Exhibit 99
AGREEMENT
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THIS AGREEMENT (as amended or restated from time to time, the "Agreement")
dated September 20, 1996, is made and entered into by and between Xxxxxxx
Enterprises, Inc., a Louisiana corporation ("Borrower"), and NationsBank of
Texas, N.A., a national banking association ("Bank" or "NationsBank"), and
provides as follows:
WITNESSETH
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This Agreement shall set forth the terms and conditions under which the
Bank is prepared to extend to Borrower, for a 120 day term, a $75,000,000.00
revolving line of credit facility. Due to the limited term of the facility and
the desire of the parties to minimize the documentation to the extent possible,
various definitions and provisions contained in this Agreement have been
incorporated herein by reference to the Fifth Amended and Restated Loan
Agreement (as amended from time to time, the "Loan Agreement") dated as of
December 11, 1995 by and among Bank (individually and as agent), Borrower and
the other "Banks" as defined therein, a copy of which is annexed hereto as
Exhibit "A."
SECTION I. CERTAIN DEFINITIONS.
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1.01 As used in this Agreement, the terms "Agreement", "Borrower",
"Bank", "NationsBank", and "Loan Agreement" shall have the meanings indicated
above.
1.02 Subject to the qualifications hereinafter set forth in this
Section 1.02, as used in this Agreement, the following terms shall have the
meanings set forth in the Loan Agreement and are incorporated into this
Agreement by reference:
(a) Acquisition(s)
(b) Advance
(c) Affiliate
(d) Base Rate
(e) Base Rate Advance
(f) Base Rate Option
(g) Basis Point
(h) Business Day
(i) CD Rate
(j) CD Rate Advance
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(k) CD Rate Option
(l) CD Reserve Requirement
(m) Eurodollar Reserve Requirement
(n) FDIC Percentage
(o) Environmental Laws
(p) Federal Funds Rate
(q) GAAP or "generally accepted accounting principles"
(r) Governmental Body
(s) Hazardous Substances
(t) Highest Lawful Rate
(u) Indebtedness
(v) LIBOR Rate
(w) LIBOR Rate Advance
(x) LIBOR Rate Option
(y) NationsBank CD Rate
(z) NationsBank LIBOR Rate
(aa) Person or Persons
(bb) Subsidiary or Subsidiaries
Notwithstanding the foregoing, as used within the definitions
set forth above in this Section 1.02, the capitalized terms "Agreement" and
"Interest Period" shall be defined as set forth in this Agreement rather than as
defined in the Loan Agreement; the term "Agent" shall mean "NationsBank"; and
the term Revolving Line of Credit Notes shall mean the $75,000,000.00 "Revolving
Line of Credit Note" as defined in this Agreement. To the extent that any other
capitalized terms are found within the foregoing definitions that are not
specifically referenced herein, such terms shall have the definitions set forth
in the Loan Agreement, subject to the agreement of Borrower and Bank to
interpret such terms in a manner intended to give effect to the intentions of
the parties in entering this Agreement.
1.03 The following terms shall have the meanings indicated below,
unless the context otherwise requires:
(a) Commitment. Shall have the meaning set forth in Section II
hereof.
(b) Event of Default. Shall mean an "Event of Default" as
defined in Section X of this Agreement.
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(c) Interest Period(s). Shall mean (i) with respect to any
Base Rate Advance, or any portion of the Revolving Line of Credit Loan to which
the Base Rate Option applies, a period not to extend beyond the Maturity Date,
and (ii) with respect to any CD Rate Advance or LIBOR Rate Advance, or any
portion of the Revolving Line of Credit Loan to which the CD Rate Option or
LIBOR Rate Option applies if the CD Rate Option or LIBOR Rate Option is
available and is elected by the Borrower, a period commencing on the date such
CD Rate Advance or LIBOR Rate Advance is made or such election is effective and
ending, as the Borrower may select (subject to the limitations set forth in
Section V and elsewhere in this Agreement), on a date that is between (x) 7 days
and 120 days thereafter for a LIBOR Rate Advance and (y) 30 days and 120 days
thereafter for a CD Rate Advance; provided that the foregoing provisions
relating to Interest Periods are subject to the following:
(A) in no event may any Interest Period chosen
extend beyond the Maturity Date;
(B) subject to the provisions of this Agreement, in the
absence of Borrower's election of an Interest Period applicable to a CD Rate
Option or LIBOR Rate Option, Borrower shall be deemed to have elected a 30-day
Interest Period;
(C) if an Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended to the next Business Day
unless the result of such extension would be to extend such Interest Period into
another calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day; and
(D) notwithstanding the length of any Interest Period
selected by Borrower with respect to a Base Rate Advance, the Base Rate shall be
adjusted automatically from time to time on and as of the effective date of any
change in NationsBank's "prime rate."
(d) Loan or Revolving Line of Credit Loan. Shall have the
meaning set forth in Section II hereof.
(e) Loan Papers. Shall mean this Agreement, the Revolving Line
of Credit Note and any and all other agreements, reports, certificates,
corporate resolutions, notices, statements, consents, documents and instruments
heretofore or hereafter delivered to Bank in connection with this Agreement, the
Obligation and the transactions contemplated thereby.
(f) Material Adverse Effect. Shall mean a material adverse
effect on (i) the properties, prospects, business, operations, financial
condition, liabilities, or capitalization of the Borrower and the Subsidiaries
taken as a whole, (ii) the ability of the Borrower to pay and perform
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its obligations under any of the Loan Papers, or (iii) the validity or
enforceability of any of the Loan Papers or the rights and remedies of the Bank
thereunder.
(g) Maturity Date. Shall mean January 17, 1997.
(h) Obligation. At any particular time shall mean,
collectively, (i) the aggregate unpaid principal amount of the Revolving Line of
Credit Note, and any extensions, renewals or rearrangements of same, and any
other promissory notes executed in connection with this Agreement, (ii) all
interest accrued and payable thereon, (iii) all fees (including commitment fees)
and other charges payable hereunder (including attorneys fees incurred in
connection with the enforcement and collection of the Borrower's obligations
hereunder or any part thereof), (iv) any and all obligations of the Borrower in
respect to such sums, and (v) all other amounts from time to time payable by the
Borrower to the Bank pursuant to this Agreement or any other Loan Papers.
(i) Revolving Line of Credit Note. Shall mean that certain
Revolving Line of Credit Note in the principal sum of Seventy-Five Million
($75,000,000.00) Dollars dated September 20, 1996 executed by Borrower in favor
of Bank, together with any extensions, renewals, amendments or rearrangements of
same.
SECTION II. LOAN; MATURITY DATE. Subject to the terms and conditions contained
herein, Bank agrees to extend to the Borrower a revolving line of credit loan
(the "Loan" or the "Revolving Line of Credit Loan") and to make Advances to the
Borrower under the Loan from time to time in the aggregate principal amount of
up to Seventy-Five Million ($75,000,000.00) Dollars (the "Commitment") from the
date of this Agreement through the Maturity Date. Advances under the Loan
shall be evidenced by the Revolving Line of Credit Note executed by the Borrower
and delivered to the Bank and reflected by a credit advice issued in connection
therewith; provided, however, that the failure to issue such credit advice shall
not affect the Borrower's obligation hereunder or under the Revolving Line of
Credit Note with respect to such Advance or otherwise.
SECTION III. NOTICE AND MANNER OF FUNDING OF ADVANCES. Subject to the terms
and conditions contained herein, in order to obtain an Advance under the Loan,
the Borrower shall notify the Bank in writing at least two (2) Business Days
prior to the date that Borrower desires such Advance to be funded (the "Funding
Date"), except that in the case of a Base Rate Advance, Borrower may notify the
Bank in writing not later than 9:00 a.m. on the Funding Date. Such written
notice shall specify (a) the Funding Date; (b) the requested amount of the
Advance (in no event less than One Million ($1,000,000.00) Dollars); (c) the
requested interest rate option, which shall be either the Base Rate Option, the
CD Rate Option, or the LIBOR Rate Option, selected by Borrower; and (d) in the
case of selection of the CD Rate Option or the LIBOR Rate Option, the requested
duration of the Interest
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Period applicable thereto. Upon satisfaction of the terms and conditions of
this Agreement, the Bank will make such funds available to the Borrower by
crediting the amount thereof to the Borrower's account with Bank or as otherwise
may be directed by Borrower. It is specifically understood, however, that the
Loan may not be used by Borrower as the basis on which to request issuance of
letters of credit by the Bank.
SECTION IV. REPAYMENTS OF REVOLVING LINE OF CREDIT NOTE. Subject to the
limitations set forth in Section V below, the Borrower may prepay at any time
and from time to time the principal amount of the Revolving Line of Credit Note,
in whole or in part, in amounts of not less than One Million ($1,000,000.00)
Dollars (or a lesser amount if such amount represents the total outstanding
principal balance under the Revolving Line of Credit Note at the time of such
prepayment), without premium or penalty. Through the Maturity Date, the
Borrower may thereafter at any time and from time to time borrow again, subject
to the terms and conditions of this Agreement, up to the full amount of the
Commitment. On the Maturity Date, the entire unpaid principal balance of the
Revolving Line of Credit Note then outstanding shall be payable in full,
together with all interest accrued thereon and any other portion of the
Obligation then outstanding.
SECTION V. INTEREST ON REVOLVING LINE OF CREDIT NOTE. The unpaid principal
balance of the Revolving Line of Credit Note shall bear interest, at Borrower's
option (subject to the limitations set forth herein) from time to time, at a
rate per annum equal to:
(a) the Base Rate, as adjusted from time to time; or
(b) the LIBOR Rate for 7 to 120 days, plus 50.625 Basis Points; or
(c) the CD Rate for 30 to 120 days, plus 63.125 Basis Points.
Borrower shall notify the Bank in writing at least two (2) Business Days prior
to the last day of each Interest Period, specifying (i) the requested interest
rate option, which shall be either the Base Rate Option, the LIBOR Rate Option,
or the CD Rate Option, selected by Borrower and (ii) in the case of the LIBOR
Rate Option or the CD Rate Option, the requested duration of the Interest Period
applicable thereto.
In the event that Borrower fails to so notify the Bank, Borrower shall
be deemed, subject to the provisions of the Agreement, to have selected the same
interest rate option(s) and Interest Period as were in effect during the
previous Interest Period. Should Borrower opt to employ the LIBOR Rate Option
or CD Rate Option for a given Interest Period, Borrower shall not be entitled to
repay the portion of the Revolving Line of Credit Note funded under the LIBOR
Rate Option or the CD Rate Option until the expiration of the Interest Period
for which Borrower has opted, unless Borrower shall have notified Bank in
writing of such request to repay and shall have indemnified
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Bank in accordance with the provisions and the formula set forth in Section
6.02(i) of the Loan Agreement.
If at any time a borrowing at the CD Rate Option is to be made, Bank
determines that by reason of circumstances affecting the domestic market for
certificates of deposit generally, either adequate and reasonable means do not
exist for ascertaining the CD Rate for any Interest Period selected by the
Borrower, or it becomes impractical for the Bank to obtain funds to make or
maintain any borrowing bearing interest at the CD Rate, or the Bank shall have
determined that the CD Rate will not adequately and fairly reflect the cost to
the Bank of making, maintaining or funding a proposed borrowing that Borrower
has requested to bear interest at the CD Rate, then Bank shall promptly give
notice to Borrower of such determination, and Borrower shall choose, subject to
the limitations set forth herein, either the Base Rate Option or the LIBOR Rate
Option.
If at any time a borrowing under the LIBOR Rate Option is to be made,
Bank determines that either adequate and reasonable means do not exist for
ascertaining the LIBOR Rate for any Interest Period selected by the Borrower, or
it becomes impractical for the Bank to obtain funds to make or maintain any
borrowing bearing interest at the LIBOR Rate, or the Bank shall have determined
that the LIBOR Rate will not adequately and fairly reflect the cost to the Bank
of making, maintaining, or funding a proposed borrowing that Borrower has
requested to bear interest at the LIBOR Rate, then Bank shall promptly give
notice to Borrower of such determination, and Borrower shall choose, subject to
the limitations set forth herein, either the Base Rate Option or the CD Rate
Option.
If at any time the Bank reasonably determines that, as a result of
changes after the date of this Agreement in laws, or the adoption or making
after such date of any interpretations, directives or regulations (whether or
not having the force of law) by any court, governmental authority or reserve
bank charged with the interpretation or administration thereof, it shall be or
become unlawful or impossible to make, maintain, or fund any borrowing bearing
interest at the CD Rate Option or LIBOR Rate Option, the Bank's obligation to
make or continue the affected borrowing shall cease and Borrower shall choose,
subject to the limitations set forth herein, one of the other available interest
rate options, and Borrower shall pay the Bank any amounts necessary to
compensate the Bank for any such conversion to a new interest rate option.
Accrued interest on the Revolving Line of Credit Note shall be payable
on October 31, 1996, and on the Maturity Date; provided, however, that in the
event that Borrower opts to employ the LIBOR Rate Option or the CD Rate Option
for all or any portion of the Loan, accrued interest on such amount, in addition
to being payable as set forth above, shall also be payable in full on the
expiration of the Interest Period selected by Borrower.
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Interest payable under the Revolving Line of Credit Note shall be
calculated on the basis of actual days elapsed over a 360-day year.
SECTION VI. PAYMENTS AND PAST DUE AMOUNTS; COMMITMENT FEE.
6.01 All amounts payable by the Borrower to the Bank in connection
with the Loan shall be paid in lawful money of the United States of America in
collected funds to the Bank at the principal office of the Bank in Dallas,
Texas, not later than 12:00 o'clock Noon (Dallas, Texas time). Payments received
after 12:00 o'clock Noon (Dallas, Texas time) shall be deemed received on the
next Business Day. If any payment or prepayment falls due on a day that is not a
Business Day, then such due date shall be extended to the first succeeding
Business Day, unless the first succeeding Business Day is in the next calendar
month, in which event the payment or prepayment shall be made on the first
preceding Business Day. All payments and prepayments on the Revolving Line of
Credit Note shall be paid to and received by the Bank for application to the
Loan as follows: first to expenses for which the Bank has not been reimbursed;
then to accrued but unpaid interest; then to unpaid principal. All past due
payments of principal and interest shall bear interest at the Highest Lawful
Rate.
6.02 In consideration for extending to Borrower the Loan, Borrower
agrees to pay to Bank, on October 31, 1996 (for the period commencing on the
date of execution of this Agreement and extending through such date) and on the
Maturity Date (for the period from November 1, 1996 through the Maturity Date),
a commitment fee equal to eighteen (18) Basis Points per annum on the average
daily amount of the unadvanced portion of the Loan.
SECTION VII. CONDITIONS PRECEDENT.
7.01 Conditions Precedent to Obligation of Bank to Fund Initial
Advance. The obligation of the Bank to fund the initial Advance under this
Agreement is subject to the conditions precedent that as of the date of the
funding of such Advance, each of the following conditions shall have been met:
(a) all representations and warranties made by the Borrower
in this Agreement or in any other Loan Papers are true and correct and each of
the covenants by or on behalf of the Borrower and the Subsidiaries provided for
in this Agreement or in any other Loan Papers have been complied with in full;
and
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(b) no Event of Default has occurred or will occur as a
result of the making of such Advance; and
(c) the Bank shall have received the following, each in form
and substance satisfactory to the Bank:
(i) this Agreement, duly executed by the Borrower;
(ii) the Revolving Line of Credit Note, duly executed by
the Borrower;
(iii) a certified copy of the resolution or unanimous
consent of the board of directors of the Borrower approving and authorizing the
execution, delivery and performance of this Agreement, the Revolving Line of
Credit Note and all other matters contemplated thereby;
(iv) a copy of the articles of incorporation and bylaws
of the Borrower, certified to be true and correct by the secretary or assistant
secretary of Borrower; and a certificate of good standing with respect to the
Borrower issued by the Secretary of State of the State of Louisiana; and
(v) the legal opinion of counsel for the Borrower in
the State of Louisiana, in form and substance satisfactory to the Bank.
7.02 Additional Conditions Precedent to the Obligation of the
Bank to Fund All Advances. The obligation of the Bank to fund all Advances under
this Agreement (including the initial Advance) shall be subject to the further
conditions precedent that on the date of the funding of such Advance, the
following statements shall be true and correct and the Bank shall have the
option to require that Borrower provide Bank with a certificate signed by a duly
authorized officer of the Borrower, dated the date of the funding of such
Advance, stating that:
(a) no installment of principal or interest on any
Indebtedness or obligations due by Borrower under this Agreement is past due
(whether or not any cure period applicable to any of the foregoing has elapsed);
(b) Borrower and the Subsidiaries (to the extent
applicable) are in full compliance (including any waivers of same granted in
writing to the Borrower) with the covenants set forth in Sections 5.22, 5.23,
5.24, 5.25, 5.26, and 5.27 of the Loan Agreement (which
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have been incorporated herein by reference) whether or not any cure period
applicable to any of the foregoing under the provisions of Section 6.01 of the
Loan Agreement has elapsed;
(c) no event has occurred that, but for the passage of
time, would constitute an Event of Default under Section 6.01(g) of the Loan
Agreement; and
(d) no Event of Default has occurred, or will occur as
a result of the making of such Advance.
SECTION VIII. REPRESENTATIONS AND WARRANTIES.
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8.01 To induce the Bank to enter into this Agreement, Borrower
represents and warrants to the Bank that as of the date of this Agreement:
(a) Organization; Qualification; Power. The Borrower and each of
its Subsidiaries are duly organized, validly existing and are duly qualified and
in good standing in each jurisdiction in which the nature of their activities or
their properties owned or leased makes such qualification necessary, except for
jurisdictions individually or in the aggregate where the failure to be so
qualified or the failure to be in good standing could not be reasonably expected
to have a Material Adverse Effect. Additionally, Borrower and each of its
Subsidiaries have all requisite power, authority and legal right to conduct
their respective businesses and to execute, deliver and perform their respective
obligations under the Loan Papers.
(b) Corporate Authorization; Consents and Approvals. The
execution, delivery and performance by the Borrower of each of the Loan Papers
has been duly authorized by all necessary corporate action, and do not and will
not (i) require any consent or approval of the stockholders of the Borrower,
(ii) violate any provision of any law, rule, regulations, order, writ, judgment,
injunction, decree, determination or award presently in effect having
applicability to the Borrower or of the charter or bylaws (or other
organizational documentation) of the Borrower, (iii) result in a breach of or
constitute a default under any indenture or loan or credit agreement or any
other agreement or instrument to which the Borrower or any Subsidiary is a party
or by which it or its property may be bound or affected or (iv) result in or
require the creation or imposition of any lien or encumbrance upon or with
respect to any of the properties now owned or hereafter acquired by the Borrower
or any Subsidiary. Additionally, no authorization, consent, approval, license,
exemption, filing or registration with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, is or
will be necessary for the valid execution, delivery or performance of any of the
Loan Papers by the Borrower.
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(c) Business 6.05Business. The Borrower and its Subsidiaries are
engaged generally in the business of the ownership, operation, development,
design and/or construction of mausoleums, cemeteries, funeral homes, real estate
(incidental to the development of cemeteries and funeral homes), and related
activities.
(d) Financial Statements 6.06Financial Statements. The audited
annual financial statements and unaudited financial statements of the Borrower
and the Subsidiaries most recently furnished to the Bank were prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved and fairly present the financial condition and
results of operations of the Borrower and its Subsidiaries as of the effective
date thereof. There are no material liabilities of the Borrower or any of its
Subsidiaries, direct or indirect, fixed or contingent, which are not reflected
in any such financial statements or in the notes thereto.
(e) Litigation, Etc. Except as described in Exhibit "B" annexed
hereto, there is no litigation, proceeding or investigation pending or, to the
knowledge of the Borrower or its Subsidiaries, threatened against such entities
or any of their business operations, properties or assets in any court or before
any arbitrator of any kind or before any Governmental Body, and neither the
Borrower nor any of its Subsidiaries is in default with respect to any order of
any court, arbitrator or any Governmental Body and neither the Borrower nor any
of the Subsidiaries have any outstanding or unpaid judgments. For purposes of
this Section 8.01(e), any litigation, proceeding or investigation wherein the
amount in controversy is less than $1,000,000.00 need not be listed in Exhibit
"B". 6.09Litigation, Etc.
(f) Compliance with Law 6.10Compliance with Law. To the knowledge
of Borrower, the businesses and operations of the Borrower and its Subsidiaries
have been and are being conducted in accordance with all applicable laws, rules
and regulations of all Governmental Bodies, including, without limitation, all
Environmental Laws, except for (i) certain violations of such laws, rules and
regulations which will not materially adversely affect the business, prospects,
profits, properties or condition (financial or otherwise) of the Borrower or any
of its Subsidiaries and (ii) such violations of laws, rules and regulations that
previously have been disclosed in writing to the Bank.
(g) Compliance with Other Instruments 6.11Compliance with Other
Instruments. To the knowledge of Borrower, neither the Borrower nor any of its
Subsidiaries is in violation of any term or provision of any charter, bylaw,
mortgage, indenture, contract, agreement, instrument or license applicable to it
or any of its properties, and there is no term or provision thereof which
materially adversely affects or in the future may materially adversely affect
any of the business operations, properties or assets or the condition, financial
or otherwise, of the Borrower or any of its Subsidiaries.
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(h) Adverse Developments 6.12Adverse Developments. Since the
effective date of the last audited financial statements provided by Borrower to
the Bank, there has occurred no event which could reasonably be expected to have
a Material Adverse Effect.
(i) Legally Enforceable Agreements 6.18Legally Enforceable
Agreements. This Agreement is, and each of the other Loan Papers heretofore or
hereafter delivered to the Bank under this Agreement will constitute legal,
valid and binding obligations of the Borrower and the Subsidiaries, as the case
may be, enforceable against the Borrower and/or the Subsidiaries, as the case
may be, in accordance with their respective terms.
(j) Disclosure. No statement, information, report, representation
or warranty made by the Borrower in this Agreement or any other Loan Paper, or
furnished to the Bank in connection with any Loan Paper, contains any untrue
statement of a material fact or omits to state any material fact necessary to
make the statements herein or therein not misleading.
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SECTION IX. COVENANTS.
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9.01 Incorporation of Covenants from Loan Agreement. For so long as
the Bank has any Commitment or obligation hereunder or any portion of the
Obligation remains unpaid, Borrower hereby covenants and agrees that the
covenants by and/or on behalf of Borrower and the Subsidiaries set forth in
Article V of the Loan Agreement are hereby incorporated by reference into this
Agreement and are hereby undertaken in favor of Bank to the same extent as same
are undertaken in favor of "Agent" and the "Banks" under the Loan Agreement;
provided, however, that Borrower shall be under no duty to furnish Bank with any
financial statement, report or similar documentation required hereunder if the
identical financial statement, report or documentation has been furnished to
Bank pursuant to the Loan Agreement. Such covenants shall survive whether or not
the Loan Agreement is terminated during the term of this Agreement. Without
limiting the generality of the foregoing, it is specifically understood and
agreed that (i) the proceeds of the Loan may only be used for the purposes (and
subject to the limitations) set forth in the Loan Agreement and (ii) in addition
to the obligation of the Borrower to notify the Bank of certain events set forth
in Section 5.10 and elsewhere in the Loan Agreement, Borrower shall notify the
Bank within five (5) Business Days following the date on which any Officer of
Borrower obtains knowledge of the occurrence of any Event of Default as defined
in this Agreement. As used in the preceding sentence, the term "Officer" shall
refer to the members of the senior management of Borrower including, without
limitation, the individuals and officers referred to in Section 5.10 of the Loan
Agreement.
9.02 Covenants Do Not Expand Rights of Borrower. The covenants
incorporated into this Agreement from the Loan Agreement contain provisions
pursuant to which the Bank grants to Borrower certain rights, benefits and
privileges. For example (and without limitation), Section 5.12 of the Loan
Agreement (Restricted Loans and Investments), among other things, authorizes
Borrower to (a) establish one finance company subsidiary (see subsection (k));
(b) make minority investments not to exceed $25 million (see subsection (m));
(c) make certain investments in land not to exceed $2 million (see subsection
(r)); and (d) make certain "other investments" which do not exceed 2% of
Borrower's Net Worth (see subsection (t)). It is specifically understood and
agreed by the parties hereto that the incorporation into this agreement of the
covenants set forth in Article V of the Loan Agreement shall not be construed to
grant to the Borrower any greater or more expansive rights, benefits and
privileges than those set forth in Article V of the Loan Agreement. Accordingly,
and again by way of example only, Borrower shall continue to be limited to the
establishment of only one finance company subsidiary under Section 5.12(k), and
the permitted allowances for "minority investments", investments in land and
"other investments" set forth in subsections 5.12 (m),(r),(t), respectively, of
the Loan Agreement shall not be increased by virtue of the incorporation of
those provisions into this Agreement.
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SECTION X. EVENTS OF DEFAULT; CERTAIN RIGHTS OF BANK.
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10.01 Nature of Events. An "Event of Default" hereunder shall exist
hereunder if any of the following shall occur:
(a) Principal and Interest Payments. The Borrower shall fail
to make any payment of principal or interest on the Obligation or any other
Indebtedness owed by the Borrower to the Bank, on or before the date such
payment is due, and same shall not have been cured within five (5) days
following written notice to Borrower; or
(b) Representations and Warranties. If any warranty,
representation or other statement by or on behalf of the Borrower or any
Subsidiary contained in this Agreement or in any certificate, opinion or
financial or other statement furnished at any time under or in connection with
this Agreement is false, misleading or incorrect in any material respect on or
as of the date made or deemed made. Notwithstanding the foregoing, in the event
that the breaching party was unaware of the breach, such party shall have
fifteen (15) days following its discovery to cure such breach, and:
(i) with respect to a breach of a representation or
warranty set forth in Sections 8.01(c), 8.01(d) or 8.01(i) of this Agreement, in
the event that (A) the task necessary to cure such default would reasonably
require more than fifteen (15) days to complete, and (B) such breaching party
diligently undertakes such task within fifteen (15) days following its discovery
of same, then such breaching party shall be entitled to complete the task so
long as such diligent efforts are maintained, but in no event for a period that
exceeds ninety (90) days from its discovery of such breach; and
(ii) with respect to a breach of a representation or
warranty set forth in Sections 8.01(a), 8.01(b) or 8.01(f) of this Agreement, in
the event that (A) the task necessary to cure such default would reasonably
require more than fifteen (15) days to complete, and (B) such breaching party
diligently undertakes such task within fifteen (15) days following its discovery
of same, then such breaching party shall be entitled to complete the task so
long as such diligent efforts are maintained; or
(c) Covenant Defaults. The Borrower or any Subsidiary shall
fail to perform or observe any other term, provision or agreement contained in
this Agreement and such failure shall continue for a period of fifteen (15) days
following written notice to Borrower (except for the obligation to provide Bank
with notice of default or similar notices, for which there shall be no cure
period); provided, however, that with respect to the covenants of the Borrower
and the
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Subsidiaries incorporated herein by reference to Article V of the Loan
Agreement, it is specifically understood that no Event of Default hereunder
shall occur until the expiration of any cure period applicable to such covenant
under the Loan Agreement; or
(d) Loan Agreement Defaults. The occurrence of an "Event of
Default" as defined in the Loan Agreement; or
(e) Loan Agreement Expiration. The expiration or cancellation
of the Loan Agreement.
10.02 Certain Remedies of Bank. Upon the occurrence of an Event of
Default, Bank shall be entitled to exercise for itself each of the rights and
remedies available to the "Agent" and/or the "Banks" under Sections 6.02(a)(i),
(ii), (iii) and (iv) and Section 6.02 (b) of the Loan Agreement (each of which
provisions being incorporated herein by reference), together with any other
rights and remedies available to it under applicable law.
10.03 Certain Additional Rights of Bank. In addition to the
foregoing, the Bank shall be entitled to exercise for itself all of the rights,
privileges, benefits and advantages available to the "Agent" or the "Banks" (and
Borrower hereby undertakes in favor of Bank each of the duties and obligations)
set forth in Sections 6.02(c), 6.02(d), 6.02(e), 6.02(f), 6.02(g), 6.02(h) and
6.02(i) of the Loan Agreement (each of which provisions being incorporated
herein by reference).
10.04 Application of Proceeds. Any and all cash proceeds ever
received by the Bank resulting from the exercise of any rights pursuant to this
Agreement or the other Loan Papers following an Event of Default shall be
applied in such manner as the Bank shall determine.
SECTION XI. GOVERNING LAW. THE LAWS OF THE STATE OF TEXAS AND OF THE UNITED
STATES OF AMERICA SHALL GOVERN THE RIGHTS AND DUTIES OF THE PARTIES HERETO AND
THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND INTERPRETATION OF THE LOAN PAPERS.
COURTS WITHIN THE STATE OF TEXAS SHALL HAVE JURISDICTION OVER ANY AND ALL
DISPUTES BETWEEN THE PARTIES TO THIS AGREEMENT, INCLUDING, BUT NOT LIMITED TO,
ALL DISPUTES ARISING OUT OF OR RELATING TO THIS AGREEMENT, AND VENUE IN ANY SUCH
DISPUTE, WHETHER IN FEDERAL OR STATE COURT, SHALL BE LAID IN DALLAS COUNTY,
TEXAS.
SECTION XII. MISCELLANEOUS:
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12.01 Notices. All notices, consents, approvals, requests, demands
and other communications hereunder shall be in writing (including telecopy
communications) and shall be made in accordance with the provisions and
procedures set forth in Section 7.02 of the Loan Agreement.
12.02 Survival. All warranties, representations, and covenants
made by or on behalf of the Borrower and each of the Subsidiaries herein or in
any other Loan Paper shall be considered to have been relied upon by the Bank
and shall survive the delivery to the Bank of such Loan Paper or the extension
of the Revolving Line of Credit Note, regardless of any investigation made by or
on behalf of the Bank.
12.03 Construction. Each party hereto acknowledges that each has had
the benefit of legal counsel of its own choice and has been afforded an
opportunity to review this Agreement and the other Loan Papers with its legal
counsel and that this Agreement and the other Loan Papers shall be construed as
if jointly drafted by the parties hereto.
12.04 Amendments or Modifications. No amendment or modification to
this Agreement shall in any event be effective unless the same shall be in
writing and signed by the parties hereto. No waiver of any provisions of this
Agreement, nor consent to any departure by the Borrower or any Subsidiary from
the provisions of this Agreement, shall be effective unless same shall be in
writing and signed by the Bank.
12.05 Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the Borrower and the Bank, and their respective
successors and assigns; provided that the Borrower may not transfer its right to
borrow hereunder without the prior written consent of the Bank.
12.06 Counterparts. Multiple counterparts of this Agreement may be
signed by the parties, each of which shall be an original but all of which
together shall constitute one and the same instrument.
12.07 Further Assurances. Borrower will promptly cure or cause to be
cured any defects in the execution and delivery of this Agreement and the other
Loan Papers and will immediately execute and deliver (and shall cause its
Subsidiaries to execute and deliver), upon request of Bank, such further
documents or agreements that are necessary to comply with or accomplish the
covenants and agreements contained in this Agreement and the other Loan Papers.
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12.08 Expenses. Whether or not any Advance is made hereunder, the
Borrower will pay all expenses relating to the Loan Papers, including, but not
limited to the reasonable fees and disbursements of Bank's counsel(s); the
reasonable out-of-pocket expenses of the Bank; all reasonable expenses relating
to any amendments, waivers or consents pursuant to the provisions hereof; and
all reasonable legal fees and out of pocket expenses incurred in connection with
the enforcement of the rights, remedies and privileges of the Bank under this
Agreement and under any other Loan Paper, as well as any other legal and out of
pocket expenses provided for under any of the Loan Papers.
12.09 NON-APPLICATION OF CHAPTER 15, ARTICLE 5069, TEXAS CIVIL
STATUTES. THE PROVISIONS OF VERNON'S TEXAS CIVIL STATUTES, ARTICLE 5069,
CHAPTER 15 (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS AND REVOLVING
TRI-PARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT, THE REVOLVING LINE OF
CREDIT NOTE, ANY OF THE OTHER LOAN PAPERS, OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
12.10 Assignments and Participations. The Bank shall be entitled to
grant one or more assignments or participations in the Revolving Line of Credit
Note provided that, except with the prior written consent of Borrower, such
assignment/participations may only be granted to an Affiliate of the Bank. It
is specifically understood, however, that such assignment/participation shall
not relieve the Bank of its obligations hereunder nor shall the recipient of
such assignment/participation become a party to this Agreement.
12.11 Subordination. The payment of all present and future
Indebtedness due by Borrower to any Subsidiary is hereby subordinated in full to
the payment in full of the Revolving Line of Credit Note and other Obligations;
provided, however, that so long as no Event of Default has occurred and is
continuing, such Indebtedness of Borrower may be repaid according to its terms.
After the occurrence of an Event of Default, no sum shall be paid on account of
any of such Indebtedness. It is specifically understood that the provisions of
this Section 12.11 shall apply to all of the Subsidiaries of Borrower, whether
same are presently existing or are acquired or created hereafter. Upon request
of the Bank, Borrower shall cause each Subsidiary to execute a subordination
agreement in form and substance satisfactory to Bank.
12.12 Certain Additional Provisions. The following provisions of the
Loan Agreement are incorporated by reference into this Agreement, Borrower
hereby (a) granting to the Bank the same rights and benefits granted to "Agent"
and the "Banks" under such sections and (b) undertaking in favor of Bank the
same duties and obligations as are set forth in such sections:
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(i) Section 7.04 - Direct or Indirect Action;
(ii) Section 7.06 - Maximum Interest Rate;
(iii) Section 7.07 - Invalid Provisions;
(iv) Section 7.10 - Accounting Principles;
(v) Section 7.16 - Determination of Interest Rate; and
(vi) Section 7.21 - Miscellaneous Additional Compensation to
Bank.
12.13 Deposits; Set Off. Any deposits or other sums credited by or due
from the Bank or any of its participants, assignees or Affiliates to the
Borrower or any of its Subsidiaries shall at all times constitute security for
the Obligation of the Borrower to the Bank and, upon the occurrence of an Event
of Default, may be set off against any and all liabilities, direct or indirect,
absolute or contingent, due or to become due, now existing or hereafter arising,
of the Borrower to the Bank, and the Borrower hereby irrevocably authorizes the
Bank and any of its participants, assignees or Affiliates to make such setoff.
The rights granted by this Section 12.13 are in addition to any other rights of
the Bank including, without limitation, any rights of set-off under any
statutory bankers' lien and under any of the Loan Papers. Notwithstanding the
foregoing, specifically excepted from this Section 12.13 shall be funds managed
by, under the custody of or placed in escrow accounts with the trust department
of the Bank or its participants, assignees or Affiliates for purposes of
providing future delivery of goods, property and services, which funds shall not
be subject to set-off pursuant hereto.
12.14 Interpretation of Agreement. At the request of the parties
hereto and for their convenience, various provisions of the Loan Agreement have
been incorporated by reference into this Agreement. It is the intention of the
parties hereto that the various rights, remedies and privileges granted to the
"Agent" and "Banks" under the Loan Agreement provisions incorporated herein by
reference, and the duties and obligations of the Borrower and the Subsidiaries
undertaken therein, are intended to be granted to and/or undertaken in favor of
the Bank hereunder with respect to the Loan that is the subject of this
Agreement. To the extent that any ambiguity exists, the parties to this
Agreement agree to interpret such provisions incorporated by reference from the
Loan Agreement in a manner intended to give effect to the intentions of the
parties in entering this Agreement.
12.14 Texas Opinion. Promptly upon a request from the Bank, the
Borrower will furnish to the Bank a legal opinion of Texas counsel to the
Borrower, in form and substance satisfactory to the Bank.
12.15 PREVIOUS AGREEMENTS; ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND
THE OTHER WRITTEN LOAN PAPERS REPRESENT, COLLECTIVELY,
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THE FINAL AGREEMENT AMONG THE PARTIES THERETO WITH RESPECT TO THE SUBJECT MATTER
HEREOF AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF SUCH PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS AMONG THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BORROWER:
XXXXXXX ENTERPRISES, INC.
By:
Name:
Title:
BANK:
NATIONSBANK OF TEXAS, N.A.
By: ___________________________
Xxxxxx Xxxxx
Senior Vice President
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