION 6 SECURITY; GUARANTIES....................................................................... 46
6.1 Guaranties................................................................................. 46
6.2 Collateral................................................................................. 46
6.3 Future Liens............................................................................... 47
6.4 Release of Collateral...................................................................... 47
6.5 Negative Pledge............................................................................ 48
6.6 Control; Limitation of Rights.............................................................. 48
SECTION 7 CONDITIONS PRECEDENT....................................................................... 48
7.1 Conditions Precedent to Closing............................................................ 48
7.2 Conditions Precedent to Each Permitted Acquisition......................................... 51
7.3 Conditions Precedent to Each Borrowing..................................................... 54
SECTION 8 REPRESENTATIONS AND WARRANTIES............................................................. 54
8.1 Purpose of Credit Facility................................................................. 54
8.2 Existence, Good Standing, Authority, and Authorizations.................................... 54
8.3 Subsidiaries; Capital Stock................................................................ 55
8.4 Authorization and Contravention............................................................ 55
8.5 Binding Effect............................................................................. 55
8.6 Financial Statements....................................................................... 56
8.7 Litigation, Claims, Investigations......................................................... 56
8.8 Taxes...................................................................................... 56
8.9 Environmental Matters...................................................................... 56
8.10 ERISA Compliance........................................................................... 57
8.11 Properties; Liens.......................................................................... 57
8.12 Government Regulations..................................................................... 57
8.13 Transactions with Affiliates............................................................... 57
8.14 Material Agreements; Management Agreements................................................. 57
8.15 Insurance.................................................................................. 58
8.16 Labor Matters.............................................................................. 58
8.17 Solvency................................................................................... 58
8.18 Intellectual Property...................................................................... 58
8.19 Compliance with Laws....................................................................... 58
8.20 Permitted Acquisitions..................................................................... 58
8.21 Regulation U............................................................................... 59
8.22 Tradename.................................................................................. 59
8.23 Full Disclosure............................................................................ 59
8.24 Perfection of Security Interests........................................................... 59
8.25 No Default................................................................................. 59
SECTION 9 COVENANTS.................................................................................. 59
9.1 Use of Proceeds............................................................................ 60
9.2 Books and Records.......................................................................... 60
9.3 Items to be Furnished...................................................................... 60
9.4 Inspections................................................................................ 62
9.5 Taxes...................................................................................... 62
9.6 Payment of Obligations..................................................................... 62
9.7 Maintenance of Existence, Assets, and Business............................................. 63
9.8 Insurance.................................................................................. 63
9.9 Preservation and Protection of Rights...................................................... 63
9.10 Employee Benefit Plans..................................................................... 64
9.11 Environmental Laws......................................................................... 64
9.12 Debt and Guaranties........................................................................ 64
9.13 Liens...................................................................................... 65
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9.14 Transactions with Affiliates............................................................... 66
9.15 Compliance with Laws and Documents......................................................... 66
9.16 Permitted Acquisitions, Subsidiary Guaranties, and Collateral Documents.................... 66
9.17 Assignment................................................................................. 66
9.18 Fiscal Year and Accounting Methods......................................................... 66
9.19 Government Regulations..................................................................... 67
9.20 Loans, Advances, Investments, and Restricted Payments...................................... 67
9.21 Restrictions on Subsidiaries............................................................... 68
9.22 Sale of Assets............................................................................. 68
9.23 Sale-Leaseback Financings.................................................................. 68
9.24 Mergers and Dissolutions; Sale of Capital Stock............................................ 68
9.25 New Business............................................................................... 68
9.26 Financial ▇▇▇▇▇▇........................................................................... 69
9.27 Affiliate Subordination Agreements......................................................... 69
9.28 Amendments to Organizational Documents..................................................... 69
9.29 Financial Covenants........................................................................ 69
9.30 Capital Expenditures....................................................................... 70
9.31 Deposit Accounts........................................................................... 70
SECTION 10 DEFAULT.................................................................................... 70
10.1 Payment of Obligation...................................................................... 70
10.2 Covenants.................................................................................. 70
10.3 Debtor Relief.............................................................................. 70
10.4 Judgments and Attachments.................................................................. 71
10.5 Government Action.......................................................................... 71
10.6 Misrepresentation.......................................................................... 71
10.7 Change of Control.......................................................................... 71
10.8 Authorizations............................................................................. 71
10.9 Default Under Other Debt and Agreements.................................................... 71
10.10 LCs........................................................................................ 72
10.11 Validity and Enforceability of Loan Documents.............................................. 72
10.12 Environmental Liability.................................................................... 72
10.13 Material Adverse Event..................................................................... 72
10.14 Collateral................................................................................. 72
10.15 Dissolution................................................................................ 72
SECTION 11 RIGHTS AND REMEDIES........................................................................ 72
11.1 Remedies Upon Default...................................................................... 72
11.2 Company Waivers............................................................................ 73
11.3 Performance by Administrative Agent........................................................ 73
11.4 Delegation of Duties and Rights............................................................ 73
11.5 Not in Control............................................................................. 73
11.6 Course of Dealing.......................................................................... 74
11.7 Cumulative Rights.......................................................................... 74
11.8 Application of Proceeds.................................................................... 74
11.9 Certain Proceedings........................................................................ 74
11.10 Limitation of Rights....................................................................... 75
11.11 Expenditures by Lenders.................................................................... 75
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11.12 Indemnification............................................................................ 75
SECTION 12 AGREEMENT AMONG LENDERS.................................................................... 76
12.1 Administrative Agent....................................................................... 76
12.2 Expenses................................................................................... 77
12.3 Proportionate Absorption of Losses......................................................... 77
12.4 Delegation of Duties; Reliance............................................................. 78
12.5 Limitation of Liability.................................................................... 78
12.6 Default; Collateral........................................................................ 79
12.7 Limitation of Liability.................................................................... 80
12.8 Relationship of Lenders.................................................................... 81
12.9 Benefits of Agreement...................................................................... 81
12.10 Agents..................................................................................... 81
12.11 Obligations Several........................................................................ 81
12.12 Financial ▇▇▇▇▇▇........................................................................... 81
SECTION 13 MISCELLANEOUS.............................................................................. 81
13.1 Headings................................................................................... 81
13.2 Nonbusiness Days........................................................................... 82
13.3 Communications............................................................................. 82
13.4 Form and Number of Documents............................................................... 82
13.5 Exceptions to Covenants.................................................................... 82
13.6 Survival................................................................................... 82
13.7 GOVERNING LAW.............................................................................. 82
13.8 Invalid Provisions......................................................................... 83
13.9 Entirety................................................................................... 83
13.10 Jurisdiction; Venue; Service of Process; Jury Trial........................................ 83
13.11 Amendments, Consents, Conflicts, and Waivers............................................... 84
13.12 Multiple Counterparts...................................................................... 85
13.13 Successors and Assigns; Assignments and Participations..................................... 85
13.14 Discharge Only Upon Payment in Full; Reinstatement in Certain Circumstances................ 88
13.15 Restatement of Original Credit Agreement................................................... 88
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SCHEDULES AND EXHIBITS
Schedule 2.1 - Lenders and Commitments
Schedule 8.3 - Capital Stock and Partnership Interests
Schedule 8.14 - Material Agreements
Schedule 9.13 - Existing Liens
Schedule 9.20 - Existing Investments
Exhibit A-1 - Form of Revolver Note
Exhibit A-2 - Form of Term Note
Exhibit A-3 - Form of Swing Line Note
Exhibit B-1 - Form of Borrowing Notice
Exhibit B-2 - Form of Conversion Notice
Exhibit B-3 - Form of LC Request
Exhibit C - Form of Guaranty
Exhibit D - Form of Pledge, Assignment, and Security Agreement
Exhibit E-1 - Form of Compliance Certificate
Exhibit E-2 - Form of Permitted Acquisition Compliance Certificate
Exhibit E-3 - Form of Borrowing Base Certificate
Exhibit F - Form of Assignment and Acceptance Agreement
Exhibit G - Form of Opinion of Counsel of Companies
Exhibit H - Form of Affiliate Subordination Agreement
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AMENDED AND RESTATED REVOLVING AND TERM LOAN CREDIT AGREEMENT
-------------------------------------------------------------
THIS AMENDED AND RESTATED REVOLVING AND TERM LOAN CREDIT AGREEMENT is entered
into as of November 1, 2001, among AZZ INCORPORATED, a Texas corporation
("Borrower"), Lenders (hereinafter defined), BANK OF AMERICA, N.A., as
Administrative Agent and Collateral Agent (hereinafter defined), for itself and
the other Lenders and COMERICA BANK-TEXAS and ▇▇▇▇▇ FARGO BANK TEXAS, NATIONAL
ASSOCIATION, as Co-Documentation Agents (hereinafter defined), for themselves
and the other Lenders.
RECITALS
--------
A. Borrower wishes to obtain Commitments from all Lenders for credit
facilities totaling $85,000,000, in the form of a revolving loan facility in the
aggregate principal amount of $45,000,000 and a term loan facility in the
aggregate principal amount of $40,000,000, to be used to fund working capital
and capital expenditures, to finance certain acquisitions and share repurchases,
and for other lawful purposes.
B. Upon and subject to the terms and conditions of this Agreement,
Lenders are willing to extend such credit to Borrower.
In consideration of the foregoing and the mutual covenants contained
herein, Borrower, Administrative Agent, Documentation Agent, and the Lenders
agree as follows:
SECTION 1 DEFINITIONS AND TERMS.
1.1 Definitions. As used herein:
-----------
"Acceptable ▇▇▇▇-and-Hold Contract" means a contract or purchase order
between a Company and an Account Debtor which complies with such Company's
stated policy relating to ▇▇▇▇-and-hold Accounts previously furnished to
Administrative Agent.
"Acceptable Progress Payment Contract" means a valid, binding, enforceable
contract between a Company and an Account Debtor, which provides for payments
pursuant to a stated schedule, and which complies with such Company's stated
policies previously furnished to Administrative Agent.
"Accounts" means all of each Loan Party's now owned or hereafter acquired
or arising accounts (as such term is used in accordance with Article 9 of the
UCC).
"Account Debtor" means each Person obligated in any way on, in respect
of, or in connection with an Account.
"Acquisition" means any transaction or series of related transactions
for the purpose of, or resulting in, directly or indirectly, (a) the acquisition
by any Company of all or substantially all of the assets of a Person or of any
business or division of a Person, (b) the acquisition by any Company of more
than 50% of any class of Voting Stock (or similar ownership interests) of any
Person (provided that, formation or organization of any entity shall not
constitute an "acquisition" to the extent that the amount of the loan, advance,
investment, or capital contribution in such entity constitutes a permitted
investment under Section 9.20); or (c) a merger,
consolidation, amalgamation, or other combination by any Company with another
Person if a Company is the surviving entity; provided that, in any merger
involving Borrower, Borrower must be the surviving entity.
"Adjusted Eurodollar Rate" means, for any Eurodollar Rate Borrowing for
any Interest Period therefor, the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined by Administrative Agent to be equal to
the quotient obtained by dividing (a) the Eurodollar Rate for such Eurodollar
Rate Borrowing for such Interest Period by (b) 1.0 minus the Reserve Requirement
for such Eurodollar Rate Borrowing for such Interest Period.
"Administrative Agent" means Bank of America, N.A., and its permitted
successors or assigns as "Administrative Agent" for Lenders under the Loan
Documents.
"Affiliate" of any Person means any other individual or entity who directly
or indirectly controls, or is controlled by, or is under common control with,
such Person, and, for purposes of this definition only, "control," "controlled
by," and "under common control with" mean possession, directly or indirectly, of
the power to direct or cause the direction of management or policies (whether
through ownership of voting securities, by contract, or otherwise).
"Affiliate Subordination Agreement" means, individually, and "Affiliate
Subordination Agreements" means collectively, any Affiliate Subordination
Agreement (substantially in the form of Exhibit H) executed and delivered by any
Person pursuant to the requirements of the Loan Documents; and any amendments,
modifications, supplements, ratifications, or restatements of any Affiliate
Subordination Agreement made in accordance with the Loan Documents.
"Agents" means, collectively, Administrative Agent and Documentation Agent.
"Agreement" means, collectively, this Revolving and Term Loan Credit
Agreement and all Exhibits and Schedules hereto (as the same may hereafter be
amended, modified, supplemented, or restated from time to time).
"Applicable Lending Office" means, for each Lender and for each Type of
Borrowing, the "Lending Office" of such Lender (or an Affiliate of such Lender)
designated on Schedule 2.1 attached hereto or such other office that such Lender
(or an Affiliate of such Lender) may from time to time specify to Administrative
Agent and Borrower by written notice in accordance with the terms hereof.
"Applicable Margin" means from the Closing Date until and including
November 1, 2002, the Applicable Margin set forth in ▇▇▇▇▇ ▇, and thereafter, on
any date of determination, the percentage per annum set forth in the table below
for the Type of Borrowing or Commitment Fees (as the case may be) that
corresponds to the Leverage Ratio at such date of determination, as calculated
based on the quarterly Compliance Certificate of Borrower most recently
delivered pursuant to Section 9.3 hereof (or initially determined based upon the
Compliance Certificate delivered pursuant to Section 7.1(r)):
2
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Applicable Margin (per annum)
----------------------------------------------------------------------
Eurodollar Rate Base Rate Commitment
Level Leverage Ratio Borrowing and Borrowing Fees
Commission Fee
------------------------------------------------------------------------------------------------------------------
1 Less than or equal to 1.250% 0.00% 0.250%
1.0:1.0
------------------------------------------------------------------------------------------------------------------
2 Greater than 1.0:1.0, 1.500% 0.00% 0.300%
but less than or equal
to 1.5:1.0
------------------------------------------------------------------------------------------------------------------
3 Greater than 1.5:1.0, 1.750% 0.250% 0.375%
but less than or equal
to 2.0:1.0
------------------------------------------------------------------------------------------------------------------
4 Greater than 2.0:1.0, 2.000% 0.500% 0.500%
but less than or equal
to 2.5:1.0
------------------------------------------------------------------------------------------------------------------
5 Greater than 2.50:1.0 2.250% 0.750% 0.500%
------------------------------------------------------------------------------------------------------------------
Upon delivery of the Compliance Certificate pursuant to Section 9.3 or the
Permitted Acquisition Compliance Certificate in connection with a Permitted
Acquisition, on and after November 2, 2002 after the end of each fiscal quarter
commencing with the Compliance Certificate delivered for the fiscal quarter
ending August 31, 2002, the Applicable Margin shall automatically be adjusted to
the rate corresponding to the Leverage Ratio set forth in the table above, such
automatic adjustment to take effect prospectively the third Business Day after
receipt by Administrative Agent of the Compliance Certificate or the Permitted
Acquisition Compliance Certificate, as the case may be. If Borrower fails to
deliver such Compliance Certificate or the Permitted Acquisition Compliance
Certificate, as the case may be, with respect to any fiscal quarter or the
Permitted Acquisition, as the case may be, which sets forth such ratio within
the period of time required by Section 9.3 or by the definition of Permitted
Acquisition, as the case may be, the Applicable Margin shall automatically be
adjusted to that set forth in Level 5. The automatic adjustments provided for in
the preceding sentence shall take effect on the last day that the Compliance
Certificate was required to be delivered and shall remain in effect until
subsequently adjusted in accordance herewith upon the delivery of such
Compliance Certificate or the Permitted Acquisition Compliance Certificate, as
the case may be.
"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 any
entity that administers or manages a Lender.
"Arranger" means Banc of America Securities LLC, and its successors and
assigns, in its capacity as sole lead arranger and book manager under the Loan
Documents.
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee pursuant to Section 13.13, and accepted by
Administrative Agent, in substantially the form of Exhibit F.
"Authorizations" means all filings, recordings, and registrations with, and
all validations or exemptions, approvals, orders, authorizations, consents,
franchises, licenses, certificates, and permits from, any Governmental
Authority.
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"Availability" means, at any time of determination, the remainder of (a)
the Borrowing Base minus (b) the Revolver Principal Debt.
"Bank of America" means Bank of America, N.A., in its individual capacity
as a Lender, and its successors and assigns.
"Base Rate" means, for any day, a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one percent
(0.5%) and (b) the rate of interest in effect for such day as publicly announced
from time to time by Administrative Agent as its "prime rate." Such rate is a
rate set by Administrative Agent based upon various factors including
Administrative Agent's costs and desired return, general economic conditions,
and other factors, and is used as a reference point for pricing some loans,
which may be priced at, above, or below such announced rate. Any change in such
rate announced by Administrative Agent shall take effect at the opening of
business on the day specified in the public announcement of such change.
"Base Rate Borrowing" means a Borrowing bearing interest at the sum of the
Base Rate plus the Applicable Margin for Base Rate Borrowings.
"▇▇▇▇-and-Hold Receivable" means any Account evidence by an invoice,
payable to any Company pursuant to any Acceptable ▇▇▇▇-and-Hold Contract.
"Borrower" is defined in the preamble to this Agreement.
"Borrowing" means any amount disbursed by any Lender under the Loan
Documents or any Loan Document, whether such amount constitutes an original
disbursement of funds, the continuation of an amount outstanding, or payment of
a draft under an LC.
"Borrowing Base" means, at any time, an amount equal to the lesser of (a)
the Revolver Commitment and (b) the sum of (i) eighty-five percent (85%) of the
Eligible Accounts of Loan Parties; plus (ii) fifty percent (50%) of the Eligible
Non-Zinc Inventory of Loan Parties; plus (iii) sixty percent (60%) of Eligible
Zinc Inventory of Loan Parties minus (iv) all reserves which Administrative
Agent deems necessary in the exercise of its reasonable credit judgment to
maintain with respect to any Loan Party's account, including reserves for any
amounts which Administrative Agent or any Lender may be obligated to pay in the
future for the account of any Loan Party; provided that, the value of the of the
items set forth in clauses (b)(ii) and (b)(iii) shall be valued at the lesser of
cost and fair market value; and provided further that the percentages set forth
in clause (b) above shall be subject to modification based on the most recent
inspection conducted on behalf of Administrative Agent in accordance with
Section 9.4.
"Borrowing Base Certificate" means a certificate by a Responsible Officer
of the Borrower, substantially in the form of Exhibit E-3 and prepared in
accordance with Section 9.3(c).
"Borrowing Date" means the date on which Borrower requests, pursuant to
Section 2.6(a), that Lenders fund a Borrowing.
"Borrowing Notice" means a request for Borrowing made pursuant to Section
2.6, substantially in the form of Exhibit B-1.
4
"Business Day" means (a) for all purposes, any day other than Saturday,
Sunday, and any other day on which commercial banking institutions are required
or authorized by Law to be closed in Dallas, Texas or New York, New York and (b)
in addition to the foregoing, in respect of any Eurodollar Rate Borrowing, a day
on which dealings in Dollars are conducted in the London interbank market and
commercial banks are open for international business in London.
"Capital Expenditures" means an expenditure (determined in accordance with
GAAP) for any fixed asset owned by any Company and used in the operations of
such Company having a useful life of more than one year, or any improvements or
additions thereto, including the direct or indirect Acquisition of such assets,
and including any obligations to pay rent or other amounts under a Capital
Lease.
"Capital Lease" means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.
"Cash Equivalents" means:
(a) Readily marketable, direct, full faith and credit obligations of
the United States of America, or obligations guaranteed by the full faith
and credit of the United States of America, maturing within not more than
one year from the date of acquisition;
(b) Short term certificates of deposit and time deposits, which
mature within one year from the date of issuance and which are fully
insured by the Federal Deposit Insurance Corporation;
(c) Commercial paper maturing in 365 days or less from the date of
issuance and rated either "P-1" by ▇▇▇▇▇'▇, or "A-" S&P;
(d) Debt instruments of a domestic issuer which mature in one year or
less and which are rated "A" or better by ▇▇▇▇▇'▇ or S&P on the date of
acquisition of such investment;
(e) Money market funds with respect to which not less than ninety-
five percent (95%) of such assets would constitute Cash Equivalents of the
kinds described in the preceding subparagraphs; and
(f) Demand deposit accounts which are maintained in the ordinary
course of business.
"Change of Control" means, with respect to any Person, an event or series
of events by which:
(a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, but excluding any
employee benefit plan of such Person or its subsidiaries, or any Person
acting in its capacity as trustee, agent or other fiduciary or
administrator of any such plan), becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except
that a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 25% or more of the equity interests of such Person; or
5
(b) during ny period of 12 consecutive months, a majority of the
members of the board of directors or other equivalent governing body of
such Person cease to be composed of individuals (i) who were members of
that board or equivalent governing body on the first day of such period,
(ii) whose election or nomination to that board or equivalent governing
body was approved by individuals referred to in clause (i) above
constituting at the time of such election or nomination at least a majority
of that board or equivalent governing body or (iii) whose election or
nomination to that board or other equivalent governing body was approved by
individuals referred to in clauses (i) and (ii) above constituting at the
time of such election or nomination at least a majority of that board or
equivalent governing body.
"Closing Date" means the date upon which this Agreement has been executed
by Borrower, Lenders and Administrative Agent and all conditions precedent
specified in Section 7.1 have been satisfied or waived.
"Code" means the Internal Revenue Code of 1986, as amended, together with
the rules and regulations promulgated thereunder.
"Co-Documentation Agents" means collectively, Comerica Bank - Texas and
▇▇▇▇▇ Fargo Bank Texas, National Association, together with their respective
successors and assigns, and Co-Documentation Agent means either of them.
"Collateral" means all of the items and types of property described as
"Collateral" in now existing or hereafter created Collateral Documents and all
cash and non-cash proceeds thereof.
"Collateral Agent" means Bank of America, N.A., together with its
successors and assigns.
"Collateral Documents" means this Agreement and all security agreements,
pledge agreements, financing statements, assignments of partnership interests,
Guaranties, mortgages and deeds of trust at any time delivered to Administrative
Agent to create or evidence Liens securing the Obligation, together with all
reaffirmations and modifications thereof and amendments or supplements thereto.
"Commission Fee" means, with respect to each LC or any extension thereof,
an amount equal to the product of (a) the Applicable Margin for Eurodollar Rate
Borrowings under the Revolver Facility in effect on the date of payment of such
fee (calculated on a per annum basis) multiplied by (b) the stated amount of
such LC.
"Commitment Fee" is defined in Section 5.3.
"Commitment Percentage" means, at any date of determination, for any Lender
with respect to a particular Facility or Subfacility, the proportion (stated as
a percentage) that its Committed Sum for such Facility or Subfacility bears to
the aggregate Committed Sums of all Lenders for such Facility or Subfacility.
"Committed Sum" means, for any Lender, with respect to the Revolver
Facility or the Term Facility, as applicable, at any date of determination
occurring prior to the Termination Date for such Facility, the amount stated
beside such Lender's name under the heading for such Facility, on the most-
recently amended
6
Schedule 2.1 to this Agreement (which amount is subject to increase, reduction,
or cancellation in accordance with the Loan Documents).
"Companies" means, at any date of determination thereof, Borrower and each
of its Subsidiaries; and Company means, on any date of determination, any one of
them.
"Compliance Certificate" means a certificate signed by a Responsible
Officer, substantially in the form of Exhibit E-1.
"Consequential Loss" means any loss, cost, or expense which any Lender may
reasonably incur in respect of a Eurodollar Rate Borrowing as a consequence of
any event described in Section 4.5.
"Consolidated Earn-Out Indebtedness" means, as to any Person, at any time,
in connection with each applicable Permitted Acquisition in which an earn-out
payment or other post-closing payment or payments is or may be due pursuant to
the applicable purchase or acquisition agreement, the projected aggregate amount
of such earn-out or post-closing payments that would be or become due based upon
all events or circumstances that have occurred as of any date of determination,
regardless of whether any such payments are then actually payable under the
terms of the applicable purchase or acquisition agreement.
"Consolidated Interest Expense" means, for any period of calculation
thereof, for the Companies, the aggregate amount of all interest (including
Commitment Fees) on all Debt of the Companies, whether paid in cash or accrued
as a liability and payable in cash during such period (including, without
limitation, imputed interest on Capital Lease obligations; the amortization of
any original issue discount on any Debt; the interest portion of any deferred
payment obligation; all commissions, discounts, and other fees and charges owed
with respect to letters of credit or bankers' acceptance financing; net costs
associated with Financial ▇▇▇▇▇▇; the interest component of any Debt that is
guaranteed or secured by such Person), and all cash premiums or penalties for
the repayment, redemption, or repurchase of Debt.
"Consolidated Net Income" means, for any Rolling Period, as applied to
Borrower and its Subsidiaries, the sum of (a) the consolidated net income (or
net loss) of Borrower and its Subsidiaries after giving effect to deduction of
or provision for all operating expenses, all taxes and reserves (including,
without limitation, reserves for deferred taxes) plus (b) the consolidated net
income (or net loss) of Recently-Acquired Entities for the Recently-Acquired
Entity Rolling Period not included in clause (a) hereof, after giving effect to
deduction of or provision for all operating expenses, all taxes and reserves
(including, without limitation, reserves for deferred taxes); provided, however,
that such sum shall exclude:
(i) any net gains or losses on the sale or the other disposition,
not in the ordinary course of business, of investments and other capital
assets, provided that there shall also be excluded any related charges for
taxes thereon;
(ii) any net gain arising from the collection of the proceeds of any
insurance policy; any write-up or write-down of any asset; and
(iii) any other extraordinary item, as defined by GAAP.
7
"Consolidated Net Worth" means, at any time of determination, all amounts
which, in conformity with GAAP, would be included as stockholders' equity on a
consolidated balance sheet of the Companies.
"Conversion Notice" means a request pursuant to Section 3.11, substantially
in the form of Exhibit B-2.
"Current Date" is defined in Section 7.1(d).
"Current Financials" means, at the time of any determination thereof, the
more recently delivered to Lenders of either (a) (i) the audited Financial
Statements for each of the fiscal years ended February 28, 1999, February 29,
2000 and February 28, 2001, calculated on a consolidated basis for Borrower and
its Subsidiaries; (ii) the unaudited Financial Statements for the fiscal quarter
ended August 31, 2001, calculated on a consolidated basis for Borrower and its
Subsidiaries; (iii) an unaudited consolidated pro forma balance sheet of
Borrower and its Subsidiaries, which balance sheet shall be prepared giving pro
forma effect to the incurrence of Debt under this Agreement as of August 31,
2001; (iv) an unaudited consolidated pro forma income statement of Borrower and
its Subsidiaries for the four fiscal quarters ending August 31, 2001, which
income statement gives pro forma effect to the incurrence of Debt under this
Agreement; and (v) an unaudited consolidated pro forma balance sheet of Borrower
and its Subsidiaries, which balance sheet shall be prepared giving pro forma
effect to the incurrence of Debt under this Agreement as of the Closing Date;
and (b) the Financial Statements required to be delivered under Sections 9.3(a)
or 9.3(b), as the case may be, calculated on a consolidated basis for the
Companies.
"Debt" means (without duplication), for any Person, the sum of the
following: (a) all liabilities, obligations, and indebtedness of such Person
which in accordance with GAAP should be classified upon such Person's balance
sheet as liabilities in respect of (i) money borrowed, including, without
limitation, the Principal Debt, (ii) obligations of such Person under Capital
Leases, and (iii) obligations of such Person issued or assumed as the deferred
Purchase Price of property, all conditional sale obligations, and obligations
under any title retention agreement; (b) all obligations of the type referred to
in clauses (a)(i) through (a)(iii) preceding of other Persons for the payment of
which such Person is responsible or liable as obligor, guarantor, or otherwise;
(c) all obligations of the type referred to in clauses (a)(i) through clause
(a)(iii) and clause (b) preceding of other Persons secured by any Lien on any
property or asset of such Person (whether or not such obligation is assumed by
such Person), the amount of such obligation being deemed to be the lesser of the
value of such property or assets or the amount of the obligation so secured; (d)
the face amount of all letters of credit and banker's acceptances issued for the
account of such Person and, without duplication, all drafts drawn and unpaid
thereunder; (e) net payments under Financial ▇▇▇▇▇▇; and (f) the principal
balance outstanding under any synthetic lease, tax retention operating lease,
off balance sheet loan, or similar off balance sheet financing product to which
such Person is a party, where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an operating lease in
accordance with GAAP.
"Debt Issuance" means any Debt of Borrower or any Loan Party for borrowed
money issued or incurred after the Closing Date, other than Permitted Debt.
"Debtor Relief Laws" means the Bankruptcy Code of the United States of
America and all other applicable liquidation, conservatorship, bankruptcy,
moratorium, rearrangement, receivership, insolvency, reorganization, fraudulent
transfer or conveyance, suspension of payments, or similar Laws from time to
time in effect affecting the Rights of creditors generally.
8
"Default" is defined in Section 10.
"Default Rate" means an interest rate equal to (a) the Base Rate plus (b)
the Applicable Margin, if any, applicable to Base Rate Borrowings plus (c) 2%
per annum; provided, however, that with respect to a Eurodollar Rate Borrowing,
the Default Rate shall be an interest rate equal to the interest rate (including
any Applicable Margin) otherwise applicable to such Borrowing plus 2% per annum,
in each case to the fullest extent permitted by applicable Laws.
"Distribution" for any Person means, with respect to any shares of any
capital stock, membership interest, or any other equity securities issued by
such Person, (a) the retirement, redemption, purchase, or other Acquisition for
value of any such securities, (b) the declaration or payment of any dividend or
distribution on or with respect to any such securities, and (c) any other
payment by such Person with respect to such securities.
"Dollars" and the symbol $ each means lawful money of the United States of
America.
"Domestic Subsidiary" of any Person means a direct or indirect Subsidiary
of such Person that is organized or incorporated under the Laws of a
jurisdiction of the United States, other than a direct or indirect Subsidiary of
a Foreign Subsidiary of such Person.
"EBITDA" means, for any period, the sum of (a) Consolidated Net Income,
plus (b) the sum of all amounts deducted therefrom during such period, in
conformity with GAAP, for interest, taxes, depreciation and amortization.
"EBITDAR" means, with respect to any Person for any fiscal period, an
amount equal to the sum of (a) EBITDA plus (b) Rental Expense.
"Eligible Accounts" means the Accounts of any Loan Party which the
Administrative Agent in the exercise of its discretion determines to be Eligible
Accounts. Without limiting the discretion of the Administrative Agent to
establish other criteria of ineligibility, Eligible Accounts shall not, unless
the Administrative Agent in its sole discretion elects, include any Account:
(a) with respect to which more than 90 days have elapsed since the date of
the original invoice therefor or it is more than 90 days past due, provided
however, that with respect to Accounts due from General Electric Company and its
Affiliates, so long as the public debt of General Electric Company is rated at
least BBB- by S&P or Baa3 by ▇▇▇▇▇'▇, then the references to "90 days" shall be
"105 days" in respect of Accounts due from General Electric Company and its
Affiliates;
(b) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Collateral Documents are not or have
ceased to be complete and correct or have been breached;
(c) with respect to which Account (or any other Account due from the
Account Debtor in respect thereof), in whole or in part, a check, promissory
note, draft, trade acceptance or other instrument for the payment of money has
been received, presented for payment and returned uncollected for any reason;
9
(d) any Progress ▇▇▇▇▇▇▇▇, the aggregate unpaid balance of which exceeds
the lesser of: (i) ten percent (10%) of the aggregate unpaid balance of all
Eligible Accounts owed to all Loan Parties in the aggregate by all such Loan
Parties' Account Debtors, and (ii) $3,000,000; provided that, Progress ▇▇▇▇▇▇▇▇
shall be included for purposes of the definition of "Eligible Accounts" from the
date hereof only through and including April 30, 2003;
(e) any ▇▇▇▇-and-Hold Receivables, the aggregate unpaid balance of which
exceeds the lesser of: (i) ten percent (10%) of the aggregate unpaid balance of
all Eligible Accounts owed to all Loan Parties in the aggregate by all such Loan
Parties' Account Debtors, and (ii) $3,000,000;
(f) with respect to which any one or more of the following events has
occurred to the Account Debtor on such Account: death or judicial declaration of
incompetency of an Account Debtor who is an individual; the filing by or against
the Account Debtor of a request or petition for liquidation, reorganization,
arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or
other relief under any Debtor Relief Law; the making of any general assignment
by the Account Debtor for the benefit of creditors; the appointment of a
receiver or trustee for the Account Debtor or for any of the assets of the
Account Debtor, including, without limitation, the appointment of or taking
possession by a "custodian," as defined in the Federal Bankruptcy Code; the
institution by or against the Account Debtor of any other type of insolvency
proceeding (under the bankruptcy laws of the United States or otherwise) or of
any formal or informal proceeding for the dissolution or liquidation of,
settlement of claims against, or winding up of affairs of, the Account Debtor;
the sale, assignment, or transfer of all or any material part of the assets of
the Account Debtor; the nonpayment generally by the Account Debtor of its debts
as they become due; or the cessation of the business of the Account Debtor as a
going concern;
(g) if twenty-five percent (25%) or more of the aggregate Dollar amount of
outstanding Accounts owed at such time by the Account Debtor thereon is
classified as ineligible under the other criteria set forth herein or otherwise
established by Administrative Agent;
(h) owed by an Account Debtor which: (i) does not maintain its chief
executive office in the United States or Canada; or (ii) is not organized under
the laws of the United States or any state thereof or Canada or any province
thereof; or (iii) is the government of any foreign country or sovereign state,
or of any state, province, municipality, or other political subdivision thereof,
or of any department, agency, public corporation, or other instrumentality
thereof, unless (A) such Account is payable in the United States and has a
guaranty, letter of credit or other support of the Export-Import Bank of the
United States satisfactory to Administrative Agent in its discretion (such
Account being hereinafter referred to as an "Eligible Foreign Account"), (B)
such Account is otherwise secured or payable by a letter of credit satisfactory
to Administrative Agent in its discretion or (C) such Account is supported by an
insurance policy issued by an insurance company acceptable to Administrative
Agent provided that the amount of accounts receivable supported by insurance
policies may not exceed One Million Dollars in the aggregate at any one time;
(i) owed by an Account Debtor which is an Affiliate or employee of such
Loan Party;
(j) except as provided in clauses (l) and (m) below, with respect to which
either the perfection, enforceability, or validity of Administrative Agent's
Lien in such Account, or Administrative Agent's right or ability to obtain
direct payment to Administrative Agent of the proceeds of such Account, is
governed by any federal, state, or local statutory requirements other than those
of the UCC;
10
(k) owed by an Account Debtor to which a Loan Party is indebted in any
way, or which is subject to any right of setoff or recoupment by the Account
Debtor, unless the Account Debtor has entered into an agreement acceptable to
Administrative Agent to waive setoff rights; or if the Account Debtor thereon
has disputed liability or made any claim with respect to any other Account due
from such Account Debtor; but in each such case only to the extent of such
indebtedness, setoff, recoupment, dispute, or claim;
(l) owed by the government of the United States of America, or any
department, agency, public corporation, or other instrumentality thereof, unless
the Federal Assignment of Claims Act of 1940, as amended (31 U.S.C. ' 3727 et
seq.), and any other steps necessary to perfect Administrative Agent's Lien
therein, have been complied with to Administrative Agent's satisfaction with
respect to such Account;
(m) owed by any state, municipality, or other political subdivision of the
United States of America, or any department, agency, public corporation, or
other instrumentality thereof and as to which Administrative Agent determines
that its Lien therein is not or cannot be perfected;
(n) which is evidenced by a promissory note or other instrument or by
chattel paper;
(o) if Administrative Agent believes, in the exercise of its reasonable
judgment, that the prospect of collection of such Account is impaired or that
the Account may not be paid by reason of the Account Debtor's financial
inability to pay;
(p) with respect to which the Account Debtor is located in any state
requiring the filing of a "Notice of Business Activities Report" or similar
report in order to permit the Loan Party to seek judicial enforcement in such
State of payment of such Account, unless such Loan Party has qualified to do
business in such state or has filed a Notice of Business Activities Report or
equivalent report for the then current year; or
(q) which arises out of a sale not made in the ordinary course of such
Loan Party's business;
(r) with respect to which the goods giving rise to such Account have not
been shipped and delivered to and accepted by the Account Debtor or the services
giving rise to such Account have not been performed by such Loan Party, and, if
applicable, accepted by the Account Debtor, or the Account Debtor revokes its
acceptance of such goods or services;
(s) owed by an Account Debtor which is obligated to the Loan Parties
respecting Accounts the aggregate unpaid balance of which exceeds twenty percent
(20%) (or in the case of General Electric Company and its Affiliates,
twenty-five percent (25%)) of the aggregate unpaid balance of all Accounts owed
to all Loan Parties in the aggregate at such time by all of such Loan Parties'
Account Debtors, but only to the extent of such excess;
(t) which arises out of an enforceable contract or order which, by its
terms, forbids, restricts or makes void or unenforceable the granting of a Lien
by such Loan Party to Administrative Agent with respect to such Account;
(u) which arises from the sale of minerals (including oil and gas) at the
wellhead or minehead; or
11
(v) which is not subject to a first priority and perfected security
interest in favor of Administrative Agent for the benefit of the Lenders.
If any Account at any time ceases to be an Eligible Account, then such
Account shall promptly be excluded from the calculation of Eligible Accounts.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender (so
long as such assignment is not made in conjunction with the sale of such
Affiliate); (c) an Approved Fund; and (d) any other Person approved by
Administrative Agent (which approval will not be unreasonably withheld or
delayed by Administrative Agent) and, unless a Default or Potential Default has
occurred and is continuing at the time any assignment is effected in accordance
with Section 13.13, Borrower, such approval not to be unreasonably withheld or
delayed by Borrower and such approval to be deemed given by Borrower if no
objection is received by the assigning Lender and Administrative Agent from
Borrower within five Business Days after notice of such proposed assignment has
been provided by the assigning Lender to Borrower; provided, however, that
neither Borrower nor any Affiliate of Borrower shall qualify as an Eligible
Assignee.
"Eligible Inventory" means the Inventory of any Loan Party which
Administrative Agent in the exercise of its discretion determines to be Eligible
Inventory, valued by Administrative Agent at cost. Without limiting the
discretion of Administrative Agent to establish other criteria of ineligibility,
Eligible Inventory shall not, unless Administrative Agent in its sole discretion
elects, include any Inventory:
(a) with respect to which any of the representations, warranties,
covenants, and agreements contained in the Collateral Documents are not or have
ceased to be complete and correct or have been breached;
(b) Inventory located on leaseholds as to which the lessor has not entered
into a consent and agreement providing Administrative Agent with the right to
receive notice of default, the right to repossess such Inventory at any time and
such other rights as may be acceptable to Administrative Agent;
(c) Inventory that is obsolete, unusable or otherwise unavailable for
sale;
(d) Inventory consisting of promotional, marketing, packaging or shipping
materials and supplies;
(e) Inventory that fails to meet all standards imposed by any Governmental
Authority having regulatory authority over such Inventory or its use or sale;
(f) Inventory that is subject to any licensing, patent, royalty,
trademark, trade name or copyright agreement with any third party from which any
Loan Party has received notice of a dispute in respect of any such agreement;
(g) Inventory located outside the United States;
(h) Inventory that is not in the possession of or under the sole control
of one or more of the Loan Parties;
(i) Inventory consisting of work-in-process; and
12
(j) Inventory in respect of which the Security Agreement, after giving
effect to the related filings of financing statements that have then been made,
if any, does not or has ceased to create a valid and perfected first priority
lien or security interest in favor of Administrative Agent for the benefit of
the Lenders securing the Obligation.
If any Inventory at any time ceases to be Eligible Inventory, then such
Inventory shall promptly be excluded from the calculation of Eligible Inventory.
"Eligible Non-Zinc Inventory" means Eligible Inventory but excluding any
Inventory comprising, or otherwise consisting of, zinc.
"Eligible Zinc Inventory" means Eligible Inventory comprising, or otherwise
consisting of, zinc.
"Employee Plan" means, at any time, each Single-Employer Plan and each
Multiemployer Plan.
"Environmental Law" means any applicable Law that relates to (a) the
condition or protection of air, groundwater, surface water, soil, or other
environmental media, (b) the environment, including natural resources or any
activity which affects the environment, (c) the regulation of any pollutants,
contaminants, wastes, substances, and Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ' 9601 et seq.) ("CERCLA"), the Clean Air Act (42
-- ---
U.S.C. ' 7401 et seq.), the Federal Water Pollution Control Act, as amended by
-- ---
the Clean Water Act (33 U.S.C. ' 1251 et seq.), the Federal Insecticide,
-- ---
Fungicide, and Rodenticide Act (7 U.S.C. ' 136 et seq.), the Emergency Planning
-- ---
and Community Right to Know Act of 1986 (42 U.S.C. ' 11001 et seq.), the
-- ---
Hazardous Materials Transportation Act (49 U.S.C. ' 1801 et seq.), the National
-- ---
Environmental Policy Act of 1969 (42 U.S.C. ' 4321 et seq.), the Oil Pollution
-- ---
Act (33 U.S.C. ' 2701 et seq.), the Resource Conservation and Recovery Act (42
-- ---
U.S.C. ' 6901 et seq.), the Rivers and Harbors Act (33 U.S.C. ' 401 et seq.),
-- --- -- ---
the Safe Drinking Water Act (42 U.S.C. ' 201 and ' 300f et seq.), the Solid
-- ---
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976 and the Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. ' 6901 et
--
seq.), the Toxic Substances Control Act (15 U.S.C. ' 2601 et seq.), and
--- -- ---
analogous state and local Laws, as any of the foregoing may have been and may be
amended or supplemented from time to time, and any analogous future enacted or
adopted Law, or (d) the Release or threatened Release of Hazardous Substances.
"Environmental Liability" means any obligation, liability (including,
without limitation, any strict liability), loss, fine, penalty, charge, Lien,
damage, cost, or expense of any kind to the extent that it results (a) from any
violation of or any obligation or liability under any Environmental Law, (b)
from the presence, Release, or threatened Release of any Hazardous Substance, or
(c) from actual or threatened damages to natural resources.
"Environmental Permit" means any permit, license, or other Authorization
from any Governmental Authority that is required under any Environmental Law for
the lawful conduct of any business, process, or other activity.
"Equity Issuance" means the issuance on and after the Closing Date by any
Company of any shares of any class of stock, warrants, or other equity
interests, other than (a) present and future shares of stock, options,
13
or warrants issued to employees, directors, or consultants of such Company or
any Company's stock option plan or other benefit or compensation plans or
arrangements, (b) stock issued upon the exercise of any such warrants or
options, (c) any shares of any class of stock, warrants, or other equity
interests issued from a Company solely to another Company, and (d) common stock
of Borrower issued solely in connection with Permitted Acquisitions, so long as,
no Default or Potential Default exists or arises as a result thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the regulations and rulings thereunder.
"ERISA Affiliate" means any company or trade or business (whether or not
incorporated) which, for purposes of Title IV of ERISA, is, or has been within
the past six years, a member of any Loan Party's controlled group or which is,
or has been within the past six years, under common control with any Loan Party
within the meaning of Section 414(b), (c), (m), or (o) of the Code.
"Eurodollar Rate" means, for any Eurodollar Rate Borrowing for any Interest
Period therefor:
(a) the rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) equal to the rate determined by Administrative Agent to be the
offered rate that appears on Telerate Page 3750 (or any successor thereto)
that displays an average British Bankers Association LIBOR Rate for
deposits in Dollars (for delivery on the first day of such Interest Period)
with a term equivalent to such Interest Period, determined as of
approximately 11:00 a.m. London time) two Business Days prior to the first
day of such Interest Period; or
(b) If for any reason the rate in the preceding clause (a) does not
appear on such page or service or such page or service shall cease to be
available, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) equal to the rate determined by Administrative Agent
to be the offered rate on such other page or other service that displays an
average British Bankers Association Interest Settlement Rate for deposits
in Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period; or
(c) if the rates referenced in the preceding clauses (a) and (b)are
not available, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by Administrative Agent to be the rate of
interest at which deposits in Dollars for delivery on the first day of such
Interest Period in same day funds in the approximate amount of the
Eurodollar Rate Borrowing being made, continued, or converted and with a
term equivalent to such Interest Period would be offered by Bank of
America's London Branch to major banks in the offshore Dollar market at
their request at approximately 1:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period.
"Eurodollar Rate Borrowing" means a Borrowing bearing interest at the sum
of the Adjusted Eurodollar Rate plus the Applicable Margin for Eurodollar Rate
Borrowings.
"Exhibit" means an exhibit to this Agreement (unless otherwise specified).
14
"Facilities" means, collectively, the Revolver Facility and the Term
Facility; "Facility" means either one of them.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined (which
determination shall be conclusive and binding, absent manifest error) by
Administrative Agent to be equal to the weighted average of the rates on
overnight Federal funds transactions with member banks of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day;
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no such rate
is so published on such next succeeding Business Day, the Federal Funds Rate for
such day shall be the average rate charged to Administrative Agent (in its
individual capacity) on such day on such transactions as determined by
Administrative Agent (which determination shall be conclusive and binding,
absent manifest error).
"Fee Letter" means that certain letter agreement dated as of August 3,
2001, by and among Borrower, Administrative Agent, and Arranger.
"Financial Hedge" means either (a) a swap, collar, floor, cap, or other
contract which is intended to reduce or eliminate the risk of fluctuations in
interest rates, or (b) a foreign exchange, currency hedging, commodity hedging,
or other contract which is intended to reduce or eliminate the market risk of
holding currency or a commodity in either the cash or futures markets, which
Financial Hedge under either clause (a) or clause (b) is entered into by any
Company with any Person under the Laws of a jurisdiction in which such contracts
are legal and enforceable (except as enforceability may be limited by applicable
Debtor Relief Laws and general principles of equity); provided that, (i) all
documentation for Financial ▇▇▇▇▇▇ must conform to ISDA standards and (ii) each
such Financial Hedge shall be or shall have been incurred in the ordinary course
of business and consistent with prior business practices of the Companies.
"Financial Statements" means balance sheets, statements of operations,
statements of shareholders' equity, and statements of cash flows prepared in
accordance with GAAP, which statements of operations and statements of cash
flows shall be in comparative form to the corresponding period of the preceding
fiscal year, and which balance sheets and statements of shareholders' equity
shall be in comparative form to the prior fiscal year-end figures.
"Fixed Charge Coverage Ratio" means, for any period, with respect to the
Companies, on a consolidated basis, the ratio of: (a) the sum of: (i) EBITDAR,
less (ii) Capital Expenditures in respect of repairs or replacements of fixed
assets, and less (iii) cash Taxes, to (b) the sum of: (i) cash Consolidated
Interest Expense, plus (ii) scheduled payments of principal of Funded Debt, plus
(iii) Rental Expense, plus (iv) any payments made during such period by any
Company with respect to all Consolidated Earn-Out Indebtedness, plus (v) any
Distribution made during such period by Borrower.
"Foreign Subsidiary" of any Person means a Subsidiary of such Person that
is organized or incorporated under the Laws of a jurisdiction other than a
jurisdiction of the United States.
15
"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, with respect to the Companies on a consolidated basis,
at any time and without duplication, the sum of (a) the principal amount of all
Debt thereof for borrowed money, including, without limitation, all letters of
credit issued on behalf of any Company, including without limitation, the LCs;
(b) the total amount capitalized on the balance sheets thereof with respect to
Capital Leases; plus (c) all other Debt thereof which by its terms or by the
terms of any instrument or agreement relating thereto matures, or which is
otherwise payable or unpaid, one year or more from, or is directly or indirectly
renewable or extendible at the option of the obligor in respect thereof to a
date one year or more (including, without limitation, an option of such obligor
under a revolving credit or similar agreement obligating the lender or lenders
to extend credit over a period of one year or more) from, the date of the
creation thereof.
"GAAP" means generally accepted accounting principles of the Accounting
Principles Board of the American Institute of Certified Public Accountants and
the Financial Accounting Standards Board which (a) with respect to the covenant
contained in Section 9.29 (and, to the extent used in or relating to such
covenant, any defined terms), are in effect on the date hereof, and (b) for all
other purposes hereunder, are applicable from time to time.
"Governmental Authority" means any (a) local, state, municipal, or federal
judicial, executive, or legislative instrumentality, (b) private arbitration
board or panel, or (c) central bank.
"Guarantor" means any Person, including, but not limited to, each Company
that is a Domestic Subsidiary of Borrower, which undertakes to be liable for all
or any part of the Obligation by execution of a Guaranty or otherwise.
"Guaranty" means (a) a Guaranty in substantially the form of and upon the
terms of Exhibit C, executed and delivered by any Person pursuant to the
requirements of the Loan Documents; and (b) any amendments, modifications,
supplements, restatements, ratifications, or reaffirmations of any Guaranty made
in accordance with the Loan Documents.
"Hazardous Substance" means (a) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance that is presently or
hereafter becomes defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
wastes," "restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants," "pollutants," or terms of similar import within the meaning of
any Environmental Law, (b) any other chemical or other material or substance,
exposure to which is presently or hereafter prohibited, limited or regulated
under any Environmental Law, including without limitation, any hazardous
substance within the meaning of Section 101(14) of CERCLA, (c) petroleum, oil,
gasoline, natural gas, fuel oil, motor oil, waste oil, diesel fuel, jet fuel,
and other petroleum hydrocarbons, (d) asbestos and asbestos-containing materials
in any form, (e) polychlorinated biphenyls, or (f) urea formaldehyde foam.
"Increase Effective Date" is defined in Section 2.7(b).
"Interest Period" is determined in accordance with Section 3.10.
16
"Inventory" means all of each Company's now owned or hereafter acquired
or arising inventory (as such term is used in accordance with Article 9 of the
UCC).
"IRBs" means, industrial development revenue bonds or industrial revenue
bonds issued for the benefit of a target company, but only to the extent they
are solely secured by certain specified real property or equipment.
"Issuing Lender" is defined in Section 12.12.
"Laws" means all applicable statutes, laws, treaties, ordinances, tariff
requirements, rules, regulations, orders, writs, injunctions, decrees,
judgments, opinions, or interpretations of any Governmental Authority.
"LC" means the commercial or standby letter(s) of credit issued hereunder
in the form agreed upon among Borrower, Administrative Agent, and the
beneficiary thereof at the time of issuance thereof and participated in by
Lenders pursuant to the terms and conditions of Section 2.3 hereof.
"LC Agreement" means a letter of credit application and agreement (in form
and substance satisfactory to Administrative Agent) submitted by Borrower to
Administrative Agent for an LC for its own account (and for its benefit or the
benefit of any other Company); provided that, in the event of any conflict,
ambiguity or inconsistency between this Agreement and any such LC Agreement,
this Agreement shall control.
"LC Exposure" means, at any time and without duplication, the sum of (a)
the aggregate undrawn portion of all uncancelled and unexpired LCs plus (b) the
aggregate unpaid reimbursement obligations of Borrower in respect of drawings of
drafts under any LC.
"LC Request" means a request pursuant to Section 2.3(a), substantially in
the form of Exhibit B-3.
"LC Subfacility" means a subfacility of the Revolver Facility for the
issuance of LCs as described in and subject to the limitations of Section 2.3,
under which the LC Exposure may never (a) collectively exceed $5,000,000 and (b)
the Revolver Commitment.
"Lenders" means, on any date of determination, the financial institutions
named on Schedule 2.1 (as the same may be amended from time to time by
Administrative Agent to reflect the addition of new Lenders pursuant to Section
2.7(a) and to reflect the assignments made in accordance with Section 13.13(b)
of this Agreement), and subject to the terms and conditions of this Agreement,
and their respective successors and assigns (but not any Participant who is not
otherwise a party to this Agreement); provided that, solely for purposes of any
Collateral Document and Section 12 and Sections 3.13 and 3.14, "Lenders" shall
also include any Lender or Affiliate of a Lender who is party to a Financial
Hedge with Borrower and their respective successors and assigns (for purposes
hereof, each Lender shall be deemed to have entered into this Agreement for and
on behalf of any Affiliate now or hereafter party to a Financial Hedge with
Borrower).
"Letter Agreement" means the Letter Agreement dated the date hereof between
Borrower and Administrative Agent relating to sale of certain assets by the
Companies.
17
"Leverage Ratio" means, with respect to the Companies on a consolidated
basis, at any date of determination thereof with respect to the most recently
ended Rolling Period, the ratio of (a) Funded Debt outstanding on such date to
(b) EBITDA, determined as of the last day of such Rolling Period.
"Lien" means any lien, mortgage, security interest, pledge, assignment,
charge, title retention agreement, or encumbrance of any kind, and any other
Right of or arrangement with any creditor (other than under or relating to
subordination or other intercreditor arrangements) to have its claim satisfied
out of any property or assets, or the proceeds therefrom, prior to the general
creditors of the owner thereof.
"Litigation" means any action by or before any Governmental Authority or
any private arbitration board or panel.
"Loan Documents" means (a) this Agreement, the Notes, the Collateral
Documents, LCs and LC Agreements, (b) all agreements, documents, or instruments
in favor of Agents or Lenders ever delivered pursuant to this Agreement or
otherwise delivered in connection with all or any part of the Obligation, and
(c) any and all renewals, extensions, restatements, reaffirmations, or
amendments or supplements to, all or any part of the foregoing.
"Loan Parties" means, on any date of determination, Borrower and all
Guarantors.
"Material Adverse Event" means any set of one or more circumstances or
events which, individually or collectively, could reasonably be expected to
result in any (a) material impairment of the ability of any Loan Party to
perform any of its payment or other material obligations under the Loan
Documents or the ability of Administrative Agent or any Lender to enforce any
such obligations or any of their respective Rights under the Loan Documents, (b)
material and adverse effect on the business, properties, condition (financial or
otherwise), or results of operations of any Loan Party or any Subsidiary
thereof, taken as a whole, or (c) Default or Potential Default.
"Maximum Amount" and "Maximum Rate" mean, respectively, for each Lender,
the maximum non-usurious amount and the maximum non-usurious rate of interest
which, under applicable Law, such Lender is permitted to contract for, charge,
take, reserve, or receive on the Obligation.
"Moody's" means ▇▇▇▇▇'▇ Investors Service, Inc., or any successor thereto.
"Multiemployer Plan" means a multiemployer plan as defined in Sections
3(37) or 4001(a)(3) of ERISA or Section 414(f) of the Code to which any Loan
Party or any ERISA Affiliate of any Loan Party is making, has made, is accruing,
or has accrued, an obligation to make contributions or has, within any of the
preceding five plan years, made or accrued an obligation to make contributions.
"Net Cash Proceeds" means (a) with respect to any Sale of Assets, cash
(freely convertible into Dollars) (including, any cash received by way of
deferred payment pursuant to a promissory note or otherwise, but only as and
when received) received in connection therewith and as consideration therefor,
on or after the date of consummation of such Sale of Assets, by any Company from
such Sale of Assets, after (i) deduction of Taxes actually paid, (ii) payment of
all usual and customary brokerage commissions and all other reasonable fees and
expenses related to such Sale of Assets (including, without limitation,
reasonable attorneys' fees and closing costs incurred in connection with such
Sale of Assets), (iii) deduction of appropriate amounts to be
18
provided by any Company as a reserve, in accordance with GAAP, against any
liabilities retained by any Company after such Sale of Assets, which liabilities
are associated with the asset or assets being sold, including, without
limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with such Sale of Assets, and (iv) deduction for the
amount of any Debt (other than the Obligation) secured by the respective asset
or assets being sold, which Debt is required to be repaid as a result of such
Sale of Assets; provided that Net Cash Proceeds from an Non-Material Asset Sale
shall be limited as set forth in the Letter Agreement unless a Default or
Potential Default exists on the date of the applicable Non-Material Asset Sale,
in which case all proceeds from such Non-Material Asset Sale shall be included
as Net Cash Proceeds; and (b) with respect to any Debt Issuance, cash (freely
convertible into Dollars) received, on or after the date of incurrence of such
Debt, by any Company from the incurrence of such Debt after (i) payment of all
reasonable attorneys' fees and usual and customary underwriting commissions,
closing costs, and other reasonable expenses associated with such incurrence of
Debt, (ii) deduction of all deposits, escrow amounts, or other reserves required
to be maintained by any Company in connection with such Debt, and (iii)
deductions for the amount of any other Debt (other than the Obligation) which is
required to be repaid concurrently with or otherwise as a result of the
incurrence of such Debt.
"New Subsidiary" is defined in Section 7.2(c).
"Non-Material Asset Sale" shall have the meaning assigned thereto in the
Letter Agreement.
"Obligation" means all present and future indebtedness, liabilities, and
obligations, and all renewals and extensions thereof, or any part thereof, now
or hereafter owed to Administrative Agent, any other Agent, any Lender, or any
Affiliate of any Lender by any Loan Party arising from, by virtue of, or
pursuant to any Loan Document, together with all interest accruing thereon,
fees, costs, and expenses (including, without limitation, all attorneys' fees
and expenses incurred in the enforcement or collection thereof) payable under
the Loan Documents; provided that, all references to the "Obligation" in the
Collateral Documents and in Sections 3.12, 3.13 and 3.14, shall, in addition to
the foregoing, also include all present and future indebtedness, liabilities,
and obligations (and all renewals and extensions thereof or any part thereof)
now or hereafter owed to any Lender or any Affiliate of a Lender arising from,
by virtue of, or pursuant to any Financial Hedge entered into by any Company.
"OSHA" means the Occupational Safety and Health Act of 1970, 29
U.S.C. ' et seq.
"Participant" is defined in Section 13.13(e).
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereof, established pursuant to ERISA.
"Permitted Acquisition" means:
(a) The Acquisition by Borrower of the Target Companies; provided,
however, that such Acquisitions shall not constitute "Permitted
Acquisitions" hereunder unless and until Borrower satisfies the conditions
precedent set forth in Section 7.2 prior to the consummation of each
Acquisition;
19
(b) Acquisitions by any Company of any business which is engaged in
manufacturing or the servicing of electrical equipment and components and
in providing hot dip galvanizing services to the steel fabrication market,
with respect to which each of the following requirements shall have been
satisfied:
(i) the Purchase Price of all Acquisitions consummated during
the term of the Facilities, excluding the Acquisitions of the Target
Companies, may not exceed $20,000,000 in the aggregate;
(ii) as of the closing of any Acquisition, the Acquisition has
been approved and recommended by the board of directors of the Person
to be acquired or from which such business is to be acquired;
(iii) not less than 14 days prior to the closing of any
Acquisition, Borrower shall have delivered to Administrative Agent a
Permitted Acquisition Compliance Certificate substantially in the form
of Exhibit E-2 hereto, demonstrating pro forma compliance with the
terms and conditions of the Loan Documents, after giving effect to the
Acquisition, including (A) pro forma income statement and balance
sheet for the Companies (after giving effect to the Acquisition), and
(B) cash flow projections for the Acquisition for the period from the
date of any such Acquisition through the Revolver Termination Date,
demonstrating compliance with the Companies' applicable financial
covenants and debt amortization schedules;
(iv) not less than 30 days prior to the closing of any
Acquisition, Borrower shall have delivered to Administrative Agent a
copy of the purchase agreement (including all schedules and exhibits
thereto) relating to such Acquisition (or if no purchase agreement is
available on such date, as soon thereafter as possible, including all
subsequent drafts thereof); and prior to consummation of any
Acquisition, Borrower shall have satisfied the conditions precedent
set forth in Section 7.2;
(v) any authorization required to be issued by any Governmental
Authority in connection with such Acquisition shall be issued and
shall be valid, binding, enforceable and subsisting without any
defaults thereunder or enforceable adverse limitations thereon and
shall not be subject to any proceedings or claims opposing the
issuance, development, or use thereof or contesting the validity
thereof unless the Company proposing to enter into such Acquisition
shall have entered into an agreement with the seller protecting such
Company from such adverse limitations, proceedings, or claims, which
agreement shall be on terms and conditions satisfactory to
Administrative Agent;
(vi) as of the closing of any Acquisition, after giving effect
to such Acquisition, the acquiring party must be Solvent and the
Companies, on a consolidated basis, must be Solvent;
(vii) as of the closing of any Acquisition, no Default or
Potential Default shall exist or occur as a result of, and after
giving effect to, such Acquisition;
20
(viii) as of the closing of any Acquisition, (A) if such
Acquisition is structured as a merger, Borrower (or if such
merger is with any Subsidiary of Borrower, then a domestic
company that is or becomes a Subsidiary) must be the surviving
entity after giving effect to such merger; and (B) if such
Acquisition is structured as a stock/equity acquisition, the
acquiring Company shall own not less than a 75% interest in
the entity being acquired and such acquired entity will be a
domestic company that is or becomes a Domestic Subsidiary; or
(c) Any other Acquisition for which the prior written consent
of Required Lenders has been obtained.
"Permitted Acquisition Compliance Certificate" means a certificate
signed by a Responsible Officer of Borrower, substantially in the form of
Exhibit E-2.
"Permitted Debt" means, with respect to the Loan Parties, Debt
permitted under Section 9.12 as described in such Section.
"Permitted Liens" means, with respect to the Loan Parties, Liens
permitted under Section 9.13 as described in such Section.
"Person" means any individual, entity (including, without limitation,
any corporation, firm, joint venture, partnership, whether general, limited, or
undeclared, trust, association, or unincorporated association), or Governmental
Authority.
"Potential Default" means the occurrence of any event or existence of
any circumstance which, with the giving of notice or lapse of time or both,
would become a Default.
"Principal Debt" means, on any date of determination and without
duplication, the sum of (a) the aggregate unpaid principal balance of all
Borrowings under (i) the Revolver Facility (including, without limitation, Swing
Line Principal Debt) and (ii) the Term Facility plus (b) the LC Exposure.
"Progress Billing" means any Account represented by an invoice, payable
to any Company pursuant to an Acceptable Progress Payment Contract.
"Pro Rata" or "Pro Rata Part," for each Lender, means on any date of
determination (a) for purposes of sharing any amount or fee payable to any
Lender in respect of a Facility or Subfacility (as the case may be) the
proportion which the portion of the Principal Debt for the applicable Facility
or Subfacility owed to such Lender (whether held directly or through a
participation in respect of the LC Subfacility or Swing Line Subfacility and
determined after giving effect thereto) bears to the Principal Debt under the
applicable Facility or Subfacility (as the case may be) owed to all Lenders at
the time in question, and (b) for all other purposes, the proportion which the
portion of the Principal Debt owed to such Lender bears to the Principal Debt
owed to all Lenders at the time in question, or if no Principal Debt is
outstanding, then the proportion that the aggregate of such Lender's Committed
Sums then in effect under the Facilities and Subfacilities bears to the Revolver
Commitment then in effect.
"Purchase Price" means, with respect to any Permitted Acquisition, all
direct, indirect, and deferred cash and non-cash payments made to or for the
benefit of the Person being acquired (or whose assets are being
21
acquired), its shareholders, officers, directors, employees, or Affiliates in
connection with such Permitted Acquisition, including, without limitation, the
amount of any Debt (including without limitation IRBs) being assumed in
connection with such Permitted Acquisition (and subject to the limitations on
Permitted Debt hereunder), seller financing, payments under non-competition or
consulting agreements entered into in connection with such Permitted Acquisition
and similar agreements, all non-cash consideration and the value of any stock,
options, or warrants or other Rights to acquire stock issued as part of the
consideration in such transaction; provided that, for the purposes hereof, non-
competition agreements and consulting agreements shall be valued at their
present value discounted over the term of such agreement at the Base Rate in
effect at the time of the Permitted Acquisition.
"Recently-Acquired Entity" means a Person that is a Subsidiary of
Borrower for a period less than one fiscal year of Borrower.
"Recently-Acquired Entity Rolling Period" means the period during which
a Recently-Acquired Entity shall have been a Subsidiary of Borrower (such
period, the "Initial Period") plus such additional fiscal quarters of such
Recently-Acquired Entity prior to the Initial Period that would, when taken
together, constitute one fiscal year.
"Register" is defined in Section 13.13(c).
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as amended.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as amended.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposal,
deposit, dispersal, migrating, or other movement into the air, ground, or
surface water, or soil.
"Rental Expense" means all fees, costs and expenses (including any
penalties and interest thereon) of Borrower and its Subsidiaries in connection
with the use, occupancy or possession by Borrower and its Subsidiaries of any
real or personal, or mixed, property, but excluding all payments pursuant to all
Capital Leases.
"Reportable Event" shall have the meaning specified in Section 4043 of
ERISA or the regulations issued thereunder in connection with an Employee Plan,
excluding events for which the notice requirement is waived under applicable
PBGC regulations other than those events described in sections 4043.21, 4043.24
and 4043.28 of such regulations, including each such provision as it may
subsequently be renumbered.
"Representatives" means representatives, officers, directors,
employees, attorneys and agents.
"Required Lenders" means, on any date of determination, those Lenders
holding 66 2/3% or more of the Total Commitment.
22
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Eurodollar Rate Borrowings, "Eurocurrency liabilities" (as such term is used in
Regulation D). Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained by such
member banks with respect to (a) any category of liabilities which includes
deposits by reference to which the Adjusted Eurodollar Rate is to be determined,
or (b) any category of extensions of credit or other assets which include
Eurodollar Rate Borrowings.
"Responsible Officer" means the chairman, president, chief executive
officer, chief financial officer, chief legal officer, executive vice president,
vice president, or treasurer of any Person, or any other officer designated from
time to time by the Board of Directors of such Person, as applicable, which
designated officer is reasonably acceptable to Administrative Agent.
"Restricted Payments" means redemptions, repurchases, dividends, and
Distributions of any kind in respect of Borrower's capital stock (including
without limitation any class of common or preferred shares).
"Revolver Commitment" means, on any date of determination, the sum of
all Committed Sums then in effect for all Lenders in respect of the Revolver
Facility.
"Revolver Facility" means the credit facility as described in and
subject to the limitations set forth in Section 2.1 hereof, including the LC
Subfacility and the Swing Line Subfacility.
"Revolver Lender" means, at any time and from time to time, any Lender
that has any Committed Sum then in effect in respect of the Revolver Facility.
"Revolver Note" means a promissory note substantially in the form of
Exhibit A-1, and all renewals and extensions of all or any part thereof.
"Revolver Principal Debt" means, on any date of determination, the
aggregate unpaid principal balance of all Borrowings under the Revolver Facility
(including, without limitation, Swing Line Principal Debt), together with the
aggregate unpaid reimbursement obligations of Borrower in respect of drawings
under any LC.
"Revolver Termination Date" means the earliest of (a) November 1, 2004,
(b) the effective date of any termination, cancellation, or acceleration of all
commitments to lend under the Revolver Facility, and (c) the Term Termination
Date.
"Rights" means rights, remedies, powers, privileges, and benefits.
"Rolling Period" means, on any date of determination, the most recent
four fiscal quarters ended on May 31, August 30, November 30 or February 28 or
29 (as the case may be).
"S&P" means Standard & Poor's Rating Group, a division of McGraw Hill,
Inc., a New York corporation, or any successor thereto.
23
"Sale of Assets" means any sale, lease, transfer, or other disposition
of any property or assets (tangible or intangible, including, without
limitation, stock or equity interests in any Company or any securitization or
Accounts) by any Company to any other Person (other than any sale, lease,
transfer, or other disposition contemplated by Section 9.22 or permitted by
Section 9.23) with respect to which the Net Cash Proceeds realized by any
Company for such asset disposition (or when aggregated with the Net Cash
Proceeds from all such other asset dispositions occurring in the same calendar
year) equals or exceeds $500,000.
"Schedule" means, unless specified otherwise, a schedule attached to
this Agreement, as the same may be supplemented and modified from time to time
in accordance with the terms of the Loan Documents.
"Security Agreement" means (a) a Pledge, Assignment, and Security
Agreement in substantially the form and upon the terms of Exhibit E, executed by
any Person pursuant to the requirements of the Loan Documents; and (b) any
amendments, modifications, supplements, restatements, ratifications, or
reaffirmations of any Pledge Agreement made in accordance with the Loan
Documents.
"Single-Employer Plan" means an employee pension benefit plan covered
by Title IV of ERISA or subject to the minimum funding standards under Section
412 of the Code and established or maintained by any Loan Party, Domestic
Subsidiary thereof, or ERISA Affiliate of any Loan Party, but not including any
Multiemployer Plan.
"Solvent" means, as to a Person, that (a) the aggregate fair market
value of such Person's assets exceeds its liabilities (whether contingent,
subordinated, unmatured, unliquidated, or otherwise), (b) such Person has
sufficient cash flow to enable it to pay its Debts as they mature, and (c) such
Person does not have unreasonably small capital to conduct such Person's
businesses.
"Subfacilities" means, collectively, the LC Subfacility and the Swing
Line Subfacility; "Subfacility" means either one of them.
"Subsidiary" of any Person means (a) any entity of which an aggregate
of more than 50% of the Voting Stock is owned of record or beneficially,
directly or indirectly, by such Person, or (b) any partnership (limited or
general) of which such Person shall at any time be the controlling general
partner determined in accordance with GAAP or own more than fifty percent (50%)
of the issued and outstanding partnership interests.
"Swing Line Borrowing" means any Borrowing under the Swing Line
Subfacility.
"Swing Line Commitment" means an amount (subject to availability,
reduction, or cancellation as herein provided) equal to $2,500,000.
"Swing Line Lender" means Bank of America, N.A. and its successors and
assigns.
"Swing Line Maturity Date" for any Swing Line Borrowing means the
Revolver Termination Date.
"Swing Line Note" means a promissory note in substantially the form of
Exhibit A-3, and all renewals and extensions of all or any part thereof.
24
"Swing Line Principal Debt" means, on any date of determination, that
portion of the Principal Debt outstanding under the Swing Line Subfacility.
"Swing Line Subfacility" means the subfacility under the Revolver
Facility described in, and subject to the limitations of, Section 2.4.
"Target Companies" means ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, Inc., a South Carolina
corporation, and Central Electric Company, a Missouri corporation; Target
Company means either one of them.
"Taxes" means, for any Person, taxes, assessments, or other
governmental charges or levies imposed upon such Person, its income, or any of
its properties, franchises, or assets.
"Term Commitment" means, on any date of determination, the sum of all
Committed Sums then in effect for all Lenders in respect of the Term Facility.
"Term Facility" means the credit facility as described in and subject
to the limitations set forth in Section 2.2 hereof.
"Term Lender" means, at any time and from time to time, any Lender that
has any Committed Sum then in effect in respect of the Term Facility.
"Term Note" means a promissory note substantially in the form of
Exhibit A-2, and all renewals and extensions of all or any part thereof.
"Term Principal Debt" means, on any date of determination, the
aggregate unpaid principal balance of all Borrowings under the Term Facility.
"Term Termination Date" means the earlier of (a) November 1, 2005, and
(b) the effective date of any other termination, cancellation, or acceleration
of the Term Facility.
"Termination Date" means the Revolver Termination Date or the Term
Termination Date, as applicable.
"Total Commitment" means, on any date of determination, the sum of all
Committed Sums then in effect for all Lenders in respect of the Revolver
Facility and the Term Facility.
"Type" means any type of Borrowing determined with respect to the
interest option applicable thereto.
"UCC" means the Uniform Commercial Code (or any successor statute) of
the State of Texas or of any other state the laws of which are required by the
Uniform Commercial Code to be applied in connection with the issue of perfection
of security interests.
"Voting Stock" means securities (as such term is defined in Section
2(1) of the Securities Act of 1933, as amended) of any class or classes, the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing similar
functions).
25
"Wholly-owned" when used in connection with any Subsidiary shall mean a
Subsidiary of which all of the issued and outstanding shares of stock (except
shares required as directors' qualifying shares) shall be owned by Borrower or
one or more of its Wholly-owned Subsidiaries.
1.2 Number and Gender of Words; Other References. Unless otherwise
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specified in the Loan Documents, (a) where appropriate, the singular includes
the plural and vice versa, and words of any gender include each other gender,
(b) heading and caption references may not be construed in interpreting
provisions, (c) monetary references are to currency of the United States of
America, (d) section, paragraph, annex, schedule, exhibit, and similar
references are to the particular Loan Document in which they are used, (e)
references to "telecopy," "facsimile," "fax," or similar terms are to facsimile
or telecopy transmissions, (f) references to "including" mean including without
limiting the generality of any description preceding that word, (g) the rule of
construction that references to general items that follow references to specific
items are limited to the same type or character of those specific items is not
applicable in the Loan Documents, (h) references to any Person include that
Person's heirs, personal representatives, successors, trustees, receivers, and
permitted assigns, (i) references to any Law include every amendment or
supplement to it, rule and regulation adopted under it, and successor or
replacement for it, and (j) references to any Loan Document or other document
include every renewal and extension of it, amendment and supplement to it, and
replacement or substitution for it.
1.3 Accounting Principles. All accounting and financial terms used in
---------------------
the Loan Documents and the compliance with each financial covenant therein shall
be determined in accordance with GAAP, and, all accounting principles shall be
applied on a consistent basis so that the accounting principles in a current
period are comparable in all material respects to those applied during the
preceding comparable period.
SECTION 2 BORROWING PROVISIONS.
2.1 Revolver Facility. Subject to and in reliance upon the terms,
-----------------
conditions, representations, and warranties in the Loan Documents, each Lender
severally, but not jointly, agrees to lend to Borrower such Lender's Commitment
Percentage of one or more Borrowings under the Revolver Facility in amounts not
to exceed such Lender's Committed Sum under the Revolver Facility (and, in the
case of each such Borrowing, subject to the Borrowing Base on the proposed
Borrowing Date), which Borrowings may be repaid and reborrowed from time to time
in accordance with the terms and provisions of the Loan Documents; provided
that, (a) each such Borrowing must occur on a Business Day and no later than the
Business Day immediately preceding the Revolver Termination Date; (b) each such
Borrowing shall be in an amount not less than $1,500,000 or a greater integral
multiple of $500,000 if a Eurodollar Rate Borrowing, $500,000 or a greater
integral multiple of $100,000 if a Base Rate Borrowing, or $250,000 or a greater
integral multiple of $50,000 if a Swing Line Borrowing; and (c) the Revolver
Facility shall never exceed the lesser of: (x) the Revolver Commitment, and (y)
the Borrowing Base.
2.2 Term Facility. Each Term Lender severally, but not jointly, agrees
-------------
to lend to Borrower in a single Borrowing on the Closing Date such Term Lender's
Commitment Percentage of the Term Commitment. If all or any portion of the Term
Principal Debt is paid or prepaid, then the amount so repaid may not be
reborrowed.
26
2.3 LC Subfacility.
--------------
(a) Conditions. Subject to the terms and conditions of this
----------
Agreement and applicable Law, Administrative Agent agrees to issue LCs upon
Borrower's application therefor (denominated in Dollars) by delivering to
Administrative Agent a properly completed LC Request and an LC Agreement with
respect thereto no later than 10:00 a.m. Dallas, Texas time three Business Days
before such LC is to be issued; provided that, (i) on any date of determination
and after giving effect to any LC to be issued on such date, the Revolver
Principal Debt shall never exceed the lesser of: (x) the Revolver Commitment,
and (y) the Borrowing Base, then in effect, (ii) on any date of determination
and after giving effect to any LC to be issued on such date, the LC Exposure
shall never exceed $5,000,000 (as such commitment under the LC Subfacility may
be reduced or canceled as herein provided), (iii) at the time of issuance of
such LC, no Default or Potential Default shall have occurred and be continuing,
(iv) each LC must expire no later than the earlier of the 30th day prior to the
Revolver Termination Date or two years from its issuance; provided that, any LC
may provide for automatic renewal for successive periods of up to one year (but
no renewal period may extend beyond the 30/th/ day prior to the Revolver
Termination Date) unless Administrative Agent has given prior notice to the
applicable beneficiary of its election not to extend such LC; (v) each LC must
be in the original face amount of not less than $5,000; (vi) Administrative
Agent shall be under no obligation to issue any LC if (A) any order, judgment,
or decree of any Governmental Authority or arbitrator shall by its terms purport
to enjoin or restrain Administrative Agent from issuing such LC, or any Law
applicable to Administrative Agent or any request or directive (whether or not
having the force of law) from any Governmental Authority with jurisdiction over
Administrative Agent shall prohibit, or request that Administrative Agent
refrain from, the issuance of letters of credit generally or such LC in
particular or shall impose upon Administrative Agent with respect to such LC any
restriction, reserve, or capital requirement (for which Administrative Agent is
not otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon Administrative Agent any unreimbursed loss, cost, or expense which
was not applicable on the Closing Date and which Administrative Agent in good
▇▇▇▇▇ ▇▇▇▇▇ material to it, or (B) the issuance of such LC would violate one or
more policies of Administrative Agent; and (vii) Administrative Agent shall be
under no obligation to amend any LC if (A) Administrative Agent would have no
obligation at such time to issue such LC in its amended form under the terms
hereof, or (B) the beneficiary of such LC does not accept the proposed amendment
to such LC.
(b) Participations. Immediately upon the issuance by
--------------
Administrative Agent of any LC, Administrative Agent shall be deemed to have
sold and transferred to each other Lender, and each other such Lender shall be
deemed irrevocably and unconditionally to have purchased and received from
Administrative Agent, without recourse or warranty, an undivided interest and
participation, to the extent of such Lender's Commitment Percentage (based upon
the Revolver Facility) in such LC, the LC Agreement related thereto, and all
Rights of Administrative Agent in respect thereof (other than Rights to receive
certain fees provided for in Section 5.5).
(c) Reimbursement Obligation. To induce Administrative Agent
------------------------
to issue and maintain LCs and to induce Lenders to participate in issued LCs,
Borrower agrees to pay or reimburse Administrative Agent (i) on the date on
which any draft is presented under any LC, the amount of any draft paid or to be
paid by Administrative Agent and (ii) promptly, upon demand, the amount of any
fees (in addition to the fees described in Section 5) which Administrative
Agent customarily charges to a Person similarly situated in the ordinary course
of its business for amending LC Agreements, for honoring drafts under letters of
credit, and taking similar action in connection with letters of credit. If
Borrower has not reimbursed Administrative Agent for any drafts paid or to be
paid within 24 hours of demand therefor by Administrative Agent, Administrative
27
Agent is hereby irrevocably authorized to fund such reimbursement obligations as
a Base Rate Borrowing under the Revolver Facility to the extent of availability
under the Revolver Facility and if the conditions precedent in this Agreement
for such a Borrowing (other than any notice requirements or minimum funding
amounts) have, to Administrative Agent's knowledge, been satisfied. The proceeds
of such Borrowing under the Revolver Facility shall be advanced directly to
Administrative Agent in payment of Borrower's unpaid reimbursement obligation.
If for any reason, funds cannot be advanced under the Revolver Facility, then
Borrower's reimbursement obligation shall continue to be due and payable.
Borrower's obligations under this Section 2.3(c) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim, or defense to payment which Borrower may have at any time against
Administrative Agent or any other Person. From the date that Administrative
Agent pays a draft under an LC until the related reimbursement obligation of
Borrower is paid or funded by proceeds of a Borrowing, unpaid reimbursement
obligations shall accrue interest at the Default Rate, which accrued interest
shall be payable on demand.
(d) General. Administrative Agent shall promptly notify
-------
Borrower of the date and amount of any draft presented for honor under any LC
(but failure to give any such notice shall not affect Borrower's obligations
under this Agreement). Administrative Agent shall pay the requested amount upon
presentment of a draft for honor unless such presentment on its face does not
comply with the terms of the applicable LC. When making payment, Administrative
Agent may disregard (i) any default or potential default that exists under any
other agreement and (ii) the obligations under any other agreement that have or
have not been performed by the beneficiary or any other Person (and
Administrative Agent shall not be liable for any obligation of any Person
thereunder). Borrower's reimbursement obligations to Administrative Agent and
Lenders, and each Lender's obligations to Administrative Agent, under this
Section 2.3 are absolute and unconditional irrespective of, and Administrative
Agent is not responsible for, (i) the validity, enforceability, sufficiency,
accuracy, or genuineness of documents or endorsements which appear appropriate
on their face (even if they are in any respect invalid, unenforceable,
insufficient, inaccurate, fraudulent, or forged), (ii) any dispute by any Loan
Party with or any Loan Party's claims, setoffs, defenses, counterclaims, or
other Rights against Administrative Agent, any Lender, or any other Person, or
(iii) the occurrence of any Potential Default or Default. However, nothing in
this Section 2.3 constitutes a waiver of the Rights of Borrower or any Lender to
assert any claim or defense based upon the gross negligence or willful
misconduct of Administrative Agent. To the extent any Lender has funded its
ratable share of any draft under an LC, then Administrative Agent shall promptly
distribute reimbursement payments received from Borrower to such Lender
according to its ratable share. In the event any payment by Borrower received by
Administrative Agent with respect to an LC and distributed to Lenders on account
of their participations therein is thereafter set aside, avoided, or recovered
from Administrative Agent in connection with any receivership, liquidation, or
bankruptcy proceeding, each Lender which received such distribution shall, upon
demand by Administrative Agent, contribute such Lender's ratable portion of the
amount set aside, avoided, or recovered, together with interest at the rate
required to be paid by Administrative Agent upon the amount required to be
repaid by it.
(e) Obligation of Lenders. If Borrower fails to reimburse
---------------------
Administrative Agent as provided in Section 2.3(c) within 24 hours of the demand
therefor by Administrative Agent and funds cannot be advanced under the Revolver
Facility to satisfy the reimbursement obligations, then Administrative Agent
shall promptly notify each Lender of Borrower's failure, of the date and amount
of the draft paid, and of such Lender's Commitment Percentage (based on the
Revolver Facility) thereof. Each Lender shall promptly and unconditionally fund
its participation interest in such unreimbursed draft by making available to
Administrative Agent in immediately available funds such Lender's Commitment
Percentage (based upon the Revolver Facility) of the unreimbursed draft. Funds
are due and payable to Administrative Agent on or before the close
28
of business on the Business Day when Administrative Agent gives notice to each
Lender of Borrower's reimbursement failure (if given prior to 1:00 p.m., Dallas,
Texas time) or on the next succeeding Business Day (if notice was given after
1:00 p.m., Dallas, Texas time). All amounts payable by any Lender shall accrue
interest at the Federal Funds Rate from the day the applicable draft is paid by
Administrative Agent to (but not including) the date the amount is paid by the
Lender to Administrative Agent. Until each Lender funds its participation
pursuant to this Section 2.3(e) to reimburse Administrative Agent for any amount
drawn under any LC, interest in respect of such Lender's Commitment Percentage
of such amount shall be solely for the account of Administrative Agent. The
obligations of Lenders to make payments to Administrative Agent (for the account
of Administrative Agent) with respect to LCs shall be irrevocable and not
subject to any qualification or exception whatsoever (other than the gross
negligence or willful misconduct of Administrative Agent) and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances: (i) any lack of validity or enforceability of this Agreement or
any of the Loan Documents; (ii) the existence of any claim, setoff, defense, or
other Right which Borrower may have at any time against a beneficiary named in a
LC, any transferee of any LC (or any Person for whom any such transferee may be
acting), Administrative Agent, any Lender, or any other Person, whether in
connection with this Agreement, any LC, the transactions contemplated herein, or
any unrelated transactions (including any underlying transaction between
Borrower and the beneficiary named in any such LC); (iii) any draft,
certificate, or any other document presented under the LC proving to be forged,
fraudulent, invalid, or insufficient in any respect or any statement therein
being untrue or inaccurate in any respect; and (iv) the occurrence of any
Potential Default or Default.
(f) Duties of Administrative Agent as Issuing Lender.
------------------------------------------------
Administrative Agent agrees with each Lender that it will exercise and give the
same care and attention to each LC as it gives to its other letters of credit.
Administrative Agent's sole liability to each Lender with respect to such LCs
(other than liability arising from the gross negligence or willful misconduct of
Administrative Agent) shall be to distribute promptly to each Lender who has
acquired a participating interest therein such Lender's ratable portion of any
payments made to Administrative Agent by Borrower pursuant to Section 2.3(c).
Each Lender and Borrower agree that, in paying any draw under any LC,
Administrative Agent shall not have any responsibility to obtain any document
(other than any documents required by the respective LC) or to ascertain or
inquire as to any document's validity, enforceability, sufficiency, accuracy, or
genuineness or the authority of any Person delivering any such document.
Administrative Agent, Lenders, and their respective Representatives shall not be
liable to any other Lender or any Loan Party for any LCs use or for any
beneficiary's acts or omissions. Any action, inaction, error, delay, or omission
taken or suffered by Administrative Agent or any of its Representatives under or
in connection with any LC, applicable drafts or documents, or the transmission,
dispatch, or delivery of any related message or advice, if in good faith and in
conformity with such Laws as Administrative Agent or any of its Representatives
may deem applicable and in accordance with the standards of care specified in
the Uniform Customs and Practice for Documentary Credits issued by the
International Chamber of Commerce, as in effect on the date of issue of such LC,
shall be binding upon the Loan Parties and Lenders and shall not place
Administrative Agent or any of its Representatives under any resulting liability
to any Loan Party or any Lender.
(g) Cash Collateral. On the Revolver Termination Date, or on
---------------
any date that the LC Exposure exceeds the then-effective commitment under the LC
Subfacility, or upon any demand by Administrative Agent upon the occurrence and
during the continuance of a Default, Borrower shall provide to Administrative
Agent, for the benefit of Lenders, (i) cash collateral in Dollars in an amount
equal to 105% of the LC Exposure existing on such date, such cash and all
interest thereon shall constitute cash collateral for all
29
LCs, and (ii) such additional cash collateral as Administrative Agent may from
time to time require, so that the cash collateral amount shall at all times
equal or exceed 105% of the LC Exposure. Any cash collateral deposited under
this clause (g), and all interest earned thereon, shall be held by
Administrative Agent and invested and reinvested at the expense and the written
direction of Borrower, in U.S. Treasury Bills with maturities of no more than
ninety (90) days from the date of investment.
(h) Applicability of ISP98 and UCP. Unless otherwise expressly
------------------------------
agreed by the Administrative Agent and Borrower when an LC is issued, (i) the
rules of the "International Standby Practices 1998" published by the Institute
of International Banking Law & Practice (or such later version thereof as may be
in effect at the time of issuance) shall apply to each standby LC, and (ii) the
rules of the Uniform Customs and Practice for Documentary Credits, as most
recently published by the International Chamber of Commerce (the "ICC") at the
time of issuance (including the ICC decision published by the Commission on
Banking Technique and Practice on April 6, 1998 regarding the European single
currency (euro)) shall apply to each commercial LC.
(i) Indemnification. Borrower shall protect, indemnify, pay,
---------------
and save Administrative Agent and each Lender harmless from and against any and
all claims, demands, liabilities, damages, or losses of, or owed to third
parties (including any of the foregoing arising from the negligence of
Administrative Agent, Lenders, or their respective representatives), and any and
all related costs, charges, and expenses (including reasonable attorneys' fees),
which Administrative Agent, or any Lender may incur or be subject to as a
consequence, direct or indirect, of (A) the issuance of any LC, (B) any dispute
about an LC, or (C) the failure of Administrative Agent to honor a draft under
such LC as a result of any act or omission (whether right or wrong) of any
present or future Governmental Authority. However, no Person is entitled to
indemnity hereunder for its own gross negligence or willful misconduct. The
foregoing indemnity provisions shall survive the satisfaction and payment of the
Obligation and termination of this Agreement.
(j) LC Agreements. Although referenced in any LC, terms of any
-------------
particular agreement or other obligation to the beneficiary are not incorporated
into this Agreement in any manner. The fees and other amounts payable with
respect to each LC are as provided in this Agreement, Borrower's reimbursement
obligation with respect to drafts under any LC shall be deemed part of the
Obligation, and in the event of any conflict between the terms of this Agreement
and any LC Agreement, the terms of this Agreement shall be controlling.
2.4 Swing Line Subfacility.
----------------------
(a) For the convenience of the parties and as an integral part
of the transactions contemplated by the Loan Documents, Swing Line Lender,
solely for its own account, agrees to make any requested Borrowing of $250,000
or a greater integral multiple of $50,000, subject to those terms and conditions
applicable to Borrowings set forth in Section 7.3(c), (d), (e), (f) and (g),
directly to Borrower as a Swing Line Borrowing without requiring any other
Lender to fund its Pro Rata Part thereof unless and until Section 2.4(b) is
applicable; provided that: (i) each Swing Line Borrowing must occur on a
Business Day and no later than the Business Day immediately preceding the
Revolver Termination Date; (ii) the aggregate Swing Line Principal Debt
outstanding on any date of determination shall not exceed the Swing Line
Commitment;
30
(iii) on any date of determination, the Revolver Debt shall never exceed the
lesser of: (a) the Revolver Commitment and (b) the Borrowing Base; (iv) the
Revolver Principal Debt outstanding on any date of determination shall not
exceed the Revolver Commitment then in effect; (v) at the time of such Swing
Line Borrowing, no Default or Potential Default shall have occurred and be
continuing; (vi) each Swing Line Borrowing shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin for Base Rate Borrowings
under the Revolver Facility; provided that at any time after Lenders are deemed
to have purchased, pursuant to Section 2.4(b), a participation in any Swing Line
Borrowing, such Borrowing shall bear interest at the Default Rate; and (vii) no
additional Swing Line Borrowing shall be made at any time after any Lender has
refused, notwithstanding the requirements of Section 2.4(b), to purchase a
participation in any Swing Line Borrowing as provided in such Section, until
such purchase shall occur or until the Swing Line Borrowing has been repaid.
Each Borrowing under the Swing Line Subfacility shall be available and may be
prepaid on same day telephonic notice from Borrower to Swing Line Lender, so
long as such notice is received by Swing Line Lender prior to 1:00 p.m., Dallas,
Texas time. Accrued interest on Swing Line Borrowings shall be due and payable
on the last Business Day of each March, June, September and December, and on the
Revolver Termination Date. On each Swing Line Maturity Date, all Swing Line
Principal Debt then outstanding shall be repaid in full.
(b) If Borrower fails to repay any Swing Line Borrowing as
provided herein, and funds cannot be or are not advanced under the Revolver
Facility to satisfy the obligations under the Swing Line Subfacility,
Administrative Agent shall timely notify each Lender of such failure and of the
date and amount not paid. No later than the close of business on the date such
notice is given (if such notice was given prior to 12:00 noon, Dallas, Texas
time on any Business Day, or, if made at any other time, on the next Business
Day following the date of such notice), each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from Swing Line Lender an
undivided interest and participation in such Swing Line Borrowing to the extent
of such Lender's Pro Rata Part (with respect to the Revolver Facility) thereof,
and each Lender shall make available to Swing Line Lender in immediately
available funds such Lender's Pro Rata Part (with respect to the Revolver
Facility) of the unpaid amount of such Swing Line Borrowing. All such amounts
payable by any Lender shall include interest thereon from the date on which such
payment is payable by such Lender to, but not including, the date such amount is
paid by such Lender to Administrative Agent, at the Federal Funds Rate. If such
Lender does not promptly pay such amount upon Administrative Agent's demand
therefor, and until such time as such Lender makes the required payment, Swing
Line Lender shall be deemed to continue to have outstanding a Swing Line
Borrowing in the amount of such unpaid obligation. Each payment by Borrower of
all or any part of any Swing Line Borrowing shall be paid to Administrative
Agent for the ratable benefit of Swing Line Lender and those Lenders who have
funded their participations in such Swing Line Principal Debt under this Section
2.4(b); provided that, with respect to any such participation, all interest
accruing on the Swing Line Principal Debt to which such participation relates
prior to the date of funding such participation shall be payable solely to Swing
Line Lender for its own account. In the event that any payment received by the
Swing Line Lender is required to be returned, each Lender will return to the
Swing Line Lender any portion thereof previously distributed by the Swing Line
Lender to such Lender.
(c) Notwithstanding anything to the contrary in this
Agreement, each Lender's obligation to fund the Borrowings and to purchase and
fund participating interests pursuant to Section 2.4(b) shall be absolute and
unconditional and shall not be affected by any circumstance, including, without
limitation, (i) any setoff, counterclaim, recoupment, defense, or other Right
which such Lender or Borrower may have against the Swing Line Lender, Borrower,
or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of a Potential Default or a Default or the failure to satisfy any of
the conditions specified in
31
Section 7; (iii) any adverse change in the condition (financial or otherwise) of
any Loan Party; (iv) any breach of this Agreement by Borrower, any Guarantor, or
any Lender; or (v) any other circumstance, happening, or event whatsoever,
whether or not similar to any of the foregoing.
2.5 Terminations or Reductions of Commitments.
-----------------------------------------
(a) Voluntary Commitment Reduction. Without premium or penalty,
------------------------------
and upon giving not less than ten Business Days prior written and irrevocable
notice to Administrative Agent, Borrower may terminate in whole or in part the
unused portion of the Revolver Commitment, the Swing Line Commitment, or the
commitment under the LC Subfacility; provided that: (i) each partial termination
of the Revolver Commitment shall be in an amount of not less than $5,000,000 or
a greater integral multiple of $1,000,000; each partial termination of the Swing
Line Commitment or the commitment under the LC Subfacility shall be in an amount
of not less than $1,000,000 or a greater integral multiple of $250,000; and (ii)
on any date of determination, the amount of the Revolver Commitment may not be
reduced below the Revolver Principal Debt; the Swing Line Commitment may not be
reduced below the Swing Line Principal Debt, and the commitment under the LC
Subfacility shall not be reduced below the LC Exposure. At the time of any
commitment termination under this Section 2.5, Borrower shall pay to
Administrative Agent, for the account of each Lender, any amounts that may then
be due under Section 3.3(d), all accrued and unpaid fees then due and payable
under this Agreement, the interest, if any, attributable to the amount of that
reduction, and any related Consequential Loss. Any part of the Revolver
Commitment, the Swing Line Commitment, or the commitment under the LC
Subfacility that is terminated may not be reinstated.
(b) Mandatory Commitment Reductions. To the extent of any
-------------------------------
payment or reduction of the Revolver Principal Debt pursuant to Section 3.12(b)
or any prepayment resulting in a mandatory reduction of the Revolver Commitment
as required by Section 3.3(b), then the Revolver Commitment shall be reduced by
the amount of such payment, and each Lender's Committed Sum under the Revolver
Facility shall be ratably reduced by such amount.
(c) Additional Reductions. The Swing Line Commitment and the
---------------------
commitment under the LC Subfacility shall each be reduced from time to time on
the date of any mandatory or voluntary reduction of the Revolver Commitment by
the amount, if any, by which either such Subfacility exceeds the Revolver
Commitment after giving effect to such reduction of the Revolver Commitment.
(d) Ratable Allocation of Revolver Commitment Reductions. Each
----------------------------------------------------
reduction of the Revolver Commitment Loan under this Section 2.5 shall be
allocated among the Lenders in accordance with their respective Commitment
Percentages under the Revolver Facility.
2.6 Borrowing Procedure. The following procedures apply to all
-------------------
Borrowings (other than Swing Line Borrowings and Borrowings pursuant to Section
2.3):
(a) Borrowing Request. Borrower may request a Borrowing by
delivering to Administrative Agent, no later than noon, Dallas, Texas time on
the third Business Day preceding the proposed Borrowing Date for any Eurodollar
Rate Borrowing or on the Business Day immediately preceding the Borrowing Date
for any Base Rate Borrowing, a Borrowing Notice which shall (i) be irrevocable
and binding on Borrower; (ii) specify the Borrowing Date, amount, Type, and (for
a Borrowing comprised of Eurodollar
32
Rate Borrowings) Interest Period; and (iii) state the purpose or purposes for
which such Borrowing is being requested.
(b) Funding. Each Lender shall remit its Commitment Percentage
-------
of each requested Borrowing to Administrative Agent's principal office in
Dallas, Texas, in funds which are or will be available for immediate use by
Administrative Agent by 1:00 p.m. Dallas, Texas time on the applicable Borrowing
Date. Subject to receipt of such funds, Administrative Agent shall (unless to
its actual knowledge any of the conditions precedent therefor have not been
satisfied by Borrower or waived by the requisite Lenders under Section 13.11)
make such funds available to Borrower by causing such funds to be deposited to
Borrower's account as designated to Administrative Agent by Borrower.
(c) Funding Assumed. Absent contrary written notice from a
---------------
Lender, Administrative Agent may assume that each Lender has made its Commitment
Percentage of the requested Borrowing available to Administrative Agent on the
applicable Borrowing Date, and, in reliance upon such assumption, Administrative
Agent may (but shall not be required to) make available to Borrower a
corresponding amount. If a Lender fails to make its Commitment Percentage of any
requested Borrowing available to Administrative Agent on the applicable
Borrowing Date, Administrative Agent may recover the applicable amount on
demand, (i) from that Lender together with interest, commencing on the Borrowing
Date and ending on (but excluding) the date Administrative Agent recovers the
amount from that Lender, at an annual interest rate equal to the Federal Funds
Rate, or (ii) if that Lender fails to pay its amount upon demand, then from
Borrower at the applicable contract rate hereunder. No Lender shall be
responsible for the failure of any other Lender to make its Commitment
Percentage of any Borrowing available as required by Section 2.6(b); however,
failure of any Lender to make its Commitment Percentage of any Borrowing so
available does not excuse any other Lender from making its Commitment Percentage
of any Borrowing so available.
2.7 Optional Renewal of Revolver Commitment.
---------------------------------------
(a) Optional Renewal Procedures. Borrower may request that the
---------------------------
Revolver Termination Date be extended for all of the Revolver Commitment to a
date which is no later than the one year anniversary of the then-current
Revolver Termination Date; provided that, (i) any such extension request shall
be made in writing (a "Extension Request") by Borrower and delivered to
Administrative Agent no more than 60 days prior to (but no later than 30 days
prior to) each of the first and second anniversaries of the Closing Date; and
(ii) no Default shall have occurred and be continuing. Promptly upon receipt of
an Extension Request, Administrative Agent shall notify Revolver Lenders of such
request.
(i) Revolver Lenders' Response to Extension Request.
-----------------------------------------------
Revolver Lenders may, at their option, accept or reject such Extension Request
by giving written notice to Administrative Agent (with a copy to Borrower)
delivered no earlier than 30 days prior to (but no later than ten days prior to)
the first or second anniversary of the Closing Date, as applicable (such tenth
day being the "Response Date"). If any Revolver Lender shall fail to give such
notice to Administrative Agent by the Response Date, such Revolver Lender shall
be deemed to have rejected the requested extension. If the Extension Request is
not consented to by all Revolver Lenders by the Response Date, the Extension
Request will be rejected, and the Revolver Commitment will terminate on the
then-effective Revolver Termination Date. If all Revolver Lenders consent to the
Extension Request by the Response Date, the Revolver Termination Date shall be
automatically extended to the date which is the one year anniversary of the
then-current Revolver Termination Date;
33
provided that the Revolver Termination Date may never be extended on any one
date for a period greater than one year. The Revolver Termination Date may not
be extended more than two times.
(b) No Obligation to Renew. Borrower acknowledges that (i)
----------------------
neither Administrative Agent nor any Revolver Lender has made any
representations to Borrower regarding its intent to agree to any extensions set
forth in this Section 2.7, (ii) neither Administrative Agent nor any Revolver
Lender shall have any obligation to extend the Revolver Commitment, (iii)
Administrative Agent's and Revolver Lenders' agreement to an Extension Request
shall not commit Administrative Agent or Revolver Lenders to an additional
extension; and (iv) Lenders' rejection of the first Revolver Extension Request
shall not prohibit an Extension Request relating to the second anniversary of
the Closing Date.
SECTION 3 TERMS OF PAYMENT.
3.1 Notes, Loan Accounts, and Payments.
----------------------------------
(a) Notes. The Principal Debt owed to each Lender shall be
-----
evidenced by one or more of the following Notes (as the case may be): (i) a
Revolver Note (with respect to Revolver Principal Debt other than under the
Swing Line Subfacility); (ii) a Swing Line Note (with respect to the Swing Line
Principal Debt); and (iii) a Term Note (with respect to the Term Principal
Debt), in each case payable to each Lender in the stated principal amount of its
Committed Sum under such Facility or Subfacility.
(b) Loan Accounts. The Principal Debt owed to each Lender shall
-------------
be evidenced by one or more loan accounts or records maintained by such Lender
in the ordinary course of business. The loan accounts or records maintained by
Administrative Agent (including, without limitation, the Register) and each
Lender shall be prima facie evidence absent manifest error of the amount of the
Borrowings made by Borrower from each Lender under this Agreement (and the
Facilities and Subfacilities hereunder) and the interest and principal payments
thereon. Any failure to so record or any error in doing so shall not, however,
limit or otherwise affect the obligation of Borrower under the Loan Documents to
pay any amount owing with respect to the Obligation.
(c) Payment. All payments of principal, interest, and other
-------
amounts to be made by Borrower under this Agreement and the other Loan Documents
shall be made to Administrative Agent at its principal office in Dallas, Texas
in Dollars and in funds which are or will be available for immediate use by
Administrative Agent by 12:00 noon Dallas, Texas time on the day due, without
setoff, deduction, or counterclaim. Payments made after 12:00 noon, Dallas,
Texas, time shall be deemed made on the Business Day next following.
Administrative Agent shall pay to each Lender any payment of principal,
interest, or other amount to which such Lender is entitled hereunder on the same
day Administrative Agent shall have received the same from Borrower; provided
such payment is received by Administrative Agent prior to 12:00 noon, Dallas,
Texas time, and otherwise before 12:00 noon Dallas, Texas time on the Business
Day next following.
(d) Payment Assumed. Unless Administrative Agent has received
---------------
notice from Borrower prior to the date on which any payment is due under this
Agreement that Borrower will not make that payment in full, Administrative Agent
may assume that Borrower has made the full payment due and Administrative Agent
may, in reliance upon that assumption, cause to be distributed to the
appropriate Lender on that date the amount then due to such Lenders. If and to
the extent Borrower does not make the full payment due to Administrative Agent,
each Lender shall repay to Administrative Agent on demand the amount distributed
to
34
that Lender by Administrative Agent together with interest for each day from the
date that Lender received payment from Administrative Agent until the date that
Lender repays Administrative Agent (unless such repayment is made on the same
day as such distribution), at an annual interest rate equal to the Federal Funds
Rate. A notice of Administrative Agent to any Lender with respect to any amount
owing under this clause (d) shall be conclusive absent manifest error.
3.2 Interest and Principal Payments.
-------------------------------
(a) Interest. Accrued interest on each Eurodollar Rate Borrowing
--------
is due and payable on the last day of its respective Interest Period and on the
Termination Date for the applicable Facility; provided that, if any Interest
Period is greater than three months, then accrued interest is also due and
payable on the three month anniversary of the date on which such Interest Period
commences, as well as on the last day of such Interest Period. Accrued interest
on each Base Rate Borrowing shall be due and payable on the last Business Day of
each March, June, September, and December, and on the Termination Date for the
applicable facility.
(b) Revolving Principal Debt. The Revolving Principal Debt is
------------------------
due and payable on the Revolver Termination Date.
(c) Term Principal Debt. The Term Principal Debt is due and
-------------------
payable in quarterly installments in the principal amounts indicated in the
table below, commencing on the last Business Day of March, 2002, and continuing
thereafter on the last Business Day of each March, June, September, and
December, with the final payment due on the Term Termination Date, in accordance
with the following amortization schedule:
==================================================================
Payment Dates Principal Installments
==================================================================
March 29, 2002 $1,000,000
----------------------------------------------------------------
June 28, 2002,
September 30, 2002 and $3,000,000/each
December 31, 2002
----------------------------------------------------------------
Last Business Day of Each March,
June, September, and December, $2,500,000/each
commencing March 31, 2003, through
and including September 30, 2005
----------------------------------------------------------------
Term Termination Date Remaining Term Principal
Debt
================================================================
35
3.3 Prepayments.
-----------
(a) Optional Prepayments. Except as set forth herein, after
--------------------
giving Administrative Agent advance written notice of the intent to prepay,
Borrower may voluntarily prepay all or any part of the Revolver Principal Debt,
the Swing Line Principal Debt, or the Term Principal Debt, from time to time and
at any time, in whole or in part, without premium or penalty; provided that: (i)
such notice must be received by Administrative Agent by 12:00 noon, Dallas,
Texas time, one Business Day preceding the date of prepayment of any Borrowing
(or in the case of Swing Line Borrowings, by 12:00 noon, Dallas, Texas time, on
the same Business Day); (ii) each such partial prepayment must be in a minimum
amount of at least $500,000 or a greater integral multiple of $100,000 thereof
or such lesser amount as may be outstanding under the Revolver Facility (or with
respect to prepayments of the Swing Line Principal Debt, $250,000 or a greater
integral multiple of $50,000 thereof or such lesser amount as may be outstanding
under the Swing Line Subfacility); (iii) any Eurodollar Rate Borrowing may only
be prepaid at the end of an applicable Interest Period (unless Borrower pays the
amount of any Consequential Loss); and (iv) Borrower shall pay any related
Consequential Loss within ten (10) days after demand therefor. Conversions under
Section 3.11 are not prepayments. Each notice of prepayment shall specify the
prepayment date, the applicable loan hereunder of Principal Debt being prepaid,
and the Type of Borrowing(s) and amount(s) of such Borrowing(s) to be prepaid
and shall constitute a binding obligation of Borrower to make a prepayment on
the date stated therein, together with (unless such prepayment is made with
respect to a Base Rate Borrowing or Swing Line Borrowing) accrued and unpaid
interest to the date of such payment on the aggregate principal amount prepaid.
(i) Revolver Principal Debt. Any voluntary prepayment of
-----------------------
the Revolver Principal Debt shall be allocated Pro Rata to each Revolver Lender.
Unless a Default or Potential Default has occurred and is continuing (or would
arise as a result thereof), any payment or prepayment of the Revolver Principal
Debt may be reborrowed by Borrower, subject to the terms and conditions of the
Loan Documents (including, without limitation, Section 7.3 of this Agreement).
(ii) Term Principal Debt. Any voluntary prepayment of the
-------------------
Term Principal Debt shall be applied (A) to the Term Principal Debt, and (B) if
no Default or Potential Default then exists or arises as a result therefrom
(whereupon the provisions of Section 3.12(b) shall apply), in direct order of
maturity to satisfy up to one year's regularly-scheduled principal installments
under the Term Facility as set forth in Section 3.2(c), and thereafter applied
proportionately to the regularly-scheduled principal installments under the Term
Facility, as set forth in Section 3.2(c) and shall be allocated Pro Rata to each
Term Lender.
(b) Mandatory Prepayments from Net Cash Proceeds. Until such
--------------------------------------------
time as the Principal Debt has been repaid in full and the Revolver Commitment
terminated in full, the Principal Debt shall be permanently prepaid (or the
Revolver Commitment reduced to the extent required in this Section 3.3(b)) in
the amounts and upon the occurrence of any of the following events:
(i) Concurrently with any Debt Issuance by any Company,
the Principal Debt shall be permanently prepaid (and the Revolver Commitment
reduced to the extent required in this Section 3.3(b)), in the order and manner
specified herein, by an amount equal to 100% of the Net Cash Proceeds realized
by any Company from such Debt Issuance.
(ii) Within 360 days after the receipt of any Net Cash
Proceeds from a Sale of Assets by any Company, such Net Cash Proceeds shall be
used: (a) either (x) to finance in whole or in part, a
36
Permitted Acquisition, (y) to make a Capital Expenditure; or (z) to acquire
other long-term assets that are used or useful in a Company's business, or (b)
in the event the Net Cash Proceeds thereof are not so applied during such
period, the Principal Debt shall be permanently prepaid and the Revolver
Commitment reduced, in the order and manner specified in Section 3.12(b), by an
amount equal to 100% of the Net Cash Proceeds realized by such Company from any
such Sale of Assets.
(iii) If any Company is required to apply (or offers to
apply) any Net Cash Proceeds from any disposition of assets (even if such
disposition of assets is not a Sale of Assets) to repayment of any Debt (other
than the Obligation), then at least fifteen (15) days prior to the date such
repayment or offer of repayment is required to be made on such other Debt, such
Company shall permanently prepay the Principal Debt in the order and manner
specified herein by an amount equal to the amount that will excuse the Company
from making such repayment or offer of repayment under such other Debt.
(iv) Concurrently with any Equity Issuance by any Company,
the Principal Debt shall be permanently prepaid (and the Revolver Commitment
reduced to the extent required in this Section 3.3(b)) in the order and manner
specified herein, by an amount equal to 100% of the Net Cash Proceeds realized
by any Company from such Equity Issuance.
(v) In the event of a Non-Material Asset Sale, Net Cash
Proceeds shall be applied as set forth in the Letter Agreement.
Each commitment reduction or prepayment under this Section 3.3(b) shall
be applied as follows unless a Default or Potential Default then exists or
arises as a result therefrom (whereupon the provisions of Section 3.12(b) shall
apply): (i) first, as a prepayment of accrued and unpaid interest on the Term
Principal Debt; (ii) second, as a prepayment of the Term Principal Debt, in
inverse order of maturity thereof, and shall be allocated Pro Rata to each Term
Lender; (iii) third, as a prepayment of accrued and unpaid interest on the
Revolver Principal Debt; and (iv) fourth, as a mandatory prepayment of the
Revolver Principal Debt, or, if the prepayment arises under Section 3.3(b)(ii)
or if a Default or Potential Default then exists or arises, as a mandatory
reduction of the Revolver Commitment. All mandatory prepayments of the Revolver
Facility shall be allocated Pro Rata to each Revolver Lender.
(c) Revolver Facilities Mandatory Payments/Reductions. On any
-------------------------------------------------
date of determination if the Revolver Principal Debt exceeds the lesser of the
Revolver Commitment and the Borrowing Base then in effect, or the Swing Line
Principal Debt exceeds the Swing Line Commitment then in effect, then Borrower
shall make a mandatory prepayment of the Principal Debt or the Swing Line
Principal Debt, as the case may be, in at least the amount of such excess,
together with (x) all accrued and unpaid interest on the principal amount so
prepaid and (y) any Consequential Loss arising as a result thereof; provided
that, on any such reduction date, if no Swing Line Principal Debt or Revolver
Principal Debt is then outstanding, but the LC Exposure exceeds the Revolver
Commitment, then Borrower shall provide to Administrative Agent, for the benefit
of Lenders, cash collateral in Dollars in an amount at least equal to 105% of
such excess. All mandatory prepayments or commitment reductions under the
Revolver Facility shall be allocated among the Lenders in accordance with their
respective Commitment Percentages under the Revolver Facility.
(d) Mandatory Prepayments of Interest/Consequential Loss. All
----------------------------------------------------
prepayments under Section 3.3 shall be made, together with accrued interest to
the date of such prepayment on the principal amount prepaid, together with any
Consequential Loss arising as a result thereof.
37
3.4 Interest Options. Except that the Eurodollar Rate may not be
----------------
selected when a Default or Potential Default exists and except as otherwise
provided in this Agreement, Borrowings bear interest at a rate per annum equal
to the lesser of (a) as to the respective Type of Borrowing (as designated by
Borrower in accordance with this Agreement), the Base Rate plus the Applicable
Margin for Base Rate Borrowings for the applicable Facility, or the Adjusted
Eurodollar Rate plus the Applicable Margin for Eurodollar Rate Borrowings for
the applicable Facility, and (b) the Maximum Rate. Each change in the Base Rate
or the Maximum Rate, subject to the terms of this Agreement, will become
effective, without notice to Borrower or any other Person, upon the effective
date of such change.
3.5 Quotation of Rates. It is hereby acknowledged that a Responsible
------------------
Officer or other appropriately designated officer of Borrower may call
Administrative Agent on or before the date on which a Borrowing Notice is to be
delivered by Borrower in order to receive an indication of the rates then in
effect, but such indicated rates shall neither be binding upon Administrative
Agent or Lenders nor affect the rate of interest which thereafter is actually in
effect when the Borrowing Notice is given or on the Borrowing Date.
3.6 Default Rate. After the occurrence and during the continuance of
------------
a Default, at the option of Required Lenders and to the extent permitted by Law,
the Obligation shall bear interest at the Default Rate; provided that, the
Default Rate shall automatically apply in the case of Sections 2.3(c), 2.4(a),
and 11.3 where the Default Rate is specified.
3.7 Interest Recapture. If the designated rate applicable to any
------------------
Borrowing exceeds the Maximum Rate, the rate of interest on such Borrowing shall
be limited to the Maximum Rate, but any subsequent reductions in such designated
rate shall not reduce the rate of interest thereon below the Maximum Rate until
the total amount of interest accrued thereon equals the amount of interest which
would have accrued thereon if such designated rate had at all times been in
effect. In the event that at maturity (stated or by acceleration), or at final
payment of the Principal Debt, the total amount of interest paid or accrued is
less than the amount of interest which would have accrued if such designated
rates had at all times been in effect, then, at such time and to the extent
permitted by Law, Borrower shall pay an amount equal to the difference between
(a) the lesser of the amount of interest which would have accrued if such
designated rates had at all times been in effect and the amount of interest
which would have accrued if the Maximum Rate had at all times been in effect,
and (b) the amount of interest actually paid or accrued on the Principal Debt.
3.8 Interest Calculations. Interest will be calculated on the basis
---------------------
of actual number of days (including the first day but excluding the last day)
elapsed but computed as if each calendar year consisted of 360 days in the case
of an Eurodollar Rate Borrowing (unless the calculation would result in an
interest rate greater than the Maximum Rate, in which event interest will be
calculated on the basis of a year of 365 or 366 days, as the case may be) and
365 or 366 days, as the case may be, in the case of a Base Rate Borrowing. All
interest rate determinations and calculations by Administrative Agent are
conclusive and binding absent manifest error.
3.9 Maximum Rate. Regardless of any provision contained in any Loan
------------
Document, neither Administrative Agent nor any Lender shall ever be entitled to
contract for, charge, take, reserve, receive, or apply, as interest on all or
any part of the Obligation, any amount in excess of the Maximum Rate, and, if
Lenders ever do so, then such excess shall be deemed a partial prepayment of
principal and treated hereunder as such and any remaining excess shall be
refunded to Borrower. In determining if the interest paid or payable
38
exceeds the Maximum Rate, Borrower and Lenders shall, to the maximum extent
permitted under applicable Law, (a) treat all Borrowings as but a single
extension of credit (and Lenders and Borrower agree that such is the case and
that provision herein for multiple Borrowings is for convenience only), (b)
characterize any nonprincipal payment as an expense, fee, or premium rather than
as interest, (c) exclude voluntary prepayments and the effects thereof, and (d)
amortize, prorate, allocate, and spread the total amount of interest throughout
the entire contemplated term of the Obligation. However, if the Obligation is
paid and performed in full prior to the end of the full contemplated term
thereof, and if the interest received for the actual period of existence thereof
exceeds the Maximum Amount, Lenders shall refund such excess, and, in such
event, Lenders shall not, to the extent permitted by Law, be subject to any
penalties provided by any Laws for contracting for, charging, taking, reserving,
or receiving interest in excess of the Maximum Amount. The terms "Maximum Rate"
or the "Maximum Amount" mean the "weekly ceiling" from time to time in effect
under Texas Finance Code ss. 303.305, as amended. Borrower agrees that Chapter
346 of the Texas Finance Code, as amended (which regulates certain revolving
credit loan accounts and revolving tri-party accounts), does not apply to the
Obligation.
3.10 Interest Periods. When Borrower requests any Eurodollar Rate
----------------
Borrowing, Borrower may elect the interest period (each an "Interest Period")
applicable thereto, which shall be, at Borrower's option and subject to
availability, one, two, three, or six months; provided, however, that: (a) the
initial Interest Period for a Eurodollar Rate Borrowing shall commence on the
date of such Borrowing (including the date of any conversion thereto), and each
Interest Period occurring thereafter in respect of such Borrowing shall commence
on the day on which the next preceding Interest Period applicable thereto
expires; (b) if any Interest Period for a Eurodollar Rate Borrowing begins on a
day for which there is no numerically corresponding Business Day in the calendar
month at the end of such Interest Period, then such Interest Period shall end on
the last Business Day in the calendar month at the end of such Interest Period);
(c) no Interest Period may be chosen with respect to any portion of the
Principal Debt which would extend beyond the scheduled repayment date (including
any dates on which mandatory prepayments are required to be made) for such
portion of the Principal Debt; and (d) no more than an aggregate of five (5)
Interest Periods shall be in effect at one time.
3.11 Conversions. Borrower may (a) convert a Eurodollar Rate Borrowing
-----------
on the last day of the applicable Interest Period to a Base Rate Borrowing, (b)
convert a Base Rate Borrowing at any time to a Eurodollar Rate Borrowing, and
(c) elect a new Interest Period (in the case of a Eurodollar Rate Borrowing), by
giving a Conversion Notice of such intent to Administrative Agent no later than
10:00 a.m. Dallas, Texas time on the third Business Day prior to the date of
conversion or the last day of the Interest Period, as the case may be (in the
case of a conversion to a Eurodollar Rate Borrowing or an election of a new
Interest Period), and no later than 10:00 a.m. Dallas, Texas time one Business
Day prior to the last day of the Interest Period (in the case of a conversion to
a Base Rate Borrowing); provided that, the principal amount converted to, or
continued as, a Eurodollar Rate Borrowing shall be in an amount not less than
$1,500,000 or a greater integral multiple of $500,000 (or such lesser amount as
may be outstanding under any Facility). Administrative Agent shall timely notify
each Lender with respect to each Conversion Notice. Absent Borrower's Conversion
Notice or election of a new Interest Period, a Eurodollar Rate Borrowing shall
be deemed converted to a Base Rate Borrowing effective as of the expiration of
the Interest Period applicable thereto. No Eurodollar Rate Borrowing may be
either made or continued as a Eurodollar Rate Borrowing, and no Base Rate
Borrowing may be converted to a Eurodollar Rate Borrowing, if the interest rate
for such Eurodollar Rate Borrowing would exceed the Maximum Rate. The right to
convert from a Base Rate Borrowing to a Eurodollar Rate Borrowing, or to
continue as a Eurodollar Rate Borrowing shall not be available during the
occurrence of a Default or Potential Default.
39
3.12 Order of Application.
--------------------
(a) No Default. If no Default or Potential Default exists and if
----------
no order of application is otherwise specified in Section 3.3 or otherwise in
the Loan Documents, payments and prepayments of the Obligation shall be applied
first to fees, second to accrued interest then due and payable on the Principal
Debt, and then to the remaining Obligation in the order and manner as Borrower
may direct.
(b) Default. If a Default or Potential Default exists (or if
-------
Borrower fails to give directions as permitted under Section 3.12(a)), any
payment or prepayment (including proceeds from the exercise of any Rights) shall
be applied to the Obligation in the following order: (i) to the ratable payment
of all fees, expenses, and indemnities for which Agents or Lenders have not been
paid or reimbursed in accordance with the Loan Documents (as used in this
Section 3.12(b)(i), a "ratable payment" for any Lender or any Agent shall be, on
any date of determination, that proportion which the portion of the total fees,
expenses, and indemnities owed to such Lender or such Agent bears to the total
aggregate fees and indemnities owed to all Lenders and Agents on such date of
determination); (ii) to the ratable payment of accrued and unpaid interest on
the Principal Debt (as used in this Section 3.12(b)(ii), "ratable payment"
means, for any Lender, on any date of determination, that proportion which the
accrued and unpaid interest on the Principal Debt owed to such Lender bears to
the total accrued and unpaid interest on the Principal Debt owed to all
Lenders); (iii) to the ratable payment of the Swing Line Principal Debt which is
due and payable and which remains unfunded by any Borrowing under the Revolver
Facility; provided that, such payments shall be allocated ratably among the
Swing Line Lender and the Lenders which have funded their participations in the
Swing Line Principal Debt; (iv) to the ratable payment of any reimbursement
obligation with respect to any LC issued pursuant to the Agreement which is due
and payable and which remains unfunded by any Borrowing under the Revolver
Facility; provided that, such payments shall be allocated ratably among the
issuer of the LC and the Lenders which have funded their participations in such
LC; (v) to the ratable payment of the Principal Debt (as used in this Section
3.12(b)(v), "ratable payment" means for any Lender, on any date of
determination, that proportion which the Principal Debt owed to such Lender
bears to the Principal Debt owed to all Lenders); (vi) to provide cash
collateral in an amount equal to 105% of the LC Exposure then existing in
accordance with Section 2.3(g); and (vii) to the payment of the remaining
Obligation in the order and manner Required Lenders deem appropriate.
Subject to the provisions of Section 12 and provided that Administrative Agent
shall not in any event be bound to inquire into or to determine the validity,
scope, or priority of any interest or entitlement of any Lender and may suspend
all payments or seek appropriate relief (including, without limitation,
instructions from Required Lenders or an action in the nature of interpleader)
in the event of any doubt or dispute as to any apportionment or distribution
contemplated hereby, Administrative Agent shall promptly distribute such amounts
to each Lender in accordance with the Agreement and the related Loan Documents.
3.13 Sharing of Payments, Etc. If any Lender shall obtain any payment
------------------------
or prepayment with respect to the Obligation (whether voluntary, involuntary, or
otherwise, including, without limitation, as a result of exercising its Rights
under Section 3.14) which is in excess of its share of any such payment in
accordance with the relevant Rights of the Lenders under the Loan Documents,
then such Lender shall purchase from the other Lenders such participations as
shall be necessary to cause such purchasing Lender to share the excess payment
with each other Lender in accordance with the relevant Rights under the Loan
Documents. If all or any portion of such excess payment is subsequently
recovered from such purchasing
40
Lender, then the purchase shall be rescinded and the Purchase Price restored to
the extent of such recovery. Borrower agrees that any Lender purchasing a
participation from another Lender pursuant to this Section may, to the fullest
extent permitted by Law, exercise all of its Rights of payment (including the
Right of offset) with respect to such participation as fully as if such Lender
were the direct creditor of Borrower in the amount of such participation.
3.14 Offset. If a Default exists, each Lender shall be entitled To
------
exercise (for the benefit of all Lenders in accordance with Section 3.13) the
Rights of offset and/or banker's Lien against each and every account and other
property, or any interest therein, which any Loan Party may now or hereafter
have with, or which is now or hereafter in the possession of, such Lender to the
extent of the full amount of the Obligation.
3.15 Booking Borrowings. To the extent permitted by Law, any Lender
------------------
may make, carry, or transfer its Borrowings at, to, or for the account of any of
its branch offices or the office of any of its Affiliates; provided that, no
Affiliate shall be entitled to receive any greater payment under Section 4 than
the transferor Lender would have been entitled to receive with respect to such
Borrowings.
SECTION 4 CHANGE IN CIRCUMSTANCES.
4.1 Increased Cost and Reduced Return.
---------------------------------
(a) Changes in Law. If, after the date hereof, the adoption of
--------------
any applicable Law or any change in any applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, or
compliance by any Lender (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such Governmental
Authority:
(i) shall subject such Lender (or its Applicable Lending
Office) to any Tax or other charge with respect to any Eurodollar Rate
Borrowing, its Notes, or its obligation to loan Eurodollar Rate Borrowings, or
change the basis of taxation of any amounts payable to such Lender (or its
Applicable Lending Office) under the Loan Documents in respect of any Eurodollar
Rate Borrowings (other than Taxes imposed on the overall net income of such
Lender by the jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve,
special deposit, assessment, or similar requirement (other than the Reserve
Requirement utilized in the determination of the Adjusted Eurodollar Rate)
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities or commitments of, such Lender (or its Applicable Lending
Office), including the commitment of such Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or the London interbank market any other condition affecting the
Loan Documents or any of such extensions of credit or liabilities or
commitments;
and the result of any of the foregoing is to increase the cost to such
Lender (or its Applicable Lending Office) of making, converting into,
continuing, or maintaining any Eurodollar Rate Borrowings or to reduce
any sum received or receivable by such Lender (or its Applicable
Lending Office) under the Loan Documents with respect to any
Eurodollar Rate Borrowing, then Borrower shall pay to such
41
Lender on demand such amount or amounts as will compensate such Lender
for such increased cost or reduction. If any Lender requests
compensation by Borrower under this Section 4.1(a), Borrower may, by
notice to such Lender (with a copy to Administrative Agent), suspend
the obligation of such Lender to loan or continue Borrowings of the
Type with respect to which such compensation is requested, or to
convert Borrowings of any other Type into Borrowings of such Type,
until the event or condition giving rise to such request ceases to be
in effect (in which case the provisions of Section 4.4 shall be
applicable); provided, that such suspension shall not affect the Right
of such Lender to receive the compensation so requested.
(b) Capital Adequacy. If, after the date hereof, any Lender
----------------
shall have determined that the adoption of any applicable Law regarding capital
adequacy or any change therein or in the interpretation or administration
thereof by any Governmental Authority charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority has
or would have the effect of reducing the rate of return on the capital of such
Lender or any corporation controlling such Lender as a consequence of such
Lender's obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Changes in Applicable Lending Office; Compensation
--------------------------------------------------
Statement. Each Lender shall promptly notify Borrower and Administrative Agent
---------
of any event of which it has knowledge, occurring after the date hereof, which
will entitle such Lender to compensation pursuant to this Section and will
designate a different Applicable Lending Office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
judgment of such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section shall furnish to Borrower and Administrative
Agent a statement setting forth the additional amount or amounts to be paid to
it hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
4.2 Limitation on Types of Loans. If on or prior to the first day of
----------------------------
any Interest Period for any Eurodollar Rate Borrowing:
(a) Inability to Determine Eurodollar Rate. Administrative Agent
--------------------------------------
determines (which determination shall be conclusive) that by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period; or
(b) Cost of Funds. Required Lenders determine (which
-------------
determination shall be conclusive) and notify Administrative Agent that the
Adjusted Eurodollar Rate will not adequately and fairly reflect the cost to the
Lenders of funding Eurodollar Rate Borrowings for such Interest Period;
then Administrative Agent shall give 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 fund additional Eurodollar
Rate Borrowings, continue Eurodollar Rate Borrowings, or to convert Base Rate
Borrowings into Eurodollar Rate Borrowings, and Borrower shall, on the last
day(s) of the then current Interest
42
Period(s) for the outstanding Eurodollar Rate Borrowings, either prepay such
Borrowings or convert such Borrowings into Base Rate Borrowings in accordance
with the terms of this Agreement.
4.3 Illegality. Notwithstanding any other provision of the Loan
----------
Documents, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Rate Borrowings
hereunder, then such Lender shall promptly notify Borrower thereof and such
Lender's obligation to make or continue Eurodollar Rate Borrowings and to
convert other Base Rate Borrowings into Eurodollar Rate Borrowings shall be
suspended until such time as such Lender may again make, maintain, and fund
Eurodollar Rate Borrowings (in which case the provisions of Section 4.4 shall be
applicable).
4.4 Treatment of Affected Loans. If the obligation of any Lender to
---------------------------
fund Eurodollar Rate Borrowings or to continue, or to convert Base Rate
Borrowings into Eurodollar Rate Borrowings, shall be suspended pursuant to
Sections 4.1, 4.2 or 4.3 hereof, such Lender's Eurodollar Rate Borrowings shall
be automatically converted into Base Rate Borrowings on the last day(s) of the
then current Interest Period(s) for Eurodollar Rate Borrowings (or, in the case
of a conversion required by Section 4.3 hereof, on such earlier date as such
Lender may specify to Borrower with a copy to Administrative Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Sections 4.1, 4.2 or 4.3 hereof that gave rise to such conversion
no longer exist:
(a) to the extent that such Lender's Eurodollar Rate Borrowings
have been so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Rate Borrowings shall be
applied instead to its Base Rate Borrowings; and
(b) all Borrowings that would otherwise be made or continued by
such Lender as Eurodollar Rate Borrowings shall be made or continued instead as
Base Rate Borrowings, and all Borrowings of such Lender that would otherwise be
converted into Eurodollar Rate Borrowings shall instead be converted into (or
shall remain as) Base Rate Borrowings.
If such Lender gives notice to Borrower (with a copy to Administrative Agent)
that the circumstances specified in Sections 4.1, 4.2 or 4.3 hereof that gave
rise to the conversion of such Lender's Eurodollar Rate Borrowings pursuant to
this Section 4.4 no longer exist (which such Lender agrees to do promptly upon
such circumstances ceasing to exist) at a time when Eurodollar Rate Borrowings
made by other Lenders are outstanding, such Lender's Base Rate Borrowings shall
be automatically converted, on the first day(s) of the next succeeding Interest
Period(s) for such outstanding Eurodollar Rate Borrowings, to the extent
necessary so that, after giving effect thereto, all Eurodollar Rate Borrowings
held by the Lenders and by such Lender are held pro rata (as to principal
amounts, Types, and Interest Periods) in accordance with their respective
Commitments.
4.5 Compensation. Upon the request of any Lender, Borrower shall pay
------------
to such Lender such amount or amounts as shall be sufficient (in the reasonable
opinion of such Lender) to compensate it for any loss, cost, or expense
(including loss of anticipated profits) incurred by it as a result of:
(a) any payment, prepayment, or conversion of a Eurodollar Rate
Borrowing for any reason (including, without limitation, the acceleration of the
loan pursuant to Section 11.1 on a date other than the last day of the Interest
Period for such Borrowing; or
43
(b) any failure by Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Section 7.3 to
be satisfied) to borrow, convert, continue, or prepay a Eurodollar Rate
Borrowing on the date for such borrowing, conversion, continuation, or
prepayment specified in the relevant Borrowing Notice, or notice of prepayment,
continuation, or conversion under this Agreement.
4.6 Taxes.
-----
(a) General. Any and all payments by Borrower to or for the
-------
account of any Lender or Administrative Agent hereunder or under any other Loan
Document shall be made free and clear of and without deduction for any and all
present or future Taxes, excluding, in the case of each Lender and
Administrative Agent, Taxes imposed on its income and franchise Taxes imposed on
it by the jurisdiction under the laws of which such Lender (or its Applicable
Lending Office) or Administrative Agent (as the case may be) is organized, or
any political subdivision thereof ("Excluded Taxes"). If Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable under
any Loan Document to any Lender or Administrative Agent, (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
4.6) such Lender or Administrative Agent receives an amount equal to the sum it
would have received had no such deductions been made, (ii) Borrower shall make
such deductions, (iii) Borrower shall pay the full amount deducted to the
relevant taxation authority or other authority in accordance with applicable
law, and (iv) Borrower shall furnish to Administrative Agent, at its address
listed in Schedule 2.1, the original or a certified copy of a receipt evidencing
payment thereof.
(b) Stamp and Documentary Taxes. In addition, Borrower agrees to
---------------------------
pay any and all present or future stamp or documentary taxes and any other
excise or property taxes or charges or similar levies which arise from any
payment made under any Loan Document or from the execution or delivery of, or
otherwise with respect to, any Loan Document (hereinafter referred to as "Other
Taxes").
(c) INDEMNIFICATION FOR TAXES. BORROWER AGREES TO INDEMNIFY EACH
-------------------------
LENDER AND ADMINISTRATIVE AGENT FOR THE FULL AMOUNT OF TAXES AND OTHER TAXES,
OTHER THAN EXCLUDED TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES OR OTHER
TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER THIS
SECTION 4.6) PAID BY SUCH LENDER OR ADMINISTRATIVE AGENT (AS THE CASE MAY BE)
AND ANY LIABILITY (INCLUDING PENALTIES, INTEREST, AND EXPENSES) ARISING
THEREFROM OR WITH RESPECT THERETO.
(d) Withholding Tax Forms. Each Lender organized under the Laws
---------------------
of a jurisdiction outside the United States, on or prior to the date of its
execution and delivery of this Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it becomes a
Lender in the case of each other Lender, and from time to time thereafter,
including, without limitation, upon the expiration or obsolescence of any
previously delivered form or upon the written request of Borrower or
Administrative Agent (but only so long as such Lender remains lawfully able to
do so) shall provide Borrower and Administrative Agent with (i) two duly
completed copies of Internal Revenue Service Form WBEN, W-8ECI, W-8IMY, W9, or
other applicable form, as the case may be, certifying in each case that such
Lender is entitled to benefits under an income tax treaty to which the United
States is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this Agreement is
44
effectively connected with the conduct of a trade or business in the United
States, or certifying that such Lender is entitled to an exemption from or a
reduced rate of tax on payment pursuant to the "portfolio interest" exception
under section 871(h) or 881(c) of the Code, (ii) if applicable, a statement
indicating that such Lender is entitled to the "portfolio interest" exception
under Section 871(h) or 881(c)(3) of the Code, and (iii) any other governmental
forms or certificates which are necessary or required under an applicable tax
treaty or otherwise by law to reduce or eliminate withholding tax, which has
been reasonably requested by Borrower or Administrative Agent. If an event
(including without limitation any change in treaty, law, or regulation) has
occurred prior to the date on which any delivery required by the preceding
sentence would otherwise be required which renders all such forms inapplicable
or which would prevent any Lender from duly completing and delivering any such
form with respect to it and such Lender advises Borrower and Administrative
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, such Lender shall not be
required to deliver such forms.
(e) Failure to Provide Withholding Forms; Change in Tax Law. For
-------------------------------------------------------
any period with respect to which a Lender has failed to provide Borrower and
Administrative Agent with the appropriate form pursuant to Section 4.6(d)
(unless such failure is due to a change in Law occurring subsequent to the date
on which a form originally was required to be provided), such Lender shall not
be entitled to indemnification under this Section 4.6 with respect to Taxes
imposed by the United States; provided, however, that should a Lender, which is
otherwise exempt from or subject to a reduced rate of withholding tax, become
subject to Taxes because of its failure to deliver a form required hereunder,
Borrower shall take such steps as such Lender shall reasonably request to assist
such Lender to recover such Taxes. Each Lender which fails to provide to
Borrower in a timely manner such forms shall reimburse Borrower or
Administrative Agent upon demand for any penalties paid by Borrower or
Administrative Agent as a result of any failure of Borrower to withhold the
required amounts that are caused by such Lender's failure to provide the
required forms in a timely manner.
(f) Changes in Applicable Lending Office. If Borrower is
------------------------------------
required to pay or will be required to pay additional amounts to or for the
account of any Lender pursuant to this Section 4.6, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender.
(g) Tax Payment Receipt. Within thirty (30) days after the
---------------------
date of any payment of Taxes, Borrower shall furnish to Administrative Agent the
original or a certified copy of a receipt evidencing such payment.
(h) Survival. Without prejudice to the survival of any other
--------
agreement of Borrower hereunder, the agreements and obligations of Borrower
contained in this Section 4.6 shall survive the termination of the Revolver
Commitment and the payment in full of the Obligation.
SECTION 5 FEES.
5.1 Treatment of Fees. Except as otherwise provided by Law, the fees
-----------------
described in this Section 5 (a) do not constitute compensation for the use,
detention, or forbearance of money, (b) are in addition to, and not in lieu of,
interest and expenses otherwise described in the Loan Documents, (c) shall be
payable in accordance with Section 3.1(c), (d) shall be non-refundable, (e)
shall, to the fullest extent permitted by Law,
45
bear interest, if not paid when due, at the Default Rate, and (f) shall be
calculated on the basis of actual number of days (including the first day but
excluding the last day) elapsed, but computed as if each calendar year consisted
of 360 days, unless such computation would result in interest being computed in
excess of the Maximum Rate in which event such computation shall be made on the
basis of a year of 365 or 366 days, as the case may be.
5.2 Fees of Administrative Agent and Arranger. Borrower shall pay to
-----------------------------------------
Administrative Agent or Arranger, as the case may be, solely for their
respective accounts, the fees described in the Fee Letter.
5.3 Revolver Facility Commitment Fees. Following the Closing Date,
---------------------------------
Borrower shall pay to Administrative Agent, for the ratable account of Revolver
Lenders, a commitment fee ("Commitment Fee"), calculated daily from the Closing
Date but payable in installments in arrears on the last Business Day of each
March, June, September, and December and on the Revolver Termination Date,
commencing the last Business Day of 2001. On any day of determination, the
commitment fee under this Section 5.3 shall be an amount equal to the Applicable
Margin for Commitment Fees multiplied by the amount by which (a) the Revolver
Commitment on such day exceeds (b) the Revolver Principal Debt on such day.
Solely for the purposes of this Section 5.3, (i) determinations of the average
daily Revolver Principal Debt shall exclude the Swing Line Principal Debt; and
(ii) "ratable" shall mean, for any period of determination, with respect to any
Revolver Lender, that proportion which (x) the average daily unused Committed
Sum of such Revolver Lender during such period bears to (y) the amount of the
average daily unused Revolver Commitment during such period.
5.4 LC Fees. As an inducement for the issuance (including, without
-------
limitation, any extension) of each LC, Borrower agrees to pay to Administrative
Agent (a) for the account of each Lender, according to each Lender's Commitment
Percentage under the Revolver Facility on the day the fee is payable, a
Commission Fee payable quarterly in arrears for so long as each such LC is
outstanding, on the last Business Day of each March, June, September, and
December and on the expiry date of the LC and (b) for its account as LC issuing
bank, LC fronting fees in accordance with the Fee Letter; provided that such fee
shall in no event be less than $500 for each LC.
SECTION 6 SECURITY; GUARANTIES.
6.1 Guaranties. As an inducement to Agents and Lenders to enter into
----------
this Agreement, Borrower shall cause each Company that is a Domestic Subsidiary
of Borrower to execute and deliver to Administrative Agent a Guaranty providing
for the guaranty of payment and performance of the Obligation. In addition,
promptly after the designation, formation, or Acquisition of any new Company
that is (or becomes) a Domestic Subsidiary of Borrower, Borrower shall cause
such new Company to execute and deliver to Administrative Agent a Guaranty,
providing for the guaranty of payment and performance of the Obligation.
6.2 Collateral. To secure, on a ratable basis, the full and complete
----------
payment and performance of the Obligation and the obligation of any Company to
any Lender arising under Section 9.26(a), Borrower shall (and shall cause each
Domestic Subsidiary of Borrower to) enter into Collateral Documents (in form and
substance acceptable to Administrative Agent) pursuant to which, among other
things, each such entity shall, to the extent permitted by applicable Law,
grant, pledge, assign, and create first priority Liens (except to the extent
Permitted Liens affect such priority) in favor of Administrative Agent (for the
ratable benefit of Lenders) in and to: (i) 100% of each such entity's Rights,
titles and interests in the issued and outstanding stock, equity, or other
investment securities of each Domestic Subsidiary of such entity (excluding any
stock,
46
equity, or other investment securities issued by any Subsidiary of any Company
to the extent not covered in clauses (ii) and (iii) below); (ii) 65% of each
such entity's Rights, titles and interests in the issued and outstanding stock,
equity or other investment securities of each directly-owned Foreign Subsidiary
of any Company; and (iii) all other present and future assets (tangible,
intangible, or personal) of such entity located in the United States; provided,
that Collateral shall not comprise real property of such entity.
6.3 Future Liens. Other than as permitted in Section 6.5, promptly
------------
after (a) the Acquisition of any material assets (personal, tangible or
intangible, other than real property) by Borrower or any Company that is a
Domestic Subsidiary of Borrower, (b) the removal, termination, or expiration of
any prohibitions upon the granting of a Lien in any asset (personal, tangible,
or intangible, other than real property) of Borrower or any Company that is a
Domestic Subsidiary of Borrower, or (c) upon the designation, formation, or
Acquisition of any new Subsidiary of any Company (the assets described in
clauses (a) through (c) hereof being referred to herein as the "Additional
Assets"), Borrower shall (or shall cause the appropriate Company to) execute and
deliver to Administrative Agent all further instruments and documents
(including, without limitation, Collateral Documents and all certificates and
instruments representing shares of stock or evidencing Debt), and shall take all
further action that may be necessary or desirable, or that Administrative Agent
may reasonably request, to grant, perfect, and protect Liens in favor of
Administrative Agent for the benefit of Lenders in such Additional Assets, as
security for the Obligation to the extent Liens are required in such assets
pursuant to Section 6.2; it being expressly understood that the granting of such
additional security for the Obligation is a material inducement to the execution
and delivery of this Agreement by each Lender. Upon satisfying the terms and
conditions hereof, such Additional Assets shall be included in the "Collateral"
for all purposes under the Loan Documents, and all references to the
"Collateral" in the Loan Documents shall include the Additional Assets.
6.4 Release of Collateral.
---------------------
(a) Upon any sale, transfer, or disposition of Collateral which
is expressly permitted pursuant to the Loan Documents (or is otherwise
authorized by Required Lenders or Lenders, as the case may be), and upon ten
(10) Business Days' (or such lesser time period agreed to by Administrative
Agent in its sole discretion) prior written request by Borrower (which request
must be accompanied by true and correct copies of the then current drafts;
together with revised drafts as they become available of (i) all documents of
transfer or disposition, including any contract of sale, (ii) a preliminary
closing statement and instructions to the title company, if any, and (iii) all
requested release instruments), Administrative Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of Liens granted to Administrative Agent for
the benefit of Lenders pursuant hereto in such Collateral.
(b) The actions of Administrative Agent under this Section 6.4
are subject to the following: (i) no such release of Liens or Guaranties shall
be granted if any Default or Potential Default has occurred and is continuing,
including, without limitation, the failure to make certain mandatory prepayments
in accordance with Section 3.3(b) in conjunction with the sale or transfer of
such Collateral; (ii) Collateral Agent shall not be required to execute any such
document on terms which, in Administrative Agent's opinion, would expose
Administrative Agent to liability or create any obligation or entail any
consequence other than the release of such Liens without recourse or warranty;
and (iii) such release shall not in any manner discharge, affect, or impair the
Obligation or Liens upon all interests retained by the Companies, including,
without limitation, the proceeds of any sale, all of which shall continue to
constitute Collateral.
47
6.5 Negative Pledge. Notwithstanding the provisions of Sections 6.2
---------------
or 6.3 hereof, until such time as Administrative Agent, or Required Lenders
otherwise require, the Companies shall not be required to perfect Liens on
certain assets constituting interests in vehicles, fixtures, real estate, assets
located in foreign jurisdictions, or stock or equity interests in Subsidiaries
of Foreign Subsidiaries of the Companies. To the extent contemplated by the
first sentence of this Section 6.5 or to the extent Administrative Agent and
Required Lenders otherwise agree to delay the perfection or attachment of any
Lien contemplated by Sections 6.2 or 6.3 hereof, for whatever reason, the
Companies hereby covenant and agree not to directly create, incur, grant,
suffer, or permit to be created or incurred any Lien on any such assets, other
than Permitted Liens. Furthermore, within thirty (30) days of the request of
Administrative Agent, Borrower shall (or shall cause each Company to) execute
and deliver to Administrative Agent all instruments and documents (including,
without limitation, certificates and instruments and documents representing
shares of stock or evidencing Debt) and shall take all further action that may
be necessary or desirable, or that Administrative Agent may reasonably request,
to grant, perfect, and protect Liens in favor of Administrative Agent for the
benefit of Lenders, in such assets, as security for the Obligation; it being
expressly understood that the provisions of this negative pledge are a material
inducement to the execution and delivery of this Agreement by each Lender.
6.6 Control; Limitation of Rights. Notwithstanding anything herein or
-----------------------------
in any other Loan Document to the contrary, (a) the transactions contemplated
hereby do not and will not constitute, create, or have the effect of
constituting or creating, directly or indirectly, actual or practical ownership
of Borrower, its Subsidiaries, or any other Loan Party by Agents or Lenders, or
control, affirmative or negative, direct or indirect, by Agents or Lenders over
the management or any other aspect of the operation of Borrower, its
Subsidiaries, or any other Loan Party, which ownership or control remains
exclusively and at all times in the Loan Parties.
SECTION 7 CONDITIONS PRECEDENT.
7.1 Conditions Precedent to Closing. This Agreement shall not become
-------------------------------
effective, and Lenders shall not be obligated to advance any Borrowing or issue
any LC, unless Administrative Agent has received all of the following:
(a) The Agreement. This Agreement (together with all Schedules
-------------
and Exhibits hereto) executed by Borrower, each Lender, Administrative Agent and
Documentation Agent.
(b) Notes. Each of the Notes, payable to the order of each
-----
applicable Lender, as contemplated in Section 3.1(a).
(c) Guaranty. A Guaranty executed by each Domestic Subsidiary of
--------
Borrower in accordance with Section 6.1.
(d) Organizational Documents. Copies of the Articles of
------------------------
Incorporation, Certificate of Incorporation, Articles of Organization or
Certificate of Formation and all amendments thereto of Borrower and each
Guarantor, each accompanied by a certificate that such copy is correct and
complete, one dated a "Current Date" (such term meaning any date not more than
30 days prior to the Closing Date), issued by the appropriate Governmental
Authority of the jurisdiction of organization of each such entity, and one dated
the Closing Date, executed by a Responsible Officer of each such entity.
48
(e) Bylaws/Operating Agreements. A copy of the Bylaws, and all
---------------------------
amendments thereto, of Borrower and each Guarantor, accompanied by a certificate
that such copy is correct and complete, dated the Closing Date, and executed by
a Responsible Officer of each such entity.
(f) Partnership Agreements. Copies of the currently-effective
----------------------
Partnership Agreement for each Guarantor or Subsidiary of Borrower that is a
partnership, and all amendments thereto, each accompanied by a certificate that
such copy is correct and complete, dated the Closing Date, executed by the
General Partner or other appropriate managing partner of such partnership,
together with a certificate of limited partnership dated a Current Date, issued
by the appropriate Governmental Authority of the jurisdiction of organization of
each such partnership that is a limited partnership.
(g) Good Standing and Authority. Certificates of the appropriate
---------------------------
Governmental Authorities of such jurisdictions as Administrative Agent may
designate, each dated a Current Date, to the effect that Borrower and each
Guarantor are in good standing with respect to the payment of franchise and
similar Taxes (to the extent such information is available) and are duly
qualified to transact business in their respective jurisdictions.
(h) Incumbency. (a) Certificates of incumbency dated as of the
----------
Closing Date with respect to all Responsible Officers of each Company and
Guarantor who will be authorized to execute or attest to any of the Loan
Documents on behalf of such Company or Guarantor, executed by the President or
any Vice President, and the Secretary or an Assistant Secretary, of each such
Company or Guarantor (or General Partner or other appropriate managing partner
for any Company or Guarantor that is a partnership) and (b) a certificate
executed by the Secretary or Assistant Secretary of each Company and Guarantor
executing a Security Agreement regarding the ownership of stock.
(i) Resolutions. Copies of resolutions duly adopted by the Board
-----------
of Managers or Board of Directors of each Company and Guarantor, approving this
Agreement and the other Loan Documents and authorizing the transactions
contemplated hereby and thereby, accompanied by a certificate of the Secretary
or an Assistant Secretary of each such Company and Guarantor, dated as of the
Closing Date, certifying that such copy is a true and correct copy of
resolutions duly adopted at a meeting of (which may be held by conference
telephone or similar communications equipment by means of which all Persons
participating in a meeting can hear each other if permitted by applicable Law
and, if required by such Law, by its Bylaws or Operating Agreement), or by the
unanimous written consent of (if permitted by applicable Law and, if required by
such Law, by its Bylaws or Operating Agreement), the Board of Managers or Board
of Directors of each such Company and Guarantor, and that such resolutions
constitute all the resolutions adopted with respect to such transactions, have
not been amended, modified, or revoked in any respect, and are in full force and
effect as of the Closing Date.
(j) Partnership Authorization. For each Company and Guarantor
-------------------------
that is a partnership, evidence of authorization by the applicable partners, in
each case authorizing the execution and full performance of the Loan Documents,
and all other documents and actions required pursuant thereto, accompanied by a
certificate from the general partner or other appropriate managing partner,
dated as of the Closing Date, certifying that such copy is a true and correct
copy of the authorizations adopted by the partnership and that such
authorizations constitute all authorizations adopted with respect to such
transactions,
49
have not been amended, modified, or revoked in any respect, and are in full
force and effect as of the Closing Date.
(k) Opinion of Counsel to the Companies. The opinion of counsel
-----------------------------------
to the Companies and Guarantors, addressed to Administrative Agent and Lenders,
substantially in the form of Exhibit G.
(l) Security Agreements. A Security Agreement, executed by
-------------------
Borrower and each Guarantor, as debtor, and delivered to Administrative Agent,
as secured party on behalf of Lenders, granting and creating Liens in favor of
Lenders in and to (a) 100% of the issued and outstanding stock or other equity
or investment securities of each Domestic Subsidiary of such entity; (b) 65% of
the outstanding stock or other equity or investment securities of each Foreign
Subsidiary of such entity; and (c) all other assets (tangible, intangible or
personal) of such entity (other than assets described in Section 6.5), together
with (i) one or more Financing Statements, executed and delivered by Borrower
and each Guarantor as debtor, in favor of Administrative Agent, as secured party
on behalf of Lenders, covering all such Collateral, and (ii) delivery to
Administrative Agent of all Pledged Shares and Collateral Notes (as such terms
are defined in the Security Agreement), together with executed blank stock
powers for each Pledged Share certificate delivered, and executed allonge
endorsements for each Collateral Note delivered, all in form acceptable to
Administrative Agent.
(m) Lien Searches. Lien searches in the name of each Loan Party
-------------
and any other name(s) as Administrative Agent may deem appropriate in each state
where each Loan Party maintains an office or has real property, showing no
financing statements or other Lien instruments of record except for Permitted
Liens or Liens being released concurrently with the transaction contemplated
hereby (if any).
(n) Lien Releases. Payoff letters in form and substance
-------------
reasonably acceptable to Administrative Agent relating to the payoff of all Debt
of any Loan Party (other than Permitted Debt) or duly executed releases or
assignments of Liens and financing statements in recordable form as may be
necessary to reflect that the Liens created by the Collateral Documents are
first priority Liens (except for Permitted Liens).
(o) Consents, filings, etc. Evidence satisfactory to
----------------------
Administrative Agent and its counsel that the Companies and Guarantors have
received all approvals, authorizations, consents, and waivers of any
Governmental Authority or other Person necessary or appropriate for the
execution, delivery, and performance by Borrower and any Guarantor of the Loan
Documents to which it is a party, including, without limitation, (a) all such
approvals, authorizations, consents, and waivers disclosed in the Loan Documents
(including those required in connection with the assignment of material
contracts), (b) any such approvals, authorizations, consents, or waivers
reasonably required by Administrative Agent in connection with the granting of a
security interest to Administrative Agent in each material contract acquired or
assumed by any Company or Guarantor, and (c) all filings, consents, or approvals
with or of Governmental Authorities necessary to enter into the Loan Documents
or any other transactions contemplated by the Loan Documents, as applicable.
(p) Insurance. Evidence that the Collateral is insured in such
---------
amounts, against such risks, with such deductibles, and with such insurers as
may be satisfactory to Administrative Agent with loss payable to Administrative
Agent, on behalf of Lenders, as their interests may appear, together with
certificates evidencing such insurance with appropriate endorsements to satisfy
Section 9.8 of the Agreement.
50
(q) Borrowing Notice. A duly completed Borrowing Notice for the
----------------
initial Borrowing, delivered to Administrative Agent, together with calculations
demonstrating compliance with Section 9 on the Closing Date after giving effect
to any Borrowings made on such date.
(r) Current Financials and Compliance Certificate. True and
---------------------------------------------
correct copies of the Current Financials in respect of the Companies and the
Target Companies (adjusted in the case of the Target Companies to the actual
fiscal year of the Target Company), together with a Compliance Certificate
prepared as of the Closing Date, on a pro forma basis after giving effect to the
closing of the Loan Documents.
(s) Phase I Audits. Phase I environmental audits where all
--------------
galvanizing operations occur, conducted by an independent firm acceptable to
Borrower and Administrative Agent.
(t) Payment of Fees and Closing Fees. Payment of all fees payable
--------------------------------
on or prior to the Closing Date to Administrative Agent, Arranger, or any Lender
as provided for in Section 5 of the Agreement, together with reimbursements to
Administrative Agent and Arranger for all fees and expenses incurred in
connection with the negotiation, preparation, and closing of the transactions
evidenced by the Loan Documents (including, without limitation, attorneys' fees
and expenses).
(u) Permitted Acquisitions. The acquisition of Central Electric
----------------------
Company must have been completed, and Administrative Agent shall have received
certified copies of any and all purchase agreements executed in connection with
such Permitted Acquisition and all other documents and instruments required by
Section 7.2 and, where appropriate, Section 9.16.
(v) No Material Adverse Event. No Material Adverse Event shall
-------------------------
have occurred since February 28, 2001.
(w) Other Documents. Such other agreements, documents,
---------------
instruments, opinions, certificates, and evidences as Administrative Agent may
reasonably request.
7.2 Conditions Precedent to Each Permitted Acquisition. In addition to
--------------------------------------------------
the Permitted Acquisition Compliance Certificate and other documents referred to
in the definition of Permitted Acquisition, Borrower shall deliver, or cause to
be delivered, to Administrative Agent all of the following no later than the
date indicated below:
(a) Purchase Documents. On or before the dates specified in the
------------------
definition of Permitted Acquisition, the documents specified therein.
(b) Schedules. If the information on any Schedule to any Loan Document
---------
changes or is incomplete as a result of the Acquisition, revised or supplemental
Schedules to such Loan Documents which are required to make the disclosures in
such Schedules accurate after giving effect to such Acquisition.
(c) Guaranties. A Guaranty, executed by each Person which first becomes
----------
a Company upon consummation of the Acquisition (each such Person, a "New
Subsidiary").
(d) Security Documents. A Security Agreement, together with all
------------------
corresponding financing statements, assignments, or other related instruments or
documents, executed by each New Subsidiary.
51
(e) Articles of Incorporation. Copies of the Articles of Incorporation,
-------------------------
Certificate of Incorporation, Articles of Organization or Certificate of
Formation and all amendments thereto, of each New Subsidiary (or, in the case of
any New Subsidiary that is a limited partnership, of the corporate general
partner of such New Subsidiary, if any), and, in the case of any New Subsidiary
that is a limited partnership, copies of its Limited Partnership Agreement and
all amendments thereto, accompanied by certificates that such copies are correct
and complete, one dated a date not more than 30 days prior to the date of the
Acquisition, issued by the appropriate Governmental Authority of the
jurisdiction of incorporation of such New Subsidiary (other than any such New
Subsidiary that is a limited partnership) or any corporate general partner
thereof, and one dated as of the date of consummation of the Acquisition,
executed by the President, a Vice President, the Secretary or an Assistant
Secretary of each such New Subsidiary, or of its general partner, as applicable.
(f) Bylaws. Copies of the Bylaws, and all amendments thereto, of each
------
New Subsidiary (or, in the case of any New Subsidiary that is a limited
partnership, of the corporate general partner of such New Subsidiary, if any),
accompanied by a certificate that such copy is correct and complete, executed by
the President, a Vice President, the Secretary or an Assistant Secretary of each
such New Subsidiary, or of its general partner, as applicable.
(g) Resolutions. Copies of resolutions duly adopted by the Board of
-----------
Directors or appropriate governing body of each New Subsidiary or, in the case
of any New Subsidiary that is a limited partnership, by the Board of Directors
or appropriate governing body of the general partner of such New Subsidiary, and
that will be executing any Loan Document as of the date of the Acquisition,
approving such Loan Documents to which it is a party and authorizing the
transactions contemplated in the Loan Documents, accompanied by a certificate of
the Secretary or an Assistant Secretary of each such New Subsidiary or of its
general partner, as applicable, that such copy is a true and correct copy of
resolutions duly adopted at a meeting of (which may be held by conference
telephone or similar communications equipment by means of which all New
Subsidiary participating in a meeting can hear each other if permitted by
applicable Law and, if required by such Law, by the Bylaws of such New
Subsidiary or of its general partner, as applicable), or by the unanimous
written consent of (if permitted by applicable Law and, if required by such Law,
by the Bylaws of such New Subsidiary or of its general partner, as applicable),
the Board of Directors of such New Subsidiary or of its general partner, as
applicable, and that such resolutions constitute all the resolutions adopted
with respect to such transactions, have not been amended, modified, or revoked
in any respect (except as any such resolution may be modified by any such other
resolution), and are in full force and effect as of the date of consummation of
such Acquisition.
(h) Incumbency. Certificates of incumbency of all Responsible Officers
----------
of each New Subsidiary (or, in the case of any New Subsidiary that is a limited
partnership, of the general partner of such New Subsidiary) who will be
authorized to execute a Guaranty or any other Loan Document on behalf of any
such New Subsidiary, executed by the President, a Vice President, the Secretary
or an Assistant Secretary of each such New Subsidiary, or of its general
partner, as applicable.
(i) Existence and Good Standing. Copies of any certificates of
---------------------------
existence and good standing and any filing officer certificates (or commercial
reports similar thereto) obtained by or delivered to Borrower in connection with
the Acquisition.
52
(j) Lien Searches. Lien searches in the name of each New Subsidiary
-------------
(and in any other relevant names) being acquired (in the case of a merger) or in
the name of each New Subsidiary (and in any other relevant names) transferring
any assets being acquired (in the case of an asset acquisition) pursuant to the
Acquisition in each state where such New Subsidiary maintains an office, has
real property, or is located, showing no financing statements or other Lien
instruments of record except for Permitted Liens or Liens being released
concurrently with such Acquisition.
(k) Lien Releases. Payoff letters in form and substance reasonably
-------------
acceptable to Administrative Agent or duly executed releases or assignments of
Liens and financing statements in recordable form as may be necessary to reflect
that the Liens created by the Loan Documents affecting the assets acquired in
connection with the Acquisition are first priority Liens (except for Permitted
Liens).
(l) Consents, filings, etc. All approvals, authorizations, consents,
----------------------
and waivers of any Governmental Authority or other Person necessary or
appropriate for the execution, delivery, and performance by any New Subsidiary
of all documents relating to the Acquisition or the Loan Documents to which it
is a party, including, without limitation, (a) all such approvals,
authorizations, consents, and waivers disclosed in the documents relating to
such Acquisition (including those required in connection with the assignment of
material contracts), (b) any such approvals, authorizations, consents, or
waivers reasonably required by Administrative Agent in connection with the
granting of a security interest to Administrative Agent in each material
contract acquired or assumed by any Company in connection with the Acquisition,
and (c) all filings, consents, or approvals with or of Governmental Authorities
necessary to consummate the Acquisition, as applicable, including, without
limitation, all filings (if any) required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976 and the lapse of all waiting periods with respect
thereto.
(m) Insurance. With respect to each New Subsidiary or additional assets
---------
acquired, certificates of insurance for each policy of insurance maintained by
such New Subsidiary or covering such additional assets and evidence that such
policies are in full force and effect, which insurance coverage and related
certificates of insurance shall satisfy the requirements of Section 9.8 of the
Credit Agreement.
(n) Borrowing Notice. To the extent Borrower uses Borrowings to fund
----------------
the Acquisition, a Borrowing Notice, substantially in the form of Exhibit B-1 to
the Credit Agreement, executed by Borrower.
(o) Legal Opinions. To the extent requested by Administrative Agent,
--------------
favorable opinions of (i) counsel for the Companies, in form and substance
satisfactory to Administrative Agent, with respect to the Acquisition and the
Loan Documents to be executed and/or delivered in connection therewith, and (ii)
such other counsel as may be acceptable to Administrative Agent, regarding the
form and enforceability of the Collateral Documents in the states where any
property acquired in connection with the Acquisition is located.
(p) Acquisition Documents. A certified copy of the executed purchase
---------------------
agreement (together with all schedules and exhibits thereto) and copies of all
other documents relating to the Acquisition.
(q) Other Documents. Such other agreements, documents, instruments,
---------------
opinions, certificates, and evidences as Administrative Agent may reasonably
request. Administrative Agent shall, upon request of Borrower, confirm to
Borrower that it has received all such items so requested and that all matters
required to be satisfactory to Administrative Agent are satisfactory.
53
7.3 Conditions Precedent to Each Borrowing. In addition to the
--------------------------------------
conditions stated in Section 7.1 and Section 7.2 (as applicable), Lenders will
not be obligated to fund (as opposed to continue or convert) any Borrowing, and
Administrative Agent will not be obligated to issue any LC, as the case may be,
unless on the date of such Borrowing or issuance (and after giving effect
thereto), as the case may be: (a) Administrative Agent shall have timely
received therefor a Borrowing Notice and Borrowing Base Certificate (each in
accordance with Section 2.6(a)) or an LC Request (together with the applicable
LC Agreement), as the case may be; (b) Administrative Agent shall have received,
as applicable, the LC fees provided for in Section 5.5 hereof; (c) all of the
representations and warranties of any Loan Party set forth in the Loan Documents
are true and correct in all material respects (except to the extent that (i) the
representations and warranties speak to a specific date or (ii) the facts on
which such representations and warranties are based have been changed by
transactions permitted by the Loan Documents); (d) no Material Adverse Event
shall have occurred; (e) no Default or Potential Default shall have occurred and
be continuing; (f) each of the funding of such Borrowing and issuance of such
LC, as the case may be, is permitted by Law; (g) in the event all or any part of
the proceeds of the Borrowing will be used to finance a Distribution to the
extent permitted by Section 9.20, Administrative Agent shall have received all
such certifications, financial information, and projections as Administrative
Agent may reasonably request; and (h) all matters related to such Borrowing must
be satisfactory to Required Lenders and their respective counsel in their
reasonable determination, and upon the reasonable request of Administrative
Agent, Borrower shall deliver to Administrative Agent evidence substantiating
any of the matters in the Loan Documents which are necessary to enable Borrower
to qualify for such Borrowing. Each Borrowing Notice and LC Request delivered to
Administrative Agent shall constitute the representation and warranty by
Borrower to Administrative Agent that, as of the Borrowing Date or the date of
issuance of the LC, as the case may be, the statements above are true and
correct in all respects. Each condition precedent in this Agreement is material
to the transactions contemplated in this Agreement, and time is of the essence
in respect of each thereof. Subject to the prior approval of Required Lenders,
Lenders may fund any Borrowing, and Administrative Agent may issue any LC,
without all conditions being satisfied, but, to the extent permitted by Law, the
same shall not be deemed to be a waiver of the requirement that each such
condition precedent be satisfied as a prerequisite for any subsequent funding or
issuance, unless Required Lenders specifically waive each such item in writing.
SECTION 8 REPRESENTATIONS AND WARRANTIES. Each Loan Party represents and
warrants to Administrative Agent and Lenders as follows:
8.1 Purpose of Credit Facility. Borrower will use (or will invest in or
--------------------------
loan such proceeds to its Subsidiaries to so use) all proceeds of Borrowings for
one or more of the following: to fund working capital and capital expenditures,
to finance certain Permitted Acquisitions and certain share repurchases to the
extent permitted by Section 9.20, and for other lawful corporate purposes. No
Loan Party is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" within the meaning of Regulation U. No part of the proceeds of
any Borrowing will be used, directly or indirectly, for any purpose which
violates any Law, including, without limitation, the provisions of Regulations
T, U, or X (as enacted by the Board of Governors of the Federal Reserve System,
as amended). "Margin Stock" (as defined in Regulation U) constitutes less than
25% of those assets of the Companies which are subject to any limitation on
sale, pledge, or other similar restrictions hereunder.
8.2 Existence, Good Standing, Authority, and Authorizations. Each Loan
-------------------------------------------------------
Party and each Subsidiary thereof are duly organized, validly existing, and in
good standing under the Laws of their respective jurisdictions of organization
(such jurisdictions being identified on Schedule 8.3, as supplemented and
54
modified in writing from time to time to reflect any changes to such Schedule as
a result of transactions permitted by the Loan Documents). Except where the
failure to do so could not reasonably be expected to constitute a Material
Adverse Event, each Loan Party and each Subsidiary thereof are duly qualified to
transact business and are in good standing in each jurisdiction where the nature
and extent of its business and properties require the same. Each Loan Party
possesses all Authorizations, franchises, permits, licenses, certificates of
compliance, and approvals and grants of authority necessary, all of which are
described on Schedule 8.2 hereto, necessary or required in the conduct of its
respective business(es), and the same are valid, binding, enforceable, and
subsisting without any defaults thereunder or enforceable adverse limitations
thereon and are not subject to any proceedings or claims opposing the issuance,
development, or use thereof or contesting the validity thereof. No
authorization, consent, approval, waiver, license, or formal exemptions from,
nor any filing, declaration, or registration with, any Governmental Authority
(federal, state, or local), non-governmental entity, or Person under the terms
of contracts or otherwise, is required by reason of or in connection with the
execution and performance of the Loan Documents by the Loan Parties and each
Subsidiary thereof.
8.3 Subsidiaries; Capital Stock. The Loan Parties have no Subsidiaries
---------------------------
except as disclosed on Schedule 8.3 (as supplemented and modified in writing
from time to time to reflect any changes to such Schedule as a result of
transactions permitted by the Loan Documents). All of the outstanding shares of
capital stock (or similar voting interests) of each Loan Party and each
Subsidiary thereof are duly authorized, validly issued, fully paid, and
nonassessable and are owned of record and beneficially as set forth on Schedule
8.3 (as supplemented and modified in writing from time to time to reflect any
changes to such Schedule as a result of transactions permitted by the Loan
Documents), free and clear of any Liens, restrictions, claims, or Rights of
another Person, other than Permitted Liens, and none of such shares owned by any
Loan Party is subject to any restriction on transfer thereof except for
restrictions imposed by applicable securities Laws and general corporate Laws.
No Loan Party or any Subsidiary thereof has outstanding any warrant, option, or
other Right of any Person to acquire any of its capital stock or similar equity
interests, except in connection with any Permitted Acquisitions.
8.4 Authorization and Contravention. The execution and delivery by each
-------------------------------
Loan Party of each Loan Document to which it is a party and the performance by
such Loan Party of its obligations thereunder (a) are within the corporate or
organizational power of such Loan Party; (b) will have been duly authorized by
all necessary limited liability company, corporate, or partnership action on the
part of such Loan Party when such Loan Document is executed and delivered, (c)
require no action by or in respect of, or filing with, any Governmental
Authority, which action or filing has not been taken or made on or prior to the
Closing Date (or if later, the date of execution and delivery of such Loan
Document), (d) will not violate any provision of the charter, bylaws,
organizational documents, or Partnership Agreement of such Loan Party, (e) will
not violate any provision of Law applicable to such Loan Party, other than such
violations which individually or collectively could not be a Material Adverse
Event, (f) will not violate any material written or oral agreements, contracts,
commitments, or understandings to which such Loan Party is a party, other than
such violations which could not be a Material Adverse Event, or (g) will not
result in the creation or imposition of any Lien on any asset of any Loan Party,
other than as contemplated by this Agreement. Each Loan Party has (or will have
upon consummation thereof) all necessary consents and approvals of any Person or
Governmental Authority required to be obtained in order to effect any asset
transfer, change of control, merger, or consolidations permitted by the Loan
Documents.
8.5 Binding Effect. Upon execution and delivery by all parties thereto,
--------------
each Loan Document will constitute a legal, valid, and binding obligation of
each Loan Party party thereto, enforceable against each such
55
Loan Party in accordance with its terms, except as enforceability may be limited
by applicable Debtor Relief Laws and general principles of equity.
8.6 Financial Statements. The Current Financials were prepared in
--------------------
accordance with GAAP and present fairly, in all material respects, the
consolidated and consolidating financial condition, results of operations, and
cash flows of the Loan Parties and their Subsidiaries thereof covered thereby
("Reporting Entities") as of and for the portion of the fiscal year ending on
the date or dates thereof (subject only to normal year-end audit adjustments for
interim statements). There were no material liabilities, direct or indirect,
fixed or contingent, of the Reporting Entities as of the date or dates of the
Current Financials which are required under GAAP to be reflected therein or in
the notes thereto, and are not so reflected. Except for transactions directly
related to, specifically contemplated by, or expressly permitted by, the Loan
Documents, (a) there have been no changes in the consolidated financial
condition or operations of the Reporting Entities from that shown in the Current
Financials after such date which could be a Material Adverse Event, nor has any
Reporting Entity incurred any liability (including, without limitation, any
liability under any Environmental Law), direct or indirect, fixed or contingent,
after such date which could be a Material Adverse Event, and (b) no Reporting
Entity has incurred any liability (including, without limitation, any liability
under any Environmental Law), direct or indirect, fixed or contingent, after
such date which could be a Material Adverse Event.
8.7 Litigation, Claims, Investigations. Except as previously disclosed
----------------------------------
in writing by Borrower to Administrative Agent, and consented to in writing by
Administrative Agent: (a) no Loan Party or any Subsidiary thereof is subject to,
or aware of the threat of, any Litigation which is reasonably likely to be
determined adversely to any Loan Party or any Subsidiary thereof, and, if so
adversely determined, could (individually or collectively with other Litigation)
be a Material Adverse Event; (b) there are no outstanding orders or judgments
for the payment of money in excess of $1,000,000 (individually or collectively)
or any warrant of attachment, sequestration, or similar proceeding against the
assets of any Loan Party or any Subsidiary thereof having a value (individually
or collectively) of $1,000,000 or more which is not either (i) stayed on appeal
or (ii) being diligently contested in good faith by appropriate proceedings and
adequate reserves have been set aside on the books of such Loan Party or any
Subsidiary thereof in accordance with GAAP; and (c) there are no formal
complaints, suits, claims, investigations, or proceedings initiated at or by any
Governmental Authority pending or threatened by or against any Loan Party or any
Subsidiary thereof which could reasonably be expected to be a Material Adverse
Event, nor any judgments, decrees, or orders of any Governmental Authority
outstanding against any Loan Party or any Subsidiary thereof that could
reasonably be expected to be a Material Adverse Event.
8.8 Taxes. All Tax returns of each Loan Party and each Subsidiary
-----
thereof required to be filed have been filed (or extensions have been granted)
prior to delinquency, except for any such returns for which the failure to so
file could not be a Material Adverse Event, and all Taxes imposed upon each Loan
Party and each of its Subsidiaries which are due and payable have been paid
prior to delinquency, other than Taxes for which the criteria for Permitted
Liens (as specified in Section 9.13(b)(v)) have been satisfied or for which
nonpayment thereof could not constitute a Material Adverse Event.
8.9 Environmental Matters. No Loan Party or any Subsidiary thereof (a)
---------------------
knows of any environmental condition or circumstance, such as the presence or
Release of any Hazardous Substance, on any property presently or previously
owned by any Loan Party or any Subsidiary thereof that could be a Material
Adverse Event, (b) knows of any violation by any Loan Party or any Subsidiary
thereof of any Environmental Law, except for such violations that could not be a
Material Adverse Event, or (c) knows that any Loan Party
56
or any of its Subsidiaries is under any obligation to remedy any violation of
any Environmental Law, except for such obligations that could not be a Material
Adverse Event; provided, however, that each Loan Party and each Subsidiary
thereof (x) to the best of its knowledge, has in full force and effect all
Environmental Permits, licenses, and approvals required to conduct its
operations and is operating in substantial compliance thereunder, and (y) has
taken prudent steps to determine that its properties and operations are not in
violation of any Environmental Law.
8.10 ERISA Compliance. (a) No Employee Plan has incurred an accumulated
----------------
funding deficiency, as defined in section 302 of ERISA and section 412 of the
Code, (b) neither Borrower nor any ERISA Affiliate has incurred material
liability which is currently due and remains unpaid under Title IV of ERISA to
the PBGC or to an Employee Plan in connection with any such Employee Plan, (c)
neither Borrower nor any ERISA Affiliate has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) Borrower has not engaged in any
"prohibited transaction" (as defined in section 406 of ERISA or section 4975 of
the Code) which would be a Material Adverse Event, and (e) no Reportable Event
has occurred which is likely to result in the termination of an Employee Plan.
The present value of all benefit liabilities within the meaning of Title IV of
ERISA under each Employee Plan (based on those actuarial assumptions used to
fund such Employee Plan) did not, as of the last annual valuation date for the
2001 plan year of such Plan, exceed the value of the assets of such Employee
Plan, and the total present values of all benefit liabilities within the meaning
of Title IV of ERISA of all Employee Plans (based on the actuarial assumptions
used to fund each such Plan) did not, as of the respective annual valuation
dates for the 2001 plan year of each such Plan, exceed the value of the assets
of all such plans.
8.11 Properties; Liens. Each Loan Party has good and marketable title
-----------------
to all its property reflected on the Current Financials, except (a) for (i)
property that is obsolete, (ii) property that has been disposed of in the
ordinary course of business, or (iii) property with title defects or failures in
title which would not be a Material Adverse Event, or (b) as otherwise permitted
by the Loan Documents. Except for Permitted Liens, there is no Lien on any
property of any Loan Party, and the execution, delivery, performance, or
observance of the Loan Documents will not require or result in the creation of
any Lien on such property.
8.12 Government Regulations. No Loan Party or Subsidiary thereof is
----------------------
subject to regulation under the Investment Company Act of 1940, as amended, the
Public Utility Holding Company Act of 1935, as amended, or any other Law (other
than Regulations T, U, and X of the Board of Governors of the Federal Reserve
System) which regulates the incurrence of Debt.
8.13 Transactions with Affiliates. Except as permitted in Section 9.14,
---------------------------
no Loan Party or any Subsidiary thereof is a party to a material transaction
with any of its Affiliates (excluding transactions between or among Companies),
other than transactions in the ordinary course of business and upon fair and
reasonable terms not materially less favorable than such Loan Party could obtain
or could become entitled to in an arm's-length transaction with a Person that
was not its Affiliate.
8.14 Material Agreements; Management Agreements. Schedule 8.14 hereto
------------------------------------------
sets forth a list of all contracts material to the respective business of the
Loan Parties, and there exists no material default under any of such contracts.
There are no failures of any material written or oral agreements, contracts,
commitments, or understandings to which any Loan Party is a party to be in full
force and effect which could be a Material Adverse Event, and no default or
potential default exists on the part of any Loan Party thereunder
57
which could be a Material Adverse Event. No Loan Party is a party to any
management or consulting agreement for the provision of services to it, except
as described in Schedule 8.14 hereto.
8.15 Insurance. Each Loan Party and each Subsidiary thereof maintains,
---------
with financially sound, responsible, and reputable insurance companies or
associations, insurance concerning its properties and businesses against such
casualties and contingencies and of such types and in such amounts (and with
co-insurance and deductibles) as is customary in the case of same or similar
businesses.
8.16 Labor Matters. Except as previously disclosed in writing by
-------------
Borrower to Administrative Agent, and consented to in writing by Administrative
Agent, there are no actual or threatened strikes, labor disputes, slow downs,
walkouts, or other concerted interruptions of operations by the employees of any
Loan Party or any Subsidiary thereof. Hours worked by and payment made to
employees of the Loan Parties and Subsidiaries thereof have not been in
violation of the Fair Labor Standards Act or any other applicable Law dealing
with such matters, other than any such violations, individually or collectively,
which could not constitute a Material Adverse Event. All payments due from any
Loan Party or any Subsidiary thereof on account of employee health and welfare
insurance have been paid or accrued as a liability on its books, other than any
such nonpayments which could not, individually or collectively, constitute a
Material Adverse Event.
8.17 Solvency. At the time of each Borrowing hereunder and on the date
--------
of each Permitted Acquisition, each Loan Party is (and after giving effect to
the transactions contemplated by the Loan Documents, any Permitted Acquisition,
and any incurrence of additional Debt, will be) Solvent.
8.18 Intellectual Property. Each Loan Party and each Subsidiary thereof
---------------------
owns or has sufficient and legally enforceable Rights to use all material
licenses, patents, patent applications, copyrights, service marks, trademarks,
trademark applications, and trade names necessary to continue to conduct its
businesses as heretofore conducted by it, now conducted by it, and now proposed
to be conducted by it. Each Loan Party and each Subsidiary thereof is conducting
its business without infringement or claim of infringement of any license,
patent, copyright, service ▇▇▇▇, trademark, trade name, trade secret, or other
intellectual property right of others, other than any such infringements or
claims which, if successfully asserted against or determined adversely to any
Loan Party and any Subsidiary thereof, could not, individually or collectively,
reasonably be expected to constitute a Material Adverse Event.
8.19 Compliance with Laws. No Loan Party or any Subsidiary thereof is
--------------------
in violation of any Laws (including, without limitation, Environmental Laws),
other than such violations which could not, individually or collectively, be a
Material Adverse Event. No Loan Party or any Subsidiary thereof has received
notice alleging any noncompliance with any Laws, except for such noncompliance
which no longer exists, or which could not constitute a Material Adverse Event.
8.20 Permitted Acquisitions.
----------------------
(a) Validity. With respect to any Permitted Acquisition, each
--------
Company has the power and authority under the Laws of its state of incorporation
or organization and under its articles of incorporation and bylaws,
organizational documents, or Partnership Agreement, as applicable, to enter into
and perform the related Acquisition agreement to which it is a party and all
other agreements, documents, and actions required thereunder; and all actions
(corporate or otherwise) necessary or appropriate by the Companies for the
execution and performance of said Acquisition agreements, and all other
documents, agreements, and actions
58
required thereunder, have been taken, and, upon their execution, such
Acquisition agreements will constitute the valid and binding obligation of the
Companies party thereto, enforceable in accordance with their respective terms.
(b) No Violations. With respect to any Permitted Acquisition, the
-------------
making and performance of the related Acquisition agreements, and all other
agreements, documents, and actions required thereunder, will not violate any
provision of any Law, including, without limitation, all state corporate Laws
and judicial precedents of the states of incorporation or formation of the
Companies, and will not violate any provisions of the articles of incorporation,
bylaws, or Partnership Agreements of the Companies, or constitute a default
under any agreement by which the Companies or their respective property may be
bound.
8.21 Regulation U. "Margin Stock" (as defined in Regulation U)
------------
constitutes less than 25% of those assets of any Loan Party, which are subject
to any limitation on sale, pledge, or other restrictions hereunder.
8.22 Tradename. No Loan Party has used or transacted business under any
---------
other corporate or trade name in the five-year period preceding the Closing
Date, except as otherwise previously disclosed in writing to Administrative
Agent.
8.23 Full Disclosure. There is no material fact or condition relating
---------------
to the Loan Documents or the financial condition, business, or property of any
Loan Party or any Subsidiary thereof which could be a Material Adverse Event and
which has not been related, in writing, to Administrative Agent. All information
heretofore furnished by any Loan Party to any Lender or Administrative Agent in
connection with the Loan Documents was, and all such information hereafter
furnished by any Loan Party to any Lender or Administrative Agent will be, true
and accurate in all material respects or based on reasonable estimates on the
date as of which such information is stated or certified.
8.24 Perfection of Security Interests. Upon filing of the financing
--------------------------------
statements against each Loan Party in the jurisdictions listed on each Annex A
of each Security Agreement and the delivery to Administrative Agent, for the
benefit of Lenders, of all the issued and outstanding shares of stock or other
evidence of equity investments owned by any Loan Party and required to be
pledged to secure the Obligation pursuant to Sections 6.1 and 6.3, the security
interests in the Collateral created by the Collateral Documents will be
perfected in favor of Administrative Agent, for the benefit of Lenders. No
further action, including any filing or recording of any document, is necessary
in order to establish, perfect, and maintain Lenders' first priority security
interests in the assets and the stock created by the Collateral Documents,
except for the periodic filing of continuation statements with respect to
financing statements filed under the UCC.
8.25 No Default. No event has occurred and is continuing or would
----------
result from the incurring of obligations by Borrower under this Agreement or any
other Loan Document which constitutes a Default or a Potential Default. Neither
Borrower, nor any Subsidiary of Borrower, is in default under or with respect to
any material written or oral agreements, contracts, commitments, or
understandings to which Borrower or any Subsidiary of Borrower is party which
could, individually or together with all such defaults, be a Material Adverse
Event.
SECTION 9 COVENANTS. Each Loan Party covenants and agrees (and agrees to
cause its ERISA Affiliates with respect to Section 9.10) to perform, observe,
and comply with each of the following covenants
59
applicable to such Person, from the Closing Date and so long thereafter as
Lenders are committed to fund Borrowings and Administrative Agent is committed
to issue LCs under this Agreement and thereafter until the payment in full of
the Principal Debt (and termination of outstanding LCs, if any) and payment in
full of all other interest, fees, and other amounts of the Obligation then due
and owing, unless Borrower receives a prior written consent to the contrary by
Administrative Agent as authorized by Required Lenders:
9.1 Use of Proceeds. Borrower shall use (and shall cause each other
---------------
Company to use) the proceeds of Borrowings only for the purposes represented
herein.
9.2 Books and Records. The Loan Parties shall maintain books, records,
-----------------
and accounts necessary to prepare financial statements in accordance with GAAP.
9.3 Items to be Furnished. Borrower shall cause the following to be
---------------------
furnished to Administrative Agent for delivery to Lenders:
(a) Promptly after preparation, and no later than 90 days
after the last day of each fiscal year of Borrower, Financial Statements showing
the consolidated and consolidating financial condition and results of operations
calculated separately for each of the Companies, as of, and for the year ended
on, such day, each accompanied by:
(i) the unqualified opinion of a firm of nationally-
recognized independent certified public accountants, based on an audit using
generally accepted auditing standards, that such Financial Statements were
prepared in accordance with GAAP and present fairly the consolidated financial
condition and results of operations of the Companies; and
(ii) with respect to the Financial Statements of the
Companies, a Compliance Certificate.
(b) Promptly after preparation, and no later than 45 days after
the last day of each fiscal quarter of Borrower, Financial Statements showing
the consolidated and consolidating financial condition and results of operations
calculated for Borrower and its Subsidiaries and the Companies for such fiscal
quarter and for the period from the beginning of the then-current fiscal year
to, such last day, accompanied by a Compliance Certificate.
(c) No later than forty-five (45) days following the last day
of each of September, October, November, and December, 2001, and no later than
thirty (30) days following the end of each month thereafter, the following:
(i) a Borrowing Base Certificate setting forth the calculation
of the Borrowing Base, including a calculation of each component thereof, as of
the close of business as of the last day of such month, all in such detail as
shall be satisfactory to Administrative Agent (and all calculations of the
Borrowing Base in connection with the preparation of any Borrowing Base
Certificate shall initially be made by the Borrower and certified to
Administrative Agent; provided, that Administrative Agent shall have the right
to review and adjust, in the exercise of its reasonable credit judgment, any
such calculation (x) to reflect its reasonable estimate of declines in value of
any of the Collateral described therein, and (y) to the extent that such
calculation is not in accordance with this Agreement); and
60
(ii) a Compliance Certificate, dated as of the date of the
Borrowing Base Certificate to be delivered in accordance with the preceding
clause (i).
(d) Within five (5) days of receipt thereof, copies of all auditor's
annual management letters delivered to Borrower.
(e) Notice, promptly after any Loan Party knows or has reason to know
of (i) the existence and status of any Litigation which could be a Material
Adverse Event, or of any order or judgment for the payment of money which
(individually or collectively) is in excess of $1,000,000, or any warrant of
attachment, sequestration, or similar proceeding against the assets of any Loan
Party or any Subsidiary thereof having a value (individually or collectively) of
$1,000,000, (ii) any material change in any material fact or circumstance
represented or warranted in any Loan Document, (iii) a Default or Potential
Default specifying the nature thereof and what action any Loan Party or any
Subsidiary thereof has taken, is taking, or proposes to take with respect
thereto, (iv) the receipt by any Loan Party or any Subsidiary thereof of any
notice from any Governmental Authority of the expiration without renewal,
termination, material modification or suspension of, or institution of any
proceedings to terminate, materially modify, or suspend, any Authorization which
any Loan Party or any Subsidiary thereof is required to hold in order to operate
its business in compliance with all applicable Laws, other than such
expirations, terminations, suspensions, or modifications which individually or
in the aggregate would not constitute a Material Adverse Event, (v) any federal,
state, or local Law limiting or controlling the operations of any Loan Party or
any Subsidiary thereof which has been issued or adopted hereafter and which
could be a Material Adverse Event, (vi) the receipt by any Loan Party or any
Subsidiary thereof of notice of any violation or alleged violation of any
Environmental Law or Environmental Permit or any Environmental Liability or
potential Environmental Liability, which violation or liability or alleged
violation or liability could, individually or collectively with other such
violations or allegations, constitute a Material Adverse Event, or (vii) (A) the
occurrence of a Reportable Event that, alone or together with any other
Reportable Event, could reasonably be expected to result in liability of
Borrower to the PBGC in an aggregate amount exceeding $1,000,000; (B) any
expressed statement in writing on the part of the PBGC of its intention to
terminate any Employee Plan or Plans; (C) Borrower's or an ERISA Affiliate's
becoming obligated to file with the PBGC a notice of failure to make a required
installment or other payment with respect to an Employee Plan; or (D) the
receipt by Borrower or an ERISA Affiliate from the sponsor of a Multiemployer
Plan of either a notice concerning the imposition of withdrawal liability in an
aggregate amount exceeding $1,000,000 or of the impending termination or
reorganization of such Multiemployer Plan.
(f) Promptly after any of the information or disclosures provided on
any of the Schedules delivered pursuant to this Agreement or any Annexes to any
of the Collateral Documents becomes outdated or incorrect in any material
respect, such revised or updated Schedule(s) or Annexes as may be necessary or
appropriate to update or correct such information or disclosures; provided that,
except in connection with any Sale of Assets, no deletions may be made to any
Annexes describing Collateral in any of the Collateral Documents unless approved
by Required Lenders.
(g) Promptly after preparation, true, correct, and complete copies of
all material reports or filings filed by or on behalf of any Loan Party with any
Governmental Authority (including the Securities and Exchange Commission).
61
(h) Promptly after the filing thereof, a true, correct, and complete
copy of each Form 10-K, Form 10-Q, and Form 8-K filed by or on behalf of any
Loan Party or any Subsidiary thereof with the Securities and Exchange
Commission.
(i) Annual operating forecasts of the Borrower and its Subsidiaries
prepared on a consolidated and consolidating basis and delivered to
Administrative Agent by May 31 of each year, commencing May 31, 2002.
(j) Promptly upon request therefor by Administrative Agent or
Required Lenders, such information (not otherwise required to be furnished under
the Loan Documents) respecting the business affairs, assets, and liabilities of
the Loan Parties or Subsidiary thereof, and such opinions, certifications, and
documents, in addition to those mentioned in this Agreement, as reasonably
requested.
9.4 Inspections. Within sixty (60) days of the Closing Date, the Loan
-----------
Parties agree to allow Administrative Agent or any Lender (or their respective
Representatives) to complete an examination and verification of the Accounts,
Inventory, books and records of each Loan Party, the results of which must be
acceptable to Administrative Agent. Upon reasonable notice, the Loan Parties
shall also allow Administrative Agent or any Lender (or their respective
Representatives) to inspect any of their properties, to review reports, files,
and other records and to make and take away copies thereof, to conduct tests or
investigations, and to discuss any of their respective affairs, conditions, and
finances with other creditors, directors, officers, employees, other
representatives, and independent accountants of the Loan Parties, from time to
time, during reasonable business hours, provided that so long as no Potential
Default or Default has occurred and is continuing, the number of inspections
made on behalf of Administrative Agent shall not exceed four in any twelve month
period.
9.5 Taxes. Each Loan Party (a) shall (and shall cause each of its
-----
Subsidiaries to) promptly pay when due any and all Taxes other than Taxes the
applicability, amount, or validity of which is being contested in good faith by
lawful proceedings diligently conducted, and against which reserve or other
provision required by GAAP has been made, and in respect of which levy and
execution of any lien securing same have been and continue to be stayed, (b)
shall not, directly or indirectly, use any portion of the proceeds of any
Borrowing to pay the wages of employees unless a timely payment to or deposit
with the appropriate Governmental Authorities of all amounts of Tax required to
be deducted and withheld with respect to such wages is also made, and (c) shall
notify Lenders immediately if the Internal Revenue Service or any other taxing
authority commences or notifies any Loan Party or Subsidiary thereof of its
intention to commence an audit or investigation with respect to any taxes of any
kind due or alleged to be due from any Loan Party or any Subsidiary thereof.
9.6 Payment of Obligations. Borrower shall pay the Obligation in
----------------------
accordance with the terms and provisions of the Loan Documents. Each Loan Party
(a) shall promptly pay (or renew and extend) all of its material obligations as
the same become due (unless such obligations other than the Obligation are being
contested in good faith by appropriate proceedings), and (b) shall not (i) make
any voluntary prepayment of principal of, or interest on, any other Debt (other
than the Obligation), whether subordinate to the Obligation or not or (ii) use
proceeds from the Revolver Facility to make any voluntary prepayment of
principal of, or interest on, or sinking fund payment in respect of any Debt of
Loan Party or Subsidiary thereof.
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9.7 Maintenance of Existence, Assets, and Business. Except as otherwise
----------------------------------------------
permitted by Section 9.24, each Loan Party shall (and shall cause each of its
Subsidiaries to) at all times: (a) maintain its existence and good standing in
the jurisdiction of its organization and its authority to transact business in
all other jurisdictions where the failure to so maintain its authority to
transact business could be a Material Adverse Event; (b) maintain all licenses,
permits, and franchises necessary for its business where the failure to so
maintain could be a Material Adverse Event; (c) keep all of its assets which are
useful in and necessary to its business in good working order and condition
(ordinary wear and tear excepted) and make all necessary repairs thereto and
replacements thereof; and (d) do all things necessary to obtain, renew, extend,
and continue in effect all Authorizations which may at any time and from time to
time be necessary for the Loan Parties and Subsidiaries thereof to operate their
businesses in compliance with applicable Law, where the failure to so renew,
extend, or continue in effect could be a Material Adverse Event.
9.8 Insurance. The Loan Parties shall, at their sole cost and expense,
---------
keep and maintain all property and assets owned by such Loan Party insured for
its actual cash value against loss or damage by fire, theft, explosion, flood,
and all other hazards and risks ordinarily insured against by other owners or
users of such properties in similar businesses of comparable size and notify
Administrative Agent promptly of any occurrence causing a material loss or
decline in value of such property or assets and the estimated (or actual, if
available) amount of such loss or decline. All such policies of insurance shall
be in a form, with such co-insurance and deductibles, and with insurers
recognized as adequate by prudent business Persons in the same businesses as the
Loan Parties and acceptable to Administrative Agent, and all such policies shall
be in such amount as may be satisfactory to Administrative Agent. On the Closing
Date and thereafter as each policy is renewed and extended, the Loan Parties
shall deliver to Administrative Agent a certificate of insurance for each policy
of insurance and evidence of payment of all premiums therefor. Such policies of
insurance and the certificates evidencing the same shall contain an endorsement,
in form and substance acceptable to Administrative Agent, showing loss payable
to Administrative Agent (for the ratable benefit of Lenders) as its interests
may appear under a standard mortgagee clause. Such endorsement, or an
independent instrument furnished to Administrative Agent, shall provide that the
insurance companies will give Administrative Agent at least 30 days prior
written notice before any such policy or policies of insurance shall be altered
or canceled and that no act or default of any Loan Party or any other Person
shall affect the Right of Administrative Agent to recover under such policy or
policies of insurance in case of loss or damage. Upon the payment by the insurer
of the proceeds of any such policy of insurance and if no Default has occurred
and is continuing, the Loan Party so insured may retain such insurance if such
proceeds are used to repair or replace the property the damage or destruction of
which gave rise to the payment of such insurance proceeds, provided, however,
that any insurance proceeds not paid as reimbursement of expenses incurred and
business losses suffered in connection with the loss or damage to the
Collateral, shall be paid to or retained by Administrative Agent for application
as a mandatory prepayment on the Obligation. Notwithstanding the foregoing, no
mandatory prepayment shall be required unless the amount of insurance proceeds
received in any calendar year under all policies of insurance of the Loan
Parties exceeds $500,000. Any mandatory prepayment hereunder shall be applied as
set forth in Section 3.3(b).
9.9 Preservation and Protection of Rights. Each Loan Party shall (and
-------------------------------------
shall cause each Subsidiary thereof to) perform such acts and duly authorize,
execute, acknowledge, deliver, file, and record any additional agreements,
documents, instruments, and certificates as Administrative Agent or Required
Lenders may reasonably deem necessary or appropriate in order to preserve and
protect the Rights of Administrative Agent and Lenders under any Loan Document.
63
9.10 Employee Benefit Plans. No Loan Party, Domestic Subsidiary
----------------------
thereof, or ERISA Affiliate of any Loan Party shall, directly or indirectly,
engage in any "prohibited transaction" (as defined in Section 406 of ERISA or
Section 4975 of the Code), and no Loan Party, Subsidiary thereof, or Affiliate
of any Loan Party shall, directly or indirectly, (a) incur any "accumulated
funding deficiency" as such term is defined in section 302 of ERISA and section
412 of the Code with respect to any Employee Plan, (b) permit any Employee Plan
to be subject to involuntary termination proceedings pursuant to Title IV of
ERISA, or (c) fully or partially withdraw from any Multiemployer Plan, if such
prohibited transaction, accumulated funding deficiency, termination proceeding,
or withdrawal would result in any liability on the part of Borrower.
9.11 Environmental Laws. Each Loan Party shall (and shall cause each
------------------
Subsidiary thereof to) (a) conduct its business so as to comply with all
applicable Environmental Laws and shall promptly take corrective action to
remedy any non-compliance with any Environmental Law, (b) promptly investigate
and remediate any known Release or threatened Release of any Hazardous Substance
on any property owned by any Loan Party or at any facility operated by any Loan
Party to the extent and degree necessary to comply with Law and to assure that
any Release or threatened Release does not result in a substantial endangerment
to human health or the environment, and (c) appropriately monitor compliance
with applicable Environmental Laws and minimize financial and other risks to
each Loan Party arising under applicable Environmental Laws or as a result of
environmentally-related injuries to Persons or property.
9.12 Debt and Guaranties. No Loan Party shall (nor shall any Loan Party
-------------------
permit any of its Foreign Subsidiaries to) directly or indirectly, create,
incur, or suffer to exist any direct, indirect, fixed, or contingent liability
for any Debt, other than:
(a) The Obligation and Guaranties thereof;
(b) Debt incurred by the Companies under any Financial Hedge
permitted by, and purchased and maintained in compliance with, the requirements
of the Loan Documents;
(c) Debt between Companies subject to the approval of, and on terms
acceptable to, Administrative Agent;
(d) Trade Debt for goods furnished or services rendered in the
ordinary course of business and payable in accordance with customary trade terms
that are not more than 90 days past due;
(e) Debt of the Companies arising under Capital Leases not to exceed
$1,000,000 in the aggregate on any date of determination, other than Capital
Leases entered into pursuant to Section 9.12(g);
(f) Endorsements of checks or drafts in the ordinary course of
business;
(g) Debt incurred or assumed by any Company for the purpose of
financing all or any part of the cost of any asset (including Capital Leases and
renewals, extensions, amendments, and modifications of such Debt), so long as
(i) the aggregate amount of such Debt (together with any and all amendments,
modifications, or refinancings thereof) does not exceed $1,000,000, and (ii) no
Default or Potential Default then exists or arises as a result of such Debt
incurrence;
64
(h) Unsecured Debt of any Company not otherwise permitted by this
Section 9.12, so long as on any date of determination such Debt does not exceed,
in the aggregate, $1,000,000;
(i) Debt of the Companies existing on the date hereof and
described in Schedule 9.12 hereof; and
(j) Not exceeding $1,000,000 aggregate outstanding IRB Debt of
Companies acquired in Permitted Acquisitions.
9.13 Liens. No Loan Party will, directly or indirectly, (a) enter into or
-----
permit to exist any arrangement or agreement which directly or indirectly
prohibits any Loan Party from creating or incurring any Lien on any of its
assets, other than the Loan Documents, or (b) create, incur, or suffer or permit
to be created or incurred or to exist any Lien upon any of its assets, except:
(i) Liens securing the Obligation, and so long as the
Obligation is ratably secured therewith, Liens securing Debt incurred by any
Company under any Financial Hedge with any Lender or an Affiliate of any Lender
to the extent permitted under Section 9.12(b);
(ii) Pledges or deposits made to secure payment of worker's
compensation, or to participate in any fund in connection with worker's
compensation, unemployment insurance, pensions, or other social security
programs, but expressly excluding any Liens in favor of the PBGC or otherwise
under ERISA;
(iii) Good-faith pledges or deposits made to secure
performance of bids, tenders, insurance or other contracts (other than for the
repayment of borrowed money), or leases, or to secure statutory obligations,
surety or appeal bonds, or indemnity, performance, or other similar bonds as all
such Liens arise in the ordinary course of business;
(iv) Encumbrances consisting of zoning restrictions,
easements, or other restrictions on the use of real property, none of which
impair in any material respect the use of such property by the Person in
question in the operation of its business, and none of which is violated by
existing or proposed structures or land use;
(v) Liens of landlords or of mortgagees of landlords,
arising solely by operation of law or contracted liens existing on the date
hereof, on fixtures and movable property located on premises leased in the
ordinary course of business;
(vi) The following, so long as the validity or amount
thereof is being contested in good faith and by appropriate and lawful
proceedings diligently conducted, reserve or other appropriate provisions (if
any) required by GAAP shall have been made, levy and execution thereon have been
stayed and continue to be stayed, and they do not in the aggregate materially
detract from the value of the property of the Person in question, or materially
impair the use thereof in the operation of its business: (i) claims and Liens
for Taxes (other than Liens relating to Environmental Laws or ERISA); (ii)
claims and Liens upon, and defects of title to, real or personal property,
including any attachment of personal or real property or other legal process
prior to adjudication of a dispute of the merits; and (iii) claims and Liens of
mechanics, materialmen, warehousemen, carriers, landlords, or other like Liens;
65
(vii) Liens securing Permitted Debt incurred pursuant to
Section 9.12(e) and (g), so long as (x) any such Lien does not extend to any
asset other than the asset purchased or financed by such Debt, and (y) any such
Lien attached to such asset concurrently with or within 180 days of the related
asset acquisition;
(viii) Liens securing Debt described in Section 9.12(j); and
(ix) Liens existing on the Closing Date, so long as such
Liens are described on
Schedule 9.13.
9.14 Transactions with Affiliates. No Loan Party shall (a) enter into any
----------------------------
material transaction with any of its Affiliates (including transactions among or
between Loan Parties), other than transactions in the ordinary course of
business and upon fair and reasonable terms not materially less favorable than
such Loan Party could obtain or could become entitled to in an arm's-length
transaction with a Person that was not its Affiliate.
9.15 Compliance with Laws and Documents. No Loan Party or Subsidiary
----------------------------------
thereof shall violate the provisions of any Laws (including, without limitation,
Environmental Laws, Environmental Permits, ERISA, and OSHA) applicable to it,
including, without limitation, all rules and regulations promulgated by any
applicable regulatory agency, or any material written or oral agreement,
contract, commitment, or understanding to which it is a party, if such violation
alone, or when aggregated with all other such violations, could be a Material
Adverse Event; no Loan Party shall violate the provisions of its charter,
bylaws, or partnership agreement, or modify, repeal, replace, or amend any
provision of its charter, bylaws, or partnership agreement, if such action could
adversely affect the Rights of Lenders.
9.16 Permitted Acquisitions, Subsidiary Guaranties, and Collateral
-------------------------------------------------------------
Documents. In connection with each Permitted Acquisition, Borrower shall
---------
deliver, or cause to be delivered, to Administrative Agent each of the items
described in Section 7.2, on or before the date specified in such Section for
each such item. Borrower shall cause each Person that becomes a Domestic
Subsidiary after the Closing Date (whether as a result of Acquisition, merger,
creation, or otherwise), (a) to execute a Guaranty on the date such entity
becomes a Subsidiary of a Company and promptly deliver (but in no event later
than 10 days following consummation of such creation, Acquisition, or merger)
such Guaranty to Administrative Agent and (b) to execute and deliver to
Administrative Agent all required Collateral Documents (in form and substance
acceptable to Administrative Agent) creating Liens in favor of Administrative
Agent on all the assets of such Subsidiary.
9.17 Assignment. No Loan Party shall assign or transfer any of its Rights,
----------
duties or obligations under any of the Loan Documents. Any such attempted
assignment or transfer shall be null and void and of no effect.
9.18 Fiscal Year and Accounting Methods. No Loan Party will change its
----------------------------------
fiscal year for book accounting purposes or its method of accounting, other than
(a) as required by GAAP, or (b) in connection with a Permitted Acquisition, such
changes to the newly-acquired entity so as to conform its fiscal year and its
method of accounting to those of the Companies; provided that, in the case of
(a) or (b) above, such Loan Party shall give prior written notice of any such
proposed change to Administrative Agent.
66
9.19 Government Regulations. No Loan Party will conduct its business in
----------------------
such a way that it will become subject to regulation under the Investment
Company Act of 1940, as amended, the Public Utility Holding Company Act of 1935,
as amended, or any other Law (other than Regulations T, U, and X of the Board of
Governors of the Federal Reserve System) which regulates the incurrence of Debt.
9.20 Loans, Advances, Investments, and Restricted Payments. No Loan
-----------------------------------------------------
Party shall, directly or indirectly, declare, make, or pay any Distributions or
any other Restricted Payment or make any loan, advance, extension of credit, or
capital contribution to, make any investment in, or purchase or commit to
purchase any stock or other securities or evidences of Debt of, or interests in,
or any assets constituting an ongoing business of, any other Person, other than:
(a) Investments in Cash Equivalents;
(b) Loans, advances, extensions of credit, capital contributions and
other investments in or between Companies;
(c) Permitted Acquisitions (other than Acquisitions of, by or
resulting in Foreign Subsidiaries); provided, however, that to the extent that
any Permitted Acquisition results in the formation or Acquisition of one or more
Foreign Subsidiaries, Borrower shall provide to Administrative Agent such
information as Administrative Agent shall reasonably request to evidence the
portion of the Purchase Price of such Acquisition attributable to such Foreign
Subsidiaries (the "Foreign Investment"), which Foreign Investment must be
permitted by Section 9.20(e);
(d) Trade accounts receivable which are for goods furnished or
services rendered in the ordinary course of business and are payable in
accordance with customary trade terms;
(e) Investments by any Company in Foreign Subsidiaries thereof not
to exceed $1,000,000 in the aggregate from and after the Closing Date;
(f) Loans, advances, extensions of credit to, or capital
contributions and other investments of the Loan Parties existing on the Closing
Date and identified on Schedule 9.20;
(g) Financial ▇▇▇▇▇▇ purchased by Borrower to the extent permitted
by, and purchased and maintained in compliance with, the Loan Documents;
(h) Purchases, redemptions, or other acquisitions for value of
Borrower's shares, not to exceed $1,000,000;
(i) Distributions declared, made, or paid by Borrower wholly in the
form of capital stock; and
(j) Distributions by Borrower not to exceed an amount equal to ten
percent (10%) of Consolidated Net Income for the most recent Rolling Period.
67
Notwithstanding the foregoing, Restricted Payments and Distributions are
permitted hereunder only to the extent that any such Restricted Payment or
Distribution is made in accordance with applicable Law and constitutes a valid,
non-voidable transaction.
9.21 Restrictions on Subsidiaries. No Guarantor nor any Subsidiary of
----------------------------
Borrower shall enter into or permit to exist any material arrangement or
agreement (other than the Loan Documents) which directly or indirectly prohibits
any such Person from (a) declaring, making, or paying, directly or indirectly,
any Distribution or Restricted Payment to Borrower or any other Loan Party, (b)
paying any Debt owed to any Loan Party, (c) making loans, advances, or
investments to any Loan Party, or (d) transferring any of its property or assets
to any Loan Party.
9.22 Sale of Assets. No Loan Party shall sell, assign, transfer, or
--------------
otherwise dispose of any of its assets, other than (a) sales of inventory in the
ordinary course of business; (b) the sale, discount, or transfer of delinquent
accounts receivable in the ordinary course of business for purposes of
collection; (c) occasional sales of immaterial assets for consideration not less
than the fair market value thereof; (d) dispositions of obsolete assets; (e)
sale, leases, or other disposition among Companies or from a Guarantor to a
Company; (f) Non-Material Asset Sales; and (g) if no Default or Potential
Default then exists or arises as a result thereof, sales of other assets in the
ordinary course of business; provided that, other than Non-Material Asset Sales,
(i) the fair market value of all assets sold (x) in any calendar year does not
exceed $1,500,000 in the aggregate, and (y) on a cumulative basis on and after
the Closing Date does not exceed, in the aggregate, more than $3,500,000, and
(ii) Borrower shall make the mandatory prepayments (if any) required by Section
3.3(b)(ii). In the case of asset sales for consideration exceeding $1,500,000,
the fair market value shall be determined by the applicable board of directors
and evidenced by a resolution of the board of directors set forth in an
officers' certificate delivered to the Administrative Agent.
9.23 Sale-Leaseback Financings. No Loan Party will enter into any sale-
-------------------------
leaseback arrangement with any Person pursuant to which such Loan Party shall
lease any asset (whether now owned or hereafter acquired) if such asset has been
or is to be sold or transferred by any Loan Party to any other Person.
9.24 Mergers and Dissolutions; Sale of Capital Stock. No Loan Party nor
-----------------------------------------------
any Subsidiary of Borrower (including any Foreign Subsidiary) will, directly or
indirectly, merge or consolidate with any other Person, other than (a) as a
result of a Permitted Acquisition, or (b) mergers among Wholly-owned
Subsidiaries of Borrower; provided that, in any merger involving Borrower
(including a Permitted Acquisition effected as a merger), Borrower must be the
surviving entity, and, in any merger involving any other Company (including a
Permitted Acquisition effected as a merger), a Company must be the surviving
entity. No Loan Party shall liquidate, wind up, or dissolve (or suffer any
liquidation or dissolution), other than liquidations, wind ups, or dissolutions
incident to mergers permitted under this Section 9.24. No Loan Party may sell,
assign, lease, transfer, or otherwise dispose of the capital stock (or other
ownership interests) of any Subsidiary of such entity, except for sales, leases,
transfers, or other such distributions to another Company.
9.25 New Business. No Loan Party will, directly or indirectly, permit or
------------
suffer to exist any material change in the type of businesses in which it is
engaged from the businesses of the Loan Parties as conducted on the Closing
Date.
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9.26 Financial ▇▇▇▇▇▇.
----------------
(a) The Companies shall, within 120 days from the date hereof, enter
into Financial ▇▇▇▇▇▇ in a form and upon terms acceptable to Administrative
Agent, issued by one or more Lenders or an institution acceptable to
Administrative Agent with a duration of a period of at least three (3) years,
which ensure that the net interest cost to Borrower is fixed, capped, or hedged
with respect to at least $40,000,000 of the Obligation at any time and from time
to time.
(b) To the extent any Lender or its Affiliate issues a Financial
Hedge to any Company which is permitted by the Loan Documents, such Lender or
its Affiliate are afforded the benefits of (and Borrower hereby confirms a grant
of) Liens in and to the Collateral as evidenced by the Collateral Documents to
the extent of the credit exposure of such Lender (or Affiliate thereof) under
such Financial Hedge; such Lien is pari passu with that of Administrative Agent
on behalf of the Lenders.
(c) Financial ▇▇▇▇▇▇ held by any Company shall be subject to the
following: (i) each such Lender or other institution issuing a Financial Hedge
shall calculate its credit exposure in a reasonable and customary manner; (ii)
all documentation for such Financial Hedge shall conform to ISDA standards and
must be acceptable to Administrative Agent with respect to intercreditor issues;
(iii) if issued by any Lender or any Affiliate of a Lender to any Company, the
credit exposure under such Financial Hedge shall be secured by Liens in and to
the Collateral as evidenced by the Collateral Documents on a pari passu basis
with the Liens of Administrative Agent (held for the benefit of Lenders), and
such Lender or Affiliate issuing a Financial Hedge shall, by acceptance of the
benefits of such Liens in the Collateral agree to the provisions of Section
12.12; and (iv) such Financial Hedge shall be incurred in the ordinary course of
business and consistent with prior business practices of the Companies and not
for speculative purposes.
9.27 Affiliate Subordination Agreements. The Loan Parties shall,
----------------------------------
simultaneously with the incurrence of any and all future Debt of any Loan Party
owed to any one or more Affiliates which are not Guarantors, cause the
appropriate Affiliate or Affiliates to execute and deliver to Administrative
Agent an Affiliate Subordination Agreement, subordinating the payment of such
Debt to the payment of the Obligation.
9.28 Amendments to Organizational Documents. On and after the Closing
--------------------------------------
Date, no Loan Party shall, without the prior written consent of Administrative
Agent, (a) amend or permit any amendments to its own or any other Loan Party's
Articles of Incorporation, Bylaws, or other organizational documents in any
manner which would conflict with the Loan Documents or which would be adverse to
the interests of the Lenders; or (b) amend any existing credit arrangement or
enter into any new credit arrangement (to the extent permitted by the Loan
Documents), if such amended or new credit arrangements contain any provisions
which are materially more restrictive (as reasonably determined by
Administrative Agent) than the provisions of the Loan Documents.
9.29 Financial Covenants. So long as Lenders are committed to fund
-------------------
Borrowings under this Agreement and until the Obligation is paid and performed
in full by Borrower, Borrower and Lenders covenant and agree that Borrower shall
not permit:
(a) Minimum Consolidated Net Worth. Consolidated Net Worth, as of
------------------------------
any date, to be less than $43,000,000, such amount to be increased on the last
day of each successive fiscal quarter of Borrower, beginning November 30, 2001,
by an amount equal to the sum of (i) seventy-five percent (75%) of
69
the Consolidated Net Income of the Companies for each such fiscal quarter
(without deduction for any losses during any fiscal quarter), plus (ii) an
amount equal to 100% of the proceeds of any Equity Issuance.
(b) Maximum Leverage Ratio. On and after the date hereof, through
----------------------
and including November 29, 2002, the Leverage Ratio to be greater than 2.75:1
determined with respect to the immediately preceding Rolling Period; and
thereafter, to be greater than 2.50:1.0.
(c) Minimum Fixed Charge Coverage Ratio. The Fixed Charge Coverage
-----------------------------------
Ratio to be less than 1.25:1 determined with respect to the immediately
preceding Rolling Period.
9.30 Capital Expenditures. Neither the Borrower nor any of its
--------------------
Subsidiaries shall make or incur any Capital Expenditure if, after giving effect
thereto, the aggregate amount of all Capital Expenditures by the Borrower and
its Subsidiaries on a consolidated basis would exceed $10,000,000 during any
Fiscal Year.
9.31 Deposit Accounts. Notwithstanding anything to the contrary set forth
----------------
in any other Loan Document, in the event any of the Target Companies or any of
their Subsidiaries maintains any material deposit account with any entity other
than Administrative Agent as of February 28, 2002, then Borrower shall cause to
be executed and delivered to Administrative Agent on or before March 31, 2002, a
deposit account control agreement substantially in the form of Annex F to
Exhibit D-1 hereto, relating to such accounts.
SECTION 10 DEFAULT. The term "Default" means the occurrence of any one or more
of the following events:
10.1 Payment of Obligation. The failure or refusal of any Loan Party or
---------------------
Subsidiary thereof to pay (a) all or any part of the Principal Debt when the
same becomes due (whether by its terms, by acceleration, or as otherwise
provided in the Loan Documents); or (b) interest, fees, or any other part of the
Obligation (including, without limitation, any deposit of cash collateral
required pursuant to Section 2.3) within three (3) Business Days after the same
becomes due and payable in accordance with the Loan Documents.
10.2 Covenants. The failure or refusal of Borrower (and, if applicable,
---------
any other Loan Party) to punctually and properly perform, observe, and comply
with:
(a) Any covenant, agreement, or condition contained in Sections 9.1,
9.3(a) through (d), 9.4, 9.8, 9.10, 9.12, 9.13, 9.14, 9.16, 9.17, 9.20 through
9.24, 9.26, 9.27, 9.29, and 9.30;
(b) Any covenant, agreement, or conditions contained in Sections
9.3(e) through (j) and 9.6 (other than the covenants to pay the Obligation as
set forth therein, which shall be governed by Section 10.1), and such failure
continues for five days; and
(c) Any other covenant, agreement, or condition contained in any
Loan Document (other than the covenants to pay the Obligation or provide cash
collateral set forth in Section 10.1 and the covenants in Section 10.2(a) and
(b)), and such failure or refusal continues for 30 days after (i) Administrative
Agent gives notice thereof, or (ii) Borrower otherwise becomes aware of such
failure or refusal.
10.3 Debtor Relief. Any Loan Party or any Subsidiary thereof (a) shall not
-------------
be Solvent, (b) fails to pay its Debts generally as they become due, (c)
voluntarily seeks, consents to, or acquiesces in the benefit of
70
any Debtor Relief Law, other than as a creditor or claimant, that could suspend
or otherwise adversely affect the Rights of Administrative Agent or any Lender
granted in the Loan Documents (unless, in the event such proceeding is
involuntary, the petition instituting same is dismissed within 60 days after its
filing).
10.4 Judgments and Attachments. Borrower fails, within 60 days after
-------------------------
entry, to pay, bond, or otherwise discharge or stay any one or more judgments or
orders for the payment of money (not paid or fully covered by insurance) in
excess of $1,500,000 (individually or collectively) or the equivalent thereof in
another currency or currencies, or any warrant of attachment, sequestration, or
similar proceeding against any Company's assets having a value (individually or
collectively) of $1,500,000 or the equivalent thereof in another currency or
currencies, which judgment, order, or warrant is not either (a) stayed on
appeals; (b) being diligently contested in good faith by appropriate proceedings
with adequate reserves having been set aside on the books of such Company in
accordance with U.S. GAAP, or (c) dismissed by a court of competent
jurisdiction.
10.5 Government Action. (a) A final non-appealable order is issued by any
-----------------
Governmental Authority, including, but not limited to, the United States Justice
Department, seeking to cause any Loan Party or any Subsidiary thereof to divest
a significant portion of its assets pursuant to any antitrust, restraint of
trade, unfair competition, industry regulation, or similar Laws, or (b) any
Governmental Authority shall condemn, seize, or otherwise appropriate, or take
custody or control of all or any substantial portion of the assets of any Loan
Party or any Subsidiary thereof.
10.6 Misrepresentation. Any representation or warranty made by any Loan
-----------------
Party contained herein or in any Loan Document shall at any time prove to have
been incorrect in any material respect when made.
10.7 Change of Control. Except as otherwise permitted pursuant to this
-----------------
Agreement, Borrower ceases to own the percentage of the issued and outstanding
equity interests issued by its Subsidiaries as determined on the Closing Date
or, if thereafter acquired, on the date of the related Acquisition, or a Change
of Control shall occur.
10.8 Authorizations. (a) Any Authorization necessary for the ownership or
--------------
operations of any Loan Party or Subsidiary thereof shall expire, and on or prior
to such expiration, the same shall not have been renewed or replaced by another
Authorization authorizing substantially the same operations by such Loan Party;
(b) any Authorization necessary for the ownership or operations of any Loan
Party or Subsidiary thereof shall be canceled, revoked, terminated, rescinded,
annulled, suspended, or modified in a materially adverse respect, or shall no
longer be in full force and effect, or the grant or the effectiveness thereof
shall have been stayed, vacated, reversed, or set aside, (c) any Loan Party or
Subsidiary thereof is required by any Governmental Authority to halt
construction or operations under any Authorization and such action shall
continue uncorrected for thirty (30) days after the applicable entity has
received notice thereof; or (d) if any Governmental Authority shall make any
other final non-appealable determination the effect of which would be to affect
materially and adversely the operations of any Loan Party or Subsidiary thereof
as now conducted.
10.9 Default Under Other Debt and Agreements. (a) Any Loan Party fails to
---------------------------------------
pay when due (after lapse of any applicable grace periods) any Debt of such Loan
Party (other than the Obligation) in excess (individually or collectively) of
$1,000,000; (b) the acceleration of any Debt of any Loan Party or the
71
occurrence of any event or condition (which with notice or lapse of time) would
enable the holder of such Debt or any Person acting on behalf of such holder to
accelerate the maturing thereof, which Debt exceeds (individually or
collectively) $1,000,000; or (c) any default exists under any material written
or oral agreement, contract, commitment, or understanding to which a Loan Party
is a party.
10.10 LCs. Administrative Agent shall have been served with, or becomes
---
otherwise subject to, a court order, injunction, or other process or decree
restraining or seeking to restrain it from paying any amount under any LC and
either (a) there has been a drawing under such LC which Administrative Agent
would otherwise be obligated to pay and Borrower has refused to reimburse
Administrative Agent for such payment or (b) the expiration date of such LC has
occurred but the right of any beneficiary thereunder to draw under such LC has
been extended past the expiration date in connection with the pendency of the
related court action or proceeding and Borrower has failed to deposit with
Administrative Agent cash collateral in an amount equal to the maximum drawing
which could be made under such LC.
10.11 Validity and Enforceability of Loan Documents. Any Loan Document
---------------------------------------------
shall, at any time after its execution and delivery and for any reason, cease to
be in full force and effect in any material respect or be declared to be null
and void (other than in accordance with the terms hereof or thereof) or the
validity or enforceability thereof be contested by any Loan Party party thereto
or any Loan Party shall deny in writing that it has any or any further liability
or obligations under any Loan Document to which it is a party.
10.12 Environmental Liability. If any event or condition shall occur or
-----------------------
exist with respect to any activity or substance regulated under the
Environmental Law and as a result of such event or condition, any Loan Party or
any of their respective Subsidiaries shall have incurred or in the opinion of
the Required Lenders will be reasonably likely to incur a liability in excess of
$1,000,000 during any consecutive twelve (12) month period or $2,500,000 in the
aggregate from and after the Closing Date to any date of determination.
10.13 Material Adverse Event. If any event or condition shall occur or
-----------------------
exist that would reasonably be expected to be a Material Adverse Event.
10.14 Collateral. If (a) Administrative Agent ceases to hold as
----------
Collateral (for the benefit of Lenders) a perfected first priority Lien on (i)
all of the issued and outstanding shares of common stock issued by Borrower and
each other Person whose stock is required to be pledged to secure the Obligation
pursuant to the Loan Documents, and such failure is not cured within five (5)
Business Days; or (b) any Collateral Document after delivery thereof pursuant to
Section 6 shall for any reason (other than pursuant to the terms thereof) cease
to create a valid and perfected first priority Lien on and security interest in
the Collateral purported to be covered thereby, except as permitted under the
Loan Documents.
10.15 Dissolution. Any Loan Party or Subsidiary thereof shall dissolve,
-----------
liquidate, or otherwise terminate its existence except as specifically permitted
by Section 9.24.
SECTION 11 RIGHTS AND REMEDIES.
11.1 Remedies Upon Default.
---------------------
(a) Debtor Relief. If a Default exists under Section 10.3(c) or
-------------
10.3(d), the commitment to extend credit hereunder shall automatically terminate
and the entire unpaid balance of the Obligation shall
72
automatically become due and payable without any action or notice of any kind
whatsoever, and Borrower shall be required to provide cash collateral in an
amount equal to 105% of the LC Exposure then existing in accordance with Section
2.3(g).
(b) Other Defaults. If any Default exists, Administrative Agent may
--------------
(and, subject to the terms of Section 12, shall upon the request of Required
Lenders) or Required Lenders may, do any one or more of the following: (i) if
the maturity of the Obligation has not already been accelerated under Section
11.1(a), declare the entire unpaid balance of the Obligation, or any part
thereof, immediately due and payable, whereupon it shall be due and payable;
(ii) terminate the commitments of Lenders to extend credit hereunder; (iii)
reduce any claim to judgment; (iv) to the extent permitted by Law, exercise (or
request each Lender to, and each Lender shall be entitled to, exercise) the
Rights of offset or banker's Lien against the interest of each Loan Party in and
to every account and other property of any Loan Party which are in the
possession of Administrative Agent or any Lender to the extent of the full
amount of the Obligation (to the extent permitted by Law, each Loan Party being
deemed directly obligated to each Lender in the full amount of the Obligation
for such purposes); (v) if the maturity of the Obligation has not already been
accelerated under Section 11.1(a), demand Borrower to provide cash collateral in
an amount equal to 105% of the LC Exposure then existing in accordance with
Section 2.3(g); and (vi) exercise any and all other legal or equitable Rights
afforded by the Loan Documents, the Laws of the State of Texas, or any other
applicable jurisdiction as Administrative Agent or Required Lenders (as the case
may be) shall deem appropriate, or otherwise, including, but not limited to, the
Right to bring suit or other proceedings before any Governmental Authority
either for specific performance of any covenant or condition contained in any of
the Loan Documents or in aid of the exercise of any Right granted to
Administrative Agent or any Lender in any of the Loan Documents.
11.2 Company Waivers. To the extent permitted by Law, the Loan Parties
---------------
hereby waive presentment and demand for payment, protest, notice of intention to
accelerate, notice of acceleration, and notice of protest and nonpayment, and
agree that their respective liability with respect to the Obligation (or any
part thereof) shall not be affected by any renewal or extension in the time of
payment of the Obligation (or any part thereof), by any indulgence, or by any
release or change in any security for the payment of the Obligation (or any part
thereof).
11.3 Performance by Administrative Agent. If any covenant, duty, or
-----------------------------------
agreement of any Loan Party is not performed in accordance with the terms of the
Loan Documents, after the occurrence and during the continuance of a Default,
Administrative Agent may, at its option (but subject to the approval of Required
Lenders), perform or attempt to perform such covenant, duty, or agreement on
behalf of such Loan Party. In such event, any amount expended by Administrative
Agent in such performance or attempted performance shall be payable by the Loan
Parties, jointly and severally, to Administrative Agent on demand, shall become
part of the Obligation, and shall bear interest at the Default Rate from the
date of such expenditure by Administrative Agent until paid. Notwithstanding the
foregoing, it is expressly understood that Administrative Agent does not assume,
and shall never have, except by its express written consent, any liability or
responsibility for the performance of any covenant, duty, or agreement of any
Loan Party.
11.4 Delegation of Duties and Rights. Lenders may perform any of their
-------------------------------
duties or exercise any of their Rights under the Loan Documents by or through
their respective Representatives.
11.5 Not in Control. Nothing in any Loan Document shall, or shall be
--------------
deemed to (a) give any Agent or any Lender the Right to exercise control over
the assets (including real property), affairs, or
73
management of any Loan Party or any Subsidiary thereof, (b) preclude or
interfere with compliance by any Loan Party or any Subsidiary thereof with any
Law, or (c) require any act or omission by any Loan Party or any Subsidiary
thereof that may be harmful to Persons or property. Any "Material Adverse Event"
or other materiality qualifier in any representation, warranty, covenant, or
other provision of any Loan Document is included for credit documentation
purposes only and shall not, and shall not be deemed to, mean that any Agent or
any Lender acquiesces in any non-compliance by any Loan Party or any Subsidiary
thereof with any Law or document, or that any Agent or any Lender does not
expect the Loan Parties and their respective Subsidiaries to promptly,
diligently, and continuously carry out all appropriate removal, remediation, and
termination activities required or appropriate in accordance with all
Environmental Laws. The Agents and the Lenders have no fiduciary relationship
with or fiduciary duty to any Loan Party or any Subsidiary thereof arising out
of or in connection with the Loan Documents, and the relationship between the
Agents and the Lenders, on the one hand, and Loan Parties and their
Subsidiaries, on the other hand, in connection with the Loan Documents is solely
that of debtor and creditor. The power of the Agents and Lenders under the Loan
Documents is limited to the Rights provided in the Loan Documents, which Rights
exist solely to assure payment and performance of the Obligation and may be
exercised in a manner calculated by the Agents and Lenders in their respective
good faith business judgment.
11.6 Course of Dealing. The acceptance by Administrative Agent or Lenders
-----------------
at any time and from time to time of partial payment on the Obligation shall not
be deemed to be a waiver of any Default then existing. No waiver by
Administrative Agent, Required Lenders, or Lenders of any Default shall be
deemed to be a waiver of any other then-existing or subsequent Default. No delay
or omission by Administrative Agent, Required Lenders, or Lenders in exercising
any Right under the Loan Documents shall impair such Right or be construed as a
waiver thereof or any acquiescence therein, nor shall any single or partial
exercise of any such Right preclude other or further exercise thereof, or the
exercise of any other Right under the Loan Documents or otherwise.
11.7 Cumulative Rights. All Rights available to Administrative Agent and
-----------------
Lenders under the Loan Documents are cumulative of and in addition to all other
Rights granted to Administrative Agent and Lenders at law or in equity, whether
or not the Obligation is due and payable and whether or not Administrative Agent
or Lenders have instituted any suit for collection, foreclosure, or other action
in connection with the Loan Documents.
11.8 Application of Proceeds. Any and all proceeds ever received by
-----------------------
Administrative Agent or Lenders from the exercise of any Rights pertaining to
the Obligation shall be applied to the Obligation in the order and manner set
forth in Section 3.12.
11.9 Certain Proceedings. Each Loan Party will promptly execute and
-------------------
deliver, or cause the execution and delivery of, all applications, certificates,
instruments, registration statements, and all other documents and papers
Administrative Agent or Lenders may reasonably request in connection with the
obtaining of any consent, approval, registration, qualification, permit,
license, or Authorization of any Governmental Authority or other Person
necessary or appropriate for the effective exercise of any Rights under the Loan
Documents. Because the Loan Parties agree that Administrative Agent's and
Lenders' remedies at Law for failure of the Loan Parties to comply with the
provisions of this Section would be inadequate and that such failure would not
be adequately compensable in damages, the Loan Parties agree that the covenants
of this Section may be specifically enforced.
74
11.10 Limitation of Rights. Notwithstanding any other provision of any
--------------------
Loan Document, any action taken or proposed to be taken by Administrative Agent,
any Agent, or any Lender under any Loan Document which would affect the
operational, voting, or other control of any Loan Party, shall be pursuant to
applicable Federal law, any applicable state Law, and the applicable rules and
regulations thereunder and, if and to the extent required thereby, subject to
the prior consent of any applicable regulatory agency.
11.11 Expenditures by Lenders. Borrower shall promptly pay within fifteen
-----------------------
(15) Business Days after request therefor (a) all reasonable costs, fees, and
expenses paid or incurred by Administrative Agent and Arranger incident to any
Loan Document (including, but not limited to, the reasonable fees and expenses
of counsel to Administrative Agent and Arranger and the allocated cost of
internal counsel in connection with the negotiation, preparation, delivery,
execution, coordination and administration of the Loan Documents and any related
amendment, waiver, or consent) and (b) all reasonable costs and expenses of
Lenders and Administrative Agent incurred by Administrative Agent or any Lender
in connection with the enforcement of the obligations of any Loan Party arising
under the Loan Documents (including, without limitation, costs and expenses
incurred in connection with any workout or bankruptcy) or the exercise of any
Rights arising under the Loan Documents (including, but not limited to,
reasonable attorneys' fees including allocated cost of internal counsel, court
costs and other costs of collection), all of which shall be a part of the
Obligation and shall bear interest at the Default Rate from the date due until
the date repaid.
11.12 Indemnification. Borrower and each other Loan Party (by execution
---------------
of a Guaranty) agrees to indemnify and hold harmless each Agent, Arranger, and
each Lender and each of their respective affiliates and their respective
officers, directors, employees, agents, attorneys, and advisors (each, an
"Indemnified Party") from and against any and all claims, damages, losses,
liabilities (including, without limitation, any Environmental Liabilities),
costs, and expenses (including, without limitation, reasonable attorneys' fees)
that may be incurred by or asserted or awarded against any Indemnified Party, in
each case arising out of or in connection with or by reason of (including,
without limitation, in connection with any investigation, litigation, or
proceeding or preparation of defense in connection therewith) the Loan
Documents, any of the transactions contemplated herein or the actual or proposed
use of the proceeds of the Borrowings (including any of the foregoing arising
from the negligence of the Indemnified Party), except to the extent such claim,
damage, loss, liability, cost, or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from such
Indemnified Party's gross negligence or willful misconduct. In the case of an
investigation, litigation or other proceeding to which the indemnity in this
Section 11.12 applies, such indemnity shall be effective whether or not such
investigation, litigation or proceeding is brought by the Borrower, its
directors, shareholders or creditors or an Indemnified Party or any other Person
or any Indemnified Party is otherwise a party thereto and whether or not the
transactions contemplated hereby are consummated. Borrower and each other Loan
Party (by execution of a Guaranty) agree not to assert any claim against any
indemnified party on any theory of liability, for special, indirect,
consequential, or punitive damages arising out of or otherwise relating to the
Loan Documents, any of the transactions contemplated herein or the actual or
proposed use of the proceeds of the Borrowings. Without prejudice to the
survival of any other agreement of the Borrower or Guarantors hereunder, the
agreements and obligations of the Loan Parties contained in
75
this Section 11.12 shall survive the payment in full of the Borrowings and all
other amounts payable under the Loan Documents. This indemnification shall not
apply to violations of federal and state banking laws or federal and state laws
regulating the conduct of brokers and dealers of securities.
SECTION 12 AGREEMENT AMONG LENDERS.
12.1 Administrative Agent.
--------------------
(a) Appointment of Administrative Agent. Each Lender hereby
-----------------------------------
appoints Bank of America, N.A. (and Bank of America, N.A. hereby accepts such
appointment) as its nominee and agent, in its name and on its behalf: (i) to act
as nominee for and on behalf of such Lender in and under all Loan Documents;
(ii) to arrange the means whereby the funds of Lenders are to be made available
to Borrower under the Loan Documents; (iii) to take such action as may be
requested by any Lender under the Loan Documents (when such Lender is entitled
to make such request under the Loan Documents and after such requesting Lender
has obtained the concurrence of such other Lenders as may be required under the
Loan Documents); (iv) to receive all documents and items to be furnished to
Lenders under the Loan Documents; (v) to timely distribute, and Administrative
Agent agrees to so distribute, to each Lender all material information,
requests, documents, and items received from Borrower under the Loan Documents;
(vi) to promptly distribute to each Lender its ratable part of each payment or
prepayment (whether voluntary, as proceeds of collateral upon or after
foreclosure, as proceeds of insurance thereon, or otherwise) in accordance with
the terms of the Loan Documents; (vii) to deliver to the appropriate Persons
requests, demands, approvals, and consents received from Lenders; and (viii) to
execute, on behalf of Lenders, such releases or other documents or instruments
as are permitted by the Loan Documents or as directed by Lenders from time to
time; provided, however, Administrative Agent shall not be required to take any
action which exposes Administrative Agent to personal liability or which is
contrary to the Loan Documents or applicable Law.
(b) Resignation of Administrative Agent; Successor Administrative
-------------------------------------------------------------
Agents. Administrative Agent may resign at any time as Administrative Agent
------
under the Loan Documents by giving written notice thereof to Lenders and may be
removed as Administrative Agent under the Loan Documents at any time with cause
by Required Lenders. Should the initial or any successor Administrative Agent
ever cease to be a party hereto or should the initial or any successor
Administrative Agent ever resign or be removed as Administrative Agent, then
Required Lenders shall elect the successor Administrative Agent from among the
Lenders (other than the resigning Administrative Agent). If no successor
Administrative Agent shall have been so appointed by Required Lenders, within 30
days after the retiring Administrative Agent's giving of notice of resignation
or Required Lenders' removal of the retiring Administrative Agent, then the
retiring Administrative Agent may, on behalf of Lenders, appoint a successor
Administrative Agent, which shall be a commercial bank having a combined capital
and surplus of at least $1,000,000,000. Upon the acceptance of any appointment
as Administrative Agent under the Loan Documents by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the Rights of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations of Administrative Agent under the Loan Documents (provided, however,
that when used in connection with LCs issued and outstanding prior to the
appointment of the successor Administrative Agent, "Administrative Agent" shall
continue to refer solely to the bank that issued the outstanding LC; provided
further that any LCs issued or renewed after the appointment of any successor
Administrative Agent shall be issued by such successor Administrative Agent),
and each Lender shall execute such documents as any Lender may
76
reasonably request to reflect such change in and under the Loan Documents. After
any retiring Administrative Agent's resignation or removal as Administrative
Agent under the Loan Documents, the provisions of this Section 12 shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under the Loan Documents.
(c) Administrative Agent as a Lender; Non-Fiduciary.
-----------------------------------------------
Administrative Agent, in its capacity as a Lender, shall have the same Rights
under the Loan Documents as any other Lender and may exercise the same as though
it were not acting as Administrative Agent; the term "lender" shall, unless the
context otherwise indicates, include Administrative Agent and any issuer of an
LC hereunder; and any resignation, or removal of Administrative Agent hereunder
shall not impair or otherwise affect any Rights which it has or may have in its
capacity as an individual Lender. Each Lender and Borrower agree that
Administrative Agent is not a fiduciary for Lenders or for Borrower but simply
is acting in the capacity described herein to alleviate administrative burdens
for both Borrower and Lenders, that Administrative Agent has no duties or
responsibilities to Lenders or Borrower except those expressly set forth herein,
and that Administrative Agent in its capacity as a Lender has all Rights of any
other Lender.
(d) Other Activities of Administrative Agent. Administrative Agent
----------------------------------------
and its Affiliates may now or hereafter be engaged in one or more loan, letter
of credit, leasing, or other financing transactions with Borrower, act as
trustee or depositary for Borrower, or otherwise be engaged in other
transactions with Borrower (collectively, the "Other Activities") not the
subject of the Loan Documents. Without limiting the Rights of Lenders
specifically set forth in the Loan Documents, Administrative Agent and its
Affiliates shall not be responsible to account to Lenders for such Other
Activities, and no Lender shall have any interest in any other activities, any
present or future guaranties by or for the account of Borrower which are not
contemplated or included in the Loan Documents, any present or future offset
exercised by Administrative Agent and its Affiliates in respect of such Other
Activities, any present or future property taken as security for any such Other
Activities, or any property now or hereafter in the possession or control of
Administrative Agent or its Affiliates which may be or become security for the
obligations of Borrower arising under the Loan Documents by reason of the
general description of indebtedness secured or of property contained in any
other agreements, documents or instruments related to any such Other Activities;
provided that, if any payments in respect of such guaranties or such property or
the proceeds thereof shall be applied to reduction of the Obligation arising
under the Loan Documents, then each Lender shall be entitled to share in such
application ratably.
12.2 Expenses. Upon demand by Administrative Agent, each Lender shall pay
--------
its ratable portion of any reasonable expenses (including, without limitation,
court costs, reasonable attorneys' fees, and other costs of collection) incurred
by Administrative Agent in connection with any of the Loan Documents if and to
the extent Administrative Agent does not receive reimbursement therefor from
other sources within 60 days after incurred; provided that, each Lender shall be
entitled to receive its ratable portion of any reimbursement for such expenses,
or part thereof, which Administrative Agent subsequently receives from such
other sources.
12.3 Proportionate Absorption of Losses. Except as otherwise provided in
----------------------------------
the Loan Documents, nothing in the Loan Documents shall be deemed to give any
Lender any advantage over any other Lender insofar as the Obligation arising
under the Loan Documents is concerned, or to relieve any Lender from absorbing
its ratable portion of any losses sustained with respect to the Obligation
(except to the extent such losses result from unilateral actions or inactions of
any Lender that are not made in accordance with the terms and provisions of the
Loan Documents).
77
12.4 Delegation of Duties; Reliance. Administrative Agent may perform any
------------------------------
of its duties or exercise any of its Rights under the Loan Documents by or
through its Representatives. Administrative Agent and its Representatives shall
(a) be entitled to rely upon (and shall be protected in relying upon) any
writing, resolution, notice, consent, certificate, affidavit, letter, cablegram,
telecopy, telegram, telex or teletype message, statement, order, or other
documents or conversation believed by it or them to be genuine and correct and
to have been signed or made by the proper Person and, with respect to legal
matters, upon opinion of counsel selected by Administrative Agent, (b) be
entitled to deem and treat each Lender as the owner and holder of the Obligation
owed to such Lender for all purposes until, subject to Section 13.13, written
notice of the assignment or transfer thereof shall have been given to and
received by Administrative Agent (and any request, authorization, consent, or
approval of any Lender shall be conclusive and binding on each subsequent
holder, assignee, or transferee of the Obligation owed to such Lender or portion
thereof until such notice is given and received), (c) not be deemed to have
notice of the occurrence of a Default or Potential Default unless a Responsible
Officer of Administrative Agent, who handles matters associated with the Loan
Documents and transactions thereunder, has received written notice from a Lender
or Borrower and stating that such notice is a "Notice of Default," and (d) be
entitled to consult with legal counsel (including counsel for Borrower),
independent accountants, and other experts selected by Administrative Agent 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.
12.5 Limitation of Liability.
-----------------------
(a) General. None of the Agents or any of their respective
-------
Representatives shall be liable for any action taken or omitted to be taken by
it or them under the Loan Documents in good faith and reasonably believed by it
or them to be within the discretion or power conferred upon it or them by the
Loan Documents or be responsible for the consequences of any error of judgment,
except for fraud, gross negligence, or willful misconduct; and none of the
Agents or any of their respective Representatives has a fiduciary relationship
with any Lender by virtue of the Loan Documents (provided that, nothing herein
shall negate the obligation of Administrative Agent to account for funds
received by it for the account of any Lender).
(b) Non-Discretionary Actions. Indemnification. Unless indemnified
------------------------------------------
to its satisfaction against loss, cost, liability, and expense, neither
Administrative Agent nor any other Agent shall be compelled to do any act under
the Loan Documents or to take any action toward the execution or enforcement of
the powers thereby created or to prosecute or defend any suit in respect of the
Loan Documents. If Administrative Agent requests instructions from Lenders or
Required Lenders, as the case may be, with respect to any act or action
(including, but not limited to, any failure to act) in connection with any Loan
Document, Administrative Agent shall be entitled (but shall not be required) to
refrain (without incurring any liability to any Person by so refraining) from
such act or action unless and until it has received such instructions. Except
where action of Required Lenders or all Lenders is required in the Loan
Documents, Administrative Agent may act hereunder in its own discretion without
requesting instructions. In no event, however, shall Administrative Agent or any
of its respective Representatives be required to take any action which it or
they determine could incur for it or them criminal or onerous civil liability.
Without limiting the generality of the foregoing, no Lender shall have any right
of action against Administrative Agent as a result of Administrative Agent's
acting or refraining from acting hereunder in accordance with the instructions
of Required Lenders (or all Lenders if required in the Loan Documents).
78
(c) Independent Credit Decision. Administrative Agent nor any other
---------------------------
Agent shall be responsible in any manner to any Lender or any Participant for,
and each Lender represents and warrants that it has not relied upon
Administrative Agent or any other Agent in respect of, (i) the creditworthiness
of any Loan Party and the risks involved to such Lender, (ii) the effectiveness,
enforceability, genuineness, validity, or the due execution of any Loan
Document, (iii) any representation, warranty, document, certificate, report, or
statement made therein or furnished thereunder or in connection therewith, (iv)
the existence, priority, or perfection of any Lien hereafter granted or
purported to be granted under any Loan Document, or (v) observation of or
compliance with any of the terms, covenants, or conditions of any Loan Document
on the part of any Loan Party. Each Lender agrees to indemnify Administrative
Agent and its Representatives and hold them harmless from and against (but
limited to such Lender's Pro Rata Part of) any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, reasonable
expenses, and reasonable disbursements of any kind or nature whatsoever which
may be imposed on, asserted against, or incurred by them in any way relating to
or arising out of the Loan Documents or any action taken or omitted by them
under the Loan Documents (INCLUDING ANY OF THE FOREGOING ARISING FROM THE
NEGLIGENCE OF ADMINISTRATIVE AGENT OR ITS REPRESENTATIVES), to the extent
Administrative Agent and its Representatives are not reimbursed for such amounts
by any Loan Party (provided that, Administrative Agent and its Representatives
shall not have the Right to be indemnified hereunder for its or their own fraud,
gross negligence, or willful misconduct).
12.6 Default; Collateral.
-------------------
(a) Upon the occurrence and continuance of a Default, Lenders agree
to promptly confer in order that Required Lenders or Lenders, as the case may
be, may agree upon a course of action for the enforcement of the Rights of
Lenders; and Administrative Agent shall be entitled to refrain from taking any
action (without incurring any liability to any Person for so refraining) unless
and until Administrative Agent shall have received instructions from Required
Lenders. All Rights of action under the Loan Documents and all Rights to the
Collateral, if any, hereunder may be enforced by Administrative Agent and any
suit or proceeding instituted by Administrative Agent in furtherance of such
enforcement shall be brought in its name as Administrative Agent without the
necessity of joining as plaintiffs or defendants any other Lender, and the
recovery of any judgment shall be for the benefit of Lenders subject to the
expenses of Administrative Agent. In actions with respect to any property of
Borrower, Administrative Agent is acting for the ratable benefit of each Lender.
Any and all agreements to subordinate (whether made heretofore or hereafter)
other indebtedness or obligations of Borrower to the Obligation shall be
construed as being for the ratable benefit of each Lender.
(b) Each Lender authorizes and directs Administrative Agent to
enter into the Collateral Documents for the benefit of the Lenders. Except to
the extent unanimity is required hereunder, each Lender agrees that any action
taken by the Required Lenders in accordance with the provisions of the Loan
Documents, and the exercise by the Required Lenders of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders.
(c) Administrative Agent is hereby authorized on behalf of all of
the Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time to take any action with respect to any Collateral or
Collateral Documents which may be necessary to perfect and maintain perfected
the Liens upon the Collateral granted pursuant to the Collateral Documents.
79
(d) Administrative Agent shall not have any obligation whatsoever
to any Lender or to any other Person to assure that the Collateral exists or is
owned by any Loan Party or is cared for, protected, or insured or has been
encumbered or that the Liens granted to Administrative Agent herein or pursuant
hereto have been properly or sufficiently or lawfully created, perfected,
protected, or enforced, or are entitled to any particular priority, or to
exercise at all or in any particular manner or under any duty of care,
disclosure, or fidelity, or to continue exercising, any of the Rights granted or
available to Administrative Agent in this Section 12.6 or in any of the
Collateral Documents; it being understood and agreed that in respect of the
Collateral, or any act, omission, or event related thereto, Administrative Agent
may act in any manner it may deem appropriate, in its sole discretion, given
Administrative Agent's own interest in the Collateral as one of the Lenders and
that Administrative Agent shall have no duty or liability whatsoever to any
Lender, other than to act without gross negligence or willful misconduct.
(e) Lenders hereby irrevocably authorize Administrative Agent, at
its option and in its discretion, to release any Lien granted to or held by
Administrative Agent upon any Collateral: (i) upon termination of the Revolver
Commitment and payment and satisfaction of the Obligation; (ii) constituting
property in which no Loan Party owned an interest at the time the Lien was
granted or at any time thereafter; (iii) constituting property leased to a Loan
Party under a lease which has expired or been terminated in a transaction
permitted under the Loan Document or is about to expire and which has not been,
and is not intended by such Loan Party to be, renewed; (iv) consisting of an
instrument evidencing Debt pledged to Administrative Agent (for the benefit of
Lenders), if the Debt evidenced thereby has been paid in full; (v) upon the
sale, transfer, or disposition of Collateral which is expressly permitted
pursuant to the Loan Documents, including, without limitation, under Section
9.22; (vi) as contemplated in Section 6.4, or (vii) if approved, authorized, or
ratified in writing by all necessary Lenders. Upon request by Administrative
Agent at any time, Lenders will confirm in writing Administrative Agent's
authority to release particular types or items of Collateral pursuant to this
Section 12.6.
(f) In furtherance of the authorizations set forth in this Section
12.6, each Lender hereby irrevocably appoints Administrative Agent its attorney-
in-fact, with full power of substitution, for and on behalf of and in the name
of each such Lender, (i) to enter into Collateral Documents (including, without
limitation, any appointments of substitute trustees under any Collateral
Document), (ii) to take action with respect to the Collateral and Collateral
Documents to perfect, maintain, and preserve Lender's Liens, and (iii) to
execute instruments of release or to take other action necessary to release
Liens upon any Collateral to the extent authorized in Paragraph (e) hereof. This
power of attorney shall be liberally, not restrictively, construed so as to give
the greatest latitude to Administrative Agent's power, as attorney, relative to
the Collateral matters described in this Section 12.6. The powers and
authorities herein conferred on Administrative Agent may be exercised by
Administrative Agent through any Person who, at the time of the execution of a
particular instrument, is an officer of Administrative Agent. The power of
attorney conferred by this Section 12.6(f) is granted for valuable consideration
and is coupled with an interest and is irrevocable so long as the Obligation, or
any part thereof, shall remain unpaid or Lenders are obligated to make any
Borrowings under the Loan Documents.
12.7 Limitation of Liability. To the extent permitted by Law, (a) neither
-----------------------
Administrative Agent nor any other Agent (acting in their respective agent
capacities) shall incur any liability to any other Lender, Agent, or Participant
except for acts or omissions resulting from its own fraud, gross negligence or
willful misconduct, and (b) neither Administrative Agent nor any other Agent,
Lender, or Participant shall incur any liability to any other Person for any act
or omission of any other Lender, Agent, or Participant.
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12.8 Relationship of Lenders. Nothing herein shall be construed as
------------------------
creating a partnership or joint venture among Agents and Lenders.
12.9 Benefits of Agreement. None of the provisions of this Section 12
---------------------
shall inure to the benefit of any Loan Party or any other Person other than
Lenders; consequently, no Loan Party or any other Person shall be entitled to
rely upon, or to raise as a defense, in any manner whatsoever, the failure of
any Agent or any Lender to comply with such provisions.
12.10 Agents. None of the Lenders identified in this Agreement as
------
"Documentation Agent" or "Collateral Agent" shall have any Rights, powers,
obligations, liabilities, responsibilities or duties under the Loan Documents
other than those applicable to all Lenders as such. Without limiting the
foregoing, none of the Lenders so identified as "Documentation Agent" or
"Collateral Agent" shall have or be deemed to have any fiduciary relationship
with any Lender. Any Lender that is a "Documentation Agent" or "Collateral
Agent" may voluntarily relinquish its title by giving written notice thereof to
Administrative Agent and Borrower. Upon such relinquishments, a successor
"Documentation Agent" or "Collateral Agent" may be appointed upon the mutual
agreement of Borrower and Administrative Agent.
12.11 Obligations Several. The obligations of Lenders hereunder are
-------------------
several, and each Lender hereunder shall not be responsible for the obligations
of the other Lenders hereunder, nor will the failure of one Lender to perform
any of its obligations hereunder relieve the other Lenders from the performance
of their respective obligations hereunder.
12.12 Financial ▇▇▇▇▇▇. To the extent any Lender or any Affiliate of a
----------------
Lender issues a Financial Hedge in accordance with the requirements of the Loan
Documents and accepts the benefits of the Liens in the Collateral arising
pursuant to the Collateral Documents, such Lender (for itself and on behalf of
any such Affiliates) agrees (i) to appoint Bank of America, N.A., as its nominee
and agent, to act for and on behalf of such Lender or Affiliate thereof in
connection with the Collateral Documents and (ii) to be bound by the terms of
this Section 12; whereupon all references to "Lender" in this Section 12 and in
the Collateral Documents shall include, on any date of determination, any Lender
or Affiliate of a Lender that is party to a then-effective Financial Hedge which
complies with the requirements of the Loan Document. Additionally, if the
Obligation owed to any Lender or Affiliate of a Lender consists solely of Debt
arising under a Financial Hedge (such Lender or Affiliate being referred to in
this Section 12.12 as an "Issuing Lender"), then such Issuing Lender (by
accepting the benefits of any Collateral Documents) acknowledges and agrees that
pursuant to the Loan Documents and without notice to or consent of such Issuing
Lender: (i) Liens in the Collateral may be released in whole or in part; (ii)
all Guaranties may be released; (iii) any Collateral Document may be amended,
modified, supplemented, or restated; and (iv) all or any part of the Collateral
may be permitted to secure other Debt.
SECTION 13 MISCELLANEOUS.
13.1 Headings. The headings, captions, and arrangements used in any
--------
o fthe Loan Documents are, unless specified otherwise, for convenience only and
shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.
81
13.2 Nonbusiness Days. In any case where any payment or action is due
----------------
under any Loan Document on a day which is not a Business Day, such payment or
action may be delayed until the next-succeeding Business Day, but interest and
fees shall continue to accrue in respect of any payment to which it is
applicable until such payment is in fact made; provided that, if, in the case of
any such payment in respect of a Eurodollar Rate Borrowing, the next-succeeding
Business Day is in the next calendar month, then such payment shall be made on
the next-preceding Business Day.
13.3 Communications. Unless specifically otherwise provided, whenever
--------------
any Loan Document requires or permits any consent, approval, notice, request, or
demand from one party to another, such communication must be in writing (which
may be by telex or telecopy) to be effective and shall be deemed to have been
given (a) if by telex, when transmitted to the telex number, if any, for such
party, and the appropriate answer back is received, (b) if by telecopy, when
transmitted to the telecopy number for such party (and all such communications
sent by telecopy shall be confirmed promptly thereafter by personal delivery or
mailing in accordance with the provisions of this section; provided, that any
requirement in this parenthetical shall not affect the date on which such
telecopy shall be deemed to have been delivered), (c) if by mail, on the third
Business Day after it is enclosed in an envelope, properly addressed to such
party, properly stamped, sealed, and deposited in the appropriate official
postal service, or (d) if by any other means, when actually delivered to such
party. Until changed by notice pursuant hereto, the address (and telex and
telecopy numbers, if any) for Administrative Agent and each Lender,
Administrative Agent, and other Agents is set forth on Schedule 2.1, and for
Borrower is the address set forth by Borrower's signature on the signature page
of this Agreement and for each Guarantor is the address set forth by such
Guarantor's signature on the signature page of its Guaranty. A copy of each such
communication to Administrative Agent, other than those required to be delivered
pursuant to Sections 2, 3, 4, 5, and 9 hereof, shall also be sent to ▇▇▇▇▇▇ and
▇▇▇▇▇, LLP, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, Fax: ▇▇▇.▇▇▇.▇▇▇▇, Attn: ▇▇▇
▇. ▇▇▇▇▇▇. A copy of each such communication to Borrower required to be
delivered pursuant to Section 11 hereof, shall also be sent to F. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇, Facsimile: 817.878.9280.
13.4 Form and Number of Documents. Each agreement, document,
----------------------------
instrument, or other writing to be furnished under any provision of the Loan
Documents must be in form and substance and in such number of counterparts as
may be reasonably satisfactory to Administrative Agent and its counsel.
13.5 Exceptions to Covenants. No Loan Party shall take any action or
-----------------------
fail to take any action which is permitted as an exception to any of the
covenants contained in any Loan Document if such action or omission would result
in the breach of any other covenant contained in any of the Loan Documents.
13.6 Survival. All covenants, agreements, undertakings,
--------
representations, and warranties made in any of the Loan Documents shall survive
all closings under the Loan Documents and, except as otherwise indicated, shall
not be affected by any investigation made by any party. All Rights of, and
provisions relating to, reimbursement and indemnification of Administrative
Agent, any Agent, or any Lender (and any other provision of the Loan Documents
that expressly provides for such survival) shall survive termination of this
Agreement and payment in full of the Obligation.
13.7 Governing Law. The Loan Documents have been entered into
-------------
pursuant to the substantive laws of the State of Texas (except to the extent the
laws of another jurisdiction govern the creation, perfection, validity, or
enforcement of Liens under the Collateral Documents), and the applicable federal
laws of the United States of
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America shall govern the validity, construction, enforcement and interpretation
of the Loan Documents.
13.8 Invalid Provisions. If any provision in any Loan Document is
------------------
held to be illegal, invalid, or unenforceable, such provision shall be fully
severable; the appropriate Loan Document shall be construed and enforced as if
such provision had never comprised a part thereof; and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by such
provision or by its severance therefrom. Administrative Agent, Lenders, and each
Loan Party party to such Loan Document agree to negotiate, in good faith, the
terms of a replacement provision as similar to the severed provision as may be
possible and be legal, valid, and enforceable.
13.9 Entirety. The Rights and Obligations of each Loan Party,
--------
Lenders, and Agents Shall Be Determined Solely from Written Agreements,
Documents, and Instruments, and Any Prior Oral Agreements Between Such Parties
Are Superseded by and Merged into Such Writings. This Agreement (As Amended in
Writing from Time To Time) and the Other Written Loan Documents Executed by Any
Loan Party, Any Lender, and/or any Agent, (Together with All Commitment Letters
and Fee Letters as They Relate to the Payment of Fees after the Closing Date)
Represent the Final Agreement Between the Loan Parties, Lenders, and Agents, and
May Not Be Contradicted by Evidence of Prior, Contemporaneous, or Subsequent
Oral Agreements by Such Parties. There Are No Unwritten Oral Agreements Between
Such Parties.
13.10 Jurisdiction; Venue; Service of Process; Jury Trial. Each Party
---------------------------------------------------
Hereto (including each Guarantor by execution of a Guaranty), in Each Case for
Itself, its Successors and Assigns, Hereby (A) irrevocably Submits to the
Nonexclusive Jurisdiction of the State and Federal Courts Located in the State
of Texas, and Agrees and Consents That Service of Process May Be Made upon it in
Any Legal Proceeding Arising out of or in Connection with the Loan Documents and
the Obligation by Service of Process as Provided by Texas Law, (B) irrevocably
Waives, to the Fullest Extent Permitted by Law, Any Objection Which it May Now
or Hereafter Have to the Laying of Venue of Any Litigation Arising out of or in
Connection with the Loan Documents and the Obligation Brought in Any Such Court,
(C) irrevocably Waives Any Claims That Any Litigation Brought in Any Such Court
Has Been Brought in an Inconvenient Forum, (D) agrees to Designate and Maintain
an Agent for Service of Process in Texas in Connection with any Such Litigation
and to Deliver to Administrative Agent Evidence Thereof, If Requested, (E)
irrevocably Consents to the Service of Process out of Any of the Aforementioned
Courts in Any Such Litigation by the Mailing of Copies Thereof by Certified
Mail, Return Receipt Requested, Postage Prepaid, at its Address Set Forth
Herein, (F) irrevocably Agrees That Any Legal Proceeding Against Any Party
Hereto Arising out of or in Connection with the Loan Documents or the Obligation
Shall Be Brought in One of the Aforementioned Courts, and (G) irrevocably
Waives, to the Fullest Extent Permitted by Law, its Respective Rights to a Jury
Trial of Any Claim or Cause of Action Based upon or Arising out of Any Loan
Document or the Transactions Contemplated Thereby. The scope of each of the
foregoing waivers is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter of this
transaction, including, without limitation, contract claims, tort claims, breach
of duty claims, and all other common law and statutory claims. The Loan Parties
and each other party to the Loan Documents acknowledge that this waiver is a
material inducement to the agreement of each party
83
hereto to enter into a business relationship, that each has already relied on
this waiver in entering into the Loan Documents, and each will continue to rely
on each of such waivers in related future dealings. The Loan Parties and each
other party to the Loan Documents warrant and represent that they have reviewed
these waivers with their legal counsel, and that they knowingly and voluntarily
agree to each such waiver following consultation with legal counsel. THE WAIVERS
IN THIS SECTION 13.10 ARE IRREVOCABLE, MEANING THAT THEY MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THESE WAIVERS SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS OR SUPPLEMENTS TO, AND REPLACEMENTS OF, THIS OR ANY OTHER LOAN
DOCUMENT. In the event of Litigation, this Agreement may be filed as a written
consent to a trial by the court.
13.11 Amendments, Consents, Conflicts, and Waivers.
--------------------------------------------
(a) Except as otherwise specifically provided, (i) this
Agreement may only be amended, modified, or waived by an instrument in writing
executed jointly by Borrower and Required Lenders, and, in the case of any
matter affecting Administrative Agent (except removal of Administrative Agent as
provided in Section 12) by Administrative Agent, and may only be supplemented by
documents delivered or to be delivered in accordance with the express terms
hereof, and (ii) the other Loan Documents may only be the subject of an
amendment, modification, or waiver if Borrower and Required Lenders, and, in the
case of any matter affecting Administrative Agent (except as set forth above),
Administrative Agent, have approved same.
(b) Any amendment to the Loan Documents which purports to (i)
change the allocation of payments among the Facilities or Subfacilities or (ii)
decrease the amount of any mandatory payment or commitment reduction required by
Section 3.3(b)(i) must be by an instrument in writing executed by Borrower and
by Required Lenders.
(c) Except as provided in Section 13.11(b), any amendment to
or consent or waiver under any Loan Document which purports to accomplish any of
the following must be by an instrument in writing executed by Borrower and
executed (or approved, as the case may be) by each Lender affected thereby, and,
in the case of any matter affecting Administrative Agent, by Administrative
Agent: (i) postpones or delays any date fixed by the Loan Documents for any
payment or mandatory prepayment of all or any part of the Obligation payable to
such Lender or Administrative Agent; (ii) reduces the interest rate or decreases
the amount of any payment of principal, interest, fees, or other sums payable to
Administrative Agent or any such Lender hereunder (except such reductions as are
contemplated by this Agreement); (iii) changes the definition of "Required
Lenders" or this Section 13.11(c) or any other provisions of the Loan Documents
that require the unanimous consent of the Lenders; (iv) changes the order of
application of any payment or prepayment set forth in Sections 3.3 and 3.12 in
any manner that materially affects such Lender or Administrative Agent; (v)
except as otherwise permitted by any Loan Document (including, without
limitation, Section 6.4), waives compliance with, amends, or releases all or
substantially all of the Guaranties; (vi) except as contemplated in Section 6.4,
releases all or substantially all of the Collateral for the Obligation or
permits the creation, incurrence, assumption, or existence of any Lien on all or
substantially all of the Collateral to secure any obligations, other than Liens
securing the Obligation and Permitted Liens; (vii) changes the applicable
advance rate percentages set forth in the definition of "Borrowing Base", (viii)
otherwise changes the definition of "Borrowing Base", "Eligible Accounts", or
"Eligible Inventory", or (ix) changes this clause (c) or any other matter
specifically requiring the consent of all Lenders hereunder. Without the consent
of such Lender, no Lender's "Committed Sum" or "Commitment Percentage" may be
increased.
84
(d) Any conflict or ambiguity between the terms and provisions
of this Agreement and terms and provisions in any other Loan Document shall be
controlled by the terms and provisions herein.
(e) No course of dealing nor any failure or delay by
Administrative Agent, any Lender, or any of their respective Representatives
with respect to exercising any Right of Administrative Agent or any Lender
hereunder shall operate as a waiver thereof. A waiver must be in writing and
signed by Administrative Agent and Required Lenders (or by all Lenders, if
required hereunder) to be effective, and such waiver will be effective only in
the specific instance and for the specific purpose for which it is given.
13.12 Multiple Counterparts. The Loan Documents may be executed in one
---------------------
or more identical counterparts, each of which shall be deemed an original for
all purposes and all of which constitute, collectively, one agreement; but, in
making proof of any Loan Document, it shall not be necessary to produce or
account for more than one such counterpart. It is not necessary that each Lender
execute the same counterpart so long as identical counterparts are executed by
Borrower, each Lender, and Administrative Agent. This Agreement shall become
effective when counterparts hereof shall have been executed and delivered to
Administrative Agent by each Lender, Administrative Agent, and Borrower, or,
when Administrative Agent shall have received telecopied, telexed, or other
evidence satisfactory to it that such party has executed and is delivering to
Administrative Agent a counterpart hereof.
13.13 Successors and Assigns; Assignments and Participations.
------------------------------------------------------
(a) This Agreement shall be binding upon, and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that (i) Borrower may not, directly or indirectly, assign or transfer, or
attempt to assign or transfer, any of its Rights, duties, or obligations under
any Loan Documents without the express written consent of all Lenders, and (ii)
except as permitted under this Section, no Lender may transfer, pledge, assign,
sell any participation in, or otherwise encumber its portion of the Obligation.
(b) Each Lender may assign to one or more Eligible Assignees
all or a portion of its Rights and obligations under the Loan Documents
(including, without limitation, all or a portion of its Borrowings and its
Notes, to the extent any Principal Debt owed to such assigning Lender is
evidenced by a Note or Notes); provided, however, that:
(i) each such assignment shall be to an Eligible
Assignee;
(ii) except in the case of an assignment to another
Lender, an Affiliate of Lender or an Approved Fund of any Lender, or in the case
of an assignment of all of a Lender's Rights and obligations under the Loan
Documents, any such partial assignment under the Revolver Facility shall not be
less than the following amounts for the Revolver Facility (unless Administrative
Agent and, unless a Default or Potential Default has occurred and is continuing,
Borrower consent thereto (in their sole discretion) in writing which may be
evidenced by their acceptance and execution of the related Assignment and
Acceptance Agreement);provided that, no partial assignment for the Revolver
Facility (including any assignment among Lenders) may result in any Lender
holding less than $5,000,000 in the Revolver Facility;
(iii) each such assignment by a Lender shall be of a
proportionate part of all of the assigning Lender's Rights and obligations under
this Agreement and the Notes (to the extent any Principal Debt owed to such
assigning Lender is evidenced by a Note or Notes);
85
(iv) the parties to such assignment shall execute and
deliver to Administrative Agent for its acceptance an Assignment and Acceptance
Agreement, together with any Notes (to the extent any Principal Debt owed to
such assigning Lender is evidenced by a Note or Notes) subject to such
assignment and a processing fee of $3,500, including, without limitation, any
assignment between Lenders; provided that, no such fee shall be payable in
respect of any assignment between a Lender and any of its Affiliates; and
(v) so long as any Lender is an Agent under this
Agreement, such Lender (or an Affiliate of such Lender) shall retain an economic
interest in the Loan Documents, will not assign all of its Rights, duties, or
obligations under the Loan Documents, except to an Affiliate of such Lender, and
will not enter into any Assignment and Acceptance Agreement that would have the
effect of such Lender assigning all of its Rights, duties, or obligations under
the Loan Documents to any Person other than an Affiliate of such Lender unless
such Agent has relinquished such title in accordance with Section 12.1 (with
respect to Administrative Agent) or Section 12.10 (with respect to the other
Agents).
Upon execution, delivery, and acceptance of such Assignment and Acceptance
Agreement, the assignee thereunder shall be a party hereto and, to the extent of
such assignment, have the obligations, Rights, and benefits of a Lender under
the Loan Documents and the assigning Lender shall, to the extent of such
assignment, relinquish its Rights and be released from its obligations under the
Loan Documents. Upon the consummation of any assignment pursuant to this
Section, but only upon the request of the assignor or assignee made through
Administrative Agent, Borrower shall issue appropriate Notes to the assignor and
the assignee, reflecting such Assignment and Acceptance. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to Borrower and Administrative Agent certification as to
exemption from deduction or withholding of Taxes in accordance with Section 4.6.
(c) Administrative Agent (acting solely for this administrative
purpose as an agent for Borrower) shall maintain at its address referred to in
Section 13.3 a copy of each Assignment and Acceptance Agreement delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment Percentage, and principal amount of the
Borrowings owing to, each Lender from time to time (the "Register"). The entries
in the Register shall be conclusive and binding for all purposes, absent
manifest error, and Borrower, Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register as a Lender hereunder for all
purposes of the Loan Documents. The Register shall be available for inspection
by Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice. Upon the consummation of any assignment in accordance
with this Section 13.13, Schedule 2.1 shall automatically be deemed amended (to
the extent required) by Administrative Agent to reflect the name, address, and,
where appropriate, the respective Committed Sums under the Revolver Facility of
the assignor and assignee.
(d) Upon its receipt of an Assignment and Acceptance Agreement
executed by the parties thereto, together with any Notes (to the extent any
Principal Debt owed to such assigning Lender is evidenced by a Note or Notes)
subject to such assignment and payment of the processing fee, Administrative
Agent shall, if such Assignment and Acceptance has been completed, (i) accept
such Assignment and Acceptance Agreement, (ii) record the information contained
therein in the Register, and (iii) give prompt notice thereof to the parties
thereto.
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(e) Subject to the provisions of this Section and in accordance
with applicable Law, any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable Law, at any time sell to one
or more Persons (other than Borrower or any Affiliate of Borrower) (each a
"Participant") participating interests in its portion of the Obligation. In the
event of any such sale to a Participant, (i) such Lender shall remain a "Lender"
under the Loan Documents and the Participant shall not constitute a "Lender"
hereunder, (ii) such Lender's obligations under the Loan Documents shall remain
unchanged, (iii) such Lender shall remain solely responsible for the performance
thereof, (iv) such Lender shall remain the holder of its share of the Principal
Debt for all purposes under the Loan Documents, (v) Borrower and Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender's Rights and obligations under the Loan Documents, and (vi)
such Lender shall be solely responsible for any withholding Taxes or any filing
or reporting requirements relating to such participation and shall hold Borrower
and Administrative Agent and their respective successors, permitted assigns,
officers, directors, employees, agents, and representatives harmless against the
same. Participants shall have no Rights under the Loan Documents, other than
certain voting Rights as provided below. Subject to the following, each Lender
shall be entitled to obtain (on behalf of its Participants) the benefits of
Section 4 with respect to all participations in its part of the Obligation
outstanding from time to time, so long as Borrower shall not be obligated to pay
any amount in excess of the amount that would be due to such Lender under
Section 4 calculated as though no participations have been made. No Lender shall
sell any participating interest under which the Participant shall have any
Rights to approve any amendment, modification, or waiver of any Loan Document,
except to the extent such amendment, modification, or waiver extends the due
date for payment of any amount in respect of principal (other than mandatory
prepayments), interest, or fees due under the Loan Documents, reduces the
interest rate or the amount of principal or fees applicable to the Obligation
(except such reductions as are contemplated by the Loan Documents), or releases
all or any substantial portion of the Guaranties or all or any substantial
portion of the Collateral for the Obligation under the Loan Documents (except
such releases of Guaranties or Collateral as are contemplated in Section 6.4);
provided that, in those cases where a Participant is entitled to the benefits of
Section 4 or a Lender grants Rights to its Participants to approve amendments to
or waivers of the Loan Documents respecting the matters previously described in
this sentence, such Lender must include a voting mechanism in the relevant
participation agreement or agreements, as the case may be, whereby a majority of
such Lender's portion of the Obligation (whether held by such Lender or
Participant) shall control the vote for all of such Lender's portion of the
Obligation. Except in the case of the sale of a participating interest to
another Lender, the relevant participation agreement shall not permit the
Participant to transfer, pledge, assign, sell participations in, or otherwise
encumber its portion of the Obligation, unless the consent of the transferring
Lender (which consent will not be unreasonably withheld) has been obtained.
(f) Notwithstanding any other provision set forth in this
Agreement, any Lender may, without notice to, or the consent of Borrower or
Administrative Agent, at any time assign and pledge all or any portion of its
Borrowings and its Notes (to the extent any Principal Debt owed to such
assigning Lender is evidenced by a Note or Notes) to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular issued
by such Federal Reserve Bank or any Lender which is a fund may pledge all or any
portion of its Borrowings and its Notes (to the extent any Principal Debt owed
to such assigning Lender is evidenced by a Note or Notes) to any trustee or to
any other representative of holders of obligations owed or securities issued by
such fund as security for such obligations or securities; provided that any
transfer to any Person upon the enforcement of such pledge or security interest
may only be made subject to this Section 13.13. No such assignment or pledge
shall release the assigning Lender from its obligations hereunder.
87
(g) Any Lender may furnish any information concerning the Loan
Parties and Subsidiaries thereof in the possession of such Lender from time to
time to Eligible Assignees and Participants (including prospective Eligible
Assignees and Participants) and to counterparties under a Financial Hedge issued
by a Lender or an Affiliate of a Lender to the extent permitted by the Loan
Documents.
13.14 Discharge Only Upon Payment in Full; Reinstatement in Certain
-------------------------------------------------------------
Circumstances. The obligations of each Loan Party under the Loan Documents shall
-------------
remain in full force and effect until termination of the Revolver Commitment,
payment in full of the Principal Debt and of all interest, fees, and other
amounts of the Obligation then due and owing, and expiration of all LCs, except
that Sections 4, 11, and 13, and any other provisions under the Loan Documents
expressly intended to survive by the terms hereof or by the terms of the
applicable Loan Documents, shall survive such termination. If at any time any
payment of the principal of or interest on any Note or any other amount payable
by any Loan Party under any Loan Document is rescinded or must be otherwise
restored or returned upon the insolvency, bankruptcy, or reorganization of such
Loan Party or otherwise, the obligations of each Loan Party under the Loan
Documents with respect to such payment shall be reinstated as though such
payment had been due but not made at such time.
13.15 Restatement of Original Credit Agreement. The parties hereto
----------------------------------------
agree that, after all conditions precedent set forth in Section 7.1 have been
satisfied or waived: (a) the Obligation (as defined herein) represents, among
other things, the amendment, extension, increase, and modification of all Debt
under the Business Loan Agreement (Receivables and Inventory) dated as of June
28, 1996 (as heretofore amended, "Original Credit Agreement") between Bank of
America, N.A. and Borrower; (b) this Agreement is intended to, and does hereby,
restate, increase, renew, extend, amend, modify, supersede, and replace the
Original Credit Agreement in its entirety; (c) the Notes executed pursuant to
this Agreement amend, renew, extend, modify, replace, substitute for, and
supersede in their entirety (but do not extinguish, the Debt arising under) the
promissory notes issued pursuant to the Original Credit Agreement, which
existing promissory notes shall be returned to Administrative Agent promptly
after the Closing Date, marked "cancelled and replaced," and, thereafter,
delivered by Administrative Agent to Borrower; and (d) the entering into and
performance of their respective obligations under this Agreement and the
transactions evidenced hereby do not constitute a novation.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURE PAGES FOLLOW.]
88
Signature page to that certain Amended and Restated Revolving and Term Loan
Credit Agreement dated as of the date first set forth above, among AZZ
incorporated, as Borrower, Bank of America, N.A., as Administrative Agent and
Collateral Agent, and certain other Agents and Lenders named therein.
EXECUTED to be effective as of the Closing Date.
AZZ INCORPORATED, as Borrower
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇, Assistant Secretary
Address: AZZ incorporated
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Signature page to that certain Amended and Restated Revolving and Term Loan
Credit Agreement dated as of the date first set forth above, among AZZ
incorporated, as Borrower, Bank of America, N.A., as Administrative Agent and
Collateral Agent, and certain other Agents and Lenders named therein.
EXECUTED to be effective as of the Closing Date.
BANK OF AMERICA, N.A., as a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Senior Vice
President
Signature page to that certain Amended and Restated Revolving and Term Loan
Credit Agreement dated as of the date first set forth above, among AZZ
incorporated, as Borrower, Bank of America, N.A., as Administrative Agent and
Collateral Agent, and certain other Agents and Lenders named therein.
EXECUTED to be effective as of the Closing Date.
BANK OF AMERICA, N.A., as
Administrative Agent and Collateral Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, Vice President
Signature page to that certain Amended and Restated Revolving and Term Loan
Credit Agreement dated as of the date first set forth above, among AZZ
incorporated, as Borrower, Bank of America, N.A., as Administrative Agent and
Collateral Agent, and certain other Agents and Lenders named therein.
EXECUTED to be effective as of the Closing Date.
COMERICA BANK-TEXAS, as Co-Documentation
Agent and a Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Senior Vice
President
Signature page to that certain Amended and Restated Revolving and Term Loan
Credit Agreement dated as of the date first set forth above, among AZZ
incorporated, as Borrower, Bank of America, N.A., as Administrative Agent and
Collateral Agent, and certain other Agents and Lenders named therein.
EXECUTED to be effective as of the Closing Date.
▇▇▇▇▇ FARGO BANK TEXAS,
NATIONAL ASSOCIATION, as Co-Documentation
Agent and a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Vice President
Signature page to that certain Amended and Restated Revolving and Term Loan
Credit Agreement dated as of the date first set forth above, among AZZ
incorporated, as Borrower, Bank of America, N.A., as Administrative Agent and
Collateral Agent, and certain other Agents and Lenders named therein.
EXECUTED to be effective as of the Closing Date.
GUARANTY BANK, as a Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Vice President
EXHIBIT A-1
-----------
FORM OF REVOLVER NOTE
---------------------
$______________ ____________ __, ____
FOR VALUE RECEIVED, the undersigned, AZZ INCORPORATED, a Texas corporation
("Borrower"), hereby promises to pay to the order of ______________________
("Lender"), at the offices of BANK OF AMERICA, N.A., as Administrative Agent
under the Credit Agreement (as hereinafter described), on the Termination Date,
the lesser of (a) $_______________ and (b) the aggregate Revolver Principal Debt
disbursed by Lender to Borrower and outstanding and unpaid on the Termination
Date (together with accrued and unpaid interest thereon).
This note has been executed and delivered under, and is subject to the
terms of, the Amended and Restated Revolving and Term Loan Credit Agreement,
dated as of November __,2001 (as amended, modified, supplemented, or restated
from time to time, the "Credit Agreement"), among Borrower, Administrative
Agent, Lender, and other Agents and Lenders party thereto, and is one of the
"Revolver Notes" referred to therein. Unless defined herein, capitalized terms
used herein that are defined in the Credit Agreement have the meaning given to
such terms in the Credit Agreement. Reference is made to the Credit Agreement
for provisions affecting this note regarding applicable interest rates,
principal and interest payment dates, final maturity, voluntary and mandatory
prepayments, acceleration of maturity, exercise of Rights, payment of attorneys'
fees, court costs, and other costs of collection, certain waivers by Borrower
and others now or hereafter obligated for payment of any sums due hereunder and
security for the payment hereof. Without limiting the immediately preceding
sentence, reference is made to Section 3.9 of the Credit Agreement for usury
savings provisions.
THE LAWS (OTHER THAN CONFLICT-OF-LAWS PROVISIONS THEREOF) OF THE STATE OF
TEXAS AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF
BORROWER AND THE LENDER AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION HEREOF.
AZZ INCORPORATED
By ______________________________
Name: ________________________
Title: _______________________
EXHIBIT A-2
-----------
FORM OF TERM NOTE
-----------------
$_____________ ____________ __, ____
FOR VALUE RECEIVED, the undersigned, AZZ INCORPORATED, a Texas corporation
("Borrower"), hereby promises to pay to the order of ______________________
("Lender"), at the offices of BANK OF AMERICA, N.A., as Administrative Agent
under the Credit Agreement (as hereinafter described), the principal sum of
____________ AND NO/100 DOLLARS ($____________), which principal shall be
payable on the dates and in the amounts provided for in Section 3.2(c) of the
Credit Agreement (together with accrued and unpaid interest thereon) at such
interest rates, on such dates and in such amounts as are specified in the Credit
Agreement.
This note has been executed and delivered under, and is subject to the
terms of, the Amended and Restated Revolving and Term Loan Credit Agreement,
dated as of November ___, 2001 (as amended, modified, supplemented, or restated
from time to time, the "Credit Agreement"), among Borrower, Administrative
Agent, Lender, and other Agents and Lenders party thereto, and is one of the
"Term Notes" referred to therein. Unless defined herein, capitalized terms used
herein that are defined in the Credit Agreement have the meaning given to such
terms in the Credit Agreement. Reference is made to the Credit Agreement for
provisions affecting this note regarding applicable interest rates, principal
and interest payment dates, final maturity, voluntary and mandatory prepayments,
acceleration of maturity, exercise of Rights, payment of attorneys' fees, court
costs and other costs of collection, certain waivers by Borrower and others now
or hereafter obligated for payment of any sums due hereunder and security for
the payment hereof. Without limiting the immediately preceding sentence,
reference is made to Section 3.9 of the Credit Agreement for usury savings
provisions.
THE LAWS (OTHER THAN CONFLICT-OF-LAWS PROVISIONS THEREOF) OF THE STATE OF
TEXAS AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF
BORROWER AND THE LENDER AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION HEREOF.
AZZ INCORPORATED
By: _______________________________
Name: _________________________
Title:_________________________
EXHIBIT A-3
-----------
FORM OF SWING LINE NOTE
-----------------------
$2,500,000 ____________ __, ____
FOR VALUE RECEIVED, the undersigned, AZZ INCORPORATED, a Texas corporation
("Borrower"), hereby promises to pay to the order of BANK OF AMERICA, N.A.
("Lender"), the lesser of (i) Two Million Five Hundred Thousand Dollars
($2,500,000.00) and (ii) the Swing Line Principal Debt disbursed by Lender to
Borrower (together with accrued and unpaid interest thereon) at such interest
rates, on such dates, and in such amounts as are specified in the Credit
Agreement (hereinafter defined).
This note has been executed and delivered under, and is subject to the
terms of, the Amended and Restated Revolving and Term Loan Credit Agreement,
dated as of November __, 2001 (as amended, modified, supplemented, or restated
from time to time, the "Credit Agreement"), among Borrower, Administrative
Agent, Lender, and other Agents and Lenders party thereto, and is one of the
"Swing Line Notes" referred to therein. Unless defined herein, capitalized terms
used herein that are defined in the Credit Agreement have the meaning given to
such terms in the Credit Agreement. Reference is made to the Credit Agreement
for provisions affecting this note regarding applicable interest rates,
principal and interest payment dates, final maturity, voluntary and mandatory
prepayments, acceleration of maturity, exercise of Rights, payment of attorneys'
fees, court costs and other costs of collection, certain waivers by Borrower and
others now or hereafter obligated for payment of any sums due hereunder and
security for the payment hereof. Without limiting the immediately preceding
sentence, reference is made to Section 3.9 of the Credit Agreement for usury
savings provisions.
THE LAWS (OTHER THAN CONFLICT-OF-LAWS PROVISIONS THEREOF) OF THE STATE OF
TEXAS AND OF THE UNITED STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF
BORROWER AND THE LENDER AND THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION HEREOF.
AZZ INCORPORATED
By: _______________________________
Name: _________________________
Title: ________________________
EXHIBIT B-1
FORM OF BORROWING NOTICE
------------------------
(AZZ incorporated)
(Dated: ______________ __, ____)
Bank of America, N.A.
as Administrative Agent for the Lenders
as defined in the Revolving and Term Loan
Credit Agreement referred to below
Bank of America Plaza, 14th Floor
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
Reference is made to the Amended and Restated Revolving and Term Loan
Credit Agreement, dated as of November , 2001 (as amended, modified,
supplemented, or restated from time to time, the "Credit Agreement"), among AZZ
incorporated ("Borrower"), Bank of America, N.A., as Administrative Agent, and
other Agents and Lenders party thereto. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. Borrower hereby gives you notice pursuant to the Credit
Agreement that it requests a Borrowing (other than a Swing Line Borrowing) under
the Credit Agreement, and in that connection sets forth below the terms on which
such Borrowing is requested to be made:
(A) The Borrowing is to be made under the (check one):
[_] Revolver Facility
[_] Term Facility
(B) Borrowing Date of Borrowing/1/ ______________________________
(C) Amount of Borrowing/2/ ______________________________________
(D) Type of Borrowing/3/ ________________________________________
(E) For a Eurodollar Rate Borrowing,
the Interest Period and the last day thereof/4/______________
Borrower hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the Borrowing Date
specified herein after giving effect to such Borrowing:
(a) The requested Borrowing will not cause the Principal Debt to
exceed the Total Commitment; if the Borrowing is a Borrowing under the
Term Facility, such Borrowing will not cause the Term Principal Debt to
exceed the Term Commitment; if the Borrowing is a Borrowing under the
Revolver Facility, such Borrowing will not cause the Revolver Principal
Debt to exceed the lesser of: (i) the Revolver Commitment, and (ii) the
Borrowing Base (as set forth on the Borrowing Base Certificate most
recently delivered under the Credit Agreement);
(b) All of the representations and warranties of any Loan Party set
forth in the Loan Documents are true and correct in all material respects
(except to the extent that (i) the representations and warranties speak to
a specific date or (ii) the facts on which such representations and
warranties are based have been changed by transactions permitted by the
Loan Documents and, if
1
applicable, supplemental Schedules have been delivered with respect
thereto and, when necessary, approved by Required Lenders);
(c) The proposed Borrowing is to be used for ________________;
(d) No change which would reasonably be expected to be a Material
Adverse Event has occurred in the financial conditions or business of
Borrower or any other Loan Party since the date of the quarterly and
audited annual financial statements most recently delivered by Borrower to
Lenders pursuant to Sections 7.1 and 9.3(a) and (b) of the Credit
Agreement;
(e) If all or part of the requested Borrowing will be used to finance
a Distribution, Borrower has complied with and delivered (or shall comply
with and deliver on or prior to the date of the requested Borrowing) the
items required by Section 7.3(g);
(f) If all or part of the requested Borrowing will be used to finance
a Permitted Acquisition, Borrower has complied with and delivered (or
shall comply with and deliver on or prior to the date of the requested
Borrowing) the items required by Section 7.2;
(g) Borrower has complied with and delivered (or shall comply with
and deliver on or prior to the date of the requested Borrowing) the items
required by Section 7.3(h); and
(h) No Default or Potential Default has occurred and is continuing or
will arise after giving effect to the requested Borrowing.
Very truly yours,
AZZ INCORPORATED
By: __________________________________
Name: ___________________________
Title: ___________________________
Rate: ___________________
Confirmed by: ___________
/1/ Any Borrowing under the Revolver Facility must occur on a Business Day
occurring prior to the Termination Date and be at least (a) three Business
Days following receipt by Administrative Agent of this Borrowing Notice for
any Eurodollar Rate Borrowing, and (b) one Business Day following receipt
by Administrative Agent of this Borrowing Notice for any Base Rate
Borrowing. The initial advance under the Term Facility must occur on the
Closing Date.
/2/ Not less than $1,500,000 or an integral multiple of $500,000 if a
Eurodollar Rate Borrowing or $500,000 or an integral multiple of $100,000
if a Base Rate Borrowing.
/3/ Eurodollar Rate Borrowing or Base Rate Borrowing.
/4/ 1, 2, 3, or 6 months -- in no event may the Interest Period end after the
Termination Date.
2
EXHIBIT B-2
-----------
FORM OF CONVERSION NOTICE
-------------------------
(AZZ incorporated)
(Dated: ______________ __, ____)
Bank of America, N.A.
as Administrative Agent for the Lenders
as defined in the Revolving and Term Loan
Credit Agreement referred to below
Bank of America Plaza, 14th Floor
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
Reference is made to the Amended and Restated Revolving and Term Loan
Credit Agreement, dated as of November ___, 2001 (as amended, modified,
supplemented, or restated from time to time, the "Credit Agreement"), among AZZ
incorporated ("Borrower"), Bank of America, N.A., as Administrative Agent, and
Agents and Lenders party thereto. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. Borrower hereby gives you notice pursuant to Section 3.11 of
the Credit Agreement that it elects to convert a Borrowing under the Credit
Agreement from one Type to another Type or elects a new Interest Period for a
Eurodollar Rate Borrowing, and in that connection sets forth below the terms on
which such election is requested to be made:
(A) The Subject Borrowing is made under the (check one):
[_] Revolver Facility
[_] Term Facility
(B) Date of conversion or last day of
applicable Interest Period/1/ __________________________
(C) Principal amount of existing Borrowing
being converted or continued/2/ ________________________
(D) New Type of Borrowing selected
(or Type of Borrowing continued)/3/ ____________________
(E) For conversion to, or continuation of, a
Eurodollar Rate Borrowing, Interest
Period and the last day thereof/4/ _____________________
As of the date hereof and of the requested Conversion, no Default or
Potential Default has occurred and is continuing.
[Remainder of Page Intentionally Blank;
Signature Page to Follow.]
1
On the date the rate is set, please confirm the interest rate below and
return by facsimile transmission to _________________________.
Very truly yours,
AZZ INCORPORATED
By: ___________________________________
Name: _____________________________
Title: ____________________________
Rate: __________________
Confirmed by: __________
/1/ Must be a Business Day at least (a) three Business Days following receipt
by Administrative Agent of this Conversion Notice for any conversion from
a Base Rate Borrowing to a Eurodollar Rate Borrowing or a continuation of
a Eurodollar Rate Borrowing for an additional Interest Period, and (b) one
Business Day following receipt by Administrative Agent of this Conversion
Notice for a conversion from a Eurodollar Rate Borrowing to a Base Rate
Borrowing.
/2/ Not less than $1,500,000 or a greater integral multiple of $500,000 (if a
Eurodollar Rate Borrowing) (or such lesser amount as may be outstanding).
/3/ Eurodollar Rate Borrowing or Base Rate Borrowing.
/4/ 1, 2, 3, or 6 months -- in no event may the Interest Period end after the
Termination Date for the applicable Facility.
2
EXHIBIT B-3
-----------
FORM OF LC REQUEST
------------------
(AZZ incorporated)
(Dated: ______________ __, ____)
Bank of America, N.A.
as Administrative Agent for the
Lenders as defined in the Revolving and Term Loan
Credit Agreement referred to below
Bank of America Plaza, 14/th/ Floor
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇
Fax: ▇▇▇.▇▇▇.▇▇▇▇
Reference is made to the Amended and Restated Revolving and Term Loan
Credit Agreement, dated as of November ___, 2001 (as amended, modified,
supplemented, or restated from time to time, the "Credit Agreement"), among AZZ
incorporated ("Borrower"), Bank of America, N.A., as Administrative Agent, and
Agents and Lenders party thereto. Capitalized terms used herein and not
otherwise defined herein shall have the meanings assigned to such terms in the
Credit Agreement. Borrower hereby gives you notice pursuant to Section 2.3(a) of
the Credit Agreement that it requests the issuance of an LC under the LC
Subfacility, and in that connection sets forth below the terms on which such LC
is requested to be issued:
(A) Face amount of the LC/1/ _______________
(B) Date on which the LC is to be issued/2/ _______________
(C) Expiration date of the LC/3/ _______________
Accompanying this notice is a duly executed and properly completed LC
Agreement in the form requested by Administrative Agent, together with the
payment of any LC Fees due and payable pursuant to Section 5.4 of the Credit
Agreement.
Borrower hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the date specified
herein for issuance of the LC, after giving effect to the issuance of such LC:
(a) the issuance of the requested LC will not cause the Revolver
Principal Debt to exceed the lesser of: (i) the Revolver Commitment, and
(ii) the Borrowing Base (as set forth on the Borrowing Base Certificate
most recently delivered under the Credit Agreement);
(b) the issuance of the requested LC will not cause the LC Exposure
to exceed the maximum LC Exposure permitted under the LC Subfacility;
(c) all of the representations and warranties of any Loan Party set
forth in the Loan Documents are true and correct in all material respects
(except to the extent that (i) the representations and warranties speak to
a specific date or (ii) the facts on which such representations and
warranties are based have been changed by transactions permitted by the
Loan Documents and, if applicable, supplemental Schedules have been
delivered with respect thereto and, when necessary, approved by Required
Lenders);
1
(d) no change which would reasonably be expected to be a Material
Adverse Event has occurred in the financial conditions or business of
Borrower or any other Loan Party since the date of the quarterly and
audited annual financial statements most recently delivered by Borrower to
Lenders pursuant to Sections 7.1 and 9.3(a) and (b) of the Credit
Agreement; and
(e) no Default or Potential Default has occurred and is continuing or
will arise after giving effect to the requested LC.
Very truly yours,
AZZ INCORPORATED
By: ___________________________________
Name: ____________________________
Title: ____________________________
Rate: ___________________
Confirmed by: ___________
/1/ Amount of requested LC plus the LC Exposure shall not exceed $5,000,000
(as the maximum amount of such LC Subfacility may be reduced or canceled
in accordance with the Loan Documents).
/2/ Must be a Business Day at least three Business Days following receipt by
Administrative Agent of this LC Request.
/3/ Not later than the earlier of two years from the date of issuance or 30
days prior to the Revolving Termination Date.
2
EXHIBIT C
---------
FORM OF GUARANTY
----------------
THIS GUARANTY ("Guaranty") is executed as of ____________, ______, by the
undersigned ("Guarantor"), for the benefit of BANK OF AMERICA, N.A., a national
banking association (in its capacity as Administrative Agent for the benefit of
Agents and Lenders).
RECITALS
--------
A. AZZ incorporated, a Texas corporation ("Borrower") has entered into a
Amended and Restated Revolving and Term Loan Credit Agreement (as amended,
modified, supplemented, or restated from time to time, the "Credit Agreement")
dated as of November __, 2001, with Bank of America, N.A., as Administrative
Agent (including its permitted successors and assigns in such capacity, the
"Administrative Agent"), and the Agents and Lenders now or hereafter party to
the Credit Agreement (including their respective permitted successors and
assigns, the "Lenders").
B. This Guaranty is integral to the transactions contemplated by the Loan
Documents, and the execution and delivery hereof are conditions precedent to
Lenders' obligations to extend credit under the Loan Documents.
ACCORDINGLY, for adequate and sufficient consideration, the receipt and
adequacy of which are hereby acknowledged, Guarantor guarantees to
Administrative Agent, the other Agents, and Lenders the prompt payment of the
Guaranteed Debt (defined below) as follows:
1. DEFINITIONS. Terms defined in the Credit Agreement have the same
meanings when used in this Guaranty, unless otherwise defined herein. As used in
this Guaranty:
Default is defined is Section 13 hereof.
Guaranteed Debt means, collectively, (a) the Obligation, and (b) all
present and future costs, attorneys' fees, and expenses reasonably incurred by
Administrative Agent or any other Agent, or any Lender to enforce Borrower's,
Guarantor's, or any other obligor's payment of any of the Guaranteed Debt,
including, without limitation (to the extent lawful), all present and future
amounts that would become due but for the operation of '' 502 or 506 or any
other provision of Title 11 of the United States Code and all present and future
accrued and unpaid interest (including, without limitation, all post-maturity
interest and any post-petition interest in any proceeding under Debtor Relief
Laws to which Borrower or any Guarantor becomes subject).
Lender means, individually, or Lenders means, collectively, on any date of
determination, Administrative Agent, the other Agents, and Lenders.
Subordinated Debt means, with respect to Guarantor, all present and future
obligations of Borrower or any Company to Guarantor, whether such obligations
are (a) direct, indirect, fixed, contingent, liquidated, unliquidated, joint,
several, or joint and several, (b) due or to become due to Guarantor, (c) held
by or are to be held by Guarantor, (d) created directly or acquired by
assignment or otherwise, or (e) evidenced in writing.
2. GUARANTY. This is an absolute, irrevocable, and continuing guaranty
of payment, not collection, and the circumstance that at any time or from time
to time the Guaranteed Debt may be paid in full does not affect the obligation
of Guarantor with respect to the Guaranteed Debt incurred after that. This
Guaranty remains in effect until the Guaranteed Debt is fully paid and
performed, all commitments to extend
1
any credit under the Loan Documents have terminated, all LCs have expired or
been terminated, and all Financial ▇▇▇▇▇▇ with any Lender or Affiliate of any
Lender have expired. Guarantor may not rescind or revoke its obligations with
respect to the Guaranteed Debt. Notwithstanding any contrary provision, it is
the intention of Guarantor, Lenders, Administrative Agent, and the other Agents,
that the amount of the Guaranteed Debt guaranteed by Guarantor by this Guaranty
shall be in, but not in excess of, the maximum amount permitted by fraudulent
conveyance, fraudulent transfer, or similar Laws applicable to Guarantor.
Accordingly, notwithstanding anything to the contrary contained in this Guaranty
or any other agreement or instrument executed in connection with the payment of
any of the Guaranteed Debt, the amount of the Guaranteed Debt guaranteed by
Guarantor by this Guaranty shall be limited to an aggregate amount equal to the
largest amount that would not render Guarantor's obligations hereunder subject
to avoidance under Section 548 of the United States Bankruptcy Code or any
comparable provision of any applicable state Law.
3. CONSIDERATION. Guarantor represents and warrants that its liability
under this Guaranty may reasonably be expected to directly or indirectly benefit
it.
4. CUMULATIVE RIGHTS. This Guaranty is in addition to and not
substitution for any other guaranty given by anyone whomsoever in connection
with the Guaranteed Debt or any other indebtedness owing by Borrower to
Administrative Agent, any other Agent, or any Lender. If Guarantor becomes
liable for any indebtedness owing by Borrower to Administrative Agent or any
other Agent or any Lender, other than under this Guaranty, that liability may
not be in any manner impaired or affected by this Guaranty. The Rights of
Administrative Agent, other Agents, or Lenders under this Guaranty are
cumulative of any and all other Rights that Administrative Agent, other Agents,
or Lenders may ever have against Guarantor. The exercise by Administrative
Agent, any other Agent, or Lenders of any Right under this Guaranty or otherwise
does not preclude the concurrent or subsequent exercise of any other Right.
5. PAYMENT UPON DEMAND. If a Default exists, Guarantor shall, on demand
and without further notice of dishonor and without any notice having been given
to Guarantor previous to that demand of either the acceptance by Administrative
Agent, any other Agent, or Lenders of this Guaranty or the creation or
incurrence of any Guaranteed Debt, pay the amount of the Guaranteed Debt then
due and payable to Administrative Agent, any other Agent, and Lenders; provided
that, if a Default exists and Administrative Agent or Lenders cannot, for any
reason, accelerate the Obligation, then the Guaranteed Debt shall be, as among
Guarantor, Administrative Agent, any other Agent, and Lenders, a fully matured,
due, and payable obligation of Guarantor to Administrative Agent, any other
Agent, and Lenders (and, as of and from the date of such demand, the amounts due
shall bear interest at the Default Rate). It is not necessary for Administrative
Agent, any other Agent, or Lenders, in order to enforce that payment by
Guarantor, first or contemporaneously to institute suit or exhaust remedies
against Borrower or others liable on any Guaranteed Debt or to enforce Rights
against any Collateral securing any Guaranteed Debt.
6. SUBORDINATION. The Subordinated Debt is expressly subordinated to
the full and final payment of the Guaranteed Debt. Guarantor agrees not to
accept any payment of any Subordinated Debt from any Company if a Default
exists. If Guarantor receives any payment of any Subordinated Debt in violation
of the foregoing, Guarantor shall hold that payment in trust for Administrative
Agent, any other Agent, and Lenders and promptly turn it over to Administrative
Agent, in the form received (with any necessary endorsements), to be applied to
the Guaranteed Debt.
7. SUBROGATION AND CONTRIBUTION. Until payment in full of the Guaranteed
Debt, the termination of the Obligation of Lenders to extend credit under the
Loan Documents, and expiration of all Financial ▇▇▇▇▇▇ between Borrower,
Guarantor, or any Company and any Lender or any Affiliate of any Lender, (a)
Guarantor may not assert, enforce, or otherwise exercise any Right of
subrogation to any of the Rights or Liens of Administrative Agent, any other
Agent, or Lenders or any other beneficiary against Borrower or any other obligor
on the Guaranteed Debt or any Collateral or other security or any Right of
2
recourse, reimbursement, subrogation, contribution, indemnification, or similar
Right against Borrower or any other obligor on any Guaranteed Debt or any
guarantor of it, (b) Guarantor defers all of the foregoing Rights (whether they
arise in equity, under contract, by statute, under common law, or otherwise),
and (c) Guarantor defers the benefit of, and subordinates any Right to
participate in, any Collateral or other security given to Administrative Agent,
any other Agent, or Lenders or any other beneficiary to secure payment of any
Guaranteed Debt.
8. NO RELEASE. Guarantor's obligations under this Guaranty may not be
released, diminished, or affected by the occurrence of any one or more of the
following events: (a) any taking or accepting of any other security or assurance
for any Guaranteed Debt; (b) any release, surrender, exchange, subordination,
impairment, or loss of any Collateral securing any Guaranteed Debt; (c) any full
or partial release of the liability of any other obligor on the Obligation,
except for any final release resulting from payment in full of such Obligation;
(d) the modification of, or waiver of compliance with, any terms of any other
Loan Document; (e) the insolvency, bankruptcy, or lack of corporate or
partnership power of any other obligor at any time liable for any Guaranteed
Debt, whether now existing or occurring in the future; (f) any renewal,
extension, or rearrangement of any Guaranteed Debt or any adjustment,
indulgence, forbearance, or compromise that may be granted or given by
Administrative Agent, any other Agent, or any Lender to any other obligor on the
Obligation; (g) any neglect, delay, omission, failure, or refusal of
Administrative Agent, any other Agent, or any Lender to take or prosecute any
action in connection with the Guaranteed Debt or to foreclose, take, or
prosecute any action in connection with any Loan Document; (h) any failure of
Administrative Agent, any other Agent, or any Lender to notify Guarantor of any
renewal, extension, or assignment of any Guaranteed Debt, or the release of any
security or of any other action taken or refrained from being taken by
Administrative Agent, any other Agent, or any Lender against Borrower or any new
agreement between Administrative Agent, any other Agent, any Lender, and
Borrower; it being understood that neither Administrative Agent, nor any other
Agent, nor any Lender is required to give Guarantor any notice of any kind under
any circumstances whatsoever with respect to or in connection with any
Guaranteed Debt, other than any notice required to be given to Guarantor by Law
or elsewhere in this Guaranty; (i) the unenforceability of any Guaranteed Debt
against any other obligor or any security securing same because it exceeds the
amount permitted by Law, the act of creating it is ultra ▇▇▇▇▇, the officers
creating it exceeded their authority or violated their fiduciary duties in
connection with it, or otherwise; (j) any payment of the Obligation to
Administrative Agent, any other Agent, or any Lender is held to constitute a
preference under any Debtor Relief Law or for any other reason Administrative
Agent, any other Agent, or any Lender is required to refund that payment or make
payment to someone else (and in each such instance this Guaranty will be
reinstated in an amount equal to that payment); or (k) any other circumstance
which might otherwise constitute a defense against, or a legal or equitable
discharge of, Guarantor's liability under this Guaranty, except payment of the
Guaranteed Debt.
9. WAIVERS. It shall not be necessary for Administrative Agent (and
Guarantor hereby waives any rights that Guarantor may have to require
Administrative Agent), in order to enforce such payment by Guarantor, first to
(i) institute suit or exhaust its remedies against Borrower or others liable on
the Guaranteed Debt or any other Person, (ii) enforce or exhaust Administrative
Agent's Rights against any security which shall ever have been given to secure
the Guaranteed Debt, (iii) enforce Administrative Agent's rights against any
other guarantors of the Guaranteed Debt, (iv) join Borrower or any others liable
on the Guaranteed Debt in any action seeking to enforce this Guaranty, or (v)
resort to any other means of obtaining payment of the Guaranteed Debt.
Administrative Agent shall not be required to mitigate damages or take any other
action to reduce, collect, or enforce the Guaranteed Debt. Further, Guarantor
expressly waives each and every right to which it may be entitled by virtue of
the suretyship law of the state of Texas, including without limitation, any
rights pursuant to Rule 31 of the Texas Rules of Civil Procedure, as amended,
Articles 1986 and 1987 of the Revised Civil Statutes of Texas, as amended,
Chapter 34 of the Texas Business and Commerce Code, as amended, and ' 17.001 of
the Texas Civil Practice and Remedies Code, as amended.
3
10. LOAN DOCUMENTS. By execution hereof, Guarantor covenants and agrees
that certain representations, warranties, terms, covenants, and conditions set
forth in the Loan Documents are applicable to Guarantor and shall be imposed
upon Guarantor, and Guarantor reaffirms that each such representation and
warranty is true and correct and covenants and agrees to promptly and properly
perform, observe, and comply with each such term, covenant, or condition.
Moreover, Guarantor acknowledges and agrees that this Guaranty is subject to the
offset provisions of the Loan Documents in favor of Administrative Agent, the
other Agents, and Lenders. In the event the Credit Agreement or any other Loan
Document shall cease to remain in effect for any reason whatsoever during any
period when any part of the Guaranteed Debt remains unpaid, the terms,
covenants, and agreements of the Credit Agreement or such other Loan Document
incorporated herein by reference shall nevertheless continue in full force and
effect as obligations of Guarantor under this Guaranty.
11. RELIANCE AND DUTY TO REMAIN INFORMED. Guarantor confirms that it has
executed and delivered this Guaranty after reviewing the terms and conditions of
the Loan Documents and such other information as it has deemed appropriate in
order to make its own credit analysis and decision to execute and deliver this
Guaranty. Guarantor confirms that it has made its own independent investigation
with respect to Borrower's creditworthiness and is not executing and delivering
this Guaranty in reliance on any representation or warranty by Administrative
Agent, any other Agent, or any Lender as to that creditworthiness. Guarantor
expressly assumes all responsibilities to remain informed of the financial
condition of Borrower and any circumstances affecting Borrower's ability to
perform under the Loan Documents to which it is a party or any Collateral
securing any Guaranteed Debt.
12. NO REDUCTION. The Guaranteed Debt may not be reduced, discharged, or
released because or by reason of any existing or future offset, claim, or
defense (except for the defense of complete and final payment of the Guaranteed
Debt) of Borrower or any other obligor against Administrative Agent or any
Lender or against payment of the Guaranteed Debt, whether that offset, claim, or
defense arises in connection with the Guaranteed Debt or otherwise. Those claims
and defenses include, without limitation, failure of consideration, breach of
warranty, fraud, bankruptcy, incapacity/infancy, statute of limitations, lender
liability, accord and satisfaction, usury, forged signatures, mistake,
impossibility, frustration of purpose, and unconscionability.
13. INSOLVENCY OF GUARANTOR. Should Guarantor become insolvent, or fail to
pay Guarantor's debts generally as they become due, or voluntarily seek, consent
to, or acquiesce in, the benefit or benefits of any Debtor Relief Law (other
than as a creditor or claimant), or become a party to (or be made the subject
of) any proceeding provided for by any Debtor Relief Law (other than as a
creditor or claimant) that could suspend or otherwise adversely affect the
Rights of Administrative Agent, any other Agent, or any Lender granted
hereunder, then, in any such event, the Guaranteed Debt shall be, as among
Guarantor, Administrative Agent, any other Agent, and Lenders, a fully matured,
due, and payable obligation of Guarantor to Administrative Agent, any other
Agent, and Lenders (without regard to whether Borrower is then in default under
the Loan Documents or whether the Obligation, or any part thereof, is then due
and owing by Borrower to any Lender), payable in full by Guarantor to Lenders
upon demand, and the amount thereof so payable shall be the estimated amount
owing in respect of the contingent claim created hereunder.
14. LOAN DOCUMENT. This Guaranty is a Loan Document and is subject to the
applicable provisions of Sections 1 and 13 of the Credit Agreement, including,
without limitation, the provisions relating to GOVERNING LAW, JURISDICTION,
VENUE, SERVICE OF PROCESS, AND WAIVER OF JURY TRIAL, all of which are
incorporated into this Guaranty by reference, as if set forth in this Guaranty
verbatim.
4
15. NOTICES. For purposes of Section 13.3 of the Credit Agreement,
Guarantor's address and telecopy number are as set forth next to Guarantor's
signature on the signature page hereof.
16. AMENDMENTS, ETC. No amendment, waiver, or discharge to or under this
Guaranty is valid unless it is in writing and is signed by the party against
whom it is sought to be enforced and is otherwise in conformity with the
requirements of Section 13.11 of the Credit Agreement.
17. ADMINISTRATIVE AGENT AND LENDERS. Administrative Agent is
Administrative Agent for each Lender and other Agent under the Credit Agreement.
All Rights granted to Administrative Agent under or in connection with this
Guaranty are for each Lender's and Agent's ratable benefit. Administrative Agent
may, without the joinder of any Lender or Agent, exercise any Rights in
Administrative Agent's, any other Agent's, or Lenders' favor under or in
connection with this Guaranty. Administrative Agent's, each other Agent's, and
each Lender's Rights and obligations vis-a-vis each other may be subject to one
or more separate agreements between those parties. However, Guarantor is not
required to inquire about any such agreement or is subject to any terms of it
unless Guarantor specifically joins such agreement. Therefore, neither Guarantor
nor its successors or assigns is entitled to any benefits or provisions of any
such separate agreement or is entitled to rely upon or raise as a defense any
party's failure or refusal to comply with the provisions of such agreement.
18. PARTIES. This Guaranty benefits Administrative Agent, other Agents,
and Lenders, and their respective successors and assigns and binds Guarantor and
its successors and assigns. Upon appointment of any successor Administrative
Agent under the Credit Agreement, all of the Rights of Administrative Agent
under this Guaranty automatically vest in that new Administrative Agent as
successor Administrative Agent on behalf of Lenders and Agents without any
further act, deed, conveyance, or other formality other than that appointment.
The Rights of Administrative Agent, other Agents, and Lenders under this
Guaranty may be transferred with any assignment of the Guaranteed Debt. The
Credit Agreement contains provisions governing assignments of the Guaranteed
Debt and of Rights and obligations under this Guaranty.
Remainder of Page Intentionally Blank.
Signature Page to Follow.
5
EXECUTED as of the date first stated in this Guaranty.
_______________________________________
GUARANTOR:
Address:
_______________________ By: __________________________________
Name:_____________________________
Telephone:_______________________ Title:____________________________
Facsimile:_______________________
Guaranty
Signature Page
EXHIBIT D-1
-----------
FORM OF PLEDGE, ASSIGNMENT, AND SECURITY AGREEMENT
--------------------------------------------------
(Borrower and Subsidiaries)
THIS PLEDGE, ASSIGNMENT, AND SECURITY AGREEMENT (this "Security Agreement")
is executed as of___________,____, by ____________________________, a
_____________ ("Debtor"), whose address is , and BANK OF AMERICA, N.A., a
national banking association (in its capacity as "Administrative Agent" for
Lenders (hereafter defined) and Agents), as "Secured Party," whose address is
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, _______, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇.
RECITALS
--------
A. Debtor, Administrative Agent, the other Agent named therein, and
Lenders now or hereafter party to the Amended and Restated Revolving and Term
Loan Credit Agreement (including their respective permitted successors and
assigns, the "Lenders") have entered into a Credit Agreement dated as of
November __, 2001 (as amended, modified, supplemented, or restated from time to
time, the "Credit Agreement");
B. This Security Agreement is integral to the transactions contemplated
by the Loan Documents, and the execution and delivery thereof, is a condition
precedent to Lenders' obligations to extend credit under the Loan Documents.
ACCORDINGLY, for valuable consideration, the receipt and adequacy of which
are hereby acknowledged, Debtor and Secured Party hereby agree as follows:
1. REFERENCE TO CREDIT AGREEMENT. The terms, conditions, and provisions
of the Credit Agreement are incorporated herein by reference, as if the same
were set forth herein verbatim, which terms, conditions, and provisions shall
continue to be in full force and effect hereunder so long as Lenders are
obligated to lend under the Credit Agreement and thereafter until the Obligation
is paid and performed in full.
2. CERTAIN DEFINITIONS. Unless otherwise defined herein, or the context
hereof otherwise requires, each term defined in either of the Credit Agreement
or in the UCC is used in this Security Agreement with the same meaning; provided
that, if the definition given to such term in the Credit Agreement conflicts
with the definition given to such term in the UCC, the Credit Agreement
definition shall control to the extent legally allowable; and if any definition
given to such term in Chapter 9 of the UCC conflicts with the definition given
to such term in any other chapter of the UCC, the Chapter 9 definition shall
prevail. As used herein, the following terms have the meanings indicated:
Collateral has the meaning set forth in Paragraph 4 hereof.
Lender means, individually, or Lenders means, collectively, on any
date of determination, Administrative Agent and Lenders and their permitted
successors and assigns.
Obligation means, collectively, (a) the "Obligation" as defined in the
Credit Agreement, and (b) all indebtedness, liabilities, and obligations of
Debtor arising under this Security Agreement or any Guaranty assuring
payment of the Obligation; it being the intention and contemplation of
Debtor and Secured Party that future advances will be made by Secured Party
or one or more Lenders to Debtor for a variety of purposes, that Debtor may
guarantee (or otherwise become directly or contingently obligated with
respect to) the obligations of others to Secured Party or to one or more
Agents or Lenders, that from time to time overdrafts of Debtor's accounts
with Secured Party, other Agents, or with other Lenders may occur, and that
Secured Party, other Agents, or one or more
Lenders may from time to time acquire from others obligations of Debtor to
such others, and that payment and repayment of all of the foregoing are
intended to and shall be part of the Obligation secured hereby. The
Obligation shall include, without limitation, future, as well as existing,
advances, indebtedness, liabilities, and obligations owed by Debtor to
Secured Party, any other Agent, or to any Lender arising under the Loan
Documents or otherwise.
Obligor means any Person obligated with respect to any of the
Collateral, whether as an account debtor, obligor on an instrument, issuer
of securities, or otherwise.
Partnerships shall mean (a) those partnerships and limited liability
companies listed on Annex B-1 attached hereto and incorporated herein by
reference, as such partnerships or limited liability companies exist or may
hereinafter be restated, amended, or restructured, (b) any partnership,
joint venture, or limited liability company in which Debtor shall, at any
time, become a limited or general partner, venturer, or member, or (c) any
partnership, joint venture, or corporation formed as a result of the
restructure, reorganization, or amendment of the Partnerships.
Partnership Agreements shall mean (a) those agreements listed on Annex
B-1 attached hereto and incorporated herein by reference (together with any
modifications, amendments, or restatements thereof), and (b) partnership
agreements, joint venture agreements, or organizational agreements for any
of the partnerships, joint ventures, or limited liability companies
described in clause (b) of the definition of "Partnerships" above (together
with any modifications, amendments or restatements thereof), and
"Partnership Agreement" means any one of the Partnership Agreements.
Partnership Interests shall mean all of Debtor's Right, title and
interest now or hereafter accruing under the Partnership Agreements with
respect to all distributions, allocations, proceeds, fees, preferences,
payments, or other benefits, which Debtor now is or may hereafter become
entitled to receive with respect to such interests in the Partnerships and
with respect to the repayment of all loans now or hereafter made by Debtor
to the Partnerships.
Pledged Securities means, collectively, the Pledged Shares and any
other Collateral constituting securities.
Security Interest means the security interest granted and the pledge
and assignment made under Paragraph 3 hereof.
UCC means the Uniform Commercial Code, including each such provision
as it may subsequently be renumbered, as enacted in the State of Texas or
other applicable jurisdiction, as amended at the time in question.
3. SECURITY INTEREST. In order to secure the full and complete payment
and performance of the Obligation when due, Debtor hereby grants to Secured
Party a Security Interest in all of Debtor's Rights, titles, and interests in
and to the Collateral and pledges, collaterally transfers, and assigns the
Collateral to Secured Party, all upon and subject to the terms and conditions of
this Security Agreement. Such Security Interest is granted and pledge and
assignment are made as security only and shall not subject Secured Party to, or
transfer or in any way affect or modify, any obligation of Debtor with respect
to any of the Collateral or any transaction involving or giving rise thereto. If
the grant, pledge, or collateral transfer or assignment of any specific item of
the Collateral is expressly prohibited by any contract, then the Security
Interest created hereby nonetheless remains effective to the extent allowed by
the UCC or other applicable Law, but is otherwise limited by that prohibition.
2
4. COLLATERAL. As used herein, the term "Collateral" means the following
items and types of property, wherever located, now owned or in the future
existing or acquired by Debtor, and all proceeds and products thereof, and any
substitutes or replacements therefor:
(a) All personal property and fixture property of every kind and
nature including, without limitation, all present and future accounts,
chattel paper (whether tangible or electronic), goods (including inventory,
equipment, and any accessions thereto), software, instruments, investment
property, documents, deposit accounts, money, commercial tort claims,
letters of credit or letter-of-credit rights, supporting obligations, Tax
refunds, and general intangibles (including payment intangibles);
(b) All present and future issued and outstanding stock, equity,
membership interests, limited liability company interests, or other
investment securities of each Domestic Subsidiary now owned or hereafter
acquired by Debtor, including, without limitation, all capital stock of the
Domestic Subsidiaries of Debtor as more particularly listed on Annex B-1
hereto, together with all Distributions with respect thereto or other
property in exchange therefor, all cash and noncash proceeds thereof, and
any securities issued in substitution or replacement thereof (collectively,
the "Domestic Pledged Shares").
(c) Sixty-five percent (65%) of all present and future issued and
outstanding stock, equity, membership interests, limited liability company
interests, or other investment securities of each directly-owned Foreign
Subsidiary now owned or hereafter acquired by such Debtor, including,
without limitation, all capital stock of the directly-owned Foreign
Subsidiaries of such Debtor as more particularly listed on Annex B-1
hereto, together with all Distributions with respect thereto or other
property in exchange therefor, all cash and noncash proceeds thereof, and
any securities issued in substitution or replacement thereof (collectively
with the Domestic Pledged Shares, the "Pledged Shares").
(d) All Rights, titles, and interests of Debtor in and to all
promissory notes and other instruments payable to Debtor, including,
without limitation, all inter-company notes from Subsidiaries and those set
forth on Annex B-1 ("Collateral Notes") and all Rights, titles, interests,
and Liens Debtor may have, be, or become entitled to under all present and
future loan agreements, security agreements, pledge agreements, deeds of
trust, mortgages, guarantees, or other documents assuring or securing
payment of or otherwise evidencing the Collateral Notes, including, without
limitation, those set forth on Annex B-1 ("Collateral Note Security");
(e) The Partnership Interests and all Rights of Debtor with respect
thereto, including, without limitation, all Partnership Interests set forth
on Annex B-1 and all of Debtor's distribution rights, income rights,
liquidation interest, accounts, contract rights, general intangibles,
notes, instruments, drafts, and documents relating to the Partnership
Interests;
(f) (i) all copyrights (whether statutory or common law, registered
or unregistered), works protectable by copyright, copyright registrations,
copyright licenses, and copyright applications of Debtor, including,
without limitation, all of Debtor's Right, title, and interest in and to
all copyrights registered in the United States Copyright Office or anywhere
else in the world and also including, without limitation, the copyrights
set forth on Annex B-2; (ii) all renewals, extensions, and modifications
thereof; (iii) all income, licenses, royalties, damages, profits, and
payments relating to or payable under any of the foregoing; (iv) the Right
to ▇▇▇ for past, present, or future infringements of any of the foregoing;
(v) all other rights and benefits relating to any of the foregoing
throughout the world; and (vi) all goodwill associated with and symbolized
by any of the foregoing, in each case, whether now owned or hereafter
acquired by Debtor ("Copyrights");
3
(g) (i) all patents, patent applications, patent licenses, and
patentable inventions of Debtor, including, without limitation,
registrations, recordings, and applications thereof in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any state thereof or any other country or any political
subdivision thereof, including, without limitation, those set forth on
Annex B-2, and all of the inventions and improvements described and claimed
therein; (ii) all continuations, divisions, renewals, extensions,
modifications, substitutions, reexaminations, continuations-in-part, or
reissues of any of the foregoing; (iii) all income, royalties, profits,
damages, awards, and payments relating to or payable under any of the
foregoing; (iv) the right to ▇▇▇ for past, present, and future
infringements of any of the foregoing; and (v) all other rights and
benefits relating to any of the foregoing throughout the world; in each
case, whether now owned or hereafter acquired by Debtor ("Patents");
(h) (i) all trademarks, trademark licenses, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, certification marks, collective marks, logos, other
business identifiers, prints, and labels on which any of the foregoing have
appeared or appear, all registrations, recordings, and applications
thereof, including, without limitation, registrations, recordings, and
applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any state thereof or any
other country or any political subdivision thereof, including, without
limitation, those set forth on Annex B-2; (ii) all reissues, extensions,
and renewals thereof; (iii) all income, royalties, damages, and payments
now or hereafter relating to or payable under any of the foregoing,
including, without limitation, damages or payments for past or future
infringements of any of the foregoing; (iv) the right to ▇▇▇ for past,
present, and future infringements of any of the foregoing; and (v) all
rights corresponding to any of the foregoing throughout the world; in each
case, whether now owned or hereafter acquired by Debtor ("Trademarks", and
collectively with the Copyrights and the Patents, the "Intellectual
Property").
(i) All Material Agreements (as described in Schedule 8.14 of the
Credit Agreement), including, without limitation, (i) all rights of Debtor
to receive moneys due and to become due under or pursuant to the Material
Agreements, (ii) all rights of Debtor to receive proceeds of any insurance,
indemnity, warranty, or guaranty with respect to the Material Agreements,
(iii) all claims of Debtor for damages arising out of or for breach of or
default under the Material Agreements, and (iv) all rights of Debtor to
compel performance and otherwise exercise all rights and remedies under the
Material Agreements;
(j) All present and future automobiles, trucks, truck tractors,
trailers, semi-trailers, or other motor vehicles or rolling stock, now
owned or hereafter acquired by such Debtor (collectively, the "Vehicles");
(k) Any and all material deposit accounts, bank accounts, investment
accounts, or securities accounts, now owned or hereafter acquired or opened
by Debtor, including, without limitation, the deposit accounts set forth on
Annex D, and any account which is a replacement or substitute for any of
such accounts, together with all monies, instruments, certificates, checks,
drafts, wire transfer receipts, and other property deposited therein and
all balances therein (the "Deposit Accounts");
(l) All present and future distributions, income, increases, profits,
combinations, reclassifications, improvements, and products of, accessions,
attachments, and other additions to, tools, parts, and equipment used in
connection with, and substitutes and replacements for, all or part of the
Collateral described above;
4
(m) All present and future accounts, contract rights, general
intangibles, chattel paper, documents, instruments, cash and noncash
proceeds, and other Rights arising from or by virtue of, or from the
voluntary or involuntary sale or other disposition of, or collections with
respect to, or insurance proceeds payable with respect to, or proceeds
payable by virtue of warranty or other claims against the manufacturer of,
or claims against any other Person with respect to, all or any part of the
Collateral heretofore described in this clause or otherwise; and
(n) All present and future security for the payment to any Company of
any of the Collateral described above and goods which gave or will give
rise to any such Collateral or are evidenced, identified, or represented
therein or thereby.
The description of the Collateral contained in this Paragraph 4 shall not be
deemed to permit any action prohibited by this Security Agreement or by the
terms incorporated in this Security Agreement. [Furthermore, notwithstanding any
contrary provision, Debtor agrees that, if, but for the application of this
paragraph, granting a Security Interest in the Collateral would constitute a
fraudulent conveyance under 11 U.S.C. (S). 548 or a fraudulent conveyance or
transfer under any state fraudulent conveyance, fraudulent transfer, or similar
Law in effect from time to time (each a "fraudulent conveyance"), then the
Security Interest remains enforceable to the maximum extent possible without
causing such Security Interest to be a fraudulent conveyance, and this Security
Agreement is automatically amended to carry out the intent of this paragraph.]
[Bracketed language to be included in all Security Agreements other than the
Security Agreement for Borrower.]
5. REPRESENTATIONS AND WARRANTIES. Debtor represents and warrants to
Secured Party that:
(a) Credit Agreement. Certain representations and warranties in the
----------------
Credit Agreement are applicable to it or its assets or operations, and each
such representation and warranty is true and correct.
(b) Binding Obligation/ Perfection. This Security Agreement creates a
------------------------------
legal, valid, and binding Lien in and to the Collateral in favor of Secured
Party and enforceable against Debtor. For Collateral in which the Security
Interest may be perfected by the filing of financing statements, once those
financing statements have been properly filed in the jurisdictions
described on Annex A hereto, the Security Interest in that Collateral will
be fully perfected and the Security Interest will constitute a first-
priority Lien on such Collateral, subject only to Permitted Liens. With
respect to Collateral consisting of investment property, deposit accounts,
electronic chattel paper, letter-of-credit rights, and instruments, upon
the delivery of such Collateral to Secured Party or the control agreement
related thereto, the Security Interest in that Collateral will be fully
perfected. None of the Collateral has been delivered nor control with
respect thereto given to any other Person. Other than the Financing
Statements and control agreements with respect to this Security Agreement,
there are no other financing statements or control agreements covering any
Collateral, other than those evidencing Permitted Liens. The creation of
the Security Interest does not require the consent of any Person that has
not been obtained.
(c) Debtor Information. Debtor's exact legal name, mailing address,
------------------
jurisdiction of organization, type of entity, and state issued
organizational identification number are as set forth on Annex E hereto.
5
(d) Location/Fixtures. (i) Debtor's place of business and chief
-----------------
executive office is where Debtor is entitled to receive notices hereunder;
the present and foreseeable location of Debtor's books and records
concerning any of the Collateral that is accounts is as set forth on Annex
A hereto, and the location of all other Collateral, including, without
limitation, Debtor's inventory and equipment, is as set forth on Annex A
hereto; and, except as noted on Annex A hereto, all such books, records,
and Collateral are in Debtor's possession, and (ii) the Collateral that is
or may be fixtures is located on or affixed to the real property described
on Annex A hereto.
(e) Governmental Authority. No Authorization, approval, or other
----------------------
action by, and no notice to or filing with, any Governmental Authority is
required either (i) for the pledge by Debtor of the Collateral pursuant to
this Security Agreement or for the execution, delivery, or performance of
this Security Agreement by Debtor, or (ii) for the exercise by Secured
Party of the voting or other Rights provided for in this Security Agreement
or the remedies in respect of the Collateral pursuant to this Security
Agreement (except as may be required in connection with the disposition of
the Pledged Securities by Laws affecting the offering and sale of
securities generally).
(f) Maintenance of Collateral. All tangible Collateral which is
-------------------------
useful in and necessary to Debtor's business is in good repair and
condition, ordinary wear and tear excepted, and none thereof is a fixture
except as specifically referred to herein in Paragraph 5(d) hereof.
(g) Liens. Debtor owns all presently existing Collateral, and will
-----
acquire all hereafter-acquired Collateral, free and clear of all Liens,
except Permitted Liens.
(h) Annex B-1. Annex B-1 accurately lists all Collateral Notes,
---------
Collateral Note Security, Pledged Shares, Partnership Interests, and
Commercial Tort Claims of Debtor (but such failure of such description to
be accurate or complete shall not impair the Security Interest in such
Collateral).
(i) Instruments, Chattel Paper, Collateral Notes, and Collateral Note
-----------------------------------------------------------------
Security. All instruments and chattel paper, including, without limitation,
--------
the Collateral Notes, have been delivered to Secured Party, together with
corresponding endorsements duly executed by Debtor in favor of Secured
Party, and such endorsements have been duly and validly executed and are
binding and enforceable against Debtor in accordance with their terms. Each
Collateral Note and the documents evidencing the Collateral Note Security
are in full force and effect; there have been no renewals or extensions of,
or amendments, modifications, or supplements to, any thereof about which
the Secured Party has not been advised in writing; and no "default" or
"potential default" has occurred and is continuing under any such
Collateral Note or documents evidencing the Collateral Note Security,
except as disclosed on Annex C hereto. Debtor has good title to the
Collateral Notes and Collateral Note Security, and such Collateral Notes
and Collateral Note Security are free from any claim for credit, deduction,
or allowance of an Obligor and free from any defense, condition, dispute,
setoff, or counterclaim, and there is no extension or indulgence with
respect thereto.
(j) Pledged Securities; Pledged Shares. All Collateral that is
----------------------------------
Pledged Shares is duly authorized, validly issued, fully paid, and non-
assessable, and the transfer thereof is not subject to any restrictions,
other than restrictions imposed by applicable securities and corporate
Laws. The Pledged Securities include 100% of the issued and outstanding
common stock or other equity interests of each Domestic Subsidiary owned by
Debtor and 65% of the issued and outstanding common stock or other equity
interests of each Foreign Subsidiary of Debtor. Debtor has good title to
the Pledged Securities, free and clear of all Liens and encumbrances
thereon (except for the Security Interest created hereby), and has
delivered to Secured Party (i) all stock certificates, or other
6
instruments or documents representing or evidencing the Pledged Securities,
together with corresponding assignment or transfer powers duly executed in
blank by Debtor, and such powers have been duly and validly executed and
are binding and enforceable against Debtor in accordance with their terms
and (ii) to the extent such Pledged Securities are uncertificated, control
and dominion over the Pledged Securities. The pledge of the Pledged
Securities in accordance with the terms hereof creates a valid and
perfected first priority security interest in the Pledged Securities
securing payment of the Obligation.
(k) Partnership Interests. Each Partnership issuing a Partnership
---------------------
Interest, is duly organized, currently existing, and in good standing under
all applicable Laws; there have been no amendments, modifications, or
supplements to any agreement or certificate creating any Partnership or any
material contract relating to the Partnerships, of which Secured Party has
not been advised in writing; no "default" or "potential default" has
occurred and is continuing under any Partnership Agreement, except as
disclosed on Annex C hereto; and no approval or consent of the partners of
any Partnership is required as a condition to the validity and
enforceability of the Security Interest created hereby or the consummation
of the transactions contemplated hereby which has not been duly obtained by
Debtor. Debtor has good title to the Partnership Interests free and clear
of all Liens and encumbrances (except for the Security Interest granted
hereby). The Partnership Interests are validly issued, fully paid, and
nonassessable and are not subject to statutory, contractual, or other
restrictions governing their transfer, ownership, or control, except as set
forth in the applicable Partnership Agreements or applicable securities
Laws. All capital contributions required to be made by the terms of the
Partnership Agreements for each Partnership have been made. The pledge of
the Partnership Interests in accordance with the terms hereof creates a
valid and perfected first priority security interest in the Partnership
Interests securing payment of the Obligation.
(l) Accounts. All Collateral that is accounts, contract rights,
--------
chattel paper, instruments, payment intangibles, or general intangibles is
free from any claim for credit, deduction, or allowance of an Obligor and
free from any defense, condition, dispute, setoff, or counterclaim, and
there is no extension or indulgence with respect thereto.
(m) Material Agreements. All Material Agreements to which Debtor is a
-------------------
party are set forth on Schedule 8.14 to the Credit Agreement.
(n) Deposit Accounts. With respect to the Deposit Accounts, (i)
----------------
Debtor maintains each Deposit Account with the banks listed on Annex D
hereto, (ii) Debtor shall use its best efforts to, within thirty (30) days
of the Closing Date, cause each such bank to acknowledge to Secured Party
that each such Deposit Account is subject to the Security Interest and
Liens herein created, that the pledge of such Deposit Account has been
recorded in the books and records of such bank, and that Secured Party
shall have dominion and control over such Deposit Account, (iii) Debtor has
the legal Right to pledge and assign to Secured Party the funds deposited
and to be deposited in each such Deposit Account; and (iv) the Deposit
Accounts set forth on Annex D hereto represent all the Deposit Accounts of
Debtor.
(o) Intellectual Property.
---------------------
(i) All of the Intellectual Property is subsisting, valid, and
enforceable. The information contained on Annex B-2 hereto is true,
correct, and complete. All issued Patents, Patent applications,
registered Trademarks, Trademark applications, registered Copyrights,
and Copyright applications of Debtor are identified on Annex B-2
hereto.
7
(ii) Debtor is the sole and exclusive owner of the entire and
unencumbered right, title, and interest in and to the Intellectual
Property free and clear of any Liens, including, without limitation,
any pledges, assignments, licenses, user agreements, and covenants by
Debtor not to ▇▇▇ third Persons, other than Permitted Liens.
(iii) To Debtor's knowledge, no third party is infringing, or in
Debtor's reasonable business judgment, may be infringing, any of
Debtor's rights under the Intellectual Property Collateral.
(iv) Debtor has performed and will continue to perform all acts
and has paid and will continue to pay all required fees and taxes to
maintain each and every item of the Intellectual Property in full
force and effect throughout the world, as applicable.
(v) Each of the Patents and Trademarks identified on Annex B-2
hereto has been properly registered with the United States Patent and
Trademark Office and in corresponding offices throughout the world
(where appropriate) and each of the Copyrights identified on Annex B-2
hereto has been properly registered with the United States Copyright
Office and in corresponding offices throughout the world (where
appropriate).
(vi) To Debtor's knowledge, no claims with respect to the
Intellectual Property Collateral have been asserted and are pending
(i) to the effect that the sale, licensing, pledge, or use of any of
the products of Debtor's business infringes any other party's valid
copyright, trademark, service ▇▇▇▇, trade secret, or other
intellectual property right, (ii) against the use by Debtor of any
Intellectual Property Collateral used in the Debtor's business as
currently conducted, or (iii) challenging the ownership or use by
Debtor of any of the Intellectual Property Collateral that Debtor
purports to own or use, nor, to Debtor's knowledge, is there a valid
basis for such a claim described in this Paragraph (o)(vi).
The foregoing representations and warranties will be true and correct in all
respects with respect to any additional Collateral or additional specific
descriptions of certain Collateral delivered to Secured Party in the future by
Debtor. The failure of any of these representations or warranties or any
description of Collateral therein to be or complete shall not impair the
Security Interest in any such Collateral.
6. COVENANTS. So long as Lenders are committed to extend credit to
Borrower or Debtor under the Credit Agreement and until the Obligation is paid
and performed in full, Debtor covenants and agrees with Secured Party that
Debtor will:
(a) Credit Agreement. (i) Comply with, perform, and be bound by all
----------------
covenants and agreements in the Credit Agreement that are applicable to it,
its assets, or its operations, each of which is hereby ratified and
confirmed (INCLUDING, WITHOUT LIMITATION, THE INDEMNIFICATION AND RELATED
PROVISIONS IN SECTION 11.12 OF THE CREDIT AGREEMENT); AND (ii) CONSENT TO
AND APPROVE THE VENUE, SERVICE OF PROCESS, AND WAIVER OF JURY TRIAL
PROVISIONS OF SECTION 13.10 OF THE CREDIT AGREEMENT.
(b) Record of Collateral. Maintain, at the place where Debtor is
--------------------
entitled to receive notices under the Loan Documents, a current record of
where all Collateral is located, permit representatives of Secured Party at
any time during normal business hours to inspect and make abstracts from
such records, and furnish to Secured Party, at such intervals as Secured
Party may request, such documents, lists, descriptions, certificates, and
other information as may be necessary
8
or proper to keep Secured Party informed with respect to the identity,
location, status, condition, and value of the Collateral.
(c) Perform Obligations. Fully perform all of Debtor's duties under
-------------------
and in connection with each transaction to which the Collateral, or any
part thereof, relates, so that the amounts thereof shall actually become
payable in their entirety to Secured Party. Furthermore, notwithstanding
anything to the contrary contained herein, (i) Debtor shall remain liable
under the contracts, agreements, documents, and instruments included in the
Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Security Agreement had
not been executed, (ii) the exercise by Secured Party of any of its rights
or remedies hereunder shall not release Debtor from any of its duties or
obligations under the contracts, agreements, documents, and instruments
included in the Collateral, and (iii) Secured Party shall not have any
indebtedness, liability, or obligation under any of the contracts,
agreements, documents, and instruments included in the Collateral by reason
of this Security Agreement, and Secured Party shall not be obligated to
perform any of the obligations or duties of Debtor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
(d) Notices. (i) Except as may be otherwise expressly permitted under
-------
the terms of the Credit Agreement, promptly notify Secured Party of (A) any
change in any fact or circumstances represented or warranted by Debtor with
respect to any of the Collateral or Obligation, (B) any claim, action, or
proceeding affecting title to all or any of the Collateral or the Security
Interest and, at the request of Secured Party, appear in and defend, at
Debtor's expense, any such action or proceeding, (C) any material change in
the nature of the Collateral, (D) any material damage to or loss of
Collateral, and (E) the occurrence of any other event or condition
(including, without limitation, matters as to Lien priority) that could
have a material adverse effect on the Collateral (taken as a whole) or the
Security Interest created hereunder; and (ii) give Secured Party thirty
(30) days written notice before any proposed (A) relocation of its
principal place of business or chief executive office, (B) change of its
name, identity, or corporate structure, (C) relocation of the place where
its books and records concerning its accounts are kept, (D) relocation of
any Collateral (other than delivery of inventory in the ordinary course of
business to third party contractors for processing and sales of inventory
in the ordinary course of business or as permitted by the Credit Agreement)
to a location not described on the attached Annex A, and (E) change of its
jurisdiction of organization or organizational identification number, as
applicable. Prior to making any of the changes contemplated in clause (ii)
preceding, Debtor shall execute and deliver all such additional documents
and perform all additional acts as Secured Party, in its sole discretion,
may request in order to continue or maintain the existence and priority of
the Security Interests in all of the Collateral.
(e) Collateral in Trust. Hold in trust (and not commingle with other
-------------------
assets of Debtor) for Secured Party all Collateral that is chattel paper,
instruments, Collateral Notes, Pledged Securities, or documents at any time
received by Debtor, and promptly deliver same to Secured Party, unless
Secured Party at its option (which may be evidenced only by a writing
signed by Secured Party stating that Secured Party elects to permit Debtor
to so retain) permits Debtor to retain the same, but any chattel paper,
instruments, Collateral Notes, or documents so retained shall be marked to
state that they are assigned to Secured Party; each such instrument shall
be endorsed to the order of Secured Party (but the failure of same to be so
marked or endorsed shall not impair the Security Interest thereon).
(f) Further Assurances. At Debtor's expense and Secured Party's
------------------
request, before or after a Default or Potential Default, (i) file or cause
to be filed such applications and take such other actions as Secured Party
may request to obtain the consent or approval of any Governmental
9
Authority to Secured Party's Rights hereunder, including, without
limitation, the Right to sell all the Collateral upon a Default or
Potential Default without additional consent or approval from such
Governmental Authority (and, because Debtor agrees that Secured Party's
remedies at Law for failure of Debtor to comply with this provision would
be inadequate and that such failure would not be adequately compensable in
damages, Debtor agrees that its covenants in this provision may be
specifically enforced); (ii) from time to time promptly execute and deliver
to Secured Party all such other assignments, certificates, supplemental
documents, and financing statements, and do all other acts or things as
Secured Party may reasonably request in order to more fully create,
evidence, perfect, continue, and preserve the priority of the Security
Interest and to carry out the provisions of this Security Agreement; and
(iii) pay all filing fees in connection with any financing, continuation,
or termination statement or other instrument with respect to the Security
Interests.
(g) Control. Execute all documents and take any action required by
-------
Secured Party in order for Secured Party to obtain "control" (as defined in
the UCC) with respect to Collateral consisting of Deposit Accounts,
investment property, uncertificated Pledged Securities, and letter-of-
credit rights. If Debtor at any time holds or acquires an interest in any
electronic chattel paper or any "transferable record, " as that term is
defined in the federal Electronic Signatures in Global and National
Commerce Act, or in the Uniform Electronic Transactions Act as in effect in
any relevant jurisdiction, promptly notify Secured Party thereof and, at
the request of Secured Party, take such action as Secured Party may
reasonably request to vest in Secured Party control under the UCC of such
electronic chattel paper or control under the federal Electronic Signatures
in Global and National Commerce Act or, as the case may be, the Uniform
Electronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record.
(h) Fixtures. For any Collateral that is a fixture or an accession
--------
which has been attached to real estate or other goods prior to the
perfection of the Security Interest, furnish Secured Party, upon reasonable
demand, a disclaimer of interest in each such fixture or accession and a
consent in writing to the Security Interest of Secured Party therein,
signed by all Persons having any interest in such fixture or accession by
virtue of any interest in the real estate or other goods to which such
fixture or accession has been attached.
(i) Encumbrances. Not create, permit, or suffer to exist, and shall
------------
defend the Collateral against, any Lien or other encumbrance on the
Collateral, and shall defend Debtor's Rights in the Collateral and Secured
Party's Security Interest in, the Collateral against the claims and demands
of all Persons except those holding or claiming Permitted Liens. Debtor
shall do nothing to impair the Rights of Secured Party in the Collateral.
(j) Estoppel and Other Agreements and Matters. Upon the reasonable
-----------------------------------------
request of Administrative Agent, either (i) use commercially reasonable
efforts to cause the landlord or lessor for each location where any of its
inventory or equipment is maintained to execute and deliver to Secured
Party an estoppel and subordination agreement in such form as may be
reasonably acceptable to Secured Party and its counsel, or (ii) deliver to
Secured Party a legal opinion or other evidence (in each case that is
reasonably satisfactory to Secured Party and it counsel) that neither the
applicable lease nor the Laws of the jurisdiction in which that location is
situated provide for contractual, common Law, or statutory landlord's Liens
that is senior to or pari passu with the Security Interest.
(k) Certificates of Title. Upon the request of Secured Party, if
---------------------
certificates of title are issued or outstanding with respect to any of the
Vehicles or other Collateral, cause the Security Interest to be properly
noted thereon.
10
(l) Warehouse Receipts Non-Negotiable. If any warehouse receipt or
---------------------------------
receipt in the nature of a warehouse receipt is issued in respect of any of
the Collateral, agree that such warehouse receipt or receipt in the nature
thereof shall not be "negotiable" (as such term is used in Section 7-104 of
the UCC) unless such warehouse receipt or receipt in the nature thereof is
delivered to Secured Party.
(m) Impairment of Collateral. Not use any of the Collateral, or
------------------------
permit the same to be used, for any unlawful purpose, in any manner that is
reasonably likely to adversely impair the value or usefulness of the
Collateral, or in any manner inconsistent with the provisions or
requirements of any policy of insurance thereon nor affix or install any
accessories, equipment, or device on the Collateral or on any component
thereof if such addition will impair the original intended function or use
of the Collateral or such component.
(n) Information. From time to time at the request of Secured Party
-----------
deliver to Secured Party such information regarding the Collateral and the
Debtor as Secured Party may reasonably request, including, without
limitation, lists and descriptions of the Collateral and evidence of the
identity and existence of the Collateral.
(o) Annexes. Immediately update all annexes hereto if any information
-------
therein shall become inaccurate or incomplete. Notwithstanding any other
provision herein, Debtor's failure to describe any Collateral required to
be listed on any annex hereto shall not impair Secured Party's Security
Interest in the Collateral.
(p) Modifications to Agreements. Not modify or substitute, or permit
---------------------------
the modification or substitution of, any Collateral Note or any document
evidencing the Collateral Note Security or contract to which any of the
Collateral which is accounts relates, nor extend or grant indulgences
regarding any account which is Collateral, other than such modifications or
indulgences as are reasonable and customary in the industry in which Debtor
is engaged.
(q) Securities. Except as permitted by the Credit Agreement, not
----------
sell, exchange, or otherwise dispose of, or grant any option, warrant, or
other Right with respect to, any of the Pledged Securities; to the extent
any issuer of any Pledged Securities is controlled by Debtor and/or its
Affiliates, not permit such issuer to issue any additional shares of stock
or other securities in addition to or in substitution for the Pledged
Securities, except issuances to Debtor on terms acceptable to Secured
Party; to the extent any company whose shares or securities constitute
Pledged Securities is controlled by Debtor and/or its Affiliates, cause
such company not to issue any stock or other securities in addition to or
in substitution for the Pledged Securities issued by such company, except
to Debtor; pledge hereunder, immediately upon Debtor's acquisition
(directly or indirectly) thereof, any and all additional shares of stock or
other securities of each Subsidiary of Debtor; and take any action
necessary, required, or requested by Secured Party to allow Secured Party
to fully enforce its Security Interest in the Pledged Securities,
including, without limitation, the filing of any claims with any court,
liquidator, trustee, custodian, receiver, or other like person or party.
(r) Partnerships and Partnership Interests. (i) Promptly perform,
--------------------------------------
observe, and otherwise comply with each and every covenant, agreement,
requirement, and condition set forth in the contracts and agreements
creating or relating to any Partnership; (ii) do or cause to be done all
things necessary or appropriate to keep the Partnerships in full force and
effect and the Rights of Debtor and Secured Party thereunder unimpaired;
(iii) except as expressly permitted by the Credit Agreement, not consent to
any Partnership selling, leasing, or disposing of substantially all of its
assets in a single transaction or a series of transactions; (iv) notify
Secured Party of the occurrence of
11
any default or breach under any contract or agreement creating or relating
to the Partnerships; (v) not consent to the amendment, modification,
surrender, impairment, forfeiture, cancellation, dissolution, or
termination of any Partnership, or material agreement relating thereto;
(vi) except as permitted by the Credit Agreement, not transfer, sell, or
assign any of the Partnership Interests or any part thereof; (vii) to the
extent any Partnership is controlled by Debtor and/or its Affiliates, cause
such Partnership to refrain from granting any Partnership Interests in
addition to or in substitution for the Partnership Interests granted by the
Partnerships, except to Debtor; (viii) pledge hereunder, immediately upon
Debtor's acquisition (directly or indirectly) thereof, any and all
additional Partnership Interests of any Partnership granted to Debtor; and
any and all additional shares of stock or other securities of each; (ix)
deliver to Secured Party a fully-executed Acknowledgment of Pledge,
substantially in the form of Annex G, for each Partnership Interest; and
(x) take any action necessary, required, or requested by Secured Party to
allow Secured Party to fully enforce its Security Interest in the
Partnership Interests, including, without limitation, the filing of any
claims with any court, liquidator, trustee, custodian, receiver, or other
like person or party.
(s) Material Agreements. (i) Promptly perform, observe, and otherwise
-------------------
comply with each and every covenant, agreement, requirement, and condition
set forth in the Material Agreements to which Debtor is a party; (ii) do or
cause to be done all things necessary or appropriate to keep the Material
Agreements to which Debtor is a party in full force and effect and the
Rights of Debtor and Secured Party thereunder unimpaired; (iii) notify
Secured Party of the occurrence of any default or breach or potential
default or breach under any Material Agreement to which Debtor is a party;
and (iv) not consent to the amendment, modification, surrender, impairment,
forfeiture, cancellation, dissolution, or termination of any Material
Agreement to which Debtor is a Party.
(t) Depository Bank. With respect to any Deposit Accounts, (i)
---------------
maintain the Deposit Accounts at the banks (each a "depository bank")
described on Annex D or such additional depository banks as have complied
with item (iv) hereof; (ii) within thirty (30) days of the Closing Date, or
at any other time requested by Secured Party, deliver to each depository
bank a letter in the form of Annex F hereto with respect to Secured Party's
Rights in such Deposit Account and use its best efforts to obtain the
execution of such letter by each depository bank that the pledge of such
Deposit Account has been recorded in the books and records of such bank and
that Secured Party shall have dominion and control over such Deposit
Account; (iii) deliver to Secured Party all certificates or instruments, if
any, now or hereafter representing or evidencing the Deposit Accounts,
accompanied by duly executed instruments of transfer or assignment in
blank, all in form and substance reasonably satisfactory to Secured Party;
and (iv) notify Secured Party prior to establishing any additional Deposit
Accounts and, at the request of Secured Party, obtain from such depository
bank an executed letter substantially in the form of Annex F and deliver
the same to Secured Party.
(u) Marking of Chattel Paper. At the request of Secured Party, not
------------------------
create any chattel paper without placing a legend on the chattel paper
acceptable to Secured Party indicating that Secured Party has a security
interest in the chattel paper.
(v) Modification of Accounts. In accordance with prudent business
------------------------
practices, endeavor to collect or cause to be collected from each account
debtor under its accounts, as and when due, any and all amounts owing under
such accounts. Except in the ordinary course of business consistent with
prudent business practices and industry standards, without the prior
written consent of Secured Party, Debtor shall not (i) grant any extension
of time for any payment with respect to any of the accounts, (ii)
compromise, compound, or settle any of the accounts for less than the full
amount thereof, (iii) release, in whole or in part, any Person liable for
payment of any of the accounts, (iv) allow any credit or discount for
payment with respect to any account other than trade discounts granted in
the ordinary course of business, or (v) release any Lien or guaranty
securing any account.
12
(w) Intellectual Property.
---------------------
(i) Prosecute diligently all applications in respect of
Intellectual Property, now or hereafter pending;
(ii) Except to the extent not required in Debtor's reasonable
business judgment, make federal applications on all of its unpatented
but patentable inventions and all of its registrable but unregistered
Copyrights and Trademarks;
(iii) Preserve and maintain all of its material rights in the
Intellectual Property and protect the Intellectual Property from
infringement, unfair competition, cancellation, or dilution by all
appropriate action necessary in Debtor's reasonable business judgment,
including, without limitation, the commencement and prosecution of
legal proceedings to recover damages for infringement and to defend
and preserve its rights in the Intellectual Property;
(iv) Not abandon any of the Intellectual Property necessary to
the conduct of its business in the exercise of Debtor's reasonable
business judgment;
(v) (A) Not sell or assign any of its interest in any of the
Intellectual Property Collateral other than in the ordinary course of
business for full and fair consideration without the prior written
consent of Secured Party; (B) not grant any license or sublicense with
respect to any of the Intellectual Property Collateral other than as
permitted by Paragraph 8(c) hereof without the prior written consent
of Secured Party; and (C) maintain the quality of any and all products
and services with respect to which the Intellectual Property
Collateral is used;
(vi) Not enter into any agreement, including, but not limited
to any licensing agreement, that is or may be inconsistent with
Debtor's obligations under this Security Agreement or any of the other
Loan Documents;
(vii) Give Secured Party prompt written notice if Debtor shall
obtain rights to or become entitled to the benefit of any Intellectual
Property not identified on Annex B-2 hereto;
(viii) If a Default or Potential Default exists, use its
reasonable efforts to obtain any consents, waivers, or agreements
necessary to enable Secured Party to exercise its rights and remedies
with respect to the Intellectual Property; and
(ix) At any time and from time to time upon the reasonable
request of Secured Party, execute and deliver to Secured Party all
such other agreements, documents, instruments, and other items as may
be necessary or appropriate for Secured Party to create and perfect
its Security Interest in the Intellectual Property and to make all
appropriate filings with respect thereto.
7. DEFAULT; REMEDIES. If a Default or a Potential Default exists, Secured
Party may, at its election (but subject to the terms and conditions of the
Credit Agreement), exercise any and all Rights available to a secured party
under the UCC, in addition to any and all other Rights afforded by the Loan
Documents, at Law, in equity, or otherwise, including, without limitation, (a)
requiring Debtor to assemble all
13
or part of the Collateral and make it available to Secured Party at a place to
be designated by Secured Party which is reasonably convenient to Debtor and
Secured Party, (b) surrendering any policies of insurance on all or part of the
Collateral and receiving and applying the unearned premiums as a credit on the
Obligation, (c) applying by appropriate judicial proceedings for appointment of
a receiver for all or part of the Collateral (and Debtor hereby consents to any
such appointment), and (d) applying to the Obligation any cash held by Secured
Party under this Security Agreement, including, without limitation, any cash in
the Cash Collateral Account (defined in Section 8(h)).
(a) Notice. Reasonable notification of the time and place of any
------
public sale of the Collateral, or reasonable notification of the time after
which any private sale or other intended disposition of the Collateral is
to be made, shall be sent to Debtor and to any other Person entitled to
notice under the UCC; provided that, if any of the Collateral threatens to
decline speedily in value or is of the type customarily sold on a
recognized market, Secured Party may sell or otherwise dispose of the
Collateral without notification, advertisement, or other notice of any
kind. It is agreed that notice sent or given not less than ten Business
Days prior to the taking of the action to which the notice relates is
reasonable notification and notice for the purposes of this subparagraph.
(b) Condition of Collateral; Warranties. Secured Party has no
-----------------------------------
obligation to clean or otherwise prepare the Collateral for sale. Secured
Party may sell the Collateral without giving any warranties as to the
Collateral. Secured Party may specifically disclaim any warranties of title
or the like. This procedure will not be considered adversely to affect the
commercial reasonableness of any sale of the Collateral.
(c) Compliance with Other Laws. Secured Party may comply with any
--------------------------
applicable state or federal law requirements in connection with a
disposition of the Collateral and compliance will not be considered to
adversely affect the commercial reasonableness of any sale of the
Collateral.
(d) Sales of Pledged Securities.
---------------------------
(i) Debtor agrees that, because of the Securities Act of 1933,
as amended, or the rules and regulations promulgated thereunder
(collectively, the "Securities Act"), or any other Laws or
regulations, and for other reasons, there may be legal or practical
restrictions or limitations affecting Secured Party in any attempts to
dispose of certain portions of the Pledged Securities and for the
enforcement of its Rights. For these reasons, Secured Party is hereby
authorized by Debtor, but not obligated, upon the occurrence and
during the continuation of a Default or Potential Default, to sell all
or any part of the Pledged Securities at private sale, subject to
investment letter or in any other manner which will not require the
Pledged Securities, or any part thereof, to be registered in
accordance with the Securities Act or any other Laws or regulations,
at a reasonable price at such private sale or other distribution in
the manner mentioned above. Debtor understands that Secured Party may
in its discretion approach a limited number of potential purchasers
and that a sale under such circumstances may yield a lower price for
the Pledged Securities, or any part thereof, than would otherwise be
obtainable if such Collateral were either afforded to a larger number
or potential purchasers, registered under the Securities Act, or sold
in the open market. Debtor agrees that any such private sale made
under this Paragraph 7(d) shall be deemed to have been made in a
commercially reasonable manner, and that Secured Party has no
obligation to delay the sale of any Pledged Securities to permit the
issuer thereof to register it for public sale under any applicable
federal or state securities Laws.
(ii) Secured Party is authorized, in connection with any such
sale, (A) to restrict the prospective bidders on or purchasers of any
of the Pledged Securities to a limited number
14
of sophisticated investors who will represent and agree that they are
purchasing for their own account for investment and not with a view to
the distribution or sale of any of such Pledged Securities, and (B) to
impose such other limitations or conditions in connection with any
such sale as Secured Party reasonably deems necessary in order to
comply with applicable Law. Debtor covenants and agrees that it will
execute and deliver such documents and take such other action as
Secured Party reasonably deems necessary in order that any such sale
may be made in compliance with applicable Law. Upon any such sale
Secured Party shall have the right to deliver, assign, and transfer to
the purchaser thereof the Pledged Securities so sold. Each purchaser
at any such sale shall hold the Pledged Securities so sold absolutely
free from any claim or right of Debtor of whatsoever kind, including
any equity or right of redemption of Debtor. Debtor, to the extent
permitted by applicable Law, hereby specifically waives all rights of
redemption, stay, or appraisal which it has or may have under any Law
now existing or hereafter enacted.
(iii) Debtor agrees that ten days' written notice from Secured
Party to Debtor of Secured Party's intention to make any such public
or private sale or sale at a broker's board or on a securities
exchange shall constitute reasonable notice under the UCC. Such notice
shall (A) in case of a public sale, state the time and place fixed for
such sale, (B) in case of sale at a broker's board or on a securities
exchange, state the board or exchange at which such a sale is to be
made and the day on which the Pledged Securities, or the portion
thereof so being sold, will first be offered to sale at such board or
exchange, and (C) in the case of a private sale, state the day after
which such sale may be consummated. Any such public sale shall be held
at such time or times within ordinary business hours and at such place
or places as Secured Party may fix in the notice of such sale. At any
such sale, the Pledged Securities may be sold in one lot as an
entirety or in separate parcels, as Secured Party may reasonably
determine. Secured Party shall not be obligated to make any such sale
pursuant to any such notice. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to
be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to
which the same may be so adjourned.
(iii) In case of any sale of all or any part of the Pledged
Securities on credit or for future delivery, the Pledged Securities so
sold may be retained by Secured Party until the selling price is paid
by the purchaser thereof, but Secured Party shall not incur any
liability in case of the failure of such purchaser to take up and pay
for the Pledged Securities so sold and in case of any such failure,
such Pledged Securities may again be sold upon like notice. Secured
Party, instead of exercising the power of sale herein conferred upon
it, may proceed by a suit or suits at Law or in equity to foreclose
the Security Interests and sell the Pledged Securities, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
(iv) Without limiting the foregoing, or imposing upon Secured
Party any obligations or duties not required by applicable Law, Debtor
acknowledges and agrees that, in foreclosing upon any of the Pledged
Securities, or exercising any other Rights or remedies provided
Secured Party hereunder or under applicable Law, Secured Party may,
but shall not be required to, (A) qualify or restrict prospective
purchasers of the Pledged Securities by requiring evidence of
sophistication or creditworthiness, and requiring the execution and
delivery of confidentiality agreements or other documents and
agreements as a condition to such prospective purchasers' receipt of
information regarding the Pledged Securities or participation in any
public or private foreclosure sale process, (B) provide to prospective
15
purchasers business and financial information regarding Debtor
or the Companies available in the files of Secured Party at
the time of commencing the foreclosure process, without the
requirement that Secured Party obtain, or seek to obtain, any
updated business or financial information or verify, or
certify to prospective purchasers, the accuracy of any such
business or financial information, or (C) offer for sale and
sell the Pledged Securities with, or without, first employing
an appraiser, investment banker, or broker with respect to the
evaluation of the Pledged Securities, the solicitation of
purchasers for Pledged Securities, or the manner of sale of
Pledged Securities.
(e) Application of Proceeds. Secured Party shall apply the
-----------------------
proceeds of any sale or other disposition of the Collateral under this
Paragraph 7 in the following order: first, to the payment of all
expenses incurred in retaking, holding, and preparing any of the
Collateral for sale(s) or other disposition, in arranging for such
sale(s) or other disposition, and in actually selling or disposing of
the same (all of which are part of the Obligation); second, toward
repayment of amounts expended by Secured Party under Paragraph 8; and
third, toward payment of the balance of the Obligation in the order and
manner specified in the Credit Agreement. Any surplus remaining shall
be delivered to Debtor or as a court of competent jurisdiction may
direct. If the proceeds are insufficient to pay the Obligation in full,
Debtor shall remain liable for any deficiency.
(e) Sales on Credit. If Secured Party sells any of the
---------------
Collateral upon credit, Debtor will be credited only with payments
actually made by the purchaser, received by the Secured Party, and
applied to the indebtedness of the purchaser. In the event the
purchaser fails to pay for the Collateral, Secured Party may resell the
Collateral and Debtor shall be credited with the proceeds of the sale.
8. OTHER RIGHTS OF SECURED PARTY.
(a) Performance. If Debtor fails to keep the Collateral in
-----------
good repair, working order, and condition, as required in this Security
Agreement, or fails to pay when due all Taxes on any of the Collateral
in the manner required by the Loan Documents, or fails to preserve the
priority of the Security Interest in any of the Collateral, or fails to
keep the Collateral insured as required by the Loan Documents, or
otherwise fails to perform any of its obligations under the Loan
Documents with respect to the Collateral, then Secured Party may, at
its option, but without being required to do so, make such repairs, pay
such Taxes, prosecute or defend any suits in relation to the
Collateral, or insure and keep insured the Collateral in any amount
deemed appropriate by Secured Party, or take all other action which
Debtor is required, but has failed or refused, to take under the Loan
Documents. Any sum which may be expended or paid by Secured Party under
this subparagraph (including, without limitation, court costs and
reasonable attorneys' fees) shall bear interest from the dates of
expenditure or payment at the Default Rate until paid and, together
with such interest, shall be payable by Debtor to Secured Party upon
demand and shall be part of the Obligation.
(b) Collection. If a Default or Potential Default exists and
----------
upon notice from Secured Party, each Obligor with respect to any
payments on any of the Collateral (including, without limitation,
dividends and other distributions with respect to the Pledged
Securities and Partnership Interests, payments on Collateral Notes,
insurance proceeds payable by reason of loss or damage to any of the
Collateral, or Deposit Accounts) is hereby authorized and directed by
Debtor to make payment directly to Secured Party, regardless of whether
Debtor was previously making collections thereon. Subject to Paragraph
8(f) hereof, until such notice is given, Debtor is authorized to retain
and expend all payments made on Collateral. If a Default or Potential
Default exists, Secured Party shall have the Right in its own name or
in the name of Debtor to compromise or extend time of payment with
respect to all or any portion of the Collateral for such amounts and
upon such terms as Secured Party may determine; to demand, collect,
receive, receipt for, ▇▇▇ for, compound, and give
16
acquittances for any and all amounts due or to become due with respect
to Collateral; to take control of cash and other proceeds of any
Collateral; to endorse the name of Debtor on any notes, acceptances,
checks, drafts, money orders, or other evidences of payment on
Collateral that may come into the possession of Secured Party; to sign
the name of Debtor on any invoice or ▇▇▇▇ of lading relating to any
Collateral, on any drafts against Obligors or other Persons making
payment with respect to Collateral, on assignments and verifications of
accounts or other Collateral and on notices to Obligors making payment
with respect to Collateral; to send requests for verification of
obligations to any Obligor; and to do all other acts and things
necessary to carry out the intent of this Security Agreement. If a
Default or Potential Default exists and any Obligor fails or refuses to
make payment on any Collateral when due, Secured Party is authorized,
in its sole discretion, either in its own name or in the name of
Debtor, to take such action as Secured Party shall deem appropriate for
the collection of any amounts owed with respect to Collateral or upon
which a delinquency exists. Regardless of any other provision hereof,
however, Secured Party shall never be liable for its failure to
collect, or for its failure to exercise diligence in the collection of,
any amounts owed with respect to Collateral, nor shall it be under any
duty whatsoever to anyone except Debtor to account for funds that it
shall actually receive hereunder. Without limiting the generality of
the foregoing, Secured Party shall have no responsibility for
ascertaining any maturities, calls, conversions, exchanges, offers,
tenders, or similar matters relating to any Collateral, or for
informing Debtor with respect to any of such matters (irrespective of
whether Secured Party actually has, or may be deemed to have, knowledge
thereof). The receipt of Secured Party to any Obligor shall be a full
and complete release, discharge, and acquittance to such Obligor, to
the extent of any amount so paid to Secured Party. Prior to the
occurrence and continuation of any Default or Potential Default,
Secured Party shall not direct any depository bank to pay over any
funds in any Deposit Accounts to Secured Party.
(c) Intellectual Property. For purposes of enabling Secured
---------------------
Party to exercise its rights and remedies under this Security Agreement
and enabling Secured Party and its successors and assigns to enjoy the
full benefits of the Collateral, Debtor hereby grants to Secured Party
an irrevocable, nonexclusive license (exercisable without payment of
royalty or other compensation to Debtor) to use, assign, license, or
sublicense any of the Intellectual Property Collateral. Debtor shall
provide Security Party with reasonable access to all media in which any
of the Intellectual Property Collateral may be recorded or stored and
all computer programs used for the completion or printout thereof. This
license shall also inure to the benefit of all successors, assigns, and
transferees of Secured Party. Secured Party may require that Debtor
assign all of its right, title, and interest in and to the Intellectual
Property or any part thereof to Secured Party or such other Person as
Secured Party may designate pursuant to documents satisfactory to
Secured Party. If no Default or Potential Default exists, Debtor shall
have the exclusive, non-transferable right and license to use the
Intellectual Property in the ordinary course of business and the
exclusive right to grant to other Persons licenses and sublicenses with
respect to the Intellectual Property for full and fair consideration.
Debtor agrees not to sell or assign its interest in, or grant any
sublicense under, the license granted under this Paragraph 8(c) other
than in the ordinary course of business for full and fair consideration
without the prior written consent of Secured Party.
(d) Record Ownership of Securities. If a Default or Potential
------------------------------
Default exists, Secured Party at any time have any Collateral that is
Pledged Securities and that is in the possession of Secured Party, or
its nominee or nominees, registered in its name, or in the name of its
nominee or nominees, as Secured Party; and, as to any Collateral that
is Pledged Securities so registered, Secured Party shall execute and
deliver (or cause to be executed and delivered) to Debtor all such
proxies, powers of attorney, dividend coupons or orders, and other
documents as Debtor may reasonably request for the purpose of enabling
Debtor to exercise the voting Rights and powers which it is entitled to
exercise under this Security Agreement or to receive the dividends and
other Distributions
17
and payments in respect of such Collateral that is Pledged Securities
or proceeds thereof which it is authorized to receive and retain under
this Security Agreement.
(e) Voting of Securities. As long as no Default or Potential
--------------------
Default exists, Debtor is entitled to exercise all voting rights
pertaining to any Pledged Securities and Partnership Interests;
provided, however, that no vote shall be cast or consent, waiver, or
ratification given or action taken without the prior written consent of
Secured Party which would (x) be inconsistent with or violate any
provision of this Security Agreement or any other Loan Document or (y)
amend, modify, or waive any term, provision or condition of the
certificate of incorporation, bylaws, certificate of formation, or
other charter document, or other agreement relating to, evidencing,
providing for the issuance of, or securing any Collateral; and provided
further that Debtor shall give Secured Party at least five Business
Days' prior written notice in the form of an officers' certificate of
the manner in which it intends to exercise, or the reasons for
refraining from exercising, any voting or other consensual Rights
pertaining to the Collateral or any part thereof which might have a
material adverse effect on the value of the Collateral or any part
thereof. If a Default or Potential Default exists and if Secured Party
elects to exercise such Right, the Right to vote any Pledged Securities
shall be vested exclusively in Secured Party. To this end, Debtor
hereby irrevocably constitutes and appoints Secured Party the proxy and
attorney-in-fact of Debtor, with full power of substitution, to vote,
and to act with respect to, any and all Collateral that is Pledged
Securities standing in the name of Debtor or with respect to which
Debtor is entitled to vote and act, subject to the understanding that
such proxy may not be exercised unless a Default exists. The proxy
herein granted is coupled with an interest, is irrevocable, and shall
continue until the Obligation has been paid and performed in full.
(f) Certain Proceeds. Notwithstanding any contrary provision
----------------
herein, any and all
(v) dividends, interest, or other Distributions paid
or payable other than in cash in respect of, and instruments
and other property received, receivable, or otherwise
distributed in respect of, or in exchange for, any Collateral;
(vi) dividends, interest, or other Distributions
hereafter paid or payable in cash in respect of any Collateral
in connection with a partial or total liquidation or
dissolution, or in connection with a reduction of capital,
capital surplus, or paid-in-surplus;
(vii) cash paid, payable, or otherwise distributed in
redemption of, or in exchange for, any Collateral; and
(viii) dividends, interest, or other Distributions paid
or payable in violation of the Loan Documents,
shall be part of the Collateral hereunder, and shall, if received by
Debtor, be held in trust for the benefit of Secured Party, and shall
forthwith be delivered to Secured Party (accompanied by proper
instruments of assignment and/or stock and/or bond powers executed by
Debtor in accordance with Secured Party's instructions) to be held
subject to the terms of this Security Agreement. Any cash proceeds of
Collateral which come into the possession of Secured Party on and after
the occurrence of a Default (including, without limitation, insurance
proceeds) may, at Secured Party's option, be applied in whole or in
part to the Obligation (to the extent then due), be released in whole
or in part to or on the written instructions of Debtor for any general
or specific purpose, or be retained in whole or in part by Secured
Party as additional Collateral. Any cash Collateral in the possession
of Secured Party may be invested by Secured Party in certificates of
deposit issued by Secured Party (if Secured Party issues such
certificates) or by any state or national bank having combined capital
and surplus
18
greater than $100,000,000 with a rating from ▇▇▇▇▇'▇ and S&P of P-1 and
A-1+, respectively, or in securities issued or guaranteed by the United
States of America or any agency thereof. Secured Party shall never be
obligated to make any such investment and shall never have any
liability to Debtor for any loss which may result therefrom. All
interest and other amounts earned from any investment of Collateral may
be dealt with by Secured Party in the same manner as other cash
Collateral. The provisions of this subparagraph are applicable whether
or not a Default or Potential Default exists.
(g) Use and Operation of Collateral. Should any Collateral
-------------------------------
come into the possession of Secured Party, Secured Party may use or
operate such Collateral for the purpose of preserving it or its value
pursuant to the order of a court of appropriate jurisdiction or in
accordance with any other Rights held by Secured Party in respect of
such Collateral. Debtor covenants to promptly reimburse and pay to
Secured Party, at Secured Party's request, the amount of all reasonable
expenses (including, without limitation, the cost of any insurance and
payment of Taxes or other charges) incurred by Secured Party in
connection with its custody and preservation of Collateral, and all
such expenses, costs, Taxes, and other charges shall bear interest at
the Default Rate until repaid and, together with such interest, shall
be payable by Debtor to Secured Party upon demand and shall become part
of the Obligation. However, the risk of accidental loss or damage to,
or diminution in value of, Collateral is on Debtor, and Secured Party
shall have no liability whatever for failure to obtain or maintain
insurance, nor to determine whether any insurance ever in force is
adequate as to amount or as to the risks insured. With respect to
Collateral that is in the possession of Secured Party, Secured Party
shall have no duty to fix or preserve rights against prior parties to
such Collateral and shall never be liable for any failure to use
diligence to collect any amount payable in respect of such Collateral,
but shall be liable only to account to Debtor for what it may actually
collect or receive thereon. The provisions of this subparagraph are
applicable whether or not a Default exists.
(h) Cash Collateral Account. If a Default exists, Secured
-----------------------
Party shall have, and Debtor hereby grants to Secured Party, the right
and authority to transfer all funds on deposit in the Deposit Accounts
to a "Cash Collateral Account" (herein so called) maintained with a
depository institution acceptable to Secured Party and subject to the
exclusive direction, domain, and control of Secured Party, and no
disbursements or withdrawals shall be permitted to be made by Debtor
from such Cash Collateral Account. Such Cash Collateral Account shall
be subject to the Security Interest and Liens in favor of Secured Party
herein created, and Debtor hereby grants a security interest to Secured
Party on behalf of Agents and Lenders in and to, such Cash Collateral
Account and all checks, drafts, and other items ever received by Debtor
for deposit therein. Furthermore, if a Default exists, Secured Party
shall have the right, at any time in its discretion without notice to
Debtor, (i) to transfer to or to register in the name of Secured Party,
any other Agent, or any Lender or nominee any certificates of deposit
or deposit instruments constituting Deposit Accounts and shall have the
right to exchange such certificates or instruments representing Deposit
Accounts for certificates or instruments of smaller or larger
denominations and (ii) to take and apply against the Obligation any and
all funds then or thereafter on deposit in the Cash Collateral Account
or otherwise constituting Deposit Accounts.
(i) Power of Attorney. Debtor hereby irrevocably constitutes
-----------------
and appoints Secured Party and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with
full irrevocable power and authority in the name of Debtor or in its
own name, to take after the occurrence and during the continuance of a
Default and from time to time thereafter, any and all action and to
execute any and all documents and instruments which Secured Party at
any time and from time to time deems necessary or desirable to
accomplish the purposes of this Security Agreement and, without
limiting the generality of the foregoing, Debtor hereby gives Secured
Party the power and right on behalf of Debtor and in its own name to do
any of the following after the
19
occurrence and during the continuance of a Default and from time to
time thereafter, without notice to or the consent of Debtor:
(ix) to transfer any and all funds on deposit in
the Deposit Accounts to the Cash Collateral Account as set
forth in herein;
(x) to receive, endorse, and collect any drafts
or other instruments or documents in connection with clause
(b) above and this clause (i);
(xi) to use the Intellectual Property or to grant
or issue any exclusive or non-exclusive license under the
Intellectual Property to anyone else, and to perform any act
necessary for the Secured Party to assign, pledge, convey, or
otherwise transfer title in or dispose of the Intellectual
Property to any other Person;
(xii) to demand, ▇▇▇ for, collect, or receive, in
the name of Debtor or in its own name, any money or property
at any time payable or receivable on account of or in exchange
for any of the Collateral and, in connection therewith,
endorse checks, notes, drafts, acceptances, money orders,
documents of title or any other instruments for the payment of
money under the Collateral or any policy of insurance;
(xiii) to pay or discharge taxes, Liens, or other
encumbrances levied or placed on or threatened against the
Collateral;
(xiv) to notify post office authorities to change
the address for delivery of Debtor to an address designated by
Secured Party and to receive, open, and dispose of mail
addressed to Debtor; and
(xv) (A) to direct account debtors and any other
parties liable for any payment under any of the Collateral to
make payment of any and all monies due and to become due
thereunder directly to Secured Party or as Secured Party shall
direct; (B) to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any
time in respect of or arising out of any Collateral; (C) to
sign and endorse any invoices, freight or express bills, bills
of lading, storage or warehouse receipts, drafts against
debtors, assignments, proxies, stock powers, verifications,
and notices in connection with accounts and other documents
relating to the Collateral; (D) to commence and prosecute any
suit, action, or proceeding at Law or in equity in any court
of competent jurisdiction to collect the Collateral or any
part thereof and to enforce any other Right in respect of any
Collateral; (E) to defend any suit, action, or proceeding
brought against Debtor with respect to any Collateral; (F) to
settle, compromise, or adjust any suit, action, or proceeding
described above and, in connection therewith, to give such
discharges or releases as Secured Party may deem appropriate;
(G) to exchange any of the Collateral for other property upon
any merger, consolidation, reorganization, recapitalization,
or other readjustment of the issuer thereof and, in connection
therewith, deposit any of the Collateral with any committee,
depositary, transfer agent, registrar, or other designated
agency upon such terms as Secured Party may determine; (H) to
add or release any guarantor, indorser, surety, or other party
to any of the Collateral; (I) to renew, extend, or otherwise
change the terms and conditions of any of the Collateral; (J)
to endorse Debtor's name on all applications, documents,
papers, and instruments necessary or desirable in order for
Secured Party to use any of the Intellectual Property; (K) to
make, settle, compromise or adjust any claims under or
pertaining to any of the Collateral (including claims under
any policy of insurance); (L) to execute on behalf of Debtor
any financing statements or continuation statements with
respect to the Security
20
Interests created hereby, and to do any and all acts and
things to protect and preserve the Collateral, including,
without limitation, the protection and prosecution of all
Rights included in the Collateral; and (M) to sell, transfer,
pledge, convey, make any agreement with respect to or
otherwise deal with any of the Collateral as fully and
completely as though Secured Party were the absolute owner
thereof for all purposes, and to do, at Secured Party's option
and Debtor's expense, at any time, or from time to time, all
acts and things which Secured Party deems necessary to
protect, preserve, maintain, or realize upon the Collateral
and Secured Party's security interest therein.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Secured Party shall be under no duty to exercise or
withhold the exercise of any of the Rights, powers, privileges, and
options expressly or implicitly granted to Secured Party in this
Security Agreement, and shall not be liable for any failure to do so or
any delay in doing so. Neither Secured Party nor any Person designated
by Secured Party shall be liable for any act or omission or for any
error of judgment or any mistake of fact or Law. This power of attorney
is conferred on Secured Party solely to protect, preserve, maintain,
and realize upon its Security Interest in the Collateral. Secured Party
shall not be responsible for any decline in the value of the Collateral
and shall not be required to take any steps to preserve rights against
prior parties or to protect, preserve, or maintain any Lien given to
secure the Collateral.
(j) Purchase Money Collateral. To the extent that Secured
-------------------------
Party, any other Agent, or any Lender has advanced or will advance
funds to or for the account of Debtor to enable Debtor to purchase or
otherwise acquire Rights in Collateral, Secured Party, any Agent, or
such Lender, at its option, may pay such funds (i) directly to the
Person from whom Debtor will make such purchase or acquire such Rights,
or (ii) to Debtor, in which case Debtor covenants to promptly pay the
same to such Person, and forthwith furnish to Secured Party evidence
satisfactory to Secured Party that such payment has been made from the
funds so provided.
(k) Subrogation. If any of the Obligation is given in renewal
-----------
or extension or applied toward the payment of indebtedness secured by
any Lien, Secured Party shall be, and is hereby, subrogated to all of
the Rights, titles, interests, and Liens securing the indebtedness so
renewed, extended, or paid.
(l) Indemnification. Debtor hereby assumes all liability for
---------------
the Collateral, for the Security Interest, and for any use, possession,
maintenance, and management of, all or any of the Collateral,
including, without limitation, any Taxes arising as a result of, or in
connection with, the transactions contemplated herein, and agrees to
assume liability for, and to indemnify and hold Secured Party, each
other Agent, and each Lender harmless from and against, any and all
claims, causes of action, or liability, for injuries to or deaths of
Persons and damage to property, howsoever arising from or incident to
such use, possession, maintenance, and management, whether such Persons
be agents or employees of Debtor or of third parties, or such damage be
to property of Debtor or of others. Debtor agrees to indemnify, save,
and hold Secured Party, each other Agent, and each Lender harmless from
and against, and covenants to defend Secured Party, each other Agent,
and each Lender against, any and all losses, damages, claims, costs,
penalties, liabilities, and expenses (collectively, "Claims"),
including, without limitation, court costs and attorneys' fees, and any
of the foregoing arising from the negligence of Secured Party, any
other Agent, or any Lender, or any of their respective officers,
employees, agents, advisors, employees, or representatives, howsoever
arising or incurred because of, incident to, or with respect to
Collateral or any use, possession, maintenance, or management thereof;
provided, however, that the indemnity set forth in this Paragraph 8(l)
will not apply to Claims caused by the gross negligence or willful
misconduct of Secured Party, any other Agent, or any Lender.
21
(m) Continuing Liability. Notwithstanding anything to the
--------------------
contrary contained in this Security Agreement, (i) Debtor shall remain
liable under the contracts, agreements, documents, and instruments
included in the Collateral to the extent set forth therein to perform
all of its duties and obligations thereunder to the same extent as if
this Security Agreement had not been executed, (ii) the exercise by
Secured Party of any of its rights or remedies hereunder shall not
release Debtor from any of its duties or obligations under the
contracts, agreements, documents, and instruments included in the
Collateral, and (iii) Secured Party shall not have any indebtedness,
liability, or obligation under any of the contracts, agreements,
documents, and instruments included in the Collateral by reason of this
Security Agreement, and Secured Party shall not be obligated to perform
any of the obligations or duties of Debtor thereunder or to take any
action to collect or enforce any claim for payment assigned hereunder.
9. MISCELLANEOUS.
(a) Continuing Security Interest. This Security Agreement
----------------------------
creates a continuing security interest in the Collateral and shall (i)
remain in full force and effect until the termination of the
obligations of Lenders to advance Borrowings or issue LCs under the
Loan Documents, the payment in full of the Obligation, and the
expiration of all LCs and all Financial ▇▇▇▇▇▇ issued by any Lender or
any Affiliate of any Lender to Borrower or any Company; (ii) be binding
upon Debtor, its successors, and assigns; and (iii) inure to the
benefit of and be enforceable by Secured Party, other Agents, Lenders,
and their respective successors, transferees, and assigns. Without
limiting the generality of the foregoing clause (iii), Secured Party,
other Agents, and Lenders may assign or otherwise transfer any of their
respective Rights under this Security Agreement to any other Person in
accordance with the terms and provisions of Section 13.13 of the Credit
Agreement, and to the extent of such assignment or transfer such Person
shall thereupon become vested with all the Rights and benefits in
respect thereof granted herein or otherwise to Secured Party, other
Agents, or Lenders, as the case may be. Upon payment in full of the
Obligation, the termination of the commitment of Lenders to extend
credit or issue LCs under the Loan Documents, and the expiration and
termination of all LCs and Financial ▇▇▇▇▇▇ issued by any Lender or any
Affiliate of any Lender to Borrower or any Company, Debtor shall be
entitled to the return, upon its request and at its expense, of such of
the Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof.
(b) Reference to Miscellaneous Provisions. This Security
-------------------------------------
Agreement is one of the "Loan Documents" referred to in the Credit
Agreement, and all provisions relating to Loan Documents set forth in
Section 13 of the Credit Agreement are incorporated herein by
reference, the same as if set forth herein verbatim.
(c) Term. Upon full and final payment and performance of the
----
Obligation, this Security Agreement shall thereafter terminate upon
receipt by Secured Party of Debtor's written notice of such payment and
performance; provided that no Obligor, if any, on any of the Collateral
shall ever be obligated to make inquiry as to the termination of this
Security Agreement, but shall be fully protected in making payment
directly to Secured Party until actual notice of such total payment of
the Obligation is received by such Obligor.
(d) Actions Not Releases. The Security Interest and Debtor's
--------------------
obligations and Secured Party's Rights hereunder shall not be released,
diminished, impaired, or adversely affected by the occurrence of any
one or more of the following events: (i) the taking or accepting of any
other security or assurance for any or all of the Obligation; (ii) any
release, surrender, exchange, subordination, or loss of any security or
assurance at any time existing in connection with any or all of the
Obligation; (iii) the modification of, amendment to, or waiver of
compliance with any terms of
22
any of the other Loan Documents without the notification or consent of
Debtor, except as required therein (the Right to such notification or
consent being herein specifically waived by Debtor); (iv) the
insolvency, bankruptcy, or lack of corporate or trust power of any
party at any time liable for the payment of any or all of the
Obligation, whether now existing or hereafter occurring; (v) any
renewal, extension, or rearrangement of the payment of any or all of
the Obligation, either with or without notice to or consent of Debtor,
or any adjustment, indulgence, forbearance, or compromise that may be
granted or given by Secured Party, any other Agent, or any Lender to
Debtor; (vi) any neglect, delay, omission, failure, or refusal of
Secured Party, any other Agent, or any Lender to take or prosecute any
action in connection with any other agreement, document, guaranty, or
instrument evidencing, securing, or assuring the payment of all or any
of the Obligation; (vii) any failure of Secured Party, any other Agent,
or any Lender to notify Debtor of any renewal, extension, or assignment
of the Obligation or any part thereof, or the release of any Collateral
or other security, or of any other action taken or refrained from being
taken by Secured Party, any other Agent, or any Lender against Debtor
or any new agreement between or among Secured Party, any other Agent,
or one or more Lenders and Debtor, it being understood that except as
expressly provided herein, neither Secured Party, nor any other Agent,
nor any Lender shall be required to give Debtor any notice of any kind
under any circumstances whatsoever with respect to or in connection
with the Obligation, including, without limitation, notice of
acceptance of this Security Agreement or any Collateral ever delivered
to or for the account of Secured Party hereunder; (viii) the
illegality, invalidity, or unenforceability of all or any part of the
Obligation against any party obligated with respect thereto by reason
of the fact that the Obligation, or the interest paid or payable with
respect thereto, exceeds the amount permitted by Law, the act of
creating the Obligation, or any part thereof, is ultra ▇▇▇▇▇, or the
officers, partners, or trustees creating same acted in excess of their
authority, or for any other reason; or (ix) if any payment by any party
obligated with respect thereto is held to constitute a preference under
applicable Laws or for any other reason Secured Party, any other Agent,
or any Lender is required to refund such payment or pay the amount
thereof to someone else.
(e) Waivers. Except to the extent expressly otherwise
-------
provided herein or in other Loan Documents and to the fullest extent
permitted by applicable Law, Debtor waives (i) any Right to require
Secured Party, any other Agent, or any Lender to proceed against any
other Person, to exhaust its Rights in Collateral, or to pursue any
other Right which Secured Party, any other Agent, or any Lender may
have; (ii) with respect to the Obligation, presentment and demand for
payment, protest, notice of protest and nonpayment, and notice of the
intention to accelerate; and (iii) all Rights of marshaling in respect
of any and all of the Collateral.
(f) Financing Statement; Authorization. Secured Party shall
----------------------------------
be entitled at any time to file this Security Agreement or a carbon,
photographic, or other reproduction of this Security Agreement, as a
financing statement, but the failure of Secured Party to do so shall
not impair the validity or enforceability of this Security Agreement.
Debtor hereby irrevocably authorizes Secured Party at any time and from
time to time to file in any UCC jurisdiction any initial financing
statements and amendments thereto (without the requirement for Debtor's
signature thereon) that (i) indicate the Collateral (A) as all assets
of Debtor or words of similar effect, regardless of whether any
particular asset comprised in the Collateral falls within the scope of
Article 9 of the UCC of the state or such jurisdiction or whether such
assets are included in the Collateral hereunder, or (B) as being of an
equal or lesser scope or with greater detail, and (ii) contain any
other information required by Article 9 of the UCC of the state or such
jurisdiction for the sufficiency or filing office acceptance of any
financing statement or amendment, including (A) whether the Company is
an organization, the type of organization, and any organization
identification number issued to Debtor and, (B) in the case of a
financing statement filed as a fixture filing or indicating Collateral
as-extracted collateral or timber to be cut, a sufficient description
of real property to which the Collateral relates. Debtor agrees to
furnish any such information to Secured Party promptly upon request.
23
(g) Amendments. This Security Agreement may be amended only
----------
by an instrument in writing executed jointly by Debtor and Secured
Party, and supplemented only by documents delivered or to be delivered
in accordance with the express terms hereof.
(h) Multiple Counterparts. This Security Agreement has been
---------------------
executed in a number of identical counterparts, each of which shall be
deemed an original for all purposes and all of which constitute,
collectively, one agreement; but, in making proof of this Security
Agreement, it shall not be necessary to produce or account for more
than one such counterpart.
(i) Parties Bound; Assignment. This Security Agreement shall
-------------------------
be binding on Debtor and Debtor's heirs, legal representatives,
successors, and assigns and shall inure to the benefit of Secured Party
and Secured Party's successors and assigns.
(xvi) Secured Party is the agent for each Lender and
each Agent under the Credit Agreement, the Security Interest
and all Rights granted to Secured Party hereunder or in
connection herewith are for the ratable benefit of each Lender
and each Agent, and Secured Party may, without the joinder of
any Lender, exercise any and all Rights in favor of Secured
Party or any other Agent or Lenders hereunder, including,
without limitation, conducting any foreclosure sales
hereunder, and executing full or partial releases hereof,
amendments or modifications hereto, or consents or waivers
hereunder. The Rights of each Lender and Agent vis-a-vis
Secured Party and each other Lender and Agent may be subject
to one or more separate agreements between or among such
parties, but Debtor need not inquire about any such agreement
or be subject to any terms thereof unless Debtor specifically
joins therein; and consequently, neither Debtor nor Debtor's
heirs, personal representatives, successors, and assigns shall
be entitled to any benefits or provisions of any such separate
agreements or be entitled to rely upon or raise as a defense,
in any manner whatsoever, the failure or refusal of any party
thereto to comply with the provisions thereof.
(xvii) Debtor may not, without the prior written
consent of Secured Party, assign any Rights, duties, or
obligations hereunder.
(j) Governing Law. The substantive laws of the State of
-------------
Texas, without regard to the choice of law principles that might
otherwise apply, except to the extent the laws of another jurisdiction
govern the creation, perfection, validity, or enforcement of Liens
under this Security Agreement, and the applicable federal laws of the
United States of America, shall govern the validity, construction,
enforcement and interpretation of this Security Agreement and all of
the other Loan Documents.
Remainder of Page Intentionally Blank.
Signature Page to Follow.
24
EXECUTED as of the date first stated in this Pledge, Assignment, and
Security Agreement.
________________________________ ,
as Debtor
By: ____________________________
Name: ______________________
Title:______________________
Mailing Address:
Pledge, Assignment, and Security Agreement
Signature Page
ANNEX A TO SECURITY AGREEMENT
-----------------------------
(TO BE PROVIDED BY BORROWER)
A. LOCATION OF BOOKS AND RECORDS
B. LOCATION OF COLLATERAL
C. LOCATION OF REAL PROPERTY
D. JURISDICTION(S) FOR FILING FINANCING STATEMENTS
ANNEX B-1 TO SECURITY AGREEMENT
-------------------------------
(TO BE PROVIDED BY BORROWER)
A. COLLATERAL NOTES AND COLLATERAL NOTE SECURITY
B. PLEDGED SHARES (OF DOMESTIC SUBSIDIARIES AND FOREIGN SUBSIDIARIES OF
DEBTOR)
C. PARTNERSHIP INTERESTS
D. COMMERCIAL TORT CLAIMS
ANNEX B-2 TO SECURITY AGREEMENT
-------------------------------
(TO BE PROVIDED BY BORROWER)
A. COPYRIGHTS
B. PATENTS
C. TRADEMARKS
ANNEX C TO SECURITY AGREEMENT
-----------------------------
DEFAULTS OR POTENTIAL DEFAULTS UNDER ANY COLLATERAL NOTE, DOCUMENTS
EVIDENCING THE COLLATERAL NOTE SECURITY, OR PARTNERSHIP AGREEMENTS
(TO BE PROVIDED BY BORROWER)
ANNEX D TO SECURITY AGREEMENT
-----------------------------
MATERIAL DEPOSIT ACCOUNTS
(TO BE PROVIDED BY BORROWER)
NAME OF BANK ADDRESS ACCOUNT NUMBER
------------ ------- --------------
ANNEX E TO SECURITY AGREEMENT
-----------------------------
DEBTOR INFORMATION
(TO BE PROVIDED BY BORROWER)
Exact Legal Name:
Mailing Address: _________________________
Type of Entity:
Jurisdiction of Organization:
State Issued Organizational Identification Number:
ANNEX F TO SECURITY AGREEMENT
-----------------------------
DEPOSIT ACCOUNT CONTROL AGREEMENT
____________, 20__
Ladies and Gentlemen:
This letter is to notify you (the "Depository Bank") that, pursuant to that
certain Pledge, Assignment, and Security Agreement dated as of __________, 20__
(as amended, modified, supplemented, or restated from time to time, the
"Security Agreement"), __________________, a [corporation] organized under the
laws of ________________ (the "Pledgor"), has granted to Bank of America, N.A.,
a national banking association, in its capacity as Administrative Agent for
Lenders and as Secured Party under the Security Agreement ("Pledgee") a first
priority security interest in and lien upon, (a) Account No. (the "Account")
maintained by Pledgor with you, (b) any extensions or renewals of the Account if
the Account is one which may be extended or renewed, and (c) all of Pledgor's
right, title, and interest (whether now existing or hereafter created or
arising) in and to the Account, all sums from time to time on deposit therein,
credited thereto, or payable thereon, all instruments, documents, certificates,
and other writings evidencing the Account, and any and all proceeds of any
thereof (the items described in clauses (a), (b) and (c) being herein
collectively called the "Collateral").
In connection therewith, the parties hereto agree (which agreement by Pledgor
will be construed as instructions to the Depository Bank):
1. The Depository Bank is instructed to register the pledge on its books
and hold the Collateral in a pledged status account.
2. The Depository Bank is instructed to deliver to Pledgee copies of
monthly statements on the account(s) identified below:
3. The Account will be styled:
"________________________________"
4. All dividends, interest, gains, and other profits on the Collateral
will be reported in the name and tax identification number of Pledgor.
5. [The Depository Bank will not, without the prior written consent of
Pledgee, allow any of the Collateral or any interest therein to be
sold, transferred, or withdrawn by or for the benefit of Pledgor.]
6. This letter agreement gives Pledgee "control" of the Account and the
Collateral. The Depository Bank agrees to comply with any order or
instruction from Pledgee as to the withdrawal or disposition of any
funds from time to time credited to the Account, or as to any other
matters relating to the Collateral, without the further consent of
Pledgor. The Depository Bank shall be fully entitled to rely upon such
instructions from Pledgee even if such instructions are contrary to any
instructions or demands that Pledgor may give to the Depository Bank.
7. Pledgee agrees to indemnify and hold the Depository Bank, its officers
and employees, harmless from and against any and all claims, causes of
action, liabilities, lawsuits, demands, and/or damages, including,
without limitation any and all costs, including court costs and
reasonable attorneys' fees, that may arise or result from the
Depository Bank complying with the instructions and orders of Pledgee
given in connection with Pledgee's exercise of its control over and
secured rights in the Account and the Collateral except to the extent
that such claims, causes of action, liabilities, lawsuits, demands,
and/or damages are found in a final, non-appealable judgment by a court
of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the Depository Bank.
8. Pledgor agrees to indemnify and hold the Depository Bank, its officers
and employees, harmless from and against any and all claims, causes of
action, liabilities, lawsuits, demands, and/or damages, including,
without limitation, any and all costs, including court costs and
reasonable attorneys' fees, that may arise or result from the
Depository Bank entering into and performing its obligations under this
letter agreement except to the extent that such claims, causes of
action, liabilities, lawsuits, demands, and/or damages are found in a
final, non-appealable judgment by a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of the
Depository Bank.
9. The Depository Bank represents that it has not received notice
regarding any lien, encumbrance, or other claim to the Account or the
Collateral from any person other than pursuant to this letter agreement
and has not entered into another agreement with any other party to act
on such party's instructions with respect to the Account. The
Depository Bank further agrees not to enter into any such agreement
with any other party.
10. The Depository Bank subordinates to the security interest of Pledgee
any right of recoupment or set-off, or to assert any security interest
or other lien, that it may at any time have against or in any of the
Collateral on account of any credit or other obligations owed to the
Depository Bank by Pledgor or any other person. The Depository Bank
may, however, from time to time debit the Account for any of its
customary charges in maintaining the Account or for reimbursement for
the reversal of any provisional credits granted by the Depository Bank
to the Account, to the extent, in each case, that Pledgor has not
separately paid or reimbursed Depository Bank therefor.
11. To the extent a conflict exists between the terms of this letter
agreement and any account agreement between Pledgor and the Depository
Bank, the terms of this letter agreement will control.
12. The terms of this letter agreement will in no way be modified except by
a writing signed by all parties hereto.
13. Each of the parties executing this letter agreement represents that he
has the proper authority to execute this letter agreement.
[Remainder of page intentionally blank. Signature page follows.]
IN WITNESS WHEREOF, Pledgor and Pledgee have agreed to the terms of
this letter agreement as of the date first indicated above.
Pledgor:
[NAME OF ENTITY]
By:
_____________________________________________________
Name:________________________________________________
Title:_______________________________________________
Pledgee:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
_____________________________________________________
Name:________________________________________________
Title:_______________________________________________
Acknowledged and Agreed on ____________, 200_:
Depository Bank:
[NAME OF ENTITY]
By:
_____________________________________________________
Name:________________________________________________
Title:_______________________________________________
ANNEX G TO SECURITY AGREEMENT
-----------------------------
ACKNOWLEDGMENT OF PLEDGE
PARTNERSHIP:_______________ INTEREST OWNER:__________________
BY THIS ACKNOWLEDGMENT OF PLEDGE, dated as of ______________________ ,
20__, (the "Partnership") hereby acknowledges the pledge in favor of Bank of
America, N.A. ("Pledgee"), in its capacity as Administrative Agent for Lenders
and as Secured Party under that certain Pledge, Assignment, and Security
Agreement dated as of , 2001 (as amended, modified, supplemented, or restated
from time to time, the "Security Agreement"), against, and a security interest
in favor of Pledgee in, all of 's (the "Interest Owner") Rights in connection
with any partnership interest in the Partnership now and hereafter owned by the
Interest Owner ("Partnership Interest").
A. Pledge Records. The Partnership has identified Pledgee's interest in
--------------
all of the Interest Owner's Right, title, and interest in and to all of the
Interest Owner's Partnership Interest as subject to a pledge and security
interest in favor of Pledgee in the Partnership Records.
B. Partnership Distributions, Accounts, and Correspondence. The
-------------------------------------------------------
Partnership hereby acknowledges that (i) all proceeds, distributions, and other
amounts payable to the Interest Owner, including, without limitation, upon the
termination, liquidation, and dissolution of the Partnership shall be paid and
remitted to the Pledgee upon demand, (ii) all funds in deposit accounts shall be
held for the benefit of Pledgee, and (iii) all future correspondence,
accountings of distributions, and tax returns of the Partnership shall be
provided to the Pledgee. The Partnership acknowledges and accepts such direction
and hereby agrees that it shall, upon the written demand by the Administrative
Agent, pay directly to the Administrative Agent at such address any and all
distributions, income, and cash flow arising from the Partnership Interests
whether payable in cash, property or otherwise, subject to and in accordance
with the terms and conditions of the Partnership. The Pledgee may from time to
time notify the Partnership of any change of address to which such amounts are
to be paid.
Remainder of Page Intentionally Blank.
Signature Page to Follow.
EXECUTED as of the date first stated in this Acknowledgment of Pledge.
___________________________________________
By:________________________________________
Name: __________________________________
Title: _________________________________
[PARTNERSHIP]
By:________________________________________
as General Partner
By:________________________________________
Name: __________________________________
Title: _________________________________
Acknowledgment of Pledge
Signature Page
Exhibit E-1
-----------
FORM OF COMPLIANCE CERTIFICATE
------------------------------
(AZZ incorporated)
FOR ______________ ENDED ____________,
DATE: ________________________,
ADMINISTRATIVE AGENT: Bank of America, N.A.
BORROWER: AZZ incorporated
--------------------------------------------------------------------------------
This certificate is delivered under the Amended and Restated Revolving
and Term Loan Credit Agreement, dated as of November __, 2001 (as amended,
modified, supplemented, or restated from time to time, the "Credit Agreement"),
among Borrower, Administrative Agent, and Agents and Lenders party thereto.
Capitalized terms used herein and not otherwise defined herein shall have the
meaning given to such terms in the Credit Agreement.
I certify to Agents and Lenders that:
(a) I am a Responsible Officer of the Companies in the position(s) set
forth under my signature below;
(b) the Financial Statements of the Companies attached to this
certificate were prepared in accordance with GAAP, and present fairly in all
material respects the consolidated and consolidating financial condition and
results of operations of the Companies as of, and for the (three, six, or nine
months, or fiscal year) ended on _______________,______, (the "Subject Period")
[(subject only to normal year-end audit adjustments)];
(c) a review of the activities of the Companies during the Subject
Period has been made under my supervision with a view to determining whether,
during the Subject Period, the Companies have kept, observed, performed, and
fulfilled all of their respective obligations under the Loan Documents, and
during the Subject Period, (i) the Companies kept, observed, performed, and
fulfilled each and every covenant and condition of the Loan Documents (except
for the deviations, if any, set forth on Annex A to this certificate) in all
material respects, and (ii) no Default (nor any Potential Default) has occurred
which has not been cured or waived (except the Defaults or Potential Defaults,
if any, described on Annex A to this Certificate);
(d) the status of compliance by the Companies with Sections 9.12,
9.13, 9.20, 9.22, 9.29 and 9.30 of the Credit Agreement at the end of the
Subject Period is as set forth on Annex B to this certificate;
(e) to the extent any Debt Issuance occurred prior to or during the
Subject Period, all mandatory prepayments or commitment reductions required
pursuant to Section 3.3(b) have been made at the times required pursuant to
Section 3.3;
(f) except for deviations described on Annex A, all Net Cash Proceeds
from the disposition of assets required to be reinvested in property or assets
of the Loan Parties during the Subject Period have been reinvested, and no
mandatory prepayment is required to be paid by Borrower to Lenders pursuant to
Section 3.3(b) of the Credit Agreement;
(g) during the Subject Period, each Schedule and Annex to each Loan
Document that was required to be revised and supplied to Administrative Agent in
accordance with the terms of the Loan Documents has been so revised and
supplied.
[Signature of Responsible Officer of Borrower]
By: ______________________________________
Name: ________________________________
Title: _______________________________
ANNEX A TO COMPLIANCE CERTIFICATE
---------------------------------
DEVIATIONS FROM LOAN DOCUMENTS/
-------------------------------
DEFAULTS OR POTENTIAL DEFAULTS
------------------------------
(If none, so state.)
ANNEX B TO COMPLIANCE CERTIFICATE
---------------------------------
Status of Compliance with
Sections 9.12, 9.13, 9.20, 9.22, 9.29 and 9.30
of the Credit Agreement
[(Unless otherwise indicated, all calculations are made on a
consolidated basis for the Companies at the date of determination
with respect to the most recently-ended Rolling Period)]
1. Section 9.12 - Debt and Guaranties.
----------------------------------
No Debt or Guaranties incurred, except as permitted pursuant to Section
9.12, as follows [check, as appropriate, and describe]:
_______ a. Financial ▇▇▇▇▇▇
_______ b. Debt between Companies
_______ c. Capital Leases
_______ d. Asset acquisition financing
_______ e. Unsecured Debt of any Company
_______ f. IRB Debt
2. Section 9.13 - Liens.
--------------------
No Liens incurred, except as permitted pursuant to Section 9.13, as
follows [check, as appropriate, and describe]:
_______ a. Liens securing Capital Leases
_______ b. Liens securing asset acquisition financing
_______ c. Liens securing IRB Debt
3. Section9.20 - Loans, Advances, Investments, and Restricted Payments.
-------------------------------------------------------------------
[Check, as appropriate, and describe.]:
_______ a. Permitted Acquisitions
_______ b. Investments in Foreign Subsidiaries
_______ c. Financial ▇▇▇▇▇▇
_______ d. Purchases, redemptions, or acquisition of Borrower's
shares
_______ e. Distributions by Borrower:
(i) Amount $_____________________
(ii) Consolidated Net Income for the Rolling Period
(iii) 10% of (ii)
(iv) (i) may not exceed (iii)
(v) Compliance: _______ Yes _____ No
4. Section 9.22 - Sale of Assets.
-----------------------------
No Asset Sales, except as follows[check, as appropriate, and describe]:
_______ a. Non-Material Asset Sale
(i) Seller: _______________________________________
(ii) Purchaser: ____________________________________
(iii) Assets Sold: __________________________________
(iv) Consideration: ________________________________
(v) Amount of Net Sales Proceeds: _________________
_______ b. Other Sales of Assets
(i) Seller: _______________________________________
(ii) Purchaser: ____________________________________
(iii) Assets Sold: ____________________________________
(iv) Aggregate Sales of Assets in Calendar Year: _____
(May not exceed $1,500,000)
(v) Aggregate Sales of Assets since ______, 2001: ___
(May not exceed $3,500,000)
5. Section 9.29--Financial Covenants.
---------------------------------
a. Minimum Consolidated Net Worth must be at least
$43,000,000, plus 75% of the Consolidated Net Income of the Companies for the
quarters beginning November 30, 2001, plus, 100% of the proceeds of any Equity
Issuance:
(i) Previous required Consolidated Net Worth: _______
(ii) Consolidated Net Income: ________________________
A. Consolidated Net Income of Borrower and
Subsidiaries is:
____________________________________________
B. Consolidated net income of each Recently-
Acquired Entity:
[Name of Entity] [Consolidated Net Income]
C. Deductions from Consolidated Net Income:
1. Gains or losses from dispositions not in
the ordinary course of business: $_________
2. Write ups and write downs of assets: ______
3. Other extraordinary items: $_______________
D. Consolidated Net Income: ______________________
[A, plus B, less D]
(iii) Required Minimum Consolidated Net Worth: $__________
(iv) Actual Consolidated Net Worth: $____________________
(v) Compliance: ________ Yes _______ No
b. Section 9.29(b) - Maximum Leverage Ratio:
(i) Funded Debt: $______________________________________
(ii) Consolidated Net Income [5(a)(ii)(D) above]: $______
(iii) Deductions from 5(b)(ii) for interest, taxes,
depreciation, and amortization: $___________________
(iv) EBITDA [5(b)(ii) less 5(b)(iii)]: $_________________
(v) Leverage Ratio: 5(b)(i) divided by 5(b)(iv)
(vi) Maximum Permitted: _________________________________
(vii) Compliance: ________ Yes _______ No
c. Section 9.29(c) - Minimum Fixed Charge Coverage Ratio:
(i) EBITDA [5(b)(iv)]: $________________________________
(ii) Rental Expense: $___________________________________
(iii) EBITDAR [5(c)(i) plus 5(c)(ii)]: $__________________
(iv) Capital Expenditures in respect of repairs and
replacements of fixed assets: $_____________________
(v) Cash taxes: $_______________________________________
(vi) Coverage [the sum of 5(c)(iii), less 5(c)(iv), less
5(c)(v)]: $__________________________________________
(vii) Cash Consolidated Interest Expense: $________________
(viii) Scheduled payments of Principal Debt: $______________
(ix) Rental Expense: $____________________________________
(x) Payments with respect of Consolidated Earn-Out
Indebtedness:
$____________________________________________________
(xi) Distributions by Borrower: $_________________________
(xii) Fixed Charges [sum of 5(c)(vii) through 5(c)(xi)]: $
_____________
(xiii) Fixed Charge Leverage Ratio [5(c)(vi) divided by
5(c)(xii): _______ to 1.0
(xiv) Required Minimum Fixed Charge Coverage Ratio: 1.25 to
1.00
(xv) Compliance: ________ Yes _______ No
6. Section 9.30--Capital Expenditures.
----------------------------------
a. Amount of Capital Expenditures in the fiscal year: $
________________
b. Maximum Capital Expenditures permitted: $___________
c. Compliance: ________ Yes _______ No
7. Attached Schedules.
------------------
Attached hereto as Schedules are the calculations supporting the
computations set forth in this Certificate, if applicable. All information
contained herein and on the attached schedules is true and correct.
EXHIBIT E-2
-----------
FORM OF PERMITTED ACQUISITION COMPLIANCE CERTIFICATE
----------------------------------------------------
DATE:______________, _______
ADMINISTRATIVE AGENT: Bank of America, N.A.
BORROWER: AZZ incorporated
--------------------------------------------------------------------------------
This Permitted Acquisition Compliance Certificate (the "Certificate") is
delivered under the Amended and Restated Revolving and Term Loan Credit
Agreement, dated as of November __, 2001 (as amended, modified, supplemented, or
restated from time to time, the "Credit Agreement"), among Borrower,
Administrative Agent, and Agents and Lenders party thereto. Capitalized terms
used herein and not otherwise defined herein shall have the meanings given to
such terms in the Credit Agreement.
1. Notification of Proposed Acquisition.
Borrower hereby notifies Administrative Agent _____________that [Borrower
or any Domestic Subsidiary of Borrower] intends to acquire the [stock][assets]
of _____________________ (the "Subject Acquisition"), on _____________, 20 __
(the "Acquisition Date") [in exchange for _____________]. In connection with the
Subject Acquisition and in satisfaction of certain conditions precedent to the
qualification of the Subject Acquisition as a "Permitted Acquisition" under the
Loan Documents, the following is attached hereto:
Annex A: which demonstrates compliance with the Purchase Price
requirements for a "Permitted Acquisition";
Annex B: which sets forth calculations demonstrating pro forma
compliance with the financial covenants in Section 9.29 and
additional covenants in Sections 9.12, 9.13, 9.20, and 9.22 of
the Credit Agreement, after giving effect to the Subject
Acquisition;
Annex C: which sets forth a pro forma income and balance sheet for the
Companies, after giving effect to the Subject Acquisition; and
Annex D: which sets forth cash flow projections for the Subject
Acquisition through the Termination Date.
2. Certifications.
On and as of the date of this Certificate, Borrower certifies to
Administrative Agent, other Agents, and Lenders that the following statements
are true and correct on the date hereof and will be true and correct on the
closing date of the Subject Acquisition:
(a) All of the representations and warranties in the Credit Agreement
are true and correct in all material respects (except to the
extent that (i) the representations and warranties speak to a
specific date or (ii) the facts on which such representations and
warranties are based have been changed by transactions permitted
by the Loan Documents and, if applicable, supplemental Schedules
have been delivered with respect thereto and, when necessary,
approved by Required Lenders);
(b) No Default or Potential Default exists nor will occur as a result
of, and after giving effect to, the Subject Acquisition;
(c) The company(ies) being acquired is (are) engaged in, or the assets
being acquired are used in, manufacturing or the servicing of
electrical equipment and components and in providing hot dip
galvanizing services to the steel fabrication market;
(d) To the extent the Subject Acquisition is structured as a merger,
Borrower (or if such merger is with any Subsidiary of Borrower,
then a domestic entity that is or becomes a Domestic Subsidiary)
is the surviving entity after giving effect to such merger;
(e) To the extent that the Subject Acquisition is structured as a
stock/equity acquisition, the acquiring Company will own not less
than 75% of the entity being acquired and such acquired entity
will be a domestic entity that is or becomes a Domestic
Subsidiary;
(f) A true and correct copy of the purchase agreement in respect of
the Subject Acquisition and all amendments, exhibits, and
schedules thereto (the "Purchase Documents") have been delivered
to Administrative Agent no later than the dates required by the
Loan Documents, and such Purchase Documents continue to be true
and correct and, except for any amendments, modifications, or
supplements attached hereto as Annex E, such Purchase Documents
have not been amended, modified, or supplemented since delivered
to Administrative Agent;
(g) The Purchase Price for the Subject Acquisition (i) does not exceed
the lesser of (A) $________ and (B) an amount equal to EBITDA for
Borrower for the preceding twelve-month period prior to the
Acquisition Date, and (ii) when aggregated with the Purchase Price
of all other Acquisitions consummated in the calendar year, shall
not exceed $________ in the aggregate;
3. Acknowledgments and Confirmation.
Borrower acknowledges that this Certificate and the attached documents are
being delivered in partial satisfaction of the requirements for a "Permitted
Acquisition, " and further confirms its understanding that the Subject
Acquisition will not be a "Permitted Acquisition" until satisfaction of each of
the criteria specified in the definition of "Permitted Acquisition" in Section
1.1 of the Credit Agreement, including, without limitation, satisfaction of the
conditions precedent set forth in Section 7.2.
4. Further Assurances.
Borrower shall timely deliver to Administrative Agent, upon reasonable
request by Administrative Agent, any documents, certificates, or information
relating to the Subject Acquisition (including, without limitation, all
information necessary to enable Administrative Agent to complete any due
diligence related to the Company(ies) or the assets being acquired), which
documents or certificates shall be in form and substance acceptable to
Administrative Agent.
AZZ INCORPORATED
By: _________________________________
Name: ___________________________
Title: __________________________
2
ANNEX A
-------
TO PERMITTED ACQUISITION COMPLIANCE CERTIFICATE
-----------------------------------------------
Compliance with Purchase Price Requirements
-------------------------------------------
A. Purchase Price
1. Purchase Price of Subject Acquisition (not to exceed $__________),
the components of which are, as follows: $_____________
A. cash $______________
B. value of capital stock, options,
warrants or rights to acquire
same $______________
C. assumed liabilities $______________
D. value of property exchanged $______________
E. consulting contracts $______________
F. non-compete agreements $______________
2. Purchase Price of all other Permitted Acquisitions consummated
in the calendar year $_____________
3. The sum of Lines 1 and 2 does not exceed $_____________ Yes No
B. EBITDA
1. EBITDA for twelve-month period preceding the closing date
of the Subject Acquisition $_____________
2. The amount set forth in the immediately preceding Line 1 exceeds
the Purchase Price Yes No
C. Revolver Availability
1. Availability under the Revolver Commitment on the
closing date of the Subject Acquisition $_____________
2. The amount set forth in the immediately preceding Line 1 exceeds
the Purchase Price Yes No
ANNEX B
-------
TO PERMITTED ACQUISITION COMPLIANCE CERTIFICATE
-----------------------------------------------
FINANCIAL COVENANTS
-------------------
Status of Compliance with Sections 9.12, 9.13, 9.20, 9.22, 9.29 and 9.30
of the Revolving and Term Loan Credit Agreement
(Unless otherwise indicated, all calculations are made on a
consolidated pro forma basis for the Companies (after giving effect to
the Subject Acquisition) with respect to the most recently-ended Rolling Period)
Calculations are to be submitted in a form substantially similar to those
utilized in the Compliance Certificate and in detail
and scope acceptable to Administrative Agent.
ANNEX C
-------
TO PERMITTED ACQUISITION COMPLIANCE CERTIFICATE
-----------------------------------------------
Date:
Subject Acquisition:
PRO FORMA INCOME AND BALANCE SHEET
----------------------------------
(TO BE PROVIDED BY BORROWER)
----------------------------
ANNEX D
-------
TO PERMITTED ACQUISITION COMPLIANCE CERTIFICATE
-----------------------------------------------
Date:
Subject Acquisition:
CASH FLOW PROJECTIONS
---------------------
(TO BE PROVIDED BY BORROWER)
ANNEX F
-------
TO PERMITTED ACQUISITION COMPLIANCE CERTIFICATE
-----------------------------------------------
Date:
Subject Acquisition:
PURCHASE AGREEMENT
------------------
(TO BE PROVIDED BY BORROWER)
EXHIBIT E-3
-----------
FORM OF PERMITTED ACQUISITION LOAN
----------------------------------
CLOSING CERTIFICATE
-------------------
(___________, 20__)
This certificate is delivered pursuant to Section 7.2 of the Amended
and Restated Revolving and Term Loan Credit Agreement, dated as of November __,
2001 (as amended, modified, supplemented, or restated from time to time, the
"Credit Agreement"), among Borrower, Administrative Agent, and Lenders party
thereto. Capitalized terms used herein and not otherwise defined herein shall
have the meaning given to such terms in the Credit Agreement.
1. Subject Acquisition. This certificate relates to the Acquisition by
-------------------
__________________ [Borrower or any Domestic Subsidiary of Borrower] of the
[stock][assets] of __________________________ (the "Subject Acquisition") [in
exchange for ___________], on ____________, 20__ (the "Acquisition Date").
2. Certification Regarding Subject Acquisition. In connection with the
-------------------------------------------
Subject Acquisition, Borrower hereby represents and warrants the following:
a. All of the representations and warranties in the Credit Agreement are
true and correct immediately prior to and after giving effect to the
Subject Acquisition (except to the extent that (i) the
representations and warranties speak to a specific date or (ii) the
facts on which such representations and warranties are based have
been changed by transactions contemplated or permitted by the Loan
Documents and, if applicable, supplemental Schedules have been
delivered with respect thereto and, when necessary, approved by
Required Lenders);
b. Immediately prior to and after giving effect to the Subject
Acquisition, no Default or Potential Default exists;
c. Not less than 14 days prior to the Acquisition Date, Borrower
delivered to Administrative Agent a Permitted Acquisition Compliance
Certificate with respect to the Subject Acquisition, together with
all financial projections, reports, and certifications required
thereby, which certifications and representations continue to be true
and correct on the Acquisition Date and which projections continue to
be accurate and complete on and as of the Acquisition Date;
d. Not less than 30 days prior to the Acquisition Date, Borrower
delivered to Administrative Agent a copy of the Purchase Agreement
and all amendments, exhibits, and schedules thereto (or if no
purchase agreement is available on such date, as soon thereafter as
possible, including all subsequent drafts thereof) (the "Purchase
Documents"), and such Purchase Documents have not been amended,
modified, or supplemented since the date of delivery to
Administrative Agent (except as delivered pursuant to the Permitted
Acquisition Compliance Certificate with respect to the Subject
Acquisition);
e. The Subject Acquisition meets all of the requirements to qualify as a
"Permitted Acquisition" under the Credit Agreement, including,
without limitation, the following conditions: (i) the Purchase Price
for the Subject when aggregated with the Purchase Price of all other
Acquisitions consummated during the term of the Facilities, excluding
the Acquisitions of the Target Companies, does not exceed $20,000,000
in the aggregate; (ii) as of the Acquisition Date, the Subject
Acquisition has been approved and recommended by the board
of directors of the Person to be acquired or from which such business
is to be acquired; (iii) each condition precedent to a Permitted
Acquisition set forth in Section 7.2 of the Credit Agreement has been
satisfied; (iv) after giving effect to the Subject Acquisition, the
acquiring party is Solvent and the Companies, on a consolidated
basis, are Solvent; (v) if the Subject Acquisition is structured as a
merger, Borrower, (or if such merger is with any Subsidiary of
Borrower, then a domestic company that is or becomes a Domestic
Subsidiary) is the surviving entity after giving effect to such
merger; and (vi) if the Subject Acquisition is structured as a
stock/equity acquisition, the acquiring Company shall own not less
than a 75% interest in the entity being acquired;
f. All acquisition documents related to the Subject Acquisition (the
"Acquisition Documents") have been duly and validly executed and
delivered by each of the parties thereto and constitute the legal,
valid, and binding obligations of the parties thereto, enforceable
against such parties in accordance with their respective terms
(except as may be limited by applicable Debtor Relief Laws);
g. All representations and warranties made by Borrower in the Permitted
Acquisition Compliance Certificate and related Borrowing Notice (if
any) delivered with respect to the Subject Acquisition, and by any
Company or other Person in the Acquisition Documents, are true and
correct in all material respects on and as of the date made or deemed
made, as of the Acquisition Date, and as of the date(s) of funding of
the Borrowing (if any) and the delivery of this certificate; and the
Acquisition Documents set forth the entire agreement and
understanding of the parties thereto relating to the subject matter
thereof, and there are no other agreements, arrangements, or
understandings, written or oral, relating to the matters covered
thereby; and
h. The Subject Acquisition has been consummated contemporaneously with
the making of the related Borrowing (if any) and the delivery of this
certificate, and in compliance, in all material respects, with all
conditions and requirements contained in the Acquisition Documents;
no breach of any material term or condition contained in such
Acquisition Documents has occurred; after giving effect to the
Subject Acquisition, Borrower or its Subsidiary, as applicable, has
acquired and become the owner(s) of all of the property or assets to
be acquired thereby free and clear of any Liens, except Permitted
Liens; in connection with the Subject Acquisition, no Company has
assumed any liabilities other than those reflected or reserved
against in the applicable pro forma Financial Statements delivered to
Administrative Agent, or contingent liabilities under the Acquisition
Documents which are not required to be reflected or reserved against
in accordance with GAAP.
Remainder of Page Intentionally Blank.
Signature Page to Follow.
EXECUTED on the date first written on this Permitted Acquisition Loan
Closing Certificate.
AZZ INCORPORATED
By: ___________________________
Name: _____________________
Title: ____________________
EXHIBIT E-4
-----------
FORM OF BORROWING BASE CERTIFICATE
----------------------------------
(___________, 20__)
This certificate is delivered pursuant to Section 9.3 of the Amended
and Restated Revolving and Term Loan Credit Agreement, dated as of November __,
2001 (as amended, modified, supplemented, or restated from time to time, the
"Credit Agreement"), among Borrower, Administrative Agent, and Agents and
Lenders party thereto. Capitalized terms used herein and not otherwise defined
herein shall have the meaning given to such terms in the Credit Agreement.
The undersigned represents and warrants that:
A. The following information is true, complete, and correct, and that
the Eligible Inventory and Eligible Accounts described below comply fully with
the condition, terms, warranties, representations, and covenants set forth in
the Amended and Restated Revolving and Term Loan Credit Agreement ("Agreement")
between the undersigned and Bank of America, N.A., dated November ___, 2001,
together with any supplements or amendments thereto.
B. There have been no Material Adverse Events and there is no
litigation or proceeding which may cause a Material Adverse Event, nor is there
any Default or Potential Default under any Loan Document.
C. The undersigned has not permitted, and will not permit the Revolver
Principal Debt at any time outstanding under the Agreement to exceed the current
Borrowing Base computed in the manner set forth in the Agreement.
AZZ INCORPORATED
By: ______________________________
Name:_________________________
Title:________________________
INSERT EXCEL DOCUMENT
BORROWING BASE CERTIFICATE
EXHIBIT F
---------
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
-------------------------------------------
Reference is made to the Amended and Restated Revolving and Term Loan
Credit Agreement dated as of November __, 2001 (as amended, modified,
supplemented, or restated to the Effective Date, the "Credit Agreement") among
AZZ incorporated ("Borrower"), Bank of America, N.A., as Administrative Agent
for Lenders ("Administrative Agent"), and Agents and Lenders party thereto.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement.
"Assignor" and "Assignee" referred to on Schedule 1 agree as follows:
1. Assignor hereby sells and assigns to Assignee, without recourse and
without representation or warranty except as expressly set forth herein, and
Assignee hereby purchases and assumes from Assignor, an interest in and to
Assignor's Rights and obligations under the Credit Agreement and the related
Loan Documents as of the Effective Date equal to the percentage interest
specified on Schedule 1 (the "Assigned Facility"). After giving effect to such
sale and assignment, Assignee's Committed Sum under such Assigned Facility and
the amount of the Principal Debt owed to Assignee under such Assigned Facility
will be as set forth on Schedule 1.
2. Assignor (a) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (b) 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, enforceability, genuineness, sufficiency,
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any party to any Loan
Document or the performance or observance by any such party of any of its
obligations under the Loan Documents or any other instrument or document
furnished pursuant thereto; and (d) attaches the Notes held by Assignor (to the
extent any of the Principal Debt being assigned and owed to Assignor is
evidenced by Notes) and requests that Administrative Agent exchange such Notes
for new Notes if so requested by either Assignor or Assignee. Any such new Notes
shall be prepared in accordance with the provisions of Section 3.1(b) of the
Credit Agreement and will reflect the respective Committed Sums or Principal
Debt of Assignee and Assignor after giving effect to this Assignment and
Acceptance Agreement.
3. Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance Agreement; (b) confirms that it has
received a copy of the Credit Agreement, together with copies of the Current
Financials and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance Agreement; (c) agrees that it will, independently and without
reliance upon Administrative Agent, Assignor, or any other Lender, and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (d) confirms that it is an Eligible Assignee; (e) appoints
and authorizes Administrative Agent to take such action as Administrative Agent
on its behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to Administrative Agent by the terms thereof,
together with such powers and discretion as are reasonably incidental thereto;
(f) agrees that it will perform in accordance with their terms all of the
obligations that by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (g) attaches any U.S. Internal Revenue Service
or other forms required under Section 4.6(d) of the Credit Agreement.
4. Following the execution of this Assignment and Acceptance Agreement
by Assignor, Assignee, and Borrower (to the extent required hereunder), it will
be delivered to Administrative Agent for
acceptance and recording by Administrative Agent pursuant to the Credit
Agreement. The effective date for this Assignment and Acceptance Agreement shall
be the date set forth on Schedule 1 hereof (the "Effective Date"), which shall
not, unless otherwise agreed to by Administrative Agent in its sole discretion,
be earlier than five Business Days from the date of such acceptance and
recording by Administrative Agent.
5. Upon such acceptance and recording by Administrative Agent, as of
the Effective Date, (a) Assignee shall be a party to the Credit Agreement and,
to the extent provided in this Assignment and Acceptance Agreement, have the
Rights and obligations of a Lender thereunder, and (b) Assignor shall, to the
extent provided in this Assignment and Acceptance Agreement, relinquish its
Rights and be released from its obligations under the Agreement.
6. Upon such acceptance and recording by Administrative Agent, from
and after the Effective Date, Administrative Agent shall make all payments under
the Credit Agreement, the Notes (to the extent any of the Principal Debt owed to
Assignee is evidenced by Notes), and loan accounts in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest, and commitment fees and other fees with respect thereto) to Assignee.
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement and the other Loan Documents for periods prior to the
Effective Date directly between themselves.
7. Unless Assignee is a Lender, an Affiliate of Assignor, or an
Approved Fund, this Assignment and Acceptance Agreement is conditioned upon the
consent of Administrative Agent and, unless a Default or Potential Default then
exists, Borrower, pursuant to the definition of "Eligible Assignee" in the
Credit Agreement. The execution and delivery of this Assignment and Acceptance
Agreement by Borrower and Administrative Agent is evidence of this consent.
8. As contemplated by Section 13.13(b)(iv) of the Credit Agreement,
Assignor or Assignee (as determined between Assignor and Assignee) agrees to pay
to Administrative Agent for its account on the Effective Date in federal funds a
processing fee of $3,500.
9. THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
10. This Assignment and Acceptance Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of Schedule 1 to this Assignment and Acceptance Agreement
by telecopier shall be effective as delivery of a manually executed counterpart
of this Assignment and Acceptance Agreement.
IN WITNESS WHEREOF, Assignor and Assignee have caused Schedule 1 to
this Assignment and Acceptance Agreement to be executed by their officers
thereunto duly authorized as of the date specified thereon.
2
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE AGREEMENT
Assigned Facility Committed Sum or Principal Commitment Percentage
----------------- -------------------------- ---------------------
Debt Assigned (as applicable)
----------------------------
(i.e. the proportion that Assignee's Committed
Sum to be acquired bears to the aggregate
Committed Sum of all Lenders) or Percentage
of Principal Debt assigned (i.e. the proportion
that the Principal Debt to be acquired by
Assignee bears to the aggregate Principal Debt
under the respective Facility)(set forth to at
least 8 decimal points)
Revolver Facility
Term Facility
EFFECTIVE DATE OF ASSIGNMENT: *______________ ___, ______
[NAME OF ASSIGNOR], as Assignor
By:_________________________________________
Name: _________________________________
Title:_________________________________
Date: ______________________________________
____________________________________________
Address for Notice:_________________________
Attn:_______________________________________
Telephone:__________________________________
Telecopier:_________________________________
[NAME OF ASSIGNEE], as Assignee
By:_________________________________________
Name: _________________________________
Title:_________________________________
Date:_______________________________________
Address for Notice:_________________________
____________________________________________
Attn:_______________________________________
Telephone:__________________________________
Telecopier:_________________________________
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance Agreement to Administrative Agent unless
otherwise agreed to by Administrative Agent in its sole discretion.
If Section 13.13(b) and clause (d) of the definition of "Eligible Assignee" of
the Credit Agreement so require, Borrower and Administrative Agent consent to
this Assignment and Acceptance Agreement.
AZZ INCORPORATED
By: __________________________________
Name:_____________________________
Title:____________________________
Date:__________________________________
3
BANK OF AMERICA, N.A.,
as Administrative Agent
By: __________________________________
Name: ___________________________
Title: ___________________________
Dated:_________________________________
EXHIBIT G-1
-----------
FORM OF OPINION OF COUNSEL OF COMPANIES
November __, 2001
Bank of America, N.A., as Administrative Agent
for the Lenders as defined in the Credit
Agreement referred to below
Each Lender named in Schedule 2.1 to the Credit Agreement referred to below
Re: Revolving and Term Loan Credit Agreement for AZZ incorporated
Ladies and Gentlemen:
We have acted as counsel to AZZ incorporated ("Borrower"), and certain
other entities affiliated with Borrower identified on Annex A hereto
(collectively with Borrower, the "Companies") in connection with the Amended and
Restated Revolving and Term Loan Credit Agreement, dated as of November __, 2001
(as amended, modified, supplemented, or restated from time to time, the "Credit
Agreement"), among Borrower, Bank of America, N.A., as Administrative Agent, and
Agents and Lenders named on Schedule 2.1 to the Credit Agreement ("Lenders").
Such entities, the respective states in which each is organized and the
respective states (other than its state of organization) in which each is
qualified to do business are identified on Annex A hereto.
This opinion is delivered pursuant to Section 7.1 of the Credit
Agreement. Except as otherwise defined herein, each capitalized term used herein
has the meaning given to such term in the Credit Agreement.
In arriving at the opinions expressed below, we have examined such
corporate documents and records of the Companies and such certificates of public
officials and of officers of the Companies, other documents, and matters of law
as we deemed necessary or appropriate, including, without limitation, originals
or copies of (a) the Credit Agreement, (b) the Notes, (c) the Guaranties, (d)
the Pledge, Assignment, and Security Agreements executed by Borrower and the
Companies (the "Security Agreements"), (f) ("Financing Statements") showing the
Companies, as Debtors, and Administrative Agent, as Secured Party, to be filed
in appropriate jurisdictions; and (g) other Collateral Documents (all of the
foregoing being, collectively, the "Transaction Documents").
For purposes of the opinions herein, we are assuming that the Agent and each
Lender have all requisite power and authority and have taken all necessary
action to enter into the Transaction Documents and to effect such transactions.
We also assume that each Agent and each Lender have duly executed and delivered
the Transaction Documents to which they are party, and such Transaction
Documents constitute valid and binding obligations of each Agent and each
Lender, enforceable against each Agent and each Lender in accordance with their
respective terms.
Based upon the foregoing, we are of the opinion that:
1. The Borrower (a) is a corporation validly existing and in good
standing under the Laws of Delaware and (b) possesses all requisite authority
and power to execute, deliver, and comply with the terms of each of the
Transaction Documents to which it is a party, which have been duly authorized
and approved by all necessary limited liability company action and for which no
approval or consent of any Person or
Governmental Authority is required which has not been obtained. Each other
Company is a corporation validly existing and in good standing under the Laws of
the state of its organization, (b) is duly qualified to transact business as a
foreign corporation in each other state identified on Annex A, and (c) possesses
all requisite corporate authority and power to execute, deliver, and comply with
the terms of each of the Transaction Documents to which it is a party, which
have been duly authorized and approved by all necessary corporate action and for
which no approval or consent of any Person or Governmental Authority is required
which has not been obtained.
2. Each of Borrower and each Company has duly executed and delivered
each Transaction Document to which it is a party.
3. Each Transaction Document evidences the valid and legally binding
obligation of the Borrower and each Company that is party thereto, enforceable
against the Borrower and each such Company in accordance with its respective
terms.
4. The execution, delivery, and performance of and compliance with the
terms of the Transaction Documents will not cause the Borrower to be in
violation of its Certificate of Organization. The execution, delivery, and
performance of and compliance with the terms of the Transaction Documents will
not cause Borrower or any Company to be in violation of its respective Articles
or Incorporation or Certificates of Incorporation or Bylaws.
5. The execution, delivery, and performance of and compliance with the
terms of the Transaction Documents will not cause Borrower or any Company to be
in violation of any Laws.
6. The execution, delivery, and performance of and compliance with the
terms of the Transaction Documents will not cause Borrower or any Company to be
in default under any of the Material Agreements described in Schedule 8.14 of
the Credit Agreement.
7. To our knowledge there is no alleged violation by Borrower or any
Company of any applicable Laws, federal, state, and local (including without
limitation, Environmental Laws), which, if determined adversely, would be
material to the conduct of its business and operations. Except as have been
obtained, no authorization, consent, approval, waiver, licenses, or formal
exemptions from, nor any filing, declaration, or registration with, any
Governmental Authority or non-governmental entity, under the terms of any
agreement or otherwise, is required by reason of or in connection with the
execution and performance of the Transaction Documents.
8. To our knowledge, there is no pending Litigation against Borrower
or any Company which, if determined adversely to Borrower or such Company, would
be material to the conduct of its business or operations. There are no
outstanding orders or judgments for the payment of money (not paid or fully
covered by insurance) in excess of $____ (individually or collectively) or any
warrant of attachment, sequestration, or similar proceeding against any
Company's assets having a value (individually or collectively) of $____ or more,
which is not either (a) stayed on appeal, (b) being diligently contested in good
faith by appropriate proceedings with adequate reserves having been sent aside
on the books of such Company in accordance with GAAP, or (c) dismissed by a
court of competent jurisdiction.
9. (a) No Employee Plan has incurred an accumulated funding deficiency
(as defined in the Code and ERISA), (b) neither Borrower nor any ERISA Affiliate
has incurred material liability which is currently due and remains unpaid to the
PBGC or to an Employee Plan in connection with any such Employee Plan, (c)
neither Borrower nor any ERISA Affiliate has withdrawn in whole or in part from
participation in a Multiemployer Plan, (d) Borrower has not engaged in any
prohibited transaction (as such term is defined in ERISA or the Code) which
would be a Material Adverse Event, and (e) to the best of my knowledge, after
2
reasonable investigation, no Reportable Event has occurred which is likely to
result in the termination of any Employee Plan.
10. No Company is an "investment company" or a company "controlled" by
an "investment company" within the meaning of the Investment Company Act of
1940, as amended.
11. No Company is a "holding company" or a "subsidiary company" of a
"holding company" within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
12. No Company is subject to regulation under the Interstate Commerce
Act, as amended.
13. The application of the proceeds of the Borrowings under the Credit
Agreement by the Borrower in accordance with the terms of the Credit Agreement
will not violate Regulation U.
14. The Persons pledging to Administrative Agent, for the benefit of
Agents and Lenders, any of the Pledged Shares (as defined in the Security
Agreements) are the record owners thereof, free and clear of any restrictions
or, to our knowledge, any encumbrances.
15. The Financing Statements are in sufficient form for recordation
under the Uniform Commercial Code as adopted in Texas. When the Financing
Statements have been filed and recorded in accordance with applicable Laws of
the jurisdictions listed on Annex A hereto, no further action, including any
filing or recording of any document, is necessary in order to establish and
perfect Agent's or Lenders' security interests created by the Security
Agreements in the assets described in the financing statements, to the extent
the same may be perfected by the filing of financing statements under the
applicable laws of such jurisdiction. No further action is required under Texas
law in order to maintain the perfection of such security interests other than
the periodic filing of continuation statements with respect to financing
statements filed under the Texas Uniform Commercial Code.
The foregoing opinions are subject to the following qualifications,
assumptions and exceptions:
(a) Our opinions are limited to matters governed by Laws of the state
of Texas and applicable federal law. We express no opinion on matters governed
by the Laws of other states. Accordingly, our opinions in paragraph 1 above, to
the extent governed by Laws other than the Laws of Texas, are (i) based solely
on our review of the organizational documents of such Companies and certificates
of good standing issued by Secretaries of State of such states and (ii) are
based on the assumption that the Laws of such states are, as to matters
addressed in paragraph 1 above, substantially similar to the Laws of Texas . Our
opinions as to the qualification and good standing of the entities described in
paragraph 1 are based on the certificates of the Secretaries of State of the
applicable jurisdictions.
(b) We express no opinion on the relative priority of liens or
encumbrances on any property described in the Transaction Documents.
(c) The enforceability of obligations under any of the Transaction
Documents is subject to (i) bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting the rights and remedies of creditors generally or the
application of principles of equity, whether in an action in law or proceeding
in equity; (ii) the requirement under the Uniform Commercial Code that a secured
party exercise its rights in a commercially reasonable manner, (iii) public
policy considerations which may limit the right to obtain certain remedies and
to indemnification; (iv) fraudulent transfer and conveyance laws; and (v)
applicable limitations on creation of encumbrances on, and transfers of,
licenses. Moreover, a court may fail or refuse to enforce provisions of
agreements or documents if the enforcement thereof is based upon defaults or
breaches which are immaterially to the ultimate performance contemplated
thereby. No opinion is expressed as to the
3
legality, validity, or enforceability of any waiver of the right to receive
notice, any waiver of any legal or equitable defense, any waiver of equity,
redemption, stay or appraisal, any waiver of the availability of specific
performance, injunctive relief or other equitable remedies, or any other waiver,
including, without limitation, any waiver as to trial by jury. Finally, certain
provisions of the Transaction Documents may be unenforceable or their
enforceability limited, but such unenforceability or limitation on
enforceability will not impair the practical realization of the rights of the
Agents and Lenders under the Transaction Documents.
(d) Our opinion in paragraph 14 as to the Pledged Shares is based
solely on our review of the corporate stock records provided by Borrower and the
Companies and certificates of officers of such entities.
(e) We have assumed the authenticity of all documents submitted to us
as originals, the conformity with the originals of all documents submitted to us
as copies and the genuineness of all signatures on documents we have reviewed.
This opinion is addressed to you solely for your use in connection with
the transactions contemplated by the Transaction Documents, and no person other
than Administrative Agent, Collateral Agent, each Lender, each assignee that
hereafter becomes a Lender as permitted by the Credit Agreement, and the law
firm of ▇▇▇▇▇▇ and ▇▇▇▇▇, LLP, is entitled to rely hereon without our prior
written consent. This opinion is given as of the date hereof, and we have no
obligation to revise or update this opinion subsequent to the date hereof or to
advise you or any other person of any matter subsequent to the date hereof which
would cause us to modify this opinion in whole or in part.
Very truly yours,
_________________________________
4
ANNEX A
-------
TO OPINION OF COUNSEL OF BORROWER
---------------------------------
COMPANY JURISDICTION OF FOREIGN
ORGANIZATION QUALIFICATIONS
5
EXHIBIT H
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FORM OF AFFILIATE SUBORDINATION AGREEMENT
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THIS AFFILIATE SUBORDINATION AGREEMENT is entered into among Bank of
America, N.A., in its capacity as Administrative Agent for Lenders (defined
below), , a __________________ ___________ ("Subordinated Creditor"), and AZZ
incorporated
WHEREAS, Borrower, Bank of America, N.A., as Administrative Agent, and
certain Agents and Lenders have entered into an Amended and Restated Revolving
and Term Loan Credit Agreement, dated as of November __, 2001 (as amended,
modified, supplemented, or restated from time to time, the "Credit Agreement");
and
WHEREAS, this Agreement is integral to the transactions contemplated by
the Loan Documents, and the execution and delivery thereof is a condition
precedent to Lenders' obligations to extend credit under the Loan Documents;
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, Administrative Agent, Subordinated Creditor, and
Borrower agree as follows:
1. Unless otherwise defined herein, or the context hereof otherwise
requires, each term defined in the Credit Agreement is used in this Agreement
with the same meaning. As used herein, the following terms have the meanings
indicated:
Senior Debt means, whether now or hereafter arising, the
Obligation, including, without limitation, interest thereon after the
commencement of any proceedings under any Debtor Relief Law.
Subordinated Debt means the principal of and interest on all Debt
of Borrower or any other Company (other than Debt arising under the
Credit Agreement), whether direct, indirect, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, now or
hereafter existing, due, or to become due to Subordinated Creditor, or
held or to be held by Subordinated Creditor, whether created directly
or acquired by assignment or otherwise, and whether evidenced by
written instrument or not.
2. The payment of any and all Subordinated Debt is hereby expressly
subordinated to all Senior Debt to the extent and in the manner set forth in
this Agreement.
3. Subordinated Creditor shall not accelerate, demand, ▇▇▇ for,
commence any collection or enforcement action or proceeding, take, receive,
accept, or retain any payment or distribution of any character, whether in cash,
securities, or other property, in respect of the principal of, premium on, or
interest on, the Subordinated Debt, or any Collateral therefor, until all Senior
Debt shall have been paid in full with interest, including, without limitation,
interest during any bankruptcy or similar proceeding involving Borrower from the
date of the filing thereof to the date of distribution (notwithstanding any
statute, including without limitation the Federal Bankruptcy Code, any rule of
Law, or bankruptcy procedures to the contrary).
4. In the event of the institution of and in connection with any
proceeding against Borrower pursuant to any Debtor Relief Law, and unless or
until the Senior Debt is paid in full:
(a) All Senior Debt shall first be paid in full before any
payment or distribution of any character, whether in cash, securities,
or other property, shall be made in respect of any Subordinated Debt;
(b) Any payment or distribution of any character, whether in cash,
securities, or other property, which would otherwise (but for the terms
hereof) be payable or deliverable in respect of any Subordinated Debt,
shall be paid or delivered directly to Administrative Agent, for the
benefit of Lenders, until all Senior Debt shall have been paid in full,
and Subordinated Creditor irrevocably authorizes, empowers, and directs
all receivers, trustees, liquidators, conservators, and others having
authority to effect all such payments and deliveries;
(c) Administrative Agent, on behalf of Lenders, may, as
attorney-in-fact for Subordinated Creditor, take such action on behalf
of Subordinated Creditor, and Subordinated Creditor hereby appoints
Administrative Agent, on behalf of Lenders, as its attorney-in-fact, to
demand, ▇▇▇ for, collect, and receive any and all such moneys,
dividends, or other assets and give acquittance therefor and to file
any claim, proof of claim, or other instrument of similar character and
to take such other proceedings in the name of Subordinated Creditor as
Administrative Agent may deem necessary or advisable for the
enforcement of this Agreement; and
(d) Each Subordinated Creditor shall execute and deliver to
Administrative Agent, for the benefit of Lenders, all such further
instruments confirming the authorization referred to in the foregoing
clauses (b) and (c) and all such proofs of claim, assignments of claim,
and other instruments and shall take all such other actions as may be
requested by Administrative Agent in order to enable Administrative
Agent to enforce all Rights of Lenders and Administrative Agent
hereunder and all claims of Administrative Agent or any Lender upon or
in respect of the Subordinated Debt, and failing execution of such
instruments or taking of such actions by Subordinated Creditor,
Administrative Agent, for the benefit of Lenders, is hereby authorized
and empowered to execute and perform the same on behalf of such
Subordinated Creditor.
5. In the event any payment or distribution of any character, whether
in cash, securities, or other property, is received by Subordinated Creditor in
contravention of the terms of this Agreement, and before all Senior Debt shall
have been paid in full, such payment or distribution shall be held by such
Subordinated Creditor, as trustee of an express trust, in trust for the benefit
of, and shall be paid over or delivered and transferred to Administrative Agent
for application to all Senior Debt remaining unpaid until such Senior Debt shall
have been paid in full. Each Subordinated Creditor hereby assigns to
Administrative Agent, for the benefit of Lenders, all its Rights to any such
payments or distributions, which Administrative Agent may exercise in
Administrative Agent's name or in the name of such Subordinated Creditor, and
agrees to execute such instruments as may be required by Administrative Agent to
enable Administrative Agent, for the benefit of Lenders, to enforce such claims.
Any payments or distributions received in excess of the amount sufficient to pay
all Senior Debt in full shall be returned by Administrative Agent to such
Subordinated Creditor.
6. Administrative Agent or Lenders may, at any time and from time to
time, without the consent of or notice to Subordinated Creditor, without
incurring responsibility to Subordinated Creditor, and without impairing or
releasing any of Administrative Agent's Rights, or any of the obligations of
Subordinated Creditor hereunder, (a) change the amount, manner, place, or terms
of payment, or change or extend the time of payment of or renew or alter all or
any part of the Senior Debt or amend, modify, supplement, or restate, any of the
Loan Documents in any manner whatsoever; (b) sell, exchange, release, or
otherwise deal with all or any part of any property by whomsoever at any time
pledged or mortgaged to secure, or howsoever securing, all or any part of the
Senior Debt; (c) hold all or any property as additional Collateral under the
Loan Documents to secure all or any part of the Senior Debt; (d) release anyone
liable in any manner for the payment or collection of all or any part of the
Senior Debt; (e) exercise or refrain from exercising any Rights against Borrower
and others (including the undersigned); and (f) apply any sums, by whomsoever
paid or however realized, to the Senior Debt.
7. Notwithstanding anything to the contrary contained in any other
instrument or document delivered in connection with the Subordinated Debt or
otherwise, including, without limitation, any prior perfection of a security
interest or Lien, any security interests and Liens now or hereafter held by
Subordinated Creditor in any Collateral for the Subordinated Debt shall be
junior and subordinate to any security interests and Liens now or hereafter held
by Administrative Agent, for the benefit of Lenders, in the same Collateral. So
long as the Senior Debt shall remain unpaid, Administrative Agent may at all
times in its sole discretion exercise any and all powers and Rights which it now
has or may hereafter acquire with respect to any of the Collateral securing the
Senior Debt, all without the necessity of obtaining any consent or approval of
Subordinated Creditor.
8. Each Subordinated Creditor represents and warrants that it is duly
organized, validly existing, and in good standing under the laws of its state of
organization and has the power and authority under the laws of such state and
under its articles of incorporation and by-laws or other organizational
documents to enter into this Agreement; all actions necessary or appropriate for
its execution and performance of this Agreement have been taken and upon its
execution, this Agreement will constitute its valid and binding obligation
enforceable in accordance with its terms; and the making and performance of this
Agreement will not violate any law or its articles of incorporation or by-laws
or other organizational documents, or result in any violation of or constitute a
default under any agreement by which it or any of its property is bound.
9. This Agreement is a continuing agreement of subordination and
Lenders may continue to make loans to or otherwise accept the obligations of
Borrower in reliance hereon, without notice to Subordinated Creditor.
10. While this Agreement remains in effect, each Subordinated Creditor
covenants and agrees that it will not modify or amend or permit modification or
amendment of the terms and conditions of the Subordinated Debt, without
obtaining the prior written consent of Administrative Agent.
11. No waiver of Administrative Agent's Rights hereunder shall be
effective unless in a writing signed by Administrative Agent, and each waiver
shall extend only to the specific instance involved and shall not impair or
affect Administrative Agent's Rights in any other respect at any other time.
Each Subordinated Creditor hereby waives all notices with respect to the subject
matter hereof, including, but not limited to, notice of acceptance of this
Agreement, of the making of loans or advances to the Borrower or any extensions,
renewals, or modifications thereof, releases of collateral security or
guarantors or other indulgences of any character, or of the occurrence or
declaration of any default or the taking of any collection or enforcement
action. This Agreement shall be governed by and construed according to the Laws
of the State of Texas.
12. This Agreement inures to the benefit of Administrative Agent,
Lenders, and their respective successors and assigns, and the Rights under this
Agreement may be assigned in whole or in part in connection with any partial or
complete assignment or transfer of the Senior Debt. Administrative Agent is
Administrative Agent for each Lender, and Administrative Agent may, without the
joinder of any Lender, exercise any and all Rights in favor of Lenders
hereunder. The Rights of each Lender vis-a-vis Administrative Agent and each
other Lender may be subject to one or more separate agreements between or among
such parties, but Subordinated Creditor need not inquire about any such
agreement or be subject to any terms thereof unless Subordinated Creditor
specifically joins therein; and, consequently, neither Subordinated Creditor nor
its heirs, personal representatives, successors, or assigns are entitled to any
benefits or provisions of any such separate agreements or are entitled to rely
upon or raise as a defense, in any manner whatsoever, the failure or refusal of
any party thereto to comply with the provisions thereof. This Agreement binds
Subordinated Creditor and its successors and assigns, and Subordinated Creditor
will advise each future holder of all or any part of the Subordinated Debt that
the Subordinated Debt is subordinated to the Senior Debt in the manner and to
the extent set forth in this Agreement.
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13. This Agreement may be executed in a number of identical
counterparts, each of which is deemed an original for all purposes and all of
which constitute, collectively, one agreement; but, in making proof of this
Agreement, it is not necessary to produce or account for more than one
counterpart.
14. Subject to the provisions of this Agreement and the Rights of
Administrative Agent hereunder, as between Borrower and Subordinated Creditor,
nothing herein contained shall impair the obligation of Borrower, which is
absolute and unconditional to pay the Subordinated Debt as and when the same
shall become due and payable in accordance with the terms thereof, or prevent
Subordinated Creditor upon default with respect to the Subordinated Debt, from
exercising all rights, powers, and remedies otherwise provided therein or by
applicable Law.
Remainder of Page Intentionally Blank.
Signature Page to Follow.
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EXECUTED on the date first stated in this Affiliate Subordination
Agreement.
[SUBORDINATED CREDITOR]
By: ____________________________________
Name: _____________________________
Title: _____________________________
BANK OF AMERICA, N.A.,
as Administrative Agent
By: ____________________________________
Name: _____________________________
Title: _____________________________
BORROWER (a) acknowledges and confirms that it has received an executed copy of
this Affiliate Subordination Agreement and approves of and consents to it in all
respects; and (b) agrees to be bound by and to observe all of the terms and
conditions of this Affiliate Subordination Agreement.
AZZ INCORPORATED
By: ____________________________________
Name: _____________________________
Title: _____________________________
Affiliate Subordination Agreement
Signature Page