EXHIBIT 10.1
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CREDIT AGREEMENT
dated as of February 28, 2000
by and among
LUFKIN INDUSTRIES, INC.,
as the Borrower,
BANK OF AMERICA, NATIONAL ASSOCIATION,
as the Agent,
and
THE LENDERS NAMED HEREIN
$20,000,000 REVOLVING LOAN A FACILITY
$5,000,000 REVOLVING LOAN B FACILITY
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TABLE OF CONTENTS
Page
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ARTICLE 1 - Definitions........................................................... 1
Section 1.1 Definitions...................................................... 1
Section 1.2 Other Definitional Provisions.................................... 18
Section 1.3 Accounting Terms and Determinations.............................. 19
Section 1.4 Financial Covenants and Reporting................................ 19
ARTICLE 2 - Loans................................................................. 20
Section 2.1 Commitments...................................................... 20
Section 2.2 Notes............................................................ 21
Section 2.3 Repayment of Loans............................................... 21
Section 2.4 Interest......................................................... 22
Section 2.5 Borrowing Procedure.............................................. 23
Section 2.6 Optional Prepayments, Conversions, and Continuations of Loans.... 23
Section 2.7 Mandatory Prepayments............................................ 23
Section 2.8 Minimum Amounts.................................................. 23
Section 2.9 Certain Notices.................................................. 24
Section 2.10 Use of Proceeds.................................................. 25
Section 2.11 Fees............................................................. 25
Section 2.12 Computations..................................................... 26
Section 2.13 Termination or Reduction of Commitments.......................... 26
Section 2.14 Letters of Credit................................................ 26
ARTICLE 3 - Payments.............................................................. 30
Section 3.1 Method of Payment and Application of Payments.................... 30
Section 3.2 Pro Rata Treatment............................................... 31
Section 3.3 Sharing of Payments, Etc......................................... 31
Section 3.4 Non-receipt of Funds by the Agent................................ 32
Section 3.5 Taxes............................................................ 32
Section 3.6 Withholding Tax Exemption........................................ 33
Section 3.7 Reinstatement of Obligations..................................... 34
Section 3.8 No Force Majeure, Disputes....................................... 34
Section 3.9 Participation Obligations Absolute; Failure to Fund Participation 35
ARTICLE 4 - Yield Protection and Illegality....................................... 35
Section 4.1 Additional Costs................................................. 35
Section 4.2 Limitation on Types of Loans..................................... 37
Section 4.3 Illegality....................................................... 37
Section 4.4 Treatment of Affected Loans...................................... 37
Section 4.5 Compensation..................................................... 38
Section 4.6 Capital Adequacy................................................. 38
Section 4.7 Replacement of Lenders........................................... 39
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ARTICLE 5 - Conditions Precedent.................................................. 39
Section 5.1 Initial Extension of Credit...................................... 39
Section 5.2 All Extensions of Credit......................................... 42
Section 5.3 Closing Certificates............................................. 42
ARTICLE 6 - Representations and Warranties........................................ 42
Section 6.1 Existence........................................................ 42
Section 6.2 Financial Statements............................................. 43
Section 6.3 Corporate Action; No Breach...................................... 43
Section 6.4 Operation of Business; Licenses.................................. 43
Section 6.5 Intellectual Property............................................ 44
Section 6.6 Litigation and Judgments......................................... 44
Section 6.7 Rights in Properties; Liens...................................... 44
Section 6.8 Enforceability................................................... 44
Section 6.9 Approvals........................................................ 44
Section 6.10 Debt............................................................. 45
Section 6.11 Taxes............................................................ 45
Section 6.12 Margin Securities................................................ 45
Section 6.13 ERISA............................................................ 45
Section 6.14 Disclosure....................................................... 46
Section 6.15 Subsidiaries; Capitalization..................................... 46
Section 6.16 Compliance With Laws............................................. 46
Section 6.17 Investment Company Act........................................... 46
Section 6.18 Public Utility Holding Company Act............................... 46
Section 6.19 Environmental Matters............................................ 46
Section 6.20 Year 2000 Compliance............................................. 48
Section 6.21 Labor Disputes and Acts of God................................... 48
Section 6.22 Outstanding Securities........................................... 48
Section 6.23 Solvency......................................................... 48
Section 6.24 Employee Matters................................................. 49
Section 6.25 Insurance........................................................ 49
Section 6.26 Principal Place of Business...................................... 49
Section 6.27 Burdensome Agreements............................................ 49
Section 6.28 Survival of Representations and Warranties, Etc.................. 49
ARTICLE 7 - Affirmative Covenants................................................. 49
Section 7.1 Reporting Requirements........................................... 50
Section 7.2 Maintenance of Existence; Conduct of Business.................... 52
Section 7.3 Maintenance of Properties and Licenses........................... 52
Section 7.4 Taxes and Claims................................................. 53
Section 7.5 Insurance........................................................ 53
Section 7.6 Inspection Rights................................................ 54
Section 7.7 Keeping Books and Records........................................ 54
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Section 7.8 Compliance With Laws............................................. 54
Section 7.9 Compliance With Agreements....................................... 54
Section 7.10 Further Assurances............................................... 54
Section 7.11 ERISA............................................................ 55
Section 7.12 Non-Consolidation................................................ 55
Section 7.13 Year 2000 Compliance............................................. 55
Section 7.14 Delivery of Certain Amendments and Funded Debt Documents......... 55
ARTICLE 8 - Negative Covenants.................................................... 55
Section 8.1 Debt............................................................. 55
Section 8.2 Limitation on Liens.............................................. 56
Section 8.3 Mergers, Etc..................................................... 56
Section 8.4 Restricted Payments.............................................. 56
Section 8.5 Limitation on Issuance of Capital Stock.......................... 57
Section 8.6 Transactions with Affiliates..................................... 57
Section 8.7 Sale and Leaseback............................................... 57
Section 8.8 Lines of Business................................................ 57
Section 8.9 Environmental Protection......................................... 57
Section 8.10 Intercompany Transactions........................................ 58
Section 8.11 ERISA............................................................ 58
Section 8.12 Disposition of Assets............................................ 58
ARTICLE 9 - Financial Covenants................................................... 58
Section 9.1 Minimum Tangible Net Worth....................................... 58
Section 9.2 Leverage Ratio................................................... 59
Section 9.3 Interest Coverage................................................ 59
Section 9.4 Net Income....................................................... 59
ARTICLE 10 - Default.............................................................. 59
Section 10.1 Events of Default................................................ 59
Section 10.2 Remedies......................................................... 61
Section 10.3 Performance by the Agent, Etc.................................... 62
ARTICLE 11 - The Agent............................................................ 62
Section 11.1 Appointment, Powers, and Immunities.............................. 62
Section 11.2 Rights of Agent as a Lender...................................... 64
Section 11.3 Defaults......................................................... 64
Section 11.4 Indemnification.................................................. 64
Section 11.5 Independent Credit Decisions..................................... 65
Section 11.6 Several Commitments.............................................. 65
Section 11.7 Successor Agent.................................................. 66
ARTICLE 12 - Miscellaneous........................................................ 66
Section 12.1 Expenses......................................................... 66
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Section 12.2 Indemnification.................................................. 67
Section 12.3 Limitation of Liability.......................................... 68
Section 12.4 No Duty.......................................................... 68
Section 12.5 No Fiduciary Relationship........................................ 68
Section 12.6 Equitable Relief................................................. 68
Section 12.7 No Waiver; Cumulative Remedies................................... 68
Section 12.8 Successors and Assigns........................................... 69
Section 12.9 Survival......................................................... 72
Section 12.10 Entire Agreement................................................. 72
Section 12.11 Amendments....................................................... 72
Section 12.12 Maximum Interest Rate............................................ 73
Section 12.13 Notices.......................................................... 73
Section 12.14 Governing Law; Venue; Service of Process......................... 74
Section 12.15 Waiver of Jury Trial............................................. 75
Section 12.16 Counterparts..................................................... 75
Section 12.17 Severability..................................................... 75
Section 12.18 Headings......................................................... 75
Section 12.19 Construction..................................................... 75
Section 12.20 Independence of Covenants........................................ 75
Section 12.21 Approvals and Consent............................................ 75
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EXHIBITS
Exhibit A - Form of Assignment and Acceptance
Exhibit B-1 - Form of Revolving Note A
Exhibit B-2 - Form of Revolving Note B
Exhibit C - Form of Notice of Borrowing
Exhibit D - Form of Compliance Certificate
SCHEDULES
Schedule 1.1 - Permitted Liens
Schedule 6.6 - Litigation and Judgments
Schedule 6.10 - Existing Debt
Schedule 6.13 - ERISA Matters
Schedule 6.15 - Subsidiaries; Capitalization
Schedule 6.25 - Employee Matters
Schedule 6.26 - Insurance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of February 28, 2000, is by and among
LUFKIN INDUSTRIES, INC., a Texas corporation (the "Borrower"), each of the
lending entities which is a party hereto (as evidenced by the signature pages of
this Agreement) or which may from time to time become a party hereto as a lender
or any successor thereof or assignee thereof pursuant to Section 12.8
(individually, a "Lender" and, collectively, the "Lenders"), and BANK OF
AMERICA, NATIONAL ASSOCIATION, a national banking association, as agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"Agent").
RECITALS:
A. The Borrower desires to obtain revolving loan facilities to finance
certain of its general corporate expenses and provide working capital in the
ordinary course of the Borrower's business.
B. The Lenders desire to provide such loan facilities with the assistance
of the Agent upon and subject to the terms and provisions contained in this
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto hereby agree as follows:
ARTICLE 1
Definitions
Section 1.1 Definitions. As used in this Agreement, the following terms
shall have the following meanings:
"Additional Costs" has the meaning specified in Section 4.1(a).
"Adjusted Federal Funds Rate" means, for any Fed Funds Rate Loan, the rate
per annum (rounded upwards, if necessary, to the nearest 1/16 of one percent
(1.00%)) determined by the Agent to be equal to the quotient obtained by
dividing (a) the Federal Funds Rate for such Fed Funds Rate Loan by (b) one (1)
minus the Reserve Requirement for such Fed Funds Rate Loan.
"Adjusted Libor Rate" means, for any Libor Rate Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of one percent (1.00%)) determined by the Agent to be equal to the
quotient obtained by dividing (a) the Libor Rate for such Libor Rate Loan for
such Interest Period by (b) one (1) minus the Reserve Requirement for such Libor
Rate Loan for such Interest Period.
"Adjusted Net Income" means, as to any Person (the "subject Person") and
its Consolidated Subsidiaries and for any period, Net Income less the following
(without duplication)
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to the extent that any of the following shall have been included in Net Income
for such period: (a) any net gain (or plus any loss) arising from the sale of
any property, plant, or equipment; (b) any net gain (or plus any loss) arising
from any write-up or write-down of assets; excluding, however, the effect of any
adjustment to the LIFO Reserve; (c) earnings or losses of any other Person,
substantially all of the assets of which have been acquired by the subject
Person or a Consolidated Subsidiary of the subject Person in any manner, to the
extent that such earnings or losses were realized by such other Person prior to
the date of such acquisition; (d) earnings or losses of any Person (other than a
Consolidated Subsidiary of the subject Person) in which the subject Person or a
Consolidated Subsidiary of the subject Person has an ownership interest, unless
such earnings have actually been received by the subject Person or such
Consolidated Subsidiary in the form of cash distributions; and (e) any net gain
or loss arising from the acquisition of any securities of the subject Person or
a Consolidated Subsidiary of the subject Person.
"Affiliate" means, as to any Person (the "subject Person"), any other
Person (a) that directly or indirectly, through one or more intermediaries,
controls or is controlled by, or is under direct or indirect common control
with, the subject Person, (b) that directly or indirectly beneficially owns or
holds ten percent (10.0%) or more of any class of Capital Stock of the subject
Person, or (c) ten percent (10.0%) or more of the Capital Stock of which is
directly or indirectly beneficially owned or held by the subject Person. For
the purposes of this definition, "control" when used with respect to any Person
means the possession, directly or indirectly, of the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of Capital Stock, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of the Loan Documents, neither the Agent, the Issuing Bank, nor any
Lender shall be deemed to be an Affiliate of the Borrower or any Affiliate of
the Borrower.
"Agent" has the meaning specified in the introductory paragraph of this
Agreement.
"Aggregate Commitments" means, as to all Lenders, the Revolving Loans A
Commitments and the Revolving Loans B Commitments.
"Agreement" means this Credit Agreement and any and all amendments,
restatements, or other modifications hereto.
"Applicable Lending Office" means, for each Lender and each Type of Loan,
the lending office of such Lender (or an Affiliate of such Lender) designated
for such Type of Loan below its name on the signature pages hereof (or, with
respect to a Lender that becomes a party to this Agreement pursuant to an
assignment made in accordance with Section 12.8, in the Assignment and
Acceptance executed by it) or such other office of such Lender (or an Affiliate
of such Lender) as such Lender may from time to time specify to the Borrower and
the Agent by written notice in accordance with the terms hereof as the office by
which such Lender's Loans of such Type are to be made and maintained.
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"Applicable Margin" means (a) with respect to the Revolving Loans A, as of
the Closing Date, one and one-half percent (1.50%) per annum with respect to
Libor Rate Loans and zero percent (0.00%) per annum with respect to Prime Rate
Loans, subject to adjustment in the case of Libor Rate Loans from time to time
as set forth in the next succeeding sentence to the percentage specified
corresponding to the Debt Ratio as set forth in the table below, respectively,
and (b) with respect to the Revolving Loans B, as of the Closing Date and
thereafter, one percent (1.00%) per annum with respect to Fed Funds Rate Loans
and zero percent (0.00%) per annum with respect to Prime Rate Loans.
Applicable Margin on
Debt Ratio Libor Rate Loans
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Greater than 3.00 to 1.00 1.75%
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Less than or equal to 3.00 to 1.00 but greater than 1.50%
2.00 to 1.00
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Less than or equal to 2.00 to 1.00 but greater than 1.25%
1.00 to 1.00
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Less than or equal to 1.00 to 1.00 1.00%
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For the purpose of determining the Applicable Margin, the Debt Ratio shall be
determined based upon the Borrower's financial statements for each respective
fiscal quarter end, commencing with the fiscal quarter ending December 31, 1999,
delivered to the Agent as required by Section 7.l(a) (with respect to the
Borrower's fiscal quarter ending December 31 of each year) and Section 7.1(b)
(with respect to the Borrower's fiscal quarters ending March 31, June 30, and
September 30 of each fiscal year), and any resulting change, if any, in the
Applicable Margin shall become effective on the first day of the calendar month
following the calendar month in which such financial statements and the required
Compliance Certificate are delivered to the Agent, and, with respect to any
Libor Loans outstanding on the effective date of such change, on the date any
Libor Rate Loan is made, Continued, or Converted, as the case may be.
"Asset Disposition" means, with respect to any Person, the disposition,
whether a sale (including, without limitation, any sale/lease-back arrangement),
lease, assignment, transfer, or other voluntary disposition of any asset of such
Person (including, without limitation, the sale or other disposition of any
Capital Stock of any Subsidiary of such Person but excludes any such transaction
among any of the Related Parties) other than (a) sales of inventory in the
ordinary course of business, (b) sales of equipment that is obsolete or no
longer useful in the business of such Person, (c) dispositions of equipment if
and to the extent that the equipment disposed of is, concurrently therewith,
exchanged or replaced by equipment of equal or greater value, and (d) any
involuntary disposition resulting from casualty damage to Property.
"Assignee" has the meaning specified in Section 12.8(b).
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"Assigning Lender" has the meaning specified in Section 12.8(b).
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and its Assignee, in substantially the form of Exhibit A.
"Bank of America" means Bank of America, National Association, and its
successors and assigns (other than Assignees pursuant to Section 12.8), acting
in its individual capacity; provided that, when used in any context with respect
to the Revolving Loans B, "Bank of America" means Bank of America, National
Association, and its successors and assigns (including, without limitation, any
such assigns pursuant to Section 12.8(h).
"Bankruptcy Code" has the meaning specified in Section 10.1(e).
"Board of Directors" means (a) with respect to any Person which is a
corporation, the board of directors of such Person and (b) with respect to any
Person which is not a corporation, an analogous body, officer or representative
of such Person which is the functional equivalent of the board of directors of a
corporation and which has the power and authority to authorize and effectuate
the execution, delivery, and performance of agreements, documents, and
instruments on behalf of such Person and to take other actions to on behalf of
such Person.
"Borrower" has the meaning specified in the introductory paragraph of this
Agreement.
"Business Day" means (a) any day excluding Saturday, Sunday, and any day
which either is a legal holiday under the laws of the State of Texas or the
State of North Carolina or is a day on which banking institutions located in
Texas or North Carolina are closed, and (b) with respect to all borrowings,
payments, Conversions, Continuations, Interest Periods, and notices in
connection with Libor Rate Loans, any day which is a Business Day described in
clause (a) preceding and which is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"Capital Expenditures" means, for any period, all expenditures of the
Borrower and its Consolidated Subsidiaries which are classified as capital
expenditures in accordance with GAAP, including, without limitation, the
aggregate amount of all such expenditures incurred during such period which
constitute Capital Lease Obligations.
"Capital Lease" means any lease of property which, in accordance with GAAP,
should be reflected as a capital lease on a balance sheet.
"Capital Lease Obligations" means, as to any Person, the obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) real and/or personal Property, which obligations are
or would be classified as a capital lease on a balance sheet of such Person
under GAAP. For purposes of this Agreement, the amount of such Capital Lease
Obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
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"Capital Stock" means corporate stock and any and all securities, shares,
partnership interests (whether general, limited, special, or other partnership
interests), limited liability company interests, membership interests, equity
interests, participations, rights, or other equivalents (however designated) of
corporate stock or any of the foregoing issued by any entity (whether a
corporation, a partnership, a limited liability company, or another entity) and
includes, without limitation, securities convertible into Capital Stock and
rights, warrants, or options to acquire Capital Stock.
"Change in Control" means the occurrence of any event where any Person, or
two or more Persons acting as a group (as defined in Section 13d-3 of the
Exchange Act), shall have acquired beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Exchange Act) of
fifty-one percent (51.0%) or more of the outstanding shares of Voting Stock of
the Borrower.
"Closing Date" means February 28, 2000, the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"Commitment" means, as to any Lender other than Bank of America, such
Lender's Revolving Loans A Commitment, and means, as to Bank of America, Bank of
America's Revolving Loans A Commitment or Revolving Loans B Commitment (as
applicable based upon the context in which such term is used), and "Commitments"
means, as to any one or more of the Lenders, such Lender's or Lenders' (as
applicable based upon the context in which such term is used) Revolving Loans A
Commitment(s) and Revolving Loans B Commitment, collectively.
"Commitment Percentage" means, as to any Lender and as to the Revolving
Loans A Commitments, the Revolving Loans B Commitment, or the Aggregate
Commitments (as applicable based upon the context in which such term is used),
the percentage equivalent of a fraction, the numerator of which is the amount of
the outstanding Revolving Loans A Commitment, Revolving Loans B Commitment, or
Aggregate Commitments (as applicable) of such Lender (or if such applicable
Commitment has terminated or expired, the outstanding principal amount of the
Revolving Loans A plus the Letter of Credit Liabilities, the Revolving Loans B,
or the Loans plus the Letter of Credit Liabilities, respectively, of such
Lender) and the denominator of which is the aggregate amount of the outstanding
Revolving Loans A Commitments, Revolving Loans B Commitment, or Aggregate
Commitments (as applicable) of all Lenders (or if such applicable Commitments
have terminated or expired, the aggregate outstanding principal amount of the
Revolving Loans A plus the Letter of Credit Liabilities, the Revolving Loans B,
or the Loans plus the Letter of Credit Liabilities, respectively, of all
Lenders), as adjusted from time to time in accordance with Section 12.8.
"Compliance Certificate" has the meaning specified in Section 7.1(c).
5
"Consolidated Subsidiary" means, with respect to any Person, any Subsidiary
of such Person the financial attributes of which are or would be consolidated
with those of such Person in the consolidated financial statements of such
Person in accordance with GAAP.
"Continue", "Continuation", and "Continued" shall refer to the continuation
pursuant to Section 2.6 of a Libor Rate Loan as a Libor Rate Loan from one
Interest Period to the next Interest Period.
"Contract Rate" has the meaning specified in Section 12.12(a).
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.6 or Article 4 of one Type of Loan into the other Type of
Loan.
"Current Date" means (a) a date occurring no more than thirty (30) days
prior to the Closing Date or other relevant date as may be specified herein (as
applicable) or (b) such earlier date which is acceptable to the Agent.
"Debt" means as to any Person at any time (without duplication): (a) all
indebtedness, liabilities, and obligations of such Person for borrowed money;
(b) all indebtedness, liabilities, and obligations of such Person evidenced by
bonds, notes, debentures, or other similar instruments; (c) all Capital Lease
Obligations of such Person; (d) all indebtedness, liabilities, and obligations
of such Person to pay the deferred purchase price of Property or services,
except trade accounts payable of such Person arising in the ordinary course of
business that are not past due by more than ninety (90) days; (e) all Debt of
others Guaranteed by such Person; (f) all indebtedness, liabilities, and
obligations secured by a Lien (other than a Lien of the type specified in any of
clause (c), (d), (e), (f), or (g) of the definition of Permitted Liens) existing
on Property owned by such Person, whether or not the indebtedness, liabilities,
or obligations secured thereby have been assumed by such Person or are non-
recourse to such Person; (g) all reimbursement obligations of such Person
(whether contingent or otherwise) in respect of letters of credit, bankers'
acceptances, surety or other bonds, and similar instruments; (h) all
indebtedness, liabilities, and obligations of such Person to redeem or retire
shares of Capital Stock of such Person; provided that the holder(s) of such
shares of Capital Stock shall currently hold the right to redeem or retire such
shares of Capital Stock in cash; (i) all indebtedness, liabilities, and
obligations of such Person under Interest Rate Protection Agreements; and (j)
all indebtedness, liabilities, and obligations of such Person in respect of
unfunded vested benefits under any pension plans, including, without limitation
of the Borrower under any Pension Plan.
"Debt Ratio" means, as of any period end and determined on a consolidated
basis for the Borrower and its Subsidiaries, the ratio of (a) Funded Debt to (b)
EBITDA for the preceding four fiscal quarters; provided that for the fiscal
quarters ending December 31, 1999, March 31, 2000, and June 30, 2000, such
calculation shall be annualized for the number of months elapsed since
September 30, 1999.
6
"Default" means an event or condition which with notice or lapse of time or
both would become an Event of Default.
"Default Rate" means, in respect of any principal of any Loan or
Reimbursement Obligation, or any other amount payable by the Borrower under any
Loan Document, a rate per annum equal to the lesser of (a) the sum of two
percent (2.00%) plus the Prime Rate as in effect from time to time plus the
Applicable Margin for Prime Rate Loans or (b) the Maximum Rate; provided,
however, that if such amount in default is principal of a Libor Rate Loan and
the due date is a day other than the last day of an Interest Period therefor,
the "Default Rate" for such principal shall be, for the period from and
including the due date and to but excluding the last day of the Interest Period
therefor, the lesser of the rate per annum equal to (i) the sum of two percent
(2.00%) plus the interest rate for such Libor Rate Loan for such Interest Period
as provided in clause (ii) of Section 2.4(a) hereof or (ii) the Maximum Rate
and, thereafter, the rate provided for above in this definition.
"Dollars" and "$" mean lawful money of the U.S.
"EBITDA" means, as to any Person and its Consolidated Subsidiaries and for
any period, without duplication, the sum of the following for such Persons for
such period determined on a consolidated basis in accordance with GAAP without
taking into effect any change or other adjustment to the amount of the LIFO
Reserve: (a) Adjusted Net Income, plus (b) Interest Expense, plus (c) income and
franchise taxes to the extent deducted in determining Adjusted Net Income, plus
(d) depreciation and amortization expense to the extent deducted in determining
Adjusted Net Income.
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender or,
with respect to any Lender that is a fund that invests in bank loans, any other
fund that invests in bank loans and is managed by the same investment advisor as
such Lender (herein a "Related Fund"), and (c) any other Person approved by the
Agent and, unless an Event of Default has occurred and is continuing at the time
any assignment is effected in accordance with Section 12.8, the Borrower, such
approval not to be unreasonably withheld, conditioned, or delayed by the
Borrower and such approval to be deemed given by the Borrower if no objection is
received by the assigning Lender and the Agent from the Borrower within thirty
(30) Business Days after notice of such proposed assignment has been provided by
the assigning Lender to the Agent and the Borrower; provided, however, that no
Affiliate of the Borrower shall qualify as an Eligible Assignee).
"Environmental Law" means any federal, state, provincial, local, or foreign
law, statute, code, or ordinance, principle of common law, rule, or regulation,
as well as any License, order, decree, judgment, or injunction issued,
promulgated, approved, or entered thereunder, relating to pollution or the
protection, cleanup, or restoration of the environment or natural resources, or
to the public health or safety, or otherwise governing the generation, use,
handling, collection, treatment, storage, transportation, recovery, recycling,
discharge, or disposal of Hazardous Materials, including, without limitation as
to U.S. laws, the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, 42 U.S.C. *(S)9601 et seq., the Superfund Amendment and
Reauthorization Act of 1986, 99-499, 100 Stat. 1613, the Resource Conservation
and Recovery Act of 1976, 42 U. S. C. *(S)6901 et seq., the Occupational Safety
and Health Act, 29 U S.C. *(S)651 et seq., the Clean Air Act,
7
42 U.S.C. *(S)7401 et seq., the Clean Water Act, 33 U. S. C. *(S)1251 et seq.,
the Emergency Planning and Community Right to Know Act, 42 U. S. C. *(S)11001
et seq., the Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C.
*(S)136 et seq., and the Toxic Substances Control Act, 15 U.S.C. *(S)2601
et seq., and any state or local counterparts.
"Environmental Liabilities" means, as to any Person, all liabilities,
obligations, responsibilities, Remedial Actions, losses, damages, punitive
damages, consequential damages, treble damages, costs and expenses (including,
without limitation, all reasonable fees, disbursements, and expenses of counsel,
expert and consulting fees, and costs of investigation and feasibility studies),
fines, penalties, sanctions, and interest incurred as a result of any claim or
demand, by any Person, whether based in contract, tort, implied or express
warranty, strict liability, or criminal, penal or civil statute, including,
without limitation, any Environmental Law, License, order, or agreement with any
Governmental Authority or other Person, arising from environmental, health, or
safety conditions or the Release or threatened Release of a Hazardous Material
into the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published interpretations
thereunder.
"ERISA Affiliate" means any corporation or trade or business which is a
member of a group of entities, organizations, or employers of which the Borrower
is also a member and which is treated as a single employer within the meaning of
Sections 414(b), (c), (m), or (o) of the Code.
"Event of Default" has the meaning specified in Section 10.1.
"Exchange Act" means the Securities Exchange Act of 1934, as amended (or
any successor act), and the rules and regulations thereunder (or respective
successors thereto).
"Fed Funds Rate Loans" means Loans made by Bank of America pursuant to
Section 2.1(b) that bear interest at rates based upon the Adjusted Federal Funds
Rate.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest one-sixteenth of one percent (1/16 of 1%))
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published by the Federal Reserve Bank of New York
on the Business Day next succeeding such day; provided that (a) if the day for
which such rate is to be determined is not a Business Day, the Federal Funds
Rate for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b) if
such rate is not so published on such next succeeding Business Day, the Federal
Funds Rate for day shall be the average rate which would be charged to Bank of
America (in its individual capacity) on such day on such transactions as
determined by Bank of America.
"Funded Debt" means Debt described in clauses (a) through (c) of the
definition of Debt; provided that Funded Debt shall not include the Debt
evidenced by the Xxxxxx Notes, such Debt having been incurred by the Borrower in
connection with the acquisition of all of the issued and
8
outstanding common stock of Xxxxxx Xxx Xxxxxxxx of Texas, Inc. and being secured
by escrowed cash or cash equivalents with Chase Bank of Texas, N.A., as escrow
agent.
"GAAP" means generally accepted accounting principles, as in effect from
time to time, applied on a consistent basis, as set forth in Opinions of the
Accounting Principles Board of the American Institute of Certified Public
Accountants and/or in statements of the Financial Accounting Standards Board
and/or their respective successors and which are applicable in the circumstances
as of the date in question. Accounting principles are applied on a "consistent
basis" when the accounting principles applied in a current period are comparable
in all material respects to those accounting principles applied in a preceding
period (subject to changes in GAAP as determined from time to time by the
Accounting Principles Board of the American Institute of Certified Public
Accountants and/or the Financial Accounting Standards Board).
"Governmental Authority" means any nation or government, any state,
provincial, or political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory, or administrative functions of or
pertaining to government.
"Governmental Requirement" means any law, statute, code, ordinance, order,
rule, regulation, judgment, decree, injunction, franchise, License, or other
directive or requirement of any Governmental Authority.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt or other obligation of
any other Person and, without limiting the generality of the foregoing, any
indebtedness, liability, or obligation, direct or indirect, contingent or
otherwise, of such Person (a) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Debt or other obligation (whether arising by
virtue of partnership arrangements, by agreement to keep-well, to purchase
assets, goods, securities, or services, to take-or-pay or to maintain financial
statement conditions, or otherwise) or (b) entered into for the purpose of
assuring in any other manner the obligee of such Debt or other indebtedness,
liability, or obligation as to the payment thereof or to protect the obligee
against loss in respect thereof (in whole or in part), provided that the term
"Guarantee" shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Guarantee" used as a verb has a
corresponding meaning. The amount of any Guarantee shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Guarantee is made or, if not stated or determinable, the
maximum anticipated liability in respect thereof (assuming such Person is
required to perform thereunder).
"Hazardous Material" means any substance, product, liquid, waste,
pollutant, chemical, contaminant, insecticide, pesticide, gaseous or solid
matter, organic or inorganic matter, fuel, micro-organisms, ray, odor,
radiation, energy, vector, plasma, constituent, or material which (a) is or
becomes listed, regulated or addressed under any Environmental Law or (b) is, or
is deemed to be, alone or in any combination, hazardous, hazardous waste, toxic,
a pollutant, a deleterious substance, a contaminant, or a source of pollution or
contamination under any Environmental Law, including, without limitation,
asbestos, petroleum, underground storage tanks (whether empty or containing any
substance), and polychlorinated biphenyls.
9
"Intellectual Property" means any U.S. or foreign patents, patent
applications, trademarks, trade names, service marks, brand names, logos and
other trade designations (including, without limitation, unregistered names and
marks), trademark and service xxxx registrations and applications, copyrights
and copyright registrations and applications, inventions, invention disclosures,
protected formulae, formulations, processes, methods, trade secrets, computer
software, computer programs and source codes, manufacturing research and similar
technical information, engineering know-how, customer and supplier information,
assembly and test data drawings, or royalty rights.
"Interest Coverage Ratio" means, for any period, the ratio of the
Borrower's and its Consolidated Subsidiaries' (a) (i) Adjusted Net Income, plus
(ii) Interest Expense, plus (iii) income and franchise taxes to the extent
deducted in determining Adjusted Net Income to (b) Interest Expense; each such
component to be determined on a consolidated basis in accordance with GAAP;
provided that for the fiscal quarters ending March 31, 2000, June 30, 2000, and
September 30, 2000, such calculation shall be annualized for the number of
months elapsed since December 31, 1999, and thereafter shall be calculated as of
the end of each fiscal quarter for the preceding four (4) consecutive fiscal
quarters.
"Interest Expense" means, as to any Person and its Consolidated
Subsidiaries and for any period, and without duplication, all interest on Debt
of such Persons determined in accordance with GAAP, including, without
limitation, the interest portion of payments in respect of Capital Lease
Obligations.
"Interest Period" means, with respect to any Libor Rate Loan, each period
commencing on the date such Loan is made or Converted from a Prime Rate Loan or
(if Continued) the last day of the next preceding Interest Period with respect
to such Loan, and ending on the numerically corresponding day in the first,
second, third, or sixth calendar month thereafter, as the Borrower may select as
provided in Section 2.9, except that each such Interest Period which commences
on the last Business Day of a calendar month (or on any day for which there is
no numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) each Interest Period which would otherwise
end on a day which is not a Business Day shall end on the next succeeding
Business Day (or, if such succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); (b) any Interest Period
which would otherwise extend beyond the Maturity Date shall end on the Maturity
Date; (c) no more than six (6) Interest Periods for Libor Rate Loans shall be in
effect at the same time; and (d) no Interest Period shall have a duration of
less than one month and, if the Interest Period for any Libor Rate Loans would
otherwise be a shorter period, such Libor Rate Loans shall not be available
hereunder.
"Interest Rate Protection Agreement" means, with respect to the Borrower,
an interest rate swap, cap, collar agreement, or other similar arrangement
between the Borrower and one or more counterparties providing for the transfer
or mitigation of interest rate risks either generally or under specified
contingencies.
10
"Issuing Bank" means Bank of America or such other Lender which is a
commercial bank as the Borrower and Bank of America may mutually designate from
time to time which agrees to be the issuer of a Letter of Credit.
"Lender" and "Lenders" have the meanings specified in the introductory
paragraph of this Agreement.
"Letter of Credit" has the meaning specified in Section 2.14.
"Letter or Credit Agreement" means, with respect to each Letter of Credit
to be issued by the Issuing Bank, the letter of credit application and
reimbursement agreement which such Issuing Bank requires to be executed by the
Borrower in connection with the issuance of such Letter of Credit.
"Letter of Credit Liabilities" means, at any time, the sum of (a) the
aggregate undrawn face amount of all outstanding Letters of Credit, plus (b) all
unreimbursed drawings under Letters of Credit.
"Leverage Ratio" means, as of any period end for the Borrower and its
Consolidated Subsidiaries determined according to GAAP, the ratio of (a) total
liabilities to (b) Tangible Net Worth.
"Libor Rate" means, for any Libor Account for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of one
percent (1.00%)) appearing on Telerate (formerly known as Dow Xxxxx Markets)
Page 3750 (or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period. If the Agent is unable to obtain any quotation as
provided above, the term "Libor Rate" shall mean, for any Libor Account for any
Interest Period therefor, the rate of interest per annum determined by Agent to
be the rate at which Dollar deposits in the approximate amount of the applicable
borrowing, Conversion, or Continuation of such Libor Account and having a
maturity comparable to such Interest Period would be offered by Bank of America
to major banks in the London interbank market at their request at approximately
11:00 a.m. (London time) two (2) Business Days prior to the commencement of such
Interest Period.
"Libor Rate Loans" means Loans that bear interest at rates based upon the
Libor Rate or the Adjusted Libor Rate.
"License" means any consent, permit, franchise, certificate, approval,
order, license, right-of-way (whether an easement, contract, or agreement in any
form), or other authorization.
"Lien" means, with respect to any Property, any mortgage or deed of trust,
pledge, hypothecation, assignment, deposit arrangement, security interest, tax
lien, financing statement, pledge, charge, hypothecation, or other lien, charge,
easement (other than any easement not
11
materially impairing usefulness), encumbrance, or other security agreement or
preferential arrangement of any kind or nature whatsoever on or with respect to
such Property (including, without limitation, any conditional sale or other
title retention agreement having substantially the same economic effect as any
of the foregoing). Notwithstanding the foregoing, a negative pledge shall not
constitute a Lien.
"LIFO Reserve" means, at any time, the cumulative reserve which appears on
the Borrower's consolidated financial statements resulting from adjustments to
state inventory at an amount determined on a last-in, first-out basis or at fair
market value, in accordance with GAAP.
"Loan Documents" means this Agreement, the Notes, the Letter of Credit
Agreements, and all other agreements, documents, instruments, and certificates
now or hereafter executed and/or delivered pursuant to or in connection with any
of the foregoing (excluding any commitment letter, term sheet, or other
agreement entered into prior to the Closing Date), and any and all amendments,
restatements, or other modifications thereof.
"Loans" means the Revolving Loans A and the Revolving Loans B, and "Loan"
means any of such Loans.
"Material Adverse Effect" means any event, development, or circumstance
that has had or could reasonably be expected to have a material adverse effect
on (a) the business, assets, financial condition, results of operations, or
prospects of the Borrower individually or of the Borrower and its Subsidiaries
taken as a whole, (b) the validity or enforceability of any of the Loan
Documents or the rights and/or remedies of the Agent and/or the Lenders
thereunder, or (c) the ability of the Borrower to pay and perform its
indebtedness, liabilities, and/or obligations under any of the Loan Documents.
"Maturity Date" means (a) with respect to the Revolving Loans A, September
1, 2002, and (b) with respect to the Revolving Loans B, the earlier to occur of
(i) September 1, 2002, or (ii) the date on which Bank of America makes demand
for payment in full of the outstanding balance of the Revolving Loans B.
"Maximum Rate" means, at any time and with respect to any Lender, the
maximum non-usurious interest rate or an amount computed in reference to such
rate (as applicable), if any, that any time or from time to time may be
contracted for, taken, reserved, charged, or received with respect to the
particular Obligations as to which such rate is to be determined, payable to
such Lender pursuant to this Agreement or any other Loan Document, under laws
applicable to such Lender which are presently in effect or, to the extent
allowed by law, under such applicable laws which may hereafter be in effect and
which allow a higher maximum non-usurious interest rate than applicable laws now
allow. The Maximum Rate shall be calculated in a manner that takes into account
any and all fees, payments and other charges in respect of the Loan Documents
that constitute interest under applicable law. Each change in any interest rate
provided for herein based upon the Maximum Rate resulting from a change in the
Maximum Rate shall take effect without notice to the Borrower at the time of
such change in the Maximum Rate. For purposes of determining the Maximum Rate
under
12
Texas law, the applicable rate ceiling shall be (a) the "weekly ceiling"
described in and computed in accordance with the provisions of Section 303.003
of the Texas Finance Code, as amended or (b) if the parties subsequently
contract as allowed by Texas law, the quarterly ceiling or the annualized
ceiling computed pursuant to Section 303.008 of the Texas Finance Code, as
amended; provided, however, that at any time the "weekly ceiling", the quarterly
ceiling or the annualized ceiling shall be less than 18% per annum or more than
24% per annum, the provisions of Section 303.009(a) and Section 303.009(b) of
the Texas Finance Code, as amended, shall control for purposes of such
determination, as applicable.
"Monthly Date" means the first day of each calendar month, the first of
which shall be January 1, 2000.
"Multiemployer Plan" means a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by or are required
from the Borrower or any ERISA Affiliate since 1974 and which is covered by
Title IV of ERISA.
"Net Income" means, as to any Person and its Consolidated Subsidiaries and
for any period, the net income (or loss) of such Persons for such period,
determined on a consolidated basis in accordance with GAAP.
"Notes" means the Revolving Notes A and the Revolving Note B, and "Note"
means any of such promissory notes.
"Notice of Borrowing" has the meaning specified in Section 2.9.
"Obligations" means any and all (a) indebtedness, liabilities, and
obligations of the Borrower to the Agent and the Lenders, or any of them,
evidenced by and/or arising pursuant to any of the Loan Documents (including,
without limitation, this Agreement and the Notes), now existing or hereafter
arising, whether direct, indirect, related, unrelated, fixed, contingent,
liquidated, unliquidated, joint, several, or joint and several, including,
without limitation, (i) the obligations of the Borrower to repay the Loans, the
Reimbursement Obligations, to pay interest on the Loans and the Reimbursement
Obligations (including, without limitation, interest accruing after any, if any,
bankruptcy, insolvency, reorganization, or other similar filing) and to pay all
fees, indemnities, costs, and expenses (including, without limitation,
reasonable attorneys' fees) provided for in the Loan Documents and (ii) the
indebtedness constituting the Loans and such interest, fees, indemnities, costs,
and expenses, and (b) indebtedness, liabilities, and obligations of the Borrower
under any and all Interest Rate Protection Agreements that it may enter into
with any Lender with the written consent of the Agent and the Required Lenders.
"Payor" has the meaning specified in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
13
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA (including a Multiemployer Plan) which is subject to the
funding requirements under Section 302 of ERISA or Section 412 of the Code, in
whole or in part, and which is maintained or contributed to currently or at any
time within the six (6) years immediately preceding the Closing Date or, in the
case of a Multiemployer Plan, at any time since September 2, 1974, by the
Borrower or any ERISA Affiliate for employees of the Borrower or any ERISA
Affiliate.
"Permitted Liens" mean:
(a) Liens disclosed on Schedule 1.1;
(b) Liens (if any) securing the Obligations in favor of the Agent (for
the benefit of the Agent and the Lenders) pursuant to the Loan Documents;
(c) encumbrances consisting of easements, rights-of-way, zoning
restrictions, or other restrictions on the use of real Property or
imperfections to title that do not (individually or in the aggregate)
materially affect the value of the Property encumbered thereby or
materially impair the ability of the owner thereof to use such Property in
its business, and none of which is violated in any material respect by
existing or proposed structures or land use;
(d) Liens for taxes, assessments, or other governmental charges that
are not delinquent or which are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the Property subject to such Liens, and for which
adequate reserves (as determined in accordance with GAAP) have been
established;
(e) Liens of mechanics, materialmen, warehousemen, carriers,
landlords, or other similar statutory Liens securing obligations that are
not yet due and are incurred in the ordinary course of business or which
are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
Property subject to such Liens, and for which adequate reserves (as
determined in accordance with GAAP) have been established;
(f) rights of set-off and similar rights of parties to which Debt is
owed or to which other obligations otherwise permitted under this Agreement
are outstanding;
(g) Liens resulting from good faith deposits to secure payment of
worker's compensation or other social security programs or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, contracts (other than for payment of Debt), or leases, all in the
ordinary course of business;
(h) Liens for purchase money obligations and Liens for Capital Lease
Obligations; provided that (i) the Debt secured by any such Lien is
permitted under
14
Section 8.1(e) and (ii) any such Lien encumbers only the Property so
purchased or leased; and
(i) any extension, renewal, or replacement of any of the foregoing
Permitted Liens, provided that Liens permitted under this clause (i) shall
not be extended or spread to cover any additional indebtedness or Property.
"Person" means any individual, corporation, trust, association, company,
partnership, joint venture, limited liability company, joint stock company,
Governmental Authority, or other entity.
"Plan" means any employee benefit plan as defined in Section 3(3) of ERISA
established or maintained or contributed to by the Borrower or any ERISA
Affiliate, including any Pension Plan.
"Prime Rate" means, for any day, the per annum rate of interest established
from time to time by Bank of America as its prime rate or reference rate, which
rate may not be the lowest rate of interest charged by Bank of America to its
customers. Any change in the Prime Rate shall be effective on the effective
date of such change.
"Prime Rate Loans" means Loans that bear interest at rates based upon the
Prime Rate.
"Principal Office" means the office of the Agent in Tyler, Texas, presently
located at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxx, Xxxxx 00000.
"Prohibited Transaction" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code.
"Property" means property and/or assets of all kinds, whether real,
personal, or mixed, tangible or intangible (including, without limitation, all
rights relating thereto), whether owned or acquired on or after the Closing
Date.
"Quarterly Date" means the first day of each March, June, September, and
December of each year, the first of which shall be March 1, 2000.
"Register" has the meaning specified in Section 12.8(d).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as the same may be amended, modified, or supplemented from time
to time or any successor regulation therefor.
"Regulatory Change" means, with respect to any Lender, any change after the
Closing Date in any U.S. federal or state or foreign laws or regulations
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretations, directives, guidelines, or requests applying
to a class of lenders including such Lender of or under any U.S. federal or
state
15
or foreign laws or regulations (whether or not having the force of law) by any
Governmental Authority charged with the interpretation or administration
thereof.
"Reimbursement Obligations" means all indebtedness, liabilities, and
obligations of the Borrower to reimburse the Agent or the Issuing Bank in
accordance with Section 2.14(e) for any demand for payment or drawing under a
Letter of Credit.
"Related Party" means the Borrower or any Consolidated Subsidiary of the
Borrower, individually, and "Related Parties" means all of such Persons,
collectively.
"Release" means, as to any Person, any release, spill, emission, leaking,
pumping, injection, deposit, discharge, disposal, dispersement, leaching, or
migration of Hazardous Materials into the indoor or outdoor environment or into
or out of Property owned by such Person, including, without limitation, the
movement of Hazardous Materials through or in the air, soil, surface water, or
ground water.
"Remedial Action" means all actions required to (a) cleanup, remove,
respond to, treat, or otherwise address Hazardous Materials in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release of Hazardous Materials so that they do not migrate or
endanger or threaten to endanger public health or welfare or the indoor or
outdoor environment, (c) perform studies and investigations on the extent and
nature of any actual or suspected contamination, the remedy or remedies to be
used or health effects or risks of such contamination, or (d) perform post-
remedial monitoring, care, or remedy of a contaminated site.
"Reportable Event" means any of the events set forth in Section 4043(b) of
ERISA other than any such event for which the thirty (30) day notice requirement
has been waived in regulations issued by the PBGC.
"Required Lenders" means any combination of the Lenders having more than
sixty-six percent (66.0%) of the Commitments or, if the Commitments have
terminated or have otherwise been fulfilled, the outstanding principal amount of
the Loans and the Letter of Credit Liabilities.
"Required Payment" has the meaning specified in Section 3.4.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against, in the case of
Libor Rate Loans, "Eurocurrency Liabilities" (as such term is used in Regulation
D) or as may be required in connection with any Fed Funds Rate Loan. Without
limiting the effect of the foregoing, the Reserve Requirement shall reflect any
other reserves required to be maintained by such member banks with respect to
(a) any category of extensions of credit or other assets which include Libor
Rate Loans and Fed Funds Rate Loans. The Adjusted Libor Rate and the Adjusted
16
Federal Funds Rate each shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Responsible Officer" means, with respect to any Related Party, the chief
executive officer, the president, any vice president, the chief financial
officer, the chief operating officer, or the treasurer of such Person.
"Restricted Payment" means (a) any dividend or other distribution (whether
in cash, Property, or obligations), direct or indirect, on account of (or the
setting apart of money for a sinking or other analogous fund for) any shares of
any class of Capital Stock of the Borrower or any of its Subsidiaries now or
hereafter outstanding, except a dividend payable solely in shares of that class
of stock to the holders of that class, (b) any redemption, conversion, exchange,
retirement, sinking fund or similar payment, purchase, or other acquisition for
value, direct or indirect, of any shares of any class of Capital Stock of the
Borrower or any of its Subsidiaries now or hereafter outstanding, (c) any
payment made to retire, or to obtain the surrender of, any outstanding warrants,
options, or other rights to acquire shares of any class of Capital Stock of the
Borrower or any of its Subsidiaries now or hereafter outstanding.
"Revolving Loans A" has the meaning specified in Section 2.1(a).
"Revolving Loans B" has the meaning specified in Section 2.1(b).
"Revolving Loans A Commitment" means, as to any Lender, the obligation (if
any) of such Lender to make or continue Revolving Loans A and purchase
participation interests in (or with respect to the Issuing Bank as a Lender,
hold other interests in) Letters of Credit hereunder in an aggregate principal
amount up to but not exceeding the amount set forth opposite the name of such
Lender on the signature pages hereto under the heading "Revolving Loans A
Commitment" or, if such Lender is a party to an Assignment and Acceptance, the
amount of the "Revolving Loans A Commitment" set forth in the most recent
Assignment and Acceptance of such Lender, as the same may be reduced or
terminated pursuant to Section 2.13 or Section 10.2, and "Revolving Loans A
Commitments" means such obligations of all Lenders. As of the Closing Date, the
aggregate principal amount of the Revolving Loans A Commitments is $20,000,000.
"Revolving Loans B Commitment" means the obligation (if any) of Bank of
America to make or continue Revolving Loans B hereunder in an aggregate
principal amount up to but not exceeding $5,000,000 or such amount as to which
such commitment may be reduced or terminated pursuant to Section 2.13 or
Section 10.2.
"Revolving Note B" means the promissory note in the form of Exhibit B-2
hereto made by the Borrower evidencing the Revolving Loans B and any and all
amendments, restatements, or other modifications thereto and all substitutions
thereto.
17
"Revolving Notes A" means the promissory notes in the form of Exhibit B-1
hereto made by the Borrower evidencing the Revolving Loans A and any and all
amendments, restatements, or other modifications thereof and all substitutions
therefor.
"Solvent" means, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the Property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations, and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature, and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's Property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.
"Subsidiary" means, with respect to any Person, any corporation or other
entity of which at least a majority of the outstanding shares of stock or other
ownership interests having by the terms thereof ordinary voting power to elect a
majority of the board of directors (or Persons performing similar functions) of
such corporation or entity (irrespective of whether or not at the time, in the
case of a corporation, stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or controlled by such
Person or one or more of its Subsidiaries or by such Person and one or more of
its Subsidiaries.
"Tangible Net Worth" means the Borrower's and its Consolidated
Subsidiaries' total shareholders' equity (including, without limitation, capital
stock, additional paid-in-capital, and retained earnings, after deducting any
treasury stock) which would appear on a balance sheet of the Borrower prepared
in accordance with GAAP, minus goodwill and other intangible assets.
"Type" means any type of Loan (i.e., a Prime Rate Loan, a Fed Funds Rate
Loan, or a Libor Rate Loan).
"UCC" means the Uniform Commercial Code as in effect in the State of Texas.
"U.S." means the United States of America.
"Voting Stock" means Capital Stock of a Person having by the terms thereof
ordinary voting power to elect a majority of the board of directors, managers,
or general partners (or persons performing similar functions) of such Person
(irrespective of whether or not at the time Capital Stock
18
of any other class or classes of such Person shall have or might have voting
power by reason of the happening of any contingency).
"Wholly-Owned Subsidiary" means, with respect to any Person, a Subsidiary
of such Person all of whose outstanding Capital Stock (other than directors'
qualifying shares, if any) shall at the time be owned by such Person and/or one
or more of its Wholly-Owned Subsidiaries.
"Xxxxxx Notes" means, collectively, the promissory notes dated July 21,
1997, executed and delivered by the Borrower as follows: (a) $2,519,845 payable
to the order of Xxxxx X. Xxxxxx, Trustee; (b) $1,161,329 payable to the order of
Xxx X. Xxxxxx; and (c) $2,168,826 payable to the order of Xxxxxxx Xxxxxx.
"Year 2000 Compliant" has the meaning specified in Section 6.20.
"Year 2000 Problem" has the meaning specified in Section 6.20.
Section 1.2 Other Definitional Provisions. All definitions contained in
this Agreement are equally applicable to the singular and plural forms of the
terms defined. The words "hereof", "herein", and "hereunder" and words of
similar import referring to this Agreement refer to this Agreement as a whole
and not to any particular provision of this Agreement. The term "continuing",
"continuation", or "continuance" means, in reference to any Default or Event of
Default that has occurred, that such Default or Event of Default has not been
either cured to the reasonable satisfaction of the Agent within the applicable
grace period (if any) specified in this Agreement or the other Loan Documents
(as applicable) or waived in writing by the requisite Lenders in accordance with
Section 12.11. The term "pro rata" as it relates to the application of payments
to the Revolving Loans A means pro rata based upon the relative outstanding
principal amounts of such Loans. Unless otherwise specified, all Article and
Section references pertain to this Agreement. Terms used herein that are
defined in the UCC, unless otherwise defined herein, shall have the meanings
specified in the UCC. All references in this Agreement to any agreement shall
be deemed to mean and refer to such agreement as it may be amended, restated, or
otherwise modified from time to time if (but only if) such amendment,
restatement, or other modification has been approved by the Agent and the
requisite Lenders, is expressly referred to in such reference or is otherwise
expressly permitted by the terms of this Agreement.
Section 1.3 Accounting Terms and Determinations.
(a) Except as may be expressly provided herein to the contrary, (i)
all accounting terms (whether or not specifically defined herein) shall be
construed in accordance with GAAP (subject to year end adjustments, if
applicable) consistent with such accounting principles applied in the
preparation of the audited financial statements delivered from time to time
pursuant to Section 7.1(a), (ii) all financial statements delivered to the
Agent pursuant to Section 7.1(b) shall be prepared in accordance with GAAP
(subject to year end adjustments, if applicable), and (iii) with respect to
accounting terms or financial information defined or described in reference
to a Person and its Consolidated Subsidiaries, all such
19
terms and financial information shall be construed as applying to such
Person and its Consolidated Subsidiaries on a consolidated basis in
accordance with GAAP.
(b) The Borrower shall deliver to the Agent and the Lenders, at the
same time as the delivery of any annual or quarterly financial statement
under Section 7.1, (i) a description, in reasonable detail, of any material
variation between the application of GAAP employed in the preparation of
the next preceding annual or quarterly financial statements prepared in
accordance with Section 1.3(a) preceding as to which no objection has been
made by the Agent and (ii) reasonable estimates of the difference between
such statements arising as a consequence thereof.
(c) To enable the ready and consistent determination of compliance
with the covenants set forth in this Agreement, the Borrower will not
change the last day of its fiscal year from December 31 or the last days of
the first three fiscal quarters of the Borrower in each of its fiscal years
from March 31, June 30, and September 30, respectively.
Section 1.4 Financial Covenants and Reporting. All financial statements
and reports required to be delivered pursuant to this Agreement and the other
Loan Documents, and all financial covenants contained in this Agreement, shall
be prepared or determined (as applicable) in accordance with GAAP (except as may
be expressly provided to the contrary herein) and, if and to the extent that
such statements, reports, or covenants are to be prepared or determined on a
consolidated basis, shall be prepared or determined on a consolidated basis for
the Borrower and its Consolidated Subsidiaries except as may be expressly
provided to the contrary herein.
ARTICLE 2
Loans
Section 2.1 Commitments.
(a) Revolving Loans A. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 2.13(a)), each Lender
severally agrees to make one or more advances to the Borrower, from time to
time from and including the Closing Date to but excluding the applicable
Maturity Date of the Revolving Loans A, up to but not exceeding the amount
(if any) of such Lender's Revolving Loans A Commitment as then in effect
(such advances referred to in this Section 2.1(a) now or hereafter made by
the Lenders to the Borrower are hereinafter collectively called the
"Revolving Loans A"); provided, however, (i) with respect to any Lender at
any time, the aggregate amount of Revolving Loans A outstanding, plus the
aggregate amount of Letter of Credit Liabilities, each as applicable to
such Lender, shall not exceed such Lender's Revolving Loans A Commitment,
and (ii) with respect to all of the Lenders at any time, the aggregate
amount of Revolving Loans A outstanding, plus the aggregate amount of
Letter of Credit Liabilities shall not exceed the Revolving Loans A
Commitments.
20
(b) Revolving Loans B. Subject to the terms and conditions of this
Agreement (including, without limitation, Section 2.3(b) and Section
2.13(a)), Bank of America agrees to make one or more advances to the
Borrower, from time to time from and including the Closing Date to but
excluding the applicable Maturity Date of the Revolving Loans B, up to but
not exceeding the amount (if any) of the Revolving Loans B Commitment as
then in effect (such advances referred to in this Section 2.1(b) now or
hereafter made by Bank of America to the Borrower are hereinafter
collectively called the "Revolving Loans B"); provided, however, the
aggregate amount of Revolving Loans B outstanding at any time shall not
exceed the Revolving Loans B Commitment.
(c) Continuation and Conversion of Loans. Subject to the terms and
conditions of this Agreement, the Borrower may (i) borrow, prepay, and
reborrow the Revolving Loans A as Prime Rate Loans or Libor Rate Loans
and, until the applicable Maturity Date with respect to the Revolving Loans
A, the Borrower may Continue Libor Rate Loans or Convert Revolving Loans A
which are Libor Rate Loans into Prime Rate Loans or Convert Revolving Loans
A which are Prime Rate Loans into Libor Rate Loans and (ii) borrow, prepay,
and reborrow the Revolving Loans B as Prime Rate Loans or Fed Funds Rate
Loans and, until the applicable Maturity Date with respect to the Revolving
Loans B, the Borrower may Convert Revolving Loans B which are Fed Funds
Rate Loans into Prime Rate Loans or Convert Revolving Loans B which are
Prime Rate Loans into Fed Funds Rate Loans.
(d) Lending Offices. Loans of each Type made by each Lender shall be
made and maintained at such Lender's Applicable Lending Office for Loans of
such Type.
Section 2.2 Notes.
(a) Notes. Each of the Revolving Loans A made by each Lender and the
Revolving Loans B made by Bank of America shall be evidenced by a single
promissory note of the Borrower in substantially the form of Exhibit B-1
and Exhibit B-2, respectively, dated the Closing Date (or such appropriate
later date if such Lender is a party to an Assignment and Acceptance),
payable to the order of such Lender in a principal amount equal to (i) with
respect to the Revolving Loans A, the amount of the Revolving Loans A
Commitment of such Lender and (ii) with respect to the Revolving Loans B,
the amount of the Revolving Loans B Commitment, respectively, as originally
in effect and otherwise duly completed. Each Lender is hereby authorized
by the Borrower to endorse on the schedule (or a continuation thereof)
attached to the Note of such Lender, to the extent applicable, the date,
amount and Type of, and the Interest Period (as applicable) for each
applicable Loan made by such Lender to the Borrower and the amount of each
payment or prepayment of principal of such Loan received by such Lender;
provided that any failure by such Lender to make any such endorsement shall
not affect the obligations of the Borrower under any such Note or this
Agreement in respect of any such Loan.
Section 2.3 Repayment of Loans.
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(a) Repayment of Revolving Loans A. The Borrower shall pay to the
Agent for the account of each Revolving Loans A Lender all outstanding
principal of the Revolving Loans A (and all outstanding principal of the
Revolving Loans A shall be due and payable in full) on the Maturity Date
with respect to the Revolving Loans A.
(b) Repayment of Revolving Loans B. The Borrower shall pay to the
Agent for the account of Bank of America all outstanding principal of the
Revolving Loans B (and all outstanding principal of the Revolving Loans B
shall be due and payable in full) on the Maturity Date with respect to the
Revolving Loans B. Notwithstanding anything in this Agreement to the
contrary, the Borrower acknowledges and agrees that the Revolving Loans B
are payable, and the Revolving Loans B Commitment shall be terminated,
immediately on demand by either the Agent (on behalf of and at the
direction of Bank of America) or Bank of America and that the recitation of
the Events of Default herein is intended merely to provide examples of
events which may result in the Agent and/or Bank of America making demand
for payment of the Revolving Loans B and terminating the Revolving Loans B
Commitment. In no event shall a demand for payment or termination of the
Revolving Loans B be conditioned upon the existence or nonexistence of any
Default or Event of Default or upon any other circumstance, including the
imposition of any condition or duty such as a duty of good faith or a duty
to demand payment only upon the occurrence of a Default or Event of
Default. The Agent (on behalf of Bank of America) and/or Bank of America
shall be entitled to demand payment of all or any portion of the Revolving
Loans B, and/or terminate all or any portion of the Revolving Loans B
Commitment at any time and from time to time in their absolute discretion
and without prior notice to or consent of the Borrower.
Section 2.4 Interest.
(a) Interest Rate. The Borrower shall pay to the Agent, for the
account of each Lender, interest on the unpaid principal amount of each
Loan made by such Lender (or deemed made by such Lender with respect to a
Loan assigned to such Lender after the making of such Loan) to the Borrower
for the period commencing on the date of such Loan to, but excluding, the
date such Loan shall be paid in full, at the following rates per annum:
(i) during the periods such Loan is a Prime Rate Loan, the lesser
of (A) the Prime Rate plus the Applicable Margin or (B) the Maximum
Rate;
(ii) during the periods such Loan is a Libor Rate Loan, the
lesser of (A) the Adjusted Libor Rate plus the Applicable Margin or
(B) the Maximum Rate; and
(iii) during the periods such Loan is a Fed Funds Rate Loan, the
lesser of (A) the Adjusted Federal Funds Rate plus the Applicable
Margin or (B) the Maximum Rate.
22
(b) Payment Dates. Accrued interest on the Loans shall be due and
payable as follows:
(i) in the case of Prime Rate Loans and Fed Funds Rate Loans, on
each Monthly Date;
(ii) in the case of each Libor Rate Loan, on the last day of the
Interest Period with respect thereto and, in the case of an Interest
Period greater than three (3) months, at three (3) month intervals
after the first day of such Interest Period;
(iii) upon the payment or prepayment (whether mandatory or
optional) of any Libor Rate Loan or the Conversion of any Libor Rate
Loan to a Loan of another Type (but only on the principal amount so
paid, prepaid, or Converted); and
(iv) with respect to all Loans, on the Maturity Date with respect
to such Loans.
(c) Default Interest. Notwithstanding the foregoing, if the Required
Lenders in their discretion elect, after notice to the Borrower and during
the existence of an Event of Default, (i) the Borrower shall pay to the
Agent, for the account of each Lender, interest at the applicable Default
Rate on any principal of any Loan made by such Lender and any Reimbursement
Obligation outstanding, and (ii) to the fullest extent permitted by law,
the Borrower shall pay to the Agent, for the account of the Agent and each
Lender, as applicable, interest at the applicable Default Rate on any other
amount payable by the Borrower under any Loan Document which is not paid in
full when due (whether at stated maturity, by acceleration, or otherwise)
for the period from and including the due date thereof to but excluding the
date the same is paid in full. Interest accrued and payable at the Default
Rate shall be payable from time to time on demand by the Agent.
Section 2.5 Borrowing Procedure. The Borrower shall give the Agent
notice of each borrowing hereunder in accordance with Section 2.9. Not later
than 12:00 noon (Tyler, Texas time) on the date specified for each borrowing
hereunder, each Lender will make available the amount of the Loan to be made by
it on such date to the Agent, at the Principal Office, in immediately available
funds, for the account of the Borrower. The amount of each borrowing hereunder
so received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available, for and on behalf of the Borrower, in immediately
available funds by no later than 12:00 noon (Tyler, Texas time); provided,
however, that the Agent may cause such amount to be made available directly to
or for the benefit of the Person who is to receive the proceeds of such Loan as
instructed by the Borrower.
Section 2.6 Optional Prepayments, Conversions, and Continuations of Loans.
Subject to Section 2.8, the Borrower shall have the right from time to time to
prepay the Loans in whole or in part, to Convert all or part of a Loan of one
Type into a Loan of another Type or to Continue Libor Rate Loans; provided,
however, that (a) the Borrower shall give the Agent notice of each such
23
prepayment, Conversion, or Continuation as provided in Section 2.9, (b) Libor
Rate Loans may only be Converted on the last day of the Interest Period and any
prepayment of Libor Rate Loans on any day other than the last day of the
Interest Period shall be subject to payment of the additional compensation
specified in Section 4.5, and (c) except for Conversions of Libor Rate Loans or
Fed Funds Rate Loans into Prime Rate Loans, no Conversions or Continuations
shall be made while an Event Default has occurred and is continuing.
Section 2.7 Mandatory Prepayments.
(a Revolving Loans A. If at any time, the aggregate amount of the
outstanding Revolving Loans A plus the Letter of Credit Liabilities exceeds
the Revolving Loans A Commitments, the Borrower shall, within one (1)
Business Day after the occurrence thereof, prepay the outstanding Revolving
Loans A by the amount of such excess.
(b Revolving Loans B. If at any time, the aggregate amount of the
outstanding Revolving Loans B exceeds the Revolving Loans B Commitment, the
Borrower shall, within one (1) Business Day after the occurrence thereof,
prepay the outstanding Revolving Loans B by the amount of such excess.
Section 2.8 Minimum Amounts. Except for Conversions pursuant to Article
4 and prepayments pursuant to Section 2.7, each borrowing, Conversion, and
optional prepayment of principal of the Loans shall be in an amount at least
equal to $100,000 or an integral multiple of $50,000 in excess thereof
(borrowings, prepayments, or Conversions of or into Loans of different Types or,
in the case of Libor Rate Loans, having different Interest Periods at the same
time hereunder shall be deemed separate borrowings, prepayments, and Conversions
for purposes of the foregoing, one for each Type or Interest Period).
Section 2.9 Certain Notices.
(a Notices by the Borrower to the Agent of terminations or
reductions of Commitments, of borrowings, Conversions, Continuations, and
prepayments of Loans and of the duration of Interest Periods shall be
irrevocable and shall be effective only if received by the Agent not later
than 10:00 a.m. (Tyler, Texas, time) on the applicable Business Day prior
to the date of the relevant termination, reduction, borrowing, Conversion,
Continuation, or prepayment or the first day of such Interest Period as
specified below:
Number of
Notice Business Days Prior
------------------------------------------------------------------------------------------
Conversions or Continuations of Loans and termination or 3
reduction of Commitments
------------------------------------------------------------------------------------------
Borrowings of Revolving Loans A which are Prime Rate Loans 1
------------------------------------------------------------------------------------------
24
Borrowings of Revolving Loans A which are Libor Rate Loans 3
------------------------------------------------------------------------------------------
Borrowings of Revolving Loans B 0
------------------------------------------------------------------------------------------
Prepayments of Loans which are Prime Rate Loans or Fed 0
Funds Rate Loans
------------------------------------------------------------------------------------------
Prepayments of Loans which are Libor Rate Loans 3
------------------------------------------------------------------------------------------
Notwithstanding the foregoing, (i) the Borrower may give an effective
notice of borrowing of Revolving Loans A as a Prime Rate Loan in accordance
with Section 2.14(e) not later than 10:00 a.m. (Tyler, Texas time) on the
Business Day of the proposed borrowing if the proceeds of such borrowing
will be used to satisfy Reimbursement Obligations and (ii) the Borrower may
give an effective notice of borrowing of Revolving Loans A as a Prime Rate
Loan not later than 10:00 a.m. (Tyler, Texas time) on the Business Day of
the proposed borrowing if Bank of America is the sole Lender hereunder or,
at any time Bank of America is not the sole Lender hereunder, if the Agent
and the Lenders consent. Any notices of the type described in this Section
which are received by the Agent after the applicable time set forth above
on a Business Day shall be deemed to be received and shall be effective on
the next Business Day. Each such notice of termination or reduction shall
specify the applicable Commitments to be affected and the amount of the
Commitments to be terminated or reduced. Each such notice of borrowing,
Conversion, Continuation, prepayment, reduction, or termination shall be in
the form of Exhibit C (a "Notice of Borrowing"), appropriately completed by
an authorized representative of the Borrower, and shall specify (1) the
Loans to be borrowed or prepaid or the Loans to be Converted or Continued;
(2) the amount (subject to Section 2.8) to be borrowed, Converted,
Continued, or prepaid; (3) in the case of a Conversion, the Type of Loans
to result from such Conversion; (4) in the case of a borrowing, the Type of
Loans to be applicable to such borrowing and the amounts thereof; (5) in
the event Libor Loans are selected, the duration of the Interest Period
therefor; and (6) the date of borrowing, Conversion, Continuation, or
prepayment (which shall be a Business Day).
(b Any notices by the Borrower of the type described in this Section
may be made orally or in writing and, if made orally and the Agent
requests, must be confirmed immediately in writing (which may be by
telecopy, provided that such telecopy is promptly followed by delivery of
an original signed notice) on the same Business Day on which such oral
notice is given; provided that any such oral notice shall be deemed to be
controlling and proper notice in the event of a discrepancy with or failure
to receive a confirming written notice. The Agent shall notify the
applicable Lenders of the contents of each such notice on the date of its
receipt of the same or, if received after the applicable time set forth
above on a Business Day, on the next Business Day. The Borrower and the
Lenders authorize the Agent to rely upon any Person whom the Agent believes
to be an authorized officer of the
25
Borrower, and for purposes of this Agreement, any such officer shall be
deemed to be authorized to deliver any notice described in this Section and
to request any such Loan on behalf of the Borrower. In the event the
Borrower fails to select the Type of Loan requested in any Notice of
Borrowing, or the duration of any Interest Period for any Libor Rate Loan
within the time period and otherwise as provided in this Section, such
Loan, (i) if outstanding as a Libor Rate Loan will be automatically
Converted into a Prime Rate Loan on the last day of the Interest Period for
such Libor Rate Loan, (ii) if outstanding as a Prime Rate Loan will remain
as a Prime Rate Loan, or (iii) if not presently outstanding will be made as
a Prime Rate Loan. The Borrower may not borrow any Loans as a Libor Rate
Loan or a Fed Funds Rate Loan, Convert any Prime Rate Loans or Fed Funds
Rate Loans into Libor Rate Loans or Fed Funds Rate Loans (as applicable) or
Continue any Libor Rate Loans as Libor Rate Loans if the applicable
interest rate for such Libor Rate Loans or Fed Funds Rate Loans (as
applicable) would exceed the Maximum Rate.
Section 2.10 Use of Proceeds.
(a Revolving Loans. The Borrower agrees that all proceeds of the
Loans shall be used for general corporate purposes of the Borrower and its
Subsidiaries in the ordinary course of business, including, without
limitation, payment of the Reimbursement Obligations.
(b Margin Stock. None of the proceeds of any Loan may be used to
acquire any security in any transaction that is subject to Section 13 or 14
of the Exchange Act or to buy or carry any margin stock (within the meaning
of Regulation T, U, or X of the Board of Governors of the Federal Reserve
System).
Section 2.11 Fees.
(a Subject to Section 12.12, the Borrower shall pay to the Agent,
for the account of each applicable Lender, a commitment fee on the daily
average unused or unfunded amount of each such Lender's Revolving Loans A
Commitment (as the same may be terminated or reduced pursuant to
Section 2.13), for the period from and including the Closing Date or the
date on which such Lender (or its predecessor in interest with respect to a
Revolving Loans A Commitment assigned to such Lender as to which a
commitment fee has not previously been paid during the applicable period)
initially became a Lender to but excluding the Maturity Date, at the per
annum rate of one-quarter percent (0.25%) based upon the daily average
unused or unfunded amount of such Lender's Revolving Loans A Commitment,
which accrued commitment fees shall be payable in arrears on each Quarterly
Date and on the Maturity Date; provided that for purposes of calculating
such fee the amount of outstanding Letters of Credit shall constitute use
of the Revolving Loans A Commitments.
(b Subject to Section 12.12, the Borrower agrees to pay to the Agent
such additional fees as are specified in that certain letter agreement
between the Borrower and the
26
Agent dated concurrently herewith, which fees shall be payable in such
amounts and on such dates as are specified therein.
Section 2.12 Computations. Interest and fees payable by the Borrower
hereunder and under the other Loan Documents shall be computed as follows: (a)
with respect to Libor Rate Loans and Fed Funds Rate Loans on the basis of a year
of 360 days and the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which payable unless such
calculation would result in a usurious rate, in which case interest shall be
calculated on the basis of a year of 365 or 366 days, as the case may be, and
(b) with respect to Prime Rate Loans and all fees payable hereunder, on the
basis of a year of 365 or 366 days, as the case may be, and the actual number of
days elapsed (including the first day but excluding the last day) occurring in
the period for which payable.
Section 2.13 Termination or Reduction of Commitments.
(a The Borrower shall have the right to terminate or reduce in part
the unused portion of the Commitments at any time and from time to time
prior to the Maturity Date; provided, however, that (i) no such termination
or reduction shall be effective unless the Borrower shall have given notice
of each such termination or reduction as provided in Section 2.9, and (ii)
each partial reduction of any Commitment shall be in an aggregate amount at
least equal to $100,000 or an integral multiple of $50,000 in excess
thereof, and (iii) the Borrower shall not have the right to terminate or
reduce in part any unfunded portion of the Revolving Loans A Commitments
that could or may be required to be advanced by the Lenders to repay
Reimbursement Obligations then outstanding.
(b The Commitments may not be reinstated after they have been
terminated or increased after they have been reduced.
Section 2.14 Letters of Credit.
27
(a) Commitment to Issue. The Borrower may utilize the Revolving Loans
A Commitments by requesting that the Agent cause the Issuing Bank to issue,
and the Agent, subject to the terms and conditions of this Agreement, shall
cause the Issuing Bank to issue, standby letters of credit for the
Borrower's account (such letters of credit being referred to herein as the
"Letters of Credit", which may be for the account of the Borrower or any
other Related Party) provided, however (i) the aggregate amount of
outstanding Letter of Credit Liabilities shall not at any time exceed
$5,000,000 (ii) the aggregate amount of the outstanding Revolving Loans A
plus the outstanding Letter of Credit Liabilities shall not any time exceed
the Revolving Loans A Commitments. Upon the date of issue of a Letter of
Credit, the Issuing Bank shall be deemed, without further action by any
party hereto, to have sold to each Lender who holds a Revolving Loans A
Commitment, and each such Lender shall be deemed, without further action by
any party hereto, to have purchased from the Issuing Bank, a participation
to the extent of such Lender's Commitment Percentage (calculated with
respect to the Revolving Loans A Commitments) in such Letter of Credit and
the related Letter of Credit Liabilities. Upon termination of the
Revolving Loans A Commitments, any Letter of Credit then outstanding which
has been fully cash collateralized to the satisfaction of the Agent and the
Issuing Bank shall no longer be considered a "Letter of Credit" covered by
the terms of this Agreement and any participating interest heretofore
granted by the Issuing Bank to the Lenders holding Revolving Loans A
Commitments in such Letter of Credit shall be deemed terminated but the
letter of credit fees payable hereunder shall continue to accrue to the
Issuing Bank with respect to such Letter of Credit until the expiry
thereof.
(b) Letter of Credit Request Procedure. The Borrower shall give the
Agent not less than five (5) Business Days prior notice (effective upon
receipt) specifying the date of each Letter of Credit and the nature of the
transactions to be supported thereby. Upon receipt of such notice, the
Agent shall notify the Issuing Bank and each Lender who holds a Revolving
Loans A Commitment of the contents thereof and of such Lender's Commitment
Percentage of the amount of the proposed Letter of Credit. Each Letter of
Credit (i) shall have an expiration date that does not extend beyond a date
which is the lesser of (A) one (1) year from the date of issuance or (B)
thirty (30) days prior to the Maturity Date, (ii) shall be payable in
Dollars, (iii) must support a transaction entered into or obligation
arising in the ordinary course of business, (iv) must be satisfactory in
form and substance to the Agent and the Issuing Bank, and (v) shall be
issued pursuant to such documentation as the Agent and the Issuing Bank may
require, including, without limitation, the Issuing Bank's standard form
Letter of Credit Agreement; provided, that, in the event of any direct
conflict, variation, or inconsistency between the terms of such agreement
and this Agreement, the terms of this Agreement shall control.
(c Letter of Credit Fees. The Borrower will pay to the Agent, for
the account of each Lender holding a Revolving Loans A Commitment, a fee on
such Lender's Commitment Percentage (calculated with respect to the
Revolving Loans A Commitments only) of the daily average amount available
for drawings under the Letters of Credit, such fee (i) to be paid in
arrears on the first Quarterly Date occurring after the date of the
issuance
28
of the first Letter of Credit and on each Quarterly Date thereafter until
the date of expiration or termination of all Letters of Credit and (ii) to
be calculated at a rate per annum equal to the Applicable Margin for Libor
Rate Loans on the basis of a year of 360 days and the actual number of days
elapsed (including the first day but excluding the last day). After
receiving any payment of any fees under this clause (c), the Agent will
promptly pay to each Lender that holds a Revolving Loans A Commitment the
fees then due such Lender. The Borrower will also pay to the Issuing Bank,
for its account only, a fee equal to the lesser of $1,000 or one and one-
half percent (1.50%) of the amount of each Letter of Credit issued pursuant
to this Section 2.14. The Borrower will also pay to the Issuing Bank, for
its account only, all customary fees for issuance, negotiation, amendment,
or processing of the Letters of Credit.
(d Funding of Drawings. Upon receipt from the beneficiary of any
Letter of Credit of any demand for payment or other drawing under such
Letter of Credit, the Issuing Bank shall so notify the Agent and the Agent
shall so notify the Borrower and each Lender that holds a Revolving Loans A
Commitment as to the amount to be paid as a result of such demand or
drawing and the respective payment date. Not later than 1:00 p.m. (Tyler,
Texas time) on the applicable payment date if the Borrower has not
reimbursed the Issuing Bank for the amount paid as a result of such demand
or drawing, each Lender will make available to the Agent, at the Principal
Office, in immediately available funds, an amount equal to such Lender's
Commitment Percentage (calculated based only on the Revolving Loans A
Commitments) of the amount to be paid as a result of such demand or drawing
which has not been reimbursed even if the conditions to a Loan under
Article 5 have not been satisfied, and the Agent shall promptly pay such
amounts to the Issuing Bank.
(e Reimbursements. The Borrower shall be irrevocably and
unconditionally obligated to immediately reimburse the Issuing Bank
(through the Agent) for any amounts paid by the Issuing Bank upon any
demand for payment or drawing under any Letter of Credit, without
presentment, demand, protest, or other formalities of any kind. All
payments on the Reimbursement Obligations shall be made to the Agent not
later than 1:00 p.m. (Tyler, Texas time) on the date of the corresponding
payment under the Letter of Credit by the Issuing Bank; provided that the
Agent has provided notice to the Borrower prior to 10:00 a.m. (Tyler, Texas
time) on such day that such payment is due. In the event such notice is
received after 10:00 a.m. (Tyler, Texas time) on a Business Day, such
payment shall be due not later than 1:00 p.m. (Tyler, Texas time) on the
next succeeding Business Day. Subject to the other terms and conditions of
this Agreement, such reimbursement may be made by the Borrower requesting a
Revolving Loan A in accordance with Section 2.5, the proceeds of which
shall be credited against the Borrower's Reimbursement Obligations. The
Agent will pay to each Lender participating in a Letter of Credit such
Lender's Commitment Percentage (calculated based only on the Revolving
Loans A Commitments) of all amounts received from the Borrower for
application in payment, in whole or in part, to the Reimbursement
Obligation in respect of any Letter of Credit, but only to the extent such
Lender has made payment to the Agent in respect of such Letter of Credit
pursuant to clause (d) of this Section 2.14.
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(f Reimbursement Obligations Absolute. The Reimbursement
Obligations of the Borrower under this Agreement shall be absolute,
unconditional, and irrevocable, and shall be performed strictly in
accordance with the terms of the Loan Documents under all circumstances
whatsoever and the Borrower hereby waives any defense to the payment of the
Reimbursement Obligations based on any circumstance whatsoever, including,
without limitation, in either case, the following circumstances: (i) any
lack of validity or enforceability of any Letter of Credit or any other
Loan Document; (ii) the existence of any claim, set-off, counterclaim,
defense, or other rights which any Related Party or any other Person may
have at any time against any beneficiary of any Letter of Credit, the
Issuing Bank, the Agent, any Lender, or any other Person, whether in
connection with any Loan Document or any unrelated transaction; (iii) any
statement, draft, or other documentation presented under any Letter of
Credit proving to be forged, fraudulent, invalid, or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect
whatsoever; (iv) payment by the Issuing Bank under any Letter of Credit
against presentation of a draft or other document that does not comply with
the terms of such Letter of Credit; or (v) any other circumstance
whatsoever, whether or not similar to any of the foregoing.
(g Assumption of Risk by Borrower. As among the Borrower and the
Lenders, the Borrower assumes all risks of the acts and omissions of, or
misuse of any of the Letters of Credit by, the respective beneficiaries of
such Letters of Credit. In furtherance and not in limitation of the
foregoing, subject to the provisions of the applications for the issuance
of Letters of Credit, the Lenders, the Issuing Bank, and the Agent shall
not be responsible for:
(i the form, validity, sufficiency, accuracy, genuineness, or
legal effect of any document submitted by any Person in connection
with the application for and issuance of and presentation of drafts
with respect to any of the Letters of Credit, even if it should prove
to be in any or all respects invalid, insufficient, inaccurate,
fraudulent, or forged;
(ii the validity or sufficiency of any instrument transferring
or assigning, or purporting to transfer or assign, any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any
reason;
(iii the failure of the beneficiary of any Letter of Credit to
comply duly with conditions required in order to draw upon such Letter
of Credit;
(iv errors, omissions, interruptions, or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex, or
otherwise, whether or not they be in cipher;
(v errors in interpretation of technical terms;
30
(vi any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of
Credit or of the proceeds thereof;
(vii the misapplication by the beneficiary of any Letter of
Credit of the proceeds of any drawing under such Letter of Credit; or
(viii any consequences arising from causes beyond the control
of any Lender or the Issuing Bank, including, without limitation, any
act of any Governmental Authority.
None of the foregoing shall affect, impair, or prevent the vesting of any of the
Lenders', the Issuing Bank's, or the Agent's rights or powers under this Section
2.14. The Borrower shall have a claim against the Issuing Bank, and the Issuing
Bank shall be liable to the Borrower, to the extent of any direct (but not
indirect, consequential, or punitive) damages suffered by the Borrower which the
Borrower proves in a final nonappealable judgment were caused by (A) the Issuing
Bank's willful misconduct or gross negligence in determining whether documents
presented under any Letter of Credit complied with the terms thereof or (B) the
Issuing Bank's willful failure to pay under any Letter of Credit after
presentation to it of documentation strictly complying with the terms and
conditions of such Letter of Credit. The Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
ARTICLE 3
Payments
Section 3.1 Method of Payment and Application of Payments. All payments
of principal, interest, fees, and other amounts to be made by the Borrower under
this Agreement and the other Loan Documents shall be made to the Agent at the
Principal Office, for the account of the Agent and each Lender, as applicable,
in Dollars and in immediately available funds, without set-off, deduction, or
counterclaim, not later than 12:00 noon (Tyler, Texas time) on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).
The Borrower shall, at the time of making each such payment, specify to the
Agent the sums payable by the Borrower under this Agreement and the other Loan
Documents to which such payment is to be applied (and in the event that the
Borrower fails to so specify, or if an Event of Default has occurred and is
continuing, the Agent may apply such payment to the Obligations in such order
and manner as the Agent may elect, subject to this Section 3.1 and Section 3.2).
Upon the occurrence and during the continuation of an Event of Default, all
funds of the Borrower in the possession of the Agent or any Lender may be
applied by the Agent to the Obligations in such order and manner as the Agent
may elect, subject to Section 3.2; provided, however, that, in the event of any
collection occurring in connection with the occurrence of an Event of Default,
or in the event of any bankruptcy or similar proceedings involving the Borrower,
and receipt by the Agent of any payments with respect to the Obligations in
connection therewith, all proceeds thereof shall be applied by the Agent as
follows unless otherwise agreed by
31
the Agent and the Lenders: (a) first, to reimburse the Agent for all fees,
costs, and expenses relating to actions taken by the Agent in connection with
such Event of Default or bankruptcy or similar proceedings, (b) second, to the
accrued and unpaid interest with respect to the Revolving Loans B, (c) third,
pro rata to the accrued and unpaid interest with respect to the Revolving Loans
A, (d) fourth, to the principal of the Revolving Loans B (until such Loans are
paid in full), (e) fifth, pro rata to the principal of the Revolving Loans A
(until such Loans are paid in full), and (f) sixth, to the then remaining
outstanding Obligations in such order as the Agent may determine. Each payment
received by the Agent under this Agreement or any other Loan Document for the
account of a Lender shall be paid promptly to such Lender, in immediately
available funds, for the account of such Lender's Applicable Lending Office.
Whenever any payment under this Agreement or any other Loan Document shall be
stated to be due on a day that is not a Business Day, such payment may be made
on the next succeeding Business Day, and such extension of time shall in such
case be included in the computation of the payment of interest and commitment
fee, as the case may be.
Section 3.2 Pro Rata Treatment. Except to the extent otherwise provided
in this Agreement: (a) each Loan shall be made by the applicable Lenders under
Section 2.1, each payment of commitment fees under Section 2.11(a) and letter of
credit fees under Section 2.14(c) shall be made for the account of the
applicable Lenders, and each termination or reduction of the Revolving Loans A
Commitments under Section 2.13 shall be applied to the Revolving Loans A
Commitments of the applicable Lenders, pro rata according to the respective
unused Revolving Loans A Commitments; (b) the making, Conversion, and
Continuation of Revolving Loans A of a particular Type (other than Conversions
provided for by Section 4.4) shall be made pro rata among the Lenders holding
Revolving Loans A of such Type according to the amounts of their respective
Revolving Loans A Commitments, as the case may be; (c) each payment and
prepayment by the Borrower of principal of or interest on Revolving Loans A of a
particular Type or of Reimbursement Obligations shall be made to the Agent for
the account of the Lenders holding Revolving Loans A of such Type or
Reimbursement Obligations pro rata in accordance with the respective unpaid
principal amounts of such Revolving Loans A or Reimbursement Obligations held by
such Lenders; (d) Interest Periods for Revolving Loans A of a particular Type
shall be allocated among the Lenders holding Revolving Loans A of such Type pro
rata according to the respective principal amounts held by such Lenders; and (e)
the Lenders holding Revolving Loans A Commitments shall purchase from the
Issuing Bank participations in the Letters of Credit to the extent of their
respective Commitment Percentages (calculated only with respect to the Revolving
Loans A Commitments), and (f) each payment of principal or interest on
Reimbursement Obligations by the Borrower shall be made to the Agent for the
account of the Lenders holding Reimbursement Obligations (or participation
interests therein) pro rata in accordance with the unpaid principal amount of
such Reimbursement Obligations (or participation interests therein) held by such
Lenders.
Section 3.3 Sharing of Payments, Etc. If a Lender shall obtain payment
of any principal of or interest on any of the Obligations due to such Lender
hereunder through the exercise of any right of set-off, banker's lien,
counterclaim, or similar right, or otherwise, it shall promptly purchase from
the other Lenders participations in the Obligations held by the other Lenders in
such amounts, and make such adjustments from time to time, as shall be equitable
to the end that all the Lenders shall share pro rata, subject to the provisions
of Section 3.1, in accordance with the unpaid principal
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and interest on the Obligations then due to each of them. To such end, all of
the Lenders shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if all or any portion of such excess
payment is thereafter rescinded or must otherwise be restored. The Borrower
agrees, to the fullest extent it may effectively do so under applicable law,
that any Lender so purchasing a participation in the Obligations by the other
Lenders may exercise all rights of set-off, banker's lien, counterclaim, or
similar rights with respect to such participation as fully as if such Lender
were a direct holder of Obligations in the amount of such participation. Nothing
contained herein shall require any Lender to exercise any such right or shall
affect the right of any Lender to exercise, and retain the benefits of
exercising, any such right with respect to any other indebtedness, liability, or
obligation of the Borrower.
Section 3.4 Non-receipt of Funds by the Agent.
(a Unless the Agent shall have been notified by a Lender or the
Borrower (the "Payor") prior to the date on which such Lender is to make
payment to the Agent of the proceeds of a Loan to be made by it hereunder
or the Borrower is to make a payment to the Agent for the account of one or
more of the Lenders, as the case may be (such payment being herein called
the "Required Payment"), which notice shall be effective upon receipt, that
the Payor does not intend to make the Required Payment to the Agent, the
Agent may assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to the Agent, the recipient
of such payment shall, on demand, pay to the Agent the amount made
available to it together with interest thereon in respect of the period
commencing on the date such amount was so made available by the Agent until
the date the Agent recovers such amount at a rate per annum equal to the
Federal Funds Rate for such period.
(b The Commitments and other obligations of the Lenders under the
Loan Documents are several. The default by any Lender in making a Loan in
accordance with its Commitment shall not relieve the other Lenders of their
obligations under the Loan Documents. In the event of any default by any
Lender in making any Loan, each nondefaulting Lender shall be obligated to
make its Loan but shall not be obligated to advance the amount which the
defaulting Lender was required to advance hereunder. Each Lender shall be
solely responsible for its own acts or omissions as provided by this
Agreement.
Section 3.5 Taxes.
(a All payments by the Borrower of principal of and interest on the
Loans and of all fees and other amounts payable under the Loan Documents
shall be made free and clear of, and without withholding or deduction by
reason of, any present or future taxes, levies, duties, imposts,
assessments, or other charges levied or imposed by any Governmental
Authority (other than franchise taxes and taxes on the overall net income
of the Issuing Bank, any Lender, or the Agent). If any such taxes, levies,
duties, imposts, assessments, or other
33
charges are so levied or imposed, the Borrower will (i) make additional
payments in such amounts so that every net payment of principal of and
interest on the Loans, the Reimbursement Obligations, and of all other
amounts payable by it under the Loan Documents, after withholding or
deduction for or on account of any such present or future taxes, levies,
duties, imposts, assessments, or other charges (including any tax imposed
on or measured by net income of the Issuing Bank, a Lender, or the Agent
attributable to payments made to or on behalf of the Issuing Bank, a
Lender, or the Agent pursuant to this Section 3.5 and any penalties or
interest attributable to such payments), will not be less than the amount
provided for herein or therein absent such withholding or deduction
(provided that the Borrower shall not have any obligation to pay such
additional amounts to the Issuing Bank, a Lender, or the Agent to the
extent that such taxes, levies, duties, imposts, assessments, or other
charges are levied or imposed by reason of the failure of the Issuing Bank,
a Lender, or the Agent to comply with the provisions of Section 3.6), (ii)
make such withholding or deduction, and (iii) remit the full amount
deducted or withheld to the relevant Governmental Authority in accordance
with applicable law. Without limiting the generality of the foregoing, the
Borrower will, upon written request of the Issuing Bank or any Lender,
reimburse the Issuing Bank or each such Lender (as applicable) for the
amount of (A) such taxes, levies, duties, imports, assessments, or other
charges so levied or imposed by any Governmental Authority and paid by the
Issuing Bank or such Lender as a result of payments made by the Borrower
under or with respect to the Loans and the Reimbursement Obligations other
than such taxes, levies, duties, imports, assessments, and other charges
previously withheld or deducted by the Borrower which have previously
resulted in the payment of the required additional amount to the Issuing
Bank or such Lender, and (B) such taxes, levies, duties, assessments, and
other charges so levied or imposed with respect to the Issuing Bank or any
Lender reimbursement under the foregoing clause (A), so that the net amount
received by the Issuing Bank or such Lender (net of payments made under or
with respect to the Loans and the Reimbursement Obligations) after such
reimbursement will not be less than the net amount the Issuing Bank or such
Lender would have received if such taxes, levies, duties, assessments, and
other charges on such reimbursement had not been levied or imposed. The
Borrower shall furnish promptly to the Agent for distribution to the
Issuing Bank or any affected Lender, as the case may be, upon request of
the Issuing Bank or such Lender, official receipts evidencing any such
payment, withholding or reduction.
(b The Borrower will indemnify the Agent, the Issuing Bank, and each
Lender (without duplication) against, and reimburse the Agent, the Issuing
Bank, and each Lender for, all present and future taxes, levies, duties,
imposts, assessments, or other charges (including, without limitation,
interest and penalties) levied or collected (whether or not legally or
correctly imposed, assessed, levied, or collected), excluding, however, any
taxes imposed on the overall net income of the Agent, the Issuing Bank, or
such Lender or any lending office of the Agent, the Issuing Bank, or such
Lender by any jurisdiction in which the Agent, the Issuing Bank, or such
Lender or any such lending office is located, on or in respect of this
Agreement, any of the Loan Documents, the Obligations, or any portion
thereof (the "reimbursable taxes"). Any such indemnification shall be on
an after-tax basis, taking into account any such reimbursable taxes imposed
on the amounts paid as indemnity.
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(c Without prejudice to the survival of any other term or provision
of this Agreement, the obligations of the Borrower under this Section 3.5
shall survive the payment of the Loans and the other Obligations and
termination of the Revolving Loans A Commitments.
Section 3.6 Withholding Tax Exemption. Each Lender that is not
incorporated or otherwise formed under the laws of the U.S. or a state thereof
agrees that it will, prior to or on or about the Closing Date or the date upon
which it initially becomes a party to this Agreement and if it is legally able
to do so, deliver to the Borrower and the Agent, two duly completed copies of
U.S. Internal Revenue Service Form W-8ECI or W-8BEN or other equivalent
successor form, as appropriate, certifying in any case that such Lender is
entitled to receive payments from the Borrower under any Loan Document without
deduction or withholding of any U.S. federal income taxes. Each Lender which so
delivers a Form W-8ECI or W-8BEN or other equivalent successor form, as
appropriate, further undertakes to deliver to the Borrower and the Agent, two
additional copies of such form (or a successor form) on or before the date such
form expires or becomes obsolete or after the occurrence of any event requiring
a change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by the Borrower
or the Agent, in each case certifying that such Lender is entitled to receive
payments from the Borrower under any Loan Document without deduction or
withholding of any U.S. federal income taxes, unless an event (including without
limitation any change in treaty, law, or regulation) has occurred prior to the
date on which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent such Lender from duly completing
and delivering any such form with respect to it and such Lender advises the
Borrower and the Agent that it is not capable of receiving such payments without
any deduction or withholding of U.S. federal income tax.
Section 3.7 Reinstatement of Obligations. Notwithstanding anything to
the contrary contained in this Agreement or any other Loan Document, if the
payment of any amount of principal of or interest with respect to the Loans or
any other amount of the Obligations, or any portion thereof, is rescinded,
voided, or must otherwise be refunded by the Agent or any Lender upon the
insolvency, bankruptcy, or reorganization of the Borrower or otherwise for any
reason whatsoever, then each of (a) the Obligations, (b) the Loan Documents
(including, without limitation, this Agreement and the Notes), (c) the
indebtedness, liabilities, and obligations of the Borrower, and (d) all Liens
(if any) for the benefit of the Agent and the Lenders created under or evidenced
by the Loan Documents, will be automatically reinstated and become automatically
effective and in full force and effect, all to the extent that and as though
such payment so rescinded, voided, or otherwise refunded had never been made.
Section 3.8 No Force Majeure, Disputes. The Borrower's obligation to
pay all amounts due under the Loans and the other Obligations shall not be
affected by (a) any insolvency, bankruptcy, reorganization, or similar
proceedings by or against the Borrower or affecting any of its Properties, (b)
any action of any Governmental Authority or any damage to or destruction of or
any taking of the Borrower's Property or any part thereof, (c) any change,
waiver, extension,
35
indulgence, or failure to perform or comply with, or other action or omission
herein or in the other Loan Documents (except for express written modifications
to this Agreement or other Loan Documents as and in the manner permitted under
this Agreement or the other Loan Documents), (d) any dissolution of the
Borrower, (e) any inability or illegality with respect to the use or ownership
of the Borrower's Property, (f) any failure to obtain, or expiration,
suspension, or other termination of, or interruption to, any required licenses,
permits, consents, authorizations, approvals, or other legal requirements, (g)
the invalidity or unenforceability of any of the Loan Documents or any other
infirmity therein or any lack of power or authority of the Agent or any Lender
or the Borrower, or (h) any other event or circumstance whatsoever, whether or
not similar to any of the foregoing and whether or not the Borrower shall have
notice or knowledge of any of the foregoing, it being the intention of the Agent
and the Lenders and the Borrower that the Obligations of the Borrower shall be
absolute and unconditional and shall be separate and independent covenants and
agreements and shall continue unaffected unless the requirements to pay or
perform the same shall have been terminated pursuant to an express provision
thereof or of any of the other Loan Documents.
Section 3.9 Participation Obligations Absolute; Failure to Fund
Participation. The obligations of a Lender holding a Revolving Loans A
Commitment to fund its participation in the Letters of Credit in accordance with
the terms hereof shall be absolute, unconditional, and irrevocable and shall be
performed strictly in accordance with the terms of the Loan Documents under all
circumstances whatsoever, including, without limitation, the following
circumstances: (a) any lack of validity of any Loan Document; (b) the occurrence
of any Default or Event of Default; (c) the existence of any claim, set-off,
counterclaim, defense, or other right which such Lender, any Related Party, or
any other Person may have; (d) the occurrence of any event that has or could be
expected to have a Material Adverse Effect; (e) the failure of any condition to
a Loan under Article 5 to be satisfied; (f) the fact that after giving effect to
the funding of the participation the aggregate outstanding Revolving Loans A
plus the aggregate amount of Letter of Credit Liabilities may exceed the
aggregate Revolving Loans A Commitments; or (g) any other circumstance
whatsoever, whether or not similar to any of the foregoing. If a Lender fails
to fund its participation in a Letter of Credit as required hereby, such Lender
shall, subject to the foregoing proviso, remain obligated to pay to the Agent
the amount it failed to fund on demand together with interest thereon in respect
of the period commencing on the date such amount should have been funded until
the date the amount was actually funded to the Agent at a rate per annum equal
to the Federal Funds Rate for such period and the Agent shall be entitled to
offset against any and all sums to be paid to such Lender hereunder the amount
due the Agent under this sentence.
ARTICLE 4
Yield Protection and Illegality
Section 4.1 Additional Costs.
(a The Borrower shall pay directly to each Lender from time to time,
promptly upon the request of such Lender, the costs incurred by such Lender
which such Lender
36
determines are attributable to its making or maintaining of any Libor Rate
Loans or its obligation to make any of such Loans, or any reduction in any
amount receivable by such Lender hereunder in respect of any such Loans or
obligations (such increases in costs and reductions in amounts receivable
being herein called "Additional Costs"), resulting from any Regulatory
Change which:
(i changes the basis of taxation of any amounts payable to such
Lender under this Agreement or its Revolving Note A in respect of any
of such Libor Rate Loans (other than taxes imposed on the overall net
income of such Lender or its Applicable Lending Office for any of such
Libor Rate Loans by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office);
(ii imposes or modifies any reserve, special deposit, minimum
capital, capital ratio, or similar requirement relating to any
extensions of credit or other assets of, or any deposits with or other
liabilities or commitments of, such Lender (including any of such
Libor Rate Loans or any deposits referred to in the definition of
"Libor Rate" in Section 1.1, but excluding the Reserve Requirement to
the extent it is included in the calculation of the Adjusted Libor
Rate); or
(iii imposes on such Lender (or its Applicable Lending Office)
or the London interbank market any other condition affecting this
Agreement or such Lender's Revolving Note A or any extensions of
credit or liabilities or commitments contemplated hereunder or
thereunder.
Each Lender will notify the Borrower (with a copy to the Agent) of any
event occurring after the Closing Date which will entitle such Lender to
compensation pursuant to this Section 4.1(a) as promptly as practicable
after it obtains knowledge thereof and determines to request such
compensation, and (if so requested by the Borrower) will designate a
different Applicable Lending Office for the Libor Rate Loans of such Lender
if such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, violate any
law, rule, or regulation or be in any way disadvantageous to such Lender,
provided that such Lender shall have no obligation to so designate an
Applicable Lending Office located in the U.S. Each Lender will furnish the
Borrower with a certificate setting forth the basis and the amount of each
request of such Lender for compensation under this Section 4.1(a). If any
Lender requests compensation from the Borrower under this Section 4.1(a),
the Borrower may, by notice to such Lender (with a copy to the Agent),
suspend the obligation of such Lender to make or Continue making, or
Convert Prime Rate Loans into, Libor Rate Loans until the Regulatory Change
giving rise to such request ceases to be in effect (in which case the
provisions of Section 4.4 shall be applicable).
(b Without limiting the effect of the foregoing provisions of this
Section 4.1, in the event that, by reason of any Regulatory Change, any
Lender either (i) incurs Additional Costs based on or measured by the
excess above a specified level of the amount of a category
37
of deposits or other liabilities of such Lender which includes deposits by
reference to which the interest rate on Libor Rate Loans is determined as
provided in this Agreement or a category of extensions of credit or other
assets of such Lender which includes Libor Rate Loans or (ii) becomes
subject to restrictions on the amount of such a category of liabilities or
assets which it may hold, then, if such Lender so elects by notice to the
Borrower (with a copy to the Agent), the obligation of such Lender to make
or Continue making, or Convert Prime Rate Loans into, Libor Rate Loans
hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 4.4 shall be applicable).
(c Determinations and allocations by any Lender for purposes of this
Section 4.1 of the effect of any Regulatory Change on its costs of
maintaining its obligation to make Loans or of making or maintaining Loans
or on amounts receivable by it in respect of Loans and of the additional
amounts required to compensate such Lender in respect of any Additional
Costs, shall be conclusive in the absence of manifest error, provided that
such determinations and allocations are made on a reasonable basis.
(d The Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section 4.1 for any increased costs or
reductions incurred more than one (1) year prior to the date that such
Lender or the Issuing Bank, as the case may be, notifies the Borrower of
the Regulatory Change giving rise to such increased costs or reductions and
of such Lender's or the Issuing Bank's intention to claim compensation
therefor; provided, however, if the Regulatory Change giving rise to such
increased costs or reductions is retroactive, then the one (1) year period
referred to in this Section 4.1(d) shall be extended to include the period
of retroactive effect thereof.
Section 4.2 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if with respect to any Libor Rate Loans for any
Interest Period therefor:
(a the Agent determines (which determination shall be conclusive
absent manifest error) that quotations of interest rates for the relevant
deposits referred to in the definition of "Libor Rate" in Section 1.1 are
38
not being provided in the relative amounts or for the relative maturities
for purposes of determining the rate of interest for such Loans as provided
in this Agreement; or
(b the Required Lenders determine (which determination shall be
conclusive absent manifest error) and notify the Agent that the relevant
rates of interest referred to in the definition of "Libor Rate" or
"Adjusted Libor Rate" in Section 1.1 on the basis of which the rate of
interest for such Loans for such Interest Period is to be determined do
not accurately reflect the cost to the Lenders of making or maintaining
such Loans for such Interest Period;
then the Agent shall give the Borrower prompt notice thereof and, so long as
such condition remains in effect, the Lenders shall be under no obligation to
make Libor Rate Loans or to Convert Prime Rate Loans into Libor Rate Loans, and
the Borrower shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Libor Rate Loans, either prepay such Loans or Convert such
Loans into Prime Rate Loans in accordance with the terms of this Agreement.
Section 4.3 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to (a) honor its obligation to make Libor Rate Loans
or (b) maintain Libor Rate Loans, then such Lender shall promptly notify the
Borrower (with a copy to the Agent) thereof and such Lender's obligation to make
or maintain Libor Rate Loans and to Convert Prime Rate Loans into Libor Rate
Loans hereunder shall be suspended until such time as such Lender may again make
and maintain Libor Rate Loans (in which case the provisions of Section 4.4 shall
be applicable).
Section 4.4 Treatment of Affected Loans. If the obligation of any
Lender to make or Continue, or to Convert Prime Rate Loans into, Libor Rate
Loans is suspended pursuant to Section 4.1 or Section 4.3, such Lender's Libor
Rate Loans shall be automatically Converted into Prime Rate Loans on the last
day(s) of the then current Interest Period(s) for the Libor Rate Loans (or, in
the case of a Conversion required by Section 4.1(b) or Section 4.3, on such
earlier date as such Lender may specify to the Borrower with a copy to the
Agent) and, unless and until such Lender gives notice as provided below that the
circumstances specified in Section 4.1 or Section 4.3 which gave rise to such
Conversion no longer exist:
(a to the extent that such Lender's Libor Rate Loans have been so
Converted, all payments and prepayments of principal which would otherwise
be applied to such Lender's Libor Rate Loans shall be applied instead to
its Prime Rate Loans; and
(b all Loans which would otherwise be made or Continued by such
Lender as Libor Rate Loans shall be made as or Converted into Prime Rate
Loans and all Loans of such Lender which would otherwise be Converted into
Libor Rate Loans shall remain as Prime Rate Loans.
If such Lender gives notice to the Borrower that the circumstances specified in
Section 4.1 or Section 4.3 which gave rise to the Conversion of such Lender's
Libor Rate Loans pursuant to this Section 4.4 no longer exist (which such Lender
agrees to do promptly upon such circumstances ceasing to exist) at a time when
Libor Rate Loans are outstanding, such Lender's Prime Rate Loans that are
Revolving Loans A shall be automatically Converted, on the first day(s) of the
next succeeding Interest Period(s) for such outstanding Libor Rate Loans, to the
extent necessary so that, after giving effect thereto, all Loans held by the
Lenders holding Libor Rate Loans and by such Lender are held pro rata (as to
principal amounts, Types, and Interest Periods) in accordance with their
respective Revolving Loans A Commitments.
Section 4.5 Compensation. The Borrower shall pay to the Agent for the
account of each Lender, promptly upon the request of such Lender through the
Agent, such amount or amounts as shall be sufficient (in the reasonable opinion
of such Lender) to compensate it for any loss, cost, or expense incurred by it
as a result of:
(a) Any payment, prepayment, or Conversion of a Libor Rate Loan for
any reason (including, without limitation, the acceleration of the
outstanding Revolving Loans A pursuant to Section 10.2) on a date other
than the last day of an Interest Period for such Loan; or
(b) Any failure by the Borrower for any reason (including, without
limitation, the failure of any conditions precedent specified in Article 5
to be satisfied) to borrow, Convert, or prepay a Libor Rate Loan on the
date for such borrowing, Conversion, or prepayment specified in the
relevant notice of borrowing, prepayment, or Conversion under this
Agreement.
Section 4.6 Capital Adequacy. If, after the Closing Date, any Lender
shall determine that the adoption or implementation after the Closing Date of
any applicable law, rule, or regulation regarding capital adequacy, or any
change after the Closing Date therein, or any change after the Closing Date in
the interpretation or administration thereof by any central bank or other
Governmental Authority charged with the interpretation or administration
thereof, or compliance by such Lender (or its parent) with any guideline,
request, or directive regarding capital adequacy (whether or not having the
force of law) of any central bank or other Governmental Authority after the
Closing Date, has or would have the effect of reducing the rate of return on
such Lender's (or its parent's) capital as a consequence of its obligations
hereunder or the transactions contemplated hereby to a level below that which
such Lender (or its parent) could have achieved but for such adoption,
implementation, change, or compliance (taking into consideration such Lender's
policies with respect to capital adequacy) by an amount deemed by such Lender to
be material, then from time to time, within ten (10) Business Days after demand
by such Lender (with a copy to the Agent), the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender (or its parent)
for such reduction. A certificate of such Lender claiming compensation under
this Section 4.6 and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive absent manifest error, provided that the
determination thereof is made on a reasonable basis. In determining such amount
or amounts, such Lender may use any reasonable averaging and attribution
methods.
Section 4.7 Replacement of Lenders. If at any time a Lender becomes a
Gross Up Lender (as defined below), the Borrower shall have the right to replace
such Lender with another Person; provided that (a) such new Person shall be an
Eligible Assignee and such new Person shall execute an Assignment and
Acceptance, (b) neither the Agent nor any Lender shall have any obligation to
the Borrower to find such other Person, (c) in the event of a replacement of a
Gross Up Lender, in order for the Borrower to be entitled to replace such
Lender, such replacement must take place no later than ninety (90) days after
the date such Gross Up Lender shall notify the Borrower and the Agent of its
desire to be paid any sums pursuant to Section 4.1 or Section 4.5, and (d) if
the Borrower replaces one Gross Up Lender, it must replace all Gross Up Lenders,
each such replacement to occur within a reasonable period of time not to exceed
ninety (90) days from the date such Gross Up Lender requested a payment under
this Article 4. Each Lender agrees to its replacement at the option of the
Borrower pursuant to this Section 4.7 and in accordance with Section 12.8;
provided that the successor Lender shall purchase without recourse such other
Lender's interest in the Obligations of the Borrower to such other Lender for
cash in an aggregate amount equal to the aggregate unpaid principal thereof, all
unpaid interest accrued thereon, all unpaid commitment fees accrued for the
account of such Lender hereunder or under any other Loan Document, and the
Borrower shall pay to the Gross Up Lender any breakage costs incurred by the
Gross Up Lender because of the prepayment of any Libor Rate Loans, all other
fees (if any) applicable thereto, and all other amounts (including, without
limitation, any amounts under this Article 4) then owing to such Lender
hereunder or under any other Loan Document and the Related Parties shall execute
a release addressed to such Lender releasing such Lender from all claims arising
in connection with the Loan Documents. In the event that the Borrower selects
an Eligible Assignee as a replacement Lender for any Gross Up Lender, the
Agent's approval of such Lender as required by Section 12.8 shall not be
unreasonably withheld. Any Lender who requests a payment pursuant to this
Article 4 shall be deemed a "Gross Up Lender".
ARTICLE 5
Conditions Precedent
--------------------
Section 5.1 Initial Extension of Credit. The obligation of each Lender
to make its initial Loan, or of the Issuing Bank to issue the initial Letter of
Credit, under this Agreement is subject to the receipt by the Agent, on or
before the Closing Date, of all of the following in form and substance
satisfactory to the Agent and the Lenders and, in the case of actions to be
taken, the taking of the following required actions and evidence that such
actions have been taken to the satisfaction of the Agent:
(a) Resolutions. Resolutions of the Board of Directors certified by
the secretary or an assistant secretary of the Borrower which authorize the
execution, delivery, and performance by the Borrower of the Loan Documents
to which it is or is to be a party;
(b) Incumbency Certificate. A certificate of incumbency certified by
the secretary or an assistant secretary of the Borrower certifying as to
the name of each officer or other representative of the Borrower (i) who is
authorized to sign the Loan Documents to which the Borrower is or is to be
a party (including any certificates contemplated therein), together with
specimen signatures of each such officer or other representative, and (ii)
who will, until replaced by other officers or representatives duly
authorized for
that purpose, act as the Borrower's representative for the purposes of
signing documents and giving notices and other communications in connection
with the Loan Documents and the transactions contemplated thereby;
(c) Articles of Incorporation, Etc. The articles of incorporation of
the Borrower certified by the Secretary of State or other applicable
Governmental Authority of the state of incorporation of the Borrower and
dated as of a Current Date;
(d) Bylaws, etc. The bylaws of the Borrower certified by its
secretary or an assistant secretary;
(e) Governmental Certificates. Certificates of appropriate
Governmental Officials as to the existence and good standing of the
Borrower in its jurisdiction of incorporation and in all other
jurisdictions in which the Borrower is qualified to do business as a
foreign business enterprise, each such certificate to be dated as of a
Current Date;
(f) Notes. The Notes duly completed and executed by the Borrower (one
payable to the order of each Lender with respect to its Revolving Loans A
Commitment and one payable to Bank of America with respect to the Revolving
Loans B Commitment).
(g) Payment of Fees and Expenses. The Borrower shall have paid all
fees due on or before the Closing Date as specified in this Agreement or
any other Loan Document and all reasonable fees, costs, and expenses of or
incurred by the Agent and its outside legal counsel to the extent billed on
or before the Closing Date and payable pursuant to this Agreement;
(h) Compliance with Laws. The Borrower shall have complied in all
material respects with all Governmental Requirements necessary to execute
and deliver the Loan Documents and to perform and consummate the
transactions contemplated by the Loan Documents;
(i) No Prohibitions. No Governmental Requirement shall prohibit the
execution or delivery of any Loan Document or the performance or
consummation of the transactions contemplated by any Loan Document, and no
order, judgment, or decree of any Governmental Authority or arbitrator
shall, and no litigation or other proceeding shall be pending or to the
Borrower's knowledge, threatened which would, enjoin, prohibit, restrain,
or otherwise adversely affect in any material manner the execution or
delivery of any Loan Document or the performance or consummation of the
transactions contemplated by any Loan Document or otherwise have a Material
Adverse Effect;
(j) Financial Statements. Copies of each of the financial statements
referred to in Section 6.2, in each case as certified by a Responsible
Officer of the Borrower as having been prepared in accordance with GAAP and
as fairly presenting the financial position as of the respective dates
indicated therein and the results of operations for the respective periods
indicated therein of the Borrower and its Consolidated Subsidiaries;
(k) Opinions of Counsel. A favorable legal opinion of counsel for the
Borrower, in form and substance satisfactory to the Agent and issued by
Xxxxxxx & Xxxxx L.L.P., with respect to the Borrower and with respect to
the Loan Documents;
(l) Legal Matters and Loan Documents. All matters of a legal nature
relating to the Borrower and the Loan Documents shall be reasonably
satisfactory to the Agent and its counsel, and the Agent shall have
received the Loan Documents required to be executed and delivered by the
Borrower or any other Person and all such other agreements, documents, and
instruments, each in form and substance and executed and delivered by all
parties, as the Agent may have reasonably requested;
(m) Waivers and Consents. Copies of all material waivers and
consents, if any, necessary for the execution, delivery, and performance by
the Borrower of the Loan Documents as the Agent may require, which waivers
and consents shall be certified by a Responsible Officer of the Borrower as
true and correct copies of such consents as of the Closing Date; and
(n) No Material Adverse Change. As of the Closing Date, (i) no
material adverse change shall have occurred with respect to the businesses,
assets, financial condition, results of operations, operations,
capitalization, indebtedness, liabilities, obligations, profitability, or
Properties, or of the general affairs or management of the Borrower
individually or of the Borrower and its Consolidated Subsidiaries taken as
a whole, in each case since September 30, 1999, and (ii) no disruption or
adverse change in the capital markets generally or in the market for loan
syndications in particular shall have occurred since September 30, 1999,
which disruption or adverse change is deemed material in the judgment of
the Agent.
The Borrower shall deliver, or cause to be delivered, to the Agent sufficient
counterparts of each agreement, document, or instrument to be received by the
Agent under this Section 5.1 to permit the Agent to distribute a copy of the
same to each of the Lenders. After the request of the Borrower, the Agent shall
inform the Borrower in writing as to the status of satisfaction of the
conditions precedent set forth in this Section 5.1.
Section 5.2 All Extensions of Credit. The obligation of each Lender to
make any Loan (including the initial Loan) and of the Agent to cause the
Issuing Bank to issue any Letter of Credit under this Agreement is subject to
the continued satisfaction of each of the conditions precedent set forth in
Section 5.1 and each of the following additional conditions precedent:
(a) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing, or would result from such Loan or
the issuance of such Letter of Credit;
(b) Representations and Warranties. All of the representations and
warranties of the Borrower contained in this Agreement and in the other
Loan Documents shall be true and correct on and as of the date of such Loan
or Letter of Credit with the same force and effect as if such
representations and warranties had been made on and as of such date unless
they relate solely to an earlier date; and
(c) Additional Documentation. The Agent shall have received such
additional approvals, agreements, documents, and instruments as the Agent
may reasonably request.
Each notice of borrowing by the Borrower hereunder, and each request for the
issuance of a Letter of Credit, shall constitute a representation and warranty
by the Borrower that the conditions precedent set forth in this Section 5.2 have
been satisfied (both as of the date of such notice and, unless the Borrower
otherwise notifies the Agent prior to the date of such borrowing or Letter of
Credit, as of the date of such borrowing or Letter of Credit).
Section 5.3 Closing Certificates. The Borrower shall, concurrently with
the Closing Date (with respect to the conditions precedent set forth in Section
5.1) and concurrently with the date of the making of each other Loan or issuing
of any Letter of Credit if requested by the Agent, execute and deliver to the
Agent a certificate in form and substance satisfactory to the Agent certifying
as to the satisfaction of each of the conditions precedent set forth in this
Article 5 which are required to be satisfied on or before such date (without
regard to whether such matters are, in fact, satisfactory to the Agent to the
extent that such satisfaction is required hereunder).
ARTICLE 6
Representations and Warranties
------------------------------
The Borrower represents and warrants to the Agent and the Lenders that the
following statements are on the Closing Date, and after giving effect to the
funding of the initial Loans, if any, on the Closing Date will be, true,
correct, and complete:
Section 6.1 Existence. The Borrower (a) is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Texas, (b) has all requisite corporate power and authority to own its Properties
and carry on its business as now conducted, and (c) is qualified to do business
in all jurisdictions in which the nature of its business makes such
qualification necessary and where failure to so qualify could have a Material
Adverse Effect. The Borrower has the power and authority and legal right to
execute, deliver, and perform its obligations under the Loan Documents to which
it is or may become a party.
Section 6.2 Financial Statements. The Borrower has delivered to the
Agent and the Lenders (i) the audited consolidated financial statements
(including balance sheet and statements of income or operations, shareholders'
equity, and cash flow) of the Borrower and its Consolidated Subsidiaries as of
and for the fiscal year
ended December 31, 1998, and (ii) the unaudited financial statements (including
balance sheet and statements of income or operations, shareholders' equity, and
cash flow) of the Borrower and its Consolidated Subsidiaries as of and for the
fiscal quarter ended September 30, 1999. All financial statements required to be
delivered to the Agent in accordance with this Agreement (including, without
limitation, those referred to in the immediately preceding sentence) are or will
be when delivered (as applicable) true and correct, have been or will be (as
applicable) prepared in accordance with GAAP (except for year-end adjustments
and the absence of financial statement footnotes required by GAAP) and fairly
and accurately present or will fairly and accurately present (as applicable),
the financial position of the Borrower and its Consolidated Subsidiaries as of
such dates and the results of operations for the respective periods indicated
therein. There has not been, as of the Closing Date, any material adverse change
in the financial condition, results of operations, businesses, operations,
Properties, capitalization, assets, or liabilities of the Borrower and its
Consolidated Subsidiaries taken as a whole, or of the Borrower on an individual
basis, since September 30, 1999.
Section 6.3 Corporate Action; No Breach. The execution, delivery, and
performance by the Borrower of the Loan Documents and compliance with the terms
and provisions hereof and thereof have been duly authorized by all requisite
corporate action and do not and will not (a) violate or conflict with, or result
in a breach of, or require any consent under (i) the certificate of
incorporation or bylaws of the Borrower, (ii) any Governmental Requirement or
any order, writ, injunction, or decree of any Governmental Authority or
arbitrator, or (iii) any material agreement, document, or instrument to which
the Borrower is a party or, in the case of this clause (iii), by which the
Borrower or any of its Property is bound or subject, or (b) constitute a default
under any material agreement, document, or instrument to which the Borrower is
a party or, in the case of this clause (b), by which the Borrower or any of its
Property is bound or subject, or result in the creation or imposition of any
Lien upon any of the revenues or Property of the Borrower.
Section 6.4 Operation of Business; Licenses. Each Related Party (a)
possesses all material Licenses necessary or appropriate to conduct its
businesses substantially as now conducted and as proposed to be conducted or for
the ownership or use of any of its Properties and (b) has complied with all
initial and on-going conditions to the issuance and use of all such Licenses
except where failure to comply could not reasonably be expected to have a
Material Adverse Effect. No Related Party is in violation of any such material
Licenses which could be expected to result in any termination or cessation
thereof. All of such Licenses are in full force and effect, and all provisions
of such Licenses have been complied with in all material respects. To the
knowledge of any Related Party, as of the Closing Date, no such License is
subject to any pending or threatened revocation or termination proceeding or
action.
Section 6.5 Intellectual Property. Each Related Party owns or possesses
(or will be licensed or have the full right to use) all material Intellectual
Property which is necessary or appropriate for the operation of its businesses
as now conducted and proposed to be conducted, without any known conflict with
the rights of others. The consummation of the transactions contemplated by this
Agreement and the other Loan Documents will not materially alter or impair,
individually or in the aggregate, any of such rights of any Related Party. No
product or service of any Related Party infringes upon any Intellectual Property
of any other Person, and no claim or litigation is, to the knowledge of any
Related Party, pending or threatened against any Related Party contesting the
right of a Related Party to sell or otherwise use any product or material or
service which could be expected to have a Material Adverse Effect. There is no
violation by any Related Party of any right of a Related Party with respect to
any material Intellectual Property owned or used by a Related Party.
Section 6.6 Litigation and Judgments. To the knowledge of any Related
Party, each material action, suit, investigation, or proceeding in any court or
before any arbitrator or mediator or before or by any Governmental Authority
(whether or not any Governmental Authority is a party thereto) pending or
threatened against or affecting any Related Party, or that relates to any of the
Loan Documents as of the Closing Date, is disclosed on Schedule 6.6. None of
such actions, suits, investigations, or proceedings could, if adversely
determined, reasonably be expected to have a Material Adverse Effect. Except as
may be disclosed on Schedule 6.6, as of the Closing Date, there are no
outstanding judgments against any Related Party.
Section 6.7 Rights in Properties; Liens. Each Related Party has good
and indefeasible title to or, with respect to leasehold interests, valid
leasehold interests in all of its material Properties and assets, real and
personal, except where failure to have good and indefeasible title or valid
leasehold interests could not be expected to have a Material Adverse Effect, and
none of the Properties or leasehold interests of any Related Party is subject to
any Lien, except Permitted Liens. Other than as set forth on Schedule 1.1, no
Related Party has granted or voluntarily
allowed or permitted to exist any Lien to or in favor of any Person which
attaches or relates to any Property of any Related Party.
Section 6.8 Enforceability. The Loan Documents have been duly and
validly executed and delivered by the Borrower, and such Loan Documents
constitute the legal, valid, and binding obligations of the Borrower,
enforceable against the Borrower in accordance with their respective terms,
except as limited by bankruptcy, insolvency, reorganization, moratorium, or
other laws of general application relating to the enforcement of creditors'
rights and general principles of equity.
Section 6.9 Approvals. No authorization, approval, or consent of, and
no filing or registration with or notice to, any Governmental Authority or third
party is or will be necessary for the execution, delivery, or performance by the
Borrower of any of the Loan Documents, or for the validity or enforceability
thereof, except for such consents, approvals, and filings as have been validly
obtained or made and are in full force and effect. The consummation of the
transactions contemplated by the Loan Documents does not require the consent or
approval of any other Person, except such consents and approvals (a) as have
been validly obtained and are in full force and effect or (b) as to which the
failure to obtain is not, individually or in the aggregate, material.
Section 6.10 Debt. As of the Closing Date, no Related Party has any
Debt other than (a) the Obligations of the Borrower under this Agreement, and
(b) the Debt disclosed on Schedule 6.10.
Section 6.11 Taxes. Each Related Party has filed (a) all tax returns
(federal, state, and local) and reports required to be filed, including, without
limitation, all income, franchise, employment, Property, and sales tax returns,
and (b) all other material tax returns and reports required to be filed except
where failure to file any such return or report could not be expected to have a
Material Adverse Effect, and has paid all federal and other material taxes
(shown on such returns or reports to be due and payable), assessments, fees, and
other governmental charges levied or imposed upon it or its Properties, income,
or assets otherwise due and payable before they become delinquent, except those
which are being contested in good faith by appropriate proceedings and for which
adequate reserves have been established in accordance with GAAP and no notice of
Lien has been received by any Related Party. There is no proposed tax
assessment against any Related Party which could, if the assessment were made,
be expected to have a Material Adverse Effect.
Section 6.12 Margin Securities. Neither the Borrower nor any Subsidiary
of the Borrower is engaged principally, or as one of its important activities,
in the business of extending credit for the purpose of buying or carrying margin
stock (within the meaning of Regulations T, U, or X of the Board of Governors of
the Federal Reserve System), and no part of the proceeds of any Loan will be
used to buy or carry any margin stock or to extend credit to others for the
purpose of buying or carrying margin stock.
Section 6.13 ERISA. No Related Party nor any ERISA Affiliate maintains
or contributes to, or has any obligation under, any Pension Plan other than the
Pension Plans identified on Schedule 6.13. Each Plan of each Related Party is
in compliance in all material respects with all applicable provisions of ERISA
and the Code. Neither a Reportable Event nor a Prohibited Transaction has
occurred within the last sixty (60) months with respect to any Plan that could
be expected have a Material Adverse Effect. No notice of intent to terminate a
Pension Plan has been filed, nor has any Pension Plan been terminated. No
circumstances exist which constitute grounds entitling the PBGC to institute
proceedings to terminate, or appoint a trustee to administer, a Pension Plan,
nor has the PBGC instituted any such proceedings. Neither any Related Party nor
any ERISA Affiliate has completely or partially withdrawn from a Multiemployer
Plan. Each Related Party and each ERISA Affiliate has met its minimum funding
requirements under ERISA and the Code or with respect to all of their respective
Pension Plans subject to such requirements, and, as of the Closing Date except
as specified on Schedule 6.13, the present value of all vested benefits under
each funded Plan (exclusive of any Multiemployer Plan) does not and will not
exceed the fair market value of all such Plan assets allocable to such benefits,
as determined on the most recent valuation date of such Plan and in accordance
with ERISA. Neither any Related Party nor any ERISA Affiliate has incurred any
liability to the PBGC under ERISA. No litigation is pending or, to any Related
Party's knowledge, threatened concerning or involving any Plan that could be
expected to have a Material Adverse Effect. There are no unfunded or unreserved
liabilities (on either a going-concern basis or a wind-up basis) relating to any
Plan that could, individually or in the aggregate, have a Material Adverse
Effect if any Related Party was required to fund or reserve such liability in
full. As of the Closing Date, no funding waivers have been or will have been
requested or granted under Section 412 of the Code with respect to any Plan. No
unfunded or unreserved liability for benefits under any Plan or Plans (exclusive
of any Multiemployer Plans) exceeds $250,000 with respect to any such Plan, or
$1,000,000 with respect to all such Plans, in the aggregate as of the Closing
Date, on either a going-concern basis or a wind-up basis.
Section 6.14 Disclosure. No written statement, information, report,
representation, or warranty made by the Borrower in any Loan Document or
furnished to the Agent or any Lender by any Related Party in connection with the
Loan Documents or any transaction contemplated hereby or thereby contains any
untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein, in light of the
circumstances in which made, not misleading. There is no fact known to any
Related Party which has had a Material Adverse Effect, and there is no fact
known to any Related Party which might in the future have a Material Adverse
Effect except as may have been disclosed in writing to the Agent.
Section 6.15 Subsidiaries; Capitalization. Schedule 6.15 attached
hereto contains, as of the Closing Date, complete and accurate information
regarding (a) the identities of each of the Subsidiaries of the Borrower, (b)
the number of issued and outstanding shares of each class of Capital Stock
issued by each of the Borrower's Subsidiaries and the identities of, and number
and percentage of each of such shares held by, the owner(s) (both of record and
beneficially) of such Capital Stock, and (c) the jurisdiction of incorporation
or other organization of each such Subsidiary.
Section 6.16 Compliance With Laws. No Related Party is in violation of
any Governmental Requirement, except for instances of non-compliance that could
not, individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect.
Section 6.17 Investment Company Act. Neither the Borrower nor any of
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
Section 6.18 Public Utility Holding Company Act. Neither the Borrower
nor any of its Subsidiaries is a "holding company" or a "subsidiary company" of
a "holding company" or an "affiliate" of a "holding company" or a "public
utility" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 6.19 Environmental Matters.
(a) Except for instances of noncompliance with or exceptions to any of
the following representations and warranties that could not have,
individually or in the aggregate, a Material Adverse Effect:
(i) each Related Party, and all of their respective Properties
and operations are in full compliance with all Environmental Laws;
(ii) no Related Party has received written notice of, any past,
present, or future conditions, events, activities, practices, or
incidents which may interfere with or prevent the compliance or
continued compliance by such Person with all Environmental Laws;
(iii) each Related Party has obtained all Licenses that are
required under applicable Environmental Laws, and all such Licenses
are in good standing and all such Persons are in compliance with all
of the terms and conditions thereof;
(iv) No Hazardous Materials exist on, about or within or have
been (to the knowledge of any Related Party) or are being used,
generated, stored, transported, disposed of on, or Released from any
of the Properties of any Related Party except in compliance with
applicable Environmental Laws;
(v) the use which each Related Party makes and intends to make
of its respective Properties will not result in the use, generation,
storage, transportation, accumulation, disposal, or Release of any
Hazardous Material on, in or from any of their currently owned
Properties except in compliance with applicable Environmental Laws;
(vi) there are no conditions or circumstances associated with
the currently owned or leased Properties or operations of any Related
Party that could be expected to give rise to any Environmental
Liabilities or claims resulting in any Environmental Liabilities;
(vii) no Related Party, and none of their respective currently
or previously owned or leased Properties or operations, is subject to
any outstanding or, to the knowledge of any Related Party, threatened
order from or agreement with any Governmental Authority or other
Person or subject to any judicial or administrative proceeding with
respect to (A) any failure to comply with Environmental Laws, (B) any
Remedial Action, or (C) any Environmental Liabilities;
(viii) no Related Party is subject to, or has received written
notice of any claim from any Person alleging that it is or will be
subject to, any Environmental Liabilities;
(ix) none of the Properties of any Related Party is a treatment
facility (except for the recycling of Hazardous Materials generated
on-site and the treatment of liquid wastes subject to the Clean Water
Act or other applicable Environmental Law for temporary storage of
Hazardous Materials generated on-site prior to their disposal off-
site) or disposal facility requiring a permit under the Resource
Conservation and Recovery Act, 42 U.S.C. S 6901 et seq., regulations
thereunder or any comparable provision of state law;
(x) each Related Party is in compliance with all applicable
financial responsibility requirements of all Environmental Laws; and
(xi) no Related Party has failed to file any notice required
under applicable Environmental Law reporting a Release.
(b) No Lien arising under any Environmental Law that could have,
individually or in the aggregate, a Material Adverse Effect has attached to
any Property or revenues of any Related Party.
Section 6.20 Year 2000 Compliance
(a) The Borrower has (i) undertaken a detailed review and
assessment of all areas within the respective business and operations of
the Related Parties that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications used by any Related
Party may be unable to recognize and perform properly date-sensitive
functions involving certain dates prior to and any date after December 31,
1999), (ii) developed a detailed plan for addressing the Year 2000 Problem
on a timely basis, and (iii) implemented that plan in all material
respects. The Borrower represents that all the Related Parties' computer
applications that are material to their respective businesses and
operations are able to perform properly date-sensitive functions for all
dates before and after January 1, 2000 (that is, be "Year 2000 Compliant")
except where any such non-performance could not be expected to have a
Material Adverse Effect.
(b) The Borrower has made inquiry of the Related Parties' key
suppliers, vendors, and customers as to whether such Persons will on a
timely basis be Year 2000 Compliant and, on the basis of that inquiry,
believes that all such Persons are so compliant except where non-compliance
could not be expected to result in a Material Adverse Effect. For purposes
hereof, "key suppliers, vendors, and customers" refers to those suppliers,
vendors, and customers of a Related Party the business failure of which
would with reasonable probability be expected to have a Material Adverse
Effect.
Section 6.21 Labor Disputes and Acts of God. Neither the business nor
the Properties of any Related Party are affected by any fire, explosion,
accident, strike, lockout, or other labor dispute, drought, storm, hail,
earthquake, embargo, act of God or of the public enemy, or other casualty
(whether or not covered by insurance) that is having or could be expected to
have a Material Adverse Effect.
Section 6.22 Outstanding Securities. All outstanding securities (as
defined in the Securities Act of 1933, as amended, or any successor thereto, and
the rules and regulations of the Securities and Exchange Commission thereunder)
of each Related Party have been offered, issued, sold, and delivered in
compliance with all applicable Governmental Requirements.
Section 6.23 Solvency. The Borrower is Solvent, both before and after
giving effect to the Loans.
Section 6.24 Employee Matters. Except as set forth on Schedule 6.25, as
of the Closing Date (a) neither any Related Party nor any of their respective
employees is subject to any collective bargaining agreement, and (b) no petition
for certification or union election is pending with respect to the employees of
any
Related Party, and no union or collective bargaining unit has sought such
certification or recognition with respect to the employees of any Related Party.
There are no strikes, slowdowns, work stoppages, or controversies pending or, to
the knowledge of any Related Party, threatened against, any Related Party or
their respective employees which could have, either individually or in the
aggregate, a Material Adverse Effect.
Section 6.25 Insurance. Schedule 6.26 sets forth a complete and
accurate description of all material policies of insurance that are in effect as
of the Closing Date for the Related Parties and their respective Properties. No
notice of cancellation has been received for any of such policies and each owner
and holder of each such policy is in compliance with all of the terms and
conditions of such policies.
Section 6.26 Principal Place of Business. The location of the
Borrower's principal place of business and where it keeps its books and records
is located at the address of the Borrower set forth as the address for notices
for the Borrower on the signature pages hereof.
Section 6.27 Burdensome Agreements. No Related Party is a party to any
indenture, loan agreement, credit agreement, stock purchase agreement, or any
lease or other agreement, document, or instrument, or subject to any charter or
corporate restriction, that is unduly and materially burdensome or that could be
expected to have a Material Adverse Effect. No Related Party is in default in
any respect in the performance, observance, or fulfillment of any of the
obligations, covenants, or conditions contained in any agreement, document, or
instrument binding on it or its Properties, except for instances of
noncompliance that, individually or in the aggregate, could not have a Material
Adverse Effect.
Section 6.28 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article 6 and all statements
contained in any certificate, financial statement (other than projections), or
other instrument, delivered by the Borrower pursuant to or in connection with
this Agreement or any of the other Loan Documents (including, but not limited
to, any such representation, warranty, or statement made in or in connection
with any amendment thereto) shall constitute representations and warranties made
under this Agreement. All representations and warranties made or deemed to be
made under this Agreement shall survive and not be waived by the execution and
delivery of this Agreement, any investigation made by or on behalf of the Agent
or any Lender, or any borrowing hereunder.
ARTICLE 7
Affirmative Covenants
---------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding, any Lender has any Commitment hereunder, or any
Letter of Credit remains outstanding, it will perform and observe, or cause to
be performed and observed, the following covenants:
Section 7.1 Reporting Requirements. The Borrower will furnish to the
Agent and each Lender:
(a) Annual Financial Statements. As soon as available, and in any
event within one hundred twenty (120) days after the end of each fiscal
year of the Borrower, beginning with the fiscal year ending December 31,
1999 (i) a copy of the Borrower's annual report on Form 10-K (such annual
report to include, without limitation, the annual audit report and other
financial information referenced in clause (ii) of this Section 7.1(a))
filed by the Borrower as of the end of and for such fiscal year then ended,
or (ii) a copy of the annual audit report of the Borrower and its
Consolidated Subsidiaries as of the end of such fiscal year (including the
balance sheet and the related statements of income or operations,
shareholders' equity, and cash flows for such fiscal year), in each case
setting forth in comparative form the figures for the previous fiscal year,
and accompanied by the opinion of independent certified public accountants
of recognized standing acceptable to the Agent, which opinion shall state
that such consolidated financial statements present fairly the financial
position and results of operations of the Borrower and its Consolidated
Subsidiaries for the periods indicated in conformity with GAAP and which
opinion shall not be qualified or limited because of a restricted or
limited examination by such accountant of any material portion of the
records of the Borrower and its Consolidated Subsidiaries;
(b) Monthly Financial Statements. As soon as available, and in any
event within forty-five (45) days after the end of each month, beginning
with the month ended December 31, 1999 (i) a copy of the unaudited
consolidated balance sheet and the related consolidated statements of
income or operations, shareholders' equity, and cash flow of the Borrower
and its Consolidated Subsidiaries as of the end of and
for such month in each case setting forth in comparative form the
information or figures for the corresponding period of the preceding fiscal
year, and certified by an appropriate Responsible Officer of the Borrower
as fairly presenting, in accordance with GAAP, the financial position and
the results of operations of the Borrower and its Consolidated
Subsidiaries, except for year-end adjustments and financial statement
footnotes required by GAAP and (ii) a current "backlog report" of the
Borrower and its Consolidated Subsidiaries as of the end of such month;
(c) Compliance Certificate. Concurrently with the delivery of each
of the financial statements for any fiscal year end referred to in Section
7.1(a) and for any fiscal quarter end referred to Section 7.1(b), a
certificate of a Responsible Officer of the Borrower substantially in the
form of Exhibit D ("Compliance Certificate"), appropriately completed (i)
stating that, to the best of such officer's knowledge, no Default or Event
of Default has occurred and is continuing or, if one or more Defaults or
Events of Default have occurred and are continuing, stating the nature
thereof, when such Default(s) or Event(s) of Default occurred, and the
steps, if any, being taken and proposed to be taken with respect thereto,
(ii) setting forth the calculations necessary to establish the status of
compliance with the covenants of Article 9 as of the date of the financial
statements delivered concurrently therewith, (iii) setting forth the
calculation of the Debt Ratio necessary to determine the Applicable Margin
with respect to Libor Rate Loans, and (iv) setting forth the amount and
date of any Restricted Payments made by any Related Party during the period
covered by such Compliance Certificate;
(d) Notice of Actions, Suits, Investigations, or Proceedings.
Promptly after a Responsible Officer of the Borrower or any Consolidated
Subsidiary obtains knowledge thereof, notice of all actions, suits,
investigations, and proceedings in any court or before any arbitrator or
mediator or before or by any Governmental Authority (whether or not any
Governmental Authority is a party thereto) affecting the Borrower or any of
its Subsidiaries or any License of the Borrower or any of its Subsidiaries,
which, if determined adversely to such Person, could reasonably be expected
to have a Material Adverse Effect;
(e) Notice of Default, Etc. As soon as possible and in any event
immediately upon the Borrower's knowledge of the occurrence of any Default
or Event of Default, a written notice setting forth the details of such
Default or Event of Default and the action that the Borrower has taken and
proposes to take with respect thereto;
(f) ERISA Plan Reports. Promptly after the filing or receipt thereof,
copies of all reports, including, without limitation, annual reports, and
notices which any Related Party or any ERISA Affiliate files with or
receives from the PBGC or the U.S. Department of Labor under ERISA with
respect to a Pension Plan or for which any Related Party has any potential
liability, and, as soon as possible and in any event within five (5) days
after any Related Party knows or has reason to know that any Pension Plan
is insolvent, or that any Reportable Event or Prohibited Transaction has
occurred with respect to any Plan or Multiemployer Plan, or that the PBGC,
any Related Party, or any ERISA Affiliate has instituted or will institute
proceedings under ERISA to terminate or withdraw from or reorganize any
Pension Plan, a certificate of a Responsible Officer the Borrower setting
forth the details as to such insolvency, withdrawal, Reportable Event,
Prohibited Transaction, or termination and the action that the Borrower
and/or any other Related Party has taken and proposes to take with respect
thereto;
(g) Proxy Statements, Etc. As soon as available, one copy of each (if
any) financial statement, report, notice, or proxy statement sent by the
Borrower to its stockholders or other security holders generally and one
copy of each (if any) regular, periodic, or special report (including,
without limitation, reports on forms 10-Q and 8-K), registration statement,
or prospectus filed by the Borrower with any securities exchange or the
Securities and Exchange Commission or any successor agency;
(h) Plan Information. From time to time, as requested by the Agent or
any Lender, such books, records, and other documents relating to any
Pension Plan as the Agent or any Lender may reasonably specify; prior to
any termination, partial termination, or merger of a Pension Plan covering
employees of any Related Party or any ERISA Affiliate, or a transfer of
assets of a Pension Plan covering employees of any Related Party or any
ERISA Affiliate, written notification thereof; promptly upon such Related
Party's receipt thereof, a copy of any determination letter or advisory
opinion regarding any Pension Plan received from any Governmental Authority
and any amendment or modification thereto as may be necessary as a
condition to obtaining a favorable determination letter or advisory
opinion, and promptly upon the occurrence thereof, written notification of
any action requested by any Governmental Authority to be taken as a
condition to any such determination letter or advisory opinion;
(i) Projections. No sooner than thirty (30) days prior to the
beginning of each fiscal year and no later than the final day of each
fiscal year, annual forecasts prepared by the Borrower during such time
period (to include forecasted consolidated balance sheets, statements of
income, and expenses) for the Related Parties as at the end of and for each
month of such succeeding fiscal year and consolidated statements of cash
flow for the Related Parties as at the end of and for each month of such
succeeding fiscal year.
(j) Management Letters. Promptly upon each receipt thereof by any
Related Party, a copy of any management letter or other written report
submitted to such Related Party by independent certified public accountants
with respect to the business, condition (financial or otherwise),
operations, or Properties of any Related Party;
(k) Reports to Other Creditors. Promptly after the furnishing
thereof, a copy of any financial or other material statement or report
furnished by any Related Party to any other party pursuant to the terms of
any indenture, loan, stock purchase, or credit or similar agreement and not
otherwise required to be furnished to the Agent and the Lenders pursuant to
any other clause of this Section 7.1;
(l) Notice of Material Adverse Effect. Within two (2) Business
Days after any Responsible Officer of any Related Party becomes aware
thereof, written notice of any matter that could reasonably be expected to
have a Material Adverse Effect;
(m) Environmental Assessments and Notices. Promptly after the
receipt thereof, a copy of each environmental assessment (including any
analysis relating thereto) prepared with respect to any Property of any
Related Party and each notice sent by any Governmental Authority to any
Related Party relating to any failure or alleged failure to comply with any
Environmental Law or any liability with respect thereto; and
(n) General Information. Promptly, such other business, financial,
corporate affairs, and other similar information concerning the Related
Parties as the Agent or any Lender may from time to time reasonably
request.
Section 7.2 Maintenance of Existence; Conduct of Business. The Borrower
will, and will cause each of the other Related Parties to, preserve and maintain
its existence and all of its leases, privileges, Licenses, qualifications,
Intellectual Property, intangible Property, and contract and other rights that
are necessary or appropriate in the ordinary conduct of its business. The
Borrower will, and will cause each of the other Related Parties to, conduct its
business in an orderly and efficient manner in accordance with good business
practices.
Section 7.3 Maintenance of Properties and Licenses. The Borrower will,
and will cause each of the other Related Parties to, maintain, keep, and
preserve all of its Properties and Licenses necessary in the proper conduct of
its business in good repair, working order, and condition (ordinary wear and
tear excepted) and make all necessary repairs, renewals, and replacements and
improvements thereof.
Section 7.4 Taxes and Claims. The Borrower will, and will cause each of
the other Related Parties to, pay or discharge before becoming delinquent (a)
all material taxes, levies, assessments, and governmental charges imposed on it
or its income or profits or any of its Property and (b) all lawful claims for
labor, material, and supplies, which, if unpaid, might become a Lien upon any of
its Property; provided, however, that none of the Related Parties shall be
required to pay or discharge any tax, levy, assessment, or governmental charge,
or claim for labor, material, or supplies, whose amount, applicability, or
validity is being contested in good faith by appropriate proceedings being
diligently pursued and for which adequate reserves have been established under
GAAP.
Section 7.5 Insurance. The Borrower will, and will cause each of the
other Related Parties to, keep insured by financially sound and reputable
insurers all Property of a character usually insured by responsible entities
engaged in the same or a similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against by such
corporations or entities and carry such other insurance as is usually carried by
such corporations or entities (which may to the extent such corporations or
entities are in whole or in part self-insured against certain risks, include
self-insurance), provided that in any event the Related Parties will maintain
(subject to the preceding self-insurance provisions):
(a) Property Insurance. Insurance against loss or damage covering
substantially all of the tangible real and personal Property of such Person
by reason of any Peril (as defined below) in such amounts as shall be
reasonable and customary and sufficient to avoid the insured named therein
from becoming a co-insurer of any loss under such policy, but in any event
in such amounts as are reasonably available as determined by the Borrower's
independent insurance broker.
(b) Automobile Liability Insurance for Bodily Injury and Property
Damage. Insurance in respect of all vehicles (whether owned, hired or
rented by such Person) at any time located at, or used in connection with,
its Properties or operations against liabilities for bodily injury and
Property damage in such amounts as are then customary for vehicles used in
connection with similar Properties and businesses, but in any event to the
extent required by applicable law.
(c) Comprehensive General Liability Insurance. Insurance against
claims for bodily injury, death, or Property damage occurring on, in or
about the real Property of such Person, in such amounts as are then
customary for Property similar in use in the jurisdictions where such
Properties are located.
(d) Workers' Compensation Insurance. Workers' compensation
insurance (including employers' liability insurance) to the extent required
by applicable law, which may be self-insurance to the extent permitted by
applicable law.
All insurance shall be written by financially responsible companies selected by
the applicable Related Party and having an A.M. Best Rating of "A-" or better
and being in a financial size category of "VI" or larger, or by other companies
reasonably acceptable to the Agent. For purposes hereof, the term "Peril" shall
mean, collectively, fire, lightning, flood, windstorm, hail, explosion, riot and
civil commotion, vandalism and malicious mischief, damage from aircraft,
vehicles, and smoke, and other perils covered by the "all-risk" endorsement then
in use in the jurisdictions where the Properties of the Related Parties are
located.
Section 7.6 Inspection Rights. The Borrower will, and will cause each
other Related Party to, permit representatives and agents of the Agent and the
Lenders, during normal business hours, to examine, copy, and make extracts from
its books and records, to visit and inspect its Properties and to discuss its
business, operations, and financial condition with its officers and independent
certified public accountants. The Borrower will authorize, and will cause each
other Related Party to authorize, its accountants in writing (with a copy to the
Agent) to comply with this Section 7.6. The costs and expenses of the Agent and
the Lenders incurred pursuant to this Section shall be paid for by each such
inspecting Person unless an Event of Default shall have occurred and be
continuing in which case such costs and expenses shall be paid for by the
Borrower pursuant to Section 12.1.
Section 7.7 Keeping Books and Records. The Borrower will, and will
cause each other Related Party to, maintain appropriate books of record and
account in accordance with GAAP consistently applied in which true, full, and
correct entries will be made of all their respective dealings and business
affairs. If any changes in accounting principles from those used in the
preparation of the financial statements referenced in Section 7.1 are hereafter
required or permitted by GAAP and are adopted by the Borrower with the
concurrence of its independent certified public accountants and such changes in
GAAP result in a change in the method of calculation or the interpretation of
any of the covenants, standards, or terms contained in this Agreement, the
Borrower and the Required Lenders agree to amend any such affected terms and
provisions so as to reflect such changes in GAAP with the result that the
criteria for evaluating the financial condition or performance of the Borrower
and its Subsidiaries shall be the same after such changes in GAAP as if such
changes in GAAP had not been made.
Section 7.8 Compliance With Laws. The Borrower will, and will cause
each other Related Party to, comply with all Governmental Requirements
applicable to the operation of its business, except for instances of
noncompliance that could not reasonably be expected to have, individually or in
the aggregate, a Material Adverse Effect.
Section 7.9 Compliance With Agreements. The Borrower will, and will
cause each other Related Party to, comply with all agreements, documents, and
instruments binding on it or affecting its Properties or business, except for
instances of noncompliance that could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.
Section 7.10 Further Assurances. The Borrower will execute and deliver,
and will cause each other Related Party to execute and deliver, such further
agreements, documents, and instruments and take such further
actions as may be requested by the Agent to carry out the terms and provisions
and purposes of this Agreement and the other Loan Documents and to evidence the
Obligations. Without limiting the generality of the foregoing, the Borrower will
take all necessary actions to and otherwise ensure that, at all times, the
Obligations will rank at least pari passu in respect of priority of treatment
with all other present and future Debt of the Borrower (excluding rights of
secured parties with respect to Permitted Liens).
Section 7.11 ERISA. The Borrower will, and will cause each other
Related Party and each ERISA Affiliate to, comply with all minimum funding
requirements and all other material requirements of ERISA so as not to give rise
to any liability thereunder in excess of $1,000,000.
Section 7.12 Non-Consolidation. The Borrower will, and will cause each
other Related Party to: (a) maintain books and records of account separate from
those of any other entity which is an Affiliate of such Related Party; (b) not
commingle its funds or assets with those of any other entity which is an
Affiliate of such Related Party; and (c) provide that its Board of Directors or
other analogous governing body will hold all appropriate meetings to authorize
and approve such Person's actions, which meetings will be separate from those of
any other Related Party.
Section 7.13 Year 2000 Compliance. The Borrower will, and will cause
each other Related Party, promptly notify Agent in the event any Related Party
discovers or determines that any computer application (including those of its
suppliers and vendors) that is material to it or any of its business and
operations will not be Year 2000 Compliant on a timely basis, except to the
extent that such failure could not reasonably be expected to have a Material
Adverse Effect.
Section 7.14 Delivery of Certain Amendments and Funded Debt Documents.
The Borrower will, and will cause each other Related Party to, promptly deliver
to the Agent any amendment, modification, or supplement to (a) the certificate
or articles of incorporation, articles of organization, bylaws, regulations, or
other constitutional documents of any Related Party and (b) any agreement,
document, or instrument entered into by a Related Party evidencing any Funded
Debt. The Borrower will, and will cause each other Related Party to, deliver to
the Agent, promptly after any agreement, document, or instrument entered into by
a Related Party evidencing any Funded Debt comes into existence, a true and
correct copy of each such agreement, document, or instrument.
ARTICLE 8
Negative Covenants
------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding, any Lender has any Commitment hereunder, or any
Letter of Credit remains outstanding, it will perform and observe, or cause to
be performed and observed, the following covenants:
Section 8.1 Debt. The Borrower will not, nor will it permit any other
Related Party to, incur, create, assume, or permit to exist any Debt, except:
(a) Debt to the Lenders pursuant to the Loan Documents;
(b) existing Debt in the principal amounts and as otherwise
described on Schedule 6.10 (including, without limitation, the Borrower's
present $5,000,000 unsecured revolving line of credit with Chase Bank of
Texas, N.A.) and renewals, extensions, or refinancings of such Debt which
do not increase the outstanding principal amount of such Debt, which do not
shorten the maturity of any principal of such Debt and the terms and
provisions of which are not materially more onerous than the terms and
conditions of such Debt on the Closing Date;
(c) liabilities of the Borrower in respect of unfunded vested
benefits under any Plan if and to the extent that the existence of such
liabilities will not constitute, cause or result in a Default or Event of
Default;
(d) intercompany Debt between or among the Borrower and any of its
Consolidated Subsidiaries;
(e) other unsecured Debt and Debt secured by Liens of the type
described in clause (h) of the definition of Permitted Liens; provided that
the aggregate amount of all such Debt shall not at any time exceed
$6,000,000; and
(f) Debt evidenced by promissory notes with a term of not more
than five (5) years payable to creditors of "Comelor"; provided that the
aggregate amount of Debt evidenced thereby shall not at any time exceed
$3,000,000.
Section 8.2 Limitation on Liens. The Borrower will not, nor will it
permit any other Related Party to, incur, create, assume, or permit to exist any
Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, except Permitted Liens.
Section 8.3 Mergers, Etc. The Borrower will not, nor will it permit any
other Related Party to, (a) become a party to a merger or consolidation, (b)
wind-up, dissolve, or liquidate itself, or (c) purchase or acquire all or a
material or substantial part of the business or Properties of any Person;
provided, however, that any Consolidated Subsidiary of the Borrower may merge
with and into the Borrower or a Wholly-Owned Subsidiary of the Borrower if the
Borrower or such Wholly-Owned Subsidiary of the Borrower is the surviving entity
in such merger, provided that no consideration is given by the surviving entity
in such merger other than Capital Stock of the surviving entity.
Section 8.4 Restricted Payments. The Borrower will not, nor will it
permit any other Related Party to, make any Restricted Payments, except:
(a) beginning with the fiscal year ending December 31, 1999, and
continuing for each fiscal year thereafter, the Borrower may declare and
pay dividends on, or make other Restricted Payments in respect of, any or
all classes of its Capital Stock in an aggregate amount not in excess of
the greater of (i) $12,000,000 or (ii) fifty percent (50.0%) of Net Income
for such fiscal year; provided that any such Restricted Payment to be made
pursuant to clause (i) preceding shall be made within 120 days of the end
of the applicable fiscal year;
(b) the Borrower may declare and pay dividends on any class of its
Capital Stock payable solely in shares of Capital Stock of the Borrower;
(c) any Related Party may make Restricted Payments to any other
Related Party; and
(d) the Borrower each other Related Party may make loans or
advances to employees, officers, and directors of the Related Parties in
the ordinary course of business that do not exceed $1,000,000 in aggregate
amount at any time outstanding;
provided, however, that no Restricted Payments may be made pursuant to clause
(a) preceding if any Default or Event of Default exists at the time of the
declaration of such Restricted Payment or if the making of such Restricted
Payment on the date of declaration would result in a Default or Event of Default
on such date.
Section 8.5 Limitation on Issuance of Capital Stock. The Borrower will
not permit any other Related Party to, at any time issue, sell, assign, or
otherwise dispose of (a) any of its Capital Stock, (b) any securities
exchangeable for or convertible into or carrying any rights to acquire any of
its Capital Stock, or (c) any option, warrant, or other right to acquire any of
its Capital Stock, in each case to any Person other than another Related Party.
Section 8.6 Transactions with Affiliates. The Borrower will not, nor
will it permit any other Related Party to, enter into any transaction,
including, without limitation, the purchase, sale, or exchange of Property or
the rendering of any service, with any Affiliate of the Borrower, other than a
Related Party, except upon fair and reasonable terms no less favorable to such
Related Party, than would be obtained in a comparable arms-length transaction
with a Person not an Affiliate of the Borrower.
Section 8.7 Sale and Leaseback. The Borrower will not, nor will it
permit any other Related Party to, enter into any arrangement with any Person
pursuant to which it leases from such Person real or personal Property that has
been or is to be sold or transferred, directly or indirectly, by it to such
Person; provided that the Related Parties may enter into any such arrangement
for which the Capital Lease Obligations incurred are permitted under Section
8.1.
Section 8.8 Lines of Business. The Borrower will not, and will not
permit any other Related Party to, (a) engage in any business other than the
lines of business in which it is engaged on the Closing Date and matters
incidental thereto or (b) discontinue any line or lines of business which
provide material revenues to such Related Party in which it is engaged on the
Closing Date.
Section 8.9 Environmental Protection. The Borrower will not, nor will
it permit any other Related Party to, (a) use (or permit any tenant to use) any
of its Properties for the handling, processing, storage, transportation, or
disposal of any Hazardous Material except in compliance with applicable
Environmental Laws, (b) generate any Hazardous Material except in compliance
with applicable Environmental Laws, (c) conduct any activity that is likely to
cause a Release or threatened Release of any Hazardous Material in violation of
any Environmental Law, or (d) otherwise conduct any activity or use any of its
Properties in any manner, that violates or is likely to violate any
Environmental Law or create any Environmental Liabilities for which any Related
Party would be responsible, except for circumstances or events described in
clauses (a) through (d) preceding that could not, individually or in the
aggregate, be expected to have a Material Adverse Effect.
Section 8.10 Intercompany Transactions. Except as may be expressly
permitted or required by the Loan Documents, the Borrower will not, nor will it
permit any other Related Party to, create or otherwise cause or permit to exist
or become effective any consensual encumbrance or restriction of any kind on the
ability of any Related Party to (a) pay dividends or make any other distribution
to the Borrower or any other Related Party in respect of the Capital Stock of
such Related Party or with respect to any other interest or participation in, or
measured by, its profits, (b) pay any indebtedness owed to any Related Party,
(c) make any loan or advance or capital contribution to any Related Party, or
(d) sell, lease, or transfer any of its Property to any Related Party.
Section 8.11 ERISA. The Borrower will not, nor will it permit any other
Related Party to:
(a) allow, or take (or permit any ERISA Affiliate to take) any
action which would cause, any unfunded or unreserved liability for benefits
under any Plan (exclusive of any Multiemployer Plan) to exist or to be
created that exceeds $250,000 with respect to any such Plan or $1,000,000
with respect to all such Plans in the aggregate on either a going concern
or a wind-up basis; or
(b) with respect to any Multiemployer Plan, allow, or take (or
permit any ERISA Affiliate to take) any action which would cause, any
unfunded or unreserved liability for benefits under any Multiemployer Plan
to exist or to be created, either individually as to any such Plan or in
the aggregate as to all such Plans, that could, upon any partial or
complete withdrawal from or termination of any such Multiemployer Plan or
Plans, have a Material Adverse Effect.
Section 8.12 Disposition of Assets. The Borrower will not permit the
aggregate of all Asset Dispositions of the Related Parties to exceed $15,000,000
after the Closing Date.
ARTICLE 9
Financial Covenants
-------------------
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding, any Lender has any Commitment hereunder, or any
Letter of Credit remains outstanding, it will perform and observe, or cause to
be performed and observed, the following covenants:
Section 9.1 Minimum Tangible Net Worth. At all times from and after
December 31, 1999, the Borrower will not permit its Tangible Net Worth to be
less than $135,000,000.
Section 9.2 Leverage Ratio. As of the end of each of the Borrower's
fiscal quarters, commencing with the fiscal quarter ending on December 31, 1999,
the Borrower shall not permit the Leverage Ratio as of such fiscal quarter end
to exceed 0.75 to 1.00.
Section 9.3 Interest Coverage. As of the end of each of the Borrower's
fiscal quarters, commencing with the fiscal quarter ending on March 31, 2000,
the Borrower shall not permit the Interest Coverage Ratio as of such fiscal
quarter end, calculated for the preceding four (4) consecutive fiscal quarter
period to be less than 2.00 to 1.00.
Section 9.4 Net Income. For the Borrower's fiscal year ending December 31,
1999, the Borrower will not permit Net Income of the Borrower and its
Consolidated Subsidiaries to be less than a loss of $3,000,000 (i.e. $-
3,000,000).
ARTICLE 10
Default
-------
Section 10.1 Events of Default. Each of the following shall be deemed
an "Event of Default":
(a) (i) the Borrower shall fail to pay, repay, or prepay when
due, any amount of principal or interest owing to any Lender pursuant to
this Agreement or any other Loan Document, or (ii) the Borrower shall fail
to pay, within two (2) Business Days after the due date thereof, any fee,
expense, or other amount or other Obligation owing to the Agent or any
Lender pursuant to this Agreement or any other Loan Document;
(b) any representation or warranty made or deemed made by or on
behalf of the Borrower in any Loan Document or in any certificate, report,
notice, or financial statement furnished at any time in connection with
this Agreement or any other Loan Document shall be false, misleading, or
erroneous in any material respect when made or deemed to have been made;
(c) the Borrower or any of its Subsidiaries shall fail to
perform, observe, or comply with any covenant, agreement or term contained
in Section 7.1(e), Section 7.2, Section 7.6, Section 7.10, Article 8 or
Article 9, the Borrower or any of its Subsidiaries shall fail to perform,
observe, or comply with any covenant, agreement, or term contained in
Section 7.1 (other than Section 7.1(e)) and such failure is not remedied or
waived within ten (10) days after such failure commenced, or the Borrower
or any of its Subsidiaries shall fail to perform, observe, or comply with
any other covenant, agreement, or term contained in this Agreement or any
other Loan Document (other than covenants to pay the Obligations) and such
failure is not remedied or waived within the earlier to occur of thirty
(30) days after such failure commenced or, if a different grace period is
expressly made applicable in such other Loan Documents, such applicable
grace period;
(d) the Borrower ceases to be Solvent;
(e) any Related Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, liquidator, or administrator of itself or of all or a substantial
part of its Property, (ii) admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due, subject to any
applicable grace periods, (iii) make a general assignment for the benefit
of its creditors, (iv) commence a voluntary case under the United States
Bankruptcy Code (as now or hereafter in effect, the "Bankruptcy Code"), (v)
file a petition seeking to take advantage of any other law providing for
the relief of debtors or relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement, or winding up, or
composition or readjustment of debts, (vi) fail to controvert in a timely
or appropriate manner, or acquiesce in writing to, any petition filed
against it in an involuntary case under the Bankruptcy Code or other
applicable Governmental Requirement, (vii) dissolve, or (viii) take any
action for the purpose of effecting any of the foregoing;
(f) a proceeding or case shall be commenced, without the
application or consent of any Related Party, in any court of competent
jurisdiction, seeking (i) the liquidation, reorganization, dissolution,
arrangement, winding up, or composition or readjustment of its debts, (ii)
the appointment of a trustee, receiver, custodian, examiner, liquidator,
administrator, or the like of it or of all or any substantial part of its
Property, or (iii) similar relief in respect of it, under any law providing
for the relief of debtors or relating to bankruptcy, insolvency,
reorganization, liquidation, dissolution, arrangement, or winding up, or
composition or readjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment, or decree approving or
ordering any of the foregoing shall be entered and continue unstayed and in
effect, for a period of sixty (60) or more days, or an order for relief
shall be entered in an involuntary case under the Bankruptcy Code against
any Related Party and shall continue unstayed and in effect for any period
of sixty (60) consecutive days;
(g) any Related Party shall fail to discharge within a period of
thirty (30) days after the commencement thereof any attachment,
sequestration, forfeiture, or similar proceeding or proceedings involving
an aggregate amount in excess of $3,000,000 against any of its Properties;
(h) a final judgment or judgments for the payment of money in
excess of $3,000,000 in the aggregate shall be rendered by a court or
courts against any Related Party on claims not covered by insurance and the
same shall not be discharged, bonded, or a stay of execution thereof shall
not be procured, within sixty (60) days from the date of entry thereof and
any Related Party shall not, within said period of sixty (60) days, or such
longer period during which execution of the same shall have been stayed,
appeal therefrom and cause the execution thereof to be stayed during such
appeal;
(i) any Related Party shall fail to pay when due any principal of
or interest on any Debt of such Related Party (other than the Obligations)
having (either individually or in the aggregate) a principal amount of at
least $3,000,000 or the maturity of any such Debt shall have been
accelerated, or any event shall have occurred (and shall not have been
waived or otherwise cured) that permits any holder or holders of such Debt
or any Person acting on behalf of such holder or holders to accelerate the
maturity thereof or require any such prepayment;
(j) this Agreement or any other Loan Document shall in any
material respect cease to be in full force and effect or shall be declared
null and void or the validity or enforceability thereof shall be contested
or challenged by the Borrower or the Borrower shall deny that it has
further liability or obligation under any of the Loan Documents;
(k) any of the following events shall occur or exist with respect
to any Related Party or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Pension
Plan; (iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Pension Plan or the termination of any Pension Plan; (iv) any
event or circumstance that could reasonably be expected to constitute
grounds entitling the PBGC to institute proceedings under Section 4042 of
ERISA for the termination of, or for the appointment of a trustee to
administer, any Pension Plan, or the institution by the PBGC of any such
proceedings; (v) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA or Section 412 of the Code) in excess of $1,000,000,
whether or not waived, shall exist with respect to any Pension Plan; or
(vi) complete or partial withdrawal under Section 4201 or 4204 of ERISA
from a Multiemployer Plan or the reorganization, insolvency or termination
of any Pension Plan; and in each case above, such event or condition,
together with all other events or conditions, if any, have subjected or
could in the reasonable opinion of the Required Lenders subject any Related
Party or any ERISA Affiliate to any tax, penalty, or other liability to a
Plan, a Multiemployer Plan, the PBGC or otherwise (or any combination
thereof) which in the aggregate exceed or could reasonably be expected to
exceed $1,000,000; or
(l) the occurrence of any Change in Control;
provided that the enumeration of Events of Default in this Section 10.1 shall
not impair the nature of the Revolving Loans B as being payable ON DEMAND
pursuant to Section 2.3(b).
Section 10.2 Remedies. If any Event of Default shall occur and be
continuing, the Agent may and, if directed by the Required Lenders, the Agent
shall do any one or more of the following:
(a) Acceleration. Declare all outstanding principal of and
accrued and unpaid interest on the Revolving Loans A and all other amounts
payable by the Borrower under the Loan Documents immediately due and
payable, and the same shall thereupon become immediately due and payable,
without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other formalities
of any kind, all of which are hereby expressly waived by the Borrower;
(b) Termination of Commitments. Terminate each of the Commitments
(including, without limitation, any obligation of the Agent to cause the
Issuing Bank to issue any Letter of Credit) without notice to the Borrower;
(c) Judgment. Reduce any claim to judgment; or
(d) Rights. Exercise any and all rights and remedies afforded by
the applicable laws of the State of Texas or any other jurisdiction, by any
of the Loan Documents, by equity, or otherwise;
provided, however, that upon the occurrence of an Event of Default under Section
10.1(e) or Section 10.1(f), the Commitments of all of the Lenders (including,
without limitation, any obligation of the Agent to cause the Issuing Bank to
issue any Letter of Credit) shall immediately and automatically terminate, and
the outstanding principal of and accrued and unpaid interest on the Loans and
all other amounts payable by the Borrower under the Loan Documents shall
thereupon become immediately and automatically due and payable, without notice,
demand, presentment, notice of dishonor, notice of acceleration, notice of
intent to accelerate, protest, or other formalities of any kind, all of which
are hereby expressly waived by the Borrower. The remedies of the Agent and the
Lenders set forth herein are in addition to any additional rights and remedies
that Bank of America may have with respect to the Revolving Loans B as set forth
in Section 2.3(b). Notwithstanding any other provision of this Section 10.2,
with respect to the Revolving Loans B, the foregoing enumeration of remedies
available to the Agent and/or Bank of America shall not impair the nature of the
Revolving Loans B as being payable on DEMAND pursuant to Section 2.3(b).
Section 10.3 Performance by the Agent, Etc. If the Borrower shall fail
to perform any covenant or agreement in accordance with the terms of the Loan
Documents, the Agent may perform or attempt to perform, or may cause any Lender
(with the consent of such Lender) to perform or attempt to perform, such
covenant or agreement on behalf of the Borrower. In such event, the Borrower
shall, at the request of the Agent, promptly pay any amount expended by the
Agent or the Lenders in connection with such performance or attempted
performance to the Agent at its Principal Office, together with interest thereon
at the applicable Default Rate from and including the date of such expenditure
to but excluding the date such expenditure is paid in full. Notwithstanding the
foregoing, it is expressly agreed that neither the Agent nor any Lender shall
have any liability or responsibility for the performance of any obligation of
the Borrower or any other Person under this Agreement or any of the other Loan
Documents.
ARTICLE 11
The Agent
---------
Section 11.1 Appointment, Powers, and Immunities.
(a) Each Lender hereby irrevocably appoints and authorizes the
Agent to act as its agent hereunder and under the other Loan Documents with
such powers as are specifically delegated to the Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Neither the Agent nor any of its
Affiliates, officers, directors, employees, attorneys, or agents shall be
liable for any action taken or omitted to be taken by any of them hereunder
or otherwise in connection with this Agreement or any of the other Loan
Documents except for its or their own gross negligence or willful
misconduct. Without limiting the generality of the preceding sentence, the
Agent (a) may treat the payee of any Note as the holder thereof until the
Agent receives written notice of the assignment or transfer thereof signed
by such payee and in form satisfactory to the Agent, (b) shall have no
duties or responsibilities except those expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee or fiduciary for any
Lender, (c) shall not be required to initiate any litigation or collection
proceedings hereunder or under any other Loan Document except to the extent
requested by the Required Lenders, (d) shall not be responsible to the
Lenders for any recitals, statements, representations, or warranties
contained in this Agreement or any other Loan Document, or any certificate
or other document referred to or provided for in, or received by any of
them under, this Agreement or any other Loan Document, or for the value,
validity, effectiveness, enforceability, or sufficiency of this Agreement
or any other Loan Document or any other document referred to or provided
for herein or therein or for any failure by any Person to perform any of
its obligations hereunder or thereunder, (e) may consult with legal counsel
(including, without limitation, counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable
for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants or experts, and (f)
shall incur no liability under or in respect of any Loan Document by acting
upon any notice, consent, certificate, or other instrument or writing
reasonably believed by it to be genuine and signed or sent by the proper
party or parties. As to any matters not expressly provided for by this
Agreement, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by
the Required
Lenders, and such instructions of the Required Lenders and any action taken
or failure to act pursuant thereto shall be binding on all of the Lenders;
provided, however, that the Agent shall not be required to take any action
which exposes the Agent to liability or which is contrary to this Agreement
or any other Loan Document or applicable law. The Agent shall not be deemed
to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations, or liabilities
shall be read into this Agreement or otherwise exist against the Agent for
the benefit of any Lender. Without limiting the generality of the
foregoing, the use of the term "agent" in this Agreement with respect to
the Agent is not intended to connote any fiduciary or other express or
implied obligation arising under agency doctrine of any applicable law;
instead, such term is used merely as a matter of market custom and is
intended to create or reflect only an administrative relationship among
independent contracting parties.
(b) The Issuing Bank shall act on behalf of the Lenders with
respect to any Letters of Credit issued by the Issuing Bank and the
documents associated therewith until such time and except for so long as
the Agent may agree at the request of the Required Lenders to act for such
Issuing Bank with respect thereto; provided, however, that the Issuing Bank
shall have all of the benefits and immunities (i) provided to the Agent in
this Article 11 with respect to any acts taken or omissions suffered by the
Issuing Bank in connection with Letters of Credit issued by it or proposed
to be issued by it and the Letters of Credit Agreements pertaining to the
Letters of Credit as fully as if the term "Agent", as used in this Article
11, included the Issuing Bank with respect to such acts or omissions, and
(ii) as additionally provided in this Agreement with respect to the Issuing
Bank.
(c) Except for the provisions of Section 11.6 and Section 11.7,
the provisions of this Article 11 are solely for the benefit of the Agent
and the Lenders, and the Borrower shall have no rights as a third party
beneficiary to any of the provisions contained in this Article 11.
Section 11.2 Rights of Agent as a Lender. With respect to its
Commitments, the Loans made by it and the Note(s) issued to it, Bank of America
(and any successor acting as the Agent) in its capacity as a Lender hereunder
shall have the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not acting as the Agent, and the term
"Lender" or "Lenders" shall, unless the context otherwise indicates, include the
Agent in its individual capacity. The Agent and its Affiliates may (without
having to account therefor to any Lender) accept deposits from, lend money to,
act as trustee under indentures of, provide merchant banking services to, own
securities of, and generally engage in any kind of banking, trust, or other
business with, the Borrower or any of its Affiliates and any other Person who
may do business with or own securities of the Borrower or any of its Affiliates,
all as if it were not acting as the Agent or the Issuing Bank and without any
duty to account therefor to the Lenders.
Section 11.3 Defaults. The Agent shall not be deemed to have knowledge
or notice of the occurrence of a Default or Event of Default (other than the
non-payment of principal of or interest on the Loans or of commitment fees)
unless the Agent has received notice from a Lender or the Borrower specifying
such Default or Event of Default and stating that such notice is a "notice of
default". In the event that the Agent receives such a notice of the occurrence
of a Default or Event of Default the Agent shall give notice thereof to the
Lenders (and shall give each Lender notice of each such non-payment). The Agent
shall (subject to Section 11.1) take such action with respect to such Default or
Event of Default as shall be directed by the Required Lenders, provided that
unless and until the Agent shall have received such directions, the Agent may
(but shall not be obligated to) take such action, or refrain from taking such
action, with respect to such Default or Event of Default as it shall seem
advisable and in the best interest of the Lenders.
Section 11.4 Indemnification. EACH LENDER HEREBY AGREES TO INDEMNIFY
THE AGENT FROM AND HOLD THE AGENT HARMLESS AGAINST (TO THE EXTENT NOT REIMBURSED
UNDER SECTION 12.1 AND SECTION 12.2, BUT WITHOUT LIMITING THE OBLIGATIONS OF THE
BORROWER UNDER SECTION 12.1 AND SECTION 12.2), RATABLY IN ACCORDANCE WITH ITS
PRO RATA SHARE (CALCULATED ON THE BASIS OF ITS COMMITMENT PERCENTAGE OF THE
AGGREGATE COMMITMENTS), ANY AND ALL LIABILITIES (INCLUDING, WITHOUT LIMITATION,
ENVIRONMENTAL LIABILITIES), OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, DEFICIENCIES, SUITS, COSTS, EXPENSES (INCLUDING, WITHOUT LIMITATION,
ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER WHICH MAY BE
IMPOSED ON, INCURRED BY OR ASSERTED AGAINST THE AGENT IN ANY WAY RELATING TO OR
ARISING OUT OF ANY OF THE LOAN DOCUMENTS OR ANY ACTION TAKEN OR OMITTED TO BE
TAKEN BY THE AGENT UNDER OR IN RESPECT OF ANY OF THE LOAN DOCUMENTS; PROVIDED,
HOWEVER, THAT NO LENDER SHALL BE LIABLE FOR ANY PORTION OF THE FOREGOING TO THE
EXTENT CAUSED BY THE AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT. WITHOUT
LIMITATION OF THE FOREGOING, IT IS THE EXPRESS INTENTION OF THE LENDERS THAT THE
AGENT SHALL BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH
LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES),
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, DEFICIENCIES,
SUITS, COSTS, EXPENSES (INCLUDING, WITHOUT LIMITATION, ATTORNEYS' FEES) AND
DISBURSEMENTS OF ANY KIND OR NATURE DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF THE AGENT (EXCEPT TO THE
EXTENT THE SAME ARE CAUSED BY THE AGENT'S GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT). WITHOUT LIMITING ANY OTHER PROVISION OF THIS SECTION 11.4, EACH
LENDER AGREES TO REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS PRO RATA SHARE
(CALCULATED ON THE BASIS OF ITS COMMITMENT PERCENTAGE OF THE AGGREGATE
COMMITMENTS) OF ANY AND ALL OUT-OF-POCKET EXPENSES (INCLUDING, WITHOUT
LIMITATION, ATTORNEYS' FEES) INCURRED BY THE AGENT IN CONNECTION WITH THE
PREPARATION, EXECUTION, DELIVERY, ADMINISTRATION, MODIFICATION, AMENDMENT, OR
ENFORCEMENT (WHETHER THROUGH NEGOTIATIONS, LEGAL PROCEEDINGS, OR OTHERWISE) OF,
OR LEGAL ADVICE IN RESPECT OF RIGHTS OR RESPONSIBILITIES UNDER, THE LOAN
DOCUMENTS, TO THE EXTENT THAT THE AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH
EXPENSES BY THE BORROWER.
Section 11.5 Independent Credit Decisions. Each Lender agrees that it
has independently and without reliance on the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Borrower and the other Related Parties and its own
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based upon such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement or any of the other Loan Documents. The Agent shall not be required
to keep itself informed as to the performance or observance by the Borrower of
this Agreement or any other Loan Document or to inspect the Properties or books
of the Borrower (or any other Person). Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
the Agent hereunder or under the other Loan Documents, the Agent shall not have
any duty or responsibility to provide any Lender with any credit or other
financial information concerning the affairs, financial condition, or business
of the Borrower which may come into the possession of the Agent or any of its
Affiliates.
Section 11.6 Several Commitments. The Commitments and other obligations
of the Lenders under this Agreement are several. The default by any Lender in
making a Loan in accordance with any of its Commitments shall not relieve the
other Lenders of their obligations under this Agreement. In the event of any
default by any Lender in making any Loan, each nondefaulting Lender shall be
obligated to make its Loan but shall not be obligated to advance the amount
which the defaulting Lender was required to advance hereunder. In no event
shall any Lender be required to advance an amount or amounts with respect to any
of the Loans which would in the aggregate exceed such Lender's Commitment with
respect to such Loans. No Lender shall be responsible for any act or omission
of any other Lender.
Section 11.7 Successor Agent. Subject to the appointment and acceptance
of a successor Agent as provided below, the Agent may resign at any time by
giving notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Required Lenders will have the right to appoint another Lender
as a successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty (30)
days after the retiring Agent's giving of notice of resignation, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the U.S. or any state
thereof or of a foreign country if acting through its U.S. branch and having
combined capital and surplus of at least $500,000,000. Upon the acceptance of
its appointment as successor Agent, such successor Agent shall thereupon succeed
to and become vested with all rights, powers, privileges, immunities, and duties
of the resigning Agent, and the resigning Agent shall be discharged from its
duties and obligations under this Agreement and the other Loan Documents. After
any Agent's resignation as Agent, the provisions of this Article 11 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was the Agent. Notwithstanding the foregoing, if the
Agent is also acting as the Issuing Bank, simultaneously with appointment of a
successor Agent as provided herein such successor Agent shall assume all of the
duties and obligations of the resigning Agent as the Issuing Bank pursuant to
documentation in form and substance satisfactory to the resigning Agent.
ARTICLE 12
Miscellaneous
-------------
Section 12.1 Expenses. The Borrower hereby agrees, on demand, to pay or
reimburse the Agent and each of the Lenders for paying: (a) all reasonable out-
of-pocket costs and expenses of the Agent accrued in connection with the
arranging, drafting, preparation, negotiation, execution, and/or delivery of the
Loan Documents and in connection with any and all waivers, amendments,
modifications, renewals, extensions, and supplements of or to the Loan
Documents, and the syndication of the Commitments and the Loans, including,
without limitation, the reasonable fees and expenses of outside legal counsel
(including all local counsel) for the Agent, (b) all out-of-pocket costs and
expenses of the Agent and the Lenders in connection with any Default or Event of
Default, the exercise of any right or remedy and the enforcement of this
Agreement or any other Loan Document or any term or provision hereof or thereof,
including, without limitation, the fees and expenses of all legal counsel for
the Agent and/or any Lender, (c) all transfer, stamp, documentary, or other
similar taxes, assessments or charges levied by any Governmental Authority in
respect of this Agreement or any of the other Loan Documents, (d) all reasonable
out-of-pocket costs and expenses incurred by the Agent in connection with due
diligence, computer services, copying, appraisals, environmental audits,
collateral audits, field exams, insurance, consultants, and search reports, and
(e) all reasonable fees, costs, and expenses of the Agent or the Issuing Bank
arising in connection with any Letter of Credit, including, without limitation,
the Issuing Bank's customary fees for amendments, transfers, and drawings on
Letters of Credit.
Section 12.2 Indemnification. THE BORROWER HEREBY AGREES TO INDEMNIFY
THE AGENT AND EACH LENDER AND EACH AFFILIATE THEREOF AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, ATTORNEYS, AND AGENTS FROM, AND HOLD EACH OF
THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES (INCLUDING, WITHOUT
LIMITATION, ENVIRONMENTAL LIABILITIES), CLAIMS, DAMAGES, PENALTIES, JUDGMENTS,
DISBURSEMENTS, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION, REASONABLE
ATTORNEYS' AND CONSULTANTS' FEES) TO WHICH ANY OF THEM MAY BECOME SUBJECT WHICH
DIRECTLY OR INDIRECTLY ARISE FROM OR RELATE TO (a) THE DRAFTING, PREPARATION,
NEGOTIATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION, OR ENFORCEMENT OF
ANY OF THE LOAN DOCUMENTS, INCLUDING, WITHOUT LIMITATION, THE EXERCISE OF ANY
RIGHT OR REMEDY WHETHER OR NOT SUCH EXERCISE IS IN COMPLIANCE WITH LAWS
AFFECTING OTHER PERSONS OR RESULTS IN DAMAGES PAYABLE TO OTHER PERSONS, (b) ANY
OF THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS, (c) THE USE OR PROPOSED
USE OF ANY LETTER OF CREDIT OR ANY PAYMENT OR FAILURE TO PAY WITH RESPECT TO ANY
LETTER OF CREDIT, (d) ANY BREACH BY THE BORROWER OF ANY MATERIAL REPRESENTATION,
WARRANTY, COVENANT, OR OTHER AGREEMENT CONTAINED IN ANY OF THE LOAN DOCUMENTS,
(e) THE USE OR PROPOSED USE OF ANY LOAN, (f) THE PRESENCE, RELEASE, THREATENED
RELEASE, DISPOSAL, REMOVAL, OR CLEANUP OF ANY HAZARDOUS MATERIAL LOCATED ON,
ABOUT, WITHIN OR AFFECTING ANY OF THE PROPERTIES OF THE BORROWER OR ANY OF ITS
AFFILIATES, EXCEPT TO THE EXTENT THAT THE LOSS, DAMAGE, OR CLAIM IS THE DIRECT
RESULT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE
INDEMNIFIED, OR (g) ANY INVESTIGATION, LITIGATION, OR OTHER PROCEEDING,
INCLUDING, WITHOUT LIMITATION, ANY THREATENED INVESTIGATION, LITIGATION, OR
OTHER PROCEEDING RELATING TO ANY OF THE FOREGOING, WHETHER BROUGHT BY ANY
RELATED PARTY, ANY CREDITOR OR ANY OTHER PERSON; BUT EXCLUDING ANY OF THE
FOREGOING TO THE EXTENT CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
THE PERSON TO BE INDEMNIFIED OR TO THE EXTENT THE AMOUNT OTHERWISE INDEMNIFIED
AGAINST IS PAYABLE TO THE BORROWER OR ANY OF ITS SUBSIDIARIES. WITHOUT LIMITING
ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER LOAN DOCUMENT, IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED UNDER THIS
SECTION 12.2 SHALL BE INDEMNIFIED FROM AND HELD HARMLESS AGAINST ANY AND ALL
LOSSES, LIABILITIES (INCLUDING, WITHOUT LIMITATION, ENVIRONMENTAL LIABILITIES),
CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, DISBURSEMENTS, COSTS, AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) ARISING OUT OF OR
RESULTING FROM THE SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON. WITHOUT
PREJUDICE TO THE SURVIVAL OF ANY OTHER TERM OR PROVISION OF THIS AGREEMENT, THE
OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 12.2 SHALL SURVIVE THE REPAYMENT
OF THE LOANS AND OTHER OBLIGATIONS AND TERMINATION OF THE COMMITMENTS.
Section 12.3 Limitation of Liability. None of the Agent, any Lender, or
any Affiliate, officer, director, employee, attorney, or agent thereof shall be
liable for any error of judgment or act done in good faith, or be otherwise
liable or responsible under any circumstances whatsoever (including such
Person's negligence), except for such Person's gross negligence or willful
misconduct. None of the Agent, any Lender, or any Affiliate, officer, director,
employee, attorney, or agent thereof shall have any liability with respect to,
and the Borrower hereby waives, releases, and agrees not to xxx any of them
upon, any claim for any special, indirect, incidental, or consequential damages
suffered or incurred by any Related Party or any Affiliate any Related Party in
connection with, arising out of or in any way related to this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. The Borrower hereby waives,
releases, and agrees not to xxx the Agent, any Lender, or any of their
respective Affiliates, officers, directors, employees, attorneys, or agents for
exemplary or punitive damages in respect of any claim in connection with,
arising out of or in any way related to this Agreement or any of the other Loan
Documents, or any of the transactions contemplated by this Agreement or any of
the other Loan Documents.
Section 12.4 No Duty. All attorneys, accountants, appraisers, and other
professional Persons and consultants retained by the Agent and the Lenders shall
have the right to act exclusively in the interest of the Agent and the Lenders
and shall have no duty of disclosure, duty of loyalty, duty of care, or other
duty or obligation of any type or nature whatsoever to any Related Party or any
of their respective Affiliates or any other Person.
Section 12.5 No Fiduciary Relationship. The relationship between the
Borrower and each Lender is solely that of debtor and creditor, and neither the
Agent nor any Lender has any fiduciary or other special relationship the
Borrower or any other Related Party or any of their respective Affiliates, and
no term, provision, or condition of any of the Loan Documents shall be construed
so as to deem the relationship between the Borrower and any Lender, between any
other Related Party and any Lender, or between any such Affiliate and any Lender
to be other than that of debtor and creditor. No joint venture or partnership
is created by this Agreement among the Lenders or among the Borrower, any other
Related Party, or any of their respective Affiliates and the Lenders.
Section 12.6 Equitable Relief. The Borrower recognizes that, in the
event it fails to pay, perform, observe, or discharge any or all of the
Obligations, any remedy at law may prove to be inadequate relief to the Agent
and the Lenders. The Borrower therefore agrees that the Agent and the Lenders,
if the Agent or the Lenders so request, shall be entitled to temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages.
Section 12.7 No Waiver; Cumulative Remedies. No failure on the part of
the Agent or any Lender to exercise and no delay in exercising, and no course of
dealing with respect to, any right, power, or privilege under this Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power, or privilege under this Agreement or
any other Loan Document preclude any other or further exercise thereof or the
exercise of any other right, power, or privilege. The rights and remedies
provided for in this Agreement and the other Loan Documents are cumulative and
not exclusive of any rights and remedies provided by law.
Section 12.8 Successors and Assigns.
(a) This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. The
Borrower may not assign or transfer any of its rights or obligations under
this Agreement or any other Loan Document without the prior written consent
of the Agent and the Lenders. Any Lender may sell participations in all or
a portion of its rights and obligations under this Agreement and the other
Loan Documents (including, without limitation, all or a portion of its
Commitments and the Loans owing to it); provided, however, that (i) such
Lender's obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitments) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the Borrower for the
performance of such obligations, (iii) such Lender shall remain the holder
of its Notes for all purposes of this Agreement, (iv) the Borrower shall
continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and the other
Loan Documents, and (v) the Lenders shall not grant any participation under
which the participant shall have the right to approve (or under which the
consent of the participant must be obtained prior to the Lenders' being
able to approve) any amendment or waiver of this Agreement or the other
Loan Documents, except to the extent that such amendment or waiver (A)
increases any Commitment, (B) reduces the interest rate or the amount of
principal or fees applicable to the Loans or Commitments in which such
participant is participating, (C) extends any Maturity Date, or (E)
releases any Related Party from its monetary Obligations (if any) under any
of the Loan Documents.
(b) The Borrower and each of the Lenders agree that any Lender
(the "Assigning Lender") may at any time assign to one or more Eligible
Assignees (each an "Assignee") all or any part of its rights and/or
obligations under this Agreement and the other Loan Documents (including,
without limitation, its Commitments and/or Loans); provided, however, that
(i) each such assignment may be of a varying percentage of the Assigning
Lender's rights and/or obligations under this Agreement and the other Loan
Documents and may relate to some but not all of such rights and/or
obligations, (ii) except in the case of (A) an assignment of all of a
Lender's rights and obligations under this Agreement and the other Loan
Documents or (B) an assignment by a Lender to an Affiliate of such Lender,
to another Lender, the amount of the Commitment(s) and/or Loans of the
Assigning Lender being assigned pursuant to each assignment (determined as
of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $5,000,000 calculated based upon
the aggregate amount of the Commitment(s) and/or Loans assigned, and (iii)
the parties to each such assignment shall execute and deliver to the Agent
for its acceptance and recording in the Register (as defined below), an
Assignment and Acceptance, together with the Note subject to such
assignment, and a processing and recordation fee of $3,500. Upon such
execution, delivery, acceptance, and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof
or such other date as may be approved by the Agent, (1) the Assignee
thereunder shall be a party hereto as a "Lender" and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and under the other Loan Documents, and (2) the Assigning Lender
thereunder shall, to the extent that rights and obligations hereunder have
been assigned by it pursuant to such Assignment and Acceptance, relinquish
its rights and be released from its obligations under this Agreement and
the other Loan Documents (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of a Lender's rights and obligations
under the Loan Documents, such Lender shall cease to be a party thereto,
provided that such Lender's rights under Article 4, Section 12.1 and
Section 12.2 accrued through the date of assignment shall continue). At
the Agent's request, the Borrower will use all commercially reasonable
means to assist the Agent in connection with the Agent's efforts to assign
Commitments and/or Loans under this Agreement. Such assistance shall
include, without limitation, making senior officers of the Borrower
available for meetings with prospective Lenders and participants and
providing (in a timely manner) such other assistance as may be reasonably
requested by the Agent and/or its advisors, including, without limitation,
providing information to and responding to inquiries from such prospective
Lenders and participants with respect to the businesses, operations,
business plan, financial condition, and results of operations of the
Borrower.
(c) By executing and delivering an Assignment and Acceptance, the
Assigning Lender thereunder and the Assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such Assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or in
connection with the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency, or value of the Loan Documents or
any other instrument or document furnished pursuant thereto; (ii) such
Assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition or results of
operations of the Borrower, any other Related Party or any of their
respective Affiliates or the performance or observance by the Borrower, any
other Related Party, or any of their respective Affiliates of any of their
respective obligations under the Loan Documents; (iii) such Assignee
confirms that it has received a copy of the Loan Documents, together with
copies of the most recent financial statements delivered by the Borrower
pursuant to Section 7.1 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter
into such Assignment and Acceptance; (iv) such Assignee will, independently
and without reliance upon the Agent or such Assigning Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (v) such Assignee
confirms that it is an Eligible Assignee; (vi) such Assignee appoints and
authorizes the Agent to take such action as agent on its behalf and
exercise such powers under the Loan Documents as are delegated to the Agent
by the terms thereof, together with such powers as are reasonably
incidental thereto; and (vii) such Assignee agrees that it will perform in
accordance with their terms all of the obligations which by the terms of
the Loan Documents are required to be performed by it as a Lender.
(d) The Agent shall maintain at its Principal Office a copy of
each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, the
Borrower, the Agent, and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes under the
Loan Documents. The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by
an Assigning Lender and Assignee representing that it is an Eligible
Assignee, together with the Note(s) subject to such assignment, the Agent
shall, if such Assignment and Acceptance has been completed, (i) accept
such Assignment and Acceptance, (ii) record the information contained
therein in the Register, and (iii) give prompt written notice thereof to
the Borrower. Within five (5) Business Days after its receipt of such
notice, the Borrower, at the Borrower's expense, shall execute and deliver
to the Agent in exchange for each surrendered Note evidencing the Loans
assigned, a new Note evidencing such Loans payable to the order of such
Eligible Assignee in an amount equal to such Loans assigned to it and, if
the Assigning Lender has retained any Loans, a new Note evidencing each
such Loans payable to the order of the Assigning Lender in the amount of
such Loans retained by it (each such promissory note shall constitute a
"Note" for purposes of the Loan Documents). Such new Notes shall be dated
the effective date of such Assignment and Acceptance and shall otherwise be
in substantially the form of Exhibit B-1 or Exhibit B-2, as applicable.
(f) Any Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 12.8, disclose to the Assignee or participant or proposed Assignee
or participant any information relating to the Borrower, any other Related
Party, or any of their respective Affiliates furnished to such Lender by
the Borrower, any other Related Party or any of their respective
Affiliates; provided that each such actual or proposed Assignee or
participant shall agree to maintain the confidentiality of any information
provided in connection with such proposed assignment.
(g) Any Lender may assign and pledge any Note held by it to any
Federal Reserve Bank or the U.S. Treasury as collateral security pursuant
to Regulation A of the Board of Governors of the Federal Reserve System and
any operating circular issued by such Federal Reserve System and/or Federal
Reserve Bank; provided, however, that any payment made by the Borrower for
the benefit of such assigning and/or pledging Lender in accordance with the
terms of the Loan Documents shall satisfy the Borrower's obligations under
the Loan Documents in respect thereof to the extent of such payment. No
such assignment and/or pledge shall release the assigning and/or pledging
Lender from its obligations hereunder.
(h) Notwithstanding any other provision of this Agreement (other
than Section 12.8(g)), Bank of America agrees that it will at all times
during the term of this Agreement hold, free and clear of any participation
or other interest therein, the entire Revolving Loans B Commitment and the
Revolving
Loans B outstanding thereunder; provided that in the event that
any Event of Default occurs hereunder, the provisions of this Section
12.8(h) shall no longer be of any force or effect.
Section 12.9 Survival. All representations and warranties made or
deemed made in this Agreement or any other Loan Document or in any document,
statement, or certificate furnished in connection with this Agreement shall
survive the execution and delivery of this Agreement and the other Loan
Documents and the making of the Loans, and no investigation by the Agent or any
Lender or any closing shall affect the representations and warranties or the
right of the Agent or any Lender to rely upon them. Without prejudice to the
survival of any other obligation of the Borrower hereunder, the obligations of
the Borrower under Article 4, Section 12.1, and Section 12.2 shall survive
repayment of the Loans and the Reimbursement Obligations, termination of the
Commitments, and payment of the other Obligations.
Section 12.10 Entire Agreement. THIS WRITTEN AGREEMENT SUPERSEDES ANY
AND ALL PRIOR COMMITMENTS (INCLUDING, WITHOUT LIMITATION, ANY COMMITMENT
LETTER), TERM SHEETS, AGREEMENTS, REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER
WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF. THIS WRITTEN AGREEMENT
(INCLUDING, WITHOUT LIMITATION, THE NOTES, AND THE OTHER LOAN DOCUMENTS REFERRED
TO HEREIN) REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
Section 12.11 Amendments. No amendment or waiver of any provision of
this Agreement, the Notes or any other Loan Document to which the Borrower is a
party, nor any consent to any departure by the Borrower therefrom, shall in any
event be effective unless the same shall be agreed or consented to by the
Required Lenders and the Borrower in writing, and each such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given; provided, however, that no amendment, waiver, or consent shall,
unless in writing and signed by all affected Lenders and the Borrower, do any of
the following: (a) increase the Commitments of the Lenders (or any Lender) or
subject the Lenders to any additional obligations; (b) reduce the principal of,
or interest on, the Loans and the Reimbursement Obligations or any fees or other
amounts payable hereunder; (c) postpone any date fixed for any payment
(including, without limitation, any mandatory prepayment) of principal of, or
interest on, the Loans and the Reimbursement Obligations or any fees or other
amounts payable hereunder; (d) change the Commitment Percentages or the
aggregate unpaid principal amount of the Loans or the number or interests of the
Lenders which shall be required for the Lenders or any of them to take any
action under this Agreement; or (e) change any provision contained in Section
3.2, Section 3.3, or this Section 12.11 or modify the definition of "Required
Lenders" contained in Section 1.1; and provided further, however, that no
amendment, waiver, or consent relating to Sections 11.1, 11.2, 11.3, 11.4, or
11.5 shall require the agreement of the Borrower. Notwithstanding anything to
the contrary contained in this Section 12.11, no amendment, waiver, or consent
shall be made with respect to (i) Article 11 without the prior written consent
of the Agent, (ii) any condition precedent set forth in Article 5 with respect
to the making of any Loans without the prior written consent of the Lenders that
hold, at the time of such amendment, waiver, or consent (A) with respect to any
condition precedent to the making of any Loan under the Revolving Loans A
Commitments, at least a majority (in Dollar amount) of the outstanding Revolving
Loans A Commitments and (B) with respect to any condition precedent to the
making of any Loan under the Revolving Loans B Commitment, Bank of America,
(iii) the interest rate applicable to the Revolving Loans A or the Maturity Date
of the Revolving Loans A, in each case without the prior written consent of the
Lenders that hold, at the time of such amendment, waiver, or consent, at least a
majority (in Dollar amount) of the outstanding Revolving Loans A Commitments, or
(iv) the interest rate applicable to the Revolving Loans B or the Maturity Date
of the Revolving Loans B, in each case without the prior written consent of Bank
of America.
Section 12.12 Maximum Interest Rate.
(a) No interest rate specified in any Loan Document (the
"Contract Rate") shall at any time exceed the Maximum Rate. If at any time
the Contract Rate for any Obligation shall exceed the Maximum Rate, thereby
causing the interest accruing on such Obligation to be limited to the
Maximum Rate, then any subsequent reduction in the Contract Rate for such
Obligation shall not reduce the rate of interest on such Obligation below
the Maximum Rate until the aggregate amount of interest accrued on such
Obligation equals the aggregate amount of interest which would have accrued
on such Obligation if the Contract Rate for such Obligation had at all
times been in effect.
(b) No provision of any Loan Document shall require the payment
or the collection of interest in excess of the Maximum Rate. If any excess
of interest in such respect is hereby provided for, or shall be adjudicated
to be so provided, in any Loan Document or otherwise in connection with
this loan transaction, the provisions of this Section shall govern and
prevail and neither the Borrower nor the sureties, guarantors, successors,
or assigns of the Borrower (if any) 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 Rate shall be applied as a
payment and reduction of the principal of the Obligations, and, if the
principal of the Obligations 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
Obligations so that interest for the entire term does not exceed the
Maximum Rate.
(c) The provisions of Chapter 346 of the Texas Finance Code are
specifically declared by the parties hereto not to be applicable to any
Loan Documents or to the transactions contemplated thereby.
Section 12.13 Notices. All notices and other communications provided
for in any Loan Document shall be given or made in writing and telecopied,
mailed by certified mail return receipt requested, or delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof, or with respect to a Lender not a party to this Agreement on the
Closing Date, in its Assignment and Acceptance, or, as to any party at such
other address as shall be designated by such party in a notice to each other
party given in accordance with this Section. Except as otherwise provided in
any Loan Document, all such communications shall be deemed to have been duly
given when transmitted by telecopy, subject to telephone confirmation of
receipt, or when personally delivered or, in the case of a mailed notice, five
(5) Business Days after being duly deposited in the mails, in each case given or
addressed as aforesaid; provided, however, notices to the Agent pursuant to
Section 2.9 or Section 2.14 shall not be effective until received by the Agent.
Any agreement of the Agent and the Lenders herein to receive certain notices by
telephone or telecopy is solely for the convenience and at the request of the
Borrower. The Agent, the Lenders, and the Issuing Bank shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Borrower to give such notice and neither the Agent, any Lender, nor the Issuing
Bank shall have any liability to the Borrower or any other Person on account of
any action taken or not taken by the Agent, any Lender, or the Issuing Bank in
reliance upon such telephonic or telecopy notice. The obligation of the
Borrower to repay the Loans and pay the Reimbursement Obligations shall not be
affected in any way or to any extent by any failure of the Agent, any Lender, or
the Issuing Bank to receive written confirmation of any telephonic or telecopy
notice or the receipt by the Agent, any Lender, or the Issuing Bank of a
confirmation which is at variance with the terms understood by the Agent, such
Lender, or the Issuing Bank to be contained in such telephonic or telecopy
notice.
Section 12.14 Governing Law; Venue; Service of Process. THIS AGREEMENT
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
TEXAS AND THE APPLICABLE LAWS OF THE U.S. ANY ACTION OR PROCEEDING AGAINST THE
BORROWER UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
MAY BE BROUGHT IN ANY TEXAS STATE COURT LOCATED IN XXXXX COUNTY, TEXAS OR
FEDERAL COURT IN THE NORTHERN DISTRICT OF TEXAS. THE BORROWER IRREVOCABLY (a)
SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (b) WAIVES ANY
OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH ACTION OR
PROCEEDING BROUGHT IN SUCH COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM.
THE BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY CERTIFIED OR
REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED OR
DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 12.13. NOTHING IN THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL AFFECT THE RIGHT OF THE AGENT OR ANY
LENDER TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF THE AGENT OR ANY LENDER TO BRING ANY ACTION OR PROCEEDING AGAINST THE
BORROWER OR WITH RESPECT TO ANY OF ITS PROPERTY IN COURTS IN OTHER
JURISDICTIONS. ANY ACTION OR PROCEEDING BY THE BORROWER OR ANY OTHER RELATED
PARTY AGAINST THE AGENT OR ANY LENDER SHALL BE BROUGHT ONLY IN A COURT LOCATED
IN XXXXX COUNTY, TEXAS.
Section 12.15 Waiver of Jury Trial. TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND EXPRESSLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM
(WHETHER BASED UPON CONTRACT, TORT, OR OTHERWISE) ARISING OUT OF OR RELATING TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY OR THE
ACTIONS OF THE AGENT OR ANY LENDER IN THE NEGOTIATION, ADMINISTRATION, OR
ENFORCEMENT THEREOF.
Section 12.16 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 12.17 Severability. Any provision of this Agreement held by a
court of competent jurisdiction to be invalid or unenforceable shall not impair
or invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
Section 12.18 Headings. The headings, captions and arrangements used in
this Agreement are for convenience only and shall not affect the interpretation
of this Agreement.
Section 12.19 Construction. The Borrower, the Agent, and each Lender
acknowledges that it has had the benefit of legal counsel of its own choice and
has been afforded an opportunity to review this Agreement and the other Loan
Documents with its legal counsel and that this Agreement and the other Loan
Documents shall be construed as if jointly drafted by the parties hereto.
Section 12.20 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default if such action is taken or such condition
exists.
Section 12.21 Approvals and Consent. Except as may be expressly
provided to the contrary in this Agreement or in the other Loan Documents (as
applicable), in any instance under this Agreement or the other Loan Documents
where the approval, consent, or exercise of judgment of the Agent or any Lender
is requested or required, (a) the granting or denial of such approval or consent
and the exercise of such judgment shall be within the sole discretion of the
Agent or such Lender, respectively, and the Agent and such Lender shall not, for
any reason or to any extent, be required to grant such approval or consent or to
exercise such judgment in any particular manner, regardless of the
reasonableness of the request or the action or judgment of the Agent or such
Lender, and (b) no approval or consent of the Agent or any Lender shall in any
event be effective unless the same shall be in writing and the same shall be
effective only in the specific instance and for the specific purpose for which
given.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
BORROWER:
--------
LUFKIN INDUSTRIES, INC.
By: /s/ X. X. Xxxxxx
-----------------------
Name: X. X. Xxxxxx
---------------------
Title: Treasurer/Director of Financial Operations
------------------------------------------
Address for Notices:
-------------------
000 Xxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxx Xxxxxxxxx
Telecopy No.: 000-000-0000
AGENT:
-----
BANK OF AMERICA, NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxxx
-----------------------
Name: Xxxxx Xxxxxxxx
---------------------
Title: Vice President
--------------------
Address for Notices:
--------------------
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telecopy No.: 000-000-0000
LENDERS:
--------
Commitments: BANK OF AMERICA, NATIONAL
------------ ASSOCIATION
Revolving Loans A Commitment
$20,000,000
Revolving Loans B Commitment By: /s/ Xxxxx Xxxxxxxx
$5,000,000 -----------------------
Name: Xxxxx Xxxxxxxx
---------------------
Title: Vice President
--------------------
Address for Notices:
-------------------
000 Xxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telecopy No.: 000-000-0000
Applicable Lending Office for Prime Rate Loans,
-----------------------------------------------
Fed Funds Rate Loans, and Libor Rate Loans:
-------------------------------------------
000 Xxxxx Xxxxxxx
Xxxxx, Xxxxx 00000
Attn: Xxxxx X. Xxxxxxxx
Telecopy No.: 000-000-0000
