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EXHIBIT 10.7
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LENNOX INTERNATIONAL INC.
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ADVANCE TERM CREDIT AGREEMENT
Dated as of March 16, 1999
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CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Administrative Agent
and
WACHOVIA BANK, N.A.,
as Documentation Agent
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS..........................................................1
SECTION 1.01. Defined Terms..................................................1
SECTION 1.02. Terms Generally...............................................12
ARTICLE II. THE CREDITS.........................................................12
SECTION 2.01. Commitments...................................................12
SECTION 2.02. Loans.........................................................12
SECTION 2.03. Borrowing Procedure...........................................13
SECTION 2.04. Fees..........................................................14
SECTION 2.05. Repayment of Loans; Evidence of Indebtedness..................14
SECTION 2.06. Interest on Loans.............................................15
SECTION 2.07. Default Interest..............................................15
SECTION 2.08. Alternate Rate of Interest....................................16
SECTION 2.09. Termination and Reduction of Commitments......................16
SECTION 2.10. Prepayment....................................................17
SECTION 2.11. Reserve Requirements; Change in Circumstances.................18
SECTION 2.12. Change in Legality............................................20
SECTION 2.13. Pro Rata Treatment............................................21
SECTION 2.14. Sharing of Setoffs............................................21
SECTION 2.15. Payments......................................................21
SECTION 2.16. Taxes.........................................................22
SECTION 2.17. Assignment of Commitments Under Certain Circumstances.........24
SECTION 2.18. Payments by Agent to the Lenders..............................25
ARTICLE III. REPRESENTATIONS AND WARRANTIES......................................25
SECTION 3.01. Organization; Powers..........................................25
SECTION 3.02. Authorization.................................................25
SECTION 3.03. Enforceability................................................25
SECTION 3.04. Governmental Approvals........................................25
SECTION 3.05. Organization and Ownership of Shares of Subsidiaries..........26
SECTION 3.06. Financial Statements..........................................26
SECTION 3.07. Litigation; Observance of Statutes and Orders.................26
SECTION 3.08. Taxes.........................................................27
SECTION 3.09. Title to Property; Leases.....................................27
SECTION 3.10. Licenses, Permits, etc........................................27
SECTION 3.11. Compliance with ERISA.........................................27
SECTION 3.12. Use of Proceeds; Margin Regulation............................28
SECTION 3.13. Existing Indebtedness.........................................28
SECTION 3.14. Foreign Assets Control Regulations, etc.......................29
SECTION 3.15. Status under Certain Statutes.................................29
SECTION 3.16. No Material Misstatements.....................................29
SECTION 3.17. Year 2000 Matters.............................................29
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ARTICLE IV. CONDITIONS OF LENDING................................................30
SECTION 4.01. All Borrowings................................................30
SECTION 4.02. Effective Date................................................30
ARTICLE V. AFFIRMATIVE AND NEGATIVE COVENANTS..................................31
SECTION 5.01. Compliance with Law...........................................31
SECTION 5.02. Insurance.....................................................31
SECTION 5.03. Maintenance of Properties.....................................31
SECTION 5.04. Payment of Taxes..............................................32
SECTION 5.05. Corporate Existence, etc......................................32
SECTION 5.06. Most Favored Lender Status....................................32
SECTION 5.07. Covenant to Secure Loans Equally..............................33
SECTION 5.08. Environmental Matters.........................................33
SECTION 5.09. Transactions with Affiliates..................................34
SECTION 5.10. Merger, Consolidation, etc....................................34
SECTION 5.11. Sale of Assets, etc...........................................35
SECTION 5.12. Incurrence of Indebtedness....................................36
SECTION 5.13. Liens.........................................................36
SECTION 5.14. Restricted Payments...........................................37
SECTION 5.15. Consolidated Net Worth........................................38
SECTION 5.16. Limitation on Dividend Restrictions, etc......................38
SECTION 5.17. Limitation on Restricted Indebtedness.........................38
SECTION 5.18. Preferred Stock of Restricted Subsidiaries....................38
SECTION 5.19. No Redesignation of Restricted Subsidiaries...................38
SECTION 5.20. Financial and Business Information............................38
SECTION 5.21 Inspection; Confidentiality...................................42
ARTICLE VI. EVENTS OF DEFAULT...................................................42
ARTICLE VII. THE ADMINISTRATIVE AGENT............................................45
ARTICLE VIII. MISCELLANEOUS.......................................................47
SECTION 8.01. Notices.......................................................47
SECTION 8.02. Survival of Agreement.........................................48
SECTION 8.03. Binding Effect................................................48
SECTION 8.04. Successors and Assigns........................................48
SECTION 8.05. Expenses; Indemnity...........................................50
SECTION 8.06. Right of Setoff...............................................52
SECTION 8.07. Applicable Law................................................52
SECTION 8.08. Waivers; Amendment............................................52
SECTION 8.09. Entire Agreement..............................................53
SECTION 8.10. Severability..................................................53
SECTION 8.11. Counterparts..................................................53
SECTION 8.12. Headings......................................................53
SECTION 8.13. Interest Rate Limitation......................................53
SECTION 8.14. Confidentiality...............................................54
SECTION 8.15. Non-Application of Chapter 346 of the Texas Finance Code......55
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EXHIBITS AND SCHEDULES
Exhibit A Form of Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D Matters to be addressed by Opinion of Counsel
Schedule 2.01 Commitments
Schedule 3.05 Subsidiaries
Schedule 3.06 Financial Statements
Schedule 3.13 Indebtedness
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ADVANCE TERM CREDIT AGREEMENT
ADVANCE TERM CREDIT AGREEMENT (the "Agreement") dated as of March 16
1999, and effective as of the Effective Date, among LENNOX INTERNATIONAL INC., a
Delaware corporation ("Borrower"); the lenders listed in Schedule 2.01 (together
with their successors and assigns, the "Lenders"), CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, a national banking association, ("Chase"), as administrative agent
for the Lenders (in such capacity, the "Administrative Agent"), and WACHOVIA
BANK, N.A., a national banking association ("Wachovia"), as documentation agent
for the Lenders (in such capacity, the "Documentation Agent"). (The
Administrative Agent and the Documentation Agent are referred to herein together
as the "Agents").
The Lenders have been requested to extend credit to the Borrower to
enable it, upon the terms and subject to the conditions set forth herein, to
borrow on and after the Effective Date and at any time prior to the Maturity
Date (as hereinafter defined) an aggregate principal amount not in excess of the
amount set forth herein. The proceeds of any such borrowings are to be used for
acquisitions, working capital and other corporate purposes. The Lenders are
willing to extend such credit on the terms and subject to the conditions herein
set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the following
terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate determined by
reference to the Alternate Base Rate in accordance with the provisions of
Article II.
"Additional Covenant" shall have the meaning assigned in Section 5.06.
"Additional Default" shall have the meaning assigned in Section 5.06.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit B hereto.
"Affiliate" shall mean, at any time, and with respect to any Person,
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of the
Borrower.
ADVANCE TERM CREDIT AGREEMENT - Page 1
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"Alternate Base Rate" shall mean, for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greatest of
(a) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%, and
(b) the Prime Rate in effect on such day. For purposes hereof, "Prime Rate"
shall mean the rate of interest per annum publicly announced from time to time
by Chase as its prime rate in effect at its principal office in Houston, Texas;
each change in the Prime Rate shall be effective on the date such change is
publicly announced as effective; and "Federal Funds Effective Rate" shall mean,
for any day, the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as released on the next succeeding Business Day by the Federal
Reserve Bank of Dallas, or, if such rate is not so released for any day which is
a Business Day, the arithmetic average (rounded upwards to the next 1/100th of
1%), as determined by Chase, of the quotations for the day of such transactions
received by Chase from three Federal funds brokers of recognized standing
selected by it. If for any reason Chase shall have determined (which
determination shall be conclusive absent manifest error; provided that Chase,
shall, upon request, provide to the applicable Borrower a certificate setting
forth in reasonable detail the basis for such determination) that it is unable
to ascertain the Federal Funds Effective Rate for any reason, including the
inability of Chase to obtain sufficient quotations in accordance with the terms
hereof, the Alternate Base Rate shall be determined without regard to clause (a)
of the first sentence of this definition until the circumstances giving rise to
such inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"Applicable Margin" shall have the meaning assigned in Section 2.06(d).
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an assignee in the form of Exhibit C.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States.
"Board of Directors" shall mean the Board of Directors of Borrower or
any duly authorized committee thereof.
"Borrower" shall have the meaning given such term in the preamble
hereto.
"Borrower Payments" shall have the meaning given such term in Section
2.16 (a).
"Borrowing" shall mean a group of Loans of a single Type made by the
Lenders on a single date and, with respect to Eurodollar Loans made on a single
date, as to which a single Interest Period is in effect.
"Borrowing Request" shall mean a request made pursuant to Section 2.03
in the form of Exhibit A.
ADVANCE TERM CREDIT AGREEMENT - Page 2
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"Business Day" shall mean any day (other than a day which is a
Saturday, Sunday or legal holiday in the State of New York or the State of
Texas) on which banks are open for business in New York City, New York and
Houston, Texas; provided, however, that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Lease Obligation" shall mean, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"Capital Leases" shall mean, at any time, a lease with respect to which
the lessee is required concurrently to recognize the acquisition of an asset and
the incurrence of a liability in accordance with GAAP.
"Change of Control" shall have the meaning assigned it in Section
2.10(c).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the rules and regulations promulgated thereunder from time to
time.
"Commitment" shall mean, with respect to each Lender, the Commitment of
such Lender set forth in Schedule 2.01 hereto, or in the most recent Assignment
and Acceptance executed by such Lender, as such Commitment may be permanently
terminated or reduced from time to time pursuant to Section 2.9. The Commitment
of each Lender shall automatically and permanently terminate on the Maturity
Date if not terminated earlier pursuant to the terms hereof.
"Commitment Fee" shall have the meaning assigned to such term in
Section 2.04(a).
"Compliance Certificate" shall mean the certificate delivered pursuant
to Section 5.20(g).
"Confidential Information" shall have the meaning assigned it in
Section 8.14.
"Consolidated Assets" shall mean the total assets of the Borrower and
its Restricted Subsidiaries which would be shown as assets on a consolidated
balance sheet of the Borrower and its Restricted Subsidiaries prepared in
accordance with GAAP, after eliminating all amounts properly attributable to
minority interests, if any, in the stock and surplus of Restricted Subsidiaries.
"Consolidated Capitalization" shall mean, at any time, the sum of
Consolidated Net Worth and Consolidated Indebtedness.
"Consolidated Indebtedness" shall mean, as of any date of
determination, the total of all Indebtedness of the Borrower and its Restricted
Subsidiaries outstanding on such date, after eliminating all offsetting debits
and credits between the Borrower and its Restricted Subsidiaries and all other
items required to be eliminated in the course of the preparation of consolidated
financial statements of the Borrower and its Restricted Subsidiaries in
accordance with GAAP.
ADVANCE TERM CREDIT AGREEMENT - Page 3
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"Consolidated Net Income" shall mean, for any period, the net income
(or net loss) of the Borrower and its Restricted Subsidiaries for such period,
determined in accordance with GAAP, excluding
(a) the proceeds of any life insurance policy;
(b) any gain arising from (1) the sale or other disposition of any
assets (other than current assets) to the extent that the aggregate amount of
gains exceeds the aggregate amount of losses from the sale, abandonment or other
disposition of assets (other than current assets), (2) any write-up of assets,
or (3) the acquisition by the Borrower or any Restricted Subsidiary of its
outstanding securities constituting Indebtedness;
(c) any amount representing the interest of the Borrower or any
Restricted Subsidiary in the undistributed earnings of any other Person;
(d) any earnings of any other Person accrued prior to the date it
becomes a Restricted Subsidiary or is merged into or consolidated with the
Borrower or a Restricted Subsidiary and any earnings, prior to the date of
acquisition, of any other Person acquired in any other manner; and
(e) any deferred credit (or amortization of a deferred credit) arising
from the acquisition of any Person.
"Consolidated Net Worth" shall mean, at any time,
(a) the sum of (i) the par value (or value stated on the books of the
Borrower) of the capital stock (but excluding treasury stock and capital stock
subscribed and unissued) of the Borrower and its Restricted Subsidiaries at such
time plus (ii) the amount of paid-in-capital and retained earnings of the
Borrower and its Restricted Subsidiaries at such time, in each case as such
amounts would be shown on a consolidated balance sheet of the Borrower and its
Restricted Subsidiaries as of such time prepared in accordance with GAAP, minus
(b) to the extent included in clause (a), all amounts properly
attributable to minority interests, if any, in the stock and surplus of
Restricted Subsidiaries.
"Continue", "Continuation", and "Continued" shall refer to the
continuation pursuant to Section 2.02 (d) of a Eurodollar Borrowing as a
Eurodollar Borrowing from one Interest Period to the next Interest Period.
"Convert", "Conversion", and "Converted" shall refer to a conversion
pursuant to Section 2.02 (d) or Section 2.12 of one Type of Borrowing into
another Type of Borrowing.
"Debt to Total Capitalization Ratio" shall mean, as of the end of any
quarterly fiscal period, the ratio expressed as a percentage, equal to the ratio
of Consolidated Indebtedness to Consolidated Capitalization calculated as of the
end of such fiscal period.
ADVANCE TERM CREDIT AGREEMENT - Page 4
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"Default" shall mean any event or condition which upon notice, lapse of
time or both would constitute an Event of Default.
"Distribution" shall mean, in respect of any corporation, association
or other business entity:
(a) dividends or other distributions or payments on capital stock or
other equity interest of such corporation, association or other business entity
(except distributions in such stock or other equity interests); and
(b) the redemption or acquisition of such stock or other equity
interests or of warrants, rights or other options to purchase such stock or
other equity interests (except when solely in exchange for such stock or other
equity interests) unless made, contemporaneously, from the net proceeds of a
sale of such stock or other equity interests.
"dollars" or "$" shall mean lawful money of the United States of
America.
"Effective Date" shall mean the date on which each condition set forth
in Section 4.02 has been satisfied.
"Environmental Laws" shall mean any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the rules and regulations promulgated
thereunder from time to time in effect.
"ERISA Affiliate" shall mean any trade or business (whether or not
incorporated) that is treated as a single employer together with the Borrower
under section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of Eurodollar
Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a rate
determined by reference to the LIBO Rate in accordance with the provisions of
Article II.
"Event of Default" shall have the meaning assigned to such term in
Article VI.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Excluded Transfer" shall have the meaning assigned to it in Section
5.11.
"Existing Credit Agreement" shall mean that certain Revolving Credit
Facility Agreement dated as of July 13, 1998, among Borrower, certain lenders,
Administrative Agent, as
ADVANCE TERM CREDIT AGREEMENT - Page 5
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administrative agent for such lenders, and Documentation Agent, as documentation
agent for such lenders, as such agreement has been or may be amended from time
to time.
"Facility Fee" shall have the meaning assigned to such term in Section
2.04(c).
"Fair Market Value" shall mean, at any time and with respect to any
property, the sale value of such property that would be realized in an arm's
length sale at such time between an informed and willing buyer and an informed
and willing seller (neither being under a compulsion to buy or sell).
"Federal Funds Effective Rate" shall have the meaning specified in the
definition of Alternate Base Rate.
"GAAP" shall mean generally accepted accounting principles as in effect
from time to time in the United States of America.
"Governmental Authority" shall mean:
(a) the government of
(i) the United States of America or any State or other
political subdivision thereof, or
(ii) any jurisdiction in which the Borrower or any
Subsidiary conducts all or any part of its business,
or which asserts jurisdiction over any properties of
the Borrower or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial, regulatory
or administrative functions of, or pertaining to, any such
government.
"Guaranty" shall mean, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing any Indebtedness, dividend or other obligation of any other Person
in any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such
Indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
Indebtedness or obligation;
ADVANCE TERM CREDIT AGREEMENT - Page 6
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(c) to lease properties or to purchase properties or services primarily
for the purpose of assuring the owner of such Indebtedness or obligation of the
ability of any other Person to make payment of the Indebtedness or obligation;
or
(d) otherwise to assure the owner of such Indebtedness or obligation
against loss in respect thereof. In any computation of the Indebtedness or other
liabilities of the obligor under any Guaranty, the Indebtedness or other
obligations that are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"Hazardous Substance" shall mean any contaminant, pollutant or toxic or
hazardous substance, and any substance that is defined or listed as a hazardous,
toxic or dangerous substance under any Environmental Law or that is otherwise
regulated or prohibited under any Environmental Law as a hazardous, toxic or
dangerous substance.
"Indebtedness" with respect to any Person shall mean, at any time,
without duplication:
(a) its liabilities for borrowed money and its redemption obligations
in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the ordinary
course of business but including all liabilities created or arising under any
conditional sale or other title retention agreement with respect to any such
property);
(c) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with respect
to any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money, but excluding in any event obligations in respect of (1) trade or
commercial letters of credit issued for the account of such Person in the
ordinary course of its business and (2) stand-by letters of credit issued to
support obligations of such Person that do not constitute Indebtedness);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.
Indebtedness of any Person shall include all obligations of such Person
of the character described in clauses (a) through (g) above to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.
ADVANCE TERM CREDIT AGREEMENT - Page 7
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"Interest Payment Date" shall mean (a) with respect to any ABR
Borrowing, each March 31, June 30, September 30 and December 31, beginning on
the first such date after the date hereof; (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable thereto and, in the case of
such a Loan with an Interest Period of more than three months or 90 day
duration, each day that would have been an Interest Payment Date for such Loan
had successive Interest Periods of three months duration or 90 days duration, as
the case may be, been applicable to such Loan; and (c) in addition, with respect
to all Loans, the date of any prepayment thereof and the Maturity Date.
"Interest Period" shall mean the period commencing on the date of a
Eurodollar Borrowing and ending on the numerically corresponding day (or, if
there is no numerically corresponding day, on the last day) in the calendar
month that is 1, 2, 3 or 6 months thereafter, or, in addition, in the case of
any Eurodollar Borrowing made during the 30-day period ending on the Maturity
Date, the period commencing on the date of such Borrowing and ending on the
seventh or fourteenth day thereafter, as the Borrower may elect, provided,
however, that if any Interest Period would end on a day other than a Business
Day, such Interest Period shall be extended to the next succeeding Business Day
unless such next succeeding Business Day would fall in the next calendar month,
in which case such Interest Period shall end on the next preceding Business Day.
Interest shall accrue from and including the first day of an Interest Period to
but excluding the last day of such Interest Period.
"Intergroup Transfer" shall have the meaning assigned it in Section
5.11.
"LIBO Rate" shall mean, with respect to any Eurodollar Borrowing for
any Interest Period, an interest rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the rate at which dollar deposits approximately
equal in principal amount to the Administrative Agent's portion of such
Eurodollar Borrowing and for a maturity comparable to such Interest Period are
offered to the principal London offices of Chase or one of its Affiliates in
immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"Lien" shall mean, with respect to any Person, any mortgage, lien,
pledge, charge, security interest or other encumbrance, or any interest or title
of any vendor, lessor, lender or other secured party to or of such Person under
any conditional sale or other title retention agreement or Capital Lease, upon
or with respect to any property or asset of such Person (including in the case
of stock, stockholder agreements, voting trust agreements and all similar
arrangements).
"Loans" shall have the meaning assigned it in Section 2.01. Each Loan
shall be a Eurodollar Loan or an ABR Loan.
"Material" shall mean material in relation to the business, operations,
affairs, financial condition, assets, or properties of the Borrower and its
Subsidiaries taken as a whole.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, operations, affairs, financial condition, assets or properties of
the Borrower and its Restricted Subsidiaries taken as a whole, or (b) the
ability of the Borrower to perform its obligations under this Agreement, or (c)
the validity or enforceability of this Agreement.
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"Maturity Date" shall mean December 31, 1999.
"Multiemployer Plan" shall mean any Plan that is a "multiemployer plan"
(as such term is defined in section 4001(a)(3) of ERISA).
"New Lending Office" shall have the meaning assigned it in Section
2.16(g).
"New Owner" shall have the meaning assigned it in Section 2.10(c).
"Non-U.S. Agent" shall have the meaning assigned it in Section 2.16(g).
"▇▇▇▇▇▇ Family" shall have the meaning assigned it in Section 2.10(c).
"Ordinary Course Transfer" shall have the meaning assigned it in
Section 5.11.
"Other Taxes" shall have the meaning assigned it in Section 2.16(b).
"Prepayment Date" shall have the meaning assigned it in Section
2.10(c).
"PBGC" shall mean the Pension Benefit Guaranty Corporation referred to
and defined in ERISA or any successor thereto.
"Person" shall mean an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or a
government or agency or political subdivision thereof.
"Plan" shall mean an "employee benefit plan" (as defined in section
3(3) of ERISA) that is or, within the preceding five years, has been established
or maintained, or to which contributions are or, within the preceding five
years, have been made or required to be made, by the Borrower or any ERISA
Affiliate or with respect to which the Borrower or any ERISA Affiliate may have
any liability.
"Preferred Stock" shall mean any class of capital stock of a
corporation that is preferred over any other class of capital stock of such
corporation as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such corporation.
"property" or "properties" shall mean, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, ▇▇▇▇▇▇
or inchoate.
"Property Disposition Date" shall have the meaning assigned to it in
Section 5.11.
"Register" shall have the meaning given such term in Section 8.04 (d).
"Required Lenders" shall mean, at any time, Lenders having Commitments
representing at least 51% of the Total Commitment or, for purposes of
acceleration pursuant to clause (ii) of
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Article VI, Lenders holding Loans representing at least 51% of the aggregate
principal amount of the Loans outstanding.
"Responsible Officer" shall mean any Senior Financial Officer and any
other officer of the Borrower with responsibility for the administration of the
relevant portion of this agreement.
"Restricted Indebtedness" shall mean, without duplication, (i)
Indebtedness of the Borrower or any Restricted Subsidiary which is secured by a
Lien not otherwise permitted under subsections (a) through (h) of Section 5.13,
and (ii) Indebtedness of a Restricted Subsidiary owing to any Person other than
the Borrower or a Wholly-Owned Subsidiary.
"Restricted Payment" shall mean any Distribution in respect of the
Borrower or any Restricted Subsidiary (other than on account of capital stock or
other equity interests of a Restricted Subsidiary owned legally and beneficially
by the Borrower or another Restricted Subsidiary), including, without
limitation, any Distribution resulting in the acquisition by the Borrower of
Securities which would constitute treasury stock. For purposes of this
Agreement, the amount of any Restricted Payment made in property shall be the
greater of (x) the Fair Market Value of such property (as determined in good
faith by the board of directors (or equivalent governing body) of the Person
making such Restricted Payment) and (y) the net book value thereof on the books
of such Person, in each case determined as of the date on which such Restricted
Payment is made.
"Restricted Subsidiary" shall mean any Subsidiary of the Borrower which
is (a) listed as a Restricted Subsidiary in Schedule 3.05 or (b) organized under
the laws of, and conducts substantially all of its business and maintains
substantially all of its property and assets within, the United States or any
state thereof (including the District of Columbia).
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Security" shall have the meaning set forth in Section 2(1) of the
Securities Act.
"Senior Financial Officer" shall mean the chief financial officer,
principal accounting officer, treasurer or comptroller of the Borrower; provided
that any executive vice president or the corporate controller of Borrower is
authorized by Borrower to execute and deliver any Borrowing Request.
"Senior Note Purchase Agreements" shall mean those certain Note
Purchase Agreements dated April 3, 1998 pursuant to which Borrower issued its
6.56% Senior Notes due April 3, 2005 and its 6.75% Senior Notes due April 3,
2008.
"Subsidiary" shall mean, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person
ADVANCE TERM CREDIT AGREEMENT - Page 10
15
and one or more of its Subsidiaries (unless such partnership can and does
ordinarily take major business actions without the prior approval of such Person
or one or more of its Subsidiaries). Unless the context otherwise clearly
requires, any reference to a "Subsidiary" is a reference to a Subsidiary of the
Borrower.
"Swaps" shall mean, with respect to any Person, payment obligations
with respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"Taxes" shall have the meaning assigned it in Section 2.16 (a).
"Total Commitment" shall mean, at any time, the aggregate amount of
Commitments of all the Lenders, as in effect at such time.
"Transactions" shall have the meaning assigned it in Section 3.02.
"Transfer" shall mean, with respect to any Person, any transaction in
which such Person sells, conveys, transfers or leases (as lessor) any of its
property, including capital stock of, or a Security issued by, a Subsidiary.
"Transferee" shall have the meaning assigned to it in Section 2.16(a).
"Type", when used in respect of any Loan or Borrowing, shall refer to
the Rate by reference to which interest on such Loan or on the Loans comprising
such Borrowing is determined. For purposes hereof, "Rate" shall include the LIBO
Rate and the Alternate Base Rate.
"U.S. Lender" shall have the meaning assigned it in Section 2.16.
"Unrestricted Subsidiary"shall mean any Subsidiary other than a
Restricted Subsidiary.
"Voting Rights" shall have the meaning assigned it in Section 2.10.
"Wholly-Owned Restricted Subsidiary" or "Wholly-Owned Subsidiary"
means, at any time, any Restricted Subsidiary or Subsidiary, respectively, one
hundred percent (100%) of all of the equity interests (except directors'
qualifying shares) and voting interests of which are owned by any one or more of
the Borrower and the Borrower's other Wholly-Owned Restricted Subsidiaries or
Wholly-Owned Subsidiaries, respectively, at such time.
ADVANCE TERM CREDIT AGREEMENT - Page 11
16
SECTION 1.02. Terms Generally. The definitions in Section 1.01 shall
apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include," "includes" and
"including" shall be deemed to be followed by the phrase "without limitation."
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP, as in effect from time to time.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. Subject to the terms and conditions and
relying upon the representations and warranties herein set forth, each Lender
agrees, severally and not jointly, to make advances (each such advance a "Loan")
to the Borrower, at any time and from time to time on and after the date hereof
and until the earlier of the Maturity Date or the termination of the Commitment
of such Lender, in a maximum principal amount not to exceed such Lender's
Commitment, subject, however, to the conditions that (i) the aggregate principal
amount of all Loans shall not exceed the Total Commitment and (ii) the aggregate
principal amount of all Loans made by any Lender shall not exceed the amount of
such Lender's Commitment. Within the foregoing limits, the Borrower may borrow,
pay or prepay Loans hereunder, on and after the Effective Date and prior to the
Maturity Date, subject to the terms, conditions and limitations set forth
herein. Once a Loan has been paid or prepaid, it may not be reborrowed.
SECTION 2.02. Loans.
(a) Each Loan shall be made as part of a Borrowing consisting of Loans
made by the Lenders ratably in accordance with their respective Commitments;
provided, however, that the failure of any Lender to make any Loan shall not in
itself relieve any other Lender of its obligation to lend hereunder (it being
understood, however, that no Lender shall be responsible for the failure of any
other Lender to make any Loan required to be made by such other Lender). The
Loans comprising any Borrowing shall be in an aggregate principal amount which
is an integral multiple of $1,000,000 and not less than $5,000,000 (or an
aggregate principal amount equal to the remaining balance of the available
Commitments).
(b) Each Borrowing shall be comprised entirely of Eurodollar Loans or
ABR Loans, as the Borrower may request pursuant to Section 2.03. Each Lender may
at its option make any Eurodollar Loan by causing any domestic or foreign branch
or Affiliate of such Lender to make such Loan; provided that any exercise of
such option shall not affect the obligation of the Borrower to repay such Loan
in accordance with the terms of this Agreement. Borrowings of more than one Type
may be outstanding at the same time.
(c) Subject to paragraph (d) below, each Lender shall make each Loan to
be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds to the Administrative Agent in Houston, Texas, not
later than 11:00 a.m., Houston time, and the
ADVANCE TERM CREDIT AGREEMENT - Page 12
17
Administrative Agent shall by 2:00 p.m., Houston time, credit the amounts so
received to the account or accounts specified from time to time in one or more
notices delivered by the Borrower to the Administrative Agent or, if a Borrowing
shall not occur on such date because any condition precedent herein specified
shall not have been met, return the amounts so received to the respective
Lenders. Loans shall be made by the Lenders pro rata in accordance with Section
2.13. Unless the Administrative Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make available to
the Administrative Agent such Lender's portion of such Borrowing, the
Administrative Agent may assume that such Lender has made such portion available
to the Administrative Agent on the date of such Borrowing in accordance with
this paragraph (c) and the Administrative Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Lender shall not have made such portion available
to the Administrative Agent, such Lender and the Borrower (without waiving any
claim against such Lender for such Lender's failure to make such portion
available) severally agree to repay to the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to the Borrower until the date such
amount is repaid to the Administrative Agent at (i) in the case of the Borrower,
the interest rate applicable at the time to the Loans comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Effective Rate. If such
Lender shall repay to the Administrative Agent such corresponding amount, such
amount shall constitute such Lender's Loan as part of such Borrowing for
purposes of this Agreement.
(d) Borrower may Convert all or any part of any Borrowing to a
Borrowing of a different Type and Borrower may Continue all or any part of any
Eurodollar Borrowing as a Borrowing of the same Type, by giving the Agent
written notice on the Business Day of the Conversion into an ABR Borrowing and
on the Business Day at least three Business Days before Conversion into or
Continuation of a Eurodollar Borrowing specifying: (i) the Conversion or
Continuation date, (ii) the amount of the Borrowing to be Converted or
Continued, (iii) in the case of Conversions, the Type of Borrowing to be
Converted into, and (iv) in the case of a Continuation of or Conversion into a
Eurodollar Borrowing, the duration of the Interest Period applicable thereto;
provided that (a) Eurodollar Borrowings may only be Converted on the last day of
the Interest Period; (b) except for Conversions to ABR Borrowings, no
Conversions shall be made while an Event of Default has occurred and is
continuing; (c) only ten (10) Eurodollar Borrowings may be in existence at any
one time; and (d) no Interest Period may end after the Maturity Date. All
notices given under this Section shall be irrevocable and shall be given not
later than 10:00 a.m. Houston, Texas time on the day which is not less than the
number of Business Days specified above for such notice. If the Borrower shall
fail to give the Agent the notice as specified above for Continuation or
Conversion of a Eurodollar Borrowing prior to the end of the Interest Period
with respect thereto, such Eurodollar Borrowing shall automatically be continued
as a Eurodollar Borrowing with an Interest Period of one month's duration. The
Agent shall promptly advise the Lenders of any notice given pursuant to this
Section 2.02. Each Eurodollar Borrowing must be in an aggregate principal amount
which is an integral multiple of $1,000,000 and not less than $5,000,000.
SECTION 2.03. Borrowing Procedure. In order to request a Borrowing, the
Borrower shall hand deliver or telecopy to the Administrative Agent a duly
completed Borrowing Request (a) in the case of a Eurodollar Borrowing, not later
than 10:00 a.m., Houston, Texas time, three Business Days
ADVANCE TERM CREDIT AGREEMENT - Page 13
18
before such Borrowing, and (b) in the case of an ABR Borrowing, not later than
10:00 a.m., Houston, Texas time, on the day of such Borrowing. Such notice shall
be irrevocable and shall in each case specify (i) whether the Borrowing then
being requested is to be a Eurodollar Borrowing or an ABR Borrowing; (ii) the
date of such Borrowing (which shall be a Business Day) and the amount thereof;
and (iii) if such Borrowing is to be a Eurodollar Borrowing, the Interest Period
with respect thereto, which shall not end after the Maturity Date. If no
election as to the Type of Borrowing is specified in any such notice, then the
requested Borrowing shall be an ABR Borrowing. If no Interest Period with
respect to any Eurodollar Borrowing is specified in any such notice, then the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. Notwithstanding any other provision of this Agreement to the contrary,
no Borrowing shall be requested if the Interest Period with respect thereto
would end after the Maturity Date. The Administrative Agent shall promptly
advise the Lenders of any notice given pursuant to this Section 2.03 and of each
Lender's portion of the requested Borrowing.
SECTION 2.04. Fees.
(a) The Borrower agrees to pay to each Lender, through the
Administrative Agent, on each March 31, June 30, September 30 and December 31
(with the first payment being due on March 31, 1999) and on each date on which
the Commitment of such Lender shall be terminated as provided herein, a
commitment fee (a "Commitment Fee"), at a rate equal to 0.15% per annum on the
amount of the daily average of the unused Commitment of such Lender during the
preceding quarter (or other period commencing on the Effective Date or ending
with the Maturity Date or any date on which the Commitment of such Lender shall
be terminated). All Commitment Fees shall be computed on the basis of the actual
number of days elapsed in a year of 365 or 366 days, as the case may be. The
Commitment Fee due to each Lender shall commence to accrue on the Effective
Date, and shall cease to accrue on the earlier of the Maturity Date and the
termination of the Commitment of such Lender as provided herein.
(b) All Commitment Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, as appropriate,
among the Lenders or to the Agents. Once paid, the Commitment Fees shall not be
refundable under any circumstances.
SECTION 2.05. Repayment of Loans; Evidence of Indebtedness.
(a) The outstanding principal balance of each Loan shall be due and
payable on the Maturity Date.
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing the indebtedness to such Lender resulting from
each Loan made by such Lender from time to time, including the amounts of
principal and interest payable and paid to such Lender from time to time under
this Agreement.
(c) The Administrative Agent shall maintain accounts in which it will
record (i) the amount of each Loan made hereunder, the Type of each Loan made
and the Interest Period applicable thereto, if any, (ii) the amount of any
principal or interest due and payable or to become due and
ADVANCE TERM CREDIT AGREEMENT - Page 14
19
payable from the Borrower to each Lender hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder from the Borrower and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to paragraphs
(b) and (c) of this Section 2.05 shall, to the extent permitted by applicable
law, be prima facie evidence of the existence and amounts of the obligations
therein recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain such accounts or any error therein shall not in
any manner affect the obligations of the Borrower to repay the Loans in
accordance with their terms.
SECTION 2.06. Interest on Loans.
(a) Subject to the provisions of Section 2.07, the Loans comprising
each Eurodollar Borrowing shall bear interest (computed on the basis of the
actual number of days elapsed over a year of 360 days) at a rate per annum equal
to the LIBO Rate for the Interest Period in effect for such Borrowing plus the
Applicable Margin from time to time in effect.
(b) Subject to the provisions of Section 2.07, the Loans comprising
each ABR Borrowing shall bear interest (computed on the basis of the actual
number of days elapsed over a year of 365 or 366 days, as the case may be, for
periods during which the Alternate Base Rate is determined by reference to the
Prime Rate and 360 days for other periods and including for all calculations the
first day of any period but excluding the last) at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin.
(c) Interest on each Loan shall be payable on each Interest Payment
Date applicable to such Loan except as otherwise provided in this Agreement. The
applicable LIBO Rate or Alternate Base Rate shall be determined by the
Administrative Agent, and such determination shall be conclusive absent manifest
error; provided that the Administrative Agent shall, upon request, provide to
the Borrower a certificate setting forth in reasonable detail the basis for such
determination.
(d) As used in this Section 2.06, "Applicable Margin" shall mean,
during each of the periods set forth below and with respect to each Type of
Loan, the percent per annum set forth in the following chart below the
applicable Type of Loan and opposite the applicable period:
================================================================================
Period Eurodollar Loans ABR Loans
--------------------------------------------------------------------------------
From the Effective Date through 1.00% 0.00%
and including July 15, 1999
--------------------------------------------------------------------------------
From July 16, 1999, through and 1.25% 0.25%
including September 30, 1999
--------------------------------------------------------------------------------
From October 1, 1999, through 1.75% 0.75%
the Maturity Date
================================================================================
SECTION 2.07. Default Interest. If the Borrower shall default in the
payment of the principal of or interest on any Loan or any other amount becoming
due hereunder, whether by
ADVANCE TERM CREDIT AGREEMENT - Page 15
20
scheduled maturity, notice of prepayment, acceleration or otherwise, the
Borrower shall on demand from time to time from the Administrative Agent pay
interest, to the extent permitted by law, on such defaulted amount up to (but
not including) the date of actual payment (after as well as before judgment) at
a rate per annum (computed as provided in Section 2.06(b)) equal to the
Alternate Base Rate plus 2%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on each
occasion, that on the day two Business Days prior to the commencement of any
Interest Period for a Eurodollar Borrowing the Administrative Agent shall have
determined (i) that dollar deposits in the principal amounts of the Eurodollar
Loans comprising such Borrowing are not generally available in the London
interbank market or (ii) that reasonable means do not exist for ascertaining the
LIBO Rate, the Administrative Agent shall, as soon as practicable thereafter,
give telecopy notice of such determination to the Borrower and the Lenders. In
the event of any such determination under clauses (i) or (ii) above, until the
Administrative Agent shall have advised the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, any request by the
Borrower for a Eurodollar Borrowing pursuant to Section 2.03 shall be deemed to
be a request for an ABR Borrowing. In the event the Required Lenders notify the
Administrative Agent that the rates at which dollar deposits are being offered
will not adequately and fairly reflect the cost to such Lenders of making or
maintaining Eurodollar Loans during such Interest Period, the Administrative
Agent shall notify the Borrower of such notice and until the Required Lenders
shall have advised the Administrative Agent that the circumstances giving rise
to such notice no longer exist, any request by the Borrower for a Eurodollar
Borrowing shall be deemed a request for an ABR Borrowing. Each determination by
the Administrative Agent hereunder shall be made in good faith and shall be
conclusive absent manifest error; provided that the Administrative Agent, shall,
upon request, provide to the Borrower a certificate setting forth in reasonable
detail the basis for such determination.
SECTION 2.09. Termination and Reduction of Commitments.
(a) The Commitments shall be automatically terminated on the Maturity
Date. A Commitment of a Lender may also terminate as provided in Section
2.10(c).
(b) Upon at least three Business Days' prior irrevocable written notice
to the Administrative Agent, the Borrower may, at any time, in whole permanently
terminate, or, from time to time, in part permanently reduce, the Total
Commitment; provided, however, that (i) each partial reduction of the Total
Commitment shall be in an integral multiple of $5,000,000 and in a minimum
principal amount of $5,000,000 and (ii) no such termination or reduction shall
be made which would reduce the Total Commitment to an amount less than
$25,000,000, unless the result of such termination or reduction is to reduce the
Total Commitment to $0. The Administrative Agent shall advise the Lenders of any
notice given pursuant to this Section 2.09(b) and of each Lender's portion of
any such termination or reduction of the Commitments.
(c) Each reduction in the Total Commitment hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments. The
Borrower shall pay to the Administrative Agent for the account of the Lenders,
on the date of each termination or reduction
ADVANCE TERM CREDIT AGREEMENT - Page 16
21
of the Total Commitment, the Commitment Fees that have accrued through the date
of such termination or reduction on the amount of the Commitments so terminated
or reduced.
SECTION 2.10. Prepayment Including Prepayment as a Result of a Change
of Control.
(a) The Borrower shall have the right at any time and from time to time
to prepay any Borrowing, in whole or in part, upon giving telecopy notice (or
telephone notice promptly confirmed by telecopy) to the Administrative Agent:
(i) before 10:00 a.m., Houston, Texas time, three Business Days prior to
prepayment, in the case of Eurodollar Loans which prepayment shall be
accompanied by any amount owed under Section 8.05(b), and (ii) before 10:00
a.m., Houston, Texas time, one Business Day prior to prepayment, in the case of
ABR Loans; provided, however, that each partial prepayment shall be in an amount
which is an integral multiple of $1,000,000 and not less than $3,000,000.
(b) On the date of any termination or reduction of the Commitments
pursuant to Section 2.09, the Borrower shall pay or prepay so much of the
Borrowings as shall be necessary in order that the aggregate principal amount of
the Loans outstanding will not exceed the Total Commitment, after giving effect
to such termination or reduction.
(c) At least 15 Business Days (or, in the case of any transaction
permitted by Section 5.10 resulting in a Change of Control, at least 45 days)
and not more than 90 days prior to the occurrence of any Change of Control, the
Borrower will give written notice thereof to each Lender. Such notice shall
contain (i) an offer by the Borrower to prepay, on the date of such Change of
Control or, if such notice shall be delivered less than 35 days prior to the
date of such Change of Control, on the date 35 days after the date of such
notice (the "Prepayment Date"), all Loans made by each Lender, together with
interest accrued thereon to the Prepayment Date and all other obligations owed
to such Lender under the terms hereof, (ii) the estimated amount of accrued
interest, showing in reasonable detail the calculation thereof and (iii) the
Borrower's estimate of the date on which such Change of Control shall occur.
Said offer shall be deemed to lapse as to any such Lender which has not replied
affirmatively thereto in writing within 35 days of the giving of such notice. As
soon as practicable (and in any event at least 24 hours) prior to such Change of
Control, the Borrower shall give written confirmation of the date thereof to
each such Lender that has affirmatively replied to the notice given pursuant to
the first sentence of this Section 2.10(c). Borrower shall, on the Prepayment
Date, prepay to each Lender that has affirmatively replied to the notice given
pursuant to the first sentence of this Section 2.10(c) all Loans then held by
such Lender together with accrued interest thereon and all other obligations
owed to such Lender under the terms hereof. Upon such payment, the Commitment of
each Lender that shall have received such prepayment shall terminate.
For the purposes of this Section 2.10(c), a "Change of Control" shall
be deemed to occur if any New Owner shall acquire beneficial ownership of shares
in the Borrower having Voting Rights pertaining thereto which would allow such
New Owner to elect more members of the Board of Directors than could be elected
by the exercise of all Voting Rights pertaining to shares in the Borrower then
owned beneficially by the ▇▇▇▇▇▇ Family. As used in this Section 2.10(c):
ADVANCE TERM CREDIT AGREEMENT - Page 17
22
(i) "Voting Rights" pertaining to shares of a corporation
means the rights to cast votes for the election of directors of such
corporation in ordinary circumstances (without consideration of voting
rights which exist only in the event of contingencies).
(ii) "▇▇▇▇▇▇ Family" means all persons who are lineal
descendants of ▇.▇. ▇▇▇▇▇▇ (by birth or adoption), all spouses of such
descendants, all estates of such descendants or spouses which are in
the course of administration, all trusts for the benefit of such
descendants or spouses, and all corporations or other entities in
which, directly or indirectly, such descendants or spouses (either
alone or in conjunction with other such descendants or spouses) have
the right, whether by ownership of stock or other equity interests or
otherwise, to direct the management and policies of such corporations
or other entities (each such person, spouse, estate, trust, corporation
or entity being referred to herein as a "member" of the ▇▇▇▇▇▇ Family).
In addition, so long as any employee stock ownership plan exercises its
Voting Rights in the same manner as members of the ▇▇▇▇▇▇ Family
(exclusive of employee stock ownership plans) who have a majority of
the Voting Rights exercised by all such members of the ▇▇▇▇▇▇ Family,
such employee stock ownership plan shall be deemed a member of the
▇▇▇▇▇▇ Family.
(iii) "New Owner" means any person (other than a member of
the ▇▇▇▇▇▇ Family), or any syndicate or group of persons (exclusive of
all members of the ▇▇▇▇▇▇ Family) which would be deemed a "person" for
the purposes of Section 13(d) of the Exchange Act, who directly or
indirectly acquires shares in the Borrower.
(d) In the event that the Borrower or any of its Subsidiaries issues
any Securities (as defined below), no later than the tenth (10th) Business Day
following the date of receipt of the proceeds from any such issuance, the
Borrower shall prepay the Loans in an amount equal to the lessor of (a) all
amounts owed to the Agents and the Lenders under this Agreement, including,
without limitation, all outstanding loans, interest and fees or (b) one-hundred
percent (100%) of the proceeds of such issuance, net of underwriting discounts
and commissions and other reasonable costs associated therewith. "Securities"
means any stock, shares, options, warrants, voting trust certificates, or other
instruments evidencing an ownership interest or a right to acquire an ownership
interest in a Person or any bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured. Immediately upon any such issuance of
Securities, each Lender's Commitment shall permanently terminate.
(e) Each notice of prepayment shall specify the prepayment date and the
principal amount of each Borrowing (or portion thereof) to be prepaid, shall be
irrevocable and shall commit the Borrower to prepay such Borrowing (or portion
thereof) by the amount stated therein on the date stated therein. All
prepayments under this Section 2.10 shall be subject to Section 8.05 but
otherwise without premium or penalty. All prepayments under this Section 2.10
shall be accompanied by accrued interest on the principal amount being prepaid
to the date of payment.
ADVANCE TERM CREDIT AGREEMENT - Page 18
23
SECTION 2.11. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of
this Agreement any change in applicable law or regulation or in the
interpretation or administration thereof by any Governmental Authority charged
with the interpretation or administration thereof (whether or not having the
force of law) shall change the basis of taxation of payments to any Lender
hereunder (except for changes in respect of taxes on the overall net income of
such Lender or its lending office imposed by the jurisdiction in which such
Lender's principal executive office or lending office is located), or shall
result in the imposition, modification or applicability of any reserve, special
deposit or similar requirement against assets of, deposits with or for the
account of or credit extended by any Lender, or shall result in the imposition
on any Lender or the London interbank market of any other condition affecting
this Agreement, such Lender's Commitment or any Eurodollar Loan made by such
Lender, and the result of any of the foregoing shall be to increase the cost to
such Lender of making or maintaining any Eurodollar Loan or to reduce the amount
of any sum received or receivable by such Lender hereunder (whether of
principal, interest or otherwise) by an amount deemed by such Lender to be
material, then the Borrower shall, upon receipt of the notice and certificate
provided for in Section 2.11(c), promptly pay to such Lender such additional
amount or amounts as will compensate such Lender for such additional costs
incurred or reduction suffered.
(b) If any Lender shall have determined that the adoption of any law,
rule, regulation or guideline arising out of the July 1988 report of the Basle
Committee on Banking Regulations and Supervisory Practices entitled
"International Convergence of Capital Measurement and Capital Standards," or the
adoption after the date hereof of any other law, rule, regulation or guideline
regarding capital adequacy, or any change in any of the foregoing or in the
interpretation or administration of any of the foregoing by any Governmental
Authority, central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or any lending office of
such Lender) or any Lender's holding company with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender's capital or on the capital of such
Lender's holding company, if any, as a consequence of this Agreement, such
Lender's Commitment or the Loans made by such Lender pursuant hereto to a level
below that which such Lender or such Lender's holding company could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time such additional amount or amounts as will compensate such
Lender for any such reduction suffered will be paid by the Borrower to such
Lender.
(c) A certificate of each Lender setting forth such amount or amounts
as shall be necessary to compensate such Lender or its holding company as
specified in paragraph (a) or (b) above, as the case may be, and containing an
explanation in reasonable detail of the manner in which such amount or amounts
shall have been determined, shall be delivered to the Borrower, and shall be
conclusive absent manifest error. The Borrower shall pay each Lender the amount
shown as due on any such certificate delivered by it within 10 days after its
receipt of the same. Each Lender shall give prompt notice to the Borrower of any
event of which it has knowledge, occurring after the date hereof, that it has
determined will require compensation by the Borrower
ADVANCE TERM CREDIT AGREEMENT - Page 19
24
pursuant to this Section; provided, however, that failure by such Lender to give
such notice shall not constitute a waiver of such Lender's right to demand
compensation hereunder.
(d) Failure on the part of any Lender to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital of the type described in paragraph (a) or (b) of this Section
2.11 with respect to any period shall not constitute a waiver of such Lender's
right to demand compensation with respect to such period or any other period;
provided, however, that no Lender shall be entitled to compensation under this
Section 2.11 for any costs incurred or reductions suffered with respect to any
date unless it shall have notified the Borrower that it will demand compensation
for such costs or reductions under paragraph (c) above not more than 90 days
after the later of (i) such date and (ii) the date on which it shall have become
aware of such costs or reductions. The protection of this Section shall be
available to each Lender regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
(e) Each Lender agrees that it will designate a different lending
office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable judgment of such Lender, be
disadvantageous to such Lender.
SECTION 2.12. Change in Legality.
(a) Notwithstanding any other provision herein, if any change in any
law or regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be
made by such Lender hereunder, whereupon any request for a Eurodollar
Borrowing shall, as to such Lender only, be deemed a request for an ABR
Loan unless such declaration shall be subsequently withdrawn (any
Lender delivering such a declaration hereby agreeing to withdraw such
declaration promptly upon determining that such event of illegality no
longer exists); and
(ii) require that all outstanding Eurodollar Loans made by
it be converted to ABR Loans, in which event all such Eurodollar Loans
shall be automatically converted to ABR Loans as of the effective date
of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii) above, all
payments and prepayments of principal which would otherwise have been applied to
repay the Eurodollar Loans that would have been made by such Lender or the
Converted Eurodollar Loans of such Lender shall instead be applied to repay the
ABR Loans made by such Lender in lieu of, or resulting from the Conversion of,
such Eurodollar Loans.
ADVANCE TERM CREDIT AGREEMENT - Page 20
25
(b) For purposes of this Section 2.12, a notice by any Lender shall be
effective as to each Eurodollar Loan, if lawful, on the last day of the Interest
Period currently applicable to such Eurodollar Loan; in all other cases such
notice shall be effective on the date of receipt.
SECTION 2.13. Pro Rata Treatment. Except as required under Sections
2.13 and 2.18, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the Commitment
Fees, each Conversion or Continuation of any Loans, and each reduction of the
Commitments, shall be allocated pro rata among the Lenders in accordance with
their respective Commitments (or, if such Commitments shall have expired or been
terminated, in accordance with the respective principal amounts of their
outstanding Loans).
SECTION 2.14. Sharing of Setoffs. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, setoff or counterclaim, or
pursuant to a secured claim under Section 506 of Title 11 of the United States
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, obtain payment (voluntary
or involuntary) in respect of any Loan or Loans as a result of which the unpaid
principal portion of its Loans shall be proportionately less than the unpaid
principal portion of the Loans of any other Lender, it shall be deemed
simultaneously to have purchased from such other Lender at face value, and shall
promptly pay to such other Lender the purchase price for, a participation in the
Loans of such other Lender, so that the aggregate unpaid principal amount of the
Loans and participations in the Loans held by each Lender shall be in the same
proportion to the aggregate unpaid principal amount of all Loans then
outstanding as the principal amount of its Loans prior to such exercise of
banker's lien, setoff or counterclaim or other event was to the principal amount
of all Loans outstanding prior to such exercise of banker's lien, setoff or
counterclaim or other event; provided, however, that, if any such purchase or
purchases or adjustments shall be made pursuant to this Section 2.14 and the
payment giving rise thereto shall thereafter be recovered, such purchase or
purchases or adjustments shall be rescinded to the extent of such recovery and
the purchase price or prices or adjustment restored without interest. The
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in a Loan deemed to have been so purchased may
exercise any and all rights of banker's lien, setoff or counterclaim with
respect to any and all moneys owing by the Borrower to such Lender by reason
thereof as fully as if such Lender had made a Loan in the amount of such
participation.
SECTION 2.15. Payments.
(a) The Borrower shall make each payment (including principal of or
interest on any Borrowing or any fees or other amounts hereunder) from an
account in the United States not later than 12:00 noon, Houston, Texas time, on
the date when due in dollars to the Administrative Agent at its offices at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇, 9th floor, MS 46, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, in immediately available
funds.
(b) Whenever any payment (including principal of or interest on any
Borrowing or any fees or other amounts) hereunder shall become due, or otherwise
would occur, on a day that is not
ADVANCE TERM CREDIT AGREEMENT - Page 21
26
a Business Day, such payment may be made on the next succeeding Business Day,
and such extension of time shall in such case be included in the computation of
interest or fees, if applicable.
SECTION 2.16. Taxes.
(a) Any and all payments of principal and interest on any Borrowings,
or of any fees or indemnity or expense reimbursements by the Borrower hereunder
("Borrower Payments") shall be made, in accordance with Section 2.15, free and
clear of and without deduction for any and all current or future United States
Federal, state and local taxes, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect to the Borrower Payments, but
only to the extent reasonably attributable to the Borrower Payments, excluding
(i) income taxes imposed on the net income of either Agent or any Lender (or any
transferee or assignee thereof, including a participation holder (any such
entity a "Transferee")) and (ii) franchise taxes imposed on the net income of
either Agent or any Lender (or Transferee), in each case by the jurisdiction
under the laws of which either Agent or such Lender (or Transferee) is organized
or doing business through offices or branches located therein, or any political
subdivision thereof (all such nonexcluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities, collectively or individually, "Taxes").
If the Borrower shall be required to deduct any Taxes from or in respect of any
sum payable hereunder to any Lender (or any Transferee) or the Agents, (i) the
sum payable shall be increased by the amount (an "additional amount") necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.16) such Lender (or Transferee) or
Agent (as the case may be) shall receive an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay to the relevant United States
Governmental Authority in accordance with applicable law any current or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies that arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement
("Other Taxes").
(c) The Borrower shall indemnify each Lender (or Transferee thereof)
and each Agent for the full amount of Taxes and Other Taxes with respect to
Borrower Payments paid by such Lender (or Transferee) or such Agent, as the case
may be, and any liability (including penalties, interest and expenses (including
reasonable attorney's fees and expenses)) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted by the relevant United States Governmental Authority. A certificate
setting forth and containing an explanation in reasonable detail of the manner
in which such amount shall have been determined and the amount of such payment
or liability prepared by a Lender or an Agent on their behalf, absent manifest
error, shall be final, conclusive and binding for all purposes. Such
indemnification shall be made within 30 days after the date the Lender (or
Transferee) or any Agent, as the case may be, makes written demand therefor.
(d) If a Lender (or Transferee) or any Agent shall become aware that it
is entitled to claim a refund from a United States Governmental Authority in
respect of Taxes or Other Taxes as to
ADVANCE TERM CREDIT AGREEMENT - Page 22
27
which it has been indemnified by the Borrower, or with respect to which the
Borrower has paid additional amounts, pursuant to this Section 2.16, it shall
promptly notify the Borrower of the availability of such refund claim and shall,
within 30 days after receipt of a request by the Borrower, make a claim to such
United States Governmental Authority for such refund at the Borrower's expense.
If a Lender (or Transferee) or any Agent receives a refund (including pursuant
to a claim for refund made pursuant to the preceding sentence) in respect of any
Taxes or Other Taxes as to which it has been indemnified by the Borrower or with
respect to which the Borrower had paid additional amounts pursuant to this
Section 2.16, it shall within 30 days from the date of such receipt pay over
such refund to the Borrower (but only to the extent of indemnity payments made,
or additional amounts paid, by the Borrower under this Section 2.16 with respect
to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of such Lender (or Transferee) or such Agent and without
interest (other than interest paid by the relevant United States Governmental
Authority with respect to such refund); provided, however, that the Borrower,
upon the request of such Lender (or Transferee) or such Agent, agrees to repay
the amount paid over to the Borrower (plus penalties, interest or other charges)
to such Lender (or Transferee) or such Agent in the event such Lender (or
Transferee) or such Agent is required to repay such refund to such United States
Governmental Authority.
(e) As soon as practicable, but in any event within 30 days, after the
date of any payment of Taxes or Other Taxes by the Borrower to the relevant
United States Governmental Authority, the Borrower will deliver to the
Administrative Agent, at its address referred to in Section 8.01, the original
or a certified copy of a receipt issued by such United States Governmental
Authority evidencing payment thereof.
(f) Without prejudice to the survival of any other agreement contained
herein, the agreements and obligations contained in this Section 2.16 shall
survive the payment in full of the principal of and interest on all Loans made
hereunder.
(g) Each Lender or Agent (or Transferee) that is organized under the
laws of a jurisdiction other than the United States, any State thereof or the
District of Columbia (a "Non-U.S. Lender" or "Non U.S. Agent", as applicable)
shall deliver to the Borrower and the Administrative Agent two copies of either
United States Internal Revenue Service Form 1001 or Form 4224, properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or reduced rate of, United States Federal withholding tax on payments by
the Borrower under this Agreement. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement (or,
in the case of a Transferee that is a participation holder, on or before the
date such participation holder becomes a Transferee hereunder) and on or before
the date, if any, such Non-U.S. Lender changes its applicable lending office by
designating a different lending office (a "New Lending Office"). In addition,
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender.
Notwithstanding any other provision of this Section 2.16(g), a Non-U.S. Lender
shall not be required to deliver any form pursuant to this Section 2.16(g) that
such Non-U.S. Lender is not legally able to deliver.
ADVANCE TERM CREDIT AGREEMENT - Page 23
28
(h) The Borrower shall not be required to indemnify any Non-U.S. Lender
or Non-U.S. Agent (including any Transferee), or to pay any additional amounts
to any Non-U.S. Lender or Non- U.S. Agent (including any Transferee), in respect
of United States Federal, state or local withholding tax pursuant to paragraph
(a) or (c) above to the extent that (i) the obligation to withhold amounts with
respect to United States Federal, state or local withholding tax existed on the
date such Non- U.S. Lender became a party to this Agreement (or, in the case of
a Transferee that is a participation holder, on the date such participation
holder became a Transferee hereunder) or, with respect to payments to a New
Lending Office, the date such Non-U.S. Lender designated such New Lending Office
with respect to a Loan; provided, however, that this clause (i) shall not apply
to any Transferee or New Lending Office that becomes a Transferee or New Lending
Office as a result of an assignment, participation, transfer or designation made
at the request of the Borrower; and provided further, however, that this clause
(i) shall not apply to the extent the indemnity payment or additional amounts
any Transferee, or Lender (or Transferee) through a New Lending Office, would be
entitled to receive (without regard to this clause (h)) do not exceed the
indemnity payment or additional amounts that the Person making the assignment,
participation or transfer to such Transferee, or Lender (or Transferee) making
the designation of such New Lending Office, would have been entitled to receive
in the absence of such assignment, participation, transfer or designation or
(ii) the obligation to pay such additional amounts or such indemnity payments
would not have arisen but for a failure by such Non-U.S. Lender (including any
Transferee) to comply with time provisions of paragraph (g) above and (i) below.
(i) Any Lender (or Transferee) claiming any indemnity payment or
additional amounts payable pursuant to this Section 2.16 shall use reasonable
efforts (consistent with legal and regulatory restrictions) to file any
certificate or document reasonably requested in writing by the Borrower or to
change the jurisdiction of its applicable lending office if the making of such a
filing or change would avoid the need for or reduce the amount of any such
indemnity payment or additional amounts that may thereafter accrue and would
not, in the good faith determination of such Lender (or Transferee), be
otherwise disadvantageous to such Lender (or Transferee).
(j) Nothing contained in this Section 2.16 shall require any Lender (or
Transferee) or any Agent to make available to the Borrower any of its tax return
(or any other information) that it deems to be confidential or proprietary.
SECTION 2.17. Assignment of Commitments Under Certain Circumstances. In
the event that any Lender shall have delivered a notice or certificate pursuant
to Section 2.11 or 2.12, or the Borrower shall be required to make additional
payments to any Lender under Section 2.16, the Borrower shall have the right, at
its own expense, upon notice to such Lender and the Agents, to require such
Lender to transfer and assign without recourse (in accordance with and subject
to the restrictions contained in Section 8.04) all such Lender's interests,
rights and obligations contained hereunder to another financial institution
approved by the Agents and the Borrower (which approval shall not be
unreasonably withheld) which shall assume such obligations; provided that (i) no
such assignment shall conflict with any law, rule or regulation or order of any
Governmental Authority and (ii) the assignee or the Borrower, as the case may
be, shall pay to the affected Lender in immediately available funds on the date
of such assignment the principal of and interest accrued to
ADVANCE TERM CREDIT AGREEMENT - Page 24
29
the date of payment on the Loan made by it hereunder and all other amounts
accrued for its account or owed to it hereunder.
SECTION 2.18. Payments by Agent to the Lenders. Any payment received by
the Agent hereunder for the account of a Lender shall be paid to such Lender by
4:00 p.m. Houston time on (a) the Business Day the payment is received in
immediately available funds, if such payment is received by 10:00 a.m. Houston
time and (b) if such payment is received after 10:00 a.m. Houston time, on the
next Business Day.
ARTICLE III. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to each of the Lenders as follows:
SECTION 3.01. Organization; Powers. Borrower (a) is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has all requisite power and authority to
own its property and assets and to carry on its business as now conducted and as
proposed to be conducted, (c) is qualified to do business in every jurisdiction
where such qualification is required, except where the failure so to qualify
would not result in a Material Adverse Effect, and (d) has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement and to borrow hereunder.
SECTION 3.02. Authorization. The execution, delivery and performance by
the Borrower of this Agreement and the Borrowings hereunder (collectively, the
"Transactions") (a) have been duly authorized by all requisite corporate action
and (b) will not (i) violate (A) any provision of any law, statute, rule or
regulation to which the Borrower is subject or of the certificate of
incorporation or other constituent documents or by-laws of the Borrower or any
of its Subsidiaries, (B) any order of any Governmental Authority or (C) any
provision of any Material indenture, agreement or other instrument to which the
Borrower or any of its Subsidiaries is a party or by which it or any of its
property is or may be bound (including the Senior Note Purchase Agreements and
the Indebtedness limitations set forth in Sections 10.4 and 10.9 thereof and the
Existing Credit Agreement and the Indebtedness limitations set forth in Sections
5.12 and 5.17 thereof), (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under any
such indenture, agreement or other instrument or (iii) result in the creation or
imposition of any Lien upon any property or assets of the Borrower.
SECTION 3.03. Enforceability. This Agreement constitutes a legal, valid
and binding obligation of the Borrower enforceable in accordance with its terms,
as such enforceability may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
SECTION 3.04. Governmental Approvals. No action, consent or approval
of, registration or filing with or other action by any Governmental Authority is
or will be required in connection with the Transactions, to the extent they
relate to the Borrower.
ADVANCE TERM CREDIT AGREEMENT - Page 25
30
SECTION 3.05. Organization and Ownership of Shares of Subsidiaries.
(a) Schedule 3.05 is (except as noted therein) a complete and correct
list of the Borrower's Subsidiaries, showing, as to each Subsidiary, the correct
name thereof, the jurisdiction of its organization, the percentage of shares of
each class of its capital stock or similar equity interests outstanding owned by
the Borrower and each other Subsidiary, and specifying whether such Subsidiary
is designated a Restricted Subsidiary.
(b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 3.05 as being owned by the
Borrower and its Subsidiaries have been validly issued, are fully paid and
nonassessable and are owned by the Borrower or another Sub sidiary free and
clear of any Lien (except as otherwise disclosed in Schedule 3.05).
(c) Each Subsidiary identified in Schedule 3.05 is a corporation or
other legal entity duly organized, validly existing and in good standing under
the laws of its jurisdiction of organization, and is duly qualified as a foreign
corporation or other legal entity and is in good standing in each jurisdiction
in which such qualification is required by law, other than those jurisdictions
as to which the failure to be so qualified or in good standing would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. Each such Sub sidiary has the corporate or other power and
authority to own or hold under lease the properties it purports to own or hold
under lease and to transact the business it transacts and proposes to transact.
SECTION 3.06. Financial Statements. The Borrower has delivered to each
Lender copies of the financial statements of the Borrower and its Subsidiaries
listed on Schedule 3.06. All of said financial statements (including in each
case the related schedules and notes) fairly present in all material respects
the consolidated financial position of the Borrower and its Subsidiaries, and of
the Borrower and its Restricted Subsidiaries, as of the respective dates
specified in such Schedule and the consolidated results of their operations and
cash flows for the respective periods so specified and have been prepared in
accordance with GAAP consistently applied throughout the periods involved except
as set forth in the notes thereto (subject, in the case of any interim financial
statements, to normal year-end adjustments). Except as disclosed in the
financial statements listed in Schedule 3.06, since December 31, 1998, there has
been no change in the financial condition, operations, business, properties or
prospects of the Borrower or any of its Subsidiaries except changes that
individually or in the aggregate would not reasonably be expected to have a
Material Adverse Effect. There is no fact known to the Borrower that could
reasonably be expected to have a Material Adverse Effect that has not been set
forth herein or in the financial statements listed in Schedule 3.06
SECTION 3.07. Litigation; Observance of Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to the
knowledge of the Borrower, threatened against or affecting the Borrower or any
Subsidiary or any property of the Borrower or any Subsidiary in any court or
before any arbitrator of any kind or before or by any
ADVANCE TERM CREDIT AGREEMENT - Page 26
31
Governmental Authority that, individually or in the aggregate, would reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Borrower nor any Subsidiary is in default under any
agreement or instrument to which it is a party or by which it is bound, or any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority or is in violation of any applicable law, ordinance, rule or
regulation (including without limitation Environmental Laws) of any Governmental
Authority, which default or violation, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect.
SECTION 3.08. Taxes. The Borrower and its Subsidiaries have filed all
income tax returns that are required to have been filed in any jurisdiction, and
have paid all taxes shown to be due and payable on such returns and all other
taxes and assessments payable by them, to the extent such taxes and assessments
have become due and payable and before they have become delinquent, except for
any taxes and assessments (i) the amount of which is not individually or in the
aggregate Material or (ii) the amount, applicability or validity of which is
currently being contested in good faith by appropriate proceedings and with
respect to which the Borrower or a Subsidiary, as the case may be, has
established adequate reserves in accordance with GAAP. The Federal income tax
liabilities of the Borrower and its Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1992.
SECTION 3.09. Title to Property; Leases. The Borrower and its
Subsidiaries have good and sufficient title to their respective Material
properties, including all such properties reflected in the most recent audited
balance sheet referred to in Section 3.06 or purported to have been acquired by
the Borrower or any Subsidiary after said date (except as sold or otherwise
disposed of in the ordinary course of business), in each case free and clear of
Liens prohibited by this Agreement, except for those defects in title and Liens
that, individually or in the aggregate, would not have a Material Adverse
Effect. All Material leases are valid and subsisting and are in full force and
effect in all material respects.
SECTION 3.10. Licenses, Permits, etc. The Borrower and its Subsidiaries
own or possess all licenses, permits, franchises, authorizations, patents,
copyrights, service marks, trademarks and trade names, or rights thereto, that
are Material, without known conflict with the rights of others, except for those
conflicts that, individually or in the aggregate, would not have a Material
Adverse Effect.
SECTION 3.11. Compliance with ERISA.
(a) The Borrower and each ERISA Affiliate have operated and
administered each Plan in compliance with all applicable laws except for such
instances of noncompliance as have not resulted in and could not reasonably be
expected to result in a Material Adverse Effect. Neither the Borrower nor any
ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or
the penalty or excise tax provisions of the Code relating to employee benefit
plans (as defined in Section 3 of ERISA), and no event, transaction or condition
has occurred or exists that would
ADVANCE TERM CREDIT AGREEMENT - Page 27
32
reasonably be expected to result in the incurrence of any such liability by the
Borrower or any ERISA Affiliate, or in the imposition of any Lien on any of the
rights, properties or assets of the Borrower or any ERISA Affiliate, in either
case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to Section 401(a)(29) or 412 of the Code, other than such
liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value of the aggregate accrued plan benefit liabilities
under each of the Plans that are subject to Title IV of ERISA (other than
Multiemployer Plans), determined in accordance with Financial Accounting
Standards Board Statement No. 87 as of the end of such Plan's most recently
ended plan year on the basis of the actuarial assumptions specified for funding
purposes in such Plan's most recent actuarial valuation report, did not exceed
the aggregate current value of the assets of such Plan allocable to such benefit
liabilities by more than $3,000,000 in the case of any single Plan and by more
than $3,000,000 in the aggregate for all Plans.
(c) The Borrower and its ERISA Affiliates have not incurred withdrawal
liabilities (and are not subject to contingent withdrawal liabilities) under
section 4201 or 4204 of ERISA in respect of Multiemployer Plans that
individually or in the aggregate are Material.
(d) The expected post-retirement benefit obligation (determined as of
the last day of the Borrower's most recently ended fiscal year in accordance
with Financial Accounting Standards Board Statement No. 106, without regard to
liabilities attributable to continuation coverage mandated by section 4980B of
the Code) of the Borrower and its Subsidiaries was approximately $17,955,591 as
of December 31, 1998.
SECTION 3.12. Use of Proceeds; Margin Regulation. The Borrower will
apply the proceeds of the Loans for acquisitions, working capital and other
general corporate purposes. No part of the proceeds from the Loans will be used,
directly or indirectly, for the purpose of buying or carrying any margin stock
within the meaning of Regulation U of the Board (12 CFR 221), or for the purpose
of buying or carrying or trading in any securities under such circumstances as
to involve the Borrower in a violation of Regulation X of the Board (12 CFR 224)
or to involve any broker or dealer in a violation of Regulation T of the Board
(12 CFR 220). Margin stock does not constitute more than 5% of the value of the
consolidated assets of the Borrower and its Restricted Subsidiaries and the
Borrower does not have any present intention that margin stock will constitute
more than 5% of the value of such assets. As used in this Section, the terms
"margin stock" and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation U.
SECTION 3.13. Existing Indebtedness. Except for the Indebtedness
outstanding in connection with the Senior Note Purchase Agreements and the
Existing Credit Agreement and except as described therein, Schedule 3.13 sets
forth a complete and correct list of all outstanding Indebtedness of the
Borrower and its Restricted Subsidiaries (other than Indebtedness of Restricted
Subsidiaries to the Borrower or other Wholly-Owned Restricted Subsidiaries) as
of December 31, 1998, since which date there has been no Material change in the
amounts, interest rates, sinking funds, installment payments or maturities of
the Indebtedness of the Borrower or its Restricted Subsidiaries. Neither the
Borrower nor any Restricted Subsidiary is in default, and no waiver of default
is currently in effect, in the payment of any principal or interest on any
Indebtedness of
ADVANCE TERM CREDIT AGREEMENT - Page 28
33
the Borrower or such Restricted Subsidiary, and no event or condition exists
with respect to any Indebtedness of the Borrower or any Restricted Subsidiary
the outstanding principal amount of which exceeds $3,000,000 in the aggregate
that would permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such Indebtedness to become due and payable
before its stated maturity or before its regularly scheduled dates of payment.
To the knowledge of the Responsible Officers of the Borrower, no event or
condition exists with respect to any Indebtedness of the Borrower or any
Restricted Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Indebtedness to
become due and payable before its stated maturity or before its regularly
scheduled dates of payment.
SECTION 3.14. Foreign Assets Control Regulations, etc. The use of the
proceeds of the Loans will not violate the Trading with the Enemy Act, as
amended, or any of the foreign assets control regulations of the United States
Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) or any enabling
legislation or executive order relating thereto.
SECTION 3.15. Status under Certain Statutes. Neither the Borrower nor
any Subsidiary is subject to regulation under the Investment Company Act of
1940, as amended, the Public Utility Holding Company Act of 1935, as amended,
the Interstate Commerce Act, as amended, or the Federal Power Act, as amended.
SECTION 3.16. No Material Misstatements. No report, financial statement
or other information furnished by or on behalf of the Borrower to the Agents or
any Lender pursuant to or in connection with this Agreement contains or will
contain any material misstatement of fact or omits or will omit to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were or will be made, not misleading.
SECTION 3.17. Year 2000 Matters. Any programming required to permit the
proper functioning, in and following the year 2000, of the Borrower's and its
Subsidiaries' Material (i) computer systems and (ii) equipment containing
imbedded microchips (including systems and equipment supplied by others or with
which the Borrower's or its Subsidiaries' systems interface) and the testing of
all such systems and equipment, as so reprogrammed, is expected to be completed
by August 1, 1999. The cost to the Borrower and its Subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 to the Borrower and its Subsidiaries (including, without limitation,
reprogramming errors and the failure of others' systems or equipment) will not
result in a Default or a Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be necessary, the
computer and management information systems of the Borrower and its Subsidiaries
are, and with ordinary course upgrading and maintenance, will continue for the
term of this Agreement to be, sufficient to permit the Borrower and its
Subsidiaries to conduct its business without Material Adverse Effect.
ADVANCE TERM CREDIT AGREEMENT - Page 29
34
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are subject to
the satisfaction of the following conditions:
SECTION 4.01. All Borrowings. On the date of each Borrowing:
(a) The Administrative Agent shall have received a notice of
such Borrowing as required by Section 2.03.
(b) The representations and warranties set forth in Article
III hereof shall be true and correct in all material respects on and as
of the date of such Borrowing with the same effect as though made on
and as of such date, except to the extent such representations and
warranties expressly relate to an earlier date.
(c) At the time of and immediately after such Borrowing no
Event of Default or Default shall have occurred and be continuing.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date of such Borrowing as to the matters specified in
paragraphs (b) and (c) of this Section 4.01.
SECTION 4.02. Effective Date. On the Effective Date:
(a) The Administrative Agent shall have received a favorable
written opinion from ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Assistant General Counsel to the
Borrower, dated the Effective Date and addressed to the Lenders and
satisfactory to Jenkens & ▇▇▇▇▇▇▇▇▇, a Professional Corporation,
counsel for the Administrative Agent, to the effect set forth in
Exhibit D hereto (and the Borrower hereby instructs its counsel to
deliver such opinion to the Administrative Agent for the benefit of the
Lenders).
(b) The Administrative Agent shall have received (i) a copy of
the certificate of incorporation, including all amendments thereto, of
the Borrower, certified as of a recent date by the Secretary of State
of its state of incorporation, and a certificate as to the good
standing of the Borrower as of a recent date from such Secretary of
State; (ii) a certificate of the Secretary or an Assistant Secretary of
the Borrower dated the Effective Date and certifying (A) that attached
thereto is a true and complete copy of the by-laws of the Borrower as
in effect on the Effective Date and at all times since a date prior to
the date of the resolutions described in clause (B) below, (B) that
attached thereto is a true and complete copy of resolutions, duly
adopted by the Board of Directors authorizing the execution, delivery
and performance of this Agreement and the Transactions, and that such
resolutions have not been modified, rescinded or amended and are in
full force and effect, (C) that the certificate of incorporation
referred to in clause (i) above has not been amended since the date of
the last amendment thereto shown on the certificate of good standing
furnished pursuant to such clause (i) and (D) as to the incumbency and
specimen
ADVANCE TERM CREDIT AGREEMENT - Page 30
35
signature of each officer executing this Agreement or any other
document delivered in connection herewith on behalf of the Borrower;
(iii) a certificate of another officer of the Borrower as to the
incumbency and specimen signature of the Secretary or Assistant
Secretary executing the certificate pursuant to (ii) above; (iv)
evidence satisfactory to the Administrative Agent that the requisite
approvals, if any, referred to in Section 3.04 hereof have been
obtained; and (v) such other documents as the Lenders or Jenkens &
▇▇▇▇▇▇▇▇▇, a Professional Corporation, counsel for the Administrative
Agent, shall reasonably request.
(c) The Administrative Agent shall have received a
certificate, dated the Effective Date and signed by a Senior Financial
Officer of the Borrower, (i) confirming compliance with the conditions
precedent set forth in paragraphs (b) and (c) of Section 4.01 and (ii)
providing the calculations demonstrating compliance with Sections 10.4
and 10.9 of the Senior Note Purchase Agreements and Sections 5.12 and
5.17 of the Existing Credit Agreement.
(d) The Agents shall have received all fees and other amounts
due and payable on or prior to the Effective Date.
ARTICLE V. AFFIRMATIVE AND NEGATIVE COVENANTS
The Borrower agrees that, so long as any Lender has any Commitment
hereunder or any amount payable hereunder remains unpaid:
SECTION 5.01. Compliance with Law. The Borrower will and will cause
each of its Subsidiaries to comply with all laws, ordinances or governmental
rules or regulations to which each of them is subject, including, without
limitation, Environmental Laws, and will obtain and maintain in effect all
licenses, certificates, permits, franchises and other governmental
authorizations necessary to the ownership of their respective properties or to
the conduct of their respective businesses, in each case to the extent necessary
to ensure that non-compliance with such laws, ordinances or governmental rules
or regulations or failures to obtain or maintain in effect such licenses,
certificates, permits, franchises and other governmental authorizations would
not reasonably be expected, individually or in the aggregate, to have a
materially adverse effect on the business, operations, affairs, financial
condition, properties or assets of the Borrower and its Restricted Subsidiaries
taken as a whole.
SECTION 5.02. Insurance. The Borrower will and will cause each of its
Subsidiaries to maintain, with financially sound and reputable insurers,
insurance with respect to their respective properties and businesses against
such casualties and contingencies, of such types, on such terms and in such
amounts (including deductibles, co-insurance and self-insurance, if adequate
reserves are maintained with respect thereto) as is customary in the case of
entities of established reputations engaged in the same or a similar business
and similarly situated.
SECTION 5.03. Maintenance of Properties. The Borrower will and will
cause each of its Subsidiaries to maintain and keep, or cause to be maintained
and kept, their respective
ADVANCE TERM CREDIT AGREEMENT - Page 31
36
properties in good repair, working order and condition (other than ordinary wear
and tear), so that the business carried on in connection therewith may be
properly conducted at all times, provided that this Section shall not prevent
the Borrower or any Subsidiary from discontinuing the operation and the
maintenance of any of its properties if such discontinuance is desirable in the
conduct of its business and the Borrower has concluded that such discontinuance
would not, individually or in the aggregate, have a materially adverse effect on
the business, operations, affairs, financial condition, properties or assets of
the Borrower and its Restricted Subsidiaries taken as a whole.
SECTION 5.04. Payment of Taxes. The Borrower will and will cause each
of its Subsidiaries to file all income tax or similar tax returns required to be
filed in any jurisdiction and to pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges,
or levies payable by any of them, to the extent such taxes and assessments have
become due and payable and before they have become delinquent, provided that
neither the Borrower nor any Subsidiary need pay any such tax or assessment if
(i) the amount, applicability or validity thereof is contested by the Borrower
or such Subsidiary on a timely basis in good faith and in appropriate
proceedings, and the Borrower or a Subsidiary has established adequate reserves
therefor in accordance with GAAP on the books of the Borrower or such Subsidiary
or (ii) the nonpayment of all such taxes and assessments in the aggregate would
not reasonably be expected to have a materially adverse effect on the business,
operations, affairs, financial condition, properties or assets of the Borrower
and its Restricted Subsidiaries taken as a whole.
SECTION 5.05. Corporate Existence, etc. The Borrower will at all times
preserve and keep in full force and effect its corporate existence. Subject to
Sections 5.10 and 5.11, the Borrower will at all times preserve and keep in full
force and effect the corporate existence of each of its Restricted Subsidiaries
(unless merged into the Borrower or a Restricted Subsidiary) and all rights and
franchises of the Borrower and its Restricted Subsidiaries unless, in the good
faith judgment of the Borrower, the termination of or failure to preserve and
keep in full force and effect such corporate existence, right or franchise would
not, individually or in the aggregate, have a materially adverse effect on the
business, operations, affairs, financial condition, properties or assets of the
Borrower and its Restricted Subsidiaries taken as a whole.
SECTION 5.06. Most Favored Lender Status. The Borrower will not and
will not permit any Restricted Subsidiary to enter into, assume or otherwise be
bound or obligated under any agreement creating or evidencing Indebtedness or
any agreement executed and delivered in connection with any Indebtedness
containing one or more Additional Covenants or Additional Defaults (as defined
below), unless prior written consent to such agreement shall have been obtained
from the Required Lenders; provided, however, in the event the Borrower or any
Restricted Subsidiary shall enter into, assume or otherwise become bound by or
obligated under any such agreement without the prior written consent of the
Lenders, the terms of this Agreement shall, without any further action on the
part of the Borrower or any of the Lenders, be deemed to be amended
automatically to include each Additional Covenant and each Additional Default
contained in such agreement. The Borrower further covenants to promptly execute
and deliver at its expense an amendment to this Agreement in form and substance
satisfactory to the Required Lenders evidencing the amendment of this Agreement
to include such Additional Covenants and
ADVANCE TERM CREDIT AGREEMENT - Page 32
37
Additional Defaults, provided that the execution and delivery of such amendment
shall not be a precondition to the effectiveness of such amendment as provided
for in this Section 5.06, but shall merely be for the convenience of the parties
hereto.
For purposes of this Agreement, (i) the term "Additional Covenant"
shall mean any affirmative or negative covenant or similar restriction
applicable to the Borrower or any Restricted Subsidiary (regardless of whether
such provision is labeled or otherwise characterized as a covenant) the subject
matter of which either (A) is similar to that of the covenants in Article V of
this Agreement, but contains one or more percentages, amounts or formulas that
is more restrictive than those set forth herein or more beneficial to the holder
or holders of such other Indebtedness (and such covenant or similar restriction
shall be deemed an "Additional Covenant" only to the extent that it is more
restrictive or more beneficial) or (B) is different from the subject matter of
the covenants in Article V of this Agreement; and (ii) the term "Additional
Default" shall mean any provision which permits the holder of such Indebtedness
to accelerate (with the passage of time or giving of notice or both) the
maturity thereof or otherwise require the Borrower or any Restricted Subsidiary
to purchase such Indebtedness prior to the stated maturity of such Indebtedness
and which either (A) is similar to the Defaults and Events of Default contained
in Article VI of this Agreement, but contains one or more percentages, amounts
or formulas that is more restrictive or has a ▇▇▇▇▇▇▇ ▇▇▇▇▇ period than those
set forth herein or is more beneficial to the holder or holders of such other
Indebtedness (and such provision shall be deemed an "Additional Default" only to
the extent that it is more restrictive, has a ▇▇▇▇▇▇▇ ▇▇▇▇▇ period or is more
beneficial) or (B) is different from the subject matter of the Defaults and
Events of Default contained in Article VI of this Agreement.
SECTION 5.07. Covenant to Secure Loans Equally. If the Borrower shall
create, assume or permit to exist any Lien upon any of its property or assets,
or permit any Restricted Subsidiary to create, assume or permit to exist any
Lien upon any of its property or assets, whether now owned or hereafter
acquired, other than those Liens permitted by the provisions of Section 5.13 the
Borrower shall make or cause to be made effective provision whereby the Loans
will be secured equally and ratably with any and all other obligations thereby
secured, with the documentation for such security to be reasonably satisfactory
to the Required Lenders and, in any such case, the Loans shall have the benefit,
to the fullest extent that, and with such priority as, the holders thereof may
be entitled under applicable law, of an equitable Lien on such property. Any
violation of Section 5.13 will constitute an Event of Default, whether or not
provision is made for an equal and ratable Lien pursuant to this Section 5.07.
SECTION 5.08. Environmental Matters.
(a) The Borrower will and will cause each of its Subsidiaries to comply
in all material respects with all applicable Environmental Laws if, individually
or in the aggregate, failure to comply therewith could reasonably be expected to
have a material adverse effect on the financial condition or results of
operations of the Borrower or the Borrower and its Subsidiaries, taken as a
whole.
ADVANCE TERM CREDIT AGREEMENT - Page 33
38
(b) The Borrower will not and will not permit any of its Subsidiaries
to cause or allow any Hazardous Substance to be present at any time on, in,
under or above any real property or any part thereof in which the Borrower or
any Subsidiary has a direct interest (including without limitation ownership
thereof or any arrangement for the lease, rental or other use thereof, or the
retention of any mortgage or security interest therein or thereon), except in a
manner and to an extent that is in compliance in all material respects with all
applicable Environmental Laws or that will not have a material adverse effect on
the financial condition or results of operations of the Borrower or the Borrower
and its Subsidiaries, taken as a whole.
SECTION 5.09. Transactions with Affiliates. The Borrower will not
permit any Restricted Subsidiary to enter into directly or indirectly any
Material transaction or Material group of related transactions (including
without limitation the purchase, lease, sale or exchange of properties of any
kind or the rendering of any service) with any Affiliate (other than the
Borrower or another Restricted Subsidiary), except pursuant to the reasonable
requirements of the Borrower's or such Restricted Subsidiary's business and upon
fair and reasonable terms no less favorable to the Borrower or such Restricted
Subsidiary than would be obtainable in a comparable arm's-length transaction
with a Person not an Affiliate.
SECTION 5.10. Merger, Consolidation, etc. The Borrower will not
consolidate with or merge with any other corporation or convey, transfer or
lease substantially all of its assets in a single transaction or series of
transactions to any Person unless:
(a) the successor formed by such consolidation or the survivor of such
merger or the Person that acquires by conveyance, transfer or lease
substantially all of the assets of the Borrower as an entirety, as the case may
be, shall be a solvent corporation organized and existing under the laws of the
United States or any State thereof (including the District of Columbia), and, if
the Borrower is not such corporation, such corporation shall have executed and
delivered to each Lender its assumption of the due and punctual performance and
observance of each covenant and condition of this Agreement, together with a
favorable opinion of counsel satisfactory to each such Lender covering such
matters relating to such corporation and such assumption as such Lender may
reasonably request; and
(b) immediately after giving effect to such transaction, no Default or
Event of Default would exist; and
(c) immediately prior to and after giving effect to such transaction,
the Borrower or such successor, as the case may be, would be permitted by the
provisions of Sections 5.12 and 5.17 to incur at least $1.00 of additional
Indebtedness and $1.00 of additional Restricted Indebtedness, respectively.
No such conveyance, transfer or lease of substantially all of the
assets of the Borrower shall have the effect of releasing the Borrower or any
successor corporation that shall theretofore have become such in the manner
prescribed in this Section 5.10 from its liability under this Agreement.
ADVANCE TERM CREDIT AGREEMENT - Page 34
39
SECTION 5.11. Sale of Assets, etc. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, make any Transfer, provided that
the foregoing restriction does not apply to a Transfer if:
(a) the property that is the subject of such Transfer constitutes
either (i) inventory held for sale, or (ii) equipment, fixtures, supplies or
materials no longer required in the operation of the business of the Borrower or
such Restricted Subsidiary or that is obsolete, and, in the case of any Transfer
described in clause (i) or (ii), such Transfer is in the ordinary course of
business (each such Transfer, an "Ordinary Course Transfer"); or
(b) such Transfer is from
(i) a Restricted Subsidiary to the Borrower or another
Restricted Subsidiary, or
(ii) the Borrower to a Restricted Subsidiary, or
(iii) the Borrower to a Subsidiary (other than a Restricted
Subsidiary) or from a Restricted Subsidiary to
another Subsidiary (other than a Restricted
Subsidiary) and in either case is for Fair Market
Value, so long as immediately before and immediately
after the consummation of such transaction, and after
giving effect thereto, no Default or Event of Default
exists or would exist (each such Transfer, an
"Intergroup Transfer");
(c) such Transfer is not an Ordinary Course Transfer or an Intergroup
Transfer (such Transfers collectively referred to as "Excluded Transfers"), and
all of the following conditions shall have been satisfied with respect thereto
(the date of the consummation of such Transfer being referred to herein as the
"Property Disposition Date"):
(i) the book value of the assets included in such
Transfer, together with the book value of the assets
included in all other Transfers (other than Excluded
Transfers) during the fiscal year which includes the
Property Disposition Date, shall not exceed fifteen
percent (15%) of Consolidated Assets as of the end of
the most recent fiscal year;
(ii) the book value of the assets included in such
Transfer, together with the book value of the assets
included in all other Transfers (other than Excluded
Transfers) from January 1, 1998 through the Property
Disposition Date, shall not exceed thirty percent
(30%) of Consolidated Assets as of the end of the
most recent fiscal year; and
(iii) immediately after giving effect to such Transfer, no
Default or Event of Default would exist and the
Borrower would be permitted by the provisions of
Sections 5.12 and 5.17 to incur at least $1.00 of
additional Indebtedness and $1.00 of additional
Restricted Indebtedness, respectively.
ADVANCE TERM CREDIT AGREEMENT - Page 35
40
If, within twelve (12) months after the Property Disposition Date, the Borrower
or a Restricted Subsidiary acquires assets similar to the assets included in the
Transfer, then, only for the purpose of determining compliance with Sections
5.11(c)(i) and (ii), the lesser of the book value of the assets acquired or the
book value of the assets included in the Transfer shall not be taken into
account.
SECTION 5.12. Incurrence of Indebtedness. The Borrower will not, and
will not permit any Restricted Subsidiary to, directly or indirectly, create,
incur, assume, guarantee, or otherwise become directly or indirectly liable with
respect to any Indebtedness, unless on the date the Borrower or such Restricted
Subsidiary becomes liable with respect to any such Indebtedness and immediately
after giving effect thereto and to the substantially concurrent retirement of
any other Indebtedness,
(a) no Default or Event of Default would exist, and
(b) Consolidated Indebtedness would not exceed sixty percent (60%) of
Consolidated Capitalization.
For purposes of this Section 5.12 any Person becoming a Restricted
Subsidiary after the date of this Agreement shall be deemed to have incurred all
of its then outstanding Indebtedness at the time it becomes a Restricted
Subsidiary.
SECTION 5.13. Liens. The Borrower will not, and will not permit any of
its Restricted Subsidiaries to, directly or indirectly create, incur, assume or
permit to exist (upon the happening of a contingency or otherwise) any Lien on
or with respect to any property or asset (including, without limitation, any
document or instrument in respect of goods or accounts receivable) of the
Borrower or any such Restricted Subsidiary, whether now owned or held or
hereafter acquired, or any income or profits therefrom, or assign or otherwise
convey any right to receive income or profits, except:
(a) Liens for taxes, assessments or other governmental charges the
payment of which is not at the time required by Section 5.04;
(b) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other similar Liens, in each case, incurred in the
ordinary course of business for sums not yet due;
(c) Liens (other than any Lien imposed by ERISA) incurred or deposits
made in the ordinary course of business (i) in connection with workers'
compensation, unemployment insurance and other types of social security or
retirement benefits, or (ii) to secure (or to obtain letters of credit that
secure) the performance of tenders, statutory obligations, surety bonds, appeal
bonds, bids, leases (other than Capital Leases), performance bonds, purchase,
construction or sales contracts and other similar obligations, in each case not
incurred or made in connection with the borrowing of money, the obtaining of
advances or credit or the payment of the deferred purchase price of property;
ADVANCE TERM CREDIT AGREEMENT - Page 36
41
(d) any attachment or judgment Lien, unless the judgment or other
obligation it secures (i) shall not, within ninety (90) days after the entry
thereof, have been discharged or execution thereof stayed pending appeal, or
shall not have been discharged within ninety (90) days after the expiration of
any such stay or (ii) exceeds, together with the amounts of all other
obligations secured by attachment or judgment Liens at the time existing in
respect of property of the Borrower and its Restricted Subsidiaries, $5,000,000;
(e) leases or subleases granted to others, easements, rights-of-way,
restrictions and other similar charges or encumbrances, in each case incidental
to, and not interfering with, the ordinary conduct of the business of the
Borrower or any of its Restricted Subsidiaries, provided that such Liens do not,
in the aggregate, materially detract from the value of such property;
(f) Liens on property or assets of the Borrower or any of its
Restricted Subsidiaries securing Indebtedness or other obligations owing to the
Borrower or to a Wholly Owned Restricted Subsidiary;
(g) Liens existing on the date of this Agreement on the building
referred to in item C of Schedule 3.13 and securing the Indebtedness referred to
in item C of Schedule 3.13;
(h) any Lien renewing, extending or refunding any Lien permitted by
Subsection (g) above, provided that (i) the principal amount of Indebtedness
secured by such Lien immediately prior to such extension, renewal or refunding
is not increased or the maturity thereof reduced, (ii) such Lien is not extended
to any other property, and (iii) immediately after such extension, renewal or
refunding no Default or Event of Default would exist and the Borrower would be
permitted by the provisions of Sections 5.12 and 5.17 to incur at least $1.00 of
additional Indebtedness and $1.00 of additional Restricted Indebtedness,
respectively; and
(i) other Liens not otherwise permitted by Subsections (a) through (h)
above, provided that (i) the total obligations secured by such other Liens shall
not exceed 10% of Consolidated Capitalization and (ii) immediately after giving
effect to the creation thereof, the Borrower would be permitted by the
provisions of Sections 5.12 and 5.17 to incur at least $1.00 of additional
Indebtedness and $1.00 of additional Restricted Indebtedness, respectively.
For purposes of this Section 5.13, any Person becoming a Restricted
Subsidiary after the date of this Agreement shall be deemed to have incurred all
of its then outstanding Liens at the time it becomes a Restricted Subsidiary,
and any Person extending, renewing or refunding any Indebtedness secured by any
Lien shall be deemed to have incurred such Lien at the time of such extension,
renewal or refunding.
SECTION 5.14. Restricted Payments. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, declare or make, or incur any
liability to declare or make, any Restricted Payment, unless immediately after
giving effect to such action:
(a) no Default or Event of Default would exist; and
ADVANCE TERM CREDIT AGREEMENT - Page 37
42
(b) the Borrower would be permitted by the provisions of Sections 5.12
and 5.17 to incur at least $1.00 of additional Indebtedness and $1.00 of
additional Restricted Indebtedness, respectively.
SECTION 5.15. Consolidated Net Worth. The Borrower will not permit
Consolidated Net Worth as at the last day of any fiscal quarter of the Borrower
to be less than the sum of (a) $261,000,000, plus (b) 15% of its aggregate
Consolidated Net Income (but only if a positive number) for the period beginning
April 1, 1998 and ending at the end of each fiscal quarter thereafter.
SECTION 5.16. Limitation on Dividend Restrictions, etc. The Borrower
will not permit any Restricted Subsidiary to enter into, adopt, create or
otherwise be or become bound by or subject to any contract or charter or by-law
provision limiting the amount of, or otherwise imposing restrictions on the
declaration, payment or setting aside of funds for the making of, any
Distributions in respect of the capital stock of such Restricted Subsidiary to
the Borrower or another Restricted Subsidiary.
SECTION 5.17. Limitation on Restricted Indebtedness. The Borrower will
not at any time permit the aggregate amount of Restricted Indebtedness to exceed
10% of Consolidated Capitalization.
SECTION 5.18. Preferred Stock of Restricted Subsidiaries. The Borrower
will not permit any Restricted Subsidiary to issue or permit to remain
outstanding any Preferred Stock unless such Preferred Stock is issued to and at
all times owned and held by the Borrower or a Wholly-Owned Restricted
Subsidiary.
SECTION 5.19. No Redesignation of Restricted Subsidiaries. The Borrower
will not designate any Restricted Subsidiary as, or take or permit to be taken
any action that would cause any Restricted Subsidiary to become, an Unrestricted
Subsidiary.
SECTION 5.20. Financial and Business Information. The Borrower will
furnish to the Agents and each Lender:
(a) Quarterly Statements. Within 60 days after the end of each
quarterly fiscal period in each fiscal year of the Borrower (other than the last
quarterly fiscal period of each such fiscal year), duplicate copies of
(i) consolidated and consolidating balance sheets of the
Borrower and its Restricted Subsidiaries and of the Borrower and its
Subsidiaries as at the end of such quarter, and
(ii) consolidated and consolidating statements of income,
changes in shareholders' equity and cash flows of the Borrower and its
Restricted Subsidiaries and of the Borrower and its Subsidiaries, for
such quarter and (in the case of the second and third quarters) for the
portion of the fiscal year ending with such quarter,
ADVANCE TERM CREDIT AGREEMENT - Page 38
43
all in reasonable detail and setting forth, in the case of such consolidated
statements, in comparative form the figures for the corresponding periods in the
previous fiscal year, prepared in accordance with GAAP applicable to quarterly
financial statements generally, and certified by a Senior Financial Officer as
fairly presenting, in all material respects, the financial position of the
companies being reported on and their results of operations and cash flows,
subject to changes resulting from year-end adjustments, provided that delivery
within the time period specified above of copies of the Borrower's Quarterly
Report on Form 10-Q prepared in compliance with the requirements therefor and
filed with the Securities and Exchange Commission shall be deemed to satisfy the
requirements of this Section 5.20(a); provided further that if such Form 10-Q
does not contain consolidating information for the Borrower and its Restricted
Subsidiaries, the Borrower shall also deliver to each such holder the
consolidating information described in this Section 5.20(a);
(b) Annual Statements. Within 120 days after the end of each fiscal
year of the Borrower, duplicate copies of
(i) consolidated and consolidating balance sheets of the
Borrower and its Restricted Subsidiaries and of the Borrower and its
Subsidiaries, as at the end of such year, and
(ii) consolidated and consolidating statements of income,
changes in shareholders' equity and cash flows of the Borrower and its
Restricted Subsidiaries and of the Borrower and its Subsidiaries, for
such year;
setting forth in each case in comparative form the figures for the previous
fiscal year, all in reasonable detail, prepared in accordance with GAAP, and
accompanied, (1) in the case of the consolidated statements, by an opinion
thereon of independent certified public accountants of recognized national
standing, which opinion shall state that such financial statements present
fairly, in all material respects, the financial position of the companies being
reported upon and their results of operations and cash flows and have been
prepared in conformity with GAAP, and that the examination of such accountants
in connection with such financial statements has been made in accordance with
generally accepted auditing standards, and that such audit provides a reasonable
basis for such opinion in the circumstances, and (2) in the case of the
consolidating statements, either certified by a Senior Financial Officer as
fairly stating, or accompanied by a report thereon by such accountants
containing a statement to the effect that such consolidating financial
statements fairly state, the financial position and the results of operations
and cash flows of the companies being reported upon in all material respects in
relation to the consolidated financial statements for the periods indicated as a
whole; provided that the delivery within the time period specified above of the
Borrower's Annual Report on Form 10-K for such fiscal year (together with the
Borrower's annual report to shareholders, if any, prepared pursuant to Rule
14a-3 under the Exchange Act) prepared in accordance with the requirements
therefor and filed with the Securities and Exchange Commission shall be deemed
to satisfy the requirements of clauses (i) and (ii) of this Section 5.20(b);
provided further that if such Form 10-K does not contain consolidating
information for the Borrower and its Restricted Subsidiaries, the Borrower
ADVANCE TERM CREDIT AGREEMENT - Page 39
44
shall also deliver to each such holder the consolidating information described
in this Section 5.20(b); and
(iii) a certificate of such accountants stating that in
making the examination for such report, they have obtained no knowledge
of any Default or Event of Default, or, if they have obtained knowledge
of any Default or Event of Default, specifying the nature and period of
existence thereof and the action the Borrower has taken or proposes to
take with respect thereto.
(c) SEC and Other Reports. If the Borrower or any Restricted Subsidiary
shall be required to file reports with the Securities and Exchange Commission,
promptly upon their becoming available, one copy of (i) each financial
statement, report, notice or proxy statement sent by the Borrower or any
Restricted Subsidiary to public securities holders generally, and (ii) each
regular or periodic report, each registration statement that shall have become
effective (without exhibits except as expressly requested by such holder), and
each final prospectus and all amendments thereto filed by the Borrower or any
Restricted Subsidiary with the Securities and Exchange Commission;
(d) Notice of Default or Event of Default. Promptly, and in any event
within five days after a Responsible Officer becoming aware of the existence of
any Default or Event of Default, a written notice specifying the nature and
period of existence thereof and what action the Borrower is taking or proposes
to take with respect thereto;
(e) ERISA Matters. Promptly, and in any event within five days after a
Responsible Officer becomes aware of any of the following, a written notice
setting forth the nature thereof and the action, if any, that the Borrower or an
ERISA Affiliate proposes to take with respect thereto:
(i) with respect to any Plan, any reportable event, as
defined in section 4043(b) of ERISA and the regulations thereunder, for
which notice thereof has not been waived pursuant to such regulations
as in effect on the date hereof and the potential cost to the Borrower
or such ERISA Affiliate resulting therefrom exceeds $500,000; or
(ii) the taking by the PBGC of steps to institute, or the
threatening in writing by the PBGC of the institution of, proceedings
under section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan, or the receipt by the Borrower or
any ERISA Affiliate of a notice from a Multiemployer Plan that such
action has been taken by the PBGC with respect to such Multiemployer
Plan; or
(iii) any event, transaction or condition that could result
in the incurrence of any liability by the Borrower or any ERISA
Affiliate pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans, or in
the imposition of any Lien on any of the rights, properties or assets
of the Borrower or any ERISA Affiliate pursuant to Title I or IV of
ERISA or such penalty or excise tax provisions, if such liability or
Lien, taken together with any other such liabilities or Liens then
existing, would reasonably be expected to have a Material Adverse
Effect; and
ADVANCE TERM CREDIT AGREEMENT - Page 40
45
(f) Requested Information. With reasonable promptness, such other data
and information relating to the business, operations, affairs, financial
condition, assets or properties of the Borrower or any of its Restricted
Subsidiaries or relating to the ability of the Borrower to perform its
obligations hereunder as from time to time may be reasonably requested by any
Lender.
(g) Officer's Certificate. Each set of financial statements delivered
pursuant to Section 5.20(a) or Section 5.20(b) hereof shall be accompanied by a
certificate of a Senior Financial Officer setting forth:
(i) Covenant Compliance. The information (including
detailed calculations) required in order to establish the Debt to Total
Capitalization Ratio and whether the Borrower was in compliance with
the requirements of Section 5.11 through Section 5.17 hereof,
inclusive, and with all Additional Covenants, if any, that involve
calculations during the quarterly or annual period covered by the
statements then being furnished (including with respect to each such
Section or Additional Covenant, as the case may be, where applicable,
the calculations of the maximum or minimum amount, ratio or percentage,
as the case may be, permissible under the terms of such Sections or
Additional Covenants, as the case may be, and the calculation of the
amount, ratio or percentage then in existence);
(ii) Event of Default. A statement that such officer has
reviewed the relevant terms hereof and has made, or caused to be made,
under his or her supervision, a review of the transactions and
conditions of the Borrower and its Subsidiaries from the beginning of
the quarterly or annual period covered by the statements then being
furnished to the date of the certificate and that such review shall not
have disclosed the existence during such period of any condition or
event that constitutes a Default or an Event of Default or, if any such
condition or event existed or exists (including, without limitation,
any such event or condition resulting from the failure of the Borrower
or any Subsidiary to comply with any Environmental Law), specifying the
nature and period of existence thereof and what action the Borrower
shall have taken or proposes to take with respect thereto;
(iii) Management's Discussion and Analysis. A written
discussion and analysis by management of the financial condition and
results of operations of the lines of business conducted by each
material Restricted Subsidiary for such accounting period; and
(iv) Litigation. A written statement that, to the best of
such Officer's knowledge after due inquiry, except as otherwise
disclosed in writing to you, there is no litigation (including
derivative actions), arbitration proceeding or governmental proceeding
pending to which the Borrower or any Subsidiary is a party, or with
respect to the Borrower or any Subsidiary or their respective
properties, which has a significant possibility of materially and
adversely affecting the business, operations, properties or condition
of the Borrower or of the Borrower and its Subsidiaries taken as a
whole.
ADVANCE TERM CREDIT AGREEMENT - Page 41
46
SECTION 5.21 Inspection; Confidentiality. The Borrower shall permit the
representatives of each Agent and each Lender:
(a) No Default. If no Default or Event of Default then exists, at the
expense of such Agent or Lender and upon reasonable prior notice to the
Borrower, to visit the principal executive office of the Borrower, to discuss
the affairs, finances and accounts of the Borrower and its Restricted
Subsidiaries with the Borrower's officers and (with the consent of the Borrower,
which consent will not be unreasonably withheld) its independent public
accountants, and (with the consent of the Borrower, which consent will not be
unreasonably withheld) to visit the other offices and properties of the Borrower
and each Restricted Subsidiary, all at such reasonable times and as often as may
be reasonably requested in writing;
(b) Default. If a Default or Event of Default then exists, at the
expense of the Borrower to visit and inspect any of the offices or properties of
the Borrower or any Subsidiary, to examine all their respective books of
account, records, reports and other papers, to make copies and extracts
therefrom, and to discuss their respective affairs, finances and accounts with
their respective officers and independent public accountants (and by this
provision the Borrower authorizes said accountants to discuss the affairs,
finances and accounts of the Borrower and its Subsidiaries), all at such times
and as often as may be requested; and
(c) Technical Data. Anything herein to the contrary notwithstanding,
neither the Borrower nor any of its Subsidiaries shall have any obligations to
disclose pursuant to this Agreement any engineering, scientific, or other
technical data without significance to the analysis of the financial position of
the Borrower and its Subsidiaries.
ARTICLE VI. EVENTS OF DEFAULT
In case of the happening of any of the following events (each an "Event
of Default"):
(a) the Borrower defaults in the payment of any principal on any Loan
when the same becomes due and payable, whether at maturity or at a date fixed
for prepayment or by declaration or otherwise; or
(b) the Borrower defaults in the payment of any interest on any Loan or
the payment of any fees due with respect to this Agreement for more than five
Business Days after the same becomes due and payable; or
(c) the Borrower defaults in the performance of or compliance with any
term contained in Section 5.20(d) or 5.10 through 5.19; or
(d) the Borrower defaults in the performance of or compliance with any
term contained herein (other than those referred to in paragraphs (a), (b) and
(c) of this Article VI) or any Additional Covenant and such default is not
remedied within 30 days after the earlier of (i) a Responsible Officer obtaining
actual knowledge of such default and (ii) the Borrower receiving
ADVANCE TERM CREDIT AGREEMENT - Page 42
47
written notice of such default from either Agent or any Lender (any such written
notice to be identified as a "notice of default" and to refer specifically to
this paragraph (d) of Article VI); or
(e) any representation or warranty made in writing by or on behalf of
the Borrower or by any officer of the Borrower in this Agreement or in any
writing furnished in connection with the transactions contemplated hereby proves
to have been false or incorrect in any material respect on the date as of which
made; or
(f) (i) the Borrower or any Restricted Subsidiary is in default (as
principal or as guarantor or other surety) in the payment of any principal of or
premium or make-whole amount or interest on any Indebtedness that is outstanding
in an aggregate principal amount of at least $5,000,000 beyond any period of
grace provided with respect thereto, or (ii) the Borrower or any Restricted
Subsidiary is in default in the performance of or compliance with any term of
any evidence of any Indebtedness in an aggregate outstanding principal amount of
at least $5,000,000 or of any mortgage, indenture or other agreement relating
thereto or any other condition exists, and as a consequence of such default or
condition such Indebtedness has become, or has been declared due and payable
before its stated maturity or before its regularly scheduled dates of payment;
or
(g) the Borrower or any Restricted Subsidiary (i) is generally not
paying, or admits in writing its inability to pay, its debts as they become due,
(ii) files, or consents by answer or otherwise to the filing against it of, a
petition for relief or reorganization or arrangement or any other petition in
bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency,
reorganization, moratorium or other similar law of any jurisdiction, (iii) makes
an assignment for the benefit of its creditors, (iv) consents to the appointment
of a custodian, receiver, trustee or other officer with similar powers with
respect to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for
the purpose of any of the foregoing; or
(h) a court or governmental authority of competent jurisdiction enters
an order appointing, without consent by the Borrower or any of its Restricted
Subsidiaries, a custodian, receiver, trustee or other officer with similar
powers with respect to it or with respect to any substantial part of its
property, or constituting an order for relief or approving a petition for relief
or reorganization or any other petition in bankruptcy or for liquidation or to
take advantage of any bankruptcy or insolvency law of any jurisdiction, or
ordering the dissolution, winding-up or liquidation of the Borrower or any of
its Restricted Subsidiaries, or any such petition shall be filed against the
Borrower or any of its Restricted Subsidiaries and such petition shall not be
dismissed within 60 days; or
(i) a final judgment or judgments for the payment of money aggregating
in excess of $5,000,000 are rendered against one or more of the Borrower and its
Restricted Subsidiaries and which judgments are not, within 60 days after entry
thereof, bonded, discharged or stayed pending appeal, or are not discharged
within 60 days after the expiration of such stay; or
ADVANCE TERM CREDIT AGREEMENT - Page 43
48
(j) if (i) any Plan subject to the minimum funding standards of ERISA
or the Code shall fail to satisfy such standards for any plan year or part
thereof or a waiver of such standards or extension of any amortization period is
sought or granted under section 412 of the Code, (ii) a notice of intent to
terminate any Plan shall have been or is reasonably expected to be filed with
the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042
to terminate or appoint a trustee to administer any Plan or the PBGC shall have
notified the Borrower or any ERISA Affiliate that a Plan may become a subject of
any such proceedings, (iii) the aggregate amount of unfunded accrued plan
benefit liabilities under all Plans subject to Title IV of ERISA, determined in
accordance with Financial Accounting Standards Board Statement No. 87 or 132, as
the case may be, as of the end of such Plans' most recently ended plan year on
the basis of actuarial assumptions specified for funding purposes in such Plans'
most recent actuarial valuation report, shall exceed $5,000,000, (iv) the
Borrower or any ERISA Affiliate shall have incurred or is reasonably expected to
incur any liability pursuant to Title I or IV of ERISA or the penalty or excise
tax provisions of the Code relating to employee benefit plans, (v) the Borrower
or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the
Borrower or any Restricted Subsidiary establishes or amends any employee welfare
benefit plan that provides post-employment welfare benefits in a manner that
would increase the liability of the Borrower or any Restricted Subsidiary
thereunder; and any such event or events described in clauses (i) through (vi)
above, either individually or together with any other such event or events,
would reasonably be expected to have a Materially Adverse Effect (as used in
Article VI, the terms "employee benefit plan" and "employee welfare benefit
plan" shall have the respective meanings assigned to such terms in Section 3 of
ERISA);
then, and in every such event, and at any time thereafter during the continuance
of such event, the Administrative Agent, at the request of the Required Lenders,
shall, by notice to the Borrower, take either or both of the following actions,
at the same or different times: (i) terminate forthwith the right of the
Borrower to borrow pursuant to the Commitments and (ii) declare the Loans of the
Borrower then outstanding to be forthwith due and payable in whole or in part,
whereupon the principal of the Loans so declared to be due and payable, together
with accrued interest thereon and any unpaid accrued fees and all other
liabilities of the Borrower accrued hereunder, shall become forthwith due and
payable, without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or any other notice of any kind, all of which are hereby
expressly waived, anything contained herein to the contrary notwithstanding;
provided that in the case of any event described in paragraph (g) or (h) above
with respect to the Borrower, the Commitments of the Lenders with respect to the
Borrower shall automatically terminate and the principal of the Loans then
outstanding of the Borrower with respect to which such event has occurred,
together with accrued interest thereon and any unpaid accrued fees and all other
liabilities of the Borrower accrued hereunder shall automatically become due and
payable, without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein to the contrary
notwithstanding.
ADVANCE TERM CREDIT AGREEMENT - Page 44
49
ARTICLE VII. THE ADMINISTRATIVE AGENT
In order to expedite the transactions contemplated by this Agreement,
Chase Bank of Texas, National Association is hereby appointed to act as
Administrative Agent, on behalf of the Lenders. Each of the Lenders hereby
irrevocably authorizes the Administrative Agent to take such actions on behalf
of such Lender or holder and to exercise such powers as are specifically
delegated to the Administrative Agent by the terms and provisions hereof,
together with such actions and powers as are reasonably incidental thereto. The
Administrative Agent is hereby expressly authorized by the Lenders, without
hereby limiting any implied authority, (a) to receive on behalf of the Lenders
all payments of principal of and interest on the Loans and all other amounts due
to the Lenders hereunder and promptly to distribute to each Lender its share of
each payment so received; (b) to give notice on behalf of each of the Lenders to
the Borrower of any Event of Default of which the Administrative Agent has
actual knowledge acquired in connection with its agency hereunder; and (c) to
distribute to each Lender copies of all notices, financial statements and other
materials delivered by the Borrower pursuant to this Agreement as received by
the Administrative Agent.
Neither Administrative Agent nor any of its directors, officers,
employees or agents shall be liable as such for any action taken or omitted by
any of them except for its or his or her own gross negligence or willful
misconduct, or be responsible for any statement, warranty or representation
herein or the contents of any document delivered in connection herewith, or be
required to ascertain or to make any inquiry concerning the performance or
observance by the Borrower of any of the terms, conditions, covenants or
agreements contained in this Agreement. The Administrative Agent shall not be
responsible to the Lenders for the due execution, genuineness, validity,
enforceability or effectiveness of this Agreement or other instruments or
agreements. The Administrative Agent may deem and treat the Lender which makes
any Loan as the holder of the indebtedness resulting therefrom for all purposes
hereof until it shall have received notice from such Lender, given as provided
herein, of the transfer thereof. The Administrative Agent shall in all cases be
fully protected in acting, or refraining from acting, in accordance with written
instructions signed by the Required Lenders and, except as otherwise
specifically provided herein, such instructions and any action or inaction
pursuant thereto shall be binding on all the Lenders. The Administrative Agent
shall, in the absence of knowledge to the contrary, be entitled to rely on any
instrument or document believed by it in good faith to be genuine and correct
and to have been signed or sent by the proper Person or Persons. Neither the
Administrative Agent nor any of its directors, officers, employees or agents
shall have any responsibility to the Borrower on account of the failure of or
delay in performance or breach by any Lender of any of its obligations hereunder
or any Lender on account of the failure of or delay in performance or breach by
any Lender or the Borrower of any of their respective obligations hereunder or
in connection herewith. The Administrative Agent may execute any and all duties
hereunder by or through agents or employees and shall be entitled to rely upon
the advice of legal counsel selected by it with respect to all matters arising
hereunder and shall not be liable for any action taken or suffered in good faith
by it in accordance with the advice of such counsel.
ADVANCE TERM CREDIT AGREEMENT - Page 45
50
The Lenders hereby acknowledge that the Administrative Agent shall be
under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement unless it shall be requested in
writing to do so by the Required Lenders.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided below, the Administrative Agent may resign at any time by
notifying the Lenders and the Borrower. Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent
acceptable to the Borrower. If no successor shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Administrative Agent gives notice of its resignation, then the
retiring Administrative Agent may, on behalf of the Lenders, appoint a successor
Agent, having a combined capital and surplus of at least $500,000,000 or an
Affiliate of any such bank. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor bank, such successor shall succeed
to and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. After the Administrative
Agent's resignation hereunder, the provisions of this Article and Section 8.05
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as Administrative Agent.
With respect to the Loans made by it hereunder, the Administrative
Agent, in its individual capacity and not as Administrative Agent shall have the
same rights and powers as any other Lender and may exercise the same as though
it were not the Administrative Agent, and the Administrative Agent and its
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not the Administrative Agent.
Each Lender agrees (i) to reimburse the Administrative Agent, on
demand, in the amount of its pro rata share (based on its Commitment hereunder
or, if the Commitments shall have been terminated, the amount of its outstanding
Loans) of any expenses incurred for the benefit of the Lenders in its role as
Administrative Agent, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall not
have been reimbursed by the Borrower AND (II) TO INDEMNIFY AND HOLD HARMLESS THE
ADMINISTRATIVE AGENT AND ANY OF ITS DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS, ON
DEMAND, IN THE AMOUNT OF SUCH PRO RATA SHARE, FROM AND AGAINST ANY AND ALL
LIABILITIES, TAXES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES OR DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH
MAY BE IMPOSED ON, INCURRED BY OR ASSERTED AGAINST IT IN ANY WAY RELATING TO OR
ARISING OUT OF THIS AGREEMENT OR ANY ACTION TAKEN OR OMITTED BY IT UNDER THIS
AGREEMENT TO THE EXTENT THE SAME SHALL NOT HAVE BEEN REIMBURSED BY THE BORROWER
(INCLUDING WITHOUT LIMITATION, ALL LIABILITIES, TAXES, OBLIGATIONS, LOSSES,
DAMAGES, PENALTIES, ACTIONS, JUDGEMENTS, SUITS, COSTS, EXPENSES, OR
DISBURSEMENTS ARISING FROM THE SOLE CONTRIBUTORY NEGLIGENCE OF THE
ADMINISTRATIVE AGENT); PROVIDED THAT NO LENDER SHALL BE LIABLE TO THE
ADMINISTRATIVE AGENT FOR ANY PORTION OF SUCH
ADVANCE TERM CREDIT AGREEMENT - Page 46
51
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES OR DISBURSEMENTS RESULTING FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE ADMINISTRATIVE AGENT OR ANY OF ITS DIRECTORS, OFFICERS,
EMPLOYEES OR AGENTS.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement
or any related agreement or any document furnished hereunder or thereunder.
Wachovia Bank, N.A. has been designated as a Documentation Agent
hereunder in recognition of the level of its Commitment. Wachovia Bank, N.A. is
not an agent for the Lenders and shall not have any obligation hereunder other
than those existing in its capacity as Lender.
ARTICLE VIII. MISCELLANEOUS
SECTION 8.01. Notices. Notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed or sent by telecopy, as follows:
(a) if to Borrower, at its principal executive offices at ▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, to the attention of Chief
Financial Officer, telecopy number ▇▇▇-▇▇▇-▇▇▇▇ with a copy to the
Corporate Controller, Telecopy 972- 497- 5015;
(b) if to the Administrative Agent, to Chase Bank of Texas,
National Association, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention of ▇▇▇ ▇▇▇▇▇▇▇▇▇ (Telecopy No. 214-965-2044), with a copy to
Chase Bank of Texas, National Association, Loan Syndications Services,
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇, telecopy
number (▇▇▇) ▇▇▇-▇▇▇▇;
(c) if to the Documentation Agent, to Wachovia Bank, N.A., ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇
▇▇▇▇▇▇▇, telecopy number (404) 332- 6898; and
(d) if to a Lender, to it at its address (or telecopy number)
set forth in the Administrative Questionnaire delivered to the
Administrative Agent by such Lender in connection with the execution of
this Agreement or in the Assignment and Acceptance pursuant to which
such Lender became a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or
ADVANCE TERM CREDIT AGREEMENT - Page 47
52
overnight courier service or sent by telecopy to such party as provided in this
Section or in accordance with the latest unrevoked direction from such party
given in accordance with this Section.
SECTION 8.02. Survival of Agreement. All covenants, agreements,
representations and warranties made by the Borrower herein and in the
certificates or other instruments prepared or delivered in connection with or
pursuant to this Agreement shall be considered to have been relied upon by the
Lenders and shall survive the making by the Lenders of the Loans regardless of
any investigation made by the Lenders or on their behalf, and shall continue in
full force and effect as long as the principal of or any accrued interest on any
Loan or any Fee or any other amount payable under this Agreement is outstanding
and unpaid or the Commitments have not been terminated.
SECTION 8.03. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and each Agent and when the
Administrative Agent shall have received copies hereof (telecopied or otherwise)
which, when taken together, bear the signature of each Lender, and thereafter
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, except that the Borrower shall not have the
right to assign any rights hereunder or any interest herein without the prior
consent of all the Lenders (except as a consequence of a transaction expressly
permitted under Section 5.10).
SECTION 8.04. Successors and Assigns.
(a) Whenever in this Agreement any of the parties hereto is referred
to, such reference shall be deemed to include the successors and assigns of such
party; and all covenants, promises and agreements by or on behalf of any party
that are contained in this Agreement shall bind and inure to the benefit of its
successors and assigns.
(b) Each Lender may assign to one or more assignees all or a portion of
its interests, rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided,
however, that (i) except in the case of an assignment to a Lender or an
Affiliate of such Lender or an assignment to a Federal Reserve Bank, the
Borrower and the Agents must give their prior written consent to such assignment
(which consent shall not be unreasonably withheld), (ii) the amount of the
Commitment of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $10,000,000, (iii)
each such assignment shall be of a constant, and not a varying, percentage of
all the assigning Lender's rights and obligations under this Agreement, (iv) the
parties to each such assignment shall execute and deliver to the Administrative
Agent an Assignment and Acceptance, and a processing and recordation fee of
$3,000, and the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire. Upon acceptance and
recording pursuant to Section 8.04(e), from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five Business Days after the execution thereof unless otherwise agreed by
the Administrative Agent (the Borrower to be given reasonable notice of any
shorter period), (A) the assignee thereunder shall be a party hereto and, to the
extent of the interest assigned by such Assignment and Acceptance, have the
rights and obligations of a Lender under this
ADVANCE TERM CREDIT AGREEMENT - Page 48
53
Agreement and (B) the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto (but shall continue to be entitled to the benefits of Sections 2.11, 2.16
and 8.05 afforded to such Lender prior to its assignment as well as to any fees
accrued for its account hereunder and not yet paid)).
(c) By executing and delivering an Assignment and Acceptance, the
assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim, (ii)
except as set forth in (i) above, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement, or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or any other instrument or document furnished pursuant
hereto or the financial condition of the Borrower or the performance or
observance by the Borrower of any obligations under this Agreement or any other
instrument or document furnished pursuant hereto; (iii) such assignee represents
and warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 5.03 and such other documents and information as
it has deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; such assignee will independently and
without reliance upon the Agents, such assigning Lender or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under this Agreement; (vi) such assignee appoints and authorizes each Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to such Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees that
it will perform in accordance with their terms all the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
(d) The Administrative Agent shall maintain at one of its offices in
the City of Houston a copy of each Assignment and Acceptance delivered to it and
a register for the recordation of the names and addresses of the Lenders, and
the Commitment of, and the principal amount of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive in the absence of manifest error and the
Borrower, the Agents and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement. The Register shall be available for inspection
by each party hereto, at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee together with an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the
ADVANCE TERM CREDIT AGREEMENT - Page 49
54
Borrower and the Agents to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance and (ii) record the information contained
therein in the Register.
(f) Each Lender may without the consent of the Borrower or the Agents
sell participations to one or more banks or other entities in all or a portion
of its rights and obligations under this Agreement (including all or a portion
of its Commitment and the Loans owing to it); provided, however, that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) each participating bank or other entity
shall be entitled to the benefit of the cost protection provisions contained in
Sections 2.11, 2.16 and 8.05 to the same extent as if it were the selling Lender
(and limited to the amount that could have been claimed by the selling Lender
had it continued to hold the interest of such participating bank or other
entity), except that all claims made pursuant to such Sections shall be made
through such selling Lender, and (iv) the Borrower, the Agents, and the other
Lenders shall continue to deal solely and directly with such selling Lender in
connection with such Lender's rights and obligations under this Agreement.
(g) Any Lender or participant may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant any
information relating to the Borrower furnished to such Lender by or on behalf of
the Borrower; provided that, prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall execute an agreement
whereby such assignee or participant shall agree (subject to customary
exceptions) to preserve the confidentiality of any such information in
accordance with Section 8.14.
(h) The Borrower shall not assign or delegate any rights and duties
hereunder without the prior written consent of all Lenders, and any attempted
assignment or delegation (except as a consequence of a transaction expressly
permitted under Section 5.10) by the Borrower without such consent shall be
void.
(i) Any Lender may at any time pledge all or any portion of its rights
under this Agreement to a Federal Reserve Bank; provided that no such pledge
shall release any Lender from its obligations hereunder or substitute any such
Bank for such Lender as a party hereto. In order to facilitate such an
assignment to a Federal Reserve Bank, the Borrower shall, at the request of the
assigning Lender, duly execute and deliver to the assigning Lender a promissory
note or notes evidencing the Loans made to the Borrower by the assigning Lender
hereunder.
SECTION 8.05. Expenses; Indemnity.
(a) The Borrower agrees to pay all reasonable out-of-pocket expenses
incurred by the Administrative Agent in connection with entering into this
Agreement or in connection with any amendments, modifications or waivers of the
provisions hereof (but only if such amendments, modifications or waivers are
requested by the Borrower) (whether or not the transactions hereby contemplated
are consummated), or incurred by the Administrative Agent or any Lender in
connection with the enforcement of their rights in connection with this
Agreement or in connection
ADVANCE TERM CREDIT AGREEMENT - Page 50
55
with the Loans made hereunder, including the reasonable fees and disbursements
of counsel for the Administrative Agent or, in the case of enforcement following
an Event of Default, the Lenders.
(b) THE BORROWER AGREES TO INDEMNIFY EACH LENDER AGAINST ANY LOSS,
CALCULATED IN ACCORDANCE WITH THE NEXT SENTENCE, OR REASONABLE EXPENSE WHICH
SUCH LENDER MAY SUSTAIN OR INCUR AS A CONSEQUENCE OF (A) ANY FAILURE BY THE
BORROWER TO BORROW OR TO CONVERT OR CONTINUE ANY LOAN HEREUNDER (INCLUDING AS A
RESULT OF THE BORROWER'S FAILURE TO FULFILL ANY OF THE APPLICABLE CONDITIONS SET
FORTH IN ARTICLE IV) AFTER IRREVOCABLE NOTICE OF SUCH BORROWING, CONVERSION OR
CONTINUATION HAS BEEN GIVEN PURSUANT TO SECTION 2.03, (B) ANY PAYMENT,
PREPAYMENT OR CONVERSION, OR ASSIGNMENT OF A EURODOLLAR LOAN OF THE BORROWER
REQUIRED BY ANY OTHER PROVISION OF THIS AGREEMENT OR OTHERWISE MADE OR DEEMED
MADE ON A DATE OTHER THAN THE LAST DAY OF THE INTEREST PERIOD, IF ANY,
APPLICABLE THERETO, (C) ANY DEFAULT IN PAYMENT OR PREPAYMENT OF THE PRINCIPAL
AMOUNT OF ANY LOAN OR ANY PART THEREOF OR INTEREST ACCRUED THEREON, AS AND WHEN
DUE AND PAYABLE (AT THE DUE DATE THEREOF, WHETHER BY SCHEDULED MATURITY,
ACCELERATION, IRREVOCABLE NOTICE OF PREPAYMENT OR OTHERWISE) OR (D) THE
OCCURRENCE OF ANY EVENT OF DEFAULT, INCLUDING, IN EACH SUCH CASE, ANY LOSS OR
REASONABLE EXPENSE SUSTAINED OR INCURRED OR TO BE SUSTAINED OR INCURRED BY SUCH
LENDER IN LIQUIDATING OR EMPLOYING DEPOSITS FROM THIRD PARTIES, OR WITH RESPECT
TO COMMITMENTS MADE OR OBLIGATIONS UNDERTAKEN WITH THIRD PARTIES, TO EFFECT OR
MAINTAIN ANY LOAN HEREUNDER OR ANY PART THEREOF AS A EURODOLLAR LOAN. SUCH LOSS
SHALL INCLUDE AN AMOUNT EQUAL TO THE EXCESS, IF ANY, AS REASONABLY DETERMINED BY
SUCH LENDER, OF (I) ITS COST OF OBTAINING THE FUNDS FOR THE LOAN BEING PAID,
PREPAID, CONVERTED OR NOT BORROWED (ASSUMED TO BE THE LIBO RATE FOR THE PERIOD
FROM THE DATE OF SUCH PAYMENT, PREPAYMENT OR FAILURE TO BORROW TO THE LAST DAY
OF THE INTEREST PERIOD FOR SUCH LOAN (OR, IN THE CASE OF A FAILURE TO BORROW THE
INTEREST PERIOD FOR SUCH LOAN WHICH WOULD HAVE COMMENCED ON THE DATE OF SUCH
FAILURE) OVER (II) THE AMOUNT OF INTEREST (AS REASONABLY DETERMINED BY SUCH
LENDER) THAT WOULD BE REALIZED BY SUCH LENDER IN REEMPLOYING THE FUNDS SO PAID,
PREPAID OR NOT BORROWED FOR SUCH PERIOD OR INTEREST PERIOD, AS THE CASE MAY BE.
(c) THE BORROWER AGREES TO INDEMNIFY THE AGENTS, EACH LENDER, EACH OF
THEIR AFFILIATES AND THE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS OF, THE
FOREGOING (EACH SUCH PERSON BEING CALLED AN "INDEMNITEE") AGAINST, AND TO HOLD
EACH INDEMNITEE HARMLESS FROM, ANY AND ALL LOSSES, CLAIMS, DAMAGES, LIABILITIES
AND RELATED EXPENSES, INCLUDING REASONABLE COUNSEL FEES AND EXPENSES, INCURRED
BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT OF (I) THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, (II) THE USE OF THE
ADVANCE TERM CREDIT AGREEMENT - Page 51
56
PROCEEDS OF THE LOANS OR (III) ANY CLAIM, LITIGATION, INVESTIGATION OR
PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER OR NOT ANY INDEMNITEE IS A
PARTY THERETO (INCLUDING, WITHOUT LIMITATION, ANY LOSSES, CLAIMS, DAMAGES,
LIABILITIES AND RELATED EXPENSES ARISING FROM THE SOLE OR CONTRIBUTORY
NEGLIGENCE OF THE INDEMNITEE); PROVIDED THAT SUCH INDEMNITY SHALL NOT, AS TO ANY
INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH LOSSES, CLAIMS, DAMAGES,
LIABILITIES OR RELATED EXPENSES (I) ARE DETERMINED TO HAVE RESULTED FROM THE
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE OR (II) RESULT FROM
ANY LITIGATION BROUGHT BY SUCH INDEMNITEE AGAINST THE BORROWER OR BY THE
BORROWER AGAINST SUCH INDEMNITEE, IN WHICH THE BORROWER IS THE PREVAILING PARTY.
(d) The provisions of this Section shall remain operative and in full
force and effect regardless of the expiration of the term of this Agreement, the
consummation of the transactions contemplated hereby, the repayment of any of
the Loans, the invalidity or unenforceability of any term or provision of this
Agreement or any investigation made by or on behalf of any Agent or any Lender.
All amounts due under this Section shall be payable on written demand therefor.
SECTION 8.06. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 8.07. Applicable Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF TEXAS.
SECTION 8.08. Waivers; Amendment.
(a) No failure or delay of Borrower, any Agent or any Lender in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Agents and the Lenders hereunder
are cumulative and are not exclusive of any rights or remedies which they would
otherwise have. No waiver of any provision of this Agreement or consent to any
departure therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) below, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given. No
notice or demand on the Borrower or any Subsidiary in any case shall entitle
such party to any other or further notice or demand in similar or other
circumstances.
ADVANCE TERM CREDIT AGREEMENT - Page 52
57
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders; provided, however, that
no such agreement shall (i) decrease the principal amount of, or extend the
maturity of or any scheduled principal payment date or date for the payment of
any interest on any Loan, or waive or excuse any such payment or any part
thereof, or decrease the rate of interest on any Loan, without the prior written
consent of each Lender affected thereby, (ii) increase any Commitment or
decrease the fees payable to any Lender without the prior written consent of
such Lender, or (iii) amend or modify the provisions of Section 2.13 or Section
8.04(h), the provisions of this Section or the definition of the "Required
Lenders", without the prior written consent of each Lender; provided further,
however, that no such agreement shall amend, modify or otherwise affect the
rights or duties of the Administrative Agent hereunder without the prior written
consent of the Administrative Agent. Each Lender shall be bound by any waiver,
amendment or modification authorized by this Section and any consent by any
Lender pursuant to this Section shall bind any assignee of its rights and
interests hereunder.
SECTION 8.09. Entire Agreement. THIS AGREEMENT (INCLUDING THE SCHEDULES
AND EXHIBITS HERETO) AND THE FEE LETTERS CONSTITUTE A "LOAN AGREEMENT" AS
DEFINED IN SECTION 26.03(A) OF THE TEXAS BUSINESS AND COMMERCE CODE, AND
REPRESENT THE ENTIRE CONTRACT AMONG THE PARTIES RELATIVE TO THE SUBJECT MATTER
HEREOF AND THEREOF. ANY PREVIOUS AGREEMENT AMONG THE PARTIES WITH RESPECT TO THE
SUBJECT MATTER HEREOF IS SUPERSEDED BY THIS AGREEMENT AND THE FEE LETTERS,
PROVIDED THAT THE EXISTING CREDIT AGREEMENT WILL REMAIN IN EFFECT. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES. NOTHING IN THIS AGREEMENT,
EXPRESSED OR IMPLIED, IS INTENDED TO CONFER UPON ANY PARTY OTHER THAN THE
PARTIES HERETO ANY RIGHTS, REMEDIES, OBLIGATIONS OR LIABILITIES UNDER OR BY
REASON OF THIS AGREEMENT.
SECTION 8.10. Severability. In the event any one or more of the
provisions contained in this Agreement should be held invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby. The parties shall endeavor in good-faith negotiations to
replace the invalid, illegal or unenforceable provisions with valid provisions
the economic effect of which comes as close as possible to that of the invalid,
illegal or unenforceable provisions.
SECTION 8.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original but all of which
when taken together shall constitute but one contract, and shall become
effective as provided in Section 8.03.
SECTION 8.12. Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and are not to affect the construction of, or to be taken into
consideration in interpreting, this Agreement.
SECTION 8.13. Interest Rate Limitation.
ADVANCE TERM CREDIT AGREEMENT - Page 53
58
(a) Notwithstanding anything herein to the contrary, if at any time the
applicable interest rate, together with all fees and charges which are treated
as interest under applicable law (collectively the "Charges"), as provided for
herein or in any other document executed in connection herewith, or otherwise
contracted for, charged, received, taken or reserved by any Lender, shall exceed
the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by such Lender in accordance with
applicable law, the rate of interest payable on the Loans of such Lender,
together with all Charges payable to such Lender, shall be limited to the
Maximum Rate.
(b) If the amount of interest, together with all Charges, payable for
the account of any Lender in respect of any interest computation period is
reduced pursuant to paragraph (a) of this Section and the amount of interest,
together with all Charges, payable for such Lender's account in respect of any
subsequent interest computation period, computed pursuant to Section 2.06, would
be less than the Maximum Rate, then the amount of interest, together with all
Charges, payable for such Lender's account in respect of such subsequent
interest computation period shall, to the extent permitted by applicable law, be
automatically increased to such Maximum Rate; provided that at no time shall the
aggregate amount by which interest paid for the account of any Lender has been
increased pursuant to this paragraph (b) exceed the aggregate amount by which
interest, together with all Charges, paid for its account has theretofore been
reduced pursuant to paragraph (a) of this Section.
(c) No provision of this Agreement shall require the payment or the
collection of interest in excess of the maximum amount permitted by applicable
law. If any excess of interest in such respect is hereby provided for, or shall
be adjudicated to be so provided, in this Agreement or otherwise in connection
with this loan transaction, the provisions of this Section shall govern and
prevail and neither the Borrower nor the sureties, guarantors, successors, or
assigns of the Borrower shall be obligated to pay the excess amount of such
interest or any other excess sum paid for the use, forbearance, or detention of
sums loaned pursuant hereto. In the event any Lender ever receives, collects, or
applies as interest any such sum, such amount which would be in excess of the
maximum amount permitted by applicable law shall be applied as a payment and
reduction of the principal of the Loans; and, if the principal of the Loans has
been paid in full, any remaining excess shall forthwith be paid to the Borrower.
In determining whether or not the interest paid or payable exceeds the Maximum
Rate, the Borrower and each Lender shall, to the extent permitted by applicable
law, (a) characterize any non-principal payment as an expense, fee, or premium
rather than as interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the entire contemplated term of
the Loans so that interest for the entire term does not exceed the Maximum Rate.
SECTION 8.14. Confidentiality. For the purposes of this Section 8.14,
"Confidential Information" means information delivered to an Agent or a Lender
by or on behalf of the Borrower or any Subsidiary in connection with the
transactions contemplated by or otherwise pursuant to this Agreement that is
proprietary in nature and that was clearly marked or labeled or otherwise
adequately identified when received by an Agent or a Lender as being
confidential information of the Borrower or such Subsidiary, provided that such
term does not include information that (a) was
ADVANCE TERM CREDIT AGREEMENT - Page 54
59
publicly known or otherwise known to an Agent or a Lender prior to the time of
such disclosure, (b) subsequently becomes publicly known through no act or
omission by an Agent or a Lender or any Person acting on their behalf, (c)
otherwise becomes known to an Agent or a Lender other than through disclosure by
the Borrower or any Subsidiary or (d) constitutes financial statements delivered
to you under Section 5.20 that are otherwise publicly available. Each Agent and
each Lender agree that they will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by them in good
faith to protect confidential information of third parties delivered to them,
provided that an Agent or a Lender may deliver or disclose Confidential
Information to (i) its directors, officers, employees, agents, attorneys and
affiliates (to the extent such disclosure reasonably relates to the
administration of this Agreement), (ii) its financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section 8.14,
(iii) any other Agent or Lender, (iv) any Transferee (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be bound by
the provisions of this Section 8.14), (v) any Person from which it offers to
purchase any security of the Borrower or a Subsidiary (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be bound by
the provisions of this Section 8.14), (vi) any federal or state regulatory
authority having jurisdiction over it, (vii) any nationally recognized rating
agency that requires access to information about its investment portfolio, or
(viii) any other Person to which such delivery or disclosure may be necessary or
appropriate (w) to effect compliance with any law, rule, regulation or order
applicable to it, (x) in response to any subpoena or other legal process, (y) in
connection with any litigation to which it is a party or (z) if an Event of
Default has occurred and is continuing, to the extent an Agent or a Lender may
reasonably determine such delivery and disclosure to be necessary or appropriate
in the enforcement or for the protection of the rights and remedies under this
Agreement.
SECTION 8.15. Non-Application of Chapter 346 of the Texas Finance Code.
The provisions of Chapter 346 of the Texas Finance Code are specifically
declared by the parties hereto not to be applicable to this Agreement or to the
transactions contemplated hereby.
ADVANCE TERM CREDIT AGREEMENT - Page 55
60
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
LENNOX INTERNATIONAL INC.,
as Borrower
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
Executive Vice President,
Chief Financial Officer and Treasurer
CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION,
individually and as Administrative Agent
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇▇
----------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President
WACHOVIA BANK, N.A.,
individually and as Documentation Agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
ADVANCE TERM CREDIT AGREEMENT - Page 56
61
EXHIBITS AND SCHEDULES
Exhibit A Form of Borrowing Request
Exhibit B Administrative Questionnaire
Exhibit C Form of Assignment and Acceptance
Exhibit D Matters to be addressed by Opinion of Counsel
Schedule 2.01 Commitments
Schedule 3.05 Subsidiaries
Schedule 3.06 Financial Statements
Schedule 3.13 Indebtedness
62
EXHIBIT A
FORM OF BORROWING REQUEST
Chase Bank of Texas, National Association, [Date]
as Administrative Agent for the Lenders referred to below
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
and
Chase Bank of Texas, National Association
Loan Syndications Services
1 Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telecopy: ▇▇▇-▇▇▇-▇▇▇▇
Ladies and Gentlemen:
The undersigned, Lennox International Inc. (the "Borrower"), refers to
the Advance Term Credit Agreement dated as of March 16, 1999 (as it may
hereafter be amended, modified, extended or restated from time to time, the
"Agreement"), among the Borrower, the Lenders named therein, Chase Bank of
Texas, National Association, as Administrative Agent, and Wachovia Bank, N.A.,
as Documentation Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Agreement. The
Borrower hereby gives you notice pursuant to Section 2.03 of the Agreement that
it requests a Borrowing under the Agreement, and in that connection sets forth
below the terms on which such Borrowing is requested to be made:
(A) Date of Borrowing (which is a Business Day)
-------------
(B) Principal amount of Borrowing (1)
-------------
(C) Interest rate basis (2)
-------------
---------------------
(1) Not less than $5,000,000 (and in integral multiples of $1,000,000)
or greater than the Total Commitment then available.
(2) Eurodollar Loan or ABR Loan.
EXHIBIT A - FORM OF BORROWING REQUEST - Page 1 of 2
63
(D) Interest Period and the last day thereof (3)
-------------
Upon acceptance of any or all of the Loans made by the Lenders in
response to this request, the Borrower shall be deemed to have represented and
warranted that the conditions to lending specified in Section 4.01(b) and (c) of
the Agreement have been satisfied.
Very truly yours,
LENNOX INTERNATIONAL INC.
By:
---------------------------------------
Name:
----------------------------------
Title:
---------------------------------
[Senior Financial Officer]
---------------------
(3) Which shall be subject to the definition of "Interest Period" and
end not later than the Maturity Date.
EXHIBIT A - FORM OF BORROWING REQUEST - Page 2 of 2
64
EXHIBIT B
ADMINISTRATIVE QUESTIONNAIRE
LENNOX INTERNATIONAL INC.
PLEASE FORWARD THIS COMPLETED
FORM AS SOON AS POSSIBLE TO:
▇▇▇▇ ▇▇▇▇▇▇▇▇ FAX (▇▇▇) ▇▇▇-▇▇▇▇
PLEASE TYPE ALL INFORMATION.
--------------------------------------------------------------------------------
Agent: Chase Bank of Texas, National Association
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 8 TCB-N 96
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Telex:
--------------------------------------------------------------------------------
Syndications Telecopier:
--------------------------------------------------------------------------------
Syndications Contacts: _____________________ (713) ____________
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Operations: ▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Letters of Credit: ▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇▇) ▇▇▇-▇▇▇▇
--------------------------------------------------------------------------------
Full Legal Name of your
Institution:
--------------------------------------------------------------------------------
Hard-copy documents, notices and periodic financial statements of the Borrower
should be sent to the following account officer designated by your bank:
--------------------------------------------------------------------------------
Officer's Name:
--------------------------------------------------------------------------------
Title:
--------------------------------------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (▇▇ ▇.▇.
▇▇▇▇▇ ▇▇▇▇▇▇):
--------------------------------------------------------------------------------
▇▇▇▇, ▇▇▇▇▇, ▇▇▇:
--------------------------------------------------------------------------------
Phone #:
--------------------------------------------------------------------------------
Telefax #:
--------------------------------------------------------------------------------
PRIMARY CONTACT INFORMATION
EXHIBIT B - ADMINISTRATIVE QUESTIONNAIRE - Page 1 of 3
65
We will send all telecopies regarding time-critical information (drawdowns,
option changes, payments, etc.) to the Primary or Alternate Contact at the
banking location you designate.
1. Your bank's primary contact for telefaxes concerning borrowings,
options on interest rates, etc.:
--------------------------------------------------------------------------------
Primary Primary Alternate
Name/ Primary Telex No. & Alternate Telex No. &
Phone No. Department Telefax No. Answerback Telefax No. Answerback
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Primary Primary Alternate
Name/ Primary Telex No. & Alternate Telex No. &
Phone No. Department Telefax No. Answerback Telefax No. Answerback
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
If at any time any of the above information changes, please advise.
Publicity: Under what name would you prefer your Institution to appear
in any further advertisements?
------------------------------------------------------------
EXHIBIT B - ADMINISTRATIVE QUESTIONNAIRE - Page 2 of 3
66
--------------------------------------------------------------------------------
Movement of Funds: TO US: Wire Fed Funds to:
Chase Bank of Texas, National Association
ABA #▇▇▇▇▇▇▇▇▇
for account number #________________
Attention: Loan syndication Svcs./ ▇▇▇▇ ▇▇▇▇▇▇▇
Reference:
--------------------------------------------------------------------------------
TO YOU: Wire Fed Funds to:
--------------------------------------------------------------------------------
NAME:
ABA #
For Credit To:
Attention:
Reference:
--------------------------------------------------------------------------------
Other:
--------------------------------------------------------------------------------
If buyer is purchasing Letter of Credit facility as part of this
participation/syndication, please provide the information below:
--------------------------------------------------------------------------------
L/C contact name:
--------------------------------------------------------------------------------
Street Address:
--------------------------------------------------------------------------------
City, State, Zip:
--------------------------------------------------------------------------------
Phone #:
--------------------------------------------------------------------------------
Telefax #:
--------------------------------------------------------------------------------
Wire Fed Funds to:
--------------------------------------------------------------------------------
NAME:
ABA #
For Credit To:
Attention:
Reference:
-------------------------------------------------------------------------------
EXHIBIT B - ADMINISTRATIVE QUESTIONNAIRE - Page 3 of 3
67
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Dated: ______________, 19__
Reference is made to the Advance Term Credit Agreement dated as of
March 16, 1999 (as amended, modified, extended or restated from time to time,
the "Agreement"), among Lennox International Inc. (the "Borrower"), the lenders
listed in Schedule 2.01 thereto (the "Lenders"), Wachovia Bank, N.A., as
Documentation Agent and Chase Bank of Texas, National Association, as
Administrative Agent for the Lenders. Terms defined in the Agreement are used
herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes, without recourse, from
the Assignor, effective as of the [Effective Date of Assignment set forth
below], the interests set forth below (the "Assigned Interest") in the
Assignor's rights and obligations under the Agreement, including, without
limitation, the interests set forth below in the Commitment of the Assignor on
the [Effective Date of Assignment] and the Loans owing to the Assignor which are
outstanding on the [Effective Date of Assignment], together with unpaid interest
accrued on the assigned Loans to the [Effective Date of Assignment] and the
amount, if any, set forth below of the fees accrued to the [Effective Date of
Assignment] for the account of the Assignor. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 8.04 of the Agreement, a copy of
which has been received by each such party. From and after the [Effective Date
of Assignment], (i) the Assignee shall be a party to and be bound by the
provisions of the Agreement and, to the extent of the interests assigned by this
Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent of the interests assigned
by this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Agreement. After giving effect to this Assignment and
Acceptance, Assignor's Commitment shall be $_____________.
2. This Assignment and Acceptance is being delivered to the Agent
together with (i) if the Assignee is organized under the laws of a jurisdiction
outside the United States, the forms specified in Section 2.15(g) of the
Agreement, duly completed and executed by such Assignee, (ii) if the Assignee is
not already a Lender under the Agreement, an Administrative Questionnaire in the
form of Exhibit B to the Agreement and (iii) a processing and recordation fee of
$3,000.
3. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of Texas.
Date of Assignment:
-------------------------------------------------------------
Legal Name of Assignor:
---------------------------------------------------------
Legal Name of Assignee:
---------------------------------------------------------
EXHIBIT C - ASSIGNMENT AND ACCEPTANCE - Page 1 of 2
68
Assignee's Address for Notices:
-------------------------------------------------
Effective Date of Assignment (may not be fewer than 5 Business Days after the
Date of Assignment unless otherwise agreed by the Agent):
Percentage Assigned of
Facility/Commitment (set forth, to at least
8 decimals, as a percentage of the Facility
and the aggregate Commitments of all
Facility Principal Amount Assigned Lender thereunder)
----------------------- ------------------------- -------------------------------------------
Commitment Assigned: $ %
-------------- --------------
Loans: $ %
-------------- --------------
Fees Assigned (if any): $ %
-------------- --------------
The terms set forth herein are hereby agreed to: Accepted:
as
---------------------------------------,
Assignor, LENNOX INTERNATIONAL INC.
By:
----------------------------------
Name: By:
------------------------------ -------------------------------
Title: Name:
------------------------------ ------------------------------
Title:
-----------------------------
, as
---------------------------------------- CHASE BANK OF TEXAS,
Assignee, NATIONAL ASSOCIATION,
as Administrative Agent
By:
----------------------------------
Name: By:
------------------------------ -------------------------------
Title: Name:
------------------------------ ------------------------------
Title:
-----------------------------
EXHIBIT C - ASSIGNMENT AND ACCEPTANCE - Page 2 of 2
69
EXHIBIT D
Matters To Be Covered In
Opinion of Counsel to Borrower
1. Each of the Borrower and Lennox Industries Inc., Heatcraft Inc. and
▇▇▇▇▇▇▇▇▇ Air Conditioning Inc. being duly incorporated, validly existing and in
good standing and the Borrower having requisite corporate power and authority to
execute, deliver and perform the Agreement.
2. Each of the Borrower and Lennox Industries Inc., Heatcraft Inc. and
▇▇▇▇▇▇▇▇▇ Air Conditioning Inc. being duly qualified and in good standing as a
foreign corporation in appropriate jurisdictions.
3. Due authorization and execution of the Agreement and the Agreement
being legal, valid, binding and enforceable.
4. No conflicts with charter documents, laws or other agreements.
5. All consents required to execute, deliver or perform the Agreement
having been obtained.
6. No litigation questioning validity of the Agreement or as to which
there is otherwise the reasonable likelihood of a Material Adverse Effect.
7. No violation of Regulations T, U or X of the Federal Reserve Board.
8. borrower not an "investment company", or a company "controlled" by
an "investment company", under the Investment Company Act of 1940, as amended.
EXHIBIT D - FORM OF OPINION OF COUNSEL TO THE BORROWER - Solo Page
70
SCHEDULE 2.01
Lender Commitment
------ ------------
▇. ▇▇▇▇▇ Bank of Texas, $ 57,500,000
National Association
b. Wachovia Bank, N.A. $ 57,500,000
============
TOTAL $115,000,000
EXHIBIT E - JOINDER AGREEMENT - Cover Page
71
SCHEDULE 3.05
Lennox International Inc. Subsidiaries
as of June 30, 1999
Location of
Name Ownership Jurisdiction of Inc. Restricted/Unrestricted Operating Assets
-------------------------------------------- --------- -------------------- ----------------------- ----------------
(1) Lennox Industries Inc. 100% Iowa Restricted United States
SEE ATTACHED CHART
(2) Heatcraft Inc. 100% Mississippi Restricted United States
(a) Frigus-▇▇▇▇ ▇.▇. de C.V. 50% Mexico Unrestricted Mexico
(3) Heatcraft Technologies Inc. 100% Delaware Restricted United States
(4) ▇▇▇▇▇▇▇▇▇ Air Conditioning Inc. 100% Ohio Restricted United States
(a) JOA Industries, Inc. 100% Nebraska Restricted United States
(i) ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ Wholesale 100% Nebraska Restricted United States
Furnace & Supply Co., d/b/a
▇▇▇▇▇▇-▇▇▇▇▇ Supply Co.
(5) Lennox Foreign Sales Corp. 100% U.S. Virgin Islands Unrestricted N/A
(6) Lennox Commercial Realty Inc. 100% Iowa Restricted United States
(7) Lennox Global Ltd. 100% Delaware Unrestricted United States
SEE ATTACHED CHART
SCHEDULE 3.05 - Subsidiaries - Page 1 of 5
72
Lennox International Inc. Subsidiaries
as of June 30, 1999
Location of
Name Ownership Jurisdiction of Inc. Restricted/Unrestricted Operating Assets
-------------------------------------------- --------- -------------------- ----------------------- ----------------
Lennox Industries, Inc.
(a) Products Acceptance Corporation 100% Iowa Restricted N/A
(b) Lennox Industries (Canada) Ltd. 100% Canada Unrestricted Canada
(c) Lennox Industries SW Inc. 100% Iowa Restricted N/A
(d) Lennox Manufacturing Inc. 100% Delaware Restricted United States
(e) Hearth Products Inc. 100% Delaware Restricted United States
(i) SFC Holdings Inc. 100% Delaware Restricted United States
SCHEDULE 3.05 - Subsidiaries - Page 2 of 5
73
Lennox International Inc. Subsidiaries
as of June 30, 1999
Location of
Name Ownership Jurisdiction of Inc. Restricted/Unrestricted Operating Assets
-------------------------------------------- --------- -------------------- ----------------------- ----------------
Lennox Global Ltd.
(a) UK Industries Inc. 100% Delaware Unrestricted N/A
(b) UK Global Ltd. 100% Delaware Unrestricted N/A
(c) Lennox Australia Pty. Ltd. 100% Australia Unrestricted Australia
(d) LGL Asia-Pacific Pte. Ltd. 100% Rep. of Singapore Unrestricted Singapore
(e) LGL (Australia) Pty. Ltd. 100% Australia Unrestricted Australia
(f) LGL de Mexico, S.A. de C.V. 99% Mexico Unrestricted Mexico
(g) Ets. Brancher S.A. 70% France Unrestricted France
(1) SEE ATTACHED CHART
(h) Fairco S.A. 50% Argentina Unrestricted Argentina
SCHEDULE 3.05 - Subsidiaries - Page 3 of 5
74
Lennox International Inc. Subsidiaries
as of June 30, 1999
Location of
Name Ownership Jurisdiction of Inc. Restricted/Unrestricted Operating Assets
-------------------------------------------- --------- -------------------- ----------------------- ----------------
Ets. Brancher S.A.
(a) HCF-Lennox Limited 99% United Kingdom Unrestricted United Kingdom
(1) Lennox Industries 100% United Kingdom Unrestricted United Kingdom
(A) Environheat Limited 100% United Kingdom Unrestricted N/A
(b) HCF ▇▇▇▇▇▇ ▇.▇. 100% France Unrestricted France
(1) SEE ATTACHED CHART
(c) Frinotech S.A. 99.68% France Unrestricted N/A
(d) ▇▇▇▇▇-▇▇▇▇ S.A. 100% France Unrestricted France
(1) ▇▇▇▇▇-▇▇▇▇ Warmeauslauscher GmbH 100% Germany Unrestricted Germany
(2) ERSA 79.5% Spain Unrestricted Spain
(3) West 80% Italy Unrestricted Italy
(4) ▇▇▇▇▇-Coil 50% Czech Republic Unrestricted Czech Republic
(5) Herac Ltd. 100% United Kingdom Unrestricted N/A
(e) SCI Geraval 99.83% France Unrestricted France
(f) SCI Groupe Brancher 76% France Unrestricted France
SCHEDULE 3.05 - Subsidiaries - Page 4 of 5
75
Lennox International Inc. Subsidiaries
as of June 30, 1999
Location of
Name Ownership Jurisdiction of Inc. Restricted/Unrestricted Operating Assets
-------------------------------------------- --------- -------------------- ----------------------- ----------------
HCF ▇▇▇▇▇▇ ▇.▇.
(a) Refac B.V. 100% Netherlands Unrestricted Netherlands
(1) Refac NV 100% Belgium Unrestricted Belgium
(2) ▇▇▇▇▇ ▇▇▇▇ GmbH 100% Germany Unrestricted N/A
(A) ▇▇▇▇▇ ▇▇▇▇ GmbH 100% Germany Unrestricted N/A
(3) ▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇ Technik 50% Germany Unrestricted N/A
Vertriebs GmbH
(4) Refac UK Ltd. 100% United Kingdom Unrestricted United Kingdom
(b) Hyfra GmbH 100% Germany Unrestricted Germany
(c) Lennox-Refac S.A. 100% Spain Unrestricted Spain
(1) Redi Andalucia S.A. 70% Spain Unrestricted N/A
(2) ▇▇▇▇▇▇ ▇▇▇▇▇ 100% Portugal Unrestricted N/A
(3) Deutsche Bronswerk GmbH 100% Germany Unrestricted Germany
(4) Bronswerk Refac GmbH 100% Germany Unrestricted Germany
SCHEDULE 3.05 - Subsidiaries - Page 5 of 5
76
SCHEDULE 3.06
FINANCIAL STATEMENTS
1. Consolidated and consolidating financial statements for the Borrower
and its Subsidiaries for the fiscal years ended December 31, 1992
through December 31, 1997.
2. Quarterly consolidated and consolidating financial statements for the
Borrower and its Subsidiaries for the periods ended March 31, June 30,
and September 30 for 1992-98.
SCHEDULE 3.06 - FINANCIAL STATEMENTS - Solo Page
77
SCHEDULE 3.13
LENNOX INTERNATIONAL INC.
AND RESTRICTED SUBSIDIARIES
INDEBTEDNESS AS OF
DECEMBER 31, 1998 (EXCEPT AS NOTED)
▇. ▇▇▇▇▇▇ INTERNATIONAL INC.
(1) Agreement of Assumption and Restatement dated as
of December 1, 1991 between Lennox International Inc.
and the Noteholders identified at the end thereof,
pursuant to which Lennox International Inc. delivered
its:
9.53% Series F Promissory Notes due 2001 $21,000,000
9.69% Series H Promissory Notes due 2003 24,600,000
(2) Note Purchase Agreement dated as of December 1,
1993 among Lennox International Inc. and the
Noteholders identified at the end thereof, pursuant
to which Lennox International Inc. delivered its
6.73% Senior Promissory Notes due 2008 100,000,000
(3) Note Purchase Agreement dated as of July
6, 1995 between Lennox International Inc.
and Teachers Insurance and Annuity
Association of America, pursuant to which
Lennox International Inc. delivered its
7.06% Senior Promissory Notes due 2005 20,000,000
(4) Guaranty dated September 19, 1995 from
Lennox International Inc. to First Bank of
Natchitoches & Trust Company and Regions
Bank of Louisiana guaranteeing 50% of debt
of Alliance Compressors to such Banks under
a Promissory Note dated September 19, 1995 1,070,586*
(5) Guaranty of 50% of amounts due from
Alliance Compressors under a Master
Equipment Lease Agreement dated March 28,
1995 with NationsBanc Leasing Corporation 343,844*
(6) Letter of Credit guaranteeing debt of
Refac B.V. to Stork N.V. in connection with
purchase of stock of Refac B.V. from Stork
N.V. 1,701,440
(7) Guaranty of 50% of Frigus-▇▇▇▇ ▇.▇. de
C.V. Line of Credit from Bank One, Texas,
N.A., in the maximum amount of $1,500,000 750,000
SCHEDULE 5.15 - LENNOX INTERNATIONAL INC. AND RESTRICTED
SUBSIDIARIES - Page 1 of 2
78
(8) Letter of Credit guaranteeing debt of
Lennox Australia Pty Ltd. to Alcair
Industries Pty Ltd. in connection with
purchase of assets of Alcair Industries Pty
Ltd. 547,000
(9) Note Purchase Agreement dated as of
April 3, 1998, between Lennox International
Inc. and the Noteholders identified therein,
pursuant to which Lennox International Inc.
delivered its:
6.56% Senior Notes due April 3, 2005 25,000,000
6.75% Senior Notes due April 3, 2008 50,000,000
(10) Existing Credit Agreement 38,000,000
▇. ▇▇▇▇▇▇ INDUSTRIES INC.
Promissory Note dated December 22, 1992 issued to Texas
Housing Opportunity Fund, Ltd. 109,358
Balance Due for deferred price payment for Pyro 3,763,182
Industries, Inc.
▇. ▇▇▇▇▇▇ COMMERCIAL REALTY INC.
11.1% Mortgage Note Agreement with Texas
Commerce Bank, N.A. due January 1, 2000,
secured by mortgage on headquarters building
and an assignment of the Lease between
Lennox Commercial Realty Inc. and Lennox
Industries Inc. 7,546,885
D. MISCELLANEOUS CAPITAL LEASES 280,954
------------
TOTAL OUTSTANDING INDEBTEDNESS OF LENNOX
INTERNATIONAL INC. AND RESTRICTED SUBSIDIARIES $294,713,249
============
*50% AS OF DECEMBER 31, 1998
SCHEDULE 5.15 - LENNOX INTERNATIONAL INC. AND RESTRICTED
SUBSIDIARIES - Page 2 of 2