EXHIBIT 10.16
SECOND AMENDED AND RESTATED CREDIT AGREEMENT dated as of November 26, 2003
AMONG
XXXXX CONSULTING, INC. a Delaware corporation
As Borrower
BANK ONE, NA a national banking association
As Agent and Swing Line Lender
CERTAIN FINANCIAL INSTITUTIONS As Lenders
and
BANC ONE CAPITAL MARKETS, INC.
As Lead Arranger And Sole Book Runner
ARTICLE I DEFINITIONS ................................................... 1
ARTICLE II THE CREDITS ...................................................17
2.1. Commitments ...................................................17
2.2. Required Payments; Termination ................................18
2.3. Ratable Loans .................................................19
2.4. Types of Advances ........ ....................................19
2.5. Swing Line Loans ..............................................19
2.6. Fees; Reductions in Aggregate Commitment ......................20
2.7. Minimum Amount of Each Advance ................................20
2.8. Optional Principal Payments ...................................20
2.9. Method of Selecting Tunes and Interest Periods for
New Advances ...............................................21
2.10. Conversion and Continuation of Outstanding Advances ...........21
2.11. Changes in Interest Rate, etc. ................................22
2.12. Rates Applicable After Default ................................22
2.13. Method of Payment .............................................22
2.14. Noteless Agreement; Evidence of Indebtedness ..................23
2.15. Telephonic Notices ............................................23
2.16. Interest Payment Dates; Interest and Fee Basis ................23
2.17. Notification of Advances Interest Rates,
Prepayments and Commitment Reductions .......................24
2.18. Lending Installations .........................................24
2.19. Non-Receipt of Funds by the Agent .............................24
2.20. Facility LCs ..................................................24
2.21. Extension of Revolving Credit Termination Date ................28
2.22. Replacement of Lender .........................................28
2.23. Limitation of Interest ........................................29
2.24. Attrition Rate ................................................30
ARTICLE III YIELD PROTECTION; TAXES; TRUST PREFERRED
SECURITIES; SECURTTIZATION .................................30
3.1. Yield Protection ..............................................30
3.2. Changes in Capital Adequacy Regulations .......................31
3.3. Availability of Types of Advances .............................31
3.4. Funding Indemnification .......................................31
3.5. Taxes .........................................................31
3.6. Lender Statements; Survival of Indemnity ......................33
3.7. Trust Preferred Securities ....................................33
3.8. Securitizations ...............................................33
ARTICLE IV CONDITIONS PRECEDENT ..........................................34
4.1. Initial Credit Extension ......................................34
4.2. Each Credit Extension .........................................35
ARTICLE V REPRESENTATIONS AND WARRANTIES ................................35
5.1. Existence and Standing ........................................35
5.2. Authorization and Validity ....................................35
5.3. No Conflict; Government Consent ...............................35
5.4. Financial Statements ..........................................36
5.5. Material Adverse Change .......................................36
5.6. Taxes .........................................................36
5.7. Litigation and Contingent Obligations .........................36
5.8. Subsidiaries ..................................................36
TABLE OF CONTENTS
(continued)
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5.9. ERISA .........................................................37
5.10. Accuracy of Information .......................................37
5.11. Regulation U ..................................................37
5.12. Material Agreements ...........................................37
5.13. Compliance With Laws ..........................................37
5.14. Ownership of Properties .......................................37
5.15. Plan Assets: Prohibited Transactions ..........................37
5.16. Environmental Matters .........................................37
5.17. Investment Company Act ........................................38
5.18. Public Utility Holding Company Act ............................38
5.19. Reportable Transaction ........................................38
5.20. Subordinated Indebtedness .....................................38
5.21. Insurance .....................................................38
5.22. Solvency ......................................................38
ARTICLE VI COVENANTS .....................................................39
6.1. Financial Reporting ...........................................39
6.2. Use of Proceeds ...............................................40
6.3. Notice of Default .............................................40
6.4. Conduct of Business ...........................................40
6.5. Taxes .........................................................40
6.6. Insurance .....................................................40
6.7. Compliance with Laws ..........................................41
6.8. Maintenance of Properties .....................................41
6.9. Inspection ....................................................41
6.10. Dividends .....................................................41
6.11. Indebtedness ..................................................41
6.12. Merger ........................................................42
6.13. Sale of Assets ................................................42
6.14. Investments and Acquisitions ..................................42
6.15. Liens .........................................................43
6.16. Affiliates ....................................................44
6.17. Subordinated Indebtedness .....................................44
6.18. Sale of Accounts ..............................................44
6.19. Sale and Leaseback Transactions and
other Off-Balance Sheet Liabilities ........................44
6.20. Contingent Obligations ........................................44
6.21. Letters of Credit .............................................44
6.22. Financial Covenants ...........................................44
6.23. Investment Company ............................................45
ARTICLE VII DEFAULTS ......................................................45
7.1. Defaults ......................................................45
ARTICLE VIII ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES ................48
8.1. Acceleration, Facility LC Collateral Account ..................48
8.2. Amendments ....................................................49
8.3. Preservation of Rights ........................................49
ARTICLE IX GENERAL PROVISIONS ............................................50
9.1. Survival of Representations ...................................50
9.2. Governmental Regulation .......................................50
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TABLE OF CONTENTS
(continued)
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9.3. Headings ......................................................50
9.4. Entire Agreement ..............................................50
9.5. Several Obligations; Benefits of this Agreement ...............50
9.6. Expenses; Indemnification .....................................50
9.7. Numbers of Documents ..........................................51
9.8. Accounting ....................................................51
9.9. Severability of Provisions ....................................51
9.10. Nonliability of Lenders .......................................51
9.11. Confidentiality ...............................................52
9.12. Nonreliance ...................................................52
9.13. Disclosure ....................................................52
ARTICLE X THE AGENT .....................................................52
10.1. Appointment: Nature of Relationship ...........................52
10.2. Powers ........................................................53
10.3. General Immunity ..............................................53
10.4. No Responsibility for Loans, Recitals, etc ....................53
10.5. Action on Instructions of Lenders .............................53
10.6. Employment of Agents and Counsel ..............................54
10.7. Reliance on Documents: Counsel ................................54
10.8. Agent's Reimbursement and Indemnification .....................54
10.9. Notice of Default .............................................54
10.10. Rights as a Lender ............................................54
10.11. Lender Credit Decision ........................................55
10.12. Successor Agent ...............................................55
10.13. Agent and Arranger Fees .......................................55
10.14. Delegation to Affiliates ......................................55
10.15. Execution of Collateral Documents .............................55
10.16. Collateral Releases ...........................................56
10.17. Co-Agents, Documentation Agent, Syndication Agent, etc. .......56
ARTICLE XI SETOFF; RATABLE PAYMENTS ......................................56
11.1. Setoff ........................................................56
11.2. Ratable Payments ..............................................56
11.3. Proceeds of Collateral ........................................56
ARTICLE XIII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS .............56
12.1. Successors and Assigns ........................................57
12.2. Participations ................................................57
12.3. Assignments ...................................................58
12.4. Dissemination of Information ..................................59
12.5. Tax Treatment .................................................59
ARTICLE XIII NOTICES .......................................................60
13.1. Notices .......................................................60
13.2. Change of Address .............................................60
ARTICLE XIV COUNTERPARTS ..................................................60
ARTICLE XV CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL ..60
15.1. CHOICE OF LAW .................................................60
15.2. CONSENT TO JURISDICTION .......................................60
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TABLE OF CONTENTS
(continued)
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15.3. WAIVER OF JURY TRIAL ..........................................61
SIGNATURE PAGES
CONSENT OF GUARANTOR
PRICING SCHEDULE*
COMMITMENT SCHEDULE*
FACILITY FEE SCHEDULE*
EXHIBIT A - FORM OF OPINION*
EXHIBIT B - FORM OF COMPLIANCE CERTIFICATE*
EXHIBIT C - FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT*
EXHIBIT D - FORM OF LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION*
EXHIBIT E-1 - FORM OF AMENDED AND RESTATED TERM NOTE*
EXHIBIT E-2 - FORM OF AMENDED AND RESTATED REVOLVING NOTE*
-------------------
* Not filed herewith.
- iv -
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
--------------------------------------------
This Second Amended and Restated Credit Agreement, dated as of the 26th
day of November, 2003, is among Xxxxx Consulting, Inc., a Delaware corporation
(f/k/a Xxxxx/Xxxxxx Consulting, Inc. and f/k/a Xxxxx/Xxxxxx, Inc.) ("BORROWER,")
the Lenders and Bank One, NA, a national banking association having its
principal office in Chicago, Illinois, as Agent. The parties hereto agree as
follows:
RECITALS:
I. Borrower, Agent and certain of the Lenders have previously entered
into that certain Amended and Restated Credit Agreement (as heretofore amended,
modified, and supplemented, the "EXISTING CREDIT AGREEMENT") dated as of
December 28, 1999, pursuant to which the Lenders agreed to make the Loans
available to Borrower. The Existing Credit Agreement has been previously
modified and amended pursuant to (i) that certain First Amendment to Amended and
Restated Credit Agreement dated as of August 23, 2000, (ii) that certain Second
Amendment to Amended and Restated Credit Agreement dated as of December 21,
2001, (iii) that certain Third Amendment to Amended and Restated Credit
Agreement dated as of May 22, 2002, (iv) that certain Fourth Amendment to
Amended and Restated Credit Agreement dated as of November 26, 2002, and (v)
that certain Fifth Amendment to Amended and Restated Credit Agreement dated as
of May 13, 2003.
II. Payment and performance of the Obligations (under and as defined in
the Existing Credit Agreement) under the Loan are guaranteed by Parent pursuant
to that certain Guaranty Agreement (the "EXISTING GUARANTY") executed by Parent
in favor of Agent and the Lenders.
III. Borrower has requested certain modifications and amendments to,
and consents under, the Existing Credit Agreement. Borrower, Agent and the
Lenders desire to execute this Agreement to amend and restate the Existing
Credit Agreement to effect such changes to the Existing Credit Agreement and to
remove certain parties as Lenders hereunder. Accordingly, in consideration of
the mutual covenants and agreements contained herein, and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
-----------
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
Borrower or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"ACQUISITION EBITDA" is defined in the definition of Consolidated
EBITDA.
Page 1
"ADVANCE" means a borrowing hereunder, (i) made by some or all of the
Lenders on the same Borrowing Date, or (ii) converted or continued by the
Lenders on the same date of conversion or continuation, consisting, in either
case, of the aggregate amount of the several Loans of the same Type and, in the
case of Eurodollar Loans, for the same Interest Period. The term "Advance" shall
include Swing Line Loans unless otherwise expressly provided.
"ADVANCE RATE" means, with respect to fees and commissions owing by (i)
insurance companies which were included in the Borrowing Base on December 28,
1999, 80%, (ii) insurance companies which were not included in the Borrowing
Base on December 28, 1999, but with which Borrower subsequently commenced doing
business (other than those covered under clause (iv) below), and who had a
financial strength rating by S&P or Xxxxx'x below A or were unrated at the time
of such commencement, 0%, (iii) insurance companies which were not included in
the Borrowing Base on December 28, 1999, but with which Borrower subsequently
commenced doing business (other than those covered under clause (iv) below), and
who had a financial strength rating by S&P or Xxxxx'x of A or above at the time
of such commencement, the advance rate set forth below opposite such company's
financial strength rating by S&P or Xxxxx'x (or the lower rating in the event of
a conflict) on the date of calculation, and (iv) companies which Borrower
proposes to include in the Borrowing Base and which arise out of an Acquisition
by Borrower, the advance rate set forth below opposite such company's financial
strength rating by S&P or Xxxxx'x (or the lower rating in the event of a
conflict) on the date of calculation:
S&P Rating Xxxxx'x Rating Advance Rate
A or better A or better 80%
A- A2 70%
BBB+ Baal 50%
BBB Baa2 30%
below BBB or unrated below Baa or unrated 0%
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"AGENT" means Bank One in its capacity as contractual representative of
the Lenders pursuant to Article X, and not in its individual capacity as a
Lender, and any successor Agent appointed pursuant to Article X.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all
the Lenders, as increased or reduced from time to time pursuant to the terms
hereof.
"AGGREGATE OUTSTANDING CREDIT EXPOSURE" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"AGREEMENT" means this Second Amended and Restated Credit Agreement, as
it may be amended or modified and in effect from time to time.
Page 2
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4.
"ALTERNATE BASE RATE" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"APPLICABLE FEE RATE" means, at any time, the percentage rate per annum
at which Commitment Fees are accruing on the unused portion of the Aggregate
Commitment at such time as set forth in the Pricing Schedule.
"APPLICABLE MARGIN" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"APPROVED FUND" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"ARRANGER" means Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, in its capacity as Lead Arranger and Sole Book
Runner.
"ASSUMED EXPENSE ALLOWANCE" means an expense and commission percentage
of twenty-five percent (25%).
"ATTRITION RATE" means the assumed yearly rate of attrition of renewals
of existing policies and contracts, which for purposes of calculating Present
Value of Renewals, are initially 5% with respect to contracts and policies in
the Banking Portfolio and 15% with respect to all other contracts and policies,
which Attrition Rate shall be re-set annually as set forth in Section 2.24.
"ARTICLE" means an article of this Agreement unless another document is
specifically referenced.
"AUTHORIZED OFFICER" means any of the Chief Financial Officer, the
Controller, the President of Borrower, or any other person designated in writing
by any of the foregoing persons, acting singly.
"AVAILABLE AGGREGATE COMMITMENT" means, at any time, the lesser of
Aggregate Commitment then in effect or the Borrowing Base then in effect, minus
the Aggregate Outstanding Credit Exposure at SUCH time.
"BANKING PORTFOLIO" means the portfolio of policies and contracts sold
to commercial Banks.
"BANK ONE" means Bank One, NA, a national banking association having
its principal office in Chicago, Illinois, in its individual capacity, and its
successors.
"BORROWER" means Xxxxx Consulting, Inc. (f/k/a Xxxxx/Xxxxxx Consulting,
Inc., and f/k/a Xxxxx/Xxxxxx, Inc.), a Delaware corporation, and its successors
and assigns.
"BORROWING BASE" means an amount equal to (i) the applicable Advance
Rate times the Net Present Value of Renewals, minus (ii) Borrower's Consolidated
Funded Indebtedness, each as indicated in the most recently delivered quarterly
compliance certificate.
Page 3
"BORROWING DATE" means a date on which an Advance is made hereunder.
"BORROWING NOTICE" IS defined in Section 2.9.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago and New York City for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Chicago for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
"CALCULATION LEVERAGE RATIO" means, as of any date of calculation, the
ratio of (i) Consolidated Funded Indebtedness outstanding on such date to (ii)
Consolidated EBITDA for Borrower's then most recently ended four fiscal
quarters.
"CAPITAL EXPENDITURES" means, without duplication, any expenditures for
any purchase or other acquisition (other than an Acquisition) of any asset which
would be classified as a fixed or capital asset on a consolidated balance sheet
of Borrower and its Subsidiaries prepared in accordance with Agreement
Accounting Principles excluding (i) the cost of assets acquired with Capitalized
Lease Obligations, (ii) expenditures of insurance proceeds to rebuild or replace
any asset after a casualty loss and (iii) leasehold improvement expenditures for
which Borrower or a Subsidiary is reimbursed promptly by the lessor.
"CAPITAL SECURITIES GUARANTEE" is defined in Section 3.7.
"CAPITALIZED LEASE" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"CASH EQUIVALENT INVESTMENTS" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Xxxxx'x, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"CHANGE IN CONTROL" means (i) the acquisition by any Person, or two or
more Persons acting in concert, other than any such Person or Persons in the
Control Group, of beneficial ownership (within the meaning of Rule 13d-3 of the
Securities and Exchange Commission under the Securities Exchange Act of 1934) of
25% or more of the outstanding shares of voting stock of Borrower or Parent;
(ii) Parent shall cease to own, free and clear of all Liens or other
encumbrances, at least 100% of the outstanding shares of voting stock of
Borrower on a fully diluted basis; or (iii) the failure of X. X. Xxxxxxx
("XXXXXXX") to (a) continue to own the greater of (1) 5% of the outstanding
capital stock of Parent or (2) more of the outstanding capital stock in Parent
than any other person in the Control Group or (b) continue to act as Chairman of
the Board of Directors of Parent.
Page 4
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COLLATERAL" means all of the assets (fixed and intangible, and whether
or not such assets would be included on a Balance Sheet of such Person in
accordance with Agreement Accounting Principles) of Borrower and Parent,
including, without limitation, all of the outstanding capital stock in Borrower,
which Collateral is to be pledged to the Lenders pursuant to the Collateral
Documents, excluding the assets of NewCo and the SPV formed in connection with
the Proposed Securitization, as well as Borrower's ownership in NewCo or any
such SPV.
"COLLATERAL DOCUMENTS" means, collectively, (i) the Pledge and Security
Agreement dated as of January 15, 1999, executed by Borrower and Parent, in
favor of Lenders pursuant to which Borrower and Parent pledged and granted a
security interest in the Collateral, and (ii) the Guaranty.
"COLLATERAL SHORTFALL AMOUNT" is defined in Section 8.1.
"COMMITMENT" means, for each Lender, the obligation of such Lender to
make Revolving Loans to, and participate in Facility LCs issued upon the
application of, Borrower in an aggregate amount not exceeding the amount set
forth opposite its signature below and on the attached "Commitment Schedule", or
as set forth in any Notice of Assignment relating to any assignment that has
become effective pursuant to Section 12.3.2, as such amount may be modified from
time to time pursuant to the terms hereof. The Commitment of each Lender shall
be increased by its pro-rata share of any Securitization Proceeds Term Loan
Repayment Amount (as defined and more particularly described in Section 2.2.3).
"CONSOLIDATED CAPITAL EXPENDITURES" means, with reference to any
period, the Capital Expenditures of Borrower and its Subsidiaries calculated on
a consolidated basis for such period.
"CONSOLIDATED EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued during such period,
(iii) depreciation, (iv) amortization and (v) extraordinary losses incurred
other than in the ordinary course of business and other than as a result of
discontinuation of operations, minus, to the extent included in Consolidated Net
Income, extraordinary gains realized other than in the ordinary course of
business, all calculated for Borrower and its Subsidiaries on a consolidated
basis. Consolidated EBITDA shall be adjusted if Borrower consummates a Permitted
Acquisition during the period in question to include the effect of pro-forma
EBITDA for the company acquired (based on EBITDA [calculated in the same manner
as Consolidated EBITDA] of the company acquired for the four quarters preceding
the date of acquisition), which amount shall be adjusted, with the approval of
Required Lenders, to negate the effect of excessive salaries and quantifiable
non-recurring expenses ("ACQUISITION EBITDA"). The foregoing adjustment based on
Acquisition EBITDA is conditioned upon receipt and approval by Required Lenders
of information substantiating such adjustment, including, without limitation,
audited financial statements (or, with the consent of Required Lenders, compiled
financial statements certified by the Chief Financial Officer of Borrower) of
the company acquired for the most recently ended fiscal year.
"CONSOLIDATED FUNDED INDEBTEDNESS" means at any time the aggregate
dollar amount of Consolidated Indebtedness which has actually been funded and is
outstanding at such time, whether or not such amount is due or payable at such
time, including, without limitation, all Permitted Acquisition Indebtedness.
"CONSOLIDATED INDEBTEDNESS" means at any time the Indebtedness of
Borrower and its Subsidiaries calculated on a consolidated basis as of such
time.
Page 5
"CONSOLIDATED INTEREST EXPENSE" means, with reference to any period,
the interest expense of Borrower and its Subsidiaries calculated on a
consolidated basis for such period (excluding fees paid to Agent and the Lenders
in connection with closing of the transaction contemplated by this Agreement),
including interest on the Subordinated Debt Securities.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of Borrower and its Subsidiaries calculated on a consolidated
basis for such period.
"CONSOLIDATED NET WORTH" means at any time the consolidated
stockholders' equity of Borrower and its Subsidiaries calculated on a
consolidated basis as of such time.
"CONSOLIDATED RENTALS" means, with reference to any period, the Rentals
of Borrower and its Subsidiaries calculated on a consolidated basis for such
period.
"CONSOLIDATED TOTAL CAPITALIZATION" means at any time the sum of
Consolidated Indebtedness and Consolidated Net Worth, each calculated at such
time.
"CONTINGENT OBLIGATION" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership.
"CONTROL GROUP" means the following individuals: Xxx Xxxxxxx, Xxx Xxxx,
Xxxxx Xxxxxxxxxxx, and Xxxx Xxxxxxx.
"CONTROLLED Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"CONVERSION/CONTINUATION NOTICE" is defined in Section 2.10.
"CREDIT EXTENSION" means the making of an Advance or the issuance of a
Facility LC hereunder.
"CREDIT EXTENSION DATE" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"DEBT TO CAPITALIZATION RATIO" means, as of any date of determination,
the ratio (expressed as a percentage) of (a) total funded debt of Borrower to
(b) the sum of (i) total funded debt of Borrower plus (ii) shareholders equity
as reflected on Borrower's balance sheet prepared in accordance with Agreement
Accounting Principles.
"DEFAULT" means an event described in Article VII.
"EARN OUT PAYMENTS" means any payment by Borrower or any Subsidiary to
the former owner of assets or equity interests which were acquired by Borrower
or such Subsidiary as additional acquisition consideration after the closing
date of such Acquisition.
Page 6
"ENVIRONMENTAL Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, hazardous
substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"EURODOLLAR ADVANCE" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association LIBOR
rate for deposits in U.S. dollars as reported by any generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such Interest Period, and having a maturity equal to
such Interest Period, provided that, if no such British Bankers' Association
LIBOR rate is available to the Agent, the applicable Eurodollar Base Rate for
the relevant Interest Period shall instead be the rate determined by the Agent
to be the rate at which Bank One or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amount of Bank One's relevant
Eurodollar Loan and having a maturity equal to such Interest Period.
"EURODOLLAR LOAN" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"EURODOLLAR RATE" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin. The Eurodollar Rate shall be rounded to the next
higher multiple of 1/16 of 1% if the rate is not such a multiple.
"EXCLUDED TAXES" means, in the case of each Lender or applicable
Lending Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent's or such Lender's principal executive office or such
Lender's applicable Lending Installation is located.
"EXHIBIT" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
"EXISTING ISSUE" is defined in Section 3.7.
"EXTENSION REQUEST" is defined in Section 2.21.
"FACILITY LC" is defined in Section 2.20.1.
"FACILITY LC APPLICATION" is defined in Section 2.20.3.
Page 7
"FACILITY LC COLLATERAL ACCOUNT" is defined in Section 2.20.11.
"FACILITY TERMINATION DATE" means, (i) with respect to each Term
Conversion, five (5) years after the date of such Term Conversion, and (ii) with
respect to the entire Revolving Credit Facility, December 31, 2006, or any later
date as may be specified as the Facility Termination Date in accordance with
Section 2.21 or any earlier date on which the Aggregate Commitment is reduced to
zero or otherwise terminated pursuant to the terms hereof.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"FINANCIAL CONTRACT" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (ii) any Rate Management
Transaction.
"FLOATING RATE" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"FLOATING RATE ADVANCE" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
"FLOATING RATE LOAN" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Floating Rate.
"FUND" means any Person (other than a natural person) that is (or will
be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"GUARANTOR" means collectively, (i) Parent and its successors and
assigns, and (ii) each Subsidiary of Borrower or Parent (other than Xxxxxxx
Financial Corporation) and its successors and assigns.
"GUARANTY" means that certain Unlimited Guaranty dated as of January
15, 1999, executed by Parent in favor of the Agent, for the ratable benefit of
the Lenders, as it may be amended or modified and in effect from time to time.
"HIGHEST LAWFUL RATE" shall mean, on any day, the maximum nonusurious
rate of interest permitted for that day by whichever of applicable federal or
Texas law permits the higher interest rate, stated as a rate per annum. On each
day, if any, that Chapter 303 of the Texas Finance Code, as amended (formerly
Tex. Rev. Civ. Stat. Xxx. Art. 5069-113.003) establishes the Highest Lawful
Rate, such rate shall be the "indicated (weekly) rate ceiling" (as defined in
Chapter 303 of the Texas Finance Code, as amended) for that day.
Page 8
"HYPOTHETICAL AMORTIZATION" means an amount equal to 20% of (a) the
Aggregate Outstanding Credit Exposure, minus (b) the Working Capital Sublimit.
"INDEBTEDNESS" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations, (viii) Letters of Credit, (ix) Net
Xxxx-to-Market Exposure of Rate Hedging Agreements and other Financial
Contracts, (x) Off-Balance Sheet Liabilities, (xi) Operating Lease Obligations,
(xii) Rate Hedging Obligations, (xiii) Sale and Leaseback Transactions, (xiv)
Receivables Transaction Attributed Indebtedness, (xv) Subordinated Debt
Securities, and (xvi) any other obligation for borrowed money or other financial
accommodation which in accordance with Agreement Accounting Principles would be
shown as a liability on the consolidated balance sheet of such Person.
"INTEREST PERIOD" means, with respect to a Eurodollar Advance, a period
of one, three, six or twelve months commencing on a Business Day selected by
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, three, six or twelve months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, third, sixth or twelfth succeeding month, such
Interest Period shall end on the last Business Day of such next, third, sixth or
twelfth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"INVESTMENT" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"LCFEE" is defined in Section 2.20.4.
"LC ISSUER" means Bank One (or any subsidiary or affiliate of Bank One
designated by Bank One) in its capacity as issuer of Facility LCs hereunder.
"LC OBLIGATIONS" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC PAYMENT DATE" is defined in Section 2.20.5.
"LENDERS" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns. Unless otherwise
specified, the term "Lenders" includes Bank One in its capacity as Swing Line
Lender.
Page 9
"LENDING INSTALLATION" means, with respect to a Lender or the Agent,
the office, branch, subsidiary or affiliate of such Lender or the Agent listed
on the signature pages hereof or on a Schedule or otherwise selected by such
Lender or the Agent pursuant to Section 2.18.
"LETTER OF CREDIT" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"LEVERAGE RATIO" means, as of any date of calculation, the ratio of (i)
Consolidated Funded Indebtedness outstanding on such date to (ii) Consolidated
EBITDA for Borrower's then most-recently ended four fiscal quarters, minus Earn
Out Payments (other than Earn Out Payments made to Xxx Xxxxxxx) made during such
period.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN" means the Term Loan, a Revolving Loan or a Swing Line Loan.
"LOAN DOCUMENTS" means this Agreement, the Facility LC Applications
and any Term Notes or Revolving Notes issued pursuant to Section 2.14, the
Collateral Documents, the Guaranty and any other agreement or instrument
executed in connection herewith or therewith.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations of
Borrower and its Subsidiaries taken as a whole, (ii) the ability of Borrower to
perform its obligations under the Loan Documents to which it is a party, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent, the LC Issuer or the Lenders thereunder.
"MATERIAL INDEBTEDNESS" means Indebtedness in an outstanding principal
amount of $1,000,000 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).
"MATERIAL INDEBTEDNESS AGREEMENT" means any agreement under which any
Material Indebtedness was created or is governed or which provides for the
incurrence of Indebtedness in an amount which would constitute Material
Indebtedness (whether or not an amount of Indebtedness constituting Material
Indebtedness is outstanding thereunder).
"MODIFY" and "MODIFICATION" are defined in Section 2.20.1.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTI-EMPLOYER PLAN" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which Borrower or any member of
the Controlled Group is a party to which more than one employer is obligated to
make contributions.
"NET XXXX-TO-MARKET EXPOSURE" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of
Page 10
the gain to such Person of replacing such Rate Management Transaction as of the
date of determination (assuming such Rate Management Transaction were to be
terminated as of that date).
"NET PRESENT VALUE OF RENEWALS" means an amount equal to the product of
(i) one minus the Assumed Expense Allowance, times (ii) the Present Value of
Renewals.
"NEWCO" is defined in Section 3.8.
"NON-U.S. LENDER" is defined in Section 3.5(iv).
"NOTE" means any promissory note issued at the request of a Lender
pursuant to Section 2.14 in the form of Exhibit E-1 or E-2, as applicable.
"NOTICE OF ASSIGNMENT" is defined in Section 12.3.1.
"OBLIGATIONS" means all unpaid principal of and accrued and unpaid
interest on the Loans, all Reimbursement Obligations, all accrued and unpaid
fees and all expenses, reimbursements, indemnities and other obligations of
Borrower to the Lenders or to any Lender, the Agent, the LC Issuer or any
indemnified party arising under the Loan Documents.
"OFF-BALANCE SHEET LIABILITY" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
"OPERATING LEASE" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"OPERATING LEASE OBLIGATIONS" means, as at any date of determination,
the amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under Agreement Accounting
Principles if such Operating Lease were a Capitalized Lease) from the date on
which each fixed lease payment is due under such Operating Lease to such date of
determination, of all fixed lease payments due under all Operating Leases of
Borrower and its Subsidiaries.
"OTHER TAXES" is defined in Section 3.5(ii).
"OUTSTANDING CREDIT EXPOSURE" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such
time plus (iii) an amount equal to its Pro Rata Share of the aggregate principal
amount of Swing Line Loans outstanding at such time.
"OVERNIGHT TRANSACTION LOAN EFFECTIVE RATE" means, as of any day, a
fluctuating rate of interest per annum determined by the Agent as its overnight
transaction loan rate for such day.
"OVERNIGHT TRANSACTION LOAN RATE" means, with respect to a Swing Line
Loan, a rate equal to the sum of (1) the Overnight Transaction Loan Effective
Rate plus (ii) the Applicable Margin.
Page 11
"PARENT" means Xxxxx, Inc., a Delaware corporation, (f/k/a
Xxxxx/Xxxxxx, Inc., and f/k/a Xxxxx/Xxxxxx Holdings, Inc.) of which Borrower is
a Wholly Owned Subsidiary.
"PARENT GUARANTEE" is defined in SECTION 3.7.
"PARTICIPANTS" is defined in Section 12.2.1.
"PAYMENT DATE" means the first (1st) day of each month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" means (a) an Acquisition by Borrower or an
Affiliate or Subsidiary of Borrower (which is or becomes a Guarantor hereunder)
which is approved in writing by Required Lenders, or (b) an Acquisition by
Borrower or an Affiliate of Borrower of companies in the same or substantially
similar industry as Borrower where (i) the total consideration for such
Acquisition is less than $20,000,000 and the cash portion of such total is less
than $10,000,000; provided, however, if less than fifty percent (50%) of the
assets purchased for such Acquisition are from existing in-force insurance, the
total consideration for such Acquisition is less than $5,000,000, and (ii)
financial projections for Borrower (together with the entity to be acquired) for
the period following such Acquisition (verified by receipt by Required Lenders
of information substantiating such projections, including, without limitation,
audited financial statements [or, with the consent of Required Lenders, compiled
financial statements certified by the Chief Financial Officer of Borrower] of
the company acquired for the most recently ended fiscal year, and approval by
Required Lenders of the accuracy of such information and the methodology
employed in making such projections) is delivered to Required Lenders,
indicating that such acquisition will not cause Borrower to be in default of any
covenant contained herein.
"PERMITTED ACQUISITION INDEBTEDNESS" means Indebtedness incurred by
Borrower or an Affiliate of Borrower as a portion of the purchase price of a
Permitted Acquisition, which Indebtedness is Subordinated Indebtedness and
otherwise on terms and conditions satisfactory to Agent.
"PERMITTED EMPLOYEE AND PRODUCER LOANS" means (i) secured advances to
Borrower's employees or producers in the aggregate not to exceed $1,000,000,
(ii) unsecured advances to Borrower's employees or producers in the aggregate
not to exceed $1,000,000 and (iii) unsecured loans made to new employees and
producers on or around their hire date, the proceeds of which are used to repay
loans from their former employer, which loans shall (A) be in an aggregate
amount not to exceed $9,000,000 and (B) be made prior to December 30, 2002.
"PERMITTED INDEBTEDNESS" is defined in Section 6.11.
"PERMITTED PURCHASE MONEY OBLIGATIONS" means purchase money obligations
(including capital leases) incurred in the ordinary course of business of
Borrower which are not in excess of $750,000 outstanding at any one time.
"PERMITTED REPURCHASE" is defined in Section 6.10.
"PERSON" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
Page 12
"PLAN" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which Borrower or any member of the Controlled Group may have any
liability.
"PRESENT VALUE OF RENEWALS" means the net commissions and fees to be
earned by Borrower (after deducting the amount required to be paid to the
producer thereof) on renewals of existing policies and contracts (excluding any
surrendered or lapsed policies or contracts and any policies or contracts for
which Borrower has received notice of non-renewal for the 10 year period
following the date of determination (deducting, for each year after such date,
the applicable Attrition Rate [i.e. multiplied by one minus such applicable
Attrition Rate for each such year]), discounted to present value at a per annum
rate equal to twelve percent (12%).
"PRICING SCHEDULE" means the Schedule attached hereto identified as
such.
"PRIME RATE" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"PROPERTY" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"PROPOSED ISSUE" is defined in Section 3.7.
"PROPOSED SECURITIZATION" is defined in Section 3.8.
"PRO RATA SHARE" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.
"PURCHASERS" is defined in Section 12.3.1.
"QUALIFIED RECEIVABLES TRANSACTION" means any transaction or series of
transactions that may be entered into by Borrower or any Subsidiary pursuant to
which Borrower or any Subsidiary may sell, convey or otherwise transfer to a
newly-formed Subsidiary or other special-purpose entity, or any other Person,
any accounts or notes receivable and rights related thereto, provided that (i)
all of the terms and conditions of such transaction or series of transactions,
including without limitation the amount and type of any recourse to Borrower or
any Subsidiary with respect to the assets transferred, are acceptable to the
Agent and the Required Lenders, and (ii) the Receivables Transaction Attributed
Indebtedness incurred in such transaction or series of transactions does not
exceed $65,000,000.
"RATE MANAGEMENT OBLIGATIONS" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"RATE MANAGEMENT TRANSACTION" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered by Borrower or
any subsidiary which is a rate swap, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap, equity or equity
index option, bond option, interest rate option, foreign exchange transaction,
cap transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
Page 13
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"RECEIVABLES TRANSACTION ATTRIBUTED INDEBTEDNESS" means the amount of
obligations outstanding under the legal documents entered into as part of any
Qualified Receivables Transaction on any date of determination that would be
characterized as principal if such Qualified Receivables Transaction were
structured as a secured lending transaction rather than as a purchase.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"REIMBURSEMENT OBLIGATIONS" means, at any time, the aggregate of all
obligations of Borrower then outstanding under Section 2.20 to reimburse the LC
Issuer for amounts paid by the LC Issuer in respect of any one or more drawings
under Facility LCs.
"RENTALS" of a Person means the aggregate fixed amounts payable by such
Person under any Operating Lease.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"REPORTS" is defined in Section 9.6.
"REQUIRED LENDERS" means Lenders in the aggregate having at least
66.67% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66.67% of the Aggregate
Outstanding Credit Exposure.
"RESERVE REQUIREMENT" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"RESPONSE DATE" is defined in Section 2.21.
"REVOLVING CREDIT FACILITY" is defined in Section 2.1.1.
"REVOLVING CREDIT TERMINATION BALANCE" means the aggregate principal
amount of Advances under the Revolving Credit Facility outstanding on December
31 of each year after giving effect to any Advances made or repaid by such date,
less the Working Capital Sublimit.
Page 14
"REVOLVING CREDIT TERMINATION DATE" means, (i) with respect to each
Term Conversion of a Year End Balance, December 31. of such year and (ii) with
respect to the entire Revolving Credit Facility, December 31, 2006 or any later
date as may be specified as the Revolving Credit Termination Date in accordance
with Section 2.20 or any earlier date on which the Aggregate Commitment is
reduced to zero or otherwise terminated pursuant to the terms hereof.
"REVOLVING LOAN" means, with respect to a Lender, such Lender's loan
made pursuant to its commitment to lend set forth in Section 2.1 (or any
conversion or continuation thereof).
"REVOLVING NOTE" is defined in Section 2.14.
"S&P" means Standard and Poor's Ratings Services, a division of The
McGraw Hill Companies, Inc.
"SALE AND LEASEBACK TRANSACTION" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"SCHEDULE" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii)
all Rate Management Obligations owing to one or more Lenders.
"SINGLE EMPLOYER PLAN" means a Plan maintained by Borrower or any
member of the Controlled Group for employees of Borrower or any member of the
Controlled Group.
"SPV" is defined in Section 3.8.
"STATED RATE" is defined in Section 2.23.
"SUBORDINATED DEBT SECURITIES" means (i) the junior subordinated debt
securities issued by Borrower pursuant to the Existing Issue and (ii) any
subordinated debt securities issued by Borrower pursuant to any Proposed Issue.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of a Person which (i) is
expressly subordinate to the Loans, (ii) is designated by such Person in a
certificate delivered to the Agent as "Subordinated Debt" at the time of the
incurrence of such Indebtedness (or in the case of Indebtedness existing on the
date hereof in a certificate delivered to the Agent on the date hereof), and
(iii) is approved in writing by Required Lenders as "Subordinated Debt".
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or, controlled, directly or indirectly, by such Person or by one or
more of its Subsidiaries or by such Person and one or more of its Subsidiaries,
or (ii) any partnership, limited liability company, association, joint venture
or similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided, all references herein to a "Subsidiary"
shall mean a Subsidiary of Borrower and a Subsidiary of Parent. For purposes of
this Agreement, in no event will NewCo or any SPV formed in connection with the
Proposed Securitization
Page 15
be considered Subsidiaries of Borrower or Parent, nor will the results of
operations (including, without limitation, revenue, expenses or indebtedness) of
NewCo or any SPV formed in connection with the Proposed Securitization be
included in the calculation of Borrower's consolidated financial results.
"SUBSTANTIAL PORTION" means, with respect to the Property of Borrower
and its Subsidiaries, Property which represents more than 15% of the
consolidated assets of Borrower and its Subsidiaries or property which is
responsible for more than 15% of the consolidated net sales or of the
consolidated net income of Borrower and its Subsidiaries, in each case, as would
be shown in the consolidated financial statements of Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made (or if financial statements have not
been delivered hereunder for that month which begins the twelve-month period,
then the financial statements delivered hereunder for the quarter ending
immediately prior to that month).
"SWING LINE BORROWING NOTICE" is defined in Section 2.5.2.
"SWING LINE COMMITMENT" means the obligation of the Swing Line Lender
to make Swing Line Loans up to a maximum principal amount of $2,500,000 at any
one time outstanding.
"SWING LINE LENDER" means Bank One or such other Lender which may
succeed to its rights and obligations as Swing Line Lender pursuant to the terms
of this Agreement.
"SWING LINE LOAN" means a Loan made available to the Borrower by the
Swing Line Lender pursuant to Section 2.5 bearing interest at the Overnight
Transaction Loan Rate.
"TAXES" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"TERM CONVERSION" is defined in Section 2.1.1.
"TERM LOAN" means a term loan by the Lenders in accordance with their
Pro Rata Shares, which amount represents a Term Conversion effected on December
31, 2002 in the original amount of $50,000,000, the outstanding principal
balance of which is $17,995,500.00 on the date hereof.
"TERM NOTE" is defined in Section 2.14.
"TRANSFEREE" is defined in Section 12.4.
"TYPE" means, with respect to any Advance, its nature as a Floating
Rate Advance, a Eurodollar Advance or a Swing Line Loan and with respect to any
Loan, its nature as a Floating Rate Loan, a Eurodollar Loan or a Swing Line
Loan.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"UNMATURED DEFAULT" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
Page 16
"WHOLLY-OWNED SUBSIDIARY" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
"WORKING CAPITAL SUBLIMIT" means (a) prior to the earlier of December
31, 2003, or the closing of the Proposed Securitization, $35,000,000, and (b)
thereafter $20,000,000.
"YEAR END BALANCE" is defined in Section 2.1.1.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
-----------
2.1. Commitments.
2.1.1 Revolving Credit Facility. From and including the date
of this Agreement and prior to the Revolving Credit Termination Date,
each Lender severally agrees, on the terms and conditions set forth in
this Agreement, (i) to make revolving Loans to Borrower from time to
time and (ii) participate in Facility LCs issued upon the request of
Borrower (the "REVOLVING CREDIT FACILITY"), provided that, after giving
effect to the making of each such Loan and the issuance of each such
Facility LC, such Lender's Outstanding Credit Exposure shall not exceed
its Commitment. Subject to the terms of this Agreement, Borrower may
borrow, repay and reborrow under the Revolving Credit Facility at any
time prior to the Revolving Credit Termination Date. Commencing on
December 31, 2004, and continuing on December 31 of each year until the
Revolving Credit Termination Date, the Revolving Credit Termination
Balance on such date (the "YEAR END BALANCE") shall convert (a "TERM
CONVERSION") to a term loan, to be repaid as provided in Section 2.2;
provided, that, (x) the amount of the Term Conversion on December 31,
2004 shall not exceed $50,000,000, and (y) the aggregate balance of all
Term Conversions in existence at any time shall not exceed $50,000,000.
Each Lender's Commitment to lend under the Revolving Credit Facility
shall (A) be reduced by its Pro Rata Share of the term loans resulting
from each Term Conversion and (B) expire on the Revolving Credit
Termination Date. Principal payments made (I) on such Year End Balances
and (II) after the Revolving Credit Termination Date, may not be
reborrowed. The Revolving Credit Facility (other than the Working
Capital Sublimit, which shall be used for the purposes set forth in the
definition thereof) shall be used solely for (x) the purchase of assets
used in the ordinary course or Borrower's business and (y) Permitted
Acquisitions. The LC Issuer will issue Facility LCs hereunder on the
terms and conditions set forth in Section 2.19.
2.1.2 Term Loan. Each Lender severally agrees, on the terms
and conditions set forth in this Agreement, to continue its Pro Rata
Share of the Term Loan to Borrower.
2.1.3 Accordion. Lenders hereby approve an increase in the
permitted maximum amount of the Revolving Credit Facility to
$105,000,000, based on new commitments from existing Lenders or new
Lenders in accordance with the terms of this Agreement (without
implying any obligation of any Lender to increase the amount of its
Commitment hereunder).
Page 17
The ability to obtain increased Commitments shall terminate on December 31,
2004, and the permitted maximum amount of the Revolving Credit Facility
following such date shall be the Aggregate Commitments on such date.
2.2. Required Payments; Termination. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full by Borrower on
the Facility Termination Date.
2.2.1 Year End Balances. Commencing on the last day of March
following each Term Conversion, and continuing on the last day of each
June, September, December and March thereafter until paid in full,
Borrower shall make a principal payment (in addition to the interest
payments required by Section 2.16) on the Year End Balances to Agent
for the account of each Lender in an amount equal to the Year End
Balance of such Term Conversion, divided by twenty (20).
2.2.2 Term Loan. Commencing on the last day of December, 2003,
and continuing on the last day of each March, June, September and
December thereafter until paid in full, Borrower shall make a principal
payment (in addition to the interest payments required by Section 2.16)
on the Term Loan to Agent for the account of each Lender in an amount
equal to $1,736,605.26. The Term Loan shall be payable in full on
December 31, 2007.
2.2.3 Other Mandatory Principal Payments. In addition to the
principal payments provided for above in Sections 2.2.1 and 2.2.2,
Borrower shall make a payment to Agent for the account of each Lender
in an amount equal to (i) the amount by which (A) the balance of the
Revolving Credit Facility at any time outstanding exceeds (B) the
Borrowing Base, and (ii) 100% of the net cash proceeds (i.e. gross cash
proceeds less ordinary and reasonable closing costs) of (V) the sale of
any material asset, including but not limited to the sale of accounts
receivable or renewals, (W) the issuance of other Indebtedness other
than Permitted Indebtedness (without implying the Lenders' consent to
any such Indebtedness except as specifically provided herein), (X) the
issuance of any equity securities by Borrower, Parent or any Subsidiary
of Borrower or Parent (whether public or private, registered or
unregistered), (Y) the issuance of Subordinated Debt Securities and (Z)
the Proposed Securitization. Except as set forth below, any mandatory
prepayment under this Section 2.2.3 shall be applied first to the Term
Loan, second to any then existing portion of the Revolving Credit
Facility which is the subject of a Term Conversion, and third to the
remainder of the Revolving Credit Facility, in each instance in the
inverse order of maturity. Any mandatory prepayment under subsection
(ii)(Y) in respect of the Proposed Issue shall be applied first to the
Revolving Credit Facility, second to any then existing portion of the
Revolving Credit Facility which is the subject of a Term Conversion,
and third to the Term Loan, in each instance in the inverse order of
maturity. The Commitments under the Revolving Credit Facility shall be
increased pro-rata by the amount of proceeds of the Proposed
Securitization paid under subsection (ii)(Z) and applied to the Term
Loan (the "Securitization Proceeds Term Loan Repayment Amount"). Upon
request of any Lender, Borrower shall execute new Notes reflecting the
aforementioned increase in the Commitments.
2.2.4 Revolving Credit Facility. On the Revolving Credit
Termination Date which relates to the entire Revolving Credit Facility,
Borrower shall pay to Agent for the account of each Lender, the
outstanding balance of the Working Capital Sublimit of the Revolving
Credit Facility, together with any accrued but unpaid interest, and any
unpaid fees and expenses relating thereto.
Any outstanding Advances and all other unpaid Obligations shall be paid in full
by Borrower on the Facility Termination Date.
Page 18
2.3. Ratable Loans. Each Advance hereunder (other than any Swing Line
Loan) shall consist of Revolving Loans made from the several Lenders ratably
according to their Pro Rata Shares.
2.4. Types of Advances. The Advances (other than Swing Line Loans) may
be Floating Rate Advances or Eurodollar Advances, or a combination thereof,
selected by Borrower in accordance with Sections 2.9 and 2.10.
2.5. Swing Line Loans.
2.5.1 Amount of Swing Line Loans. Upon the satisfaction of the
conditions precedent set forth in Section 4.2 and, if such Swing Line
Loan is to be made on the date of the initial Advance hereunder, the
satisfaction of the conditions precedent set forth in Section 4.1 as
well, from and including the date of this Agreement and prior to the
Revolving Credit Termination Date, the Swing Line Lender agrees, on the
terms and conditions set forth in this Agreement, to make Swing Line
Loans to the Borrower from time to time in an aggregate principal
amount not to exceed the Swing Line Commitment, provided that the
Aggregate Outstanding Credit Exposure will not at any time exceed the
Aggregate Commitment, and provided further that at no time shall the
sum of (i) the Swing Line Lender's Pro Rata Share of the Swing Line
Loans, plus (ii) the outstanding Revolving Loans made by the Swing Line
Lender pursuant to Section 2.1, exceed the Swing Line Lender's
Commitment at such time. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Swing Line Loans at any time
prior to the Revolving Credit Termination Date.
2.5.2 Borrowing Nom. The Borrower shall deliver to the Agent
and the Swing Line Lender irrevocable notice (a "Swing Line Borrowing
Notice") not later than noon (Chicago time) on the Borrowing Date of
each Swing Line Loan, specifying (i) the applicable Borrowing Date
(which date shall be a Business Day), and (ii) the aggregate amount of
the requested Swing Line Loan which shall be an amount not less than
$100,000. The Swing Line Loans shall bear interest at the Overnight
Transaction Loan Rate.
2.5.3 Making of Swing Line Loans. Not later than 2:00 p.m.
(Chicago time) on the applicable Borrowing Date, the Swing Line Lender
shall make available the Swing Line Loan, in funds immediately
available in Chicago, to the Agent at its address specified pursuant to
Article XIII. The Agent will promptly make the funds so received from
the Swing Line Lender available to the Borrower on the Borrowing Date
at the Agent's aforesaid address.
2.5.4 Repayment of Swing Line Loans. Swing Line Lender may at
any time in its sole discretion with respect to any outstanding Swing
Line Loan, require each Lender (including the Swing Line Lender) to
make a Revolving Loan in the amount of such Lender's Pro Rata Share of
such Swing Line Loan (including, without limitation, any interest
accrued and unpaid thereon), for the purpose of repaying such Swing
Line Loan. Not later than noon (Chicago time) on the date of any notice
received pursuant to this Section 2.5.4, each Lender shall make
available its required Revolving Loan, in funds immediately available
in Chicago to the Agent at its address specified pursuant to Article
XIII. Revolving Loans made pursuant to this Section 2.5.4 shall
initially be Floating Rate Loans and thereafter may be continued as
Floating Rate Loans or converted into Eurodollar Loans in the manner
provided in Section 2.10 and subject to the other conditions and
limitations set forth in this Article II. Unless a Lender shall have
notified the Swing Line Lender, prior to its making any Swing Line
Loan, that any applicable condition precedent set forth in Sections 4.1
and 4.2 had not then been satisfied, such Lender's obligation to make
Revolving Loans pursuant to this Section 2.5.4 to repay Swing Line
Loans shall be unconditional, continuing, irrevocable and absolute and
shall not be affected by any
Page 19
circumstances, including, without limitation, (a) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against the Agent,
the Swing Line Lender or any other Person, (b) the occurrence or continuance of
a Default or Unmatured Default, (c) any adverse change in the condition
(financial or otherwise) of the Borrower, or (d) any other circumstances,
happening or event whatsoever. In the event that any Lender fails to make
payment to the Agent of any amount due under this Section 2.5.4, the Agent shall
be entitled to receive, retain and apply against such obligation the principal
and interest otherwise payable to such Lender hereunder until the Agent receives
such payment from such Lender or such obligation is otherwise fully satisfied.
In addition to the foregoing, if for any reason any Lender fails to make payment
to the Agent of any amount due under this Section 2.5.4, such Lender shall be
deemed, at the option of the Agent, to have unconditionally and irrevocably
purchased from the Swing Line Lender, without recourse or warranty, an undivided
interest and participation in the applicable Swing Line Loan in the amount of
such Revolving Loan, and such interest and participation may be recovered from
such Lender together with interest thereon at the Federal Funds Effective Rate
for each day during the period commencing on the date of demand and ending on
the date such amount is received. On the Revolving Credit Termination Date, the
Borrower shall repay in full the outstanding principal balance of the Swing Line
Loans.
2.6. Fees, Reductions in Aggregate Commitment.
2.6.1 Facility Fee. Borrower agrees to pay to the Agent for
the account of each Lender a facility fee in an amount set forth on the
attached "Facility Fee Schedule" as reasonable compensation to the
Lenders for making the Credit Extensions available to the Borrower,
payable on the date of the closing of this Agreement.
2.6.2 Commitment Fee. Borrower agrees to pay to the Agent for
the account of each Lender a commitment fee at a per annum rate equal
to the Applicable Fee Rate on the daily unused portion of such Lender's
Pro Rata Share of the maximum amount of the Revolving Credit Facility
from the date hereof to and including the Revolving Credit Termination
Date, payable at the end of each calendar quarter hereafter and on the
Revolving Credit Termination Date. Swing Line Loans shall not count as
usage of any Lender's Commitment for purposes of calculating the
commitment fee due hereunder.
2.6.3 Reductions in Aggregate Commitment. Borrower may
permanently reduce the Aggregate Commitment (which shall also result in
a reduction in the commitment fee provided for in the first sentence of
this Section) in whole, or in part ratably among the Lenders in
integral multiples of $5,000,000, upon at least three Business Days'
written notice to the Agent, which notice shall specify the amount of
any such reduction, provided, however, that the amount of the Aggregate
Commitment may not be reduced below the aggregate principal amount of
the outstanding Advances. All accrued commitment fees shall be payable
on the effective date of any termination of the obligations of the
Lenders to make Loans hereunder.
2.7. Minimum Amount of Each Advance. Each Eurodollar Advance and each
Floating Rate Advance (other than an Advance to repay Swing Line Loans) shall be
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof), provided, however, that any Floating Rate Advance may be in the amount
of the unused Aggregate Commitment.
2.8. Optional Principal Payments. Borrower may from time to time pay,
without penalty or premium, all outstanding Floating Rate Advances, or, in a
minimum aggregate amount of $1,000,000 or any integral multiple of $100,000 in
excess thereof, any portion of the outstanding Floating Rate Advances. Borrower
may at any time pay, without penalty or premium, all outstanding Swing Line
Page 20
Loans, or in a minimum amount of $100,000 and increments of $50,000 in excess
thereof, any portion of the outstanding Swing Line Loans, with notice to Agent
and the Swing Line Lender by 11:00 A.M. (Chicago time) on the date of repayment.
Borrower may from time to time pay, subject to the payment of any funding
indemnification amounts required by Section 3.4 but without penalty or premium,
all outstanding Eurodollar Advances, or, in a minimum aggregate amount of
$1,000,000 or any integral multiple of $100,000 in excess thereof, any portion
of the outstanding Eurodollar Advances upon two Business Days' prior notice to
the Agent. Prior to the occurrence of an Unmatured Default, principal payments
shall be applied to the Loans as determined by Borrower; after the occurrence of
an Unmatured Default, principal payments shall be applied to the Loans as
determined by Required Lenders. In any event, principal installments applied to
the Term Loan shall be applied in the inverse order of maturity.
2.9. Method of Selecting Types and Interest Periods for New Advances.
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Advance, the Interest Period applicable thereto from time to time. Borrower
shall give the Agent irrevocable notice (a "BORROWING NOTICE") not later than
11:00 a.m. (Chicago time) on the Borrowing Date of each Floating Rate Advance
and each Swing Line Loan and two Business Days before the Borrowing Date for
each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business
Day, of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the
Interest Period applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans in funds immediately available in Chicago
to the Agent at its address specified pursuant to Article XIII. The Agent will
make the funds so received from the Lenders available to Borrower at the Agent's
aforesaid address. Borrower shall be entitled to no more than seven (7)
Eurodollar Loans outstanding at any one time.
2.10. Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Eurodollar Advances pursuant to this
Section 2.10 or are repaid in accordance with Section 2.8. Each Eurodollar
Advance shall continue as a Eurodollar Advance until the end of the then
applicable Interest Period therefor, at which time such Eurodollar Advance shall
be automatically converted into a Floating Rate Advance unless (x) such
Eurodollar Advance is or was repaid in accordance with Section 2.8 or (y)
Borrower shall have given the Agent a Conversion/Continuation Notice (as defined
below) requesting that, at the end of such Interest Period, such Eurodollar
Advance continue as a Eurodollar Advance for the same or another Interest
Period. Subject to the terms of Section 2.7, Borrower may elect from time to
time to convert all or any part of a Floating Rate Advance into a Eurodollar
Advance. Borrower shall give the Agent irrevocable notice (a
"CONVERSION/CONTINUATION NOTICE") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
10:00 a.m. (Chicago time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business
Day, of such conversion or continuation,
Page 21
(ii) the aggregate amount and Type of the Advance
which is to be converted or continued, and
(iii) the amount of such Advance which is to be
converted into or continued as a Eurodollar Advance and the
duration of the Interest Period applicable thereto.
2.11. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.10, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.10 hereof, at a rate per annum equal to the Floating Rate for such
day. Each Swing Line Loan shall bear interest on the outstanding principal
amount thereof, for each day from and including the day such Swing Line Loan is
made to but excluding the date it is paid, at a rate per annum equal to the
Overnight Transaction Loan Rate for such day. Changes in the rate of interest on
that portion of any Advance maintained as a Floating Rate Advance will take
effect simultaneously with each change in the Alternate Base Rate. Each
Eurodollar Advance shall bear interest on the outstanding principal amount
thereof from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
interest rate determined by the Agent as applicable to such Eurodollar Advance
based upon Borrower's selections under Sections 2.9 and 2.10 and otherwise in
accordance with the terms hereof. No Interest Period may end after the Facility
Termination Date.
2.12. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.9, 2.10 or 2.11, during the continuance of a
Default or Unmatured Default the Required Lenders may, at their option, by
notice to Borrower (which notice may be revoked at the option of the Required
Lenders notwithstanding any provision of Section 8.2 requiring unanimous consent
of the Lenders to changes in interest rates), declare that no Advance may be
made as, converted into or continued as a Eurodollar Advance. During the
continuance of a Default the Required Lenders may, at their option, by notice to
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that (i) each Eurodollar Advance
shall bear interest for the remainder of the applicable Interest Period at the
rate otherwise applicable to such Interest Period plus 3% per annum, (ii) each
Floating Rate Advance shall bear interest at a rate per annum equal to the
Floating Rate in effect from time to time plus 3% per annum and (iii) the LC Fee
shall be increased by 3% per annum, provided that, during the continuance of a
Default under Section 7.1 (f) or (g), the interest rates set forth in clauses
(i) and (ii) above and the increase in the LC Fee set forth in clause (iii)
above shall be applicable to all Credit Extensions without any election or
action on the part of the Agent or any Lender.
2.13. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article XIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to Borrower, by noon (local time) on the date when due and
shall (except in the case of Reimbursement Obligations for which the LC Issuer
has not been fully indemnified by the Lenders, or as otherwise specifically
required hereunder) be applied ratably by the Agent among the Lenders. Each
payment delivered to the Agent for the account of any Lender shall be delivered
promptly by the Agent to such Lender in the same type of funds that the Agent
received at its address specified pursuant to Article XIII or at any Lending
Installation specified in a notice received by the Agent from such Lender. The
Agent is hereby authorized to charge the account of Borrower maintained with
Bank One for each payment of principal, interest, Reimbursement Obligations and
fees as it becomes due hereunder. Each reference to the Agent in this Section
2.13 shall also be deemed to refer, and shall apply equally, to the LC Issuer,
in the case of payments required to be made by Borrower to the LC Issuer
pursuant to Section 2.20.6.
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2.14. Noteless Agreement; Evidence of Indebtedness. (i) Each Lender
shall maintain in accordance with its usual practice an account or accounts
evidencing the indebtedness of Borrower to such Lender resulting from each Loan
made by such Lender from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder.
(ii) The Agent shall also maintain accounts in which it will record (a)
the amount of each Loan made hereunder, the Type thereof and the Interest Period
with respect thereto, (b) the amount of any principal or interest due and
payable or to become due and payable from Borrower to each Lender hereunder, (c)
the original stated amount of each Facility LC and the amount of LC Obligations
outstanding at any time, and (d) the amount of any sum received by the Agent
hereunder from Borrower and each Lender's share thereof.
(iii) The entries maintained in the accounts maintained pursuant to
paragraphs (i) and (ii) above shall be prima facie evidence of the existence and
amounts of the Obligations therein recorded; provided, however, that the failure
of the Agent or any Lender to maintain such accounts or any error therein shall
not in any manner affect the obligation of Borrower to repay the Obligations in
accordance with their terms.
(iv) Any Lender may request that its Loans under the Term Loan be
evidenced by a promissory note (a "TERM NOTE"). In such event, Borrower shall
prepare, execute and deliver to such Lender a Term Note payable to the order of
such Lender in the form attached hereto as Exhibit E-1. Thereafter, the Loans
evidenced by such Term Note and interest thereon shall at all times (including
after any assignment pursuant to Section 12.3) be represented by one or more
Term Notes payable to the order of the payee named therein or any assignee
pursuant to Section 12.3, except to the extent that any such Lender or assignee
subsequently returns any such Term Note for cancellation and requests that such
Loans once again be evidenced as described in paragraphs (i) and (ii) above.
(v) Any Lender may request that its Loans under the Revolving Credit
Facility be evidenced by a promissory note, or in the case of Swing Line Lender,
promissory notes representing its Revolving Loans and Swing Line Loans,
respectively (a "REVOLVING NOTE"). In such event, Borrower shall prepare,
execute and deliver to such Lender a Revolving Note payable to the order of such
Lender in the form attached hereto as Exhibit E-2 (with appropriate changes for
notes evidencing Swing Line Loans). Thereafter, the Loans evidenced by such
Revolving Note and interest thereon shall at all times (including after any
assignment pursuant to Section 12.3) be represented by one or more Revolving
Notes payable to the order of the payee named therein or any assignee pursuant
to Section 12.3, except to the extent that any such Lender or assignee
subsequently returns any such Revolving Note for cancellation and requests that
such Loans once again be evidenced as described in paragraphs (i) and (ii)
above.
2.15. Telephonic Notices. Borrower hereby authorizes the Lenders and
the Agent to extend, convert or continue Advances, effect selections of Types of
Advances and to transfer funds based on telephonic notices made by any person or
persons the Agent or any Lender in good faith believes to be acting on behalf of
Borrower, it being understood that the foregoing authorization is specifically
intended to allow Borrowing Notices and Conversion/Continuation Notices to be
given telephonically. Borrower agrees to deliver promptly to the Agent a written
confirmation, if such confirmation is requested by the Agent or any Lender, of
each telephonic notice signed by an Authorized Officer. If the written
confirmation differs in any material respect from the action taken by the Agent
and the Lenders, the records of the Agent and the Lenders shall govern absent
manifest error.
2.16. Interest Payment Dates, Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof and at maturity.
Interest accrued on each Eurodollar Advance shall be payable on the last day
Page 23
of its applicable Interest Period, on any date on which the Eurodollar Advance
is prepaid, whether by acceleration or otherwise, and at maturity. Interest
accrued on each Eurodollar Advance having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period. Interest, commitment fees and LC Fees shall be calculated
for actual days elapsed on the basis of a 360-day year. Interest shall be
payable for the day an Advance is made but not for the day of any payment on the
amount paid if payment is received prior to noon (local time) at the place of
payment. If any payment of principal of or interest on an Advance shall become
due on a day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.17. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Borrowing Notice, Swing Line Borrowing Notice, Conversion/Continuation Notice,
and repayment notice received by it hereunder. Promptly after notice from the LC
Issuer, the Agent will notify each Lender of the contents of each request for
issuance of a Facility LC hereunder. The Agent will notify each Lender of the
interest rate applicable to each Eurodollar Advance promptly upon determination
of such interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.
2.18. Lending Installations. Each Lender may book its Loans and its
participation in any LC Obligations and the LC Issuer may book the Facility LCs
at any Lending Installation selected by such Lender or the LC Issuer, as the
case may be, and may change its Lending Installation from time to time. All
terms of this Agreement shall apply to any such Lending Installation and the
Loans, Facility LCs, participations in LC Obligations and any Notes issued
hereunder shall be deemed held by each Lender or the LC Issuer, as the case may
be, for the benefit of any such Lending Installation. Each Lender and the LC
Issuer may, by written notice to the Agent and Borrower in accordance with
Article XIII, designate replacement or additional Lending Installations through
which Loans will be made by it or Facility LCs will be issued by it and for
whose account Loan payments or payments with respect to Facility LCs are to be
made.
2.19. Non-Receipt of Funds by the Agent. Unless Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or Borrower, as the case may be, has not in fact made such payment
to the Agent, the recipient of such payment shall, on demand by the Agent, repay
to the Agent the amount so made available together with interest thereon in
respect of each day during the period commencing on the date such amount was so
made available by the Agent until the date the Agent recovers such amount at a
rate per annum equal to (x) in the case of payment by a Lender, the Federal
Funds Effective Rate for such day for the first three days and, thereafter, the
interest rate applicable to the relevant Loan or (y) in the case of payment by
Borrower, the interest rate applicable to the relevant Loan.
2.20. Facility LCs.
2.20.1 Issuance. The LC Issuer hereby agrees, on the terms and
conditions set forth in this Agreement, to issue standby and commercial
letters of credit (each, a "FACILITY LC") and to renew, extend,
increase, decrease or otherwise modify each Facility LC ("MODIFY," and
each such action a "MODIFICATION"), from time to time from and
including the date of this Agreement and
Page 24
prior to the Facility Termination Date upon the request of Borrower;
provided that immediately after each such Facility LC is issued or
Modified, (i) the aggregate amount of the outstanding LC Obligations
shall not exceed $5,000,000 and (ii) the Aggregate Outstanding Credit
Exposure shall not exceed the Aggregate Commitment. No Facility LC
shall have an expiry date later than the earlier of (x) the fifth
Business Day prior to the Revolving Credit Termination Date and (y) one
year after its issuance.
2.20.2 Participations. Upon the issuance or Modification by
the LC Issuer of a Facility LC in accordance with this Section 2.20,
the LC Issuer shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably sold to each Lender,
and each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the LC
Issuer, a participation in such Facility LC (and each Modification
thereof) and the related LC Obligations in proportion to its Pro Rata
Share.
2.20.3 Notice. Subject to Section 2.20.1, Borrower shall give
the LC Issuer notice prior to 11:00 a.m. (Chicago time) at least three
Business Days prior to the proposed date of issuance or Modification of
each Facility LC, specifying the beneficiary, the proposed date of
issuance (or Modification) and the expiry date of such Facility LC, and
describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby. Upon receipt of such
notice, the LC Issuer shall promptly notify the Agent, and the Agent
shall promptly notify each Lender, of the contents thereof and of the
amount of such Lender's participation in such proposed Facility LC. The
issuance or Modification by the LC Issuer of any Facility LC shall, in
addition to the conditions precedent set forth in Article IV (the
satisfaction of which the LC Issuer shall have no duty to ascertain),
be subject to the conditions precedent that such Facility LC shall be
satisfactory to the LC Issuer and that Borrower shall have executed and
delivered such application agreement and/or such other instruments and
agreements relating to such Facility LC as the LC Issuer shall have
reasonably requested (each, a "FACILITY LC APPLICATION"). In the event
of any conflict between the terms of this Agreement and the terms of
any Facility LC Application, the terms of this Agreement shall control.
2.20.4 LC Fees. Borrower shall pay to the Agent, for the
account of the Lenders ratably in accordance with their respective Pro
Rata Shares, (i) with respect to each standby Facility LC, a letter of
credit fee at a per annum rate equal to the Applicable Margin for
Eurodollar Loans in effect from time to time on the average daily
undrawn stated amount under such standby Facility LC, such fee to be
payable in arrears on each Payment Date, and (ii) with respect to each
commercial Facility LC, a one-time letter of credit fee in an amount
equal to 1/8% of the initial stated amount (or, with respect to a
Modification of any such commercial Facility LC which increases the
stated amount thereof, such increase in the stated amount) thereof,
such fee to be payable on the date of such issuance or increase (each
such fee described in this sentence an "LC FEE"). Borrower shall also
pay to the LC Issuer for its own account (x) at the time of issuance of
each Facility LC, a fronting fee in an amount to be agreed upon between
the LC Issuer and Borrower, and (y) documentary and processing charges
in connection with the issuance or Modification of and draws under
Facility LCs in accordance with the LC Issuer's standard schedule for
such charges as in effect from time to time.
2.20.5 Administration, Reimbursement by Lenders. Upon receipt
from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the LC Issuer shall notify the Agent and the Agent
shall promptly notify Borrower and each other Lender as to the amount
to be paid by the LC Issuer as a result of such demand and the proposed
payment date (the "LC PAYMENT DATE"). The responsibility of the LC
Issuer to Borrower and each Lender shall be only to determine that the
documents (including each demand for payment) delivered under each
Page 25
Facility LC in connection with such presentment shall be in conformity
in all material respects with such Facility LC. The LC Issuer shall
endeavor to exercise the same care in the issuance and administration
of the Facility LCs as it does with respect to letters of credit in
which no participations are granted, it being understood that in the
absence of any gross negligence or willful misconduct by the LC Issuer,
each Lender shall be unconditionally and irrevocably liable without
regard to the occurrence of any Default or any condition precedent
whatsoever, to reimburse the LC Issuer on demand for (i) such Lender's
Pro Rata Share of the amount of each payment made by the LC Issuer
under each Facility LC to the extent such amount is not reimbursed by
Borrower pursuant to Section 2.20.6 below, plus (ii) interest on the
foregoing amount to be reimbursed by such Lender, for each day from the
date of the LC Issuer's demand for such reimbursement (or, if such
demand is made after 11:00 a.m. (Chicago time) on such date, from the
next succeeding Business Day) to the date on which such Lender pays the
amount to be reimbursed by it, at a rate of interest per annum equal to
the Federal Funds Effective Rate for the first three days and,
thereafter, at a rate of interest equal to the rate applicable to
Floating Rate Advances.
2.20.6 Reimbursement by Borrower. Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the applicable LC Payment Date for any amounts to be paid by
the LC Issuer upon any drawing under any Facility LC, without
presentment, demand, protest or other formalities of any kind; provided
that neither Borrower nor any Lender shall hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered
by Borrower or such Lender to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. All such amounts paid by the LC Issuer
and remaining unpaid by Borrower shall bear interest, payable on
demand, for each day until paid at a rate per annum equal to (x) the
rate applicable to Floating Rate Advances for such day if such day
falls on or before the applicable LC Payment Date and (y) the sum of 3%
plus the rate applicable to Floating Rate Advances for such day if such
day falls after such LC Payment Date. The LC Issuer will pay to each
Lender ratably in accordance with its Pro Rata Share all amounts
received by it from Borrower for application in payment, in whole or in
part, of the Reimbursement Obligation in respect of any Facility LC
issued by the LC Issuer, but only to the extent such Lender has made
payment to the LC Issuer in respect of such Facility LC pursuant to
Section 2.20.5. Subject to the terms and conditions of this Agreement
(including without limitation the submission of a Borrowing Notice in
compliance with Section 2.8 and the satisfaction of the applicable
conditions precedent set forth in Article IV), Borrower may request an
Advance hereunder for the purpose of satisfying any Reimbursement
Obligation.
2.20.7 Obligations Absolute. Borrower's obligations under this
Section 2.20 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which Borrower may have or have had against the LC Issuer,
any Lender or any beneficiary of a Facility LC. Borrower further agrees
with the LC Issuer and the Lenders that the LC Issuer and the Lenders
shall not be responsible for, and Borrower's Reimbursement Obligation
in respect of any Facility LC shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or
all respects invalid, fraudulent or forged, or any dispute between or
among Borrower, any of its Affiliates, the beneficiary of any Facility
LC or any financing institution or other party to whom any Facility LC
may be transferred or any claims or defenses whatsoever of Borrower or
of any of its Affiliates against the beneficiary of any Facility LC or
any such transferee. The LC Issuer shall not be liable for any error,
omission,
Page 26
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. Borrower agrees that any action taken or omitted by the LC Issuer
or any Lender under or in connection with each Facility LC and the
related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon Borrower and shall not put
the LC Issuer or any Lender under any liability to Borrower. Nothing in
this Section 2.20.7 is intended to limit the right of Borrower to make
a claim against the LC Issuer for damages as contemplated by the
proviso to the first sentence of Section 2.20.6.
2.20.8 Actions of LC Issuer. The LC Issuer shall be entitled
to rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.20, the LC Issuer
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon the Lenders and any future
holders of a participation in any Facility LC.
2.20.9 Indemnification. Borrower hereby agrees to indemnify
and hold harmless each Lender, the LC Issuer and the Agent, and their
respective directors, officers, agents and employees from and against
any and all claims and damages, losses, liabilities, costs or expenses
which such Lender, the LC Issuer or the Agent may incur (or which may
be claimed against such Lender, the LC Issuer or the Agent by any
Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason
of or in connection with (i) the failure of any other Lender to fulfill
or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights Borrower may have against any
defaulting Lender) or (ii) by reason of or on account of the LC Issuer
issuing any Facility LC which specifies that the term "Beneficiary"
included therein includes any successor by operation of law of the
named Beneficiary, but which Facility LC does not require that any
drawing by any such successor Beneficiary be accompanied by a copy of a
legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that Borrower shall
not be required to indemnify any Lender, the LC Issuer or the Agent for
any claims, damages, losses, liabilities, costs or expenses to the
extent, but only to the extent, caused by (x) the willful misconduct or
gross negligence of the LC Issuer in determining whether a request
presented under any Facility LC complied with the terms of such
Facility LC or (y) the LC Issuer's failure to pay under any Facility LC
after the presentation to it of a request strictly complying with the
terms and conditions of such Facility LC. Nothing in this Section
2.20.9 is intended to limit the obligations of Borrower under any other
provision of this Agreement.
2.20.10 Lenders' Indemnification. Each Lender shall, ratably
in accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by Borrower) against any cost,
expense (including
Page 27
reasonable counsel fees and disbursements), claim, demand, action, loss
or liability (except such as result from such indemnitees' gross
negligence or willful misconduct or the LC Issuer's failure to pay
under any Facility LC after the presentation to it of a request
strictly complying with the terms and conditions of the Facility LC)
that such indemnitees may suffer or incur in connection with this
Section 2.20 or any action taken or omitted by such indemnitees
hereunder.
2.20.11 Facility LC Collateral Account. Borrower agrees that
it will, upon the request of the Agent or the Required Lenders and
until the final expiration date of any Facility LC and thereafter as
long as any amount is payable to the LC Issuer or the Lenders in
respect of any Facility LC, maintain a special collateral account
pursuant to arrangements satisfactory to the Agent (the "FACILITY LC
COLLATERAL ACCOUNT") at the Agent's office at the address specified
pursuant to Article XIII, in the name of such Borrower but under the
sole dominion and control of the Agent, for the benefit of the Lenders
and in which such Borrower shall have no interest other than as set
forth in Section 8.1. Borrower hereby pledges, assigns and grants to
the Agent, on behalf of and for the ratable benefit of the Lenders and
the LC Issuer, a security interest in all of Borrower's right, title
and interest in and to all funds which may from time to time be on
deposit in the Facility LC Collateral Account to secure the prompt and
complete payment and performance of the Obligations. The Agent will
invest any funds on deposit from time to time in the Facility LC
Collateral Account in certificates of deposit of Bank One having a
maturity not exceeding 30 days. Nothing in this Section 2.20.11 shall
either obligate the Agent to require Borrower to deposit any funds in
the Facility LC Collateral Account or limit the right of the Agent to
release any funds held in the Facility LC Collateral Account in each
case other than as required by Section 8.1.
2.20.12 Rights as a Lender. In its capacity as a Lender, the
LC Issuer shall have the same rights and obligations as any other
Lender.
2.21. Extension of Revolving Credit Termination Date. Borrower may
request an extension of the Revolving Credit Termination Date by submitting a
request for an extension to the Agent (an "EXTENSION REQUEST") no more than 60
days prior to the Revolving Credit Termination Date. The Extension Request must
specify the new Revolving Credit Termination Date requested by Borrower and the
date (which must be at least 30 days after the Extension Request is delivered to
the Agent) as of which the Lenders must respond to the Extension Request (the
"RESPONSE DATE"). The new Revolving Credit Termination Date shall be no more
than 364 days after the Revolving Credit Termination Date in effect at the time
the Extension Request is received, including the Revolving Credit Termination
Date as one of the days in the calculation of the days elapsed. Promptly upon
receipt of an Extension Request, the Agent shall notify each Lender of the
contents thereof and shall request each Lender to approve the Extension Request.
Each Lender approving the Extension Request shall deliver its written consent no
later than the Response Date. If the consent of each of the Lenders is received
by the Agent, the Revolving Credit Termination Date specified in the Extension
Request shall become effective on the existing Revolving Credit Termination Date
and the Agent shall promptly notify Borrower and each Lender of the new
Revolving Credit Termination Date.
2.22. Replacement of Lender. If Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "AFFECTED LENDER"), Borrower may elect, if such amounts continue
to be charged or such suspension is still effective, to replace such Affected
Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement, (i)
another bank
Page 28
or other entity which is reasonably satisfactory to Borrower and the Agent shall
agree, as of such date, to purchase for cash the Advances and other Obligations
due to the Affected Lender pursuant to an assignment substantially in the form
of Exhibit C and to become a Lender for all purposes under this Agreement and to
assume all obligations of the Affected Lender to be terminated as of such date
and to comply with the requirements of Section 12.3 applicable to assignments,
and (ii) Borrower shall pay to such Affected Lender in same day funds on the day
of such replacement (A) all interest, fees and other amounts then accrued but
unpaid to such Affected Lender by Borrower hereunder to and including the date
of termination, including without limitation payments due to such Affected
Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if any, equal to the
payment which would have been due to such Lender on the day of such replacement
under Section 3.4 had the Loans of such Affected Lender been prepaid on such
date rather than sold to the replacement Lender.
2.23. Limitation of Interest. Borrower, the Agent and the Lenders
intend to strictly comply with all applicable laws, including applicable usury
laws. Accordingly, the provisions of this Section 2.23 shall govern and control
over every other provision of this Agreement or any other Loan Document which
conflicts or is inconsistent with this Section 2.23, even if such provision
declares that it controls. As used in this Section 2.23, the term "interest"
includes the aggregate of all charges, fees, benefits or other compensation
which constitute interest under applicable law, provided that, to the maximum
extent permitted by applicable law, (a) any non-principal payment shall be
characterized as an expense or as compensation for something other than the use,
forbearance or detention of money and not as interest, and (b) all interest at
any time contracted for, reserved, charged or received shall be amortized,
prorated, allocated and spread, in equal parts during the full term of the
Obligations. In no event shall Borrower or any other Person be obligated to pay,
or any Lender have any right or privilege to reserve, receive or retain, (a) any
interest in excess of the maximum amount of nonusurious interest permitted under
the laws of the State of Texas or the applicable laws (if any) of the United
States or of any other applicable state, or (b) total interest in excess of the
amount which such Lender could lawfully have contracted for, reserved, received,
retained or charged had the interest been calculated for the full term of the
Obligations at the Highest Lawful Rate. On each day, if any, that the interest
rate (the "STATED RATE") called for under this Agreement or any other Loan
Document exceeds the Highest Lawful Rate, the rate at which interest shall
accrue shall automatically be fixed by operation of this sentence at the Highest
Lawful Rate for that day, and shall remain fixed at the Highest Lawful Rate for
each day thereafter until the total amount of interest accrued equals the total
amount of interest which would have accrued if there were no such ceiling rate
as is imposed by this sentence. Thereafter, interest shall accrue at the Stated
Rate unless and until the Stated Rate again exceeds the Highest Lawful Rate when
the provisions of the immediately preceding sentence shall again automatically
operate to limit the interest accrual rate. The daily interest rates to be used
in calculating interest at the Highest Lawful Rate shall be determined by
dividing the applicable Highest Lawful Rate per annum by the number of days in
the calendar year for which such calculation is being made. None of the terms
and provisions contained in this Agreement or in any other Loan Document which
directly or indirectly relate to interest shall ever be construed without
reference to this Section 2.23, or be construed to create a contract to pay for
the use, forbearance or detention of money at an interest rate in excess of the
Highest Lawful Rate. If the term of any Obligation is shortened by reason of
acceleration of maturity as a result of any Default or by any other cause, or by
reason of any required or permitted prepayment, and if for that (or any other)
reason any Lender at any time, including but not limited to, the stated
maturity, is owed or receives (and/or has received) interest in excess of
interest calculated at the Highest Lawful Rate, then and in any such event all
of any such excess interest shall be canceled automatically as of the date of
such acceleration, prepayment or other event which produces the excess, and, if
such excess interest has been paid to such Lender, it shall be credited pro
tanto against the then-outstanding principal balance of Borrower's obligations
to such Lender, effective as of the date or dates when the event occurs which
causes it to be excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first, and any
remaining balance of such excess shall be promptly refunded to its payor.
Chapter 346 of the Texas
Page 29
Finance Code (which regulates certain revolving credit accounts (formerly Tex.
Rev. Civ. Stat. Xxx. Art. 0000, Xx. 15 )) shall not apply to this Agreement or
to any Loan, nor shall this Agreement or any Loan be governed by or be subject
to the provisions of such Chapter 346 in any manner whatsoever.
2.24. Attrition Rate. On or before February 28 of each year, Borrower
shall submit and certify to Agent and each Lender a schedule of actual
persistency and attrition for its policies and contracts during the prior four
(4) calendar years, which schedule shall be in substance and detail satisfactory
to Agent and shall contain such back-up documentation as Agent shall require.
Agent shall recalculate the Attrition Rate to be effective in calculating the
Borrowing Base on the next March 31 and thereafter as the weighted average
(based on dollar value of applicable policies and contracts) attrition, plus
four percent (4%). Agent's calculation of the Attrition Rate shall be conclusive
absent manifest error.
ARTICLE III
YIELD PROTECTION; TAXES; TRUST PREFERRED SECURITIES; SECURITIZATION
-------------------------------------------------------------------
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation
or the LC Issuer to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any Lender or
the LC Issuer in respect of its Eurodollar Loans, Facility LCs or
participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation or the
LC Issuer (other than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its Eurodollar
Loans, or of issuing or participating in Facility LCs, or reduces any
amount receivable by any Lender or any applicable Lending Installation
or the LC Issuer in connection with its Eurodollar Loans, Facility LCs
or participations therein, or requires any Lender or any applicable
Lending Installation or the LC Issuer to make any payment calculated by
reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received by it, by
an amount deemed material by such Lender or the LC Issuer as the case
may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within 15 days of demand by
Page 30
such Lender or the LC Issuer, as the case may be, Borrower shall pay such Lender
or the LC Issuer, as the case may be, such additional amount or amounts as will
compensate such Lender or the LC Issuer, as the case may be, for such increased
cost or reduction in amount received.
3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within 30 days of demand by such Lender or the LC
Issuer, Borrower shall pay such Lender or the LC Issuer the amount necessary to
compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines or (ii) any adoption of or change
in any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the date of this Agreement which affects the amount of capital required or
expected to be maintained by any Lender or the LC Issuer or any Lending
Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Agent shall suspend the availability of Eurodollar Advances and require any
affected Eurodollar Advances to be repaid or converted to Floating Rate
Advances, subject to the payment of any funding indemnification amounts required
by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment (other than prepayments pursuant to
Section 2.2.3) or otherwise, or a Eurodollar Advance is not made on the date
specified by Borrower for any reason other than default by the Lenders, Borrower
will indemnify each Lender for any loss or cost incurred by it resulting
therefrom, including, without limitation, any loss or cost in liquidating or
employing deposits acquired to fund or maintain such Eurodollar Advance.
3.5. Taxes. (i) All payments by Borrower to or for the account of any
Lender, the LC Issuer or the Agent hereunder or under any Note or Facility LC
Application shall be made free and clear of and without deduction for any and
all Taxes. If Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender, the LC Issuer or the Agent,
(a) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 3.5) such Lender, the LC Issuer or the Agent (as the case may
be) receives an amount equal to the sum it would have received had no such
deductions been made, (b) Borrower shall make such deductions, (c) Borrower
shall pay the full amount deducted to the relevant authority in accordance with
applicable law and (d) Borrower shall furnish to the Agent the original copy of
a receipt evidencing payment thereof within 30 days after such payment is made.
Page 31
(ii) In addition, Borrower hereby agrees to pay any present or future
stamp or documentary taxes and any other excise or property taxes, charges or
similar levies which arise from any payment made hereunder or under any Note or
Facility LC Application or from the execution or delivery of, or otherwise with
respect to, this Agreement or any Note or Facility LC Application ("OTHER
TAXES").
(iii) Borrower hereby agrees to indemnify the Agent, the LC Issuer and
each Lender for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable under this
Section 3.5) paid by the Agent, the LC Issuer or such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto. Payments due under this indemnification shall be made within 30 days of
the date the Agent, the LC Issuer or such Lender makes demand therefor pursuant
to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "NON-U.S. LENDER") agrees that it
will, not less than ten Business Days after the date of this Agreement, (i)
deliver to each of Borrower and the Agent two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to the Agent a United States Internal Revenue Form W-8 or W-9, as the
case may be, and certify that it is entitled to an exemption from United States
backup withholding tax. Each Non-U.S. Lender further undertakes to deliver to
each of Borrower and the Agent (x) renewals or additional copies of such form
(or any successor form) on or before the date that such form expires or becomes
obsolete, and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by Borrower or the Agent. All forms or
amendments described in the preceding sentence shall certify that such Lender is
entitled to receive payments under this Agreement without deduction or
withholding of any United States 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 or amendment with
respect to it and such Lender advises Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to provide
Borrower with an appropriate form pursuant to clause (iv), above (unless such
failure is due to a change in treaty, law or regulation, or any change in the
interpretation or administration thereof by any governmental authority,
occurring subsequent to the date on which a form originally was required to be
provided), such Non-U.S. Lender shall not be entitled to indemnification under
this Section 3.5 with respect to Taxes imposed by the United States; provided
that, should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its failure
to deliver a form required under clause (iv), above, Borrower shall take such
steps as such Non-U.S. Lender shall reasonably request to assist such Non-U.S.
Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or any Note
pursuant to the law of any relevant jurisdiction or any treaty shall deliver to
Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Agent did not properly withhold tax from
amounts paid to or for the account of any Lender (because the appropriate
Page 32
form was not delivered or properly completed, because such Lender failed to
notify the Agent of a change in circumstances which rendered its exemption from
withholding ineffective, or for any other reason), such Lender shall indemnify
the Agent fully for all amounts paid, directly or indirectly, by the Agent as
tax, withholding therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to the Agent
under this subsection, together with all costs and expenses related thereto
(including attorneys fees and time charges of attorneys for the Agent, which
attorneys may be employees of the Agent). The obligations of the Lenders under
this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6. Lender Statements, Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to Borrower (with a copy to the
Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4 or 3.5. Such
written statement shall set forth in reasonable detail the calculations upon
which such Lender determined such amount and shall be final, conclusive and
binding on Borrower in the absence of manifest error. Determination of amounts
payable under such Sections in connection with a Eurodollar Loan shall be
calculated as though each Lender funded its Eurodollar Loan through the purchase
of a deposit of the type and maturity corresponding to the deposit used as a
reference in determining the Eurodollar Rate applicable to such Loan, whether in
fact that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement of any Lender shall be payable on demand
after receipt by Borrower of such written statement. The obligations of Borrower
under Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations
and termination of this Agreement.
3.7. Trust Preferred Securities. In connection with the Existing Credit
Agreement, the Lenders approved and consented to a series of transactions
pursuant to which (a) Borrower established Xxxxx/Xxxxxx Capital Trust I, a
statutory trust organized under the Delaware Statutory Trust Act (the "TRUST"),
(b) the Trust sold and issued to Borrower common securities of the Trust for an
aggregate purchase price of up to $464,000, (c) the Trust sold and issued to
InCapS Funding I, Ltd., an exempted company with limited liability established
under the laws of the Cayman Islands (the "VEHICLE"), capital securities with an
aggregate liquidation preference of up to $15,000,000 (the "CAPITAL
SECURITIES"), (d) the Trust purchased from Borrower $15,464,000 aggregate
principal amount of Borrower's junior subordinated debt securities due 2033, (e)
Parent guaranteed payments by the Trust to the Vehicle under the Capital
Securities (the "CAPITAL SECURITIES GUARANTEE"), and (f) Parent guaranteed all
of Borrower's obligations under an Indenture, among Borrower, Parent and
Wilmington Trust Company, as trustee, and the certificate evidencing Borrower's
junior subordinated debt securities referenced above, on the terms and subject
to the conditions set forth therein (the "PARENT GUARANTEE"). The transactions
referred to in (a), (b), (c), (d), (e) and (f) above are collectively the
"EXISTING ISSUE". Borrower has requested that the Lenders approve and consent to
one or more such transactions pursuant to which Borrower will issue up to an
additional $30,000,000 (in aggregate liquidation preference) and $30,900,000 (in
aggregate principal amount) of the subordinated debt securities of Borrower on
terms substantially similar to those of the Existing Issue (the "PROPOSED
ISSUE"). The Lenders hereby consent to and approve the Proposed Issue, provided
(i) Agent and the Lenders shall have received and approved the terms and
documents by which the Proposed Issue is to be consummated and (ii) no Default
or Event of Default exists under this Agreement as of the date of the closing of
the Proposed Issue.
3.8. Securitizations. In connection with the Existing Credit Agreement,
the Lenders approved and consented to a series of transactions pursuant to which
(i) Borrower transferred certain assets to CBC Insurance Revenue Securitization,
LLC ("NEWCO"), a special purpose vehicle which is wholly owned by Borrower and
(ii) NewCo issued certain asset-backed notes in the aggregate amount of up to
Page 33
$325,000,000.00 and to the granting of liens as security therefore as more
particularly described in that certain Preliminary Offering Memorandum dated
September 26, 2002. The transactions referred to in (i) and (ii) above are
collectively the "EXISTING SECURITIZATION". Borrower has requested that the
Lenders approve and consent to a transaction pursuant to which Borrower will
similarly transfer the assets described on Schedule 3.8 (the "SECURITIZED
ASSETS") to a special purpose vehicle which is or will be wholly owned by
Borrower ("SPV") and the issuance by NewCo or some other SPV of certain
asset-backed notes in the aggregate amount of up to $65,000,000.00 (the
"SECURITIZATION NOTES") and the granting of liens by NewCo or SPV on the
Securitized Assets as security for the Securitization Notes (the "PROPOSED
SECURITIZATION"). The Lenders hereby consent to and approve the Proposed
Securitization, provided (i) Agent and the Lenders shall have received and
approved the documents by which the Proposed Securitization is consummated and
(ii) no Default or Event of Default exists under this Agreement as of the date
of the closing of the Proposed Securitization and (iii) the Proposed
Securitization constitutes a Qualified Receivables Transaction.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
4.1. Initial Credit Extension. The Lenders shall not be required to
make the initial Credit Extension hereunder unless Borrower has furnished to the
Agent with sufficient copies for the Lenders:
(i) Copies of the articles or certificate of incorporation of
Borrower and each Guarantor, together with all amendments, and a
certificate of good standing, each certified by the appropriate
governmental officer in its jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary
of Borrower and each Guarantor, of their by-laws and of their Board of
Directors' resolutions and of resolutions or actions of any other body
authorizing the execution of the Loan Documents to which Borrower and
each Guarantor is a party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of Borrower and each Guarantor, which shall
identify by name and title and bear the signatures of the Authorized
Officers and any other officers of Borrower and such Guarantor
authorized to sign the Loan Documents to which Borrower and each
Guarantor is a party, upon which certificate the Agent and the Lenders
shall be entitled to rely until informed of any change in writing by
Borrower or a Guarantor.
(iv) A certificate, signed by the chief financial officer of
Borrower, stating that on the initial Credit Extension Date no Default
or Unmatured Default has occurred and is continuing.
(v) A written opinion of Borrower's and Guarantors' counsel,
addressed to the Lenders in substantially the form of Exhibit A.
(vi) Any Notes requested by a Lender pursuant to Section 2.14
payable to the order of each such requesting Lender.
(vii) Written money transfer instructions, in substantially
the form of Exhibit D, addressed to the Agent and signed by an
Authorized Officer, together with such other related money transfer
authorizations as the Agent may have reasonably requested.
Page 34
(viii) The Collateral Documents, fully executed by all parties
thereto.
(ix) The insurance certificate described in Section 5.21.
(x) Such other documents as any Lender or its counsel may have
reasonably requested.
4.2. Each Credit Extension. The Lenders shall not be (except as
otherwise set forth in Section 2.5.4 with respect to Revolving Loans for the
purpose of repaying Swing Line Loans) required to make any Credit Extension
unless on the applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V
are true and correct as of such Credit Extension Date except to the
extent any such representation or warranty is stated to relate solely
to an earlier date, in which case such representation or warranty shall
have been true and correct on and as of such earlier date.
(iii) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their counsel.
Each Borrowing Notice, Swing Line Borrowing Notice or request for
issuance of a Facility LC, as the case may be, with respect to each such Credit
Extension shall constitute a representation and warranty by Borrower that the
conditions contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender
may require a duly completed compliance certificate in substantially the form of
Exhibit B as a condition to making an a Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
Borrower represents and warrants to the Lenders that:
5.1. Existence and Standing. Each of Borrower, Parent and their
respective Subsidiaries is a corporation, partnership (in the case of
Subsidiaries only) or limited liability company duly and properly incorporated
or organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
5.2. Authorization and Validity. Borrower has the power and authority
and legal right to execute and deliver the Loan Documents to which it is a party
and to perform its obligations thereunder. The execution and delivery by
Borrower of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and the Loan Documents to which Borrower is a party constitute
legal, valid and binding obligations of Borrower enforceable against Borrower in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by Borrower of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on Borrower or any of its
Subsidiaries or (ii)
Page 35
Borrower's or any Subsidiary's articles or certificate of incorporation,
partnership agreement, certificate of partnership, articles or certificate of
organization, by-laws, or operating or other management agreement, as the case
may be, or (iii) the provisions of any indenture, instrument or agreement to
which Borrower or any of its Subsidiaries is a party or is subject, or by which
it, or its Property, is bound, or conflict with or constitute a default
thereunder, or result in, or require, the creation or imposition of any Lien in,
of or on the Property of Borrower or a Subsidiary pursuant to the terms of any
such indenture, instrument or agreement. No order, consent, adjudication,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, or other action in respect of any
governmental or public body or authority, or any subdivision thereof, which has
not been obtained by Borrower or any of its Subsidiaries, is required to be
obtained by Borrower or any of its Subsidiaries in connection with the execution
and delivery of the Loan Documents, the borrowings under this Agreement, the
payment and performance by Borrower of the Obligations or the legality,
validity, binding effect or enforceability of any of the Loan Documents.
5.4. Financial Statements. The June 30, 2003 consolidated financial
statements of Parent, Borrower and their respective Subsidiaries heretofore
delivered to the Lenders were prepared in accordance with generally accepted
accounting principles in effect on the date such statements were prepared and
fairly present the consolidated financial condition and operations of Parent,
Borrower and its Subsidiaries at such date and the consolidated results of their
operations for the period then ended.
5.5. Material Adverse Change. Since June 30, 2003 there has been no
change in the business, Property, prospects, condition (financial or otherwise)
or results of operations of Parent, Borrower and their respective Subsidiaries
which could reasonably be expected to have a Material Adverse Effect.
5.6. Taxes. Parent, Borrower and their respective Subsidiaries have
filed all United States federal tax returns and all other tax returns which are
required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by Parent, Borrower or any of their
respective Subsidiaries, except such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided in accordance
with Agreement Accounting Principles. The United States income tax returns of
Parent, Borrower and their respective Subsidiaries have been filed with the
Internal Revenue Service through the fiscal year ended December 31, 2002. No tax
liens have been filed and no claims are being asserted with respect to any such
taxes. The charges, accruals and reserves on the books of Parent, Borrower and
their respective Subsidiaries in respect of any taxes or other governmental
charges are adequate. If any of the Subsidiaries of Borrower is a limited
liability company, each such limited liability company qualifies for partnership
tax treatment under United States federal tax law.
5.7. Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting Borrower
or any of its Subsidiaries which could reasonably be expected to have a Material
Adverse Effect or which seeks to prevent, enjoin or delay the making of any
Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, Borrower has no material contingent obligations not
provided for or disclosed in the financial statements referred to in Section
5.4.
5.8. Subsidiaries. Schedule 1 contains an accurate list of all
Subsidiaries of Parent and Borrower as of the date of this Agreement, setting
forth their respective jurisdictions of organization and the percentage of their
respective capital stock or other ownership interests owned by Parent, Borrower
or other Subsidiaries. All of the issued and outstanding shares of capital stock
or other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.
Page 36
5.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Neither Borrower nor any other member of
the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $1,000,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither Borrower nor any other member of the Controlled
Group has withdrawn from any Plan or initiated steps to do so, and no steps have
been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by Borrower or any of its Subsidiaries to the Agent or to any Lender
in connection with the negotiation of, or compliance with, the Loan Documents
contained any material misstatement of fact or omitted to state a material fact
or any fact necessary to make the statements contained therein not misleading.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of Parent, Borrower
and their respective Subsidiaries which are subject to any limitation on sale,
pledge, or other restriction hereunder.
5.12. Material Agreements. Neither Parent, Borrower nor any of their
respective Subsidiaries is a party to any agreement or instrument or subject to
any charter or other corporate restriction which could reasonably be expected to
have a Material Adverse Effect. Neither Parent, Borrower nor any of their
respective Subsidiaries is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i)
any agreement to which it is a party, which default could reasonably be expected
to have a Material Adverse Effect or (ii) any agreement or instrument evidencing
or governing Indebtedness in excess of $1,000,000.
5.13. Compliance With Laws. Parent, Borrower and their respective
Subsidiaries have complied with all applicable statutes, rules, regulations,
orders and restrictions of any domestic or foreign government or any
instrumentality or agency thereof having jurisdiction over the conduct of their
respective businesses or the ownership of their respective Property except for
any failure to comply with any of the foregoing which could not reasonably be
expected to have a Material Adverse Effect.
5.14. Ownership of Properties. Except as set forth on Schedule 2, on
the date of this Agreement, Borrower and its Subsidiaries will have good title,
free of all Liens other than those permitted by Section 6.15, to all of the
Property and assets reflected in Borrower's most recent consolidated financial
statements provided to the Agent as owned by Borrower and its Subsidiaries.
5.15. Plan Assets, Prohibited Transactions. Neither Parent nor Borrower
is an entity deemed to hold "plan assets" within the meaning of 29 C.F.R. ss.
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code, and "benefit plan
investors" (as defined in 29 C.F.R. ss. 2510.3-101(f)) do not own 25% or more of
the value of any class of equity interests in Borrower.
5.16. Environmental Matters. In the ordinary course of its business,
the officers of Borrower consider the effect of Environmental Laws on the
business of Borrower and its Subsidiaries, in the course of which they identify
and evaluate potential risks and liabilities accruing to Borrower due to
Environmental Laws. On the basis of this consideration, Borrower has concluded
that Environmental Laws cannot reasonably be expected to have a Material Adverse
Effect. Neither Borrower nor any Subsidiary has received any notice to the
effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state
Page 37
investigation evaluating whether any remedial action is needed to respond to a
release of any toxic or hazardous waste or substance into the environment, which
non-compliance or remedial action could reasonably be expected to have a
Material Adverse Effect.
5.17. Investment Company Act. Neither Borrower, Parent nor any of their
respective Subsidiaries is an "investment company" or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended.
5.18. Public Utility Holding Company Act. Neither Borrower nor any
Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
5.19. Reportable Transaction. Borrower does not intend to treat the
Advances and related transactions as being a "reportable transaction" (within
the meaning of Treasury Regulation Section 1.6011-4). In the event Borrower
determines to take any action inconsistent with such intention, it will promptly
notify the Agent thereof.
5.20. Subordinated Indebtedness. The Obligations constitute senior
indebtedness which is entitled to the benefits of the subordination provisions
of all outstanding Subordinated Indebtedness.
5.21. Insurance. The certificate signed by the President or Chief
Financial Officer of Borrower, that attests to the existence and adequacy of,
and summarizes, the property and casualty insurance program carried by Borrower
with respect to itself and its Subsidiaries and that has been furnished by
Borrower to the Agent and the Lenders, is complete and accurate. This summary
includes the insurer's or insurers' name(s), policy number(s), expiration
date(s), amount(s) of coverage, type(s) of coverage, exclusion(s), and
deductibles. This summary also includes similar information, and describes any
reserves, relating to any self-insurance program that is in effect.
5.22. Solvency. (i) Immediately after the consummation of the
transactions to occur on the date hereof and immediately following the making of
each Loan, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the assets of
Borrower and its Subsidiaries on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or otherwise, of
Borrower and its Subsidiaries on a consolidated basis; (b) the present fair
saleable value of the Property of Borrower and its Subsidiaries on a
consolidated basis will be greater than the amount that will be required to pay
the probable liability of Borrower and its Subsidiaries on a consolidated basis
on their debts and other liabilities, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (c) Borrower and
its Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) Borrower and its Subsidiaries
on a consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.
(ii) Borrower does not intend to, or to permit any of its Subsidiaries
to, and does not believe that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect of its
indebtedness or the Indebtedness of any such Subsidiary.
Page 38
ARTICLE VI
COVENANTS
---------
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. Borrower will maintain, for itself and each
Subsidiary, a system of accounting established and administered in accordance
with generally accepted accounting principles, and furnish to the Lenders:
(i) Within 90 days after the close of each of its fiscal
years, an unqualified audit report certified by independent certified
public accountants acceptable to the Lenders, prepared in accordance
with Agreement Accounting Principles on a consolidated basis for itself
and its Subsidiaries, including balance sheets as of the end of such
period, related profit and loss and reconciliation of surplus
statements, and a statement of cash flows, accompanied by (a) any
management letter prepared by said accountants, and (b) as soon as
possible but in no event later than April 30 of each calendar year,
effective as of September 30 of the prior calendar year, a
self-prepared report, which has been reviewed by Deloitte & Touche, or
such other independent certified public accounting firm acceptable to
Agent confirming that the in force insurance numbers in the year end
Borrowing Base compliance certificate have been reviewed with any
discrepancies noted.
(ii) Within 45 days after the close of the first three
quarterly periods of each of its fiscal years, for itself and its
Subsidiaries, consolidated unaudited balance sheets as at the close of
each such period and consolidated profit and loss and reconciliation of
surplus statements and a statement of cash flows for the period from
the beginning of such fiscal year to the end of such quarter, all
certified by its chief financial officer.
(iii) Together with the financial statements required under
Sections 6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit B signed by an Authorized Officer of Borrower showing
the calculations necessary to determine compliance with this Agreement,
showing the calculation of the Borrowing Base and stating that no
Default or Unmatured Default exists, or if any Default or Unmatured
Default exists, stating the nature and status thereof.
(iv) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA.
(v) As soon as available, but in any event within 90 days
after the close of each of Borrower's fiscal years, a self-prepared
report acceptable in form and substance to Agent showing the financial
strength ratings by S&P and Xxxxx'x for all insurance companies or
carriers that issued policies or contracts which in the aggregate
represent two percent (2%) or more of the Present Value of Renewals.
(vi) As soon as possible and in any event within 10 days after
Borrower knows that any Reportable Event has occurred with respect to
any Plan, a statement, signed by an Authorized Officer of Borrower,
describing said Reportable Event and the action which Borrower proposes
to take with respect thereto.
Page 39
(vii) As soon as possible and in any event within 10 days
after receipt by Borrower, a copy of (a) any notice or claim to the
effect that Borrower or any of its Subsidiaries is or may be liable to
any Person as a result of the release by Borrower, any of its
Subsidiaries, or any other Person of any toxic or hazardous waste or
substance into the environment, and (b) any notice alleging any
violation of any federal, state or local environmental, health or
safety law or regulation by Borrower or any of its Subsidiaries, which,
in either case, could reasonably be expected to have a Material Adverse
Effect.
(viii) Promptly upon the furnishing thereof to the
shareholders of Borrower, copies of all financial statements, reports
and proxy statements so furnished.
(ix) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission.
(x) Such other information (including non-financial
information) as the Agent or any Lender may from time to time
reasonably request.
If any information which is required to be furnished to the Lenders
under this Section 6.1 is required by law or regulation to be filed with a
government body on an earlier date, then the information required hereunder
shall be furnished to the Lenders at such earlier date.
6.2. Use of Proceeds. Borrower will, and will cause Parent and each
Subsidiary to, use the proceeds of the Credit Extensions for the purposes set
forth in Section 2.1. Borrower will not, nor will it permit Parent or any
Subsidiary to, use any of the proceeds of the Advances to purchase or carry any
"margin stock" (as defined in Regulation U).
6.3. Notice of Default. Borrower will, and will cause Parent and each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. Borrower will, and will cause Parent and each
Subsidiary to, carry on and conduct its business in a substantially similar
manner and in substantially similar fields of enterprise as it is presently
conducted and do all things necessary to remain duly incorporated or organized,
validly existing and (to the extent such concept applies to such entity) in good
standing as a domestic corporation, partnership or limited liability company in
its jurisdiction of incorporation or organization, as the case may be, and
maintain all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
6.5. Taxes. Borrower will, and will cause Parent and each Subsidiary
to, timely file complete and correct United States federal and applicable
foreign, state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles. At any time that Borrower or
Parent or any of their respective Subsidiaries is organized as a limited
liability company, each such limited liability company will qualify for
partnership tax treatment under United States federal tax law.
6.6. Insurance. Borrower will, and will cause Parent and each
Subsidiary to, maintain with financially sound and reputable insurance companies
insurance on all their Property in such amounts and
Page 40
covering such risks as is consistent with sound business practice, and Borrower
will furnish to any Lender upon request full information as to the insurance
carried.
6.7. Compliance with Laws. Borrower will, and will cause Parent and
each Subsidiary to, comply in all material respects with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
it may be subject including, without limitation, all Environmental Laws.
6.8. Maintenance of Properties. Borrower will, and will cause Parent
and each Subsidiary to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that its business
carried on in connection therewith may be properly conducted at all times.
6.9. Inspection. Borrower will, and will cause Parent and each
Subsidiary to, permit the Agent and the Lenders, by their respective
representatives and agents, with reasonable notice, to inspect any of the
Property, books and financial records of Borrower, Parent and each Subsidiary,
to examine and make copies of the books of accounts and other financial records
of Borrower, Parent and each Subsidiary, and to discuss the affairs, finances
and accounts of Borrower, Parent and each Subsidiary with, and to be advised as
to the same by, their respective officers at such reasonable times and intervals
as the Agent or any Lender may designate.
6.10. Dividends. Borrower will not, nor will it permit any Parent or
any Subsidiary to, declare or pay any dividends or make any distributions on its
capital stock (other than dividends payable in its own capital stock) or redeem,
repurchase or otherwise acquire or retire any of its capital stock at any time
outstanding, except that (i) any Subsidiary may declare and pay dividends or
make distributions to Borrower or to a Wholly-Owned Subsidiary of Parent or
Borrower, (ii) prior to the occurrence of a Default or Unmatured Default,
Borrower may repurchase capital stock of Parent pursuant to its Employee Stock
Purchase Plan ("ESPP REPURCHASES"), and (iii) prior to the occurrence of a
Default or Unmatured Default, Borrower or Parent may otherwise repurchase or
retire (as applicable) capital stock in Parent in an amount not to exceed
$5,000,000 in the aggregate (a "PERMITTED REPURCHASE").
6.11. Indebtedness. Borrower will not, nor will it permit Parent or any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except the
following (collectively, the "PERMITTED INDEBTEDNESS"):
(i) The Loans and the Reimbursement Obligations.
(ii) Indebtedness existing on the date hereof and
described in Schedule 2.
(iii) Indebtedness arising under Rate Management
Transactions related to the Loans having a Net Xxxx-to-Market
Exposure not exceeding $5,000,000.
(iv) Receivables Transaction Attributed Indebtedness.
(v) Permitted Acquisition Indebtedness.
(vi) Permitted Purchase Money Obligations.
(vii) Indebtedness described in Schedule 6.11.
(viii) The Subordinated Debt Securities.
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(ix) Other unsecured Indebtedness in an amount not to
exceed $1,000,000 in the aggregate.
6.12. Merger. Borrower will not, nor will it permit Parent or any
Subsidiary to, merge or consolidate with or into any other Person, except that a
Subsidiary may merge into Borrower or a Wholly-Owned Subsidiary.
6.13. Sale of Assets. Borrower will not, nor will it permit Parent or
any Subsidiary to, lease, sell or otherwise dispose of its Property to any
other Person, except:
(i) Sales of inventory in the ordinary course of
business.
(ii) Leases, sales or other dispositions of its
Property that, together with all other Property of Borrower,
Parent and their respective Subsidiaries previously leased,
sold or disposed of (other than inventory in the ordinary
course of business) as permitted by this Section during the
twelve-month period ending with the month in which any such
lease, sale or other disposition occurs, do not constitute a
Substantial Portion of the Property of Borrower and its
Subsidiaries.
(iii) Any transfer of an interest in accounts or
notes receivable and related assets as part of the Proposed
Securitization.
The Lenders acknowledge that Borrower is obligated to pay a percentage of the
Renewals (as defined in the Collateral Documents) to the producers of such
Renewals pursuant to Principal Office Agreements (or similar oral arrangements)
between Borrower and such producers.
6.14. Investments and Acquisitions. (a) Borrower will not, nor will it
permit Parent or any Subsidiary to, make or suffer to exist any Investments
(including without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof and described in
Schedule 1.
(iii) Other than during the existence of a Default,
Permitted Acquisitions (where any Subsidiary thereby created
or acquired becomes a Guarantor by signing a joinder to the
Guaranty and signs a joinder to the Collateral Documents as
more particularly described in subsection (vi) below).
(iv) Investments comprised of capital contributions
(whether in the form of cash, a note, or other assets) to an
SPV in connection with the Proposed Securitization.
(v) Permitted Employee and Producer Loans.
(vi) Other than during the existence of a Default,
Investments in any newly created or acquired Subsidiary so
long as such Subsidiary (i) becomes a Guarantor by signing a
joinder to the Guaranty and (ii) signs a joinder to the
Collateral Documents, in each instance within ten days after
it becomes active (i.e. not "inactive"). Borrower may
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establish or create Subsidiaries which are "inactive" (as
hereinafter defined) when established or created without the
necessity of complying with the foregoing requirements so long
as such Subsidiaries remain "inactive"; provided that, as soon
as practicable after, but in no event later than ten days
after, each such Subsidiary so established or created ceases
to be "inactive", Borrower shall (i) cause such Subsidiary to
Guaranty the Loans, (ii) cause such Subsidiary to join the
Collateral Documents as a grantor and pledgor thereunder, and
(iii) amend the Collateral Documents to reflect the pledge by
Borrower, Parent or the appropriate Subsidiary of all of the
ownership interests in such new Subsidiary. As used herein, an
"inactive" Subsidiary shall mean any Subsidiary which has no
assets or liabilities, other than as nominally required under
applicable law in order for such Subsidiary to be established
or created. "Inactive" Subsidiaries may include, without
limitation, Subsidiaries formed to reserve a certain corporate
or trade name in anticipation of business being done under
that name and those formed in anticipation of an Acquisition
which is pending.
(vii) Other Investments in an amount not to exceed
$5,000,000 in the aggregate.
(b) Borrower will not, nor will it permit Parent or any Subsidiary to,
make or suffer to exist any Permitted Acquisition if the total consideration for
such Acquisition, plus the total consideration for all Acquisitions consummated
during the 12 month period preceding the effective date of such Permitted
Acquisition is greater than $25,000,000 without the prior written consent of
Required Lenders.
6.15. Liens. (a) Borrower will not, nor will it permit Parent or any
Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of Borrower, Parent or any of their respective Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with Agreement Accounting Principles shall have
been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more than 60
days past due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside
on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character
and which do not in any material way affect the marketability of the
same or interfere with the use thereof in the business of Borrower or
its Subsidiaries.
(v) Liens existing on the date hereof and described in
Schedule 2.
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(vi) Liens in favor of the Agent, for the benefit of the
Lenders, granted pursuant to any Collateral Document.
(vii) Liens incurred in connection with any transfer of an
interest in accounts or notes receivable or related assets as part of a
Qualified Receivables Transaction.
(viii) Liens securing Permitted Purchase Money Obligations.
(b) Borrower shall not, and Borrower shall not permit Parent or any
Subsidiary of Parent or Borrower to, enter into any agreement (excluding this
Agreement or any other Loan Documents) prohibiting the creation or assumption of
any Lien upon any property, revenues, or assets of such Person, whether now
owned or hereafter acquired.
6.16. Affiliates. Borrower will not, and will not permit Parent or any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except (i) in the ordinary course of business and
pursuant to the reasonable requirements of Borrower's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to Borrower or
such Subsidiary than Borrower or such Subsidiary would obtain in a comparable
arms-length transaction and (ii) transactions between Borrower or any
Subsidiary, on the one hand, and any Subsidiary or other special-purpose entity
created to engage solely in a Qualified Receivables Transaction.
6.17. Subordinated Indebtedness. Borrower will not, and will not permit
any Subsidiary to, make any amendment or modification to the indenture, note or
other agreement evidencing or governing any Subordinated Indebtedness, or
directly or indirectly voluntarily prepay, defease or in substance defease,
purchase, redeem, retire or otherwise acquire, any Subordinated Indebtedness.
6.18. Sale of Accounts. Borrower will not, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse except as part of the Proposed
Securitization.
6.19. Sale and Leaseback Transactions and other Off-Balance Sheet
Liabilities. Borrower will not, nor will it permit Parent or any Subsidiary to,
enter into or suffer to exist any (i) Sale and Leaseback Transaction, other
than Permitted Indebtedness, or (ii) any other transaction pursuant to which it
incurs or has incurred Off-Balance Sheet Liabilities, except for (a) Rate
Management Obligations permitted to be incurred under the terms of Section and
(b) Permitted Indebtedness.
6.20. Contingent Obligations. Borrower will not, nor will it permit
Parent or any Subsidiary to, make or suffer to exist any Contingent Obligation
(including, without limitation, any Contingent Obligation with respect to the
obligations of a Subsidiary), except (i) by endorsement of instruments for
deposit or collection in the ordinary course of business, (ii) for the
Reimbursement Obligations and (iii) for the Capital Securities Guaranty and the
Parent Guarantee.
6.21. Letters of Credit. Borrower will not, nor will it permit any
Subsidiary to, apply for or become liable upon or in respect of any Letter of
Credit other than Facility LCs.
6.22. Financial Covenants.
6.22.1 Fixed Charge Coverage Ratio. Borrower will not permit
the ratio, determined as of the end of each of its fiscal quarters for
the then most-recently ended four fiscal quarters, of (i) Consolidated
EBITDA, minus Consolidated Capital Expenditures, minus taxes paid
during such
Page 44
period, minus Earn Out Payments (other than Earn Out Payments made to
Xxx Xxxxxxx) made during such period to (ii) Consolidated Interest
Expense, plus Consolidated Rentals, plus required payments of principal
Indebtedness (including Capitalized Lease Obligations), plus any
Permitted Repurchases (other than ESPP Repurchases), plus, without
duplication of the foregoing, the Hypothetical Amortization, plus
expense for taxes paid or accrued, all calculated for Borrower and its
Subsidiaries on a consolidated basis, to be less than 1.25 to 1.0.
6.22.2 Leverage Ratio. Borrower will not permit the Leverage
Ratio, determined as of the end of each of its fiscal quarters, for the
then most-recently ended four fiscal quarters to be greater than 3.00
to 1.0.
6.22.3 Minimum Net Worth. Borrower will at all times maintain
Consolidated Net Worth of not less than the sum of (i) $217,009,800,
plus (ii) 75% of Consolidated Net Income earned in each fiscal quarter
beginning with the quarter ending March 31, 2003 (without deduction for
losses), plus (iii) 100% of the net cash proceeds of any offering of
equity securities after the date of this Agreement (whether public or
private), plus (iv) 100% of the shareholder equity of any entity
acquired by Borrower, Parent or any of their respective Subsidiaries,
minus (v) the amount (not to exceed, in the aggregate, $5,000,000)
determined by Borrower in accordance with generally accepted accounting
principles and approved by Agent, in its reasonable discretion, of
impaired goodwill, including expensed options.
6.22.4 Maximum Debt to Capitalization. The Borrower will not
permit the Debt to Capitalization Ratio to be, as of the last day of
each of its fiscal quarters, greater than 55%.
6.23. Investment Company. The Borrower will cause any Subsidiary of
Borrower or Parent which is an "investment company" or a company "controlled" by
an "investment company", within the meaning of the Investment Company Act of
1940, as amended (15 U.S.C.A. ss. 80a, et seq.) (the "INVESTMENT COMPANY ACT")
or which is otherwise subject to the Investment Company Act to be in compliance
with the Investment Company Act, including, without limitation, 15 U.S.C.A. ss.
80a-18(f)(1).
ARTICLE VII
DEFAULTS
--------
7.1. Defaults. The occurrence of any one or more of the following
events shall constitute a Default:
(a) Any representation or warranty made or deemed made by or
on behalf of Borrower or any of its Subsidiaries to the Lenders or the
Agent under or in connection with this Agreement, any Credit Extension,
or any certificate or information delivered in connection with this
Agreement or any other Loan Document shall be materially false on the
date as of which made.
(b) Nonpayment of principal of any Loan when due, nonpayment
of any Reimbursement Obligation within one Business Day after the same
becomes due, or nonpayment of interest upon any Loan or of any
commitment fee, LC Fee or other obligations under any of the Loan
Documents within five days after the same becomes due.
(c) The breach by Borrower of any of the terms or provisions
of Article VI, Section 6.2, 6.10, 6.11, 6.12, 6.13, 6.14, 6.22, or
6.23.
Page 45
(d) The breach by Borrower (other than a breach which
constitutes a Default under another Section of this Article VII) of any
of the terms or provisions of this Agreement which is not remedied
within five days after written notice from the Agent or any Lender;
provided, that if such breach can be cured and Borrower begins and is
diligently pursuing a cure thereof prior to the expiration of the ten
day cure period above provided, then Borrower shall not be in default
hereunder if Borrower cures such failure within thirty days after the
above provided written notice of such breach.
(e) Failure of Borrower or any of its Subsidiaries or any
Guarantor to pay when due any Material Indebtedness; or the default by
Borrower or any of its Subsidiaries or any Guarantor in the performance
(beyond the applicable grace period with respect thereto, if any) of
any term, provision or condition contained in any Material Indebtedness
Agreement, or any other event shall occur or condition exist, the
effect of which default, event or condition is to cause, or to permit
the holder(s) of such Material Indebtedness or the lender(s) under any
Material Indebtedness Agreement to cause, such Material Indebtedness to
become due prior to its stated maturity or any commitment to lend under
any Material Indebtedness Agreement to be terminated prior to its
stated expiration date; or any Material Indebtedness of Borrower or any
of its Subsidiaries or any Guarantor shall be declared to be due and
payable or required to be prepaid or repurchased (other than by a
regularly scheduled payment) prior to the stated maturity thereof; or
Borrower or any of its Subsidiaries or any Guarantor shall not pay, or
admit in writing its inability to pay, its debts generally as they
become due.
(f) Borrower or any of its Subsidiaries or any Guarantor shall
(i) have an order for relief entered with respect to it under the
Federal bankruptcy laws as now or hereafter in effect, (ii) make an
assignment for the benefit of creditors, (iii) apply for, seek, consent
to, or acquiesce in, the appointment of a receiver, custodian, trustee,
examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (iv) institute any proceeding seeking an order
for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail
to file an answer or other pleading denying the material allegations of
any such proceeding filed against it, (v) take any corporate or
partnership action to authorize or effect any of the foregoing actions
set forth in this Section 7.1 (f) or (vi) fail to contest in good faith
any appointment or proceeding described in Section 7.1(g).
(g) Without the application, approval or consent of Borrower
or any of its Subsidiaries, or any Guarantor, a receiver, trustee,
examiner, liquidator or similar official shall be appointed for
Borrower or any of its Subsidiaries or any Guarantor or any Substantial
Portion of its Property, or a proceeding described in Section
7.1(f)(iv) shall be instituted against Borrower or any of its
Subsidiaries or any Guarantor and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of 60 consecutive days.
(h) Any court, government or governmental agency shall
condemn, seize or otherwise appropriate, or take custody or control of,
all or any portion of the Property of Borrower and its Subsidiaries or
any Guarantor which, when taken together with all other Property of
Borrower and its Subsidiaries or any Guarantor so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month
period ending with the month in which any such action occurs,
constitutes a Substantial Portion.
Page 46
(i) Borrower, Parent or any of their Subsidiaries shall fail
within 30 days to pay, bond or otherwise discharge one or more (i)
final judgments or orders for the payment of money in excess of
$1,000,000 (or the equivalent thereof in currencies other than U.S.
Dollars) in the aggregate, or (ii) nonmonetary judgments or orders
which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested
in good faith.
(j) The Unfunded Liabilities of all Single Employer Plans
shall exceed in the aggregate $1,000,000 or any Reportable Event shall
occur in connection with any Plan.
(k) Nonpayment by Borrower, Parent or any Subsidiary of any
Rate Management Obligation when due or the breach by Borrower or any
Subsidiary of any term, provision or condition contained in any Rate
Management Transaction or any transaction of the type described in the
definition of "Rate Management Transactions," whether or not any Lender
or Affiliate of a Lender is a party thereto.
(1) Any Change in Control shall occur.
(m) Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan in an amount
which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by Borrower or any other member of the Controlled
Group as withdrawal liability (determined as of the date of such
notification), exceeds $1,000,000 or requires payments exceeding
$250,000 per annum.
(n) Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if as a result of such reorganization
or termination the aggregate annual contributions of Borrower and the
other members of the Controlled Group (taken as a whole) to all
Multiemployer Plans which are then in reorganization or being
terminated have been or will be increased over the amounts contributed
to such Multiemployer Plans for the respective plan years of each such
Multiemployer Plan immediately preceding the plan year in which the
reorganization or termination occurs by an amount exceeding $1,000,000.
(o) Borrower, Parent or any of their Subsidiaries shall (i) be
the subject of any proceeding or investigation pertaining to the
release by Borrower, any of its Subsidiaries or any other Person of any
toxic or hazardous waste or substance into the environment, or (ii)
violate any Environmental Law, which, in the case of an event described
in clause (i) or clause (ii), could reasonably be expected to have a
Material Adverse Effect.
(p) The occurrence of any "default", as defined in any Loan
Document (other than this Agreement) or the breach of any of the terms
or provisions of any Loan Document (other than this Agreement), which
default or breach continues beyond any period of grace therein
provided.
(q) Any Guaranty shall fail to remain in full force or effect
or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Guaranty, or any Guarantor shall fail to
comply with any of the terms or provisions of any Guaranty to which it
is a party, or any Guarantor shall deny that it has any further
liability under any Guaranty to which it is a party, or shall give
notice to such effect.
Page 47
(r) Any Collateral Document shall for any reason fail to
create a valid and perfected first priority security interest in any
collateral purported to be covered thereby, except as permitted by the
terms of any Collateral Document, or any Collateral Document shall fail
to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of any
Collateral Document, or Borrower shall fail to comply with any of the
terms or provisions of any Collateral Document.
(s) The representations and warranties set forth in Section
5.15 (Plan Assets; Prohibited Transactions) shall at any time not be
true and correct.
(t) Borrower, Parent or any Subsidiary shall fail to pay when
due (i) any Operating Lease Obligation, obligation under a Sale and
Leaseback Transaction or Contingent Obligation where the total amount
of such Operating Lease Obligation, Sale and Leaseback Transaction or
Contingent Obligation is in excess of $1,000,000, or (ii) any
obligation with respect to a Letter of Credit.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
----------------------------------------------
8.1. Acceleration, Facility LC Collateral Account. (i) If any Default
described in Section 7.1 (f) or (g) occurs with respect to Borrower, the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the LC Issuer or any Lender and Borrower will
be and become thereby unconditionally obligated, without any further notice, act
or demand, to pay to the Agent an amount in immediately available funds, which
funds shall be held in the Facility LC Collateral Account, equal to the
difference of (x) the amount of LC Obligations at such time, less (y) the amount
on deposit in the Facility LC Collateral Account at such time which is free and
clear of all rights and claims of third parties and has not been applied against
the Obligations (such difference, the "COLLATERAL SHORTFALL AMOUNT"). If any
other Default occurs, the Required Lenders (or the Agent with the consent of the
Required Lenders) may (a) terminate or suspend the obligations of the Lenders to
make Loans hereunder and the obligation and power of the LC Issuer to issue
Facility LCs, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which Borrower hereby
expressly waives, and (b) upon notice to Borrower and in addition to the
continuing right to demand payment of all amounts payable under this Agreement,
make demand on Borrower to pay, and Borrower will, forthwith upon such demand
and without any further notice or act, pay to the Agent the Collateral Shortfall
Amount, which funds shall be deposited in the Facility LC Collateral Account.
(ii) If at any time while any Default is continuing, the Agent
determines that the Collateral Shortfall Amount at such time is greater than
zero, the Agent may make demand on Borrower to pay, and Borrower will, forthwith
upon such demand and without any further notice or act, pay to the Agent the
Collateral Shortfall Amount, which funds shall be deposited in the Facility LC
Collateral Account.
(iii) The Agent may at any time or from time to time after funds are
deposited in the Facility LC Collateral Account, apply such funds to the payment
of the Obligations and any other amounts as shall from time to time have become
due and payable by Borrower to the Lenders or the LC Issuer under the Loan
Documents.
Page 48
(iv) At any time while any Default is continuing, neither Borrower nor
any Person claiming on behalf of or through Borrower shall have any right to
withdraw any of the funds held in the Facility LC Collateral Account. After all
of the Obligations have been indefeasibly paid in full and the Aggregate
Commitment has been terminated, any funds remaining in the Facility LC
Collateral Account shall be returned by the Agent to Borrower or paid to
whomever may be legally entitled thereto at such time.
(v) If, within 30 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans and
the obligation and power of the LC Issuer to issue Facility LCs hereunder as a
result of any Default (other than any Default as described in Section 7.1 (f) or
(g) with respect to Borrower) and before any judgment or decree for the payment
of the Obligations due shall have been obtained or entered, the Required Lenders
(in their sole discretion) shall so direct, the Agent shall, by notice to
Borrower, rescind and annul such acceleration and/or termination.
8.2. Amendments. Subject to the provisions of this Section 8.2, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of all of the Lenders:
(i) Extend the final maturity of any Loan, or extend the
expiry date of any Facility LC to a date after the Facility Termination
Date or postpone any regularly scheduled payment of principal of any
Loan or forgive all or any portion of the principal amount thereof or
any Reimbursement Obligation related thereto, or reduce the rate or
extend the time of payment of interest or fees thereon or Reimbursement
Obligations related thereto.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Extend the Facility Termination Date, the Revolving
Termination Date, or reduce the amount or extend the payment date for,
the mandatory payments required under Section 2.2, or increase the
amount of the Aggregate Commitment, the Commitment of any Lender
hereunder or the commitment to issue Facility LCs, or permit Borrower
to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any guarantor of any Advance or, except as
provided in the Collateral Documents, in one transaction or series of
transactions, release all or a Substantial Portion of the Collateral.
No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer. No Amendment of any provision of this Agreement
relating to the Swing Line Lender or any Swing Line Loans shall be effective
without the written consent of the Swing Line Lender. The Agent may waive
payment of the fee required under Section 12.3.3 without obtaining the consent
of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders, the
LC Issuer or the Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Credit Extension notwithstanding the
Page 49
existence of a Default or the inability of Borrower to satisfy the conditions
precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Agent, the LC Issuer and the Lenders until the Obligations have been paid
in full.
ARTICLE IX
GENERAL PROVISIONS
------------------
9.1. Survival of Representations. All representations and warranties of
Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among Borrower, the Agent, the LC Issuer and the Lenders and
supersede all prior agreements and understandings among Borrower, the Agent, the
LC Issuer and the Lenders relating to the subject matter thereof other than the
fee letter described in Section 10.13, which shall survive and remain in full
force and effect during the term of this Agreement.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns, provided, however, that the parties
hereto expressly agree that the Arranger shall enjoy the benefits of the
provisions of Sections 9.6, 9.10 and 10.11 to the extent specifically set forth
therein and shall have the right to enforce such provisions on its own behalf
and in its own name to the same extent as if it were a party to this Agreement.
9.6. Expenses; Indemnification. (i) BORROWER SHALL REIMBURSE THE AGENT
AND ARRANGER FOR ANY COSTS, INTERNAL CHARGES AND OUT-OF-POCKET EXPENSES
(INCLUDING ATTORNEYS' FEES AND TIME CHARGES OF ATTORNEYS FOR AGENT, WHICH
ATTORNEYS MAY BE EMPLOYEES OF THE AGENT) PAID OR INCURRED BY AGENT OR ARRANGER
IN CONNECTION WITH THE PREPARATION, NEGOTIATION, EXECUTION, DELIVERY,
SYNDICATION, REVIEW, AMENDMENT, MODIFICATION, AND ADMINISTRATION OF THE LOAN
DOCUMENTS. BORROWER ALSO AGREES TO REIMBURSE AGENT, ARRANGER, LC ISSUER AND THE
LENDERS FOR ANY COSTS, INTERNAL CHARGES AND OUT-OF-POCKET EXPENSES (INCLUDING
ATTORNEYS' FEES AND TIME CHARGES OF ATTORNEYS FOR AGENT, ARRANGER, LC ISSUER AND
THE LENDERS, WHICH ATTORNEYS MAY BE EMPLOYEES OF AGENT, ARRANGER, LC ISSUER
Page 50
OR THE LENDERS) PAID OR INCURRED BY AGENT, ARRANGER, LC ISSUER OR ANY LENDER IN
CONNECTION WITH THE COLLECTION AND ENFORCEMENT OF THE LOAN DOCUMENTS. EXPENSES
BEING REIMBURSED BY BORROWER UNDER THIS SECTION INCLUDE, WITHOUT LIMITATION,
COSTS AND EXPENSES INCURRED IN CONNECTION WITH THE REPORTS DESCRIBED IN THE
FOLLOWING SENTENCE. BORROWER ACKNOWLEDGES THAT FROM TIME TO TIME BANK ONE MAY
PREPARE AND MAY DISTRIBUTE TO THE LENDERS (BUT SHALL HAVE NO OBLIGATION OR DUTY
TO PREPARE OR TO DISTRIBUTE TO THE LENDERS) CERTAIN AUDIT REPORTS (THE
"REPORTS") PERTAINING TO BORROWER'S ASSETS FOR INTERNAL USE BY BANK ONE FROM
INFORMATION FURNISHED TO IT BY OR ON BEHALF OF BORROWER, AFTER BANK ONE HAS
EXERCISED ITS RIGHTS OF INSPECTION PURSUANT TO THIS AGREEMENT.
(II) BORROWER HEREBY FURTHER AGREES TO INDEMNIFY AGENT, ARRANGER, LC
ISSUER AND EACH LENDER, ITS DIRECTORS, OFFICERS AND EMPLOYEES AGAINST ALL
LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION
THEREFOR WHETHER OR NOT AGENT, ARRANGER, LC ISSUER OR ANY LENDER IS A PARTY
THERETO) WHICH ANY OF THEM MAY PAY OR INCUR ARISING OUT OF OR RELATING TO THIS
AGREEMENT, THE OTHER LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE
DIRECT OR INDIRECT APPLICATION OR PROPOSED APPLICATION OF THE PROCEEDS OF ANY
CREDIT EXTENSION HEREUNDER EXCEPT TO THE EXTENT THAT THEY ARE DETERMINED IN A
FINAL NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PARTY SEEKING
INDEMNIFICATION. THE OBLIGATIONS OF BORROWER UNDER THIS SECTION 9.6 SHALL
SURVIVE THE TERMINATION OF THIS AGREEMENT.
9.7. Numbers of Documents. All statements, notices, closing
documents, and requests hereunder shall be furnished to the Agent with
sufficient counterparts so that the Agent may furnish one to each of the
Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for Borrower and all its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on Borrower's
audited financial statements.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between Borrower on the
one hand and the Lenders, the LC Issuer and the Agent on the other hand shall be
solely that of borrower and lender. Neither the Agent, the Arranger, the LC
Issuer nor any Lender shall have any fiduciary responsibilities to Borrower.
Neither the Agent, the Arranger, the LC Issuer nor any Lender undertakes any
responsibility to Borrower to review or inform Borrower of any matter in
connection with any phase of Borrower's business or operations. Borrower agrees
that neither the Agent, the Arranger, the LC Issuer nor any Lender shall have
liability to Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by Borrower in connection with, arising out of, or in any way
related to, the transactions
Page 51
contemplated and the relationship established by the Loan Documents, or any act,
omission or event occurring in connection therewith, unless it is determined in
a final non-appealable judgment by a court of competent jurisdiction that such
losses resulted from the gross negligence or willful misconduct of the party
from which recovery is sought. Neither the Agent, the Arranger, the LC Issuer
nor any Lender shall have any liability with respect to, and Borrower hereby
waives, releases and agrees not to xxx for, any special, indirect or
consequential damages suffered by Borrower in connection with, arising out of,
or in any way related to the Loan Documents or the transactions contemplated
thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect contractual counterparties in swap agreements or to legal counsel,
accountants and other professional advisors to such counterparties, (vii)
permitted by Section 12.4 and (viii) to rating agencies if requested or required
by such agencies in connection with a rating relating to the Advances hereunder.
Notwithstanding anything herein to the contrary, confidential information shall
not include, and each Lender (and each employee, representative or other agent
of any Lender) may disclose to any and all Persons, without limitation of any
kind, the "tax treatment" and "tax structure" (in each case, within the meaning
of Treasury Regulation Section 1.6011-4) of the transactions contemplated hereby
and all materials of any kind (including opinions or other tax analyses) that
are or have been provided to such Lender relating to such tax treatment or tax
structure; provided that with respect to any document or similar item that in
either case contains information concerning such tax treatment or tax structure
of the transactions contemplated hereby as well as other information, this
sentence shall only apply to such portions of the document or similar item that
relate to such tax treatment or tax structure.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.
9.13. Disclosure. Borrower and each Lender hereby (i) acknowledge and
agree that (a) one or more Affiliates of Bank One are or may become direct or
indirect equity investors in Borrower or Parent, (b) Bank One is or may become a
lender to, and agent bank for, Borrower or Parent, and (c) Bank One and/or its
Affiliates from time to time may hold other investments in, make other loans to
or have other relationships with Borrower or Parent, and (ii) waive any
liability of Bank One or such Affiliate to Borrower or any Lender, respectively,
arising out of or resulting from such investments, loans or relationships other
than liabilities arising out of the gross negligence or willful misconduct of
Bank One or its Affiliates.
ARTICLE X
THE AGENT
---------
10.1. Appointment, Nature of Relationship. Bank One, NA is hereby
appointed by each of the Lenders as its contractual representative (herein
referred to as the "AGENT") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Agent to act as the contractual
representative of such Lender with the rights and duties expressly set forth
herein and in the other Loan Documents. The Agent agrees to act as such
contractual representative upon the express conditions contained in this Article
X. Notwithstanding the use of the defined term "Agent," it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason
Page 52
of this Agreement or any other Loan Document and that the Agent is merely acting
as the contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Agent (i) does not
hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of the term "secured party"
as defined in the Illinois Uniform Commercial Code and (iii) is acting as an
independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders hereby agrees to assert no claim against the Agent on any agency theory
or any other theory of liability for breach of fiduciary duty, all of which
claims each Lender hereby waives.
10.2. Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3. General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to Borrower, the Lenders or any
Lender for any action taken or omitted to be taken by it or them hereunder or
under any other Loan Document or in connection herewith or therewith except to
the extent such action or inaction is determined in a final non-appealable
judgment by a court of competent jurisdiction to have arisen from the gross
negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain, inquire into, or verify (a) any statement, warranty
or representation made in connection with any Loan Document or any borrowing
hereunder; (b) the performance or observance of any of the covenants or
agreements of any obligor under any Loan Document, including, without
limitation, any agreement by an obligor to furnish information directly to each
Lender; (c) the satisfaction of any condition specified in Article IV, except
receipt of items required to be delivered solely to the Agent; (d) the existence
or possible existence of any Default or Unmatured Default; (e) the validity,
enforceability, effectiveness, sufficiency or genuineness of any Loan Document
or any other instrument or writing furnished in connection therewith; (f) the
value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of Borrower or any guarantor
of any of the Obligations or of any of Borrower's or any such guarantor's
respective Subsidiaries. The Agent shall have no duty to disclose to the Lenders
information that is not required to be furnished by Borrower to the Agent at
such time, but is voluntarily furnished by Borrower to the Agent (either in its
capacity as Agent or in its individual capacity).
10.5. Action on Instructions of Lenders. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder and under
any other Loan Document in accordance with written instructions signed by the
Required Lenders (unless the consent of more than the Required Lenders is
required pursuant to Section 8.2, in which case the Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Lenders required by such Section), and such instructions and any action taken or
failure to act pursuant thereto shall be binding on all of the Lenders. The
Lenders hereby acknowledge that the Agent shall be under no duty to take any
discretionary action permitted to be taken by it pursuant to the provisions of
this Agreement or any other Loan Document unless it shall be requested in
writing to do so by the Required Lenders. The Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
Page 53
10.6. Employment of Agents and Counsel. The Agent may execute any of
its duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
10.7. Reliance on Documents, Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8. Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (or, if the Commitments have been terminated, in proportion to their
Commitments immediately prior to such termination) (i) for any amounts not
reimbursed by Borrower for which the Agent is entitled to reimbursement by
Borrower under the Loan Documents, (ii) for any other expenses incurred by the
Agent on behalf of the Lenders, in connection with the preparation, execution,
delivery, administration and enforcement of the Loan Documents (including,
without limitation, for any expenses incurred by the Agent in connection with
any dispute between the Agent and any Lender or between two or more of the
Lenders) and (iii) for any liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind and
nature whatsoever which may be imposed on, incurred by or asserted against the
Agent in any way relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions contemplated
thereby (including, without limitation, for any such amounts incurred by or
asserted against the Agent in connection with any dispute between the Agent and
any Lender or between two or more of the Lenders), or the enforcement of any of
the terms of the Loan Documents or of any such other documents, provided that
(i) no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent and (ii) any indemnification required pursuant to Section 3.5(vii)
shall, notwithstanding the provisions of this Section 10.8, be paid by the
relevant Lender in accordance with the provisions thereof. The obligations of
the Lenders under this Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.
10.9. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Unmatured Default
hereunder unless the Agent has received written notice from a Lender or Borrower
referring to this Agreement describing such Default or Unmatured Default and
stating that such notice is a "notice of default". In the event that the Agent
receives such a notice, the Agent shall give prompt notice thereof to the
Lenders.
10.10. Rights as a Lender. In the event the Agent is a Lender, the
Agent shall have the same rights and powers hereunder and under any other Loan
Document with respect to its Commitment and its Loans as any Lender and may
exercise the same as though it were not the Agent, and the term "Lender" or
"Lenders" shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity. The Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with Borrower or any
of its Subsidiaries in which Borrower or such Subsidiary is not restricted
hereby from engaging with any other Person. The Agent, in its individual
capacity, is not obligated to remain a Lender.
Page 54
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent, the Arranger or any other
Lender and based on the financial statements prepared by Borrower and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement and the other Loan Documents.
Each Lender also acknowledges that it will, independently and without reliance
upon the Agent, the Arranger or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
10.12. Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. The Agent may be removed at any time with or without cause
by written notice received by the Agent from the Required Lenders, such removal
to be effective on the date specified by the Required Lenders. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint, on
behalf of Borrower and the Lenders, a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders within thirty days after
the resigning Agent's giving notice of its intention to resign, then the
resigning Agent may appoint, on behalf of Borrower and the Lenders, a successor
Agent. Notwithstanding the previous sentence, the Agent may at any time without
the consent of Borrower or any Lender, appoint any of its Affiliates which is a
commercial bank as a successor Agent hereunder. If the Agent has resigned or
been removed and no successor Agent has been appointed, the Lenders may perform
all the duties of the Agent hereunder and Borrower shall make all payments in
respect of the Obligations to the applicable Lender and for all other purposes
shall deal directly with the Lenders. No successor Agent shall be deemed to be
appointed hereunder until such successor Agent has accepted the appointment. Any
such successor Agent shall be a commercial bank having capital and retained
earnings of at least $100,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Agent. Upon the effectiveness of the resignation or
removal of the Agent, the resigning or removed Agent shall be discharged from
its duties and obligations hereunder and under the Loan Documents. After the
effectiveness of the resignation or removal of an Agent, the provisions of this
Article X shall continue in effect for the benefit of such Agent in respect of
any actions taken or omitted to be taken by it while it was acting as the Agent
hereunder and under the other Loan Documents. In the event that there is a
successor to the Agent by merger, or the Agent assigns its duties and
obligations to an Affiliate pursuant to this Section 10.12, then the term "Prime
Rate" as used in this Agreement shall mean the prime rate, base rate or other
analogous rate of the new Agent.
10.13. Agent and Arranger Fees. Borrower agrees to pay to the Agent and
the Arranger, for their respective accounts, the fees agreed to by Borrower, the
Agent and the Arranger pursuant to that certain letter agreement dated of even
date herewith, or as otherwise agreed from time to time.
10.14. Delegation to Affiliates. Borrower and the Lenders agree that
the Agent may delegate any of its duties under this Agreement to any of its
Affiliates. Any such Affiliate (and such Affiliate's directors, officers, agents
and employees) which performs duties in connection with this Agreement shall be
entitled to the same benefits of the indemnification, waiver and other
protective provisions to which the Agent is entitled under Articles IX and X.
10.15. Execution of Collateral Documents. The Lenders hereby empower
and authorize the Agent to execute and deliver to Borrower on their behalf the
Collateral Documents and all related financing statements and any financing
statements, agreements, documents or instruments as shall be necessary or
appropriate to effect the purposes of the Collateral Documents.
Page 55
10.16. Collateral Releases. The Lenders hereby empower and authorize
the Agent to execute and deliver to Borrower on their behalf any agreements,
documents or instruments as shall be necessary or appropriate to effect any
releases of Collateral which shall be permitted by the terms hereof or of any
other Loan Document or which shall otherwise have been approved by the Required
Lenders (or, if required by the terms of Section 8.2, all of the Lenders) in
writing.
10.17. Co-Agents, Documentation Agent, Syndication Agent, etc. Neither
any of the Lenders identified in this Agreement as a "co-agent" nor the
Documentation Agent or the Syndication Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Agent in Section 10.11.
ARTICLE XI
SETOFF; RATABLE PAYMENTS
------------------------
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of Borrower may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part thereof, shall then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Sections 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure held by the
other Lenders so that after such purchase each Lender will hold its Pro Rata
Share of the Aggregate Outstanding Credit Exposure. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their respective Pro Rata Shares of the
Aggregate Outstanding Credit Exposure. In case any such payment is disturbed by
legal process, or otherwise, appropriate further adjustments shall be made.
11.3. Proceeds of Collateral. Lenders agree, among themselves, that
unless otherwise agreed to by Agent and the Required Lenders, all monies
collected or received by Agent after the occurrence of an Event of Default in
respect of the security for the Loans, directly or indirectly, or by any other
means shall be applied (a) to all costs of collection or maintenance of the
Collateral, and then to either interest or principal of the Aggregate
Outstanding Credit Exposure as recommended by Agent and approved by the Required
Lenders (except that any amounts to be applied to interest or principal shall be
distributed to Lenders based on their Pro Rata Shares) until the Loans are paid
in full, and (b) to any Rate Management Obligations owed to any Lender under any
Rate Management Transaction, only after payment in full of the outstanding
principal and interest under the Loans.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
------------------------------------------------
Page 56
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and the
Lenders and their respective successors and assigns permitted hereby, except
that (i) Borrower shall not have the right to assign its rights or obligations
under the Loan Documents without the prior written consent of each Lender, (ii)
any assignment by any Lender must be made in compliance with Section 12.3, and
(iii) any transfer by Participation must be made in compliance with Section
12.2. Any attempted assignment or transfer by any party not made in compliance
with this Section 12.1 shall be null and void, unless such attempted assignment
or transfer is treated as a participation in accordance with Section 12.3.3. The
parties to this Agreement acknowledge that clause (ii) of this Section 12.1
relates only to absolute assignments and this Section 12.1 does not prohibit
assignments creating security interests, including, without limitation, (x) any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a
Lender which is a Fund, any pledge or assignment of all or any portion of its
rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
Agent may in its discretion (but shall not be required to) follow instructions
from the Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person. Any assignee of the rights to
any Loan or any Note agrees by acceptance of such assignment to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Loan (whether or not a
Note has been issued in evidence thereof), shall be conclusive and binding on
any subsequent holder or assignee of the rights to such Loan.
12.2. Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("PARTICIPANTS") participating interests in any Outstanding Credit
Exposure of such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender under the Loan
Documents (in amounts of not less than $5,000,000, or a lesser amount
with the consent of Borrower). In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, such Lender shall remain the owner
of its Outstanding Credit Exposure and the holder of any Note issued to
it in evidence thereof for all purposes under the Loan Documents, all
amounts payable by Borrower under this Agreement shall be determined as
if such Lender had not sold such participating interests, and Borrower
and the Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under
the Loan Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Commitment in which such Participant has an interest which
forgives principal, interest or fees or reduces the interest rate or
fees payable with respect to any such Credit Extension or Commitment,
extends the Revolving Credit Termination Date, postpones any date fixed
for any regularly scheduled payment of principal of, or interest or
fees on, any such Credit Extension or Commitment, releases any
guarantor of any such Credit Extension or releases all or
Page 57
substantially all of the collateral, if any, securing any such
Credit Extension, or which would require consent of all of the Lenders
pursuant to the terms of Section 8.2 or of any other Loan Document.
12.2.3 Benefit of Certain Provisions. Borrower agrees that
each Participant shall be deemed to have the right of setoff provided
in Section 11.1 in respect of its participating interest in amounts
owing under the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as a Lender under
the Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such
interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of Borrower, and
(ii) any Participant not incorporated under the laws of the United
States of America or any State thereof agrees to comply with the
provisions of Section 3.5 to the same extent as if it were a Lender.
12.3. Assignments.
12.3.1 Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("PURCHASERS") all
or any part of its rights and obligations under the Loan Documents,
provided such Lender provides to Borrower, the Agent, the LC Issuer and
the other Lenders notice of such Lender's intent to make such
assignment (a "NOTICE OF ASSIGNMENT"). Such assignment shall be
substantially in the form of Exhibit C or in such other form as may be
agreed to by the parties thereto. The consent of Borrower, and the
Agent and the LC Issuer shall be required prior to an assignment
becoming effective with respect to a Purchaser which is not a Lender or
an Affiliate thereof; provided, however, that if a Default has occurred
and is continuing, the consent of Borrower shall not be required. Such
consent shall not be unreasonably withheld or delayed. Each such
assignment with respect to a Purchaser which is not a Lender or an
Affiliate thereof shall (unless each of Borrower and the Agent
otherwise consents) be in an amount not less than the lesser of (i)
$5,000,000 or (ii) the remaining amount of the assigning Lender's
Commitment (calculated as at the date of such assignment) or
outstanding Loans (if the applicable Commitment has been terminated).
12.3.2 Consents. The consent of Borrower shall be required
prior to an assignment becoming effective unless the Purchaser is a
Lender, an Affiliate of a Lender or an Approved Fund, provided that the
consent of Borrower shall not be required if a Default has occurred and
is continuing. The consent of the Agent shall be required prior to an
assignment becoming effective unless the Purchaser is a Lender with a
Revolving Commitment (in the case of an assignment of a Revolving
Commitment) or is a Lender, an Affiliate of a Lender or an Approved
Fund (in the case of an assignment of any other Commitment or Loans).
The consent of the Issuing Bank shall be required prior to an
assignment of a Revolving Commitment becoming effective unless the
Purchaser is a Lender with a Revolving Commitment. Any consent required
under this Section 12.3.2 shall not be unreasonably withheld or
delayed.
Page 58
12.3.3 Effect; Effective Date. Upon (i) delivery to the Agent
of an assignment, together with any consents required by Sections
12.3.1 and 12.3.2, and (ii) payment of a $4,000 fee paid by the
assigning Lender or purchaser to the Agent for processing such
assignment (unless such fee is waived by the Agent), such assignment
shall become effective on the effective date specified in such
assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Outstanding Credit Exposure under the
applicable assignment agreement constitutes "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and
after the effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any other Loan
Document executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party thereto, and the transferor
Lender shall be released with respect to the Commitment and Outstanding
Credit Exposure assigned to such Purchaser without any further consent
or action by Borrower, the Lenders or the Agent. In the case of an
assignment covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a
Lender hereunder but shall continue to be entitled to the benefits of,
and subject to, those provisions of this Agreement and the other Loan
Documents which survive payment of the Obligations and termination of
the applicable agreement. Any assignment or transfer by a Lender of
rights or obligations under this Agreement that does not comply with
this Section 12.3 shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations
in accordance with Section 12.2. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.3, the
transferor Lender, the Agent and Borrower shall, if the transferor
Lender or the Purchaser desires that its Loans be evidenced by Notes,
make appropriate arrangements so that new Notes or, as appropriate,
replacement Notes are issued to such transferor Lender and new Notes
or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments,
as adjusted pursuant to such assignment.
12.3.4 Register. The Agent, acting solely for this purpose
as an agent of Borrower, shall maintain at one of its offices in
Chicago, Illinois, a copy of each Assignment and Assumption delivered
to it and a register for the recordation of the names and addresses of
the Lenders, and the Commitments of, and principal amounts of the Loans
owing to, each Lender pursuant to the terms hereof from time to time
(the "REGISTER"). The entries in the Register shall be conclusive
absent manifest error, and Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register pursuant to
the terms hereof as a Lender hereunder for all purposes of this
Agreement, notwithstanding notice to the contrary. The Register shall
be available for inspection by Borrower at any reasonable time and from
time to time upon reasonable prior notice.
12.4. Dissemination of Information. Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is not incorporated under the laws of the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, to comply with
the provisions of Section 3.5(iv).
Page 59
ARTICLE XIII
NOTICES
-------
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of Borrower or the Agent, at its address or facsimile number set
forth on the signature pages hereof, (y) in the case of any Lender, at its
address or facsimile number set forth below its signature hereto or (z) in the
case of any party, at such other address or facsimile number as such party may
hereafter specify for the purpose by notice to the Agent and Borrower in
accordance with the provisions of this Section 13.1. Each such notice, request
or other communication shall be effective (i) if given by facsimile
transmission, when transmitted to the facsimile number specified in this Section
and confirmation of receipt is received, (ii) if given by mail, 72 hours after
such communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or if given by any other means, when delivered (or, in
the case of electronic transmission, received) at the address specified in this
Section; provided that notices to the Agent under Article II shall not be
effective until received.
13.2. Change of Address. Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIV
COUNTERPARTS
------------
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by Borrower, the Agent,
the LC Issuer and the Lenders and each party has notified the Agent by facsimile
transmission or telephone that it has taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
------------------------------------------------------------
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (INCLUDING, WITHOUT LIMITATION, 735 ILCS SECTION 105/5-1 ET
SEQ, BUT OTHERWISE WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL
BANKS.
15.2. CONSENT TO JURISDICTION. BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND BORROWER HEREBY IRREVOCABLY AGREES THAT ALL
CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT
OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
Page 60
HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING
PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY
JUDICIAL PROCEEDING BY BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER
OR ANY AFFILIATE OF THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED
WITH ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
15.3. WAIVER OF JURY TRIAL. BORROWER, THE AGENT, THE LC ISSUER AND EACH
LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY
OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN
ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
[REMAINDER OF PAGE INTENTIONALLY BLANK.
SIGNATURES FOUND ON FOLLOWING PAGES.]
Page 61
IN WITNESS WHEREOF, Borrower, the Lenders, the LC Issuer and the Agent
have executed this Agreement as of the date first above written.
BORROWER:
---------
XXXXX CONSULTING, INC. (f/k/a
Xxxxx/Xxxxxx Consulting, Inc.,
and f/k/a Xxxxx/Xxxxxx, Inc.), a
Delaware corporation
By: /s/ Xxxxxx X. Xxxx
---------------------------------------
Print Name: Xxxxxx X. Xxxx
Title: COO
000 X. Xxxxxxxx Xxxx Xxxxx, Xxxxx 000
X. Xxxxxxxxxx, Xxxxxxxx 00000
Attention: X. X. Xxxxxxx, Xxx Xxxx
and Xxxx Xxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
COMMITMENTS: LENDERS:
------------ --------
Term: $7,423,143.75 BANK ONE, NA, a national
Revolving: $25,576,856.25 banking association,
Individually and as Agent
By: /s/ J. Xxxxxxx Xxxxxxxxx
---------------------------------------
Print Name: J. Xxxxxxx Xxxxxxxxx
Title: Vice President
0000 Xxxx Xxxxxx; Xxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Signature Page
Term: $4,498,875.00 LASALLE BANK NATIONAL ASSOCIATION,
Revolving: $15,501,125.00 a national banking association
(f/k/a LaSalle National Bank)
By: /s/ Xxxxx Xxxxx
----------------------------------------
Print Name: Xxxxx Xxxxx
Title: Commercial Loan Officer
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Term: $3,374,156.25 THE FROST NATIONAL BANK, a national
Revolving: $11,625,843.75 banking association
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Print Name: Xxxxx X. Xxxxxx
Title: Senior Vice President
0000 X. Xxxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Term: $2,699,325.00 MB FINANCIAL BANK, N.A., a national
Revolving: $9,300,675.00 banking association
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------------
Print Name: Xxxxxxx X. Xxxxx
Title: Vice President
0000 X. Xxxxxxx Xxx.
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Signature Page
CONSENT OF GUARANTOR
--------------------
The undersigned Guarantor hereby (a) acknowledges its consent to the
changes effected by this Agreement, (b) ratifies and confirms all terms and
provisions of the Unlimited Guaranty dated January 15, 1999, (c) agrees that
such Unlimited Guaranty is and shall remain in full force and effect with
respect to the Loans, as increased and amended hereby, (d) acknowledges that
there are no claims or offsets against, or defenses or counterclaims to, the
terms and provisions of and the obligations created and evidenced by such
Unlimited Guaranty, and (e) reaffirms all agreements and obligations under such
Unlimited Guaranty with respect to the Loan Agreement, the Notes, the Loans and
all other documents, instruments or agreements governing, securing or pertaining
to the Loans, as the same may be modified and increased by this Agreement.
EXECUTED as of this 20th day of November, 2003.
GUARANTOR:
----------
XXXXX, INC. (f/k/a Xxxxx/Xxxxxx, Inc.,
and f/k/a Xxxxx/Xxxxxx Holdings, Inc.),
a Delaware corporation
By: /s/ Xxxxxx X. Xxxx
----------------------------------------
Print Name: Xxxxxx X. Xxxx
Title: COO
Signature Page
