EXHIBIT 10.41
EXECUTION
CREDIT AGREEMENT
among
XXXXX-XXXXXXXX ENERGY INC.,
as the Borrower,
ROYAL BANK OF CANADA,
as Administrative Agent
and
as Collateral Agent
and
The Lenders Party Hereto
$55,000,000
SENIOR CREDIT FACILITY
RBC CAPITAL MARKETS
As Lead Arranger and Sole Bookrunner
DATED AS OF JULY 11, 2005
TABLE OF CONTENTS
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Page
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ARTICLE I. DEFINITIONS AND ACOUNTING TERMS.............................................................1
1.01 DEFINED TERMS...................................................................................1
1.02 OTHER INTERPRETIVE PROVISIONS..................................................................28
1.03 ACCOUNTING TERMS...............................................................................28
1.04 ROUNDING.......................................................................................28
1.05 REFERENCES TO AGREEMENTS AND LAWS..............................................................28
ARTICLE II. THE COMMITMENT AND BORROWINGS.............................................................28
2.01 LOANS..........................................................................................28
2.02 BORROWING BASE DETERMINATIONS..................................................................29
2.03 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.............................................30
2.04 PREPAYMENTS....................................................................................31
2.05 REDUCTION OR TERMINATION OF COMMITMENTS........................................................33
2.06 REPAYMENT OF LOANS.............................................................................33
2.07 INTEREST.......................................................................................34
2.08 FEES...........................................................................................34
2.09 COMPUTATION OF INTEREST AND FEES...............................................................35
2.10 EVIDENCE OF DEBT...............................................................................35
2.11 PAYMENTS GENERALLY.............................................................................36
2.12 SHARING OF PAYMENTS............................................................................38
2.13 PRIORITY OF HEDGING OBLIGATIONS................................................................38
2.14 LETTERS OF CREDIT..............................................................................38
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY.....................................................45
3.01 TAXES..........................................................................................45
3.02 ILLEGALITY.....................................................................................45
3.03 INABILITY TO DETERMINE RATES...................................................................46
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON EURODOLLAR RATE LOANS.........46
3.05 FUNDING LOSSES.................................................................................47
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION............................................47
3.07 SURVIVAL.......................................................................................47
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ARTICLE IV. CONDITIONS PRECEDENT.......................................................................47
4.01 CONDITIONS PRECEDENT...........................................................................48
4.02 DEADLINE FOR CONDITIONS EFFECTIVE DATE.........................................................50
4.03 CONDITIONS TO ALL LOANS AND L/C CREDIT EXTENSION...............................................50
4.04 CONDITIONS TO ALL ACQUISITION LOANS............................................................51
ARTICLE V REPRESENTATIONS AND WARRANTIES.............................................................51
5.01 EXISTENCE; QUALIFICATION AND POWER; COMPLIANCE WITH LAWS.......................................52
5.02 AUTHORIZATION; NO CONTRAVENTION................................................................52
5.03 GOVERNMENTAL AUTHORIZATION.....................................................................52
5.04 BINDING EFFECT.................................................................................52
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT...............................................52
5.06 LITIGATION.....................................................................................53
5.07 NO DEFAULT.....................................................................................53
5.08 OWNERSHIP OF PROPERTY; LIENS...................................................................53
5.09 ENVIRONMENTAL COMPLIANCE.......................................................................53
5.10 INSURANCE......................................................................................53
5.11 TAXES..........................................................................................53
5.12 ERISA COMPLIANCE...............................................................................53
5.13 SUBSIDIARIES AND OTHER INVESTMENTS.............................................................54
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT;
USE OF PROCEEDS................................................................................54
5.15 DISCLOSURE.....................................................................................55
5.16 LABOR MATTERS..................................................................................55
5.17 COMPLIANCE WITH LAWS...........................................................................55
5.18 THIRD PARTY APPROVALS..........................................................................55
5.19 SOLVENCY.......................................................................................55
5.20 COLLATERAL.....................................................................................55
5.21 INTELLECUTAL PROPERTY; LICENSES, ETC...........................................................56
5.22 LEASED LOCATIONS...............................................................................56
5.23 PERMITTED ACQUISITIONS.........................................................................56
5.24 MATERIAL AGREEMENTS............................................................................56
ARTICLE VI. AFFIRMATIVE COVENANTS......................................................................56
6.01 FINANCIAL STATEMENTS...........................................................................56
6.02 CERTIFICATES; OTHER INFORMATION................................................................57
6.03 NOTICES........................................................................................58
6.04 PAYMENT OF OBLIGATIONS.........................................................................58
6.05 PRESERVATION OF EXISTENCE, ETC.................................................................59
6.06 MAINTENANCE OF ASSETS AND BUSINESS; MOVEMENT OF COLLATERAL.....................................59
6.07 MAINTENANCE OF INSURANCE.......................................................................59
6.08 COMPLIANCE WITH LAWS AND CONTRACTUAL OBLIGATIONS...............................................59
6.09 BOOKS AND RECORDS..............................................................................60
6.10 INSPECTION RIGHTS..............................................................................60
6.11 COMPLIANCE WITH ERISA..........................................................................60
6.12 USE OF PROCEEDS................................................................................60
6.13 GUARANTIES.....................................................................................60
6.14 FURTHER ASSURANCES; ADDITIONAL COLLATERAL......................................................60
6.15 LANDLORD LIEN WAIVERS..........................................................................61
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ARTICLE VII NEGATIVE COVENANTS.........................................................................61
7.01 LIENS..........................................................................................61
7.02 INVESTMENTS....................................................................................63
7.03 SWAP CONTRACTS.................................................................................63
7.04 INDEBTEDNESS...................................................................................63
7.05 LEASE OBLIGATIONS..............................................................................64
7.06 FUNDAMENTAL CHANGES............................................................................64
7.07 DISPOSITIONS...................................................................................65
7.08 RESTRICTED PAYMENTS; DISTRIBUTIONS AND REDEMPTIONS.............................................65
7.09 ERISA..........................................................................................65
7.10 CHANGE IN NATURE OF BUSINESS...................................................................66
7.11 TRANSACTIONS WITH AFFILIATES...................................................................66
7.12 BURDENSOME AGREEMENTS..........................................................................66
7.13 USE OF PROCEEDS................................................................................66
7.14 CAPITAL EXPENDITURES...........................................................................66
7.15 PREPAYMENTS....................................................................................66
7.16 SUBORDINATED INDEBTEDNESS......................................................................66
7.17 AMENDMENTS OF CONSTITUTIVE DOCUMENTS...........................................................67
7.18 ACCOUNTING CHANGES.............................................................................67
7.19 FINANCIAL COVENANTS...........................................................................67
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES.............................................................68
8.01 EVENTS OF DEFAULT..............................................................................68
8.02 REMEDIES UPON EVENT OF DEFAULT.................................................................70
8.03 APPLICATION OF FUNDS...........................................................................71
ARTICLE IX. ADMINISTRATIVE AGENT.......................................................................71
9.01 APPOINTMENT AND AUTHORIZATION OF AGENTS; LENDER HEDGING AGREEMENTS.............................72
9.02 DELEGATION OF DUTIES...........................................................................72
9.03 DEFAULT; COLLATERAL............................................................................72
9.04 LIABILITY OF AGENTS............................................................................74
9.05 RELIANCE BY ADMINISTRATIVE AGENT...............................................................74
9.06 NOTICE OF DEFAULT..............................................................................75
9.07 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE AGENT.............................75
9.08 INDEMNIFICATION OF AGENTS......................................................................76
9.09 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY................................................76
9.10 SUCCESSOR ADMINISTRATIVE AGENT.................................................................76
9.11 OTHER AGENTS; ARRANGER.........................................................................77
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ARTICLE X MISCELLANEOUS..............................................................................77
10.01 AMENDMENTS, RELEASE OF COLLATERAL, ETC.........................................................77
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.............................................79
10.03 NO WAIVER; CUMULATIVE REMEDIES.................................................................80
10.04 ATTORNEY COSTS; EXPENSES AND TAXES.............................................................80
10.05 INDEMNIFICATION................................................................................80
10.06 PAYMENTS SET ASIDE.............................................................................81
10.07 SUCCESSORS AND ASSIGNS.........................................................................82
10.08 CONFIDENTIALITY................................................................................84
10.09 SET-OFF........................................................................................85
10.10 INTEREST RATE LIMITATION.......................................................................85
10.11 COUNTERPARTS...................................................................................85
10.12 INTEGRATION....................................................................................85
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.....................................................86
10.14 SEVERABILITY...................................................................................86
10.15 FOREIGN LENDERS................................................................................86
10.16 GOVERNING LAW..................................................................................87
10.17 WAIVER OF RIGHT TO TRIAL BY JURY, ETC..........................................................87
10.18 ENTIRE AGREEMENT...............................................................................88
SCHEDULES
2.01 Commitments
5.05 Existing Indebtedness
5.13 Subsidiaries and other Equity Investments
5.22 Leased Locations
5.23 Permitted Acquisitions
7.01 Existing Liens
7.12 Agreements Restricting Liens on Leasehold Interests
10.02 Addresses for Notices to Borrower, Guarantors and Administrative Agent
EXHIBITS
Exhibit: Form of:
-------- --------
A-1 Borrowing Notice
A-2 Conversion/Continuation Notice
A-3 Payment/Prepayment Notice
B-1 Revolving Note
B-2 Term Note
B-3 Acquisition Note
C-1 Compliance Certificate pursuant to SECTION 6.02(A)
C-2 Borrowing Base
D Assignment and Assumption
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of July 11, 2005, among
XXXXX-XXXXXXXX ENERGY INC., a Delaware corporation (the "BORROWER"), each lender
from time to time party hereto (collectively, the "LENDERS" and individually, a
"LENDER"), and ROYAL BANK OF CANADA, as Administrative Agent and L/C Issuer.
The Borrower has requested that the Lenders provide a (i) revolving
credit facility, (ii) a term loan facility, and (iii) an acquisition facility
and the Lenders are willing to provide such facilities on the terms and
conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
ARTICLE I.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS.
As used in this Agreement, the terms defined in the introductory
paragraph hereof shall have the meanings therein indicated and the following
terms shall have the meanings set forth below:
ACCOUNTS RECEIVABLE means and includes all of the Borrower's and its
Domestic Subsidiaries' now owned or hereafter acquired or arising accounts, as
defined in the UCC, including any rights to payment for the sale or lease of
goods or rendition of services, whether or not they have been earned by
performance.
ACQUISITION means any transaction or series of related transactions for
the purpose of, or resulting in, directly or indirectly: (a) the acquisition by
the Borrower or any Subsidiary of all or substantially all of the assets located
in the United States of a Person or of any business or division of a Person; (b)
the acquisition by the Borrower or any Subsidiary of more than 50% of any class
of Voting Stock (or similar Equity Interests) of any Domestic Person; or (c) a
merger, consolidation or other combination by the Borrower or any Subsidiary
with another Person if the Borrower or any Subsidiary is the surviving entity;
PROVIDED THAT, (i) in any merger involving the Borrower, the Borrower must be
the surviving entity; and (ii) in any merger involving a Subsidiary which is a
Loan Party and another Subsidiary which is not a Loan Party, the Subsidiary
which is a Loan Party shall be the survivor.
ACQUISITION FACILITY means the non-revolving credit facility as
described in and subject to the limitations set forth in SECTION 2.01(C).
ACQUISITION FACILITY COMMITMENT means as to each Lender, its obligation
to make Acquisition Loans to the Borrower pursuant to SECTION 2.01(C), in an
amount not to exceed its Acquisition Facility Committed Sum, in each case as
such amount may be reduced or adjusted from time to time in accordance with this
Agreement (collectively, the "AGGREGATE ACQUISITION FACILITY COMMITMENT").
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ACQUISITION FACILITY COMMITTED SUM means for any Lender with respect to
the Acquisition Facility, at any date of determination occurring prior to the
Acquisition Facility Drawdown Termination Date, the amount stated beside such
Lender's name under the heading for the Acquisition Facility on the
most-recently amended SCHEDULE 2.01 to this Agreement (which amount is subject
to increase, reduction, or cancellation in accordance with the Loan Documents).
ACQUISITION FACILITY DRAWDOWN TERMINATION DATE means (a) the fifth
Business Day following the Conditions Effective Date, or (b) such earlier
effective date of any other termination, cancellation, or acceleration of the
Aggregate Acquisition Facility Commitment under this Agreement.
ACQUISITION LOAN means an extension of credit by a Lender to the
Borrower pursuant to SECTION 2.01(C).
ACQUISITION LOAN PRINCIPAL DEBT means, on any date of determination,
the aggregate unpaid principal balance of all Acquisition Loans.
ACQUISITION NOTE means a promissory note of Borrower in substantially
the form of EXHIBIT B-4, evidencing the obligation of Borrower to repay the
Acquisition Facility Loans and all renewals and extensions of all or any part
thereof and "ACQUISITION NOTES" refers to all such promissory notes.
ADMINISTRATIVE AGENT means Royal Bank of Canada in its capacity as
administrative agent under any of the Loan Documents, or any successor
administrative agent.
ADMINISTRATIVE AGENT'S OFFICE means the Administrative Agent's address
and, as appropriate, account as set forth on SCHEDULE 10.02, or such other
address or account as the Administrative Agent may from time to time notify to
the Borrower and the Lenders.
ADMINISTRATIVE DETAILS FORM means the Administrative Details Reply Form
furnished by a Lender to the Administrative Agent in connection with this
Agreement.
AFFILIATE means, as to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to be controlled by any
other Person if such other Person possesses, directly or indirectly, power (a)
to vote 10% or more of the Voting Stock (on a fully diluted basis) having
ordinary voting power for the election of directors, managing members, or
managing general partner; or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
AGENT/ARRANGER FEE LETTER has the meaning specified in SECTION 2.08(B).
AGENT-RELATED PERSONS means the Administrative Agent (including any
successor administrative agent) and its respective Affiliates (including the
officers, directors, employees, agents and attorneys-in-fact of such Person).
AGGREGATE ACQUISITION FACILITY COMMITMENT has the meaning specified in
the definition of ACQUISITION FACILITY COMMITMENT.
AGGREGATE COMMITMENT means collectively (i) the Aggregate Revolving
Commitment, (ii) the Aggregate Term Loan Commitment, and (iii) the Aggregate
Acquisition Facility Commitment.
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AGGREGATE REVOLVING COMMITMENT has the meaning specified in the
definition of REVOLVING COMMITMENT.
AGGREGATE TERM LOAN COMMITMENT has the meaning specified in the
definition of TERM LOAN COMMITMENT.
AGREEMENT means this Credit Agreement.
AIRCOMP means AirComp, LLC, a Delaware limited liability company and
Wholly-Owned Subsidiary.
AIRCOMP RELATED SUBORDINATED INDEBTEDNESS means Indebtedness of the
Borrower owing to M-I, L.L.C. in connection with that certain promissory note
dated July 11, 2005 in the original principal amount of $4,000,000.00, which
Indebtedness has been subordinated to the Obligations pursuant to the AirComp
Subordination Agreement.
AIRCOMP SUBORDINATION AGREEMENT means that certain subordination
agreement of even date herewith among Borrower, M-I, L.L.C., and Administrative
Agent for the benefit of the Lenders, in form and substance satisfactory to the
Administrative Agent, and all supplements, assignments, amendments, and
restatements thereto (or any agreement in substitution therfor).
APPLICABLE RATE means the following amounts per annum set forth in the
table below, on any date of determination, with respect to the Type of Credit
Extension and Loan at such date of determination and Level 1 applies if the
Leverage Ratio on such date is less than 2.00 to 1.00 and Xxxxx 0 applies if the
Leverage Ratio on such date is 2.00 to 1.00 or greater:
Loan Letter of Credit and Eurodollar Rate Base Rate + (basis points)
+ (basis points)
From Closing Date From one year From Closing Date From one year
until one year anniversary of Closing until one year anniversary of Closing
anniversary of Date and thereafter anniversary of Date and thereafter
Closing Date Closing Date
Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 0 Xxxxx 1 Xxxxx 0 Xxxxx 0 Xxxxx 0
Xxxxxxxxx Xxxx 250.0 300.0 350.0 400.0 150.0 200.00 250.0 300.0
Term Loan 300.0 350.0 400.0 450.0 200.0 250.0 300.0 350.0
Acquisition Loan 300.0 350.0 400.0 450.0 200.0 250.0 300.0 350.0
Any increase or decrease in the Applicable Rate resulting from a change
in the Leverage Ratio shall become effective as of the first day of the fiscal
quarter of the Borrower immediately following the date of a Compliance
Certificate delivered pursuant to SECTION 6.02(A); PROVIDED, HOWEVER, that if no
Compliance Certificate is delivered during a fiscal quarter when due in
accordance with such Section, Level 2 shall apply as of the first day of such
following fiscal quarter. The Applicable Rate in effect from the Closing Date
through September 30, 2005 shall be based upon Level 2.
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APPROVED FUND means any Fund that is administered or managed by a
Lender, an Affiliate of a Lender, or an entity or an Affiliate of an entity that
administers or manages a Lender.
ARRANGER means RBC Capital Markets in its capacity as lead arranger and
sole bookrunner.
ASSIGNMENT AND ASSUMPTION means an Assignment and Assumption
substantially in the form of EXHIBIT D.
ATTORNEY COSTS means and includes the reasonable fees and disbursements
of any law firm or other external counsel and the allocated cost of internal
legal services and all disbursements of internal counsel.
ATTRIBUTABLE INDEBTEDNESS means, on any date, (a) in respect of any
Capital Lease of any Person, the capitalized amount thereof that would appear on
a balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of
the remaining lease payments under the relevant lease that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP if
such lease were accounted for as a capital lease.
AUTHORIZATIONS means all filings, recordings, and registrations with,
and all validations or exemptions, approvals, orders, authorizations, consents,
franchises, licenses, certificates, and permits from, any Governmental
Authority.
BASE RATE means for any day a fluctuating rate per annum equal to the
higher of (a) the Federal Funds Rate plus 1/2 of 1% and (b) the rate of interest
in effect for such day as publicly announced from time to time by the
Administrative Agent as its "PRIME RATE." Such rate is a rate set by the
Administrative Agent based upon various factors including the Administrative
Agent's costs and desired return, general economic conditions and other factors,
and is used as a reference point for pricing some loans, which may be priced at,
above, or below such announced rate. Any change in such rate announced by the
Administrative Agent shall take effect at the opening of business on the day
specified in the public announcement of such change.
BASE RATE LOAN means a Loan that bears interest based on the Base Rate.
BOARD means the Board of Governors of the Federal Reserve System of the
United States.
BORROWER has the meaning specified in the introductory paragraph
hereof.
BORROWER AFFILIATE means the Borrower's Subsidiaries.
BORROWING means a borrowing consisting of simultaneous Loans of one or
more Types, which are either Base Rate Loans or Eurodollar Rate Loans, and if
Eurodollar Rate Loans have the same Interest Period, made by each of the Lenders
pursuant to SECTION 2.01.
BORROWING BASE has the meaning given to such term in SECTION 2.02.
BORROWING BASE REPORT means a report in the form attached hereto as
EXHIBIT C-2, appropriately completed, together with the following attachments:
(a) a detailed aged schedule of all Accounts Receivable as of the date specified
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in such report, listing face amounts and dates of invoices of each such Accounts
Receivable and the name of each account debtor obligated on such Accounts
Receivable (and, upon request of Administrative Agent, copies of invoices,
credit reports, and any other matters and information relating to the Accounts
Receivable), (b) a detailed aged schedule of all Eligible Accounts Receivable as
of the date specified in such report, listing face amounts and dates of invoices
of each such Accounts Receivable and the name of each account debtor obligated
on such Accounts Receivable (and, upon request of Administrative Agent, copies
of invoices, credit reports, and any other matters and information relating to
the Eligible Accounts Receivable), (c) an Inventory report, setting forth the
location, type and cost of all such Inventory, and (d) a summary aged listing of
Borrower's accounts payable and an aged list of the ten (10) largest accounts
payable.
BORROWING NOTICE means a notice of (a) a Borrowing, (b) a conversion of
Loans from one Type to the other, or (c) a continuation of Loans as the same
Type, pursuant to SECTION 2.03(A), which, if in writing, shall be substantially
in the form of EXHIBIT A-1 or A-2, as applicable.
BUSINESS DAY means any day other than a Saturday, Sunday, or other day
on which commercial banks are authorized to close under the Laws of Texas, or
are in fact closed and, if such day relates to any Eurodollar Rate Loan, means
any such day on which dealings in Dollar deposits are conducted by and between
banks in the applicable offshore Dollar interbank market.
CAPITAL EXPENDITURE by a Person means an expenditure (determined in
accordance with GAAP) for any fixed asset owned by such Person for use in the
operations of such Person having a useful life of more than one year, or any
improvements or additions thereto.
CAPITAL LEASE means any capital lease or sublease which should be
capitalized on a balance sheet in accordance with GAAP.
CASH COLLATERALIZE means to pledge and deposit with or deliver to the
Administrative Agent, for the benefit of the L/C Issuer and the Lenders, as
collateral for the L/C Obligations, cash and deposit account balances pursuant
to documentation in form and substance satisfactory to the Administrative Agent
and the L/C Issuer (which documents hereby are consented to by the Lenders).
CASH EQUIVALENTS means:
(a) United States Dollars;
(b) direct general obligations, or obligations of, or
obligations fully and unconditionally guaranteed as to the timely
payment of principal and interest by, the United States or any agency
or instrumentality thereof having remaining maturities of not more than
13 months, but excluding any such securities whose terms do not provide
for payment of a fixed dollar amount upon maturity or call for
redemptions;
(c) certificates of deposit and eurodollar-time deposits with
maturities of thirteen (13) months or less, bankers acceptances with
maturities not exceeding 180 days, overnight bank deposits and other
similar short term instruments, in each case with any domestic
commercial bank having capital and surplus in excess of $250,000,000
and having a rating of at least "A2" by Xxxxx'x and at least "A" by
S&P;
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(d) repurchase obligations with a term of not more than 13
months for underlying securities of the types described in (b) and (c)
above entered into with any financial institution meeting the
qualifications in (c) above;
(e) commercial paper (having original maturities of not more
than 270 days) of any Person rated "P-1" or better by Xxxxx'x or "A-1"
or the equivalent by S&P; and
(f) money market mutual or similar funds having assets in
excess of $100,000,000, at least 95% of the assets of which are
comprised of assets specified in clause (a) through (e) above.
CERCLA has the meaning specified in the definition of ENVIRONMENTAL
LAW.
CHANGE OF CONTROL means an event or series of events by which:
(a) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
excluding any employee benefit plan of such person or its subsidiaries,
and any person or entity acting in its capacity as trustee, agent or
other fiduciary or administrator of any such plan) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be
deemed to have "beneficial ownership" of all securities that such
person or group has the right to acquire (such right, an "OPTION
RIGHT"), whether such right is exercisable immediately or only after
the passage of time), directly or indirectly, of 25% or more of the
Voting Stock of the Borrower entitled to vote for members of the board
of directors or equivalent governing body of the Borrower on a
fully-diluted basis (and taking into account all such securities that
such person or group has the right to acquire pursuant to any option
right);
(b) during any period of 12 consecutive months, a majority of
the members of the board of directors or other equivalent governing
body of the Borrower cease to be composed of individuals (i) who were
members of that board or equivalent governing body on the first day of
such period, (ii) whose election or nomination to that board or
equivalent governing body was approved by individuals referred to in
clause (i) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body or (iii) whose election or nomination to that board or other
equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing
body (excluding, in the case of both clause (ii) and clause (iii), any
individual whose initial nomination for, or assumption of office as, a
member of that board or equivalent governing body occurs as a result of
an actual or threatened solicitation of proxies or consents for the
election or removal of one or more directors by any person or group
other than a solicitation for the election of one or more directors by
or on behalf of the board of directors); or
(c) any Person or two or more Persons acting in concert shall
have acquired by contract or otherwise, or shall have entered into a
contract or arrangement that, upon consummation thereof, will result in
its or their acquisition of the power to exercise, directly or
indirectly, a controlling influence over the management or policies of
the Borrower, or control over the Voting Stock of the Borrower entitled
to vote for members of the board of directors or equivalent governing
body of the Borrower on a fully-diluted basis (and taking into account
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all such securities that such Person or group has the right to acquire
pursuant to any option right) representing 25% or more of the combined
voting power of such securities; or
(d) the Borrower ceases to own 100% of the Equity Interests of
each Subsidiary which is a Loan Party.
CHANGE IN LAW means (a) the adoption of any Law after the date of this
Agreement, (b) any change in any Law or in the interpretation or application
thereof by any Governmental Authority after the date of this Agreement or (c)
compliance by any Lender or the L/C Issuer (or, for purposes of SECTION 3.04(B),
by any Lending Office of such Lender or by such Lender's or the L/C Issuer's
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement.
CLOSING DATE means the date upon which this Agreement has been executed
by the Borrower, the Lenders and the Administrative Agent.
CODE means the Internal Revenue Code of 1986 as amended from time to
time, and the regulations promulgated and rulings issued thereunder.
COLLATERAL means all property and interests in property and proceeds
thereof now owned or hereafter acquired by the Borrower, and its Subsidiaries in
or upon which a Lien now or hereafter exists in favor of the Lenders, or the
Administrative Agent on behalf of the Lenders, whether under this Agreement, the
Collateral Documents, or under any other document executed by any Borrower
Affiliate and delivered to the Administrative Agent or the Lenders.
COLLATERAL AGENT means Royal Bank of Canada in its capacity as
collateral agent under any of the Loan Documents, or any successor collateral
agent.
COLLATERAL DOCUMENTS means (a) each Guaranty, Security Agreement, the
Lockbox and Collection Account Agreement, each pledge agreement, assignment, and
all other security agreements, deeds of trust, mortgages, chattel mortgages,
assignments, pledges, guaranties, financing statements, continuation statements,
extension agreements and other similar agreements or instruments executed by the
Borrower or any Subsidiary which is a Loan Party for the benefit of the Lenders
now or hereafter delivered to the Lenders or the Administrative Agent pursuant
to or in connection with the transactions contemplated hereby, and all financing
statements (or comparable documents now or hereafter filed in accordance with
the UCC or comparable Law) against the Borrower or any Subsidiary which is a
Loan Party, as debtor, in favor of the Lenders or the Administrative Agent for
the benefit of the Lenders, as secured party, to secure or guarantee the payment
of any part of the Obligations or the performance of any other duties and
obligations of Borrower under the Loan Documents, whenever made or delivered,
and (b) any amendments, supplements, modifications, renewals, replacements,
consolidations, substitutions, restatements, and extensions of any of the
foregoing.
COMMITMENT means, as to each Lender individually, its (i) Revolving
Commitment, (ii) Term Loan Commitment, and (iii) Acquisition Facility
Commitment.
COMPENSATION PERIOD has the meaning set forth in SECTION 2.11(E)(II).
COMPLIANCE CERTIFICATE means a certificate substantially in the form of
EXHIBIT C-1.
7
CONDITIONS EFFECTIVE DATE means the first date all the conditions
precedent in SECTION 4.01 and SECTION 4.03 are satisfied or waived (or, in the
case of SECTIONS 4.01(B) and (C), waived by the Person entitled to receive the
applicable payment).
CONSOLIDATED CASH FLOW FROM OPERATIONS means, for a given period the
sum of (i) Consolidated Net Income, (ii) the amount of depreciation and
amortization expense deducted in determining such Consolidated Net Income, (iii)
deferred income taxes, and (iv) other non-cash items, each as determined for
such period in accordance with GAAP.
CONSOLIDATED CURRENT ASSETS means at any time, all assets that should
be, in accordance with GAAP, classified as current assets on a consolidated
balance sheet of the Borrower and its Subsidiaries.
CONSOLIDATED CURRENT LIABILITIES means at any time, all liabilities
that should be, in accordance with GAAP, classified as current liabilities on a
consolidated balance sheet of the Borrower and its Subsidiaries (excluding that
portion of the principal balance of any Loans outstanding hereunder which would
be classified as current liabilities in accordance with GAAP).
CONSOLIDATED EBITDA means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, an amount equal to the sum of (a)
Consolidated Net Income, (b) Consolidated Interest Charges, (c) the amount of
taxes, based on or measured by income, used or included in the determination of
such Consolidated Net Income, (d) the amount of depreciation, depletion, and
amortization expense deducted in determining such Consolidated Net Income, and
(e) other non-cash charges and expenses, including, without limitation, non-cash
charges and expenses relating to Swap Contracts or resulting from accounting
convention changes, of the Borrower and its Subsidiaries on a consolidated
basis, all determined in accordance with GAAP.
CONSOLIDATED INTEREST CHARGES means, for any period, for the Borrower
and its Subsidiaries on a consolidated basis, the sum of (a) all interest,
premium payments, fees, charges and related expenses of the Borrower and its
Subsidiaries in connection with Indebtedness (including capitalized interest),
in each case to the extent treated as interest in accordance with GAAP, and (b)
the portion of rent expense of the Borrower and its Subsidiaries with respect to
such period under Capital Leases that is treated as interest in accordance with
GAAP.
CONSOLIDATED NET DEBT means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, Indebtedness (excluding the amounts of any
undrawn Letters of Credit) minus cash in excess of $3,000,000 (the amount
necessary to meet Borrower's and its Subsidiaries' working capital needs for
ongoing operations).
CONSOLIDATED NET INCOME means, for any period, for the Borrower and its
Subsidiaries on a consolidated basis, the net income or net loss of the Borrower
and its Subsidiaries from continuing operations; PROVIDED that there shall be
excluded from such net income (to the extent otherwise included therein): (a)
the income (or loss) of any entity other than a Subsidiary in which the Borrower
or any Subsidiary has an ownership interest, except to the extent that any such
income has been actually received by the Borrower or such Subsidiary in the form
of cash dividends or similar cash distributions; (b) net extraordinary gains and
losses, (c) any gains or losses attributable to non-cash write-ups or
write-downs of assets, (d) proceeds of any Insurance Payment other than business
interruption insurance, (e) any gain or loss, net of taxes, on the sale,
8
retirement or other disposition of assets (including Equity Interests of any
other Person, but excluding the sale of inventories in the ordinary course of
business), and (f) the cumulative effect of a change in accounting principles.
CONSOLIDATED TANGIBLE NET WORTH means the consolidated net worth of the
Borrower and its Subsidiaries after subtracting therefrom the aggregate amount
of any Intangible Assets of the Borrower and its Subsidiaries.
CONTRACTUAL OBLIGATION means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
CREDIT EXTENSION means each of the following: (a) a Borrowing and (b)
an L/C Credit Extension.
CURRENT MATURITIES OF LONG TERM INDEBTEDNESS means, in respect of the
Borrower and as of any applicable date of determination thereof, all
Indebtedness which should be classified as "funded indebtedness" or "long term
indebtedness" on a balance sheet of such Person as of such date in accordance
with GAAP.
CURRENT RATIO means the ratio derived from dividing Consolidated
Current Assets by Consolidated Current Liabilities.
DEBT ISSUANCE means the issuance by the Borrower or any Subsidiary of
any Indebtedness other than Indebtedness permitted under SECTION 7.04.
DEBTOR RELIEF LAWS means the Bankruptcy Code of the United States, and
all other liquidation, conservatorship, bankruptcy, assignment for the benefit
of creditors, moratorium, rearrangement, receivership, insolvency,
reorganization, or similar debtor relief Laws of the United States or other
applicable jurisdictions from time to time in effect and affecting the rights of
creditors generally.
DEFAULT means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.
DEFAULT RATE means an interest rate equal to (a) the Base Rate plus (b)
the Applicable Rate, if any, applicable to Base Rate Loans plus (c) 2% per
annum; PROVIDED, HOWEVER, that with respect to a Eurodollar Rate Loan, the
Default Rate shall be an interest rate equal to the interest rate (including any
Applicable Rate) otherwise applicable to such Loan plus 2% per annum, in each
case to the fullest extent permitted by applicable Laws.
DEPOSIT ACCOUNT PLEDGE AGREEMENT means collectively the agreements,
however styled, among one or more Loan Parties, the Administrative Agent and
Xxxxx Fargo Credit, Inc. and/or Xxxxx Fargo Bank, N.A. relating to the pledge of
deposit accounts held in such financial institutions by one or more Loan Parties
to the Administrative Agent, for the benefit of the Lenders, as Collateral.
DISPOSITION or DISPOSE means the sale, transfer, license or other
disposition (including any sale and leaseback transaction) of any property by
any Person of property owned by such Person, including any sale, assignment,
transfer or other disposal, with or without recourse, of any notes or accounts
receivable or any rights and claims associated therewith. The terms DISPOSITION
and DISPOSE shall not include any Equity Issuance.
9
DOLLAR and $ means lawful money of the United States.
DOMESTIC means, with respect to an entity, that such entity is
incorporated, organized or formed under the Laws of the United States, a state
in the United States or any subdivision thereof or the District of Columbia.
DOWNHOLE INJECTION means Downhole Injection Systems, LLC, a Texas
limited liability company and Wholly-Owned Subsidiary.
ELIGIBLE ASSIGNEE means (a) a Lender, (b) an Affiliate of a Lender, (c)
an Approved Fund, (d) any institutional investor and (e) any other Person (other
than a natural Person) approved in each of the foregoing instances by the
Administrative Agent, the L/C Issuer (in instances involving the Revolving
Facility only) and, unless a Default has occurred and is continuing or in
connection with the settlement of a credit derivative transaction, the Borrower
(each such approval not to be unreasonably withheld, conditioned or delayed);
PROVIDED that notwithstanding the foregoing, "Eligible Assignee" shall not
include the Borrower or any of its respective Affiliates or Subsidiaries.
ELIGIBLE ACCOUNTS RECEIVABLE means Accounts Receivable of the Borrower
and any Domestic Subsidiary which is a Guarantor, excluding any Accounts
Receivable:
(i) with respect to which more than ninety (90) days have elapsed
since the date of the original invoice;
(ii) with respect to which any of the representations, warranties,
covenants, and agreements contained in any Collateral Document
are incorrect or have been breached in any material respect;
(iii) with respect to which, in whole or in part, a check,
promissory note, draft, trade acceptance or other instrument
for the payment of money has been received, presented for
payment and returned uncollected for any reason for such
Accounts Receivable (or any other Accounts Receivable due from
such account debtor);
(iv) which represents a progress billing (as hereinafter defined)
or as to which the Borrower or any of the Domestic
Subsidiaries has extended the time for payment without the
consent of the Administrative Agent; for the purposes hereof,
"PROGRESS BILLING" means any invoice for goods sold or leased
or services rendered under a contract or agreement pursuant to
which the account debtor's obligation to pay such invoice is
conditioned upon the Borrower's or any of the Domestic
Subsidiaries' completion of any further performance under the
contract or agreement;
(v) with respect to which any one or more of the following events
has occurred to the account debtor on such Accounts
Receivable: death or judicial declaration of incompetency of
an account debtor who is an individual; the filing by or
against the account debtor of a request or petition for
liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, winding-up, or other relief under
Debtor Relief Laws of the U.S. or any foreign jurisdiction,
now or hereafter in effect; the making of any general
assignment by the account debtor for the benefit of creditors;
10
the appointment of a receiver or trustee for the account
debtor or for any of the assets of the account debtor
including, without limitation, the appointment of or taking
possession by a "custodian," as defined in the Bankruptcy Code
of the United States; the institution by or against the
account debtor of any other type of insolvency proceeding
(under Debtor Relief Laws of the United States or otherwise)
or of any formal or informal proceeding for the dissolution or
liquidation of, settlement of claims against, or winding up of
affairs of, the account debtor; the sale, assignment, or
transfer of all or any material part of the assets of the
account debtor; the nonpayment generally by the account debtor
of its debts as they become due; or the cessation of the
business of the account debtor as a going concern;
(vi) if fifteen percent (15%) or more of the aggregate Dollar
amount of outstanding Accounts Receivable owed at such time by
the account debtor thereon is classified as ineligible under
CLAUSE (I) above;
(vii) owed by an account debtor which: (1) does not maintain its
chief executive office in the United States; or (2) is not
organized under the Laws of the United States or any state
thereof; or (3) is the government of any foreign country or
sovereign state, or of any state, province, municipality, or
other political subdivision thereof, or of any department,
agency, public corporation, or other instrumentality thereof;
EXCEPT to the extent that such Accounts Receivable is secured
or payable by a letter of credit satisfactory to the
Administrative Agent in its discretion;
(viii) owed by an account debtor which is an Affiliate or employee of
the Borrower or any of its Subsidiaries;
(ix) except as provided in CLAUSE (XI) below, with respect to which
either the perfection, enforceability, or validity of the
Administrative Agent's Liens in such Accounts Receivable, or
the Administrative Agent's right or ability to obtain direct
payment to the Administrative Agent of the proceeds of such
Accounts Receivable, is governed by any federal, state, or
local statutory requirements other than those of the UCC;
(x) owed by an account debtor to which the Borrower or any of its
Subsidiaries, is indebted in any way, or which is subject to
any right of setoff or recoupment by the account debtor,
unless the account debtor has entered into an agreement
acceptable to the Administrative Agent to waive setoff rights;
or if the account debtor thereon has disputed liability or
made any claim with respect to any other Accounts Receivable
due from such account debtor; but in each such case only to
the extent of such indebtedness, setoff, recoupment, dispute,
or claim;
(xi) owed by the government of the United States, or any
department, agency, public corporation, or other
instrumentality thereof, unless the Federal Assignment of
Claims Act of 1940, as amended (31 U.S.C. ss.3727 ET SEQ.),
and any other steps necessary to perfect the Administrative
Agent's Liens therein, have been complied with to the
Administrative Agent's satisfaction with respect to such
Accounts Receivable;
(xii) owed by any state, municipality, or other political
subdivision of the United States, or any department, agency,
public corporation or other instrumentality thereof and as to
which the Administrative Agent determines that its Lien
therein is not or cannot be perfected;
11
(xiii) which represents a sale on a xxxx-and-hold, guaranteed sale,
sale and return, sale on approval, consignment, or other
repurchase or return basis;
(xiv) which is evidenced by a promissory note or other instrument or
by chattel paper;
(xv) if the Administrative Agent believes, in the exercise of its
reasonable judgment, that the prospect of collection of such
Accounts Receivable is reasonably likely to be impaired or
that the Accounts Receivable could reasonably be expected not
to be paid by reason of the account debtor's financial
inability to pay;
(xvi) with respect to which the account debtor is located in any
state requiring the filing of a Notice of Business Activities
Report or similar report in order to permit the Borrower or
any of the Domestic Subsidiaries to seek judicial enforcement
in such state of payment of such Accounts Receivable, unless
such Borrower or Domestic Subsidiary has qualified to do
business in such state or has filed a Notice of Business
Activities Report or equivalent report for the then current
year;
(xvii) with respect to which the goods giving rise to such Accounts
Receivable have not been shipped and delivered to and accepted
by the account debtor or the services giving rise to such
Accounts Receivable have not been performed by the Borrower or
a Domestic Subsidiary, as applicable, and, if applicable,
accepted by the account debtor, or the account debtor revokes
its acceptance of such goods or services;
(xviii) owed by an account debtor which is obligated to the Borrower
or any of the Domestic Subsidiaries representing Accounts
Receivable the aggregate unpaid balance of which exceeds
fifteen percent (15%) of the aggregate unpaid balance of all
Accounts Receivable owed to the Borrower or any of the
Domestic Subsidiaries at such time by all of the Borrower's
and the Domestic Subsidiaries' account debtors, but only to
the extent of such excess;
(xx) which is not subject to a first priority and perfected
security interest in favor of the Administrative Agent for the
benefit of the Lenders;
(xxi) which is owed to any Subsidiary acquired after the Closing
Date unless a field audit of such Person's Accounts Receivable
has been delivered to the Administrative Agent, in form and
substance satisfactory to the Administrative Agent;
(xxii) Accounts Receivables that do not arise out of sales of goods
or rendering of services in the ordinary course of the
business of the Borrower or any Subsidiary, as the case may
be; or
(xxiii) which the Administrative Agent or the Required Lenders in
their reasonable discretion determine to be ineligible.
12
If any Accounts Receivable at any time ceases to be an Eligible Accounts
Receivable, then such Accounts Receivable shall promptly be excluded from the
calculation of Eligible Accounts Receivable.
ELIGIBLE INVENTORY means all Inventory of the Borrower and a Domestic
Subsidiary which is a Guarantor, excluding any Inventory:
(i) that is not owned by the Borrower or is not owned by a
Domestic Subsidiary which is a Guarantor;
(ii) that is not subject to the Administrative Agent's Liens, which
are perfected as to such Inventory, or that are subject to any
other Lien whatsoever (other than the Liens described in
CLAUSE (D) (to the extent CLAUSE (VIII) below has been
complied with) of SECTION 7.01; PROVIDED that such Permitted
Liens (1) are junior in priority to the Administrative Agent's
Liens and (2) do not impair directly or indirectly the ability
of the Administrative Agent to realize on or obtain the full
benefit of such Inventory);
(iii) that does not consist of finished goods or raw materials;
(iv) that consists of work-in-process, samples, prototypes,
supplies, or packing and shipping materials;
(v) that is not in good condition, is unmerchantable, or does not
meet all standards imposed by any Governmental Authority
having regulatory authority over such goods, their use or
sale;
(vi) that is obsolete or returned or repossessed or used goods
taken in trade;
(vii) that is located outside the United States (or that is in
transit from vendors or suppliers);
(viii) that is located in a public warehouse or in possession of a
bailee or in a facility leased by the Borrower or any of its
Subsidiaries, if the warehouseman, or the bailee, or the
lessor has not delivered to the Administrative Agent, if
requested by the Administrative Agent, a subordination
agreement in form and substance satisfactory to the
Administrative Agent;
(ix) that contains or bears any intellectual property rights
licensed to the Borrower or any of its Subsidiaries by any
Person, if the Administrative Agent is not satisfied that it
may sell or otherwise dispose of such Inventory in accordance
with the terms of any Collateral Document and SECTION 8.02
without infringing the rights of the licensor of such
intellectual property rights or violating any contract with
such licensor (and without payment of any royalties other than
any royalties due with respect to the sale or disposition of
such Inventory pursuant to the existing license agreement),
and, as to which the Borrower has not delivered to the
Administrative Agent a consent or sublicense agreement from
such licensor in form and substance acceptable to the
Administrative Agent if requested;
13
(x) that is not reflected in the details of an Inventory report;
(xi) that is Inventory placed on consignment;
(xii) owned by any Loan Party unless a field audit of such Person's
Inventory has been delivered to the Administrative Agent, in
form and substance satisfactory to the Administrative Agent;
(xiii) with respect to which any of the representations, warranties,
covenants, and agreements contained in any Collateral Document
are incorrect or have been breached in any material respect;
or
(xiv) which the Administrative Agent or the Required Lenders in
their reasonable discretion determine to be ineligible.
If any Inventory at any time ceases to be Eligible Inventory, such Inventory
shall promptly be excluded from the calculation of Eligible Inventory.
EMPLOYEE EQUITY SALES means the sale of Equity Interests in the
Borrower to directors, officers, employees and consultants to the Loan Parties
(whether or not under a plan).
ENVIRONMENTAL LAW means any applicable Law that relates to (a) the
condition or protection of air, groundwater, surface water, soil, or other
environmental media, (b) the environment, including natural resources or any
activity which affects the environment, (c) the regulation of any pollutants,
contaminants, wastes, substances, and Hazardous Substances, including, without
limitation, the Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. ss.9601 et seq.) ("CERCLA"), the Clean Air Act (42
U.S.C. ss. 7401 et seq.), the Federal Water Pollution Control Act, as amended by
the Clean Water Act (33 U.S.C. ss.1251 et seq.), the Federal Insecticide,
Fungicide, and Rodenticide Act (7 U.S.C. ss.136 et seq.), the Emergency Planning
and Community Right to Know Act of 1986 (42 U.S.C. ss.1100 1 et seq.), the
Hazardous Materials Transportation Act (49 U.S.C. ss.1801 et seq.), the National
Environmental Policy Act of 1969 (42 U.S.C. ss.4321 et seq.), the Oil Pollution
Act (33 U.S.C. ss.2701 et seq.), the Resource Conservation and Recovery Act (42
U.S.C. ss.6901 et seq.), the Rivers and Harbors Act (33 U.S.C. ss.401 et seq.),
the Safe Drinking Water Act (42 U.S.C. ss.201 and ss.300f et seq.), the Solid
Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of
1976 and the Hazardous and Solid Waste Amendments of 1984 (42 U.S.C. ss.6901 et
seq.), the Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.), and
analogous state and local Laws, as any of the foregoing may have been and may be
amended or supplemented from time to time, and any analogous enacted or adopted
Law, or (d) the Release or threatened Release of Hazardous Substances.
EQUITY INTERESTS means, with respect to any Person, all of the shares
of capital stock of (or other ownership or profit interests in) such Person, all
of the warrants, options or other rights for the purchase or acquisition from
such Person of shares of capital stock of (or other ownership or profit
interests in) such Person, all of the securities convertible into or
exchangeable for shares of capital stock of (or other ownership or profit
interests in) such Person or warrants, rights or options for the purchase or
acquisition from such Person of such shares (or such other interests), and all
of the other ownership or profit interests in such Person (including
partnership, member or trust interests therein), whether voting or nonvoting,
and whether or not such shares, warrants, options, rights or other interests are
outstanding on any date of determination.
14
EQUITY ISSUANCE means any issuance by the Borrower or any Subsidiary to
any Person of its Equity Interests, other than (a) any issuance of its Equity
Interests pursuant to the exercise of options or warrants, (b) any issuance of
its Equity Interests pursuant to the conversion of any debt securities to equity
or the conversion of any class equity securities to any other class of equity
securities, (c) any issuance of options or warrants relating to its Equity
Interests, (d) any issuance of its Equity Interests in connection with financing
the acquisition of 100% of the capital stock of Casing Services and Equipment,
Inc., (e) any issuance of its Equity Interests as consideration for all or a
portion of the purchase price for any acquisition, (f) the sale of up to 1.8
million shares of Borrower's capital stock by Borrower in connection with the
Public Offering, and (g) Employee Equity Sales. The term "EQUITY ISSUANCE" shall
not be deemed to include any sale by existing shareholders of the Borrower of
Borrower's common stock in the Public Offering.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulations issued pursuant thereto.
ERISA AFFILIATE means any trade or business (whether or not
incorporated) under common control with the Borrower within the meaning of
SECTION 414(B) or (C) of the Code (and SECTIONS 414(M) and (O) of the Code for
purposes of provisions of this Agreement relating to obligations imposed under
SECTION 412 of the Code).
ERISA EVENT means: (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by the Borrower or any ERISA Affiliate from a Pension
Plan subject to SECTION 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in SECTION 4001(A)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under SECTION 4062(E) of
ERISA; (c) a complete or partial withdrawal by the Borrower or any ERISA
Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is
in reorganization; (d) the filing of a notice of intent to terminate, the
treatment of a Pension Plan amendment as a termination under SECTIONS 4041 or
4041A of ERISA, or the commencement of proceedings by the PBGC to terminate a
Pension Plan or Multiemployer Plan; (e) an event or condition which might
reasonably be expected to constitute grounds under SECTION 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan
or Multiemployer Plan; or (f) the imposition of any liability under TITLE IV of
ERISA, other than PBGC premiums due but not delinquent under SECTION 4007 of
ERISA, upon the Borrower or any ERISA Affiliate.
EURODOLLAR RATE means for any Interest Period with respect to any
Eurodollar Rate Loan:
(a) the rate per annum equal to the rate determined by the
Administrative Agent to be the offered rate that appears on the page of
the LIBOR I screen (or any successor thereto) that displays an average
British Bankers Association Interest Settlement Rate for deposits in
Dollars (for delivery on the first day of such Interest Period) with a
term equivalent to such Interest Period, determined as of approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period, or
(b) if the rate referenced in the preceding subsection (a)
does not appear on such page or service or such page or service shall
cease to be available, the rate per annum equal to the rate determined
by the Administrative Agent to be the offered rate on such other page
or other service that displays an average British Bankers Association
Interest Settlement Rate for deposits in Dollars (for delivery on the
first day of such Interest Period) with a term equivalent to such
15
Interest Period, determined as of approximately 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period,
or
(c) if the rates referenced in the preceding subsections (a)
and (b) are not available, the rate per annum determined by the
Administrative Agent as the rate of interest (rounded upward to the
next 1/100th of 1%) at which deposits in Dollars for delivery on the
first day of such Interest Period in same day funds in the approximate
amount of the Eurodollar Rate Loan being made, continued or converted
by the Administrative Agent and with a term equivalent to such Interest
Period would be offered by the Administrative Agent's London Branch to
major banks in the offshore Dollar market at their request at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period.
EURODOLLAR RATE LOAN means a Loan that bears interest at a rate based
on the Eurodollar Rate.
EVENT OF DEFAULT means any of the events or circumstances specified in
ARTICLE VIII.
EVERGREEN LETTER OF CREDIT has the meaning specified in SECTION
2.14(B)(III).
EXCESS CASH FLOW means quarterly, the amount equal to Consolidated Cash
Flow From Operations for such quarter, MINUS the sum of (i) maintenance Capital
Expenditures for such quarter PLUS (ii) principal payments on Indebtedness
actually made during such quarter and permitted to be made under this Agreement.
EXISTING CREDIT AGREEMENTS means collectively Borrower's and its
Subsidiaries' existing Credit Agreement with Xxxxx Fargo Credit, Inc. dated
December 7, 2004 and AirComp's existing Credit Agreement with Xxxxx Fargo Bank,
N.A. dated November 15, 2004.
FEDERAL FUNDS RATE means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; PROVIDED that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to the Administrative Agent on such day on
such transactions as determined by the Administrative Agent.
FISCAL YEAR means each year beginning January 1st and ending the
following December 31st.
FIXED ASSET COVERAGE RATIO means as of any determination date, the
ratio derived by dividing the fair market value of the Borrower's and its
Subsidiaries' fixed assets (as determined by the most recently delivered asset
appraisals delivered to the Administrative Agent pursuant to SECTION 6.02(D)) on
which the Administrative Agent, for the benefit of the Lenders, holds a
perfected, first priority Lien divided by the sum of the Outstanding Amount on
such date of the Acquisition Loan Principal Debt PLUS Term Loan Principal Debt.
FOREIGN LENDER has the meaning specified in SECTION 10.15.
16
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.
GAAP means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied. If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either the
Borrower or the Required Lenders shall so request, the Administrative Agent, the
Lenders and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP (subject to the approval of the Required Lenders); PROVIDED THAT, until so
amended, (a) such ratio or requirement shall continue to be computed in
accordance with GAAP prior to such change therein and (b) the Borrower shall
provide to the Administrative Agent and the Lenders financial statements and
other documents required under this Agreement or as reasonably requested
hereunder setting forth a reconciliation between calculations of such ratio or
requirement made before and after giving effect to such change in GAAP.
GOVERNMENTAL AUTHORITY means any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, administrative tribunal, central bank or other legal
entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
GUARANTORS means any Person and every present and future Subsidiary of
Borrower which undertakes to be liable for all or any part of the Obligations by
execution of a Guaranty, or otherwise.
GUARANTY means collectively a guaranty in form and substance
satisfactory to the Administrative Agent now or hereafter executed by any
Guarantor in favor of the Administrative Agent on behalf of the Lenders
guaranteeing the Obligations.
GUARANTY OBLIGATION means, as to any Person, (a) any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other payment obligation of another
Person (the "PRIMARY OBLIGOR") in any manner, whether directly or indirectly,
and including, without limitation, any obligation of such Person, direct or
indirect, (i) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Indebtedness or other payment obligation, (ii) to purchase or
lease property, securities or services for the purpose of assuring the obligee
in respect of such Indebtedness or other payment obligation of the payment of
such Indebtedness or other payment obligation, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other payment obligation, or (iv) entered into for the purpose
of assuring in any other manner the obligees in respect of such Indebtedness or
other payment obligation of the payment thereof or to protect such obligees
against loss in respect thereof (in whole or in part), or (b) any Lien on any
assets of such Person securing any Indebtedness or other payment obligation of
any other Person, whether or not such Indebtedness or other payment obligation
is assumed by such Person; PROVIDED, HOWEVER, that the term "GUARANTY
OBLIGATION" shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be the lesser of (a) an amount equal to the stated
17
or determinable outstanding amount of the related primary obligation and (b) the
maximum amount for which such guaranteeing Person may be liable pursuant to the
terms of the instrument embodying such Guaranty Obligation, unless the
outstanding amount of such primary obligation and the maximum amount for which
such guaranteeing Person may be liable are not stated or determinable, in which
case the amount of such Guaranty Obligation shall be the maximum reasonably
anticipated liability in respect thereof as determined by the guaranteeing
Person in good faith.
HAZARDOUS SUBSTANCE means any substance that poses a threat to, or is
regulated to protect, human health, safety, public welfare, or the environment,
including without limitation (a) any "hazardous substance," "pollutant" or
"contaminant," and any "petroleum" or "natural gas liquids" as those terms are
defined or used under SECTION 101 of CERCLA, (b) "solid waste" as defined by the
federal SOLID WASTE DISPOSAL ACT (42 U. S.C. xx.xx. 6901 et seq.), (c) asbestos
or a material containing asbestos, (d) any material that contains lead or
lead-based paint, (e) any item or equipment that contains or is contaminated by
polychlorinated biphenyls, (f) any radioactive material, (g) urea formaldehyde,
(h) putrescible materials, (i) infectious materials, (j) toxic microorganisms,
including mold, or (k) any substance the presence or Release of which requires
reporting, investigation or remediation under any Environmental Law.
HONOR DATE has the meaning set forth in SECTION 2.14(C)(I).
INDEBTEDNESS means, as to any Person at a particular time, all of the
following:
(a) all obligations of such Person for borrowed money and all
obligations of such Person evidenced by bonds, debentures, notes, loan
agreements or other similar instruments;
(b) the face amount of all letters of credit (including
standby and commercial), banker's acceptances, surety bonds, and
similar instruments issued for the account of such Person and, without
duplication, all drafts drawn and unpaid thereunder;
(c) net obligations under any Swap Contract in an amount equal
to (i) if such Swap Contract has been closed out, the termination value
thereof, or (ii) if such Swap Contract has not been closed out, the
xxxx-to-market value thereof determined on the basis of readily
available quotations provided by any recognized dealer in such Swap
Contract;
(d) whether or not so included as liabilities in accordance
with GAAP, all obligations of such Person to pay the deferred purchase
price of property or services, other than trade accounts payable in the
ordinary course of business not overdue by more than 90 days, and
indebtedness (excluding prepaid interest thereon) secured by a Lien on
property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;
(e) Capital Leases and Synthetic Lease Obligations;
(f) all obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any Equity
Interests in such Person or any other Person or any warrants, rights or
options to acquire such Equity Interests, valued, in the case of any
redeemable preferred Equity Interests, at the greater of its voluntary
or involuntary liquidation preference PLUS accrued and unpaid
dividends; and
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(g) all Guaranty Obligations of such Person in respect of any
of the foregoing.
For all purposes hereof, the Indebtedness of any Person shall include
the Indebtedness of any partnership or joint venture in which such Person is a
general partner, unless such Indebtedness is expressly made non-recourse to such
Person except for customary exceptions acceptable to the Required Lenders. The
amount of any Capital Lease or Synthetic Lease Obligation as of any date shall
be deemed to be the amount of Attributable Indebtedness in respect thereof as of
such date. In addition, the determination of Indebtedness of the Borrower and/or
its Subsidiaries shall be made on a consolidated basis without taking into
account any Indebtedness owed by any such Person to any other such Person.
INDEMNIFIED LIABILITIES has the meaning set forth in SECTION 10.05.
INDEMNITEES has the meaning set forth in SECTION 10.05.
INSURANCE PAYMENT means any payment by an insurance company or other
surety on account of property damage or casualty loss to any property of the
Borrower or any of its Subsidiaries.
INTANGIBLE ASSETS means the amount (to the extent reflected in
determining consolidated net worth) of all unamortized debt discount and expense
(to the extent, if any, recorded as an unamortized deferred charge), unamortized
deferred charges, goodwill, franchises, licenses, patents, trademarks, trade
names, copyrights, service marks and brand names; PROVIDED, THAT for purposes of
this definition, consolidated net worth shall be adjusted to exclude non-cash
items, including foreign currency translation adjustments, unrealized gains and
losses, and xxxx-to-market adjustments relating to Swap Contracts, pursuant to
GAAP.
INTEREST COVERAGE RATIO means, as of any date of determination, the
ratio of (a) Consolidated EBITDA for the period of the four prior fiscal
quarters ending on such date to (b) the sum of (i) Consolidated Interest Charges
during such period and (ii) imputed interest charges on Synthetic Leases, of the
Borrower and its Subsidiaries during such period, if any.
INTEREST PAYMENT DATE means, (a) as to any Loan other than a Base Rate
Loan, the last day of each Interest Period applicable to such Loan; PROVIDED,
HOWEVER, that if any Interest Period for a Eurodollar Rate Loan exceeds three
months, the respective dates that fall every three months after the beginning of
such Interest Period shall also be Interest Payment Dates; and (b) as to any
Base Rate Loan, the last Business Day of each March, June, September and
December and the Maturity Date.
INTEREST PERIOD means, as to each Eurodollar Rate Loan, the period
commencing on the date such Eurodollar Rate Loan is disbursed or converted to or
continued as a Eurodollar Rate Loan and ending on the date one, two, three or
six months thereafter, as selected by the Borrower in its Borrowing Notice;
PROVIDED that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless, in the case of a Eurodollar Rate Loan, such Business Day
falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(ii) any Interest Period pertaining to a Eurodollar Rate Loan
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
19
month at the end of such Interest Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
and
(iii) no Interest Period shall extend beyond the Maturity
Date.
INVENTORY means, for any of the Borrower and the Domestic Subsidiaries,
all now owned or hereafter acquired inventory (as defined in the UCC), goods and
merchandise, wherever located, to be furnished under any contract of service or
held for sale or lease, all returned goods, raw materials, work-in-process,
finished goods (including embedded software), and other materials and supplies
of any kind, nature or description which are used or consumed in its business
including packing and shipping materials.
INVESTMENT means, as to any Person, any acquisition or investment by
such Person, whether by means of (a) the purchase or other acquisition of Equity
Interest of another Person, (b) a loan, advance or capital contribution to,
guaranty of debt of, or purchase or other acquisition of any other debt or
Equity Interest in, another Person, including any partnership or joint venture
interest in such other Person, or (c) the purchase or other acquisition (in one
transaction or a series of transactions) of assets of another Person that
constitute a business unit. For purposes of covenant compliance, the amount of
any Investment shall be the amount actually invested, without adjustment for
subsequent increases or decreases in the value of such Investment, less all
returns of principal or equity thereon, and shall, if made by the transfer or
exchange of property other than cash be deemed to have been made in an amount
equal to the fair market value of such property.
INVOLUNTARY DISPOSITION means any loss of, damage to or destruction of,
or any condemnation or other taking for public use of, any property of the
Borrower or any Subsidiary.
IRS means the United States Internal Revenue Service.
JENS' OIL FIELD SERVICE means Jens' Oil Field Service, Inc., a Texas
corporation.
JENS RELATED SUBORDINATED INDEBTEDNESS means Indebtedness of Borrower
owing to Xxxx X. Xxxxxxxxx, Xx. in connection with that certain promissory note
dated July 11, 2005 in the original principal amount of $3,330,522.60, which
Indebtedness has been subordinated to the Obligations pursuant to the Jens
Subordination Agreement.
JENS SUBORDINATION AGREEMENT means that certain subordination agreement
of even date herewith among the Borrower, Xxxx X. Xxxxxxxxx, Xx. and
Administrative Agent for the benefit of the Lenders, in form and substance
satisfactory to the Administrative Agent, and all supplements, assignments,
amendments, and restatements thereto (or any agreement in substitution therfor).
LAWS means, collectively, all applicable international, foreign,
federal, state and local statutes, treaties, rules, regulations, ordinances,
codes and administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, licenses, authorizations and permits of, any
Governmental Authority.
L/C ADVANCE means, with respect to each Lender, such Lender's
participation in any L/C Borrowing in accordance with its Pro Rata Share.
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L/C BORROWING means an extension of credit resulting from a drawing
under any Letter of Credit which has not been reimbursed on the date when made
or refinanced as a Borrowing.
L/C CREDIT EXTENSION means, with respect to any Letter of Credit, the
issuance thereof or extension of the expiry date thereof, or the renewal or
increase of the amount thereof.
L/C ISSUER means Royal Bank of Canada in its capacity as issuer of
Letters of Credit hereunder, or any successor issuer of Letters of Credit
hereunder.
L/C OBLIGATIONS means, as at any date of determination, the aggregate
undrawn face amount of all outstanding Letters of Credit PLUS the aggregate of
all Unreimbursed Amounts, including all L/C Borrowings.
LENDER has the meaning specified in the introductory paragraph hereto
and, as the context requires, includes the L/C Issuer.
LENDER HEDGING AGREEMENT means a Swap Contract between the Borrower and
a Lender or an Affiliate of a Lender.
LENDING OFFICE means, as to any Lender, the office or offices of such
Lender set forth on its Administrative Details Form, or such other office or
offices as a Lender may from time to time notify the Borrower and the
Administrative Agent.
LETTER OF CREDIT means any standby letter of credit issued hereunder.
LETTER OF CREDIT APPLICATION means an application and agreement for the
issuance or amendment of a letter of credit in the form from time to time in use
by the L/C Issuer.
LETTER OF CREDIT EXPIRATION DATE means the day that is five days prior
to the Maturity Date (or, if such day is not a Business Day, the next preceding
Business Day).
LETTER OF CREDIT SUBLIMIT means an amount equal to the lesser of (i)
the Aggregate Revolving Commitment and (ii) $3,000,000.
LEVERAGE RATIO means, for the Borrower and its Subsidiaries on a
consolidated basis, the ratio of (a) Consolidated Net Debt as of the
determination date to (b) Consolidated EBITDA for the period of the four fiscal
quarters ending on such date, or if such date is not the last day of a fiscal
quarter, ending on the last day of the fiscal quarter most recently ended.
LIEN means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement of any kind or
nature whatsoever to secure or provide for payment of any obligation of any
Person (including any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the UCC or comparable
Laws of any jurisdiction), including the interest of a purchaser of accounts
receivable.
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LOANS means collectively (i) the Revolving Loans, (ii) the Term Loans,
and (iii) the Acquisition Loans, in each case as made by the Lenders to the
Borrower pursuant to this Agreement and "LOANS" individually refers to any one
of such Loans.
LOAN DOCUMENTS means this Agreement, each Note, each of the Collateral
Documents, the Agent/Arranger Fee Letter, each Borrowing Notice, each Borrowing
Base Report, each Compliance Certificate, each Subordination Agreement, each
Letter of Credit Application, and each other agreement, document or instrument
delivered by the Borrower or any of its Subsidiaries from time to time in
connection with this Agreement and the Notes.
LOAN PARTY means each of the Borrower, each Guarantor, and each other
entity that is an Affiliate of the Borrower that executes one or more Loan
Documents.
LOCKBOX AND COLLECTION ACCOUNT AGREEMENT means the Lockbox and
Collection Account Agreement executed by each of the Loan Parties in favor of
the Administrative Agent for the benefit of the Lenders, in form and substance
satisfactory to the Administrative Agent and all supplements, assignments,
amendments, and restatements thereto (or any agreement in substitution
therefor).
MASTER AGREEMENT has the meaning specified in the definition of SWAP
CONTRACT.
MATERIAL ADVERSE EFFECT means: (a) a material adverse change in, or a
material adverse effect upon, the operations, business, properties or condition
(financial or otherwise) or prospects of the Borrower or any of its
Subsidiaries; (b) a material impairment of the ability of the Borrower, or any
other Loan Party to perform their obligations under the Loan Documents to which
it is a party; or (c) a material adverse effect upon the legality, validity,
binding effect or enforceability against the Borrower or any other Loan Party of
any Loan Documents or the rights and remedies of Agent or any Lender thereunder.
MATERIAL AGREEMENT means each agreement set forth in SCHEDULE 5.24.
MATURITY DATE means July 11, 2007 and with reference to the Revolver
Facility only means the earlier of (a) July 11, 2007, or (b) such earlier
effective date of any other termination, cancellation, or acceleration of the
Aggregate Revolving Commitment under this Agreement.
MAXIMUM AMOUNT and MAXIMUM RATE respectively mean, for each Lender, the
maximum non-usurious amount and the maximum non-usurious rate of interest which,
under applicable Law, such Lender is permitted to contract for, charge, take,
reserve, or receive on the Obligations.
MEXICAN CAPEX means capital expenditures by any Loan Party for the
purchase of equipment or fixed or capital assets intended for use in, or
actually used in, Mexico.
MOODY'S means Xxxxx'x Investors Service, Inc.
MULTIEMPLOYER PLAN means any employee benefit plan of the type
described in SECTION 4001(A)(3) of ERISA, to which the Borrower or any ERISA
Affiliate makes or is obligated to make contributions, or during the preceding
three calendar years, has made or been obligated to make contributions.
22
NET CASH PROCEEDS means (i) cash received in connection with any Equity
Issuance, (ii) cash received in connection with any Debt Issuance, (iii) any
Insurance Payment and (iv) cash received in connection with any Disposition
(including any cash received by way of deferred payment as and when received),
in each case received by the Borrower or any of its Subsidiaries in connection
with and as consideration therefor, on or after the date of consummation of such
transaction, AFTER (i) deduction of Taxes payable in connection with or as a
result of such transaction, and (ii) payment of all usual and customary
brokerage commissions and all other reasonable fees and expenses related to such
transaction (including, without limitation, reasonable attorneys' fees and
closing costs incurred in connection with such transaction).
NONRENEWAL NOTICE DATE has the meaning specified in SECTION
2.14(B)(III).
NOTE means individually each (i) Revolver Note, (ii) Term Note, and
(iii) Acquisition Note and "NOTES" collectively refers to all such Notes.
OBLIGATIONS means all advances to, and debts, liabilities, obligations,
covenants and duties of, any Loan Party arising under any Loan Document, whether
direct or indirect (including those acquired by assumption), absolute or
contingent, due or to become due, now existing or hereafter arising and
including interest that accrues after the commencement by or against any Loan
Party of any proceeding under any Debtor Relief Laws naming such Person as the
debtor in such proceeding. In addition, all references to the "OBLIGATIONS" in
the Collateral Documents and in SECTIONS 2.13 and 10.09 of this Agreement shall,
in addition to the foregoing, also include all present and future indebtedness,
liabilities, and obligations (and all renewals and extensions thereof or any
part thereof now or hereafter owed to any Lender or any Affiliate of a Lender
arising pursuant to any Lender Hedging Agreement.
OBLIGOR means the Borrower or any other Person (other than the
Administrative Agent or any Lender) obligated under any Loan Document.
ORGANIZATION DOCUMENTS means, (a) with respect to any corporation, the
certificate or articles of incorporation and the bylaws, (b) with respect to any
limited liability company, the certificate of formation and operating agreement
or limited liability company agreement; and (c) with respect to any partnership,
joint venture, trust or other form of business entity, the partnership, joint
venture or other applicable agreement of formation and any agreement,
instrument, filing or notice with respect thereto filed in connection with its
formation with the secretary of state or other department in the state of its
formation, in each case as amended from time to time.
OTHER TAXES has the meaning specified in SECTION 3. 01(B).
OUTSTANDING AMOUNT on any date (i) with respect to Loans, means the
aggregate principal amount thereof after giving effect to any Borrowings and
prepayments or repayments occurring on such date, (ii) with respect to any L/C
Obligations, the amount of such L/C Obligations on such date after giving effect
to any L/C Credit Extension occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date, including as a result
of any reimbursements of outstanding unpaid drawings under any Letters of Credit
or any reductions in the maximum amount available for drawing under Letters of
Credit taking effect on such date, and (iii) for purposes of SECTION 2.11(D)
with respect to Obligations under a Lender Hedging Agreement, means the amount
then due and payable under such Lender Hedging Agreement.
23
PARTICIPANT has the meaning specified in SECTION 10.07(D).
PBGC means the Pension Benefit Guaranty Corporation.
PENSION PLAN means any "EMPLOYEE PENSION BENEFIT PLAN" (as such term is
defined in SECTION 3(2)(A) of ERISA), other than a Multiemployer Plan, that is
subject to TITLE IV of ERISA and is sponsored or maintained by the Borrower or
any ERISA Affiliate or to which the Borrower or any ERISA Affiliate contributes
or has an obligation to contribute, or in the case of a multiple employer plan
(as described in SECTION 4064(A) of ERISA) has made contributions at any time
during the immediately preceding five plan years.
PERMITTED ACQUISITIONS means those acquisitions described on SCHEDULE
5.23.
PERMITTED LIENS means Liens permitted under SECTION 7.01 as described
in such Section.
PERSON means any individual, trustee, corporation, general partnership,
limited partnership, limited liability company, joint stock company, trust,
unincorporated organization, bank, business association, firm, joint venture or
Governmental Authority.
PLAN means any "EMPLOYEE BENEFIT PLAN" (as such term is defined in
SECTION 3(3) of ERISA) established by the Borrower or any ERISA Affiliate.
PRO RATA SHARE means, at any date of determination, for any Lender, the
percentage (carried out to the ninth decimal place) that its Commitment bears to
the Aggregate Commitment.
PUBLIC OFFERING means a public sale to occur within 120 days of the
Closing Date of up to an aggregate of 5.3 million shares of the Borrower's
common stock, of which up to 1.8 million shares can be sold by the Borrower and
up to 3.5 million shares can be sold by shareholders of the Borrower.
REGISTER has the meaning set forth in SECTION 10.07(C).
RELATED PARTIES means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliate.
RELEASE means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposal,
deposit, dispersal, migrating, or other movement into the air, ground, or
surface water, or soil.
REPORTABLE EVENT means any of the events set forth in SECTION 4043(C)
OF ERISA, other than events for which the 30 day notice period has been waived.
REQUEST FOR CREDIT EXTENSION means (a) with respect to a Borrowing,
conversion or continuation of Loans, a Borrowing Notice, and (b) with respect to
an L/C Extension, a Letter of Credit Application.
REQUIRED LENDERS means (a) on any date of determination on and after
the Closing Date and prior to the date of the initial Borrowing under this
Agreement, those Lenders holding more than 66-2/3% of the Aggregate Commitment,
(b) on any date of determination on and after the date of the initial Borrowing
under this Agreement and prior to the Maturity Date, those Lenders holding more
than 66- 2/3% of the Outstanding Amount of Loans.
24
RESPONSIBLE OFFICER means the president, chief executive officer,
executive vice president, senior vice president, vice president, chief financial
officer, controller, treasurer, assistant treasurer, secretary or general
counsel of a Person. Any document delivered hereunder that is signed by a
Responsible Officer of a Loan Party shall be conclusively presumed to have been
authorized by all necessary corporate, partnership, limited liability company,
and/or other action on the part of such Loan Party and such Responsible Officer
shall be conclusively presumed to have acted on behalf of such Loan Party.
RESTRICTED PAYMENT by a Person means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interest in such Person, or any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such Equity Interest or of any option, warrant or other right to acquire any
such Equity Interest.
REVOLVER FACILITY means the revolving credit facility as described in
and subject to the limitations set forth in SECTION 2.01(A).
REVOLVER FACILITY COMMITTED SUM means for any Lender with respect to
the Revolver Facility, at any date of determination occurring prior to the
Maturity Date, the amount stated beside such Lender's name under the heading for
the Revolver Facility Commitment on the most-recently amended SCHEDULE 2.01 to
this Agreement (which amount is subject to increase, reduction, or cancellation
in accordance with the Loan Documents).
REVOLVER NOTE means a promissory note of Borrower in substantially the
form of EXHIBIT B-1, evidencing the obligation of Borrower to repay the
Revolving Loans and all renewals and extensions of all or any part thereof and
"REVOLVER NOTES" refers to all such promissory notes.
REVOLVER PRINCIPAL DEBT means, on any date of determination, the
aggregate unpaid principal balance of all Loans under the Revolver Facility.
REVOLVING COMMITMENT means as to each Lender, its obligation to make
Revolving Loans to the Borrower pursuant to SECTION 2.01(A) and to purchase
participations in L/C Obligations pursuant to SECTION 2.14, in an aggregate
principal amount at any one time outstanding not to exceed, when aggregated with
the Revolving Loans made pursuant to SECTION 2.01(A), its Revolver Facility
Committed Sum, in each case as such amount may be reduced or adjusted from time
to time in accordance with this Agreement (collectively, the "AGGREGATE
REVOLVING COMMITMENT").
REVOLVING LOAN means an extension of credit by a Lender to the Borrower
pursuant to SECTION 2.01(A).
RIGHTS means rights, remedies, powers, privileges, and benefits.
S&P means Standard & Poor's.
SECURITY AGREEMENTS means, collectively, the security agreements, or
similar instruments, executed by any of the Loan Parties in favor of the
Administrative Agent for the benefit of the Lenders, in form and substance
25
satisfactory to the Administrative Agent and all supplements, assignments,
amendments, and restatements thereto (or any agreement in substitution
therefor), and "SECURITY AGREEMENT" means each of such Security Agreements.
SUBORDINATED INDEBTEDNESS means collectively (i) the AirComp Related
Subordinated Indebtedness, (ii) the Jens' Subordinated Indebtedness, and (iii)
any other Indebtedness of Borrower or any of its Subsidiaries subordinated to
the Obligations pursuant to a Subordination Agreement in form and substance
satisfactory to the Administrative Agent.
SUBORDINATION AGREEMENTS means collectively (i) the AirComp Related
Subordination Agreement, (ii) the Jens' Subordination Agreement, and (iii) any
other subordination agreement with Borrower or any of its Subsidiaries
subordinating any Indebtedness to the Obligations pursuant to a subordination
agreement in form and substance satisfactory to the Administrative Agent and
SUBORDINATION AGREEMENT refers to any one of the foregoing.
SUBSIDIARY of a Person means a corporation, partnership, joint venture,
limited liability company or other business entity of which more than 50% of the
Voting Stock at the time beneficially owned, or the management of which is
otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise specified, all
references herein to a "SUBSIDIARY" or to "SUBSIDIARIES" shall refer to a
Subsidiary or Subsidiaries of the Borrower.
SWAP CONTRACT means (a) any and all rate swap transactions, basis
swaps, credit derivative transactions, forward rate transactions, commodity
swaps, commodity options, forward commodity contracts, equity or equity index
swaps or options, bond or bond price or bond index swaps or options or forward
bond or forward bond price or forward bond index transactions, interest rate
options, forward foreign exchange transactions, cap transactions, floor
transactions, collar transactions, currency swap transactions, cross-currency
rate swap transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all transactions
of any kind, and the related confirmations, which are subject to the terms and
conditions of, or governed by, any form of master agreement published by the
International Swaps and Derivatives Association, Inc., any International Foreign
Exchange Master Agreement, or any other master agreement (any such master
agreement, together with any related schedules, a "MASTER AGREEMENT"), including
any such obligations or liabilities under any Master Agreement.
SWAP TERMINATION VALUE means, in respect of any one or more Swap
Contracts, after taking into account the effect of any legally enforceable
netting agreement relating to such Swap Contracts, (a) for any date on or after
the date such Swap Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s), and (b) for any
date prior to the date referenced in clause (a) the amount(s) determined as the
xxxx-to-market value(s) for such Swap Contracts, as determined based upon one or
more mid-market or other readily available quotations provided by any recognized
dealer in such Swap Contracts (which may include any Lender).
SYNTHETIC LEASE OBLIGATION means the monetary obligation of a Person
under (a) a so-called synthetic or tax retention lease, or (b) an agreement for
the use or possession of property creating obligations that do not appear on the
balance sheet of such Person but which are depreciated for tax purposes by such
Person. The amount of any Synthetic Lease Obligation as of any date shall be
deemed to be the amount of Attributable Indebtedness in respect thereof as of
such date.
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TAXES has the meaning set forth in SECTION 3.01.
TERM FACILITY COMMITTED SUM means for any Lender with respect to the
Term Loan Facility, the amount stated beside such Lender's name under the
heading for the Term Loan Facility on the most-recently amended SCHEDULE 2.01 to
this Agreement (which amount is subject to increase, reduction, or cancellation
in accordance with the Loan Documents).
TERM LOAN means an extension of credit by a Lender to the Borrower
pursuant to SECTION 2.01(B).
TERM LOAN COMMITMENT means as to each Lender, its obligation to make a
Term Loan to the Borrower on the Conditions Effective Date pursuant to SECTION
2.01(B), in an amount not to exceed its Term Facility Committed Sum, in each
case as such amount may be reduced or adjusted from time to time in accordance
with this Agreement (collectively, the "AGGREGATE TERM LOAN COMMITMENT").
TERM LOAN FACILITY means the term credit facility as described in and
subject to the limitations set forth in SECTION 2.01(B).
TERM NOTE means a promissory note of Borrower in substantially the form
of EXHIBIT B-2, evidencing the obligation of Borrower to repay the Term Loans
and all renewals and extensions of all or any part thereof and "TERM NOTES"
refers to all such promissory notes.
TERM PRINCIPAL DEBT means, on any date of determination, the aggregate
unpaid principal balance of all Term Loans.
TYPE means, with respect to a Loan, (i) its character as a Revolving
Loan, Term Loan or Acquisition Loan and (ii) its character as a Base Rate Loan
or a Eurodollar Rate Loan.
UCC means the Uniform Commercial Code as in effect in the State of
Texas or other applicable jurisdiction.
UNFUNDED PENSION LIABILITY means the excess of a Pension Plan's benefit
liabilities under SECTION 4001(A)(16) of ERISA, over the current value of that
Pension Plan's assets, determined in accordance with the assumptions used for
funding the Pension Plan pursuant to SECTION 412 of the Code for the applicable
plan year.
UNITED STATES or U.S. means the United States of America, its fifty
states and the District of Columbia.
UNREIMBURSED AMOUNT has the meaning set forth in SECTION 2.14(C)(I).
VOTING STOCK means the capital stock (or equivalent thereof) of any
class or kind, of a Person, the holders of which are entitled to vote for the
election of directors, managers, or other voting members of the governing body
of such Person.
WHOLLY-OWNED when used in connection with a Person means any Subsidiary
of such Person of which all of the issued and outstanding Equity Interests
(EXCEPT shares required as directors' qualifying shares) are owned by such
Person or one or more of its Wholly-Owned Subsidiaries.
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1.02 OTHER INTERPRETIVE PROVISIONS.
(a) The meanings of defined terms are equally applicable to the
singular and plural forms of the defined terms.
(b) (i) The words "HEREIN" and "HEREUNDER" and words of similar import
when used in any Loan Document shall refer to such Loan Document as a whole and
not to any particular provision thereof.
(ii) Unless otherwise specified herein, Article, Section,
Exhibit and Schedule references are to this Agreement.
(iii) The term "INCLUDING" is by way of example and not
limitation.
(iv) The term "DOCUMENTS" includes any and all instruments,
documents, agreements, certificates, notices, reports, financial
statements and other writings, however evidenced.
(c) In the computation of periods of time from a specified date to a
later specified date, the word "FROM" means "FROM AND INCLUDING;" the words "TO"
and "UNTIL" each mean "TO BUT EXCLUDING;" and the word "THROUGH" means "TO AND
INCLUDING."
(d) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.
1.03 ACCOUNTING TERMS. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data required to be submitted pursuant to this Agreement shall be
prepared in conformity with, GAAP applied on a consistent basis, as in effect
from time to time, applied in a manner consistent with that used in preparing
the audited financial statements, except as otherwise specifically prescribed
herein.
1.04 ROUNDING. Any financial ratios required to be maintained by the
Borrower pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed herein and
rounding the result up or down to the nearest number (with a rounding-up if
there is no nearest number).
1.05 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, extensions, supplements and other modifications
thereto, but only to the extent that such amendments, restatements, extensions,
supplements and other modifications are not prohibited by any Loan Document; and
(b) references to any Law shall include all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such Law.
ARTICLE II.
THE COMMITMENT AND BORROWINGS
2.01 LOANS.
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(a) REVOLVING LOANS. Subject to and in reliance upon the terms,
conditions, representations, and warranties in the Loan Documents, each Lender
severally, but not jointly, agrees to make revolving loans (each such Loan a
"REVOLVING LOAN") to Borrower from time to time on any Business Day during the
period from the Conditions Effective Date to the Maturity Date, in an aggregate
amount not to exceed at any time outstanding the lesser of (i) the amount of
such Lender's Pro Rata Share of one or more Revolving Loan Borrowings not to
exceed, when aggregated with the Outstanding Amount of the L/C Obligations, such
Lender's Revolving Commitment and (ii) such Lender's Pro Rata Share of the
Borrowing Base. Revolving Loan Borrowings may be repaid and reborrowed from time
to time in accordance with the terms and provisions of the Loan Documents;
PROVIDED THAT, each such Revolving Loan Borrowing must occur on a Business Day
and no later than the Business Day immediately preceding the Maturity Date.
Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further
provided herein; PROVIDED, HOWEVER, all Revolving Loan Borrowings made on the
Conditions Effective Date shall be made as Base Rate Loans.
(b) TERM LOANS. Subject to and in reliance upon the terms, conditions,
representations, and warranties in the Loan Documents, each Lender severally,
but not jointly, agrees to make a term loan (each such Loan a "TERM LOAN") to
Borrower in a single disbursement on the Conditions Effective Date in an
aggregate amount not to exceed at any time outstanding the amount of such
Lender's Pro Rata Share of the Term Loan Commitment. If all or any portion of
the Term Loan Principal Debt is paid or prepaid, then the amount so paid or
prepaid may not be reborrowed. Any portion of the Term Loan Commitment that
remains undisbursed after the initial disbursement under the Term Loan Facility
shall be reduced to zero and cancelled on the date of such initial disbursement.
The Term Loan may consist of Base Rate Loans or Eurodollar Rate Loans, as
further provided herein; PROVIDED, HOWEVER, the initial disbursement under the
Term Loan Facility shall be made as a Base Rate Loan.
(c) ACQUISITION LOANS. Subject to and in reliance upon the terms,
conditions, representations, and warranties in the Loan Documents, each Lender
severally, but not jointly, agrees to make non-revolving loans (each such Loan
an "ACQUISITION LOAN") to Borrower from time to time on any Business Day during
the period from the Conditions Effective Date to the Acquisition Facility
Drawdown Termination Date, in an aggregate amount not to exceed at any time
outstanding the amount of such Lender's Pro Rata Share of one or more Borrowings
not to exceed such Lender's Acquisition Facility Commitment; provided that, each
such Borrowing must occur on a Business Day and no later than the Acquisition
Facility Drawdown Termination Date. If all or any portion of the Acquisition
Loan Principal Debt is paid or prepaid, then the amount so paid or prepaid may
not be reborrowed. Any portion of the Acquisition Facility Commitment that
remains undisbursed after the Acquisition Facility Drawdown Termination Date
shall be reduced to zero and cancelled on such date. The Acquisition Loan may
consist of Base Rate Loans or Eurodollar Rate Loans, as further provided herein;
PROVIDED, HOWEVER, the initial disbursement under the Acquisition Facility shall
be made as a Base Rate Loan.
2.02 BORROWING BASE DETERMINATIONS.
(a) The Borrowing Base (the "BORROWING BASE") shall be equal to the
lesser of (i) $13,000,000, and (ii) eighty-five percent (85%) of Eligible
Accounts Receivable, plus fifty percent (50%) of Eligible Inventory (not to
exceed $2,000,000 for Eligible Inventory). The Borrowing Base shall be
determined each month by reference to the most recent Borrowing Base Report
delivered to the Administrative Agent (absent any error in such Borrowing Base
Report) which shall be effective as of the date such Borrowing Base Report is
required to be delivered pursuant to SECTION 6.02(C).
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(b) During the period from the date hereof to the first redetermination
of the Borrowing Base pursuant to SECTION 2.02(A), the Borrowing Base shall be
determined based on the Borrowing Base Report delivered pursuant to SECTION
4.01(A)(VII).
2.03 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Each Borrowing, each conversion of Loans from one interest rate
Type to the other, and each continuation of Loans as the same interest rate Type
shall be made upon the Borrower's irrevocable notice to the Administrative
Agent, which may be given by telephone. Each such notice must be received by the
Administrative Agent not later than 11:00 a.m., New York time, three Business
Days prior to the requested date of any Borrowing of, conversion to or
continuation of Eurodollar Rate Loans, and one Business Day prior to the
requested date of any Borrowing of, conversion to or continuation of Base Rate
Loans. Each such telephonic notice must be confirmed promptly by delivery to the
Administrative Agent of a written Borrowing Notice, appropriately completed and
signed by an authorized officer of the Borrower. Each Borrowing of, conversion
to or continuation of Eurodollar Rate Loans shall be in a principal amount of
$500,000 or a whole multiple of $500,000 in excess thereof. Each Borrowing of or
conversion to Base Rate Loans shall be in a principal amount of $500,000 or a
whole multiple of $100,000 in excess thereof. Each Borrowing Notice (whether
telephonic or written) shall specify (i) whether the Borrowing, conversion or
continuation (as applicable) is under the Acquisition Facility or Term Loan
Facility, (ii) whether the Borrower is requesting a Borrowing, a conversion of
Loans from one interest rate Type to the other, or a continuation of Loans as
the same interest rate Type, (iii) the requested date of the Borrowing,
conversion or continuation, as the case may be (which shall be a Business Day),
(iv) the principal amount of Loans to be borrowed, converted or continued, (v)
the interest rate Type of Loans to be borrowed or to which existing Loans are to
be converted, and (vi) if applicable, the duration of the Interest Period with
respect thereto. If the Borrower fails to specify the interest rate Type for a
Loan in a Borrowing Notice or if the Borrower fails to give a timely notice
requesting a conversion or continuation, then the applicable Loans shall be made
or continued as, or converted to, Base Rate Loans. Any such automatic conversion
to Base Rate Loans shall be effective as of the last day of the Interest Period
then in effect with respect to the applicable Eurodollar Rate Loans. If the
Borrower requests a Borrowing of, conversion to, or continuation of Eurodollar
Rate Loans in any such Borrowing Notice, but fails to specify an Interest
Period, it will be deemed to have specified an Interest Period of one month.
(b) Following receipt of a Borrowing Notice, the Administrative Agent
shall promptly notify each Lender of its Pro Rata Share of the applicable Loans,
and if no timely notice of a conversion or continuation is provided by the
Borrower, the Administrative Agent shall notify each Lender of the details of
any automatic conversion to Base Rate Loans described in the preceding
subsection. In the case of a Borrowing, each Lender shall make the amount of its
Loan available to the Administrative Agent in immediately available funds at the
Administrative Agent's Office not later than 11:00 a.m., New York time, on the
Business Day specified in the applicable Borrowing Notice. Upon satisfaction of
the applicable conditions set forth in SECTION 4.01 and SECTION 4.03 (and in the
case of an Acquisition Loan, SECTION 4.04), the Administrative Agent shall make
all funds so received available to the Borrower in like funds as received by the
Administrative Agent either by (i) crediting the account of the Borrower on the
books of the Administrative Agent with the amount of such funds or (ii) wire
transfer of such funds, in each case in accordance with instructions provided to
the Administrative Agent by the Borrower; PROVIDED, HOWEVER, that if, on the
date of the Borrowing there are L/C Borrowings outstanding, then the proceeds of
such Borrowing shall be applied, FIRST, to the payment in full of any such L/C
Borrowings, and SECOND, to the Borrower as provided above.
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(c) Except as otherwise provided herein, a Eurodollar Rate Loan may be
continued or converted only on the last day of the Interest Period for such
Eurodollar Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, converted to or continued as Eurodollar Rate Loans
without the consent of the Required Lenders, and the Required Lenders may demand
that any or all of the then outstanding Eurodollar Rate Loans be converted
immediately to Base Rate Loans.
(d) The Administrative Agent shall promptly notify the Borrower and the
Lenders of the interest rate applicable to any Eurodollar Rate Loan upon
determination of such interest rate. The determination of the Eurodollar Rate by
the Administrative Agent shall be conclusive in the absence of manifest error.
(e) After giving effect to all Borrowings, all conversions of Loans
from one interest rate Type to the other, and all continuations of Loans as the
same interest rate Type, there shall not be more than six (6) Interest Periods
in effect at any given time with respect to Loans.
2.04 PREPAYMENTS.
(a) OPTIONAL PREPAYMENTS. The Borrower may, upon notice to the
Administrative Agent, at any time or from time to time voluntarily prepay in
whole or in part Loans outstanding under the Acquisition Facility, Revolver
Facility and/or Term Loan Facility without premium or penalty; PROVIDED that (i)
such notice must be received by the Administrative Agent not later than 11:00
a.m., New York time, (A) three Business Days prior to any date of prepayment of
Eurodollar Rate Loans, and (B) one Business Day prior to any date of prepayment
of Base Rate Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a
principal amount of $500,000 or a whole multiple of $500,000 in excess thereof;
(iii) any prepayment of Base Rate Loans shall be in a principal amount of
$500,000 or a whole multiple of $100,000 in excess thereof; (iv) any prepayment
of the Acquisition Loan and/or Term Loan shall be applied to installments of the
Loan elected to be prepaid by Borrower in the inverse order of the remaining
principal amortization payments for such Loan. Each such notice shall specify
the date and amount of such prepayment and the Type(s) of Loans and the interest
rate Type(s) to be prepaid. The Administrative Agent will promptly notify each
Lender of its receipt of each such notice, and of such Lender's Pro Rata Share
of such prepayment. If such notice is given by the Borrower, the Borrower shall
make such prepayment and the payment amount specified in such notice shall be
due and payable on the date specified therein. Any prepayment of a Eurodollar
Rate Loan shall be accompanied by all accrued interest thereon, together with
any additional amounts required pursuant to SECTION 3.05. Each such prepayment
shall be applied to the Loans of the Lenders in accordance with their respective
Pro Rata Shares.
Unless a Default or Event of Default has occurred and is continuing or
would arise as a result thereof, any payment or prepayment of the Revolving
Loans may be reborrowed by Borrower, subject to the terms and conditions hereof.
(b) MANDATORY PREPAYMENTS. In addition to the prepayments required in
SECTION 2.06, Borrower shall also make mandatory prepayments as follows:
(i) PREPAYMENTS BY REASON OF BORROWING BASE DEFICIENCY. If on
any date the Outstanding Amount of all Revolving Loans and L/C
Obligations shall exceed the Borrowing Base, then the Borrower shall
immediately make a mandatory prepayment of the Revolving Loans equal to
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such excess, and if any such excess remains after such prepayments, to
the extent of such excess the Borrower shall immediately Cash
Collateralize the L/C Obligations.
(ii) PREPAYMENTS BY REASON OF AGGREGATE REVOLVING COMMITMENT
EXCEEDED. If on any date the Outstanding Amount of all Revolving Loans
and L/C Obligations shall exceed the Aggregate Revolving Commitment,
then the Borrower shall immediately make mandatory prepayments of
Revolving Loans equal to such excess, and if any such excess remains
after such prepayments, to the extent of such excess the Borrower shall
immediately Cash Collateralize the L/C Obligations.
(iii) PREPAYMENTS BY REASON OF AGGREGATE ACQUISITION FACILITY
COMMITMENT EXCEEDED. If on any date the Outstanding Amount of all
Acquisition Loans shall exceed the Aggregate Acquisition Facility
Commitment, then the Borrower shall immediately make a mandatory
prepayment of Acquisition Loans equal to such excess.
(iv) DISPOSITIONS AND INVOLUNTARY DISPOSITIONS. The Borrower
shall prepay the Loans and/or Cash Collateralize the L/C Obligations as
hereafter provided in an aggregate amount equal to 100% of the Net Cash
Proceeds of all Dispositions (other than Dispositions permitted by
SECTION 7.07), Insurance Payments and Involuntary Dispositions (such
prepayment to be applied as set forth in clause (viii) below).
(v) DEBT ISSUANCES. Immediately upon receipt by the Borrower
or any Subsidiary of the Net Cash Proceeds of any Debt Issuance, the
Borrower shall prepay the Loans and/or Cash Collateralize the L/C
Obligations as hereafter provided in an aggregate amount equal to 100%
of such Net Cash Proceeds (such prepayment to be applied as set forth
in clause (viii) below).
(vi) EQUITY ISSUANCES. Immediately upon the receipt by the
Borrower or any Subsidiary of the Net Cash Proceeds of any Equity
Issuance, the Borrower shall prepay the Loans and/or Cash Collateralize
the L/C Obligations in an aggregate amount equal to 100% of such Net
Cash Proceeds (such prepayment to be applied as set forth in clause
(viii) below).
(vii) EXCESS CASH FLOW. Commencing with the first quarter
following the first anniversary of the Closing Date, and quarterly
thereafter within 45 days of each quarter end, provided that Borrower's
Current Ratio would be at least 1.00 to 1.00 after giving effect to any
mandatory prepayment required by this subsection, Borrower shall make a
mandatory prepayment equal to seventy-five percent (75%) of Excess Cash
Flow, which shall be applied pro rata to installments of principal, in
the inverse order of their maturities, as a prepayment of the Term Loan
and Acquisition Loan.
(viii) APPLICATION OF MANDATORY PREPAYMENTS. All amounts
required to be paid pursuant to this SECTION 2.04(B)(IV), (V) and (VI)
shall be applied as follows:
FIRST, to the payment of any L/C Borrowing;
SECOND, to the payment of any unpaid fees or expenses
of the Administrative Agent;
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THIRD, to the Acquisition Loan (in the inverse order
of the remaining principal amortization payments)(with a
corresponding reduction in the Aggregate Acquisition Facility
Commitment);
FOURTH, (after the Acquisition Loan has been paid in
full) to the Term Loan (in the inverse order of the remaining
principal amortization payments) (with a corresponding
reduction in the Aggregate Term Loan Commitment);
FIFTH, (after the Term Loan has been paid in full) to
the Revolving Loan (with a corresponding reduction in the
Aggregate Revolving Commitment); and
SIXTH, after all Revolving Loans have been repaid, to
Cash Collateralize L/C Obligations.
Within the parameters of the applications set forth above, prepayments
shall be applied first to Base Rate Loans and then to Eurodollar Rate Loans in
direct order of Interest Period maturities
(c) PREPAYMENTS: INTEREST/FUNDING LOSS. All prepayments under this
SECTION 2.04 shall be subject to SECTION 3.05, but otherwise without premium or
penalty, and shall be accompanied by interest on the principal amount prepaid
through the date of prepayment.
2.05 REDUCTION OR TERMINATION OF COMMITMENTS. The Borrower may, upon
notice to the Administrative Agent: (i) terminate the Revolving Commitment prior
to the Maturity Date to an amount not less than the sum of the Outstanding
Amount of the then existing (a) Revolver Principal Debt and (b) L/C Obligations;
(ii) terminate the Term Loan Commitment prior to the date of disbursement of the
Term Loan; and (iii) terminate the Acquisition Facility Commitment prior to the
Acquisition Facility Drawdown Termination Date to an amount not less than the
Outstanding Amount of the then existing Acquisition Loa Principal Debt; PROVIDED
THAT (i) any such notice shall be received by the Administrative Agent not later
than 11:00 a.m., five Business Days prior to the date of termination or
reduction, and (ii) any such partial reduction shall be in an aggregate amount
of $1,000,000 or any whole multiple of $500,000 in excess thereof. The
Administrative Agent shall promptly notify the Lenders of any such notice of
reduction or termination. Once reduced in accordance with this Section, the
Commitment so reduced may not be increased. Any reduction of any Commitment
shall be applied to the corresponding Commitment of each Lender according to its
Pro Rata Share. All commitment fees on the portion of the Commitment so
terminated which have accrued to the effective date of any termination of the
such Commitment shall be paid on the effective date of such termination.
2.06 REPAYMENT OF LOANS.
(a) REVOLVING LOANS. The Borrower shall repay to the Lenders on the
Maturity Date the aggregate Revolver Principal Debt outstanding on such date.
(b) TERM LOANS. The Borrower shall repay the Term Loan Principal Debt
in installments commencing on the first anniversary of the Closing Date and in
monthly installments thereafter on the same day of each succeeding calendar
month (or if there is no corresponding date in any month, on the last day of
such month), each installment to be equal to 1/48th of the Term Loan Principal
Debt outstanding on the first anniversary of the Closing Date (as such
installments may hereafter be adjusted as a result of prepayments made pursuant
to SECTION 2.04), with the Term Loan Principal Debt remaining outstanding on the
Maturity Date being payable in full on the Maturity Date unless sooner
accelerated pursuant to SECTION 8.02.
33
(c) ACQUISITION LOANS. The Borrower shall repay the Acquisition Loan
Principal Debt in installments commencing on the first anniversary of the
Closing Date and in monthly installments thereafter on the same day of each
succeeding calendar month (or if there is no corresponding date in any month, on
the last day of such month), each installment to be equal to 1/48th of the
Acquisition Loan Principal Debt outstanding on the first anniversary of the
Closing Date (as such installments may hereafter be adjusted as a result of
prepayments made pursuant to SECTION 2.04), with the Acquisition Loan Principal
Debt remaining outstanding on the Maturity Date being payable in full on the
Maturity Date unless sooner accelerated pursuant to SECTION 8.02.
2.07 INTEREST.
(a) Subject to the provisions of subsection (b) below, (i) each
Eurodollar Rate Loan shall bear interest on the outstanding principal amount
thereof for each Interest Period at a rate per annum equal to the Eurodollar
Rate for such Interest Period PLUS the Applicable Rate and (ii) each Base Rate
Loan shall bear interest on the outstanding principal amount thereof from the
applicable borrowing date at a rate per annum equal to the Base Rate PLUS the
Applicable Rate.
(b) While any Event of Default exists or after acceleration (i) the
Borrower shall pay interest on the principal amount of all outstanding
Obligations at a fluctuating interest rate per annum at all times equal to the
Default Rate to the fullest extent permitted by applicable Law, and (ii) accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.
(c) Interest on each Loan shall be due and payable in arrears on each
Interest Payment Date applicable thereto and at such other times as may be
specified herein. Interest hereunder shall be due and payable in accordance with
the terms hereof before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Law.
(d) If the designated rate applicable to any Borrowing exceeds the
Maximum Rate, the rate of interest on such Borrowing shall be limited to the
Maximum Rate, but any subsequent reductions in such designated rate shall not
reduce the rate of interest thereon below the Maximum Rate until the total
amount of interest accrued thereon equals the amount of interest which would
have accrued thereon if such designated rate had at all times been in effect. In
the event that at maturity (stated or by acceleration), or at final payment of
the Outstanding Amount of any Loans or L/C Obligations, the total amount of
interest paid or accrued is less than the amount of interest which would have
accrued if such designated rates had at all times been in effect, then, at such
time and to the extent permitted by Law, the Borrower shall pay an amount equal
to the difference between (a) the lesser of the amount of interest which would
have accrued if such designated rates had at all times been in effect and the
amount of interest which would have accrued if the Maximum Rate had at all times
been in effect, and (b) the amount of interest actually paid or accrued on such
Outstanding Amount.
2.08 FEES.
(a) COMMITMENT FEES. The Borrower shall pay to the Administrative Agent
for the account of each Lender the following:
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(i) in accordance with its Pro Rata Share (based on its
Revolving Commitment as a percentage of the Aggregate Revolving
Commitment) a Revolver Facility commitment fee equal to one half
percent (0.5%) per annum times the actual daily amount by which the
Aggregate Revolving Commitment (subject to reduction pursuant to
SECTION 2.05) exceeds the sum of (i) the Outstanding Amount of
Revolving Loans PLUS (ii) the Outstanding Amount of L/C Obligations.
The Revolver Facility commitment fee shall accrue at all times from the
Closing Date until the Maturity Date, shall be calculated quarterly in
arrears and shall be due and payable quarterly in arrears on the last
Business Day of each March, June, September and December, commencing
with the first such date to occur after the Closing Date, and on the
Maturity Date. The Revolver Facility commitment fee shall accrue at all
times, including at any time during which one or more of the conditions
in ARTICLE IV is not met; and
(ii) in accordance with its Pro Rata Share (based on its
Acquisition Facility Commitment as a percentage of the Aggregate
Acquisition Facility Commitment) an Acquisition Facility commitment fee
equal to one half percent (0.5%) per annum times the actual daily
amount by which the Aggregate Acquisition Facility Commitment (subject
to reduction pursuant to SECTION 2.05) exceeds the Outstanding Amount
of Acquisition Loans. The Acquisition Facility commitment fee shall
accrue at all times from the Closing Date until the Acquisition
Facility Drawdown Termination Date, and shall be due and payable on the
Acquisition Facility Drawdown Termination Date. The Acquisition
Facility commitment fee shall accrue at all times, including at any
time during which one or more of the conditions in ARTICLE IV is not
met.
(b) ARRANGER'S AND ADMINISTRATIVE AGENT'S FEES. On the Closing Date,
the Borrower shall pay certain fees to the Arranger and Administrative Agent to
be shared between them and the Borrower shall pay certain fees to the
Administrative Agent for the Administrative Agent's own account as an
administrative agency fee, in the amounts and at the times specified in the
letter agreement dated June 30, 2005 (the "AGENT/ARRANGER FEE LETTER"), between
the Borrower, the Arranger and the Administrative Agent. Such fees shall be
fully earned when paid and shall be nonrefundable for any reason whatsoever.
Additionally, Borrower shall pay to the Administrative Agent for the
Administrative Agent's own account the fees in the amounts and on the dates
specified in the Agent/Arranger Fee Letter.
2.09 COMPUTATION OF INTEREST AND FEES. Computation of interest on Base
Rate Loans shall be calculated on the basis of a year of 365 or 366 days, as the
case may be, and the actual number of days elapsed. Computation of all other
types of interest and all fees shall be calculated on the basis of a year of 360
days and the actual number of days elapsed. Interest shall accrue on each Loan
for the day on which the Loan is made, and shall not accrue on a Loan, or any
portion thereof, for the day on which the Loan or such portion is paid; PROVIDED
that any Loan that is repaid on the same day on which it is made shall bear
interest for one day.
2.10 EVIDENCE OF DEBT.
(a) The Loans made by each Lender shall be evidenced by one or more
accounts or records maintained by such Lender and by the Administrative Agent in
the ordinary course of business. The accounts or records maintained by the
Administrative Agent and each Lender shall be conclusive, absent manifest error,
of the amount of the Loans made by the Lenders to the Borrower and the interest
and payments thereon. Any failure so to record or any error in doing so shall
not, however, limit or otherwise affect the obligation of the Borrower hereunder
to pay any amount owing with respect to the Loans or the L/C Obligations. In the
event of any conflict between the accounts and records maintained by any Lender
35
and the accounts and records of the Administrative Agent in respect of such
matters, the accounts and records of such Lender shall control. Upon the request
of any Lender made through the Administrative Agent, such Lender's Loans may be
evidenced by one or more Notes. Each Lender may attach schedules to its Note(s)
and endorse thereon the date, Type (if applicable), amount and maturity of the
applicable Loans and payments with respect thereto.
(b) In addition to the accounts and records referred to in subsection
(a), each Lender and the Administrative Agent shall maintain in accordance with
its usual practice accounts or records evidencing the purchases and sales by
such Lender of participations in Letters of Credit. In the event of any conflict
between the accounts and records maintained by the Administrative Agent and the
accounts and records of any Lender in respect of such matters, the accounts and
records of the Administrative Agent shall control.
2.11 PAYMENTS GENERALLY.
(a) All payments to be made by the Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment or setoff.
Except as otherwise expressly provided herein, all payments by the Borrower
hereunder shall be made to the Administrative Agent, for the account of the
respective Lenders to which such payment is owed, at the Administrative Agent's
Office in Dollars and in immediately available funds not later than 11:00 a.m.,
New York time, on the date specified herein. The Administrative Agent will
promptly distribute to each Lender its Pro Rata Share (or other applicable share
as provided herein) of such payment in like funds as received by wire transfer
to such Lender's Lending Office. All payments received by the Administrative
Agent after 11:00 a.m., New York time, shall be deemed received on the next
succeeding Business Day and any applicable interest or fee shall continue to
accrue.
(b) Subject to the definition of "INTEREST PERIOD," if any payment to
be made by the Borrower shall come due on a day other than a Business Day,
payment shall be made on the next following Business Day, and such extension of
time shall be reflected in computing interest or fees, as the case may be.
(c) If no Default or Event of Default exists and if no order of
application is otherwise specified in the Loan Documents, payments and
prepayments of the Obligations shall be applied first to fees, second to accrued
interest then due and payable on the Outstanding Amount of Loans and L/C
Obligations, and then to the remaining Obligations in the order and manner as
Borrower may direct.
(d) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully the Obligations, or if a Default or Event
of Default exists (and SECTION 8.03 is not by its terms applicable), any payment
or prepayment shall be applied in the following order: (i) to the payment of
enforcement expenses incurred by the Administrative Agent, including Attorney
Costs; (ii) to the ratable payment of all other fees, expenses, and indemnities
for which the Administrative Agent or Lenders have not been paid or reimbursed
in accordance with the Loan Documents (as used in this SECTION 2.11(D)(II), a
"RATABLE PAYMENT" for any Lender or the Administrative Agent shall be, on any
date of determination, that proportion which the portion of the total fees,
expenses, and indemnities owed to such Lender or the Administrative Agent bears
to the total aggregate fees and indemnities owed to all Lenders and the
Administrative Agent on such date of determination); (iii) to the ratable
payment of accrued and unpaid interest on the Outstanding Amount of Loans,
Outstanding L/C Obligations and the Outstanding Amount of Obligations under
Lender Hedging Agreements; and (iv) to the payment of the remaining Obligations,
if any, in the order and manner the Required Lenders deem appropriate.
36
(e) Unless the Borrower or any Lender has notified the Administrative
Agent prior to the date any payment is required to be made by it to the
Administrative Agent hereunder, that the Borrower or such Lender, as the case
may be, will not make such payment, the Administrative Agent may assume that the
Borrower or such Lender, as the case may be, has timely made such payment and
may (but shall not be so required to), in reliance thereon, make available a
corresponding amount to the Person entitled thereto. If and to the extent that
such payment was not in fact made to the Administrative Agent in immediately
available funds, then:
(i) if the Borrower failed to make such payment, each Lender
shall forthwith on demand repay to the Administrative Agent the portion
of such assumed payment that was made available to such Lender in
immediately available funds, together with interest thereon in respect
of each day from and including the date such amount was made available
by the Administrative Agent to such Lender to the date such amount is
repaid to the Administrative Agent in immediately available funds, at
the Federal Funds Rate from time to time in effect; and
(ii) if any Lender failed to make such payment, such Lender
shall forthwith on demand pay to the Administrative Agent the amount
thereof in immediately available funds, together with interest thereon
for the period from the date such amount was made available by the
Administrative Agent to the Borrower to the date such amount is
recovered by the Administrative Agent (the "COMPENSATION PERIOD") at a
rate per annum equal to the Federal Funds Rate from time to time in
effect. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan, included in the
applicable Borrowing. If such Lender does not pay such amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent may make a demand therefor upon the Borrower, and the Borrower
shall pay such amount to the Administrative Agent, together with
interest thereon for the Compensation Period at a rate per annum equal
to the rate of interest applicable to the applicable Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which the
Administrative Agent or the Borrower may have against any Lender as a
result of any default by such Lender hereunder.
A notice of the Administrative Agent to any Lender with respect to any
amount owing under this subsection (e) shall be conclusive, absent manifest
error.
(f) If any Lender makes available to the Administrative Agent funds for
any Loan to be made by such Lender as provided in the foregoing provisions of
this ARTICLE II, and the conditions to the applicable Borrowing set forth in
ARTICLE IV are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.
(g) The obligations of the Lenders hereunder to make Loans are several
and not joint. The failure of any Lender to make any Loan on any date required
hereunder shall not relieve any other Lender of its corresponding obligation to
do so on such date, and no Lender shall be responsible for the failure of any
other Lender to so make its Loan or purchase its participation.
37
(h) Nothing herein shall be deemed to obligate any Lender to obtain the
funds for any Loan in any particular place or manner or to constitute a
representation by any Lender that it has obtained or will obtain the funds for
any Loan in any particular place or manner.
2.12 SHARING OF PAYMENTS. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it, or
the participations in the L/C Obligations, any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) in
excess of its ratable share (or other share contemplated hereunder) thereof,
such Lender shall immediately (a) notify the Administrative Agent, of such fact,
and (b) purchase from the other Lenders such participations in the Loans made by
them, and/or such subparticipations in the participations in L/C Obligations
held by them, as shall be necessary to cause such purchasing Lender to share the
excess payment in respect of such Loan or such participations, as the case may
be, pro rata with each of them; PROVIDED, HOWEVER, that if all or any portion of
such excess payment is thereafter recovered from the purchasing Lender, such
purchase shall to that extent be rescinded and each other Lender shall repay to
the purchasing Lender the purchase price paid therefor, together with an amount
equal to such paying Lender's ratable share (according to the proportion of (i)
the amount of such paying Lender's required repayment to (ii) the total amount
so recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender may, to the fullest extent permitted by Law, exercise all its rights of
payment (including the right of set-off, but subject to SECTION 10.09) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. The Administrative
Agent will keep records (which shall be conclusive and binding in the absence of
manifest error) of participations purchased under this Section and will in each
case notify the Lenders following any such purchases or repayments. Each Lender
that purchases a participation pursuant to this Section shall from and after
such purchase have the right to give all notices, requests, demands, directions
and other communications under this Agreement with respect to the portion of the
Obligations purchased to the same extent as though the purchasing Lender were
the original owner of the Obligations purchased.
2.13 PRIORITY OF HEDGING OBLIGATIONS. Any amounts received in
satisfaction of any Obligations arising under the Loan Documents, including,
without limitation, Obligations under this Agreement and Obligations under any
Lender Hedging Agreement shall rank PARI PASSU in right of payment and shall be
used to repay such Obligations on a pro rata basis, unless specified otherwise
in SECTION 2.11(D).
2.14 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT COMMITMENT.
(i) Subject to the terms and conditions set forth herein, (A)
the L/C Issuer agrees, in reliance upon the agreements of the other
Lenders set forth in this SECTION 2.14, (1) from time to time on any
Business Day during the period from the Conditions Effective Date until
the Letter of Credit Expiration Date, to issue Letters of Credit for
the account of the Borrower or any of its Subsidiaries, and to amend or
renew Letters of Credit previously issued by it, in accordance with
subsection (b) below, and (2) to honor drafts under the Letters of
Credit; and (B) the Lenders severally agree to participate in Letters
of Credit issued for the account of the Borrower and its Subsidiaries;
PROVIDED that the L/C Issuer shall not be obligated to make any L/C
Credit Extension with respect to any Letter of Credit, and no Lender
shall be obligated to participate in any Letter of Credit, if as of the
date of such L/C Credit Extension, (w) the Outstanding Amount of all
38
L/C Obligations and all Revolving Loans would exceed the Borrowing
Base, (x) the Outstanding Amount of all L/C Obligations and all
Revolving Loans would exceed the Aggregate Revolving Commitment, (y)
the aggregate Outstanding Amount of the Revolving Loans of any Lender,
PLUS such Lender's Pro Rata Share of the Outstanding Amount of all L/C
Obligations would exceed such Lender's Revolving Commitment, or (z) the
Outstanding Amount of the L/C Obligations would exceed the Letter of
Credit Sublimit. Within the foregoing limits, and subject to the terms
and conditions hereof, the Borrower's ability to obtain Letters of
Credit shall be fully revolving, and accordingly the Borrower may,
during the foregoing period, obtain Letters of Credit to replace
Letters of Credit that have expired or that have been drawn upon and
reimbursed.
(ii) The L/C Issuer shall be under no obligation to issue any
Letter of Credit if:
(A) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin
or restrain the L/C Issuer from issuing such Letter of Credit,
or any Law applicable to the L/C Issuer or any request or
directive (whether or not having the force of law) from any
Governmental Authority with jurisdiction over the L/C Issuer
shall prohibit, or request that the L/C Issuer refrain from,
the issuance of letters of credit generally or such Letter of
Credit in particular or shall impose upon the L/C Issuer with
respect to such Letter of Credit any restriction, reserve or
capital requirement (for which the L/C Issuer is not otherwise
compensated hereunder) not in effect on the Closing Date, or
shall impose upon the L/C Issuer any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and
which the L/C Issuer in good xxxxx xxxxx material to it;
(B) subject to SECTION 2.14(B)(III), the expiry date
of such requested Letter of Credit would occur more than
twelve months after the date of issuance or last renewal,
unless the Required Lenders have approved such expiry date;
(C) the expiry date of such requested Letter of
Credit would occur after the Letter of Credit Expiration Date,
unless all the Lenders have approved such expiry date;
(D) the issuance of such Letter of Credit would
violate one or more policies of the L/C Issuer generally
applicable to all borrowers; or
(E) such Letter of Credit is in a face amount less
than $100,000, or is to be used for a purpose other than as
described in SECTION 6.12 or is denominated in a currency
other than Dollars.
(iii) The L/C Issuer shall be under no obligation to amend any
Letter of Credit if (A) the L/C Issuer would have no obligation at such
time to issue such Letter of Credit in its amended form under the terms
hereof, or (B) the beneficiary of such Letter of Credit does not accept
the proposed amendment to such Letter of Credit.
(b) Procedures for Issuance and Amendment of Letters of Credit;
Evergreen Letters of Credit.
39
(i) Each Letter of Credit shall be issued or amended, as the
case may be, upon the request of the Borrower delivered to the L/C
Issuer (with a copy to the Administrative Agent) in the form of a
Letter of Credit Application, appropriately completed and signed by a
Responsible Officer of the Borrower. Such Letter of Credit Application
must be received by the L/C Issuer and the Administrative Agent not
later than 11:00 a.m., New York time, at least two Business Days (or
such later date and time as the L/C Issuer may agree in a particular
instance in its sole discretion) prior to the proposed issuance date or
date of amendment, as the case may be. In the case of a request for an
initial issuance of a Letter of Credit, such Letter of Credit
Application shall specify in form and detail satisfactory to the L/C
Issuer: (A) the proposed issuance date of the requested Letter of
Credit (which shall be a Business Day); (B) the amount thereof; (C) the
expiry date thereof; (D) the name and address of the beneficiary
thereof; (E) the documents to be presented by such beneficiary in case
of any drawing thereunder; (F) the full text of any certificate to be
presented by such beneficiary in case of any drawing thereunder; and
(G) such other matters as the L/C Issuer may require. In the case of a
request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail
satisfactory to the L/C Issuer (A) the Letter of Credit to be amended;
(B) the proposed date of amendment thereof (which shall be a Business
Day); (C) the nature of the proposed amendment; and (D) such other
matters as the L/C Issuer may require.
(ii) Promptly after receipt of any Letter of Credit
Application, the L/C Issuer will confirm with the Administrative Agent
(by telephone or in writing) that the Administrative Agent has received
a copy of such Letter of Credit Application from the Borrower and, if
not, the L/C Issuer will provide the Administrative Agent with a copy
thereof. Upon receipt by the L/C Issuer of confirmation from the
Administrative Agent that the requested issuance or amendment is
permitted in accordance with the terms hereof, then, subject to the
terms and conditions hereof, the L/C Issuer shall, on the requested
date, issue a Letter of Credit for the account of the Borrower or enter
into the applicable amendment, as the case may be, in each case in
accordance with the L/C Issuer's usual and customary business
practices. Immediately upon the issuance of each Letter of Credit, each
Lender shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the L/C Issuer a participation in such Letter
of Credit in an amount equal to the product of such Lender's Pro Rata
Share TIMES the amount of such Letter of Credit.
(iii) If the Borrower so requests in any applicable Letter of
Credit Application, the L/C Issuer may, in it sole and absolute
discretion, agree to issue a Letter of Credit that has automatic
renewal provisions (each, an "EVERGREEN LETTER OF CREDIT"); PROVIDED
that any such Evergreen Letter of Credit must permit the L/C Issuer to
prevent any such renewal at least once in each twelve-month period
(commencing with the date of issuance of such Letter of Credit) by
giving prior notice to the beneficiary thereof not later than a day
(the "NONRENEWAL NOTICE DATE") in each such twelve-month period to be
agreed upon at the time such Letter of Credit is issued. Unless
otherwise directed by the L/C Issuer, the Borrower shall not be
required to make a specific request to the L/C Issuer for any such
renewal. Once an Evergreen Letter of Credit has been issued, the
Lenders shall be deemed to have authorized (but may not require) the
L/C Issuer to permit the renewal of such Letter of Credit at any time
to a date not later than the Letter of Credit Expiration Date;
PROVIDED, HOWEVER, that the L/C Issuer shall not permit any such
renewal if it has received notice at least five Business Days
immediately preceding the Nonrenewal Notice Date (1) from the
Administrative Agent that the Required Lenders have elected not to
permit such renewal or (2) from any Lender stating that one or more of
the applicable conditions specified in SECTION 4.03 is not then
40
satisfied and directing the L/C Issuer not to permit such renewal.
Notwithstanding anything to the contrary contained herein, the L/C
Issuer shall have no obligation to permit the renewal of any Evergreen
Letter of Credit at any time.
(iv) Promptly after its delivery of any Letter of Credit or
any amendment to a Letter of Credit to an advising bank with respect
thereto or to the beneficiary thereof, the L/C Issuer will also deliver
to the Borrower and the Administrative Agent a true and complete copy
of such Letter of Credit or amendment.
(c) DRAWINGS AND REIMBURSEMENTS; FUNDING OF PARTICIPATIONS.
(i) Upon any drawing under any Letter of Credit, the L/C
Issuer shall notify the Borrower and the Administrative Agent thereof.
Not later than 11:00 a.m., New York time, on the date of any payment by
the L/C Issuer under a Letter of Credit (each such date, an "HONOR
DATE"), the Borrower shall reimburse the L/C Issuer through the
Administrative Agent in an amount equal to the amount of such drawing.
If the Borrower fails to so reimburse the L/C Issuer by such time, the
Administrative Agent shall promptly notify each Lender of the Honor
Date, the amount of the unreimbursed drawing (the "UNREIMBURSED
AMOUNT"), and such Lender's Pro Rata Share thereof. In such event, the
Borrower shall be deemed to have requested a Borrowing under the
Revolver Facility of Base Rate Loans to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the
minimum and multiples specified in SECTION 2.03 for the principal
amount of Base Rate Loans, but subject to the amount of the unutilized
portion of the Aggregate Revolving Commitment and the conditions set
forth in SECTION 4.03 (other than the delivery of a Borrowing Notice).
Any notice given by the L/C Issuer or the Administrative Agent pursuant
to this SECTION 2.14(c)(i) may be given by telephone if immediately
confirmed in writing; PROVIDED that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of
such notice.
(ii) Each Lender (including the Lender acting as L/C Issuer)
shall upon any notice pursuant to SECTION 2.14(C)(I) make funds
available to the Administrative Agent for the account of the L/C Issuer
at the Administrative Agent's Office in an amount equal to its Pro Rata
Share of the Unreimbursed Amount not later than 11:00 a.m., New York
time, on the Business Day specified in such notice by the
Administrative Agent, whereupon, subject to the provisions of SECTION
2.14(C)(III), each Lender that so makes funds available shall be deemed
to have made a Base Rate Revolving Loan to the Borrower in such amount.
The Administrative Agent shall remit the funds so received to the L/C
Issuer.
(iii) With respect to any Unreimbursed Amount that is not
fully refinanced by a Borrowing of Base Rate Revolving Loans because
the conditions set forth in SECTION 4.03 cannot be satisfied or for any
other reason, the Borrower shall be deemed to have incurred from the
L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable
on demand (together with interest) and shall bear interest at the
Default Rate. In such event, each Lender's payment to the
Administrative Agent for the account of the L/C Issuer pursuant to
SECTION 2.14(C) (II) shall be deemed payment in respect of its
participation in such L/C Borrowing and shall constitute an L/C Advance
from such Lender in satisfaction of its participation obligation under
this SECTION 2.14.
41
(iv) Until each Lender funds its Revolving Loan or L/C Advance
pursuant to this SECTION 2.14(c) to reimburse the L/C Issuer for any
amount drawn under any Letter of Credit, interest in respect of such
Lender's Pro Rata Share of such amount shall be solely for the account
of the L/C Issuer.
(v) Each Lender's obligation to make Revolving Loans or L/C
Advances to reimburse the L/C Issuer for amounts drawn under Letters of
Credit, as contemplated by this SECTION 2.14(C), shall be absolute and
unconditional and shall not be affected by any circumstance, including
(A) any set-off, counterclaim, recoupment, defense or other right which
such Lender may have against the L/C Issuer, the Borrower or any other
Person for any reason whatsoever, (B) the occurrence or continuance of
a Default or Event of Default, or (C) any other occurrence, event or
condition, whether or not similar to any of the foregoing. Any such
reimbursement shall not relieve or otherwise impair the obligation of
the Borrower to reimburse the L/C Issuer for the amount of any payment
made by the L/C Issuer under any Letter of Credit, together with
interest as provided herein.
(vi) If any Lender fails to make available to the
Administrative Agent for the account of the L/C Issuer any amount
required to be paid by such Lender pursuant to the foregoing provisions
of this SECTION 2.14(C) by the time specified in SECTION 2.14(C)(II),
the L/C Issuer shall be entitled to recover from such Lender (acting
through the Administrative Agent), on demand, such amount with interest
thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the L/C Issuer
at a rate per annum equal to the Federal Funds Rate from time to time
in effect. A certificate of the L/C Issuer submitted to any Lender
(through the Administrative Agent) with respect to any amounts owing
under this clause (vi) shall be conclusive absent manifest error.
(d) REPAYMENT OF PARTICIPATIONS.
(i) At any time after the L/C Issuer has made a payment under
any Letter of Credit and has received from any Lender such Lender's L/C
Advance in respect of such payment in accordance with SECTION 2.14(C),
if the Administrative Agent receives for the account of the L/C Issuer
any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of cash Collateral applied
thereto by the Administrative Agent), or any payment of interest
thereon, the Administrative Agent will distribute to such Lender its
Pro Rata Share thereof in the same funds as those received by the
Administrative Agent.
(ii) If any payment received by the Administrative Agent for
the account of the L/C Issuer pursuant to SECTION 2.14(C)(I) is
required to be returned, each Lender shall pay to the Administrative
Agent for the account of the L/C Issuer its Pro Rata Share thereof on
demand of the Administrative Agent, plus interest thereon from the date
of such demand to the date such amount is returned by such Lender, at a
rate per annum equal to the Federal Funds Rate from time to time in
effect.
(e) OBLIGATIONS ABSOLUTE. The obligation of the Borrower to reimburse
the L/C Issuer for each drawing under each Letter of Credit, and to repay each
L/C Borrowing and each drawing under a Letter of Credit that is refinanced by a
Borrowing of Revolving Loans, shall be absolute, unconditional and irrevocable,
and shall be paid strictly in accordance with the terms of this Agreement under
all circumstances, including the following:
42
(i) any lack of validity or enforceability of such Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto;
(ii) the existence of any claim, counterclaim, set-off,
defense or other right that the Borrower may have at any time against
any beneficiary or any transferee of such Letter of Credit (or any
Person for whom any such beneficiary or any such transferee may be
acting), the L/C Issuer or any other Person, whether in connection with
this Agreement, the transactions contemplated hereby or by such Letter
of Credit or any agreement or instrument relating thereto, or any
unrelated transaction;
(iii) any draft, demand, certificate or other document
presented under such Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect or any statement therein being
untrue or inaccurate in any respect; or any loss or delay in the
transmission or otherwise of any document required in order to make a
drawing under such Letter of Credit;
(iv) any payment by the L/C Issuer under such Letter of Credit
against presentation of a draft or certificate that does not strictly
comply with the terms of such Letter of Credit; or any payment made by
the L/C Issuer under such Letter of Credit to any Person purporting to
be a trustee in bankruptcy, debtor-in-possession, assignee for the
benefit of creditors, liquidator, receiver or other representative of
or successor to any beneficiary or any transferee of such Letter of
Credit, including any arising in connection with any proceeding under
any Debtor Relief Law; or
(v) any other circumstance or happening whatsoever, whether or
not similar to any of the foregoing, that might otherwise constitute a
defense available to, or a discharge of, the Borrower.
The Borrower shall promptly examine a copy of each Letter of Credit and
each amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower's instructions or other irregularity, the
Borrower will immediately notify the L/C Issuer. The Borrower shall be
conclusively deemed to have waived any such claim against the L/C Issuer and its
correspondents unless such notice is given as aforesaid.
The Borrower shall also promptly examine any documents sent to the L/C
Issuer in connection with a drawing under a Letter of Credit after the L/C
Issuer provides copies of such documents to the Borrower and the Borrower shall
immediately notify the L/C Issuer of any objection or claim of noncompliance of
such documents with the requirements of the Letter of Credit.
(f) ROLE OF L/C ISSUER. Each Lender and the Borrower agree that, in
paying any drawing under a Letter of Credit, the L/C Issuer shall not have any
responsibility to obtain any document (other than any sight draft, certificates
and documents expressly required by the Letter of Credit) or to ascertain or
inquire as to the validity or accuracy of any such document or the authority of
the Person executing or delivering any such document. No Agent-Related Person
nor any of the respective correspondents, participants or assignees of the L/C
Issuer shall be liable to any Lender for (i) any action taken or omitted in
connection herewith at the request or with the approval of the Lenders or the
Required Lenders, as applicable, (ii) any action taken or omitted in the absence
of gross negligence or willful misconduct; or (iii) the due execution,
effectiveness, validity or enforceability of any document or instrument related
to any Letter of Credit or Letter of Credit Application. The Borrower hereby
assumes all risks of the acts or omissions of any beneficiary or transferee with
43
respect to its use of any Letter of Credit; PROVIDED, HOWEVER, that this
assumption is not intended to, and shall not, preclude the Borrower's pursuing
such rights and remedies as it may have against the beneficiary or transferee at
law or under any other agreement. No Agent-Related Person, nor any of the
respective correspondents, participants or assignees of the L/C Issuer, shall be
liable or responsible for any of the matters described in clauses (i) through
(v) of SECTION 2.14(E); PROVIDED, HOWEVER, that anything in such clauses to the
contrary notwithstanding, the Borrower may have a claim against the L/C Issuer,
and the L/C Issuer may be liable to the Borrower, to the extent, but only to the
extent, of any direct, as opposed to consequential or exemplary, damages
suffered by the Borrower which the Borrower proves were caused by the L/C
Issuer's willful misconduct or gross negligence or the L/C Issuer's willful
failure to pay under any Letter of Credit after the presentation to it by the
beneficiary of a sight draft and certificate(s) strictly complying with the
terms and conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing, the L/C Issuer may accept documents that appear on their face
to be in order, without responsibility for further investigation, regardless of
any notice or information to the contrary, and the L/C Issuer shall not be
responsible for the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign a Letter of Credit or the rights
or benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason.
(g) CASH COLLATERAL. Upon the request of the Administrative Agent, (i)
if the L/C Issuer has honored any full or partial drawing request under any
Letter of Credit and such drawing has resulted in an L/C Borrowing, or (ii) if,
as of the Letter of Credit Expiration Date, any Letter of Credit may for any
reason remain outstanding and partially or wholly undrawn, the Borrower shall
immediately Cash Collateralize the then Outstanding Amount of all L/C
Obligations (in an amount equal to such Outstanding Amount). The Borrower hereby
grants the Administrative Agent, for the benefit of the L/C Issuer and the
Lenders, a Lien on all such cash and deposit accounts at any Lender.
(h) APPLICABILITY OF ISP98. Unless otherwise expressly agreed by the
L/C Issuer and the Borrower when a Letter of Credit is issued, the rules of the
"International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Letter of Credit.
(i) LETTER OF CREDIT FEES. The Borrower shall pay to the Administrative
Agent for the account of each Lender in accordance with its Pro Rata Share a
letter of credit fee for each Letter of Credit issued equal to the Applicable
Rate times the actual daily undrawn amount under each Letter of Credit. Such fee
for each Letter of Credit shall be due and payable on the last Business Day of
each March, June, September and December, commencing with the first such date to
occur after the issuance of such Letter of Credit, and on the Letter of Credit
Expiration Date.
(j) FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO L/C
ISSUER. The Borrower shall pay directly to the L/C Issuer for its own account a
fronting fee in an amount with respect to each Letter of Credit issued equal to
the greater of (i) $500 and (ii) 1/4 of 1% calculated on the face amount
thereof. In addition, the Borrower shall pay directly to the L/C Issuer for its
own account the customary issuance, presentation, amendment and other processing
fees, and other standard costs and charges, of the L/C Issuer relating to
letters of credit as from time to time in effect. Such fees and charges are due
and payable on demand and are nonrefundable.
(k) CONFLICT WITH LETTER OF CREDIT APPLICATION. In the event of any
conflict between the terms hereof and the terms of any Letter of Credit
Application, the terms hereof shall control.
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ARTICLE III.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by the Borrower to or for the account of the
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto; EXCLUDING, in the case of the
Administrative Agent and each Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which the
Administrative Agent or such Lender, as the case may be, is organized or
maintains its Lending Office (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "TAXES"). If the Borrower shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to the Administrative Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), each of the Administrative Agent and such Lender receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxation authority or other authority in
accordance with applicable Laws, and (iv) within 30 days after the date of such
payment, the Borrower shall furnish to the Administrative Agent (which shall
forward the same to such Lender) the original or a certified copy of a receipt
evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "OTHER TAXES").
(c) If the Borrower shall be required to deduct or pay any Taxes or
Other Taxes from or in respect of any sum payable under any Loan Document to the
Administrative Agent or any Lender, the Borrower shall also pay to the
Administrative Agent (for the account of such Lender) or to such Lender, at the
time interest is paid, such additional amount that such Lender specifies as
necessary to preserve the after-tax yield (after factoring in all taxes,
including taxes imposed on or measured by net income) such Lender would have
received if such Taxes or Other Taxes had not been imposed.
(d) The Borrower agrees to indemnify the Administrative Agent and each
Lender for (i) the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by the Administrative Agent and such Lender, (ii) amounts
payable under SECTION 3.01(C) and (iii) any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto. Payment under
this subsection (d) shall be made within 30 days after the date the Lender or
the Administrative Agent makes a demand therefor.
3.02 ILLEGALITY. If any Lender determines that any Law has made it
unlawful, or that any Governmental Authority has asserted that it is unlawful,
for any Lender or its applicable Lending Office to make, maintain or fund
Eurodollar Rate Loans, or materially restricts the authority of such Lender to
45
purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the
Eurodollar Rate, then, on notice thereof by such Lender to the Borrower through
the Administrative Agent, any obligation of such Lender to make or continue
Eurodollar Rate Loans or to convert Base Rate Loans to Eurodollar Rate Loans
shall be suspended until such Lender notifies the Administrative Agent and the
Borrower that the circumstances giving rise to such determination no longer
exist. Upon receipt of such notice, the Borrower shall, upon demand from such
Lender (with a copy to the Administrative Agent), prepay or, if applicable,
convert all Eurodollar Rate Loans of such Lender to Base Rate Loans, either on
the last day of the Interest Period thereof, if such Lender may lawfully
continue to maintain such Eurodollar Rate Loans to such day, or immediately, if
such Lender may not lawfully continue to maintain such Eurodollar Rate Loans.
Upon any such prepayment or conversion, the Borrower shall also pay interest on
the amount so prepaid or converted. Each Lender agrees to designate a different
Lending Office if such designation will avoid the need for such notice and will
not, in the reasonable judgment of such Lender, otherwise be materially
disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If the Administrative Agent
determines in connection with any request for a Eurodollar Rate Loan or a
conversion to or continuation thereof that (a) Dollar deposits are not being
offered to banks in the applicable offshore Dollar market for the applicable
amount and Interest Period of such Eurodollar Rate Loan, or adequate and
reasonable means do not exist for determining the Eurodollar Rate for such
Eurodollar Rate Loan, or (b) if the Required Lenders determine and notify the
Administrative Agent that the Eurodollar Rate for such Eurodollar Rate Loan does
not adequately and fairly reflect the cost to the Lenders of funding such
Eurodollar Rate Loan, then the Administrative Agent will promptly notify the
Borrower and all Lenders. Thereafter, the obligation of the Lenders to make or
maintain Eurodollar Rate Loans shall be suspended until the Administrative Agent
revokes such notice. Upon receipt of such notice, the Borrower may revoke any
pending request for a Borrowing, conversion or continuation of Eurodollar Rate
Loans or, failing that, will be deemed to have converted such request into a
request for a Borrowing of Base Rate Loans in the amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY; RESERVES ON
EURODOLLAR RATE LOANS.
(a) If any Lender determines that as a result of a Change in Law, or
such Lender's compliance therewith, there shall be any increase in the cost to
such Lender of agreeing to make or making, funding or maintaining Eurodollar
Rate Loans, or a reduction in the amount received or receivable by such Lender
in connection with any of the foregoing (excluding for purposes of this
subsection (a) any such increased costs or reduction in amount resulting from
(i) Taxes or Other Taxes (as to which SECTION 3.01 shall govern), (ii) changes
in the basis of taxation of overall net income or overall gross income by the
United States or any foreign jurisdiction or any political subdivision of either
thereof under the Laws of which such Lender is organized or has its Lending
Office, and (iii) reserve requirements contemplated by SECTION 3.04(C) utilized,
as to Eurodollar Rate Loans, in the determination of the Eurodollar Rate), then
from time to time upon demand of such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay to such Lender such additional
amounts as will compensate such Lender for such increased cost or reduction.
(b) If any Lender determines a Change in Law has the effect of reducing
the rate of return on the capital of such Lender or any corporation controlling
such Lender as a consequence of such Lender's obligations hereunder (taking into
consideration its policies with respect to capital adequacy and such Lender's
desired return on capital, then from time to time upon demand of such Lender
46
(with a copy of such demand to the Administrative Agent), the Borrower shall pay
to such Lender such additional amounts as will compensate such Lender for such
reduction.
(c) The Borrower shall pay to each Lender, as long as such Lender shall
be required under regulations of the Board to maintain reserves with respect to
liabilities or assets consisting of or including Eurocurrency funds or deposits
(currently known as "EUROCURRENCY LIABILITIES"), additional costs on the unpaid
principal amount of each Eurodollar Rate Loan equal to the actual costs of such
reserves allocated to such Loan by such Lender (as determined by such Lender in
good faith, which determination shall be conclusive), which shall be due and
payable on each date on which interest is payable on such Loan; PROVIDED the
Borrower shall have received at least 10 days' prior notice (with a copy to the
Administrative Agent) of such additional interest from such Lender. If a Lender
fails to give notice 10 days prior to the relevant Interest Payment Date, such
additional interest shall be due and payable 10 days from receipt of such
notice.
3.05 FUNDING LOSSES. Upon demand of any Lender (with a copy to the
Administrative Agent) from time to time, the Borrower shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any continuation, conversion, payment or prepayment of any Loan
other than a Base Rate Loan on a day other than the last day of the Interest
Period for such Loan (whether voluntary, mandatory, automatic, by reason of
acceleration, or otherwise); or
(b) any failure by the Borrower (for a reason other than the failure of
such Lender to make a Loan) to prepay, borrow, continue or convert any Loan
other than a Base Rate Loan on the date or in the amount notified by the
Borrower; including any loss of anticipated profits and any loss or expense
arising from the liquidation or reemployment of funds obtained by it to maintain
such Loan or from fees payable to terminate the deposits from which such funds
were obtained. The Borrower shall also pay any customary administrative fees
charged by such Lender in connection with the foregoing.
For purposes of calculating amounts payable by the Borrower to the
Lenders under this SECTION 3.05, each Lender shall be deemed to have funded each
Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a
matching deposit or other borrowing in the applicable offshore Dollar interbank
market for a comparable amount and for a comparable period, whether or not such
Eurodollar Rate Loan was in fact so funded.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. A certificate
of the Administrative Agent or any Lender claiming compensation under this
ARTICLE III and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of manifest error. In determining
such amount, the Administrative Agent or such Lender may use any reasonable
averaging and attribution methods.
3.07 SURVIVAL. All of the Borrower's obligations under this ARTICLE III
shall survive termination of the Aggregate Commitment and payment in full of all
the other Obligations.
ARTICLE IV.
CONDITIONS PRECEDENT
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4.01 CONDITIONS PRECEDENT. This Agreement shall be effective on the
Conditions Effective Date subject to satisfaction of the following conditions
precedent on or prior to such date:
(a) The Administrative Agent's receipt of the following, each of which
shall be originals or facsimiles (followed promptly by originals) and unless
otherwise specified, each properly executed by an authorized officer of the
signing Loan Party or other Person party thereto, each dated the Closing Date
(or, in the case of certificates of governmental officials, a recent date before
the Closing Date), and each in form and substance satisfactory to the
Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement, the Guaranty, the
Subordination Agreements, all other Collateral Documents (excluding the
Lockbox and Collection Account Agreement), and the Deposit Account
Pledge Agreement as deemed advisable by the Administrative Agent or its
counsel, each dated as of the Closing Date;
(ii) Notes executed by the Borrower in favor of each Lender
requesting such Notes, each Note in a principal amount equal to such
Lender's Acquisition Facility Commitment, Revolving Commitment and Term
Loan Commitment, and each Note dated as of the Closing Date;
(iii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of officers of each
Loan Party as the Administrative Agent may require to establish the
identities of and verify the authority and capacity of each officer
thereof authorized to act in connection with this Agreement and the
other Loan Documents to which such Loan Party is a party;
(iv) such evidence as the Administrative Agent may reasonably
require to verify that each Loan Party is duly organized or formed,
validly existing, and in good standing in the jurisdiction of its
organization;
(v) a certificate signed by a Responsible Officer of the
Borrower certifying (A) that all amounts under the Existing Credit
Agreements have been, or concurrently with the initial funding under
this Agreement will be repaid in full and all commitments of the
lenders thereunder have been or concurrently with the initial funding
under this Agreement, will be terminated and that all Liens securing
any Indebtedness under the Existing Credit Agreements have been
released, (B) that the representations and warranties contained in
ARTICLE V are true and correct in all respects on and as of the Closing
Date, (C) that no default or event of default under the Existing Credit
Agreements has occurred and is continuing as of the day preceding the
Closing Date, (D) that no Default or Event of Default has occurred and
is continuing under this Agreement as of the Closing Date after the
initial funding under this Agreement, (E) since March 31, 2005 there
has occurred no material adverse change in the business, assets,
liabilities (actual or contingent), operations, or condition (financial
or otherwise) or prospects of the Borrower and its Subsidiaries, taken
as a whole, or in the facts and information regarding the Borrower and
its Subsidiaries previously delivered to the Administrative Agent or
the Lenders, (F) that as of the Closing Date there are no material
environmental or material legal issues affecting any Loan Party or any
of the Collateral, (G) all necessary governmental and third party
approvals necessary or required for any Loan Party to (i) enter into
this Agreement or any of the Loan Documents or (ii) continue its
business operations have been obtained and are in full force and
48
effect, (H) there is no litigation, investigation or proceeding known
to and affecting the Borrower or any of its Subsidiaries for which the
Borrower is required to give notice pursuant to SECTION 6.03(B) (or, if
there is any such litigation, investigation or proceeding, then a
notice containing the information required by SECTION 6.03(B) shall be
given concurrently with the delivery of the certificate given pursuant
to this clause (v)), (I) no action, suit, investigation or proceeding
is pending or, to the Borrower's knowledge, threatened in any court or
before any arbitrator or Governmental Authority by or against the
Borrower, or any of its Subsidiaries or any of their respective
properties, that (y) could reasonably be expected to materially and
adversely affect the Borrower or any Subsidiary, or (z) seeks to affect
or pertains to any transaction contemplated hereby or the ability of
the Borrower or any Loan Party to perform its obligations under the
Loan Documents, (J) that contemporaneously with the funding of the
initial Loan under this Agreement, Borrower will own 100% of the Equity
Interest of AirComp and all Liens granted by AirComp as collateral
security for the Existing Credit Agreement and all guaranties of
AirComp's Indebtedness under the Existing Credit Agreement have been
released, and (K) that the maturity of the Jens Related Subordinated
Indebtedness has been extended to no earlier than October 11, 2007 and
the maturity of the AirComp Related Subordinated Indebtedness is no
earlier than October 11, 2007;
(vi) a certificate of a Responsible Officer of the Borrower
(a) demonstrating compliance with all financial covenants herein for
the quarter ended Xxxxx 00, 0000, (x) as to the satisfaction of all
conditions specified in this SECTION 4.01 and SECTION 4.03 (and if an
Acquisition Loan is requested on the Conditions Effective Date,
satisfaction of all conditions specified in SECTION 4.04), and (c)
attaching a one-year financial forecast for the Borrower and its
Subsidiaries on a consolidated basis;
(vii) a Borrowing Base Report from a Responsible Officer of
the Borrower as of the most recent month end preceding the Closing
Date;
(viii) a certificate of a Borrower's chief financial officer,
in form and substance satisfactory to the Administrative Agent,
certifying that neither the Borrower and any of its Subsidiaries is
"insolvent" as such term is used and defined in (i) the United States
Bankruptcy Code or (ii) the Texas Uniform Fraudulent Transfer Act, Tex.
Bus. & Com. Code Xxx. ss.24.003;
(ix) a commercial finance exam of the Borrower's and its
Subsidiaries' accounts receivable, paid for by the Borrower, in form
and substance satisfactory to the Administrative Agent;
(x) an opinion from counsel to each Loan Party, in form and
substance satisfactory to the Administrative Agent and its counsel;
(xi) updated asset appraisals of the Borrower's and its
Subsidiaries' assets from a recognized independent third party
appraiser, paid for by the Borrower, in form and substance satisfactory
to the Administrative Agent; and
(xii) such other assurances, certificates, documents, consents
or opinions as the Administrative Agent reasonably may require.
(b) Any fees due and payable at the Closing Date shall have been paid
including, without limitation, payment of fees and expenses pursuant to the
Agent/Arranger Fee Letter.
49
(c) The Borrower shall have paid Attorney Costs of the Administrative
Agent to the extent invoiced prior to, or on, the Closing Date.
(d) Loan Documents, executed by each Loan Party that has assets or
conducts business, in appropriate form for recording, where necessary, together
with:
(i) such Lien searches as the Administrative Agent shall have
reasonably requested, and such termination statements or other
documents as may be necessary to confirm that the Collateral is subject
to no other Liens (other than Permitted Liens) in favor of any Persons;
(ii) funds sufficient to pay any filing or recording tax or
fee in connection with any and all UCC-1 financing statements or fees
associated with the filing of any mortgages;
(iii) evidence that the Administrative Agent has been named as
loss payee under all policies of casualty insurance pertaining to the
Collateral;
(iv) certificates evidencing all of the issued and outstanding
shares of capital stock, partnership interests, or membership interests
pledged pursuant to any Collateral Document, which certificates shall
in each case be accompanied by undated stock powers duly executed in
blank, or, if any securities pledged pursuant thereto are
uncertificated securities, confirmation and evidence satisfactory to
the Administrative Agent that the security interest in such
uncertificated securities has been transferred to and perfected by the
Administrative Agent for the benefit of the Lenders in accordance with
the UCC; and
(v) evidence that all other actions necessary or, in the
opinion of the Administrative Agent or the Lenders, desirable to
perfect and protect the first priority Lien created by the Collateral
Documents (except to the extent otherwise permitted hereunder), and to
enhance the Administrative Agent's ability to preserve and protect its
interests in and access to the Collateral, have been taken.
(e) The Administrative Agent's receipt (with sufficient copies for all
Lenders) of the certificate of incorporation of the Borrower, together with all
amendments, certified by an appropriate governmental officer in its jurisdiction
of organization, as well as any other information required by SECTION 326 of the
USA Patriot Act or necessary for the Administrative Agent or any Lender to
verify the identity of Borrower as required by SECTION 326 of the USA Patriot
Act.
The Administrative Agent shall notify the Borrower and the Lenders of
the Conditions Effective Date, and such notice shall be conclusive and binding.
4.02 DEADLINE FOR CONDITIONS EFFECTIVE DATE. If for any reason the
Conditions Effective Date has not occurred by July 15, 2005, then, unless
otherwise agreed by all Lenders, the Aggregate Commitment shall terminate at
noon, Central time, on such date.
4.03 CONDITIONS TO ALL LOANS AND L/C CREDIT EXTENSION. The obligation
of each Lender to honor any Borrowing Notice and the obligation of the L/C
Issuer to issue any Letter of Credit is subject to the following conditions
precedent:
50
(a) The representations and warranties of the Loan Parties contained in
ARTICLE V, including without limitation, SECTION 5.05(B) and SECTION 5.06, or
which are contained in any document furnished at any time under or in connection
herewith, including, but not limited to the Collateral Documents, shall be true
and correct in all material respects on and as of the date such Loan is made,
continued or converted, as applicable, or such Letter of Credit is issued except
to the extent that such representations and warranties specifically refer to an
earlier date, in which case they shall be true and correct as of such earlier
date.
(b) No Default or Event of Default shall exist or would result from
such proposed Loan, continuation or conversion, or L/C Credit Extension.
(c) The Administrative Agent and, if applicable, the L/C Issuer, shall
have received a Request for Credit Extension and, if applicable, a Letter of
Credit Application in accordance with the requirements hereof.
(d) The Administrative Agent shall have received, in form and substance
reasonably satisfactory to it, such other assurances, certificates, documents or
consents related to the foregoing as the Administrative Agent reasonably may
require.
Each Request for Credit Extension submitted by the Borrower shall be
deemed to be a representation and warranty that the conditions specified in
SECTIONS 4.03(A) and (B) have been satisfied on and as of the date of the
applicable Credit Extension.
4.04 CONDITIONS TO ALL ACQUISITION LOANS. The obligation of each Lender
to honor any Borrowing Notice requesting an Acquisition Loan in connection with
a Permitted Acquisition is subject to the following conditions precedent in
addition to those set forth in SECTION 4.03:
(a) the Administrative Agent shall have received, in form and substance
reasonably satisfactory to it, if available, historical audited financial
statements of the target company's operations for a minimum of one year (and for
up to three years if available) or if audited historical financial statements
are unavailable, such unaudited historical financial statements as may be
satisfactory to the Administrative Agent as it reasonably may require;
(b) an asset appraisal of the target company or target line of business
from a recognized independent third party appraiser, paid for by Borrower, in
form and substance satisfactory to the Administrative Agent; and
(c) a Compliance Certificate for the most recent quarter end
demonstrating compliance with all financial covenants on a pro forma basis
giving effect to the proposed Permitted Acquisition for which an Acquisition
Loan is being requested.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower and each Loan Party by its execution of this Agreement
represents and warrants to the Administrative Agent and the Lenders that:
51
5.01 EXISTENCE; QUALIFICATION AND POWER; COMPLIANCE WITH LAWS. Borrower
and each Loan Party (a) is a corporation, partnership or limited liability
company duly organized or formed, validly existing and in good standing under
the Laws of the jurisdiction of its incorporation or organization, (b) has all
requisite power and authority and all governmental licenses, authorizations,
consents and approvals to own its assets, carry on its business and to execute,
deliver, and perform its obligations under the Loan Documents to which it is a
party, (c) is duly qualified and is licensed and in good standing under the Laws
of each jurisdiction where its ownership, lease or operation of properties or
the conduct of its business requires such qualification or license, and (d) is
in compliance with all Laws, except in each case referred to in clause (c) or
this clause (d), to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect.
5.02 AUTHORIZATION; NO CONTRAVENTION. The execution, delivery and
performance by each Loan Party of each Loan Document to which such Person is
party and the consummation of the transactions described herein, have been duly
authorized by all necessary corporate or other organizational action, and do not
and will not: (a) contravene the terms of any of such Person's Organization
Documents; (b) conflict with or result in any breach or contravention of, or the
creation of any Lien under, any material Contractual Obligation to which such
Person is a party or any order, injunction, writ or decree of any Governmental
Authority to which such Person or its property is subject; or (c) violate any
Law.
5.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority, except for the filings in connection with the granting
of security interests pursuant to the Collateral Documents, is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, any Loan Party of this Agreement or any other Loan
Document.
5.04 BINDING EFFECT. This Agreement has been, and each other Loan
Document, when delivered hereunder, will have been duly executed and delivered
by each Loan Party that is party thereto. This Agreement constitutes, and each
other Loan Document when so delivered will constitute, a legal, valid and
binding obligation of such Loan Party, enforceable against each Loan Party that
is party thereto in accordance with its terms.
5.05 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The audited financial statements delivered to the Lenders were
prepared in accordance with GAAP consistently applied throughout the period
covered thereby, except as otherwise expressly noted therein. Such financial
statements: (i) fairly present the financial condition of the Borrower and its
Subsidiaries on a consolidated basis as of the date thereof and their results of
operations for the period covered thereby in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise expressly
noted therein; and (ii) fairly present the financial condition of the Borrower
and its Subsidiaries on a consolidated basis as of the date thereof and their
results of operations for the period covered thereby, subject, in the case of
clauses (i) and (ii), to the absence of footnotes and to normal year-end audit
adjustments. SCHEDULE 5.05 sets forth all material indebtedness and other
liabilities, direct or contingent, of the Borrower and its Subsidiaries on a
consolidated basis as of the date of such financial statements, including
liabilities for taxes, material commitments and Indebtedness.
(b) Since March 31, 2005, there has been no event or circumstance that
has or could reasonably be expected to have a Material Adverse Effect.
52
5.06 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending or, to the knowledge of the Borrower threatened or contemplated
in writing, at law, in equity, in arbitration or before any Governmental
Authority, by or against the Borrower or any Loan Party or against any of their
properties or revenues which (a) seek to affect or pertain to this Agreement or
any other Loan Document, the borrowing of Loans, the use of the proceeds
thereof, or the issuance of Letters of Credit hereunder, or (b) if determined
adversely, could reasonably be expected to have a Material Adverse Effect.
5.07 NO DEFAULT. Neither the Borrower nor any Loan Party is in default
under or with respect to any Contractual Obligation which could be reasonably
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing or would result from the consummation of the
transactions contemplated by this Agreement or any other Loan Document.
5.08 OWNERSHIP OF PROPERTY; LIENS. From and after the Closing Date, (a)
each Loan Party has good record and marketable title in fee simple to, or valid
leasehold interests in, all its real and personal property necessary or used in
the ordinary conduct of its business, except for such defects in title as would
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and (b) the property of the Borrower and Loan Parties is subject
to no Liens, other than Permitted Liens. At the Closing Date, the only Loan
Party which owns real property is Jen's Oil-Field Service which owns an
approximately 8 acre equipment yard in Edinburg, Texas.
5.09 ENVIRONMENTAL COMPLIANCE. The Borrower has reasonably concluded
that (a) there are no claims alleging potential liability under or
responsibility for violation of any Environmental Law except any such claims
that could not, individually or in the aggregate, reasonably be expected to have
a Material Adverse Effect, (b) there is no environmental condition or
circumstance, such as the presence or Release of any Hazardous Substance, on any
property owned, operated or used the Borrower or any Borrower Affiliate that
could reasonably be expected to have a Material Adverse Effect, and (c) there is
no violation of or by the Borrower or any Borrower Affiliate of any
Environmental Law, except for such violations as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect.
5.10 INSURANCE. The properties of the Borrower and the Subsidiaries are
insured with financially sound and reputable insurance companies not Affiliates
of the Borrower, in such amounts, with such deductibles and covering such risks
as are customarily carried by companies engaged in similar businesses and owning
similar properties in localities where the Borrower or the Subsidiaries operate.
5.11 TAXES. The Borrower and the Subsidiaries have filed all federal,
state and other material tax returns and reports required to be filed for tax
years ending prior to 2004, and have paid all federal, state and other material
taxes, assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable, except
those which are being contested in good faith by appropriate proceedings and for
which adequate reserves have been provided in accordance with GAAP. There is no
proposed tax assessment against Borrower or any of its Subsidiaries that would,
if made, have a Material Adverse Effect. Neither any Loan Party nor any
Subsidiary thereof is party to any tax sharing agreement.
5.12 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state Laws except
to the extent that noncompliance could not reasonably be expected to have a
53
Material Adverse Effect. Each Plan that is intended to qualify under SECTION
401(A) of the Code has received a favorable determination letter from the IRS or
an application for such a letter is currently being processed by the IRS with
respect thereto and, to the best knowledge of the Borrower, nothing has occurred
which would prevent, or cause the loss of, such qualification. The Borrower and
each ERISA Affiliate have made all required contributions to each Plan subject
to SECTION 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to SECTION 412 of the Code has
been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of the Borrower,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that could reasonably be expected to have a Material
Adverse Effect. There has been no prohibited transaction or violation of the
fiduciary responsibility rules with respect to any Plan that has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to occur;
(ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither the
Borrower nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under SECTION 4007 of ERISA); (iv) neither
the Borrower nor any ERISA Affiliate has incurred, or reasonably expects to
incur, any liability (and no event has occurred which, with the giving of notice
under SECTION 4219 of ERISA, would result in such liability) under SECTIONS 4201
or 4243 of ERISA with respect to a Multiemployer Plan; and (v) neither the
Borrower nor any ERISA Affiliate has engaged in a transaction that could be
subject to SECTIONS 4069 or 4212(C) of ERISA.
5.13 SUBSIDIARIES AND OTHER INVESTMENTS. As of the Closing Date the
Borrower (i) will have no Subsidiaries other than those specifically disclosed
in SCHEDULE 5.13, and all of the outstanding equity interests in such
Subsidiaries have been validly issued, are fully paid and nonassessable and are
owned by a Loan Party in the amounts specified in SCHEDULE 5.13 free and clear
of all Liens, (ii) will have no equity investment in any other corporation or
other entity other than those specifically disclosed in SCHEDULE 5.13, and (iii)
will have no other Investments except as disclosed in SCHEDULE 5.13.
5.14 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT; USE OF PROCEEDS.
(a) Neither the Borrower nor any of its Subsidiaries is engaged nor
will it engage, principally or as one of its important activities, in the
business of purchasing or carrying margin stock (within the meaning of
Regulation U issued by the Board), or extending credit for the purpose of
purchasing or carrying margin stock. Margin stock constitutes less than 25% of
those assets of each Loan Party which are subject to any limitation on a sale,
pledge, or other restrictions hereunder.
(b) Neither the Borrower nor any Borrower Affiliate, no Person
controlling the Borrower or any Borrower Affiliate, or any Subsidiary thereof
(i) 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,
or (ii) is or is required to be registered as an "INVESTMENT COMPANY" under the
Investment Company Act of 1940.
(c) The Borrower will use all proceeds of Credit Extension in the
manner set forth in SECTION 6.12.
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5.15 DISCLOSURE. The Borrower has disclosed to the Administrative Agent
and the Lenders all agreements, instruments and corporate or other restrictions
to which it or any of its Subsidiaries is subject, and all other matters known
to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. No report, financial statement, certificate
or other information furnished (whether in writing or orally) by or on behalf of
any Loan Party to the Administrative Agent or any Lender in connection with the
transactions contemplated hereby and the negotiation of this Agreement or
delivered hereunder or under any other Loan Document (in each case, as modified
or supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading; PROVIDED that, with respect to projected financial
information, the Borrower represents only that such information was prepared in
good faith based upon assumptions believed to be reasonable at the time.
5.16 LABOR MATTERS. There are no actual or threatened strikes, labor
disputes, slowdowns, walkouts, or other concerted interruptions of operations
that could reasonably be expected to have a Material Adverse Effect.
5.17 COMPLIANCE WITH LAWS. Each of the Borrower and each Subsidiary is
in compliance in all material respects with the requirements of all Laws and all
orders, writs, injunctions and decrees applicable to it or to its properties,
except in such instances in which (a) such requirement of Law or order, writ,
injunction or decree is being contested in good faith by appropriate proceedings
diligently conducted or (b) the failure to comply therewith, either individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect.
5.18 THIRD PARTY APPROVALS. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any party that
is not a party to this Agreement is necessary or required in connection with the
execution, delivery or performance by, or enforcement against, any Loan Party of
this Agreement or any other Loan Document EXCEPT where obtained or where the
failure to receive such approval, consent, exemption, authorization, or the
failure to do such other action by, or provide such notice could not reasonably
be expected to have a Material Adverse Effect.
5.19 SOLVENCY. Neither the Borrower nor any of its Subsidiaries is
"insolvent" as such term is used and defined in (i) the United States Bankruptcy
Code or (ii) the Texas Uniform Fraudulent Transfer Act, Tex. Bus. & Com. Code
Xxx. ss.24.003.
5.20 COLLATERAL.
(a) The provisions of each of the Collateral Documents are effective to
create in favor of the Administrative Agent for the benefit of the Lenders, a
legal, valid and enforceable first priority security interest in all Rights,
titles and interests of each Loan Party in the Collateral described therein,
except as otherwise permitted hereunder; and financing statements have been
filed in the offices in all of the jurisdictions listed in the schedule to all
Security Agreements.
(b) All representations and warranties of each Loan Party thereto
contained in the Collateral Documents are true and correct in all material
respects.
(c) None of the terms or provisions of any indenture, mortgage, deed of
trust, agreement or other instrument to which the Borrower or any Loan Party is
55
a party or by which the Borrower or any Loan Party or the property of the
Borrower or any Loan Party is bound prohibit the filing or recordation of any of
the Loan Documents or any other action which is necessary or appropriate in
connection with the perfection of the Liens on material assets evidenced and
created by any of the Loan Documents.
5.21 INTELLECTUAL PROPERTY: LICENSES, ETC.. The Borrower and its
Subsidiaries own, or possess the right to use, all of the trademarks, service
marks, trade names, copyrights, patents, patent rights, franchises, licenses and
other intellectual property rights that are reasonably necessary for the
operation of their respective businesses, without conflict with the rights of
any other Person. To the best knowledge of the Borrower, no slogan or other
advertising device, product, process, method, substance, part or other material
now employed, or now contemplated to be employed, by the Borrower or any
Subsidiary infringes upon any rights held by any other Person. No claim or
litigation regarding any of the foregoing is pending or, to the best knowledge
of the Borrower, threatened, which, either individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
5.22 LEASED LOCATIONS. SCHEDULE 5.22 lists all locations where any
Collateral is located.
5.23 PERMITTED ACQUISITIONS. The Borrower has delivered, or caused to
be delivered, to the Administrative Agent and each Lender prior to the Closing
Date all relevant information regarding the potential acquisition targets and/or
assets specified on SCHEDULE 5.23 for which Borrower has requested the Lenders'
prior consent to use proceeds of the Acquisition Loan to close the purchase of
such potential targets and/or assets.
5.24 MATERIAL AGREEMENTS. Set forth on SCHEDULE 5.24 are all material
agreements of any Loan Party, which for purposes of this representation are
agreements (whether written or oral) relating to Indebtedness of any Loan Party
in excess of $1,000,000 or pertaining to sales or provision of services
accounting for more than 10% of any Loan Party's aggregate Consolidated EBITDA.
The Borrower has delivered, or caused to be delivered, to the Administrative
Agent and each Lender prior to the Closing Date a copy of each Material
Agreement.
ARTICLE VI.
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligation shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower shall, and shall cause each Subsidiary
to:
6.01 FINANCIAL STATEMENTS. Deliver to the Administrative Agent and each
Lender, in form and detail reasonably satisfactory to the Administrative Agent
and the Required Lenders:
(a) as soon as available, but in any event within 90 days after the end
of each Fiscal Year of the Borrower, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such Fiscal Year, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for such Fiscal Year, setting forth in each case in comparative form the
figures for the previous Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, audited and accompanied by (i) a report and opinion of a
firm of independent certified public accountants of nationally recognized
standing reasonably acceptable to the Required Lenders, which report and opinion
shall be prepared in accordance with generally accepted auditing standards and
applicable state and federal securities laws and shall not be subject to any
"going concern" or like qualification or exception or any qualification or
56
exception as to the scope of such audit and (ii) if applicable, an attestation
report of such independent certified public accountants as to the Borrower's
internal controls pursuant to Section 404 of Xxxxxxxx-Xxxxx expressing a
conclusion to which the Required Lenders do not object;
(b) as soon as available, but in any event within 45 days after the end
of each of the first three fiscal quarters of each Fiscal Year of the Borrower,
a consolidated balance sheet of the Borrower and its Subsidiaries as at the end
of such fiscal quarter, and the related consolidated statements of income or
operations, shareholders' equity and cash flows for such fiscal quarter and for
the portion of the Borrower's Fiscal Year then ended, setting forth in each case
in comparative form the figures for the corresponding fiscal quarter of the
previous Fiscal Year and the corresponding portion of the previous Fiscal Year,
all in reasonable detail, certified by a Responsible Officer of the Borrower as
fairly presenting the financial condition, results of operations, shareholders'
equity and cash flows of the Borrower and its Subsidiaries in accordance with
GAAP, subject only to normal year-end audit adjustments and the absence of
footnotes;
(c) within 45 days after the end of each Fiscal Year, the Borrower
shall deliver a one year projection/budget for the Borrower and its Subsidiaries
on a consolidated basis for the then current Fiscal Year.
6.02 CERTIFICATES; OTHER INFORMATION. Deliver to the Administrative
Agent and each Lender, in form and detail satisfactory to the Administrative
Agent and the Required Lenders:
(a) concurrently with the delivery of the financial statements referred
to in SECTIONS 6.01(A) and (b), a duly completed Compliance Certificate in the
form of EXHIBIT C signed by a Responsible Officer of the Borrower;
(b) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or written communication
sent to the equity owners of the Borrower, and copies of all annual, regular,
periodic and special reports and registration statements which the Borrower may
file or be required to file with the Securities and Exchange Commission under
SECTION 13 or 15(D) of the Securities Exchange Act of 1934, and not otherwise
required to be delivered to the Administrative Agent pursuant hereto;
(c) within fifteen (15) days after the end of each calendar month, (i)
a completed Borrowing Base Report calculating and certifying the Borrowing Base
as of the last day of such calendar month, certified as complete and correct and
signed on behalf of the Borrower by its chief financial officer, and (ii) such
other supporting documentation and additional reports with respect to the
Borrowing Base as the Administrative Agent shall request;
(d) within fifteen (15) days after the first anniversary of the Closing
Date, an independent third party asset appraisal of the Borrower's and its
Subsidiaries' assets;
(e) commencing with the fiscal quarter ending September 30, 2005 and as
of each fiscal quarter thereafter, within 30 days after the end of each fiscal
quarter, at Borrower's expense, a commercial finance examination of the
Borrower's and each Subsidiary's financial and accounting records;
(f) promptly upon receipt thereof, copies of all material notices,
requests and other documents received by any Loan Party under or pursuant to any
Contractual Obligation governing Indebtedness that is outstanding in a principal
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amount of at least $1,000,000 and, from time to time upon the reasonable request
by the Administrative Agent, such information and reports regarding the such
Contractual Obligation as the Administrative Agent may reasonably request; and
(g) promptly after thereof, copies of all Revenue Agent Reports (IRS
Form 886), or other written proposals of the IRS, that propose, determine or
otherwise set forth positive adjustments to the Federal income tax liability of
the affiliated group (within the meaning of Section 1504(a)(1) of the Code) of
which the Borrower is a member aggregating $1,000,000 or more; and
(h) promptly, such additional information regarding the business,
financial or corporate affairs of Borrower or any of its Subsidiaries as the
Administrative Agent, at the request of any Lender, may from time to time
reasonably request, which information may include copies of any detailed audit
reports, if any, management letters or recommendations submitted to the board of
directors (or the audit committee of the board of directors) of the Borrower by
independent accountants in connection with the accounts or books of the Borrower
or any Subsidiary, or any audit of any of them.
6.03 NOTICES. Promptly notify the Administrative Agent and each Lender:
(a) of the occurrence of any Default;
(b) of any matter that has resulted or could reasonably be expected to
result in a Material Adverse Effect, including (i) breach or non-performance of,
or any default under, a Contractual Obligation of the Borrower or any
Subsidiary; (ii) any dispute, litigation, investigation, proceeding or
suspension of licenses or permits between the Borrower or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material
development in, any litigation or proceeding affecting the Borrower or any
Subsidiary, including pursuant to any applicable Environmental Laws;
(c) of the occurrence of any ERISA Event; and
(d) of any material change in accounting policies or financial
reporting practices by the Borrower.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has taken
and proposes to take with respect thereto. Each notice pursuant to SECTION
6.03(A) shall describe with particularity any and all provisions of this
Agreement or other Loan Document that have been breached.
6.04 PAYMENT OF OBLIGATIONS. Pay and discharge as the same shall become
due and payable, all its obligations and liabilities, including (a) the
Obligations, (b) all tax liabilities, assessments and governmental charges or
levies upon it or its properties or assets and (c) all lawful claims which, if
unpaid, would by Law become a Lien upon its property; EXCEPT in the case of
clause (b) or (c), where (i) the validity thereof are being contested in good
faith by appropriate proceedings and (ii) adequate reserves in accordance with
GAAP are being maintained by the Borrower or a Subsidiary; unless and until any
Lien resulting therefrom attaches to its property and becomes enforceable
against its other creditors.
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6.05 PRESERVATION OF EXISTENCE, ETC. Preserve, renew and maintain in
full force and effect its legal existence and good standing under the Laws of
the jurisdiction of its organization except in a transaction permitted by
SECTIONS 7.06 and 7.07; and (b) take all reasonable action to maintain all
rights, privileges, permits, licenses and franchises necessary or desirable in
the normal conduct of its business, except to the extent that failure to do so
could not reasonably be expected to have a Material Adverse Effect.
6.06 MAINTENANCE OF ASSETS AND BUSINESS; MOVEMENT OF COLLATERAL.
(a) Maintain all material properties, equipment, licenses, permits, and
franchises necessary for its normal business; (b) keep all of its assets which
are useful in and necessary to its business in good working order and condition
(ordinary wear and tear excepted) and make all necessary repairs thereto and
replacements thereof; (c) do all things necessary to obtain, renew, extend, and
continue in effect all Authorizations which may at any time and from time to
time be necessary for the operation of its business in compliance with
applicable Law, EXCEPT where the failure to so maintain, renew, extend, or
continue in effect could not reasonably be expected to have a Material Adverse
Effect; (d) preserve or renew all of its registered patents, trademarks, trade
names and service marks, the non-preservation of which could reasonably be
expected to have a Material Adverse Effect; and (e) use the standard of care
typical in the industry in the operation and maintenance of its facilities.
(b) Keep all Collateral other than Collateral located outside the
United States on the Closing Date within the United States unless prior written
notice is given to the Administrative Agent of the intent to move such
Collateral outside the United States and the Administrative Agent consents in
writing to the movement of such Collateral outside the United States.
6.07 MAINTENANCE OF INSURANCE. Maintain insurance with financially
sound and reputable insurance companies not Affiliates of Borrower with respect
to its properties and business (including business interruption insurance)
against such casualties and contingencies and of such types and in such amounts
as is customary in the case of similar businesses and which is satisfactory to
the Administrative Agent and the Required Lenders and will (i) furnish to the
Administrative Agent on each anniversary of the Closing Date a certificate or
certificates of insurance from the applicable insurance company evidencing the
existence of insurance required to be maintained by this Agreement and the other
Loan Documents and evidencing that Administrative Agent is listed as sole loss
payee on property insurance and the Administrative Agent and Lenders are
additional insureds on liability insurance, and (ii) upon request of the
Administrative Agent, furnish to each Lender at reasonable intervals a
certificate of an Authorized Officer of the Borrower setting forth the nature
and extent of all insurance maintained in accordance with this Section.
6.08 COMPLIANCE WITH LAWS AND CONTRACTUAL OBLIGATIONS.
(a) Comply in all material respects with the requirements of all Laws
(including Environmental Laws and ERISA Laws) applicable to it or to its
business or property, except in such instances in which (i) such requirement of
Law is being contested in good faith or a bona fide dispute exists with respect
thereto, or (ii) the failure to comply therewith could not be reasonably
expected to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations, except the failure to comply therewith could not be reasonably
expected to have a Material Adverse Effect.
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6.09 BOOKS AND RECORDS. Maintain proper books of record and account, in
which full, true and correct entries in conformity with GAAP consistently
applied shall be made of all financial transactions and matters involving the
assets and business of the Borrower or such Subsidiary, as the case may be.
6.10 INSPECTION RIGHTS. Permit representatives and independent
contractors of the Administrative Agent and each Lender to visit and inspect any
of its properties, to examine its corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss its affairs,
finances and accounts with its directors, officers, and independent public
accountants, all at the expense of the Borrower and at such reasonable times
during normal business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Borrower; PROVIDED, HOWEVER, that when an Event
of Default exists the Administrative Agent or any Lender (or any of their
respective representatives or independent contractors) may do any of the
foregoing at the expense of the Borrower at any time during normal business
hours and without advance notice.
6.11 COMPLIANCE WITH ERISA. With respect to each Plan maintained by
Borrower, do each of the following: (a) maintain each Plan in compliance in all
material respects with the applicable provisions of ERISA, the Code and other
federal or state Laws; (b) cause each Plan which is qualified under SECTION
401(A) of the Code to maintain such qualification; and (c) make all required
contributions to any Plan subject to SECTION 412 of the Code, EXCEPT to the
extent that noncompliance, with respect to each event listed above, could not be
reasonably expected to have a Material Adverse Effect
6.12 USE OF PROCEEDS. Use proceeds of (i) the Revolver Facility to (a)
finance working capital requirements and other general corporate purposes of the
Borrower and its Subsidiaries, and (b) issue Letters of Credit, (ii) the Term
Loan Facility to refinance certain Indebtedness of the Borrower and its
Subsidiaries and to pay related financing costs and transaction expenses; and
(iii) the Acquisition Facility to refinance existing Indebtedness of AirComp, to
finance Permitted Acquisitions and to pay related financing costs and
transaction expenses.
6.13 GUARANTIES. As an inducement to the Administrative Agent and
Lenders to enter into this Agreement, each Subsidiary of Borrower shall execute
a Guaranty in connection with this Agreement. In addition, at the time of the
formation or acquisition of any Subsidiary of the Borrower, the Borrower shall
cause such Subsidiary to execute and deliver to the Administrative Agent (a) a
Guaranty providing for the guaranty of payment and performance of the
Obligations, (b) Collateral Documents in form and substance satisfactory to the
Administrative Agent creating liens and security interests in all assets and
properties of such Subsidiary and in the Equity Interests in such Subsidiary,
and (c) certified copies of such Subsidiary's Organization Documents and
opinions of counsel with respect to such Subsidiary and such Guaranty, and (d)
such other documents and instruments as may be required with respect to such
Subsidiary pursuant to SECTION 6.14.
6.14 FURTHER ASSURANCES; ADDITIONAL COLLATERAL.
(a) The Borrower shall and shall cause each of its Subsidiaries to take
such actions and to execute and deliver such documents and instruments as the
Administrative Agent shall require to ensure that the Administrative Agent on
behalf of the Lenders shall, at all times, have received currently effective
duly executed Loan Documents granting Liens and security interests in
substantially all of the assets of the Borrower and each of its Subsidiaries,
including all fixed assets, real property, Accounts Receivable, Inventory,
Equity Interests, equipment, general intangibles, and deposit accounts.
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(b) In connection with the actions required pursuant to the foregoing
subsection (a), the Borrower shall and shall cause each Subsidiary to execute
and deliver such stock certificates, blank stock powers, evidence of corporate
authorization, opinions of counsel, current valuations, evidence of title, title
insurance and other documents, and shall use commercially reasonable efforts to
obtain landlord and mortgagee waivers and third party consents, as shall be
requested by the Administrative Agent, in each case in form and substance
satisfactory to the Administrative Agent.
(c) The Liens required by this SECTION 6.14 shall be first priority
perfected Liens in favor of the Administrative Agent for the benefit of the
Lenders, subject to no other Liens except Permitted Liens of the type described
in SECTION 7.01. If the Administrative Agent shall determine that, as of any
date, the Borrower shall have failed to comply with this SECTION 6.14, the
Administrative Agent may (and at the direction of the Required Lenders, shall)
notify the Borrower in writing of such failure and, within 30 days from and
after receipt of such written notice by the Borrower, the Borrower shall execute
and deliver to the Administrative Agent supplemental or additional Loan
Documents, in form and substance satisfactory to the Administrative Agent and
its counsel, securing payment of the Notes and the other Obligations and
covering additional assets and properties of the Borrower or its Subsidiaries
not then encumbered by any Loan Documents (together with such other information,
as may be requested by the Administrative Agent, each of which shall be in form
and substance reasonably satisfactory to the Administrative Agent) such that the
Administrative Agent shall have received currently effective duly executed and
perfected Collateral Documents encumbering substantially all of the assets of
the Borrower and its Subsidiaries as required by SECTION 6.14(A).
(d) Within sixty (60) days after the Closing Date, the Loan Parties and
Administrative Agent shall have entered into the Lockbox and Collection Account
Agreement with the financial institution holding the Loan Parties' operating and
other bank accounts or otherwise have taken such actions as the Administrative
Agent reasonably requests to give the Administrative Agent, for the benefit of
the Lenders, a first priority perfected Lien on all deposit accounts of the Loan
Parties.
6.15 LANDLORD LIEN WAIVERS. The Borrower will use its best efforts to
deliver, or cause to be delivered, to the Administrative Agent landlord and
mortgagee waivers, executed by the landlords and mortgagees specified on
SCHEDULE 5.22 and, except as disclosed in writing to Administrative Agent, there
are no locations where any Collateral is located and Borrower or any Subsidiary
is a tenant or lessee which is not subject to a valid landlord or mortgagee
waiver in favor of the Administrative Agent or if there are any such locations,
Borrower will so advise the Administrative Agent and promptly under take to
obtain landlord and mortgagee waivers.
ARTICLE VII.
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any Loan
or other Obligations shall remain unpaid or unsatisfied, or any Letter of Credit
shall remain outstanding, the Borrower agrees that it shall not, nor shall it
permit any Subsidiary to, directly or indirectly:
7.01 LIENS. Create, incur, assume or suffer to exist, any Lien upon any
of its property, assets or revenues, whether now owned or hereafter acquired,
other than the following:
(a) Liens pursuant to any Loan Document;
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(b) Liens existing on the Conditions Effective Date and listed on
SCHEDULE 7.01 to this Agreement and any renewals or extensions thereof; PROVIDED
that the property covered thereby is not changed, (ii) the amount secured or
benefited thereby is not increased, (iii) the direct or any contingent obligor
with respect thereto is not changed, and (iv) any renewal or extension of the
obligations secured or benefited thereby is permitted by SECTION 7.04(B);
(c) Liens for taxes not yet due or which are being contested in good
faith and by appropriate proceedings diligently conducted, if adequate reserves
with respect thereto are maintained on the books of the applicable Person in
accordance with GAAP;
(d) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 60 days or which are being contested in good
faith and by appropriate proceedings, if adequate reserves with respect thereto
are maintained on the books of the applicable Person;
(e) pledges or deposits in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other social
security legislation, other than any Lien imposed by ERISA;
(f) deposits to secure the performance of bids, trade contracts and
leases (other than Indebtedness), statutory obligations, surety bonds (other
than bonds related to judgments or litigation), performance bonds and other
obligations of a like nature, in each case incurred in the ordinary course of
business;
(g) easements, rights-of-way, restrictions and other encumbrances
affecting real property which, in the aggregate, are not substantial in amount
and which do not, in any case, materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct of the
business of the applicable Person;
(h) any Lien existing on any asset (other than stock of a Subsidiary)
prior to acquisition thereof by the Borrower or a Loan Party, and not created in
contemplation of such acquisition; PROVIDED that (i) no such Lien shall be
extended to cover property other than the asset being acquired, (ii) such Lien
was not created in contemplation of or in connection with such acquisition, and
(iii) the Indebtedness thereby secured is permitted by SECTION 7.04(F);
(i) Liens securing Capital Lease obligations permitted under SECTION
7.04(G); PROVIDED that no such Lien shall extend to or cover any Collateral or
assets other than the assets subject to such Capitalized Lease obligations;
(j) Purchase money Liens upon or in any property acquired by Borrower
or any Loan Party to secure the deferred portion of the purchase price of such
property or to secure Indebtedness incurred to finance the acquisition of such
property; PROVIDED that (i) no such Lien shall be extended to cover property
other than the property being acquired, and (ii) the Indebtedness thereby
secured is permitted by SECTION 7.04(E);
(k) Liens reserved in or exercisable under any lease or sublease to
which the Borrower or a Loan Party is a lessee which secure the payment of rent
or compliance with the terms of such lease or sublease; PROVIDED, that the rent
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under such lease or sublease is not then overdue and the Borrower or Loan Party
is in material compliance with the terms and conditions thereof;
(l) any interest or title of a lessor under any lease entered into by
the Borrower or any Loan Party in the ordinary course of its business and
covering only the assets so leased; and
(m) Liens securing Indebtedness permitted under SECTION 7.04(H).
7.02 INVESTMENTS. Make or own any Investments (including any Investment
in any foreign Subsidiary), except:
(a) Investments existing on the Closing Date and listed on SCHEDULE
5.13;
(b) Cash Equivalents;
(c) advances to officers, directors and employees of the Borrower and
Subsidiaries in an aggregate amount not to exceed $50,000 at any time
outstanding, for travel, entertainment, relocation and analogous ordinary
business purposes;
(d) Investments of the Borrower in any Domestic Subsidiary which is a
Guarantor and Investments of any Guarantor in another Guarantor;
(e) Investments consisting of extensions of credit in the nature of
accounts receivable or notes receivable arising from the grant of trade credit
in the ordinary course of business, and Investments received in satisfaction or
partial satisfaction thereof from financially troubled account debtors to the
extent reasonably necessary in order to prevent or limit loss;
(f) Permitted Acquisitions;
(g) Investments consisting of (i) the acquisition of 100% of the
capital stock of Casing Services and Equipment, Inc. by issuance of Borrower's
Equity Interests and/or proceeds from the sale of up to 1.8 million shares of
Borrower's capital stock by Borrower in connection with the Public Offering (it
being agreed and understood that no Loan proceeds may be used for such
acquisition) and (ii) other Investments made by issuance of Borrower's Equity
Interest and/or proceeds from the sale of up to 1.8 million shares of Borrower's
capital stock by Borrower in connection with the Public Offering; PROVIDED any
Investment described in clause (ii) has been approved in writing by the
Administrative Agent.
(h) other Investments not exceeding $100,000 in the aggregate in any
Fiscal Year of the Borrower.
7.03 SWAP CONTRACTS. Enter into any Swap Contracts other than in the
ordinary course of business for the purpose of protecting against fluctuations
in interest rates or foreign exchange rates and not for purposes of speculation;
PROVIDED that the Swap Contract shall not contain any provision exonerating the
non-defaulting party from its obligation to make payments on outstanding
transactions to the defaulting party.
7.04 INDEBTEDNESS. Create, incur, or assume any Indebtedness except:
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(a) Indebtedness under the Loan Documents;
(b) Indebtedness (including Subordinated Indebtedness) outstanding on
the date hereof and listed on SCHEDULE 5.05 and any refinancings, refundings,
renewals or extensions thereof; PROVIDED that the amount of such Indebtedness is
not increased at the time of such refinancing, refunding, renewal or extension
except by an amount equal to a reasonable premium or other reasonable amount
paid, and fees and expenses reasonably incurred, in connection with such
refinancing and by an amount equal to any existing commitments unutilized
thereunder;
(c) Guaranty Obligations of the Borrower in respect of Indebtedness
otherwise permitted hereunder of the Borrower;
(d) Obligations (contingent or otherwise) of the Borrower or any
Subsidiary existing or arising under any Swap Contract to the extent permitted
by SECTION 7.03;
(e) Indebtedness of the Borrower and its Subsidiaries in respect of
purchase money obligations for fixed or capital assets within the limitations
set forth in SECTION 7.01(J); PROVIDED, HOWEVER, that the aggregate annual
amount of such Indebtedness at any one time outstanding shall not exceed
$1,000,000;
(f) Indebtedness associated with Liens on assets acquired by the
Borrower or any Loan Party or Indebtedness assumed by the Borrower or any Loan
Party, in either instance in connection with a Permitted Acquisition; PROVIDED,
HOWEVER, such Indebtedness at any one time outstanding shall not exceed
$1,000,000;
(g) Indebtedness of the Borrower and its Subsidiaries in connection
with Capital Leases; PROVIDED, HOWEVER, such Indebtedness at any one time
outstanding shall not exceed $1,000,000; and
(h) Indebtedness associated with equipment financing for the Borrower
and its Subsidiaries; PROVIDED, HOWEVER, such Indebtedness at any one time
outstanding shall not exceed $5,000,000.
PROVIDED, that if any Indebtedness is incurred pursuant to this SECTION 7.04,
both before and after such Indebtedness is created, incurred or assumed, no
Default or Event of Default shall exist.
7.05 LEASE OBLIGATIONS. Create or suffer to exist any obligations for
the payment of rent for any property under lease or agreement to lease, EXCEPT
for operating leases (other than those constituting Synthetic Lease Obligations)
entered into or assumed by the Borrower or any Subsidiary in the ordinary course
of business prior to the Conditions Effective Date; PROVIDED that, such
operating leases will not require the payment of an aggregate amount of payments
in excess of (excluding escalations resulting from a rise in the consumer price
or similar index) $500,000 during the full remaining term of such leases,
exclusive of expenses for maintenance, repairs, insurance taxes, assessments and
similar changes.
7.06 FUNDAMENTAL CHANGES. Merge, dissolve, liquidate, consolidate with
or into another Person, or Dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) to or in favor of any Person, except that, so long as no
Default exists or would result therefrom:
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(a) any Subsidiary may merge with (i) the Borrower; PROVIDED that the
Borrower shall be the continuing or surviving Person, or (ii) any one or more
other Subsidiaries; PROVIDED that when any Guarantor is merging with another
Subsidiary, the Guarantor shall be the continuing or surviving Person; and
(b) any Subsidiary may Dispose of all or substantially all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or to another
Subsidiary; PROVIDED that if the transferor in such a transaction is a
Guarantor, then the transferee must either be the Borrower or a Guarantor.
7.07 DISPOSITIONS.
Make any Disposition or enter into any agreement to make any
Disposition, except:
(a) Dispositions of obsolete or worn out property, whether now owned or
hereafter acquired, in the ordinary course of business;
(b) Dispositions of Inventory in the ordinary course of business;
(c) Dispositions of property by any Subsidiary to the Borrower, or by
any Subsidiary or by the Borrower, to a Wholly-Owned Subsidiary that is a
Guarantor;
(d) Dispositions of equipment or real property to the extent that (i)
such property is exchanged for credit against the purchase price of similar
replacement property or (ii) the proceeds of such Disposition are reasonably
promptly applied to the purchase price of such replacement property; or
(e) Dispositions permitted BY SECTION 7.06.
7.08 RESTRICTED PAYMENTS; DISTRIBUTIONS AND REDEMPTIONS. Declare or
make, directly or indirectly, any Restricted Payment, or incur any obligation
(contingent or otherwise) to do so, except that:
(a) each Subsidiary may make Restricted Payments to the Borrower and to
Wholly-Owned Subsidiaries of the Borrower;
(b) the Borrower and each Subsidiary may declare and make dividend
payments or other distributions payable solely in the common stock or other
common Equity Interests of such Person;
(c) the Borrower and each Subsidiary may purchase, redeem or otherwise
acquire Equity Interests issued by it with the proceeds received from the
substantially concurrent issue of new shares of its common stock or other common
Equity Interests; and
(d) the Borrower may engage in any Equity Issuance, so long as the Net
Cash Proceeds thereof are applied to the prepayment of the Loans pursuant to
SECTION 2.04(B)(VI).
7.09 ERISA. At any time engage in a transaction which could be subject
to SECTION 4069 or 4212(C) of ERISA, or permit any Plan maintained by Borrower
or an ERISA Affiliate to: (a) engage in any non-exempt "PROHIBITED TRANSACTION"
(as defined in SECTION 4975 of the Code); (b) fail to comply with ERISA or any
other applicable Laws; or (c) incur any material "ACCUMULATED FUNDING
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DEFICIENCY" (as defined in SECTION 302 of ERISA), which, with respect to each
event listed above, could be reasonably expected to have a Material Adverse
Effect.
7.10 CHANGE IN NATURE OF BUSINESS. Engage in any material line of
business substantially different from those lines of business conducted by the
Borrower and its Subsidiaries on the Closing Date.
7.11 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of any
kind with any Affiliate of the Borrower, whether or not in the ordinary course
of business, other than on fair and reasonable terms substantially as favorable
to the Borrower or such Subsidiary as would be obtainable by the Borrower or
such Subsidiary at the time in a comparable arm's length transaction with a
Person other than an Affiliate.
7.12 BURDENSOME AGREEMENTS. Enter into any Contractual Obligation
(other than this Agreement or any other Loan Document) that (a) limits the
ability (i) of any Subsidiary to make Restricted Payments to the Borrower or any
Guarantor or to otherwise transfer property to the Borrower or any Guarantor,
(ii) of any Subsidiary to Guarantee the Indebtedness of the Borrower or (iii) of
the Borrower or any Subsidiary to create, incur, assume or suffer to exist Liens
on property of such Person; PROVIDED, HOWEVER, that this clause (iii) shall not
prohibit any negative pledge incurred or provided in favor of any holder of
Indebtedness permitted under SECTION 7.05 solely to the extent any such negative
pledge relates to the property financed by or the subject of such Indebtedness;
or (b) requires the grant of a Lien to secure an obligation of such Person if a
Lien is granted to secure another obligation of such Person.
7.13 USE OF PROCEEDS. Use the proceeds of any Loan or Letter of Credit
for purposes other than those permitted by SECTION 6.12, or use the proceeds of
any Loan, whether directly or indirectly, and whether immediately, incidentally
or ultimately, to (i) purchase or carry margin stock (within the meaning of
Regulation U of the Board) or to extend credit to others for the purpose of
purchasing or carrying margin stock or to refund indebtedness originally
incurred for such purpose or (ii) to finance the acquisition of 100% of the
capital stock of Casing Services and Equipment, Inc.
7.14 CAPITAL EXPENDITURES. During any Fiscal Year make capital
expenditures in excess of $10,000,000 in the aggregate (of which Mexican CapEx
shall not exceed $4,500,000 for the Fiscal Year 2005 or $3,000,000 for any
Fiscal Year thereafter); PROVIDED, HOWEVER, it is agreed and understood that
capital expenditures excludes acquisitions made prior to the Closing Date,
Permitted Acquisitions and those Investments allowed under SECTION 7.02(G).
7.15 PREPAYMENTS. Except for Indebtedness incurred pursuant to the Loan
Documents, neither Borrower nor any Subsidiary shall prepay any Indebtedness.
7.16 SUBORDINATED INDEBTEDNESS. The Borrower will not amend documents
governing Subordinated Indebtedness unless approved in writing by the Required
Lenders (other than ministerial amendments and amendments to extend the time or
times for payment). The Borrower shall not make any payments of interest or any
other amounts in respect of the Subordinated Indebtedness if a Default or Event
of Default shall have occurred and be continuing or would result from such
payment. The Borrower will not repay any principal, interest or other
indebtedness in respect of the Subordinated Indebtedness, or make any redemption
or acquisition for value or defeasance, refinancing or exchange thereof or
therefore, or make any payments in contravention of the applicable Subordination
Agreement; PROVIDED, HOWEVER, with respect to the Jens/M-I Subordinated
Indebtedness, a principal payment in the amount of $300,000 may be made on or
before August 31, 2005 to reduce the outstanding principal balance thereof to no
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less than $3,020,000 and with respect to all Subordinated Indebtedness up to an
additional $1,000,000 principal may be repaid or prepaid so long as no Default
or Event of Default shall have occurred and be continuing or would result from
such payment and Borrower shall so certify to Administrative Agent in writing
prior to any such payment; provided, however, any non-compete payments made to
any holder of Subordinated Indebtedness is not considered a payment of
Subordinated Indebtedness and does not count against the $1,000,000 amount
specified in this sentence.
7.17 AMENDMENTS OF CONSTITUTIVE DOCUMENTS. Borrower shall not amend, or
permit any of its Subsidiaries to amend, its certificate of incorporation or
bylaws or other constitutive documents other than amendments that could not be
reasonably expected to have a Material Adverse Effect.
7.18 ACCOUNTING CHANGES. Borrower shall not make or permit, or permit
any of its Subsidiaries to make or permit, any change in (i) accounting policies
or reporting practices, except as required or permitted by GAAP, or (ii) in its
Fiscal Year.
7.19 FINANCIAL COVENANTS.
(a) MINIMUM TANGIBLE NET WORTH. Permit the Consolidated Tangible Net
Worth of the Borrower and its Subsidiaries on a consolidated basis as of the end
of any calendar quarter to be less than the sum of (i) eighty-five percent (85%)
of Borrower's Consolidated Tangible Net Worth as of June 30, 2005 PLUS (ii) 50%
of Consolidated Net Income (if positive) after March 31, 2005, PLUS (c) 100% of
the Net Cash Proceeds of any Equity Interest issued by Borrower or any of its
Subsidiaries (including pursuant to the Public Offering) after the Closing Date.
For purposes of calculating Consolidated Tangible Net Worth, the write-off of
unamortized financing costs shall not be considered.
(b) INTEREST COVERAGE RATIO. Permit the Interest Coverage Ratio as of
the end of any fiscal quarter to be less than the ratio of 3.0 to 1.0.
(c) CURRENT RATIO. Permit the Current Ratio as of the end of any fiscal
quarter to be less than the ratio of 1.0 to 1.0.
(d) FIXED ASSET COVERAGE RATIO. Permit the Fixed Asset Coverage Ratio
as of the end of any fiscal quarter to be less than the ratio of 1.25 to 1.0.
(e) LEVERAGE RATIO. Permit the Leverage Ratio as of the end of any
fiscal quarter set forth below to be greater than the ratio set forth below:
Fiscal Quarter Ending Leverage Ratio
Prior to and including September 30, 2006 3.50 to 1.00
December 31, 2006 and thereafter 3.25 to 1.00
(f) ADJUSTMENTS FOR CERTAIN ACQUISITIONS. For purposes of determining
compliance with SECTION 7.19(B) AND (E):
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(i) Consolidated EBITDA shall be calculated after giving
effect, on a pro forma basis for the four consecutive fiscal quarters
most recently completed, to any Permitted Acquisition or any
acquisition pursuant to SECTION 7.02(G) occurring during such period,
as if such acquisition occurred on the first day of such period.
(ii) If, in connection with a Permitted Acquisition or any
acquisition pursuant to SECTION 7.02(G), any Indebtedness is incurred
or assumed by the Borrower or any of its Subsidiaries, then
Consolidated Interest Charges shall be calculated, on a pro forma basis
(in a manner acceptable to the Required Lenders) for the four quarters
most recently completed, as if such Indebtedness had been incurred on
the first day of such period.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any of the following shall constitute an Event
of Default:
(a) NON-PAYMENT. The Borrower or any other Loan Party fails to pay (i)
any amount due under the Agent/Arranger Fee Letter when and as required to be
paid therein, (ii) when and as required to be paid herein, any amount of
principal of any Loan or any L/C Obligation or (iii) within three Business Days
after the same becomes due, any interest on any Loan, any L/C Obligation, any
commitment or other fee due hereunder (other than a fee specified in the
Agent/Arranger Fee Letter), or any other amount payable hereunder or under any
other Loan Document; or
(b) SPECIFIC COVENANTS. The Borrower fails to perform or observe any
term, covenant or agreement contained in any of SECTION 6.02, 6.03(A), 6.05
(with respect to any Loan Party's existence), 6.06, 6.10, 6.12, 6.13, 6.14, or
ARTICLE VII; or
(c) OTHER DEFAULTS. Any Loan Party fails to perform or observe any
other covenant or agreement (not specified in subsection (a) or (b) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days after the earlier of (i) the date notice has been
given to the Borrower by the Administrative Agent or a Lender or (ii) the date a
Responsible Officer knew or reasonably should have known of such Default; or
(d) REPRESENTATIONS AND WARRANTIES. Any representation or warranty made
or deemed made by the Borrower or any other Loan Party herein, in any other Loan
Document, or in any document delivered in connection herewith or therewith
proves to have been incorrect in any material respect when made or deemed made;
or
(e) CROSS-DEFAULT. (i) The Borrower or any Subsidiary (A) fails to make
any payment when due (whether by scheduled maturity, required prepayment,
acceleration, demand, or otherwise) in respect of any Indebtedness or Guaranty
Obligation (other than Indebtedness hereunder or under Swap Contracts) having an
aggregate principal amount (or, in the case of a Capital Lease or a Synthetic
Lease Obligation, Attributable Indebtedness) (including undrawn or available
amounts and including amounts owing to all creditors under any combined or
syndicated credit arrangement) of more than (individually or collectively)
$1,000,000, or (B) fails to observe or perform any other agreement or condition
relating to any such Indebtedness or Guaranty Obligation or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event occurs, the effect of which default or other event is to cause, or to
permit the holder or holders of such Indebtedness, the lessor under such
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Synthetic Lease Obligation or the beneficiary or beneficiaries of such Guaranty
Obligation (or a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice if required,
such Indebtedness to be demanded or to become due or to be repurchased or
redeemed (automatically or otherwise) prior to its stated maturity, or such
Guaranty Obligation to become payable or cash collateral in respect thereof to
be demanded; or (ii) (A) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from any event of
default under such Swap Contract as to which the Borrower or any Subsidiary is
the Defaulting Party (as defined in such Swap Contract) or any Termination Event
(as so defined) under such Swap Contract to which the Borrower or any Subsidiary
is an Affected Party (as so defined) and, in either event, the Swap Termination
Value owed by the Borrower or such Subsidiary as a result thereof is greater
than $1,000,000; or
(f) INSOLVENCY PROCEEDINGS, ETC. (i) Any Loan Party or any of its
Subsidiaries institutes or consents to the institution of any proceeding under
any Debtor Relief Law, or makes an assignment for the benefit of creditors; or
applies for or consents to the appointment of any receiver, trustee, custodian,
conservator, liquidator, rehabilitator or similar officer for it or for all or
any material part of its property or takes any action to effect any of the
foregoing; or (ii) any receiver, trustee, custodian, conservator, liquidator,
rehabilitator or similar officer is appointed without the application or consent
of such Person and the appointment continues undischarged or unstayed for 30
calendar days; or (iii) any proceeding under any Debtor Relief Law relating to
any such Person or to all or any part of its property is instituted without the
consent of such Person and continues undismissed or unstayed for 30 calendar
days, or an order for relief is entered in any such proceeding; or
(g) INABILITY TO PAY DEBTS; ATTACHMENT. (i) The Borrower or any
Subsidiary becomes unable or admits in writing its inability or fails generally
to pay its debts as they become due, or (ii) any writ or warrant of attachment
or execution or similar process is issued or levied against property which is a
material part of the property of such Person and is not released, vacated or
fully bonded within 30 days after its issue or levy; or
(h) JUDGMENTS. There is entered against the Borrower or any Subsidiary
(i) a final judgment or order for the payment of money in an aggregate amount
exceeding (individually or collectively) $1,000,000 (to the extent not covered
by third-party insurance as to which the insurer does not dispute coverage), or
(ii) any non-monetary final judgment that has or could reasonably be expected to
have a Material Adverse Effect and, in either case, (A) enforcement proceedings
are commenced by any creditor upon such judgment or order, or (B) there is a
period of 30 consecutive days during which a stay of enforcement of such
judgment, by reason of a pending appeal or otherwise, is not in effect; or
(i) ERISA. (i) If the Borrower, any Borrower Affiliate or any of their
ERISA Affiliates maintains any Pension Plan or any Multiemployer Plan, an ERISA
Event occurs with respect to a Pension Plan or Multiemployer Plan which has
resulted or could reasonably be expected to result in liability of the Borrower
or any Borrower Affiliate under TITLE IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of $1,000,000,
or (ii) if there is any Multiemployer Plan, the Borrower, any Borrower Affiliate
or any ERISA Affiliate thereof fails to pay when due, after the expiration of
any applicable grace period, any installment payment with respect to its
withdrawal liability under SECTION 4201 of ERISA under a Multiemployer Plan in
an aggregate amount in excess of $1,000,000; or
(j) INVALIDITY OF LOAN DOCUMENTS. Any Loan Document, at any time after
its execution and delivery and for any reason other than the agreement of all
the Lenders or termination of all Commitments and satisfaction in full of all
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the Obligations, ceases to be in full force and effect, or is declared by a
court of competent jurisdiction to be null and void, invalid or unenforceable in
any material respect; or any Loan Party denies that it has any or further
liability or obligation under any Loan Document, or purports to revoke,
terminate or rescind any Loan Document; or
(k) CHANGE OF CONTROL. There occurs any Change of Control; or
(l) DISSOLUTION. The Borrower or any Loan Party shall dissolve,
liquidate, or otherwise terminate its existence, except as permitted in SECTION
7.06; or
(m) MATERIAL AGREEMENTS. (i) Termination of any Material Agreement, or
any material provision of any of the foregoing if such termination could
reasonably be expected to have a Material Adverse Effect and such agreement or
provision is not replaced (prior to such cessation) in a manner satisfactory to
the Administrative Agent; (ii) default by any Person in the performance or
observance of any material term of any Material Agreement which is not cured
within the applicable cure period specified in such Material Agreement, if such
default could reasonably be expected to have a Material Adverse Effect; or (iii)
any event or condition occurs or exists which in the opinion of the
Administrative Agent is reasonably likely to (x) have a material adverse effect
on the ability of Borrower or any of its Subsidiaries to perform its obligations
under a Material Agreement and (y) result in a Material Adverse Effect
hereunder; or
(n) COLLATERAL; IMPAIRMENT OF SECURITY, ETC. (i) Any provision of any
Loan Document shall for any reason cease to be valid and binding on or
enforceable against a Loan Party or any Loan Party shall so state in writing or
bring an action to limit its obligations or liabilities thereunder; or (ii) any
Collateral Document shall for any reason (other than pursuant to the terms
thereof) cease to create a valid security interest in the Collateral purported
to be covered thereby or such security interest shall for any reason cease to be
a perfected and first priority security interest subject to Permitted Liens; or
(o) PROCEEDINGS BY SECURED CREDITORS. Any secured creditor of any Loan
Party which is owed $1,000,000 or more takes any action to foreclose any Lien
securing the Indebtedness owed to such secured creditor.
8.02 REMEDIES UPON EVENT OF DEFAULT. If any Event of Default occurs and
is continuing, the Administrative Agent shall, at the request of, or may, with
the consent of, the Required Lenders, take any or all of the following actions:
(a) declare the Commitment of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions to be terminated,
whereupon such Commitments and obligations shall be terminated;
(b) declare the unpaid principal amount of all outstanding Loans, all
interest accrued and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due and payable,
without presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other notice of any kind, all of which are hereby expressly
waived by the Borrower;
(c) require that the Borrower Cash Collateralize the L/C Obligations
(in an amount equal to the then Outstanding Amount thereof); and
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(d) exercise on behalf of itself and the Lenders all rights and
remedies available to it and the Lenders under the Loan Documents or applicable
Law;
PROVIDED, HOWEVER, that upon the occurrence of any event specified in subsection
(f) of SECTION 8.01, the obligation of each Lender to make Loans and any
obligation of the L/C Issuer to make L/C Credit Extensions shall automatically
terminate, the unpaid principal amount of all outstanding Loans and all interest
and other amounts as aforesaid shall automatically become due and payable, and
the obligation of the Borrower to Cash Collateralize the L/C Obligations as
aforesaid shall automatically become effective, in each case without further act
of the Administrative Agent or any Lender.
8.03 APPLICATION OF FUNDS. After the exercise of remedies provided for
in SECTION 8.02 (or after the Loans have automatically become immediately due
and payable and the L/C Obligations have automatically been required to be Cash
Collateralized as set forth in the proviso to SECTION 8.02), any amounts
received on account of the Obligations shall be applied by the Administrative
Agent in the following order:
FIRST, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts (including Attorney Costs of the
Administrative Agent and amounts payable under ARTICLE III) payable to the
Administrative Agent in its capacity as such;
SECOND, to payment of that portion of the Obligations constituting
fees, indemnities and other amounts (other than principal, interest and Letter
of Credit Fees) payable to the Lenders and the L/C Issuer (including Attorney
Costs of the respective Lenders and the L/C Issuer and amounts payable under
ARTICLE III), ratably among them in proportion to the respective amounts
described in this clause SECOND payable to them;
THIRD, to payment of that portion of the Obligations constituting
accrued and unpaid Letter of Credit fees and interest on the Loans, L/C
Borrowings and other Obligations, ratably among the Lenders and the L/C Issuer
in proportion to the respective amounts described in this clause THIRD payable
to them;
FOURTH, to payment of that portion of the Obligations constituting
unpaid principal of the Loans and L/C Borrowings, ratably among the Lenders and
the L/C Issuer in proportion to the respective amounts described in this clause
FOURTH held by them;
FIFTH, to the Administrative Agent for the account of the L/C Issuer,
to Cash Collateralize that portion of L/C Obligations comprised of the aggregate
undrawn amount of Letters of Credit; and
LAST, the balance, if any, after all of the Obligations have been
indefeasibly paid in full, to the Borrower or as otherwise required by Law.
Subject to SECTION 2.14(C), amounts used to Cash Collateralize the aggregate
undrawn amount of Letters of Credit pursuant to clause FIFTH above shall be
applied to satisfy drawings under such Letters of Credit as they occur. If any
amount remains on deposit as cash collateral after all Letters of Credit have
either been fully drawn or expired, such remaining amount shall be applied to
the other Obligations, if any, in the order set forth above.
ARTICLE IX.
ADMINISTRATIVE AGENT
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9.01 APPOINTMENT AND AUTHORIZATION OF AGENTS; LENDER HEDGING
AGREEMENTS. (a) Each Lender and the L/C Issuer hereby irrevocably (subject to
SECTION 9.10) appoints, designates and authorizes the Administrative Agent to
take such action on its behalf under the provisions of this Agreement and each
other Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere herein or in
any other Loan Document, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the
Administrative Agent have or be deemed to have any fiduciary relationship with
any Lender or participant, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against the
Administrative Agent. Without limiting the generality of the foregoing sentence,
the use of the term "AGENT" herein and in the other Loan Documents with
reference to the Administrative Agent is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable Law. Instead, such term is used merely as a matter of market custom,
and is intended to create or reflect only an administrative relationship between
independent contracting parties.
(b) The L/C Issuer shall act on behalf of the Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time (and except for so long) as the Administrative Agent may agree at the
request of the Required Lenders to act for the L/C Issuer with respect thereto;
PROVIDED, HOWEVER, that the L/C Issuer shall have all of the benefits and
immunities (i) provided to the Administrative Agent in this ARTICLE IX with
respect to any acts taken or omissions suffered by the L/C Issuer in connection
with Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term "Administrative Agent" as used in this ARTICLE IX
included the L/C Issuer with respect to such acts or omissions, and (ii) as
additionally provided herein with respect to the L/C Issuer.
(c) To the extent any Lender or any Affiliate of a Lender is a party to
a Lender Hedging Agreement and accepts the benefits of the Liens in the
Collateral arising pursuant to the Collateral Documents, such Lender (for itself
and on behalf of any such Affiliates) shall be deemed (i) to appoint the
Administrative Agent, as its nominee and agent, to act for and on behalf of such
Lender or Affiliate thereof in connection with the Collateral Documents and (ii)
to be bound by the terms of this ARTICLE IX.
9.02 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts concerning all matters pertaining to such duties.
Administrative Agent shall not be responsible for the negligence or misconduct
of any agent or attorney-in-fact that it selects in the absence of gross
negligence or willful misconduct.
9.03 DEFAULT; COLLATERAL. (a) Upon the occurrence and continuance of a
Default or Event of Default, the Lenders agree to promptly confer in order that
Required Lenders or the Lenders, as the case may be, may agree upon a course of
action for the enforcement of the rights of the Lenders; and the Administrative
Agent shall be entitled to refrain from taking any action (without incurring any
liability to any Person for so refraining) UNLESS AND UNTIL the Administrative
Agent shall have received instructions from Required Lenders. All rights of
action under the Loan Documents and all right to the Collateral, if any,
hereunder may be enforced by the Administrative Agent and any suit or proceeding
instituted by the Administrative Agent in furtherance of such enforcement shall
be brought in its name as the Administrative Agent without the necessity of
joining as plaintiffs or defendants any other Lender, and the recovery of any
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judgment shall be for the benefit of the Lenders (and, with respect to Lender
Hedging Agreements, Affiliates, if applicable) subject to the expenses of the
Administrative Agent. In actions with respect to any property of the Borrower or
any other Obligor, the Administrative Agent is acting for the ratable benefit of
each Lender (and, with respect to Lender Hedging Agreement, Affiliates, if
applicable). Any and all agreements to subordinate (whether made heretofore or
hereafter) other indebtedness or obligations of Borrower to the Obligations
shall be construed as being for the ratable benefit of each Lender (and, with
respect to Lender Hedging Agreement, Affiliates, if applicable).
(b) Each Lender authorizes and directs the Administrative Agent to
enter into the Collateral Documents on behalf of and for the benefit of the
Lenders (and, with respect to Lender Hedging Agreements, Affiliates, if
applicable)(or if previously entered into, hereby ratifies the Administrative
Agent's previously entering into such agreements and Collateral Documents).
(c) EXCEPT to the extent unanimity (or other percentage set forth in
SECTION 10.1) is required hereunder, each Lender agrees that any action taken by
the Required Lenders in accordance with the provisions of the Loan Documents,
and the exercise by the Required Lenders of the power set forth herein or
therein, TOGETHER with such other powers as are reasonably incidental thereto,
shall be authorized and binding upon all of the Lenders.
(d) The Administrative Agent is hereby authorized on behalf of the
Lenders, without the necessity of any notice to or further consent from any
Lender, from time to time to take any action with respect to any Collateral or
Collateral Documents which may be necessary to perfect and maintain perfected
the Liens upon the Collateral granted pursuant to the Collateral Documents.
(e) The Administrative Agent shall have no obligation whatsoever to any
Lender or to any other Person to assure that the Collateral exists or is owned
by any Obligor or is cared for, protected, or insured or has been encumbered or
that the Liens granted to the Administrative Agent herein or pursuant thereto
have been properly or sufficiently or lawfully created, perfected, protected, or
enforced, or are entitled to any particular priority, or to exercise at all or
in any particular manner or under any duty of care, disclosure, or fidelity, or
to continue exercising, any of the Rights granted or available to the
Administrative Agent in this SECTION 9.03 or in any of the Collateral Documents;
it being understood and agreed that in respect of the Collateral, or any act,
omission, or event related thereto, the Administrative Agent may act in any
manner it may deem appropriate, in its sole discretion, given the Administrative
Agent's own interest in the Collateral as one of the Lenders and that the
Administrative Agent shall have no duty or liability whatsoever to any Lender,
other than to act without gross negligence or willful misconduct.
(f) The Lenders hereby irrevocably authorize the Administrative Agent,
at its option and in its discretion, to release any Lien granted to or held by
the Administrative Agent upon any Collateral: (i) constituting property in which
no Obligor owned an interest at the time the Lien was granted or at any time
thereafter; (ii) constituting property leased to an Obligor under a lease which
has expired or been terminated in a transaction permitted under the Loan
Document or is about to expire and which has not been, and is not intended by
such Obligor to be, renewed; and (iii) consisting of an instrument evidencing
Indebtedness pledged to the Administrative Agent (for the benefit of the
Lenders), if the Indebtedness evidenced thereby has been paid in full. In
addition, the Lenders irrevocably authorize the Administrative Agent to release
Liens upon Collateral as contemplated in SECTION 10.01(C) or (D), or if
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approved, authorized, or ratified in writing by the requisite Lenders. Upon
request by the Administrative Agent at any time, the Lenders will confirm in
writing the Administrative Agent's authority to release particular types or
items of Collateral pursuant to this SECTION 9.03.
(g) In furtherance of the authorizations set forth in this SECTION
9.03, each Lender hereby irrevocably appoints the Administrative Agent its
attorney-in-fact, with full power of substitution, for and on behalf of and in
the name of each such Lender (i) to enter into Collateral Documents (including,
without limitation, any appointments of substitute trustees under any Collateral
Documents), (ii) to take action with respect to the Collateral and Collateral
Documents to perfect, maintain, and preserve Lenders' Liens, and (iii) to
execute instruments of release or to take other action necessary to release
Liens upon any Collateral to the extent authorized in paragraph (f) hereof. This
power of attorney shall be liberally, not restrictively, construed so as to give
the greatest latitude to the Administrative Agent's power, as attorney, relative
to the Collateral matters described in this SECTION 9.03. The powers and
authorities herein conferred on the Administrative Agent may be exercised by the
Administrative Agent through any Person who, at the time of the execution of a
particular instrument, is an officer of the Administrative Agent (or any Person
acting on behalf of the Administrative Agent pursuant to a valid power of
attorney). The power of attorney conferred by this SECTION 9.03(G) to the
Administrative Agent is granted for valuable consideration and is coupled with
an interest and is irrevocable so long as the Obligations, or any part thereof,
shall remain unpaid or the Lenders are obligated to make any Borrowings under
the Loan Documents.
9.04 LIABILITY OF AGENTS. No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be responsible
in any manner to any Lender or participant for any recital, statement,
representation or warranty made by any Loan Party or any officer thereof,
contained herein or in any other Loan Document, or in any certificate, report,
statement or other document referred to or provided for in, or received by
Administrative Agent under or in connection with, this Agreement or any other
Loan Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document, or for the creation,
perfection or priority of any Liens purported to be created by any of the Loan
Documents, or the validity, genuineness, enforceability, existence, value or
sufficiency of any collateral security, or to make any inquiry respecting the
performance by the Borrower of its obligations hereunder or under any other Loan
Document, or for any failure of any Loan Party or any other party to any Loan
Document to perform its obligations hereunder or thereunder. No Agent-Related
Person shall be under any obligation to any Lender or participant to ascertain
or to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of any Loan Party or any Affiliate
thereof.
9.05 RELIANCE BY ADMINISTRATIVE AGENT. (a) The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon any
writing, communication, signature, resolution, representation, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation reasonably 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 (including counsel
to any Loan Party), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under any Loan Document unless it shall
first receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
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be incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders or all the Lenders,
if required hereunder, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and participants. Where
this Agreement expressly permits or prohibits an action unless the Required
Lenders otherwise determine, the Administrative Agent shall, and in all other
instances, the Administrative Agent may, but shall not be required to, initiate
any solicitation for the consent or a vote of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in SECTION 4.01, each Lender that has funded its Pro Rata Share of the
Borrowing(s) on the Conditions Effective Date (or, if there is no Borrowing made
on such date, each Lender other than Lenders who gave written objection to the
Administrative Agent prior to such date) shall be deemed to have consented to,
approved or accepted or to be satisfied with, each document or other matter
either sent by the Administrative Agent to such Lender for consent, approval,
acceptance or satisfaction, or required hereunder to be consented to or approved
by or acceptable or satisfactory to a Lender.
9.06 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "NOTICE OF DEFAULT." The
Administrative Agent will notify the Lenders of its receipt of any such notice.
The Administrative Agent shall take such action with respect to such Default or
Event of Default as may be directed by the Required Lenders in accordance with
ARTICLE VIII; PROVIDED, HOWEVER, that unless and until the Administrative Agent
has received any such direction, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable or in the best
interest of the Lenders.
9.07 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that no Agent-Related Person has made any
representation or warranty to it, and that no act by the Administrative Agent
hereinafter taken, including any consent to and acceptance of any assignment or
review of the affairs of any Loan Party or any Affiliate thereof, shall be
deemed to constitute any representation or warranty by any Agent-Related Person
to any Lender as to any matter, including whether Agent-Related Persons have
disclosed material information in their possession. Each Lender represents to
the Administrative Agent that it has, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties and their respective Subsidiaries, and all
applicable bank or other regulatory Laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower hereunder. Each Lender also represents that it
will, independently and without reliance upon any Agent-Related Person and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Borrower and the other Loan Parties. Except for notices,
reports and other documents expressly required to be furnished to the Lenders by
the Administrative Agent herein, the Administrative Agent shall not have any
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duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
and other condition or creditworthiness of any of the Loan Parties or any of
their respective Affiliates which may come into the possession of any Agent
Related Person.
9.08 INDEMNIFICATION OF AGENTS. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
each Agent-Related Person (to the extent not reimbursed by or on behalf of any
Loan Party and without limiting the obligation of any Loan Party to do so), pro
rata, and hold harmless each Agent-Related Person from and against any and all
Indemnified Liabilities incurred by it; PROVIDED, HOWEVER, that no Lender shall
be liable for the payment to any Agent-Related Person of any portion of such
Indemnified Liabilities resulting from such Person's gross negligence or willful
misconduct; PROVIDED, HOWEVER, that no action taken in accordance with the
directions of the Required Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section. Without
limitation of the foregoing, each Lender shall reimburse the Administrative
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Administrative Agent in connection
with the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal proceedings or
otherwise) of, or legal advice in respect of rights or responsibilities under,
this Agreement, any other Loan Document, or any document contemplated by or
referred to herein, to the extent that the Administrative Agent is not
reimbursed for such expenses by or on behalf of the Borrower. The undertaking in
this Section shall survive termination of the Commitments, the payment of all
Obligations hereunder and the resignation or replacement of the Administrative
Agent.
9.09 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. Royal Bank of
Canada and its Affiliates may make loans to, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with each of the Loan Parties
and their respective Affiliates as though Royal Bank of Canada were not the
Administrative Agent or the L/C Issuer hereunder and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Royal Bank of Canada or its Affiliates may receive information
regarding any Loan Party or its Affiliates (including information that may be
subject to confidentiality obligations in favor of such Loan Party or such
Affiliate) and acknowledge that the Administrative Agent shall be under no
obligation to provide such information to them. With respect to its Loans, Royal
Bank of Canada shall have the same rights and powers under this Agreement as any
other Lender and may exercise such rights and powers as though it were not the
Administrative Agent or the L/C Issuer, and the terms "LENDER" and "LENDERS"
include Royal Bank of Canada in its individual capacity.
9.10 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders with a copy
of such notice to the Borrower and may be removed by the Required Lenders at any
time with or without cause. If the Administrative Agent resigns or is removed
under this Agreement, the Required Lenders shall appoint from among the Lenders
a successor administrative agent for the Lenders which successor administrative
agent shall be consented to by the Borrower at all times other than during the
existence of an Event of Default (which consent of the Borrower shall not be
unreasonably withheld or delayed). If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrower, a successor administrative agent from among the Lenders. Upon
the acceptance of its appointment as successor administrative agent hereunder,
such successor administrative agent shall succeed to all the rights, powers and
duties of the retiring Administrative Agent and the term "ADMINISTRATIVE AGENT"
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shall mean such successor administrative agent and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall be
terminated. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this ARTICLE IX and SECTIONS 10.04 and
10.13 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and the Lenders shall perform all of the duties of
the Administrative Agent hereunder until such time, if any, as the Required
Lenders appoint a successor agent as provided for above.
9.11 OTHER AGENTS; ARRANGER. None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as any other
type of agent (other than the Administrative Agent), "arranger," or "bookrunner"
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 the Lenders so identified shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
ARTICLE X.
MISCELLANEOUS
10.01 AMENDMENTS, RELEASE OF COLLATERAL, ETC.
(a) No amendment or waiver of any provision of this Agreement or any
other Loan Document, and no consent to any departure by the Borrower or any
other Loan Party therefrom, shall be effective unless in writing signed by the
Required Lenders and the Borrower or the applicable Loan Party, as the case may
be, and acknowledged by the Administrative Agent, and each such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; PROVIDED, HOWEVER, that no such amendment, waiver or
consent shall, unless in writing and signed by each of the Lenders directly
affected thereby and by the Borrower, and acknowledged by the Administrative
Agent, do any of the following:
(i) extend or increase the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to SECTION 8.02);
(ii) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or
other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document;
(iii) reduce the principal of, or the rate of interest
specified herein on, any Loan or L/C Borrowing or (subject to clause
(ii) of the proviso below) any fees or other amounts payable hereunder
or under any other Loan Document; PROVIDED, HOWEVER, that only the
consent of the Required Lenders shall be necessary to amend the
definition of "DEFAULT RATE" or to waive any obligation of the Borrower
to pay interest at the Default Rate;
(iv) change the percentage of the Aggregate Commitment or of
the aggregate unpaid principal amount of the Loans and L/C Obligations
which is required for the Lenders or any of them to take any action
hereunder;
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(v) change the Pro Rata Share of any Lender;
(vi) release more than $1,000,000 worth of Collateral or
release any Guarantor from a Guaranty (except in connection with a
Disposition permitted under SECTION 7.07 or as otherwise permitted
under this SECTION 10.01); or
(vii) amend this Section, or SECTION 2.12, or any provision
herein providing for unanimous consent or other action by all the
Lenders;
and, PROVIDED FURTHER: (i) no amendment, waiver or consent shall, unless in
writing and signed by the L/C Issuer in addition to the Required Lenders or all
the Lenders, as the case may be, affect the rights or duties of the L/C Issuer
under this Agreement or any Letter of Credit Application relating to any Letter
of Credit issued or to be issued by it; (ii) no amendment, waiver or consent
shall, unless in writing and signed by the Administrative Agent in addition to
the Required Lenders or all the Lenders, as the case may be, affect the rights
or duties of the Administrative Agent under this Agreement or any other Loan
Document; and (iii) the Agent/Arranger Fee Letter may be amended, or rights or
privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, any Lender that has failed to
fund any portion of the Loans or participation in L/C Obligations required to be
funded by it hereunder shall not have any right to approve or disapprove any
amendment, waiver or consent hereunder, except that the Pro Rata Share of such
Lender may not be increased without the consent of such Lender.
(b) Any amendment to any Loan Document which purports to (i) decrease
the amount of any mandatory prepayment or commitment reduction required by
SECTION 2.04 or (ii) change this SECTION 10.01(B), must be by an instrument in
writing executed by Borrower, the Administrative Agent, and the Required
Lenders.
(c) Upon any Disposition of Collateral which is permitted pursuant to
the Loan Documents, and upon 10 Business Days' prior written request by the
Borrower (which request must be accompanied by (i) true and correct copies of
all material documents of transfer or disposition, including any contract of
sale, (ii) a preliminary closing statement and instructions to the title
company, if any, (iii) all requested release instruments in form and substance
satisfactory to the Administrative Agent and (iv) if required, written consent
of the requisite Lenders), the Administrative Agent shall (and is hereby
irrevocably authorized by the Lenders to) execute such documents as may be
necessary to evidence the release of Liens granted to the Administrative Agent
for the benefit of the Lenders pursuant hereto in such Collateral. The
Administrative Agent shall not be required to execute any release instruments on
terms which, in the Administrative Agent's opinion, would expose the
Administrative Agent to liability or create any obligation or entail any
consequence other than the release of Liens without recourse or warranty. No
such release shall impair the Administrative Agent's Lien on the proceeds of
sale of such Collateral.
(d) If all outstanding Loans and other Obligations have been
indefeasibly paid in full and the Commitments have terminated or have been
reduced to zero, and, subject to SECTION 10.01(E) all Lender Hedging Agreement
have terminated, the Administrative Agent agrees to, and the Lenders hereby
instruct the Administrative Agent to, at the Borrower's expense, execute and
authorize such releases of the Collateral Documents as the Borrower shall
reasonably request and this Agreement shall be deemed terminated except that
such termination shall not relieve the Borrower of any obligation to make any
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payments to the Administrative Agent or any Lender required by any Loan Document
to the extent accruing, or relating to an event occurring, prior to such
termination.
(e) Notwithstanding any provision herein to the contrary, if the
Commitments have been terminated, and the only outstanding Obligations are
amounts owed pursuant to one or more Lender Hedging Agreements, the
Administrative Agent will, and is hereby authorized to, (A) release the Liens
created under the Loan Documents and (B) release all Guaranties of the Borrower;
PROVIDED, that contemporaneously with such release, (i) the Borrower (and, if
applicable, the Subsidiary that is a party to such Lender Hedging Agreements)
(A) executes a margin agreement in form and substance acceptable to such
Lender(s) (or its Affiliates) that are parties to such Lender Hedging Agreements
(the "LENDER COUNTERPARTIES") and (B), if required, provides collateral in the
form of cash or a letter of credit having an aggregate value acceptable to such
Lender Counterparties, and (ii) if such Lender Hedging Agreement is executed by
a Subsidiary of the Borrower and the Borrower is not a party thereto, the
Borrower executes a guaranty covering such Subsidiary's obligations thereunder,
such guaranty to be in form and substance satisfactory to the Lender
Counterparties. Any release under this SECTION 10.01(E) must be in writing and
signed by the Administrative Agent.
10.02 NOTICES AND OTHER COMMUNICATIONS; FACSIMILE COPIES.
(a) GENERAL. Unless otherwise expressly provided herein, all notices
and other communications provided for hereunder and under the other Loan
Documents shall be in writing (including by facsimile transmission) and mailed,
faxed or delivered, to the address, facsimile number or (subject to subsection
(c) below) electronic mail address specified for notices on SCHEDULE 10.02 (for
the Borrower, any Guarantor and the Administrative Agent) or on the
Administrative Details Form (for the other Lenders); or, in the case of the
Borrower, the Guarantors, the Administrative Agent, or the L/C Issuer, to such
other address as shall be designated by such party in a notice to the other
parties, and in the case of any other party, to such other address as shall be
designated by such party in a notice to the Borrower, the Administrative Agent
and the L/C Issuer. All such notices and other communications shall be deemed to
be given or made upon the earlier to occur of (i) actual receipt by the intended
recipient and (ii) (A) if delivered by hand or by courier, when signed for by
the intended recipient; (B) if delivered by mail, five (5) Business Days after
deposit in the mails, postage prepaid; (C) if delivered by facsimile, when sent
and receipt has been confirmed by telephone; and (D) if delivered by electronic
mail (which form of delivery is subject to the provisions of subsection (c)
below), when delivered; PROVIDED, HOWEVER, that notices and other communications
to the Administrative Agent or the L/C Issuer pursuant to ARTICLE II shall not
be effective until actually received by such Person. Any notice or other
communication permitted to be given, made or confirmed by telephone hereunder
shall be given, made or confirmed by means of a telephone call to the intended
recipient at the number specified in accordance with this Section, it being
understood and agreed that a voicemail message shall in no event be effective as
a notice, communication or confirmation hereunder.
(b) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES. Loan Documents
may be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on all Loan
Parties, the Administrative Agent and the Lenders. The Administrative Agent may
also require that any such documents and signatures be confirmed by a
manually-signed original thereof; PROVIDED, HOWEVER, that the failure to request
or deliver the same shall not limit the effectiveness of any facsimile document
or signature.
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(c) LIMITED USE OF ELECTRONIC MAIL. Electronic mail and internet and
intranet websites may be used only to distribute routine communications, such as
financial statements and other information, and to distribute Loan Documents for
execution by the parties thereto, and shall not be recognized hereunder for any
other purpose.
(d) RELIANCE BY ADMINISTRATIVE AGENT, L/C ISSUER AND LENDERS. The
Administrative Agent, L/C Issuer and the Lenders shall be entitled to rely and
act upon any notices (including telephonic Borrowing Notices) purportedly given
by or on behalf of the Borrower even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by any
other form of notice specified herein, or (ii) the terms thereof, as understood
by the recipient, varied from any confirmation thereof. The Borrower shall
indemnify each Agent-Related Person and each Lender from all losses, costs,
expenses and liabilities resulting from the reliance by such Person on each
notice purportedly given by or on behalf of the Borrower. All telephonic notices
to and other communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.03 NO WAIVER; CUMULATIVE REMEDIES. No failure by any Lender or the
Administrative Agent to exercise, and no delay by any such Person in exercising,
any right, remedy, power or privilege hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein or therein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by Law.
10.04 ATTORNEY COSTS; EXPENSES AND TAXES. The Borrower agrees (a) to
pay or reimburse the Administrative Agent for all costs and expenses associated
with the due diligence and background investigation undertaken in connection
with this Agreement and incurred in connection with the development,
preparation, negotiation, syndication, administration and execution of this
Agreement and the other Loan Documents, including the filing, recording,
refiling or rerecording of any pledge agreement and any Security Agreement
and/or any UCC financing statements relating thereto and all amendments,
supplements and modifications to any thereof and any and all other documents or
instruments of further assurance required to be filed or recorded or refiled or
rerecorded by the terms hereof or of any mortgage, any pledge agreement or any
security agreement, and any amendment, waiver, consent or other modification of
the provisions hereof and thereof (whether or not the transactions contemplated
hereby or thereby are consummated), and the consummation and administration of
the transactions contemplated hereby and thereby, including all Attorney Costs,
and (b) to pay or reimburse the Administrative Agent and each Lender for all
costs and expenses incurred in connection with the enforcement, attempted
enforcement, or preservation of any rights or remedies under this Agreement or
the other Loan Documents (including all such costs and expenses incurred during
any workout or restructuring in respect of the Obligations and during any legal
proceeding, including any proceeding under any Debtor Relief Law), including all
Attorney Costs. The foregoing costs and expenses shall include all search,
filing, recording, title insurance and appraisal charges and fees and taxes
related thereto, and other out-of-pocket expenses incurred by the Administrative
Agent and the cost of independent public accountants and other outside experts
retained by the Administrative Agent or any Lender. The agreements in this
Section shall survive the termination of the Commitments and repayment of all
the other Obligations.
10.05 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Borrower and each Guarantor (by execution of a
Guaranty), jointly and severally, agrees to indemnify, save and hold harmless
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each Agent-Related Person, the Administrative Agent, the Arranger, each Lender,
the L/C Issuer and their respective Affiliates, directors, officers, employees,
counsel, agents and attorneys-in-fact (collectively the "INDEMNITEES") from and
against: (a) any and all claims, demands, actions or causes of action that are
asserted against any Indemnitee by any Person (other than the Administrative
Agent or any Lender) relating directly or indirectly to a claim, demand, action
or cause of action that such Person asserts or may assert against any Loan
Party, any Affiliate of any Loan Party or any of their respective officers or
directors, arising out of or relating to, the Loan Documents, the Commitments,
the use or contemplated use of the proceeds of any Loans, or the relationship of
any Loan Party, the Administrative Agent, the Lenders and the L/C Issuer under
this Agreement or any other Loan Document; (b) any and all claims, demands,
actions or causes of action that may at any time (including at any time
following repayment of the Obligations and the resignation of the Administrative
Agent or the replacement of any Lender) be asserted or imposed against any
Indemnitee by any Person or by the Borrower or any other Loan Party, arising out
of or relating to, the Loan Documents, the Commitments, the use or contemplated
use of the proceeds of any Loans, or the relationship of any Loan Party, the
Administrative Agent, the Lenders and the L/C Issuer under this Agreement or any
other Loan Document; (c) without limiting the foregoing, any and all claims,
demands, actions or causes of action, judgments and orders, penalties and fines
that are asserted or imposed against any Indemnitee, (i) under the application
of any Environmental Law applicable to the Borrower or any of its Subsidiaries
or any of their properties or assets, including the treatment or disposal of
Hazardous Substances on any of their properties or assets, (ii) as a result of
the breach or non-compliance by the Borrower or any Subsidiary with any
Environmental Law applicable to the Borrower or any Subsidiary, (iii) due to
past ownership by the Borrower or any Subsidiary of any of their properties or
assets or past activity on any of their properties or assets which, though
lawful and fully permissible at the time, could result in present liability,
(iv) due to the presence, use, storage, treatment or disposal of Hazardous
Substances on or under, or the escape, seepage, leakage, spillage, discharge,
emission or Release from, any of the properties owned or operated by the
Borrower or any Subsidiary (including any liability asserted or arising under
any Environmental Law), regardless of whether caused by, or within the control
of, the Borrower or such Subsidiary, or (v) due to any other environmental,
health or safety condition in connection with the Loan Documents; (d) any
administrative or investigative proceeding by any Governmental Authority arising
out of or related to a claim, demand, action or cause of action described in
subsection (a), (b) or (c) above; and (e) any and all liabilities (including
liabilities under indemnities), losses, costs, damages or expenses (including
Attorney Costs and settlement costs) that any Indemnitee suffers or incurs as a
result of the assertion of any foregoing claim, demand, action, cause of action
or proceeding, or as a result of the preparation of any defense in connection
with any foregoing claim, demand, action, cause of action or proceeding, in all
cases, WHETHER OR NOT ARISING OUT OF THE STRICT LIABILITY OR NEGLIGENCE OF AN
INDEMNITEE, and whether or not an Indemnitee is a party to such claim, demand,
action, cause of action or proceeding (all the foregoing, collectively, the
"INDEMNIFIED LIABILITIES"); PROVIDED that no Indemnitee shall be entitled to
indemnification for any claim to the extent caused by its own gross negligence
or willful misconduct. The agreements in this Section shall survive and continue
for the benefit of the Indemnitees at all times after the Borrower's acceptance
of the Lenders' Commitments under this Agreement, whether or not the Conditions
Effective Date shall occur and shall survive the termination of the Commitments
and repayment of all the other Obligations.
10.06 PAYMENTS SET ASIDE. To the extent that the Borrower makes a
payment to the Administrative Agent or any Lender, or the Administrative Agent
or any Lender exercises its right of setoff, and such payment or the proceeds of
such set-off or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required (including pursuant to any
settlement entered into by the Administrative Agent or such Lender in its
discretion) to be repaid to a trustee, receiver or any other party, in
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connection with any proceeding under any Debtor Relief Law or otherwise, then
(a) to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such setoff had not occurred, and (b)
each Lender severally agrees to pay to the Administrative Agent upon demand its
applicable share of any amount so recovered from or repaid by the Administrative
Agent, plus interest thereon from the date of such demand to the date such
payment is made at a rate per annum equal to the Federal Funds Rate from time to
time in effect.
10.07 SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
each Lender and no Lender may assign or otherwise transfer any of its rights or
obligations hereunder except (i) to an Eligible Assignee in accordance with the
provisions of paragraph (b) of this Section, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
paragraph (f) of this Section (and any other attempted assignment or transfer by
any party hereto shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other than the parties
hereto, their respective successors and assigns permitted hereby, Participants
to the extent provided in paragraph (d) of this Section and, to the extent
expressly contemplated hereby, the Related Parties of each of the Administrative
Agent and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.
(b) Any Lender may at any time assign to one or more Eligible Assignees
all or a portion of its rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans (including for purposes of this
subsection (b), participations in L/C Obligations) at the time owing to it);
PROVIDED that: (i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund with respect to a Lender, the aggregate amount of the Commitment
(which for this purpose includes Loans outstanding thereunder) or, if the
applicable Commitment is not then in effect, the outstanding principal balance
of the Loans of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Assumption with respect to such assignment is
delivered to the Administrative Agent or, if "TRADE DATE" is specified in the
Assignment and Assumption, as of the Trade Date) shall not be less than
$1,000,000, unless each of the Administrative Agent, L/C Issuer and, so long as
no Default has occurred and is continuing, the Borrower otherwise consent
(Borrower's consent not to be unreasonably withheld, conditioned or delayed);
(ii) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender's rights and obligations under this Agreement
with respect to the Loans and/or the Commitment assigned; and (iii) the parties
to each assignment shall execute and deliver to the Administrative Agent an
Assignment and Assumption, together with a processing and recordation fee of
$3,500, and the Eligible Assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Details Form. Subject to acceptance
and recording thereof by the Administrative Agent pursuant to paragraph (c) of
this Section, from and after the effective date specified in each Assignment and
Assumption, the Eligible Assignee thereunder shall be a party to this Agreement
and, to the extent of the interest assigned by such Assignment and Assumption,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall, to the extent of the interest assigned by
such Assignment and Assumption, be released from its obligations under this
82
Agreement (and, in the case of an Assignment and Assumption covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto) but shall continue to be entitled to the
benefits of SECTIONS 3.07, 10.04 and 10.05 with respect to facts and
circumstances occurring prior to the effective date of such assignment. Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph 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 paragraph (d) of this Section.
(c) The Administrative Agent, acting solely for this purpose as an
agent of the Borrower, shall maintain at one of its offices 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 and L/C Obligations 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 the Borrower, the Administrative
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 the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
(d) Any Lender may at any time, without the consent of, or notice to,
the Borrower, the Administrative Agent or the L/C Issuer, sell participations to
any Person (other than a natural person or the Borrower or any of the Borrower's
Affiliates or Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such
Lender's rights and/or obligations under this Agreement (including all or a
portion of its Commitment and/or the Loans (including such Lender's
participation in L/C Obligations) owing to it); PROVIDED that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement or instrument pursuant to which a Lender sells such a participation
shall provide that such Lender shall retain the sole right to enforce this
Agreement and to approve any amendment, modification or waiver of any provision
of this Agreement; PROVIDED that such agreement or instrument may provide that
such Lender will not, without the consent of the Participant, agree to any
amendment, modification or waiver that would (i) postpone any date upon which
any payment of money is scheduled to be paid to such Participant, (ii) reduce
the principal, interest, fees or other amounts payable to such Participant, or
(iii) extend the Acquisition Facility Drawdown Termination Date or the Maturity
Date. Subject to subsection (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of SECTIONS 3.01, 3.04 and 3.05 to
the same extent as if it were a Lender and had acquired its interest by
assignment pursuant to subsection (b) of this Section. To the extent permitted
by Law, each Participant also shall be entitled to the benefits of SECTION 10.09
as though it were a Lender; PROVIDED such Participant agrees to be subject to
SECTION 2.12 as though it were a Lender.
(e) A Participant shall not be entitled to receive any greater payment
under SECTION 3.01 or 3.04 than the applicable Lender would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of SECTION 3.01 unless the Borrower
is notified of the participation sold to such Participant and such Participant
agrees, for the benefit of the Borrower, to comply with SECTION 10.15 as though
it were a Lender.
83
(f) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement (including under its Note,
if any) to secure obligations of such Lender, including any pledge or assignment
to secure obligations to a Federal Reserve Bank; PROVIDED that no such pledge or
assignment shall release a Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) If the consent of the Borrower to an assignment or to an Eligible
Assignee is required hereunder (including a consent to an assignment which does
not meet the minimum assignment threshold specified in clause (i) of the proviso
to the first sentence of SECTION 10.07(B)), the Borrower shall be deemed to have
given its consent five Business Days after the date notice thereof has been
delivered by the assigning Lender (through the Administrative Agent) unless such
consent is expressly refused by the Borrower prior to such fifth Business Day.
(h) Notwithstanding anything to the contrary contained herein, if at
any time Royal Bank of Canada assigns all of its Commitment and Loans pursuant
to subsection (b) above, Royal Bank of Canada may, (i) upon 30 days' notice to
the Borrower and the Lenders, resign as L/C Issuer. In the event of any such
resignation as L/C Issuer, the Borrower shall be entitled to appoint from among
the Lenders a successor L/C Issuer hereunder; PROVIDED, HOWEVER, that no failure
by the Borrower to appoint any such successor shall affect the resignation of
Royal Bank of Canada as L/C Issuer. Royal Bank of Canada shall retain all the
rights and obligations of the L/C Issuer hereunder with respect to all Letters
of Credit outstanding as of the effective date of its resignation as L/C Issuer
and all L/C Obligations with respect thereto (including the right to require the
Lenders to make Base Rate Loans or fund participations in Unreimbursed Amounts
pursuant to SECTION 2.14(C)).
10.08 CONFIDENTIALITY. Each Lender agrees that it will not disclose
without the prior consent of the Borrower (other than to directors, officers,
employees, auditors, accountants, counsel or other professional advisors of the
Administrative Agent or any Lender) any information with respect to the Borrower
or its Subsidiaries, which is furnished pursuant to this Agreement and which (i)
the Borrower in good faith considers to be confidential and (ii) is either
clearly marked confidential or is designated by the Borrower to the
Administrative Agent or the Lenders in writing as confidential; PROVIDED that
any Lender may disclose any such information (a) as has become generally
available to the public, (b) as may be required or appropriate in any report,
statement or testimony submitted to or required by any municipal, state or
federal regulatory body having or claiming to have jurisdiction over such Lender
or submitted to or required by the Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (c) as may be required or appropriate in response to any
summons or subpoena in connection with any litigation, (d) in order to comply
with any Law, order, regulation or ruling applicable to such Lender, (e) to any
Eligible Assignee of or Participant in, or any prospective Eligible Assignee of
or Participant in, any of its rights or obligations under this Agreement;
PROVIDED that such Eligible Assignee or Participant or prospective Eligible
Assignee or Participant executes an agreement containing provisions
substantially similar to those contained in this SECTION 10.08, (f) in
connection with the exercise of any remedy by such Lender following an Event of
Default pertaining to the Loan Documents, (g) in connection with any litigation
involving such Lender pertaining to the Loan Documents, (h) to any Lender or the
Administrative Agent, or (i) to any Affiliate of any Lender (it being understood
that the Persons to whom such disclosure is made will be informed of the
confidential nature of such information and obligated to keep such information
confidential); PROVIDED FURTHER, that notwithstanding anything in this Agreement
to the contrary, the Borrower, the Administrative Agent, the L/C Issuer, each
Lender and each Related Party may disclose to any and all Persons, without
limitation of any kind, the tax treatment and tax structure of the transactions
84
contemplated hereby and all materials of any kind (including opinions or other
tax analysis) that are provided to it relating to such tax treatment and tax
structure; and nothing in the foregoing authorization shall apply to any
disclosure that would constitute a violation of applicable federal or state
securities Laws.
10.09 SET-OFF. In addition to any rights and remedies of the Lenders
provided by Law, upon the occurrence and during the continuance of any Event of
Default, each Lender is authorized at any time and from time to time, without
prior notice to the Borrower or any other Loan Party, any such notice being
waived by the Borrower (on its own behalf and on behalf of each Loan Party) to
the fullest extent permitted by Law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held by,
and other indebtedness at any time owing by, such Lender to or for the credit or
the account of the respective Loan Parties against any and all Obligations owing
to the Administrative Agent and the Lenders, now or hereafter existing,
irrespective of whether or not the Administrative Agent or such Lender shall
have made demand under this Agreement or any other Loan Document and although
such Obligations may be contingent or unmatured. Each Lender agrees promptly to
notify the Borrower and the Administrative Agent after any such set-off and
application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such set-off and application.
10.10 INTEREST RATE LIMITATION. Regardless of any provision contained
in any Loan Document, neither the Administrative Agent nor any Lender shall ever
be entitled to contract for, charge, take, reserve, receive, or apply, as
interest on all or any part of the Obligations, any amount in excess of the
Maximum Rate, and, if any Lender ever does so, then such excess shall be deemed
a partial prepayment of principal and treated hereunder as such and any
remaining excess shall be refunded to the Borrower. In determining if the
interest paid or payable exceeds the Maximum Rate, the Borrower and the Lenders
shall, to the maximum extent permitted under applicable Law, (a) treat all
Borrowings as but a single extension of credit (and the Lenders and the Borrower
agree that such is the case and that provision herein for multiple Borrowings is
for convenience only), (b) characterize any nonprincipal payment as an expense,
fee, or premium rather than as interest, (c) exclude voluntary prepayments and
the effects thereof, and (d) amortize, prorate, allocate, and spread the total
amount of interest throughout the entire contemplated term of the Obligations.
However, if the Obligations are paid and performed in full prior to the end of
the full contemplated term thereof, and if the interest received for the actual
period of existence thereof exceeds the Maximum Amount, the Lenders shall refund
such excess, and, in such event, the Lenders shall not, to the extent permitted
by Law, be subject to any penalties provided by any Laws for contracting for,
charging, taking, reserving or receiving interest in excess of the Maximum
Amount. To the extent the Laws of the State of Texas are applicable for purposes
of determining the "MAXIMUM RATE" or the "MAXIMUM AMOUNT," then those terms mean
the "WEEKLY CEILING" from time to time in effect under Texas Finance Code ss.
303.001, as limited by Texas Finance Code ss. 303.009. The Borrower agrees that
Chapter 346 of the Texas Finance Code, as amended (which regulates certain
revolving credit loan accounts and revolving tri-party accounts), does not apply
to the Obligations.
10.11 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.12 INTEGRATION. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; PROVIDED THAT the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
85
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.
10.13 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder and in any other Loan Document or other document
delivered pursuant hereto or thereto or in connection herewith or therewith
shall survive the execution and delivery hereof and thereof. Such
representations and warranties have been or will be relied upon by the
Administrative Agent and each Lender, regardless of any investigation made by
the Administrative Agent or any Lender or on their behalf and notwithstanding
that the Administrative Agent or any Lender may have had notice or knowledge of
any Default or Event of Default at the time of any Borrowing, and shall continue
in full force and effect as long as any Loan or any other Obligation shall
remain unpaid or unsatisfied.
10.14 SEVERABILITY. Any provision of this Agreement and the other Loan
Documents to which the Borrower is a party that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions thereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
10.15 FOREIGN LENDERS. Each Lender that is a "foreign corporation,
partnership or trust" within the meaning of the Code (a "FOREIGN LENDER") shall
deliver to the Administrative Agent, prior to receipt of any payment subject to
withholding under the Code (or after accepting an assignment of an interest
herein), two duly signed completed copies of either IRS Form W-8BEN or any
successor thereto (relating to such Person and entitling it to an exemption
from, or reduction of, withholding tax on all payments to be made to such Person
by the Borrower pursuant to this Agreement) or IRS Form W-8ECI or any successor
thereto (relating to all payments to be made to such Person by the Borrower
pursuant to this Agreement) or such other evidence satisfactory to the Borrower
and the Administrative Agent that such Person is entitled to an exemption from,
or reduction of, U.S. withholding tax. Thereafter and from time to time, each
such Person shall (a) promptly submit to the Administrative Agent such
additional duly completed and signed copies of one of such forms (or such
successor forms as shall be adopted from time to time by the relevant United
States taxing authorities) as may then be available under then current United
States Laws and regulations to avoid, or such evidence as is satisfactory to the
Borrower and the Administrative Agent of any available exemption from or
reduction of, United States withholding taxes in respect of all payments to be
made to such Person by the Borrower pursuant to this Agreement, (b) promptly
notify the Administrative Agent of any change in circumstances which would
modify or render invalid any claimed exemption or reduction, and (c) take such
steps as shall not be materially disadvantageous to it, in the reasonable
judgment of such Lender, and as may be reasonably necessary (including the
re-designation of its Lending Office) to avoid any requirement of applicable
Laws that the Borrower make any deduction or withholding for taxes from amounts
payable to such Person. If such Person fails to deliver the above forms or other
documentation, then the Administrative Agent may withhold from any interest
payment to such Person an amount equivalent to the applicable withholding tax
imposed by SECTIONS 1441 and 1442 of the Code, without reduction. If any
Governmental Authority asserts that the Administrative Agent did not properly
withhold any tax or other amount from payments made in respect of such Person,
such Person shall indemnify the Administrative Agent therefor, including all
penalties and interest, any taxes imposed by any jurisdiction on the amounts
payable to the Agent under this Section, and costs and expenses (including
86
Attorney Costs) of the Administrative Agent. The obligation of the Lenders under
this Section shall survive the payment of all Obligations and the resignation or
replacement of the Administrative Agent.
10.16 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF TEXAS APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT THE ADMINISTRATIVE AGENT AND
EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER UNITED STATES FEDERAL LAW.
(b) EACH LOAN PARTY AND OTHER PARTY HERETO, AND EACH GUARANTOR, BY
EXECUTION OF A GUARANTY, AGREES AS TO THIS SECTION 10.16(B). ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS SITTING IN XXXXXX COUNTY OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH
LENDER CONSENTS, AND BY EXECUTION OF A GUARANTY, EACH GUARANTOR CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS. THE BORROWER, EACH GUARANTOR, THE ADMINISTRATIVE AGENT AND EACH
LENDER (1) IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF ANY LOAN DOCUMENT OR OTHER DOCUMENT RELATED THERETO,
AND (2) IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID, AT ITS
ADDRESS FOR NOTICES DESIGNATED HEREIN. THE BORROWER, EACH GUARANTOR, THE
ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF SUCH STATE.
10.17 WAIVER OF RIGHT TO TRIAL BY JURY, ETC. EACH PARTY TO THIS
AGREEMENT AND EACH GUARANTOR, BY EXECUTION OF A GUARANTY, HEREBY (a) EXPRESSLY
AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES TO THE LOAN DOCUMENTS OR
ANY OF THEM WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED
THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER
FOUNDED IN CONTRACT OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED
BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN
ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN
EVIDENCE OF THE CONSENT OF THE LOAN PARTIES TO THE WAIVER OF THEIR RIGHT TO
TRIAL BY JURY; AND (b) EXPRESSLY AND IRREVOCABLY WAIVES, TO THE MAXIMUM EXTENT
87
NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH
ACTION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES, OR DAMAGES
OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; PROVIDED THAT THE WAIVER
CONTAINED IN THIS SECTION 10.17(B) SHALL NOT APPLY TO THE EXTENT THAT THE PARTY
AGAINST WHOM DAMAGES ARE SOUGHT HAS ENGAGED IN GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
10.18 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[REMAINDER OF PAGE INTENTIONALLY BLANK;
SIGNATURES BEGIN ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
XXXXX-XXXXXXXX ENERGY INC.,
a Delaware corporation, as Borrower
By: /s/ Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx
Chief Financial Officer
ROYAL BANK OF CANADA,
as Administrative Agent
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Manager, Agency
ROYAL BANK OF CANADA,
as Collateral Agent
By: /s/ Xxxxx Xxxxxxxx
Name: Xxxxx Xxxxxxxx
Title: Manager, Agency
ROYAL BANK OF CANADA, as Lender
and L/C Issuer
By: /s/ Xxxxx Xxxx
Xxxxx Xxxx
Authorized Signatory
CATERPILLAR FINANCIAL
SERVICES CORPORATION, as Lender
By: /s/ Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Syndications Sales Manager
Signature Page
Schedule 2.01
COMMITMENTS
--------------------- --------------- ---------------- --------------- --------------
Revolver Term Loan Acquisition
Lender Facility Facility Facility Aggregate
Commitment Commitment Commitment Commitments
--------------------- --------------- ---------------- --------------- --------------
Royal Bank $13,000,000.00 $ 9,428,571.43 $12,571,428.57 $35,000,000.00
of Canada
--------------------- --------------- ---------------- --------------- --------------
Caterpillar Financial $ 0.00 $ 8,571,428.57 $11,428,571.43 $20,000,000.00
Services Corporation
--------------------- --------------- ---------------- --------------- --------------
Total: $13,000,000.00 $18,000,000.00 $24,000,000.00 $55,000,000.00
--------------------- --------------- ---------------- --------------- --------------
SCHEDULE 2.01
Schedule 5.05
EXISTING INDEBTEDNESS
-------------------------------------------------------- -----------------------
Description of Indebtedness Amount
--------------------------------------------------------------------------------
-------------------------------------------------------- -----------------------
M-I Subordinated Note $ 4,000,000
-------------------------------------------------------- -----------------------
Jens' Subordinated Seller Note 3,330,523
-------------------------------------------------------- -----------------------
Jens' Real Estate Loan 552,121
-------------------------------------------------------- -----------------------
Mountain Air Seller Note 500,000
-------------------------------------------------------- -----------------------
Strata Vendor Financing 420,000
-------------------------------------------------------- -----------------------
Delta Rental Seller Note 350,000
-------------------------------------------------------- -----------------------
Capcoil Non-Compete 330,000
-------------------------------------------------------- -----------------------
Mountain Air Term Loan 177,000
-------------------------------------------------------- -----------------------
Safco Non-Compete 150,000
-------------------------------------------------------- -----------------------
Jens' Non-Compete 391,272
-------------------------------------------------------- -----------------------
N/P to Former A-C Directors 96,000
-------------------------------------------------------- -----------------------
Downhole N/P to Former Shareholder 22,000
-------------------------------------------------------- -----------------------
Miscellaneous Vehicle and Equipment Notes 501,320
-------------------------------------------------------- -----------------------
Total Indebtedness: $10,820,236
-------------------------------------------------------- -----------------------
Schedule 5.05
Schedule 5.13
SUBSIDIARIES
AND OTHER EQUITY INVESTMENTS
(a) Subsidiaries as of the Closing Date:
------------------------------------
Name Jurisdiction of Organization Ownership
---- ---------------------------- ---------
OilQuip Rentals, Inc. Delaware 100% owned by the Borrower
Jens' Oil Field Service, Inc. Texas 100% owned by the Borrower
Strata Directional Technology, Inc. Texas 100% owned by the Borrower
Downhole Injection Systems, LLC Texas 100% owned by the Borrower
AirComp, LLC Delaware 100% owned by the Borrower
Mountain Compressed Air, Inc. Texas 100% owned by OilQuip Rentals, Inc.
Delta Rental Service, Inc. . Louisiana 100% owned by the Borrower
Safco-Oil Field Products, Inc. Texas 100% owned by the Borrower
Capcoil Tubing Services, Inc. Texas 100% owned by the Borrower
(b) Other Equity Investments as of the Closing Date:
------------------------------------------------
(c) Other Investments as of the Closing Date:
-----------------------------------------
Schedule 5.13
Schedule 5.22
LEASED LOCATIONS
Borrower
1. Leased office space in Houston, Texas
AirComp
1. Leased site in Grand Junction, Colorado
2. Leased site in Farmington, New Mexico
3. Leased site in Fort Stockton, Texas
4. Leased site in San Angelo, Texas
5. Leased site in Carlsbad, New Mexico
6. Leased site in Denver, Colorado
7. Leased site in Houston, Texas
8. Leased site in Wilburton, Oklahoma
Jens' Oil Field Service
1. Leased site in Victoria, Texas
2. Leased site in Pearsall, Texas
3. Leased site in Alice, Texas
4. Leased site in Edinburg, Texas
Strata
1. Leased site in Houston, Texas
2. Leased site in Midland, Texas
3. Leased site in Corpus Christi, Texas
4. Leased site in Oklahoma City, Oklahoma
Safco
1. Leased site in Houston, Texas
Delta
1. Leased site in Lafayette, Louisiana
Downhole
1. Leased site in Midland, Texas
2. Leased site in Corpus Christi, Texas
3. Leased site in Carthage, Texas
Capcoil
1. Leased site in Kilgore, Texas
Schedule 5.22
Schedule 5.23
PERMITTED ACQUISITIONS
1. Acquisition of 45% of AirComp Equity Interest.
2. Acquisition of 100% of Assets and Equipment in Lone Star Air Service.
Schedule 5.23
Schedule 5.24
MATERIAL AGREEMENTS
1 Lease Agreement between Materiales y Equipo Petroleo, S.A. de C.V.
(Matyep) and Jens' Oil Field Service dated August 4, 1997.
Schedule 5.24
SCHEDULE 7.01
EXISTING LIENS
--------------------------------------- --------------------------- ------------------------ ----------------------
DEBTOR CREDITOR ASSET SECURED FILING
JURISDICTION
--------------------------------------- --------------------------- ------------------------ ----------------------
Jens' Oil Field Service PACCAR 4 Trucks Xxxxxxx County, Texas
--------------------------------------- --------------------------- ------------------------ ----------------------
Jens' Oil Field Service Texas State Bank Yard in Edinburg, Texas Xxxxxxx County, Texas
--------------------------------------- --------------------------- ------------------------ ----------------------
Jens' Oil Field Service Xxxx X. Xxxxxxxxx, Xx. Tools, machinery and Xxxxxxx County, Texas
equipment
--------------------------------------- --------------------------- ------------------------ ----------------------
Jens' Oil Field Service Xxxx X. Xxxxxxxxx, Xx. Equipment in Mexico
Mexico
--------------------------------------- --------------------------- ------------------------ ----------------------
Jens' Oil Field Service Texas State Bank 3 Forklifts Xxxxxxx County, Texas
9 Vehicles
--------------------------------------- --------------------------- ------------------------ ----------------------
Downhole Injection Systems Ford Motor Credit Ford vehicle Midland County, Texas
--------------------------------------- --------------------------- ------------------------ ----------------------
Capcoil Tubing Services Navistar 3 Trucks Xxxxx County, Texas
--------------------------------------- --------------------------- ------------------------ ----------------------
Capcoil Tubing Services Ford Motor Credit 7 Vehicles Xxxxx County, Texas
--------------------------------------- --------------------------- ------------------------ ----------------------
SCHEDULE 7.01
SCHEDULE 7.12
AGREEMENTS RESTRICTING LIENS ON LEASEHOLD INTERESTS
SCHEDULE 7.12
SCHEDULE 10.02
ADDRESSES FOR NOTICES TO BORROWER,
GUARANTORS AND ADMINISTRATIVE AGENT
ADDRESS FOR NOTICES TO BORROWER
-------------------------------
XXXXX-XXXXXXXX ENERGY INC.
0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (713)
ADDRESS FOR NOTICES TO GUARANTORS
---------------------------------
[Name of Guarantor]
0000 Xxxxxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attn: General Counsel
Telephone: (000) 000-0000
Facsimile: (713)
ADDRESSES FOR ROYAL BANK OF CANADA
----------------------------------
Royal Bank of Canada's Lending Office:
-------------------------------------
Royal Bank of Canada
New York Branch
Xxx Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Manager, Loans Administration
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
For matters related to letters of credit:
-----------------------------------------
Attention: Manager, Trade Products
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SCHEDULE 10.02 - Page 1
in each case with a copy to:
---------------------------
Royal Bank of Canada
0000 Xxxx Xxx Xxxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Electronic Mail: Xxxxx.Xxxx@xxxxx.xxx
Administrative Agent's Office:
-----------------------------
Royal Bank of Canada
Agency Services Group
Xxxxx Xxxx Xxxxx
X. X. Xxx 00, 200 Bay Street
00xx Xxxxx, Xxxxx Xxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Manager Agency
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Wiring Instructions:
--------------------
JPMorgan Chase Bank, New York, New York
ABA 021-000021
For account Royal Bank of Canada, New York
Swift Code: XXXXXX0X
A/C 920-1033363
For further credit to A/C 000-000-0, Transit 1269
Ref: Xxxxx-Xxxxxxxx Energy
Attn: Agency Services
SCHEDULE 10.02 - Page 2
EXHIBIT A-1
FORM OF BORROWING NOTICE
Date: ____________, _____
Royal Bank of Canada,
as Administrative Agent
Global Banking Agency
Xxxxx Xxxx Xxxxx, 000 Xxx Xxxxxx
00xx Xxxxx, Xxxxx Xxxxx
Xxxxxxx XX X0X 0X0
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of July
11, 2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "AGREEMENT;" the terms defined therein being used
herein as therein defined), among Xxxxx-Xxxxxxxx Energy Inc., a Delaware
corporation (the "BORROWER"), Royal Bank of Canada, as Administrative Agent, and
the Lenders from time to time party thereto.
The undersigned hereby requests a revolving loan:
I. REVOLVER FACILITY
-----------------
1. Status Information for the Revolver Facility
(a) Amount of Revolver Facility: $13,000,000
(b) Revolving Loans outstanding prior to the
Borrowing requested herein: $__________
(c) Letters of Credit outstanding prior to the
Borrowing requested herein: $__________
(d) Principal amount of Revolving Loans
available to be borrowed (1(a) minus the sum
of 1(b) and 1(c)): $__________
2. Amount of Borrowing: $__________
3(a). Initial Borrowing Base as of Closing Date:
$____________ OR
3(b). Borrowing Base as of most recent calendar month end:
$__________
4. Requested date of Borrowing: _______________, 200_;
must be prior to Maturity Date.
5. Requested interest rate Type of Revolving Loan and
applicable Dollar amount:
(a) Base Rate Revolving Loan for $__________
Exhibit A-1 - Page 1
(b) Eurodollar Rate Revolving Loan with Interest
Period of:
(i) one month for $________
(ii) two months for $________
(iii) three months for $________
(iv) six months for $________
II. TERM LOAN FACILITY
------------------
1. Amount of Borrowing: $__________
2. Requested date of Borrowing: _______________, 2005;
must be Conditions Effective Date.
3. Requested interest rate Type of Term Loan and
applicable Dollar amount:
(a) Base Rate Term Loan for $__________
(b) Eurodollar Rate Term Loan with Interest
Period of:
(i) one month for $________
(ii) two months for $________
(iii) three months for $________
(iv) six months for $________
4. Purpose of Loan:
___ Refinance certain Indebtedness of Borrower and
its Subsidiaries
___ To pay related financing costs and transaction
expenses
III. ACQUISITION FACILITY
--------------------
1. Status Information for the Acquisition Facility
(a) Amount of Acquisition Facility: $24,000,000
(b) Acquisition Loans outstanding prior to the
Borrowing requested herein: $__________
(c) Principal amount of Acquisition Loans
available to be borrowed is (1(a) minus
(b)): $___________
2. Amount of Borrowing: $__________
3. Requested date of Borrowing: _______________, 2005;
must be prior to Acquisition Facility Drawdown
Termination Date.
4. Requested interest rate Type of Acquisition Loan and
applicable Dollar amount:
Exhibit A-1 - Page 2
(a) Base Rate Acquisition Loan for $__________
(b) Eurodollar Rate Acquisition Loan with
Interest Period of:
(i) one month for $________
(ii) two months for $________
(iii) three months for $________
(iv) six months for $________
The undersigned hereby certifies that the following statements will be
true on the date of the proposed Borrowing(s) after giving effect thereto and to
the application of the proceeds therefrom:
(a) the representations and warranties of the Borrower contained in
ARTICLE V of the Agreement are true and correct as though made on and as of such
date (except such representations and warranties which expressly refer to an
earlier date, which are true and correct as of such earlier date);
(b) with respect to a Borrowing of Revolving Loans, if any, the amount
of the requested Borrowing, when added to Revolving Loans outstanding prior to
the Borrowing and Letters of Credit outstanding prior to the Borrowing will not
exceed the Borrowing Base referred to in SECTION I.3. above; and
(c) with respect to a Borrowing of Acquisition Loans, if any, the
amount of the requested Borrowing, when added to Acquisition Loans outstanding
prior to the Borrowing will not exceed the amount referred to in SECTION IV.(C).
above; and
(d) no Default or Event of Default has occurred and is continuing, or
would result from such proposed Borrowing(s).
The Borrowing requested herein complies with SECTIONS 2.01, 2.02, 2.03,
4.01, 4.02 and 4.04 of the Agreement, as applicable.
XXXXX-XXXXXXXX INC.,
a Delaware corporation, as Borrower
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
--------------------------------------------
Exhibit A-1 - Page 3
EXHIBIT A-2
FORM OF CONVERSION/CONTINUATION NOTICE
Date: _______________, ____
Royal Bank of Canada,
as Administrative Agent
Global Banking Agency
Xxxxx Xxxx Xxxxx, 000 Xxx Xxxxxx
00xx Xxxxx, Xxxxx Xxxxx
Xxxxxxx XX X0X 0X0
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of July
11, 2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "AGREEMENT;" the terms defined therein being used
herein as therein defined), among Xxxxx-Xxxxxxxx Energy Inc., a Delaware
corporation (the "BORROWER"), Royal Bank of Canada, as Administrative Agent, and
the Lenders from time to time party thereto.
The undersigned hereby requests:
I. REVOLVER FACILITY
-----------------
1. Amount of [conversion] [continuation]: $__________
2. Existing rate: Check applicable blank
(a) Base Rate
(b) Eurodollar Rate Loan with Interest Period
of:
(i) one month ________
(ii) two months ________
(iii) three months ________
(iv) six months ________
3. If a Eurodollar Rate Loan, date of the last day of
the Interest Period for such Loan: _______________,
200_.
The Revolving Loan described above is to be [converted]
[continued] as follows:
4. Requested date of [conversion] [continuation]:
_______________, 200_.
5. Requested Type of Loan and applicable Dollar amount:
Exhibit A-2 - Page 1
(a) Base Rate Loan for $__________
(b) Eurodollar Rate Loan with Interest Period
of:
(i) one month for $_______
(ii) two months for $_______
(iii) three months for $_______
(iv) six months for $_______
II. TERM LOAN FACILITY
------------------
1. Amount of [conversion] [continuation]: $__________
2. Existing rate: Check applicable blank
(a) Base Rate
(b) Eurodollar Rate Loan with Interest Period
of:
(i) one month ________
(ii) two months ________
(iii) three months ________
(iv) six months ________
3. If a Eurodollar Rate Loan, date of the last day of
the Interest Period for such Loan: _______________,
200_.
The Term Loan described above is to be [converted] [continued]
as follows:
4. Requested date of [conversion] [continuation]:
_______________, 200_.
5. Requested Type of Loan and applicable Dollar amount:
(a) Base Rate Loan for $__________
(b) Eurodollar Rate Loan with Interest Period
of:
(i) one month for $_______
(ii) two months for $_______
(iii) three months for $_______
(iv) six months for $_______
III. ACQUISITION FACILITY
--------------------
1. Amount of [conversion] [continuation]: $__________
2. Existing rate: Check applicable blank
Exhibit A-2 - Page 2
(a) Base Rate
(b) Eurodollar Rate Loan with Interest Period
of:
(i) one month ________
(ii) two months ________
(iii) three months ________
(iv) six months ________
3. If a Eurodollar Rate Loan, date of the last day of
the Interest Period for such Loan: _______________,
200_.
The Acquisition Loan described above is to be [converted]
[continued] as follows:
4. Requested date of [conversion] [continuation]:
_______________, 200_.
5. Requested Type of Loan and applicable Dollar amount:
(a) Base Rate Loan for $__________
(b) Eurodollar Rate Loan with Interest Period
of:
(i) one month for $________
(ii) two months for $________
(iii) three months for $________
(iv) six months for $________
The [conversion] [continuation] requested herein complies with SECTIONS
2.01 and 2.03 of the Agreement, as applicable.
XXXXX-XXXXXXXX ENERGY INC.,
a Delaware corporation, as Borrower
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Exhibit A-2 - Page 3
EXHIBIT A-3
NOTICE IN RESPECT OF REPAYMENTS, PREPAYMENTS
AND REDUCTIONS OF COMMITMENT
[Date]
Royal Bank of Canada,
as Administrative Agent
Global Banking Agency
Royal Bank Plaza, 000 Xxx Xxxxxx
00xx Xxxxx, Xxxxx Xxxxx
Xxxxxxx XX X0X 0X0
Dear Sirs:
The undersigned, Xxxxx-Xxxxxxxx Energy Inc. (the "Borrower"), refers to
the Credit Agreement dated as of July 11, 2005 (as may be amended, restated,
replaced or supplemented from time to time, the "Credit Agreement", the terms
defined therein being used herein as therein defined) among the Borrower, the
financial institutions that are named on the signature pages thereto, as
Lenders, RBC Capital Markets as Lead Arranger and Sole Bookrunner, and Royal
Bank of Canada, as Administrative Agent, and hereby gives you notice pursuant to
[Section 2.04/Section 2.05] of the Credit Agreement that on [insert proposed
date of repayment, prepayment or reduction of the Commitment], the Borrower
shall [make a repayment of $_______________________ under [describe Loan] and
such repayment shall apply to ___________________ (specify Type of Loan to be
repaid)]/[make a prepayment of/ permanently reduce the Commitment by an
aggregate principal amount of $____________________ [the repayment, prepayment
or reduction shall be for no less than the minimums specified in the Credit
Agreement.
Yours truly,
Xxxxx-Xxxxxxxx Energy Inc.
By:
-----------------------------
Title:
-----------------------------
Exhibit A-3 Page 1
EXHIBIT B-1
FORM OF REVOLVING NOTE
$_____________________ July 11, 2005
FOR VALUE RECEIVED, the undersigned (the "BORROWER"), hereby promises
to pay to the order of _____________________ (the "LENDER"), on the Maturity
Date (as defined in the Credit Agreement referred to below) the principal amount
of _______________ Dollars ($__________), or such lesser principal amount of
Revolving Loans made by Lender under that certain Credit Agreement dated of even
date herewith (as amended, restated, extended, supplemented or otherwise
modified in writing from time to time, the "CREDIT AGREEMENT"; the terms defined
therein being used herein as therein defined), among the Borrower, the Lenders
from time to time party thereto, and Royal Bank of Canada, as Administrative
Agent.
The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Loan from the date of such Revolving Loan until such principal
amount is paid in full, at such interest rates, and at such times as are
specified in the Credit Agreement. All payments of principal and interest shall
be made to the Administrative Agent for the account of the Lender in Dollars in
immediately available funds to the account designated by the Administrative
Agent in the Credit Agreement. If any amount is not paid in full when due
hereunder, such unpaid amount shall bear interest, to be paid upon demand, from
the due date thereof until the date of actual payment (and before as well as
after judgment) computed at the per annum rate set forth in the Credit
Agreement.
This Note is one of the Revolving Notes referred to in the Credit
Agreement, is entitled to the benefits thereof and is subject to optional and
mandatory prepayment in whole or in part as provided therein. This Note is also
entitled to the benefits of each Guaranty. Upon the occurrence of one or more of
the Events of Default specified in the Credit Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Credit Agreement. Revolving
Loans made by the Lender shall be evidenced by one or more loan accounts or
records maintained by the Lender in the ordinary course of business. The Lender
may also attach schedules to this Note and endorse thereon the date, amount and
maturity of its Revolving Loans and payments with respect thereto.
This Note is a Loan Document and is subject to SECTION 10.10 of the
Credit Agreement, which is incorporated herein by reference the same as if set
forth herein verbatim.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, notice of
intent to accelerate, notice of acceleration, demand, dishonor and non-payment
of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.
XXXXX-XXXXXXXX ENERGY INC.,
a Delaware corporation, as Borrower
By:
--------------------------------
Name:
Title:
Exhibit B-1 Page 1
EXHIBIT B-2
FORM OF TERM NOTE
$_____________________ July 11, 2005
FOR VALUE RECEIVED, the undersigned (the "BORROWER"), hereby promises
to pay to the order of _____________________ (the "LENDER"), in installments and
on the Maturity Date (as defined in the Credit Agreement referred to below) the
principal amount of _______________ Dollars ($__________), or such lesser
principal amount of Term Loans made by Lender under that certain Credit
Agreement dated as of even date herewith (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the "CREDIT
AGREEMENT"; the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Royal Bank
of Canada, as Administrative Agent.
The Borrower promises to pay interest on the unpaid principal amount of
each Term Loan from the date of such Term Loan until such principal amount is
paid in full, at such interest rates, and at such times as are specified in the
Credit Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds to the account designated by the Administrative Agent in the
Credit Agreement. If any amount is not paid in full when due hereunder, such
unpaid amount shall bear interest, to be paid upon demand, from the due date
thereof until the date of actual payment (and before as well as after judgment)
computed at the per annum rate set forth in the Credit Agreement.
This Note is one of the Term Notes referred to in the Credit Agreement,
is entitled to the benefits thereof and is subject to optional and mandatory
prepayment in whole or in part as provided therein. This Note is also entitled
to the benefits of each Guaranty. Upon the occurrence of one or more of the
Events of Default specified in the Credit Agreement, all amounts then remaining
unpaid on this Note shall become, or may be declared to be, immediately due and
payable all as provided in the Credit Agreement. Term Loans made by the Lender
shall be evidenced by one or more loan accounts or records maintained by the
Lender in the ordinary course of business. The Lender may also attach schedules
to this Note and endorse thereon the date, amount and maturity of its Term Loans
and payments with respect thereto.
This Note is a Loan Document and is subject to SECTION 10.10 of the
Credit Agreement, which is incorporated herein by reference the same as if set
forth herein verbatim.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, notice of
intent to accelerate, notice of acceleration, demand, dishonor and non-payment
of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.
XXXXX-XXXXXXXX ENERGY INC.,
a Delaware corporation, as Borrower
By:
--------------------------------
Name:
Title:
Exhibit B-2 Page 1
EXHIBIT B-3
FORM OF ACQUISITION NOTE
$_____________________ July 11, 2005
FOR VALUE RECEIVED, the undersigned (the "BORROWER"), hereby promises
to pay to the order of _____________________ (the "LENDER"), in installments and
on the Maturity Date (as defined in the Credit Agreement referred to below) the
principal amount of _______________ Dollars ($__________), or such lesser
principal amount of Acquisition Loans made by Lender under that certain Credit
Agreement dated as of even date herewith (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the "CREDIT
AGREEMENT"; the terms defined therein being used herein as therein defined),
among the Borrower, the Lenders from time to time party thereto, and Royal Bank
of Canada, as Administrative Agent.
The Borrower promises to pay interest on the unpaid principal amount of
each Acquisition Loan from the date of such Acquisition Loan until such
principal amount is paid in full, at such interest rates, and at such times as
are specified in the Credit Agreement. All payments of principal and interest
shall be made to the Administrative Agent for the account of the Lender in
Dollars in immediately available funds to the account designated by the
Administrative Agent in the Credit Agreement. If any amount is not paid in full
when due hereunder, such unpaid amount shall bear interest, to be paid upon
demand, from the due date thereof until the date of actual payment (and before
as well as after judgment) computed at the per annum rate set forth in the
Credit Agreement.
This Note is one of the Acquisition Notes referred to in the Credit
Agreement, is entitled to the benefits thereof and is subject to optional and
mandatory prepayment in whole or in part as provided therein. This Note is also
entitled to the benefits of each Guaranty. Upon the occurrence of one or more of
the Events of Default specified in the Credit Agreement, all amounts then
remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable all as provided in the Credit Agreement. Acquisition
Loans made by the Lender shall be evidenced by one or more loan accounts or
records maintained by the Lender in the ordinary course of business. The Lender
may also attach schedules to this Note and endorse thereon the date, amount and
maturity of its Acquisition Loans and payments with respect thereto.
This Note is a Loan Document and is subject to SECTION 10.10 of the
Credit Agreement, which is incorporated herein by reference the same as if set
forth herein verbatim.
The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, notice of
intent to accelerate, notice of acceleration, demand, dishonor and non-payment
of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.
XXXXX-XXXXXXXX ENERGY INC.,
a Delaware corporation, as Borrower
By:
--------------------------------
Name:
Title:
Exhibit B-3 Page 1
EXHIBIT C-1
FORM OF COMPLIANCE CERTIFICATE
(Pursuant to SECTION 6.02 of the Agreement)
Financial Statement Date: ___________, 200_
Royal Bank of Canada,
as Administrative Agent
Global Banking Agency
Xxxxx Xxxx Xxxxx, 000 Xxx Xxxxxx
00xx Xxxxx, Xxxxx Xxxxx
Xxxxxxx XX X0X 0X0
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement, dated as of July
11, 2005 (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "AGREEMENT;" the terms defined therein being used
herein as therein defined), among Xxxxx-Xxxxxxxx Energy Inc., a Delaware
corporation (the "BORROWER"), the Lenders from time to time party thereto, and
Royal Bank of Canada, as Administrative Agent. Capitalized terms used herein but
not defined herein shall have the meaning set forth in the Agreement.
The undersigned Responsible Officer hereby certifies as of the date
hereof that he/she is the ___________________________ of the Borrower, and that,
as such, he/she is authorized to execute and deliver this Certificate to the
Administrative Agent on the behalf of the Borrower, and that:
[Use the following for Fiscal Year-end financial statements]
Attached hereto as SCHEDULE 1 are the year-end audited consolidated
financial statements of the Borrower and its Subsidiaries required by SECTION
6.01(A) of the Agreement for the Fiscal Year of the Borrower ended as of the
above date, together with the report and opinion of an independent certified
public accountant required by such section; and
[Use the following for fiscal quarter-end financial statements]
Attached hereto as SCHEDULE 1 are, the unaudited consolidated financial
statements of the Borrower and its Subsidiaries required by SECTION 6.01(B) of
the Agreement for the first three fiscal quarters of the Borrower ended as of
the above date, together with a certificate of a Responsible Officer of the
Borrower stating that such financial statements fairly present the financial
condition, results of operations and cash flows of the Borrower and its
Subsidiaries for such fiscal quarter in accordance with GAAP as at such date and
for such period, subject only to normal year-end audit adjustments and the
absence of footnotes.
[Use the following for both Fiscal Year-end and quarter-end financial
statements]
1. The undersigned has reviewed and is familiar with the terms of the
Agreement and has made, or has caused to be made under his/her supervision, a
detailed review of the transactions and condition (financial or otherwise) of
the Borrower during the accounting period covered by the attached financial
statements.
Exhibit C-1 - Page 1
2. A review of the activities of the Borrower during such fiscal period
has been made under the supervision of the undersigned with a view to
determining whether during such fiscal period the Borrower performed and
observed all its Obligations under the Loan Documents, and no Default or Event
of Default has occurred and is continuing EXCEPT as follows (list of each such
Default or Event of Default and include the information required by SECTION 6.03
of the Credit Agreement):
3. During such fiscal period no casualty losses have occurred, except
as described below:
4. The covenant analyses and information set forth on SCHEDULE 3
attached hereto are true and accurate on and as of the date of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
___________, 200_.
XXXXX-XXXXXXXX ENERGY INC.
a Delaware corporation, as Borrower
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Exhibit C-1 - Page 2
For the Quarter/Year ended _____________________("STATEMENT DATE")
SCHEDULE 3
to the Compliance Certificate
($ in 000's)
I. SECTION 7.04 -- Indebtedness
A. Indebtedness outstanding on Closing Date and listed on Schedule 5.05 $___________
and any refinancings, etc. permitted by SECTION 7.04(b)
B. Indebtedness in connection with Swap Contracts permitted by SECTION 7.04(d) $___________
C. Outstanding Principal Amount of Purchase Money Indebtedness for fixed $___________
or capital assets permitted by SECTION 7.04(e) (may not exceed
$1,000,000)
D. Outstanding Principal Amount of Indebtedness associated with Liens on $___________
acquired assets permitted by SECTION 7.04(f) (may not exceed
$1,000,000)
E. Outstanding Principal Amount of Indebtedness associated with Capital $___________
Leases permitted by SECTION 7.04(g) (may not exceed $1,000,000)
F. Outstanding Indebtedness associated with equipment financing permitted
by SECTION 7.04(h) (may not exceed $5,000,000)
II. SECTION 7.19(a) - Minimum Consolidated Tangible Net Worth
A. Consolidated Tangible Net Worth at most recent Financial Statement $___________
Date:
B. 50% of Consolidated Net Income (if positive) after March 31, 2005: $___________
C. 100% of Net Cash Proceeds of all Equity Interests issued by Borrower or $___________
any Subsidiary after Closing Date (including the Public Offering):
D. Minimum Net Worth (85% of Consolidated Tangible Net Worth as of June $___________
30, 2005 + Lines III.B and C):
E. Is Line III.A greater than or equal to Line III.D? Yes/No
III. SECTION 7.19(b) - Interest Coverage Ratio
A. Consolidated EBITDA for four consecutive fiscal quarters ending on the $___________
Financial Statement Date ("SUBJECT PERIOD")(see Credit Agreement
definition of "CONSOLIDATED EBITDA"):
Exhibit C-1 - Page 3
B. Sum of (i) Consolidated Interest Charges during Subject Period PLUS(ii) $___________
imputed interest charges on Synthetic Leases during Subject Period:
C. Is ratio of III.A. to III.B. at least 3.0 to 1.0? Yes/No
IV. SECTION 7.19(c) - Current Ratio
A. Consolidated Current Assets as at most recent Financial Statement Date: $___________
B. Consolidated Current Liabilities as at most recent Financial Statement $___________
Date:
C. Is ratio of IV.A. to IV.B. at least 1.0 to 1.0? Yes/No
V. SECTION 7.19(d) - Fixed Asset Coverage Ratio
A. Fair market value of Borrower's and its Subsidiaries' fixed assets $___________
(determined as of most recently delivered annual asset appraisal
delivered pursuant to SECTION 6.02(d) of the Credit Agreement) on which
Administrative Agent holds first priority perfected Lien:
B. Outstanding Amount of Acquisition Loan Principal Debt on most recent $___________
Financial Statement Date:
C. Outstanding Amount of Term Loan Principal Debt on most recent Financial $___________
Statement Date:
D. Is ratio of V.A. to sum of V.B. PLUS V.C. at least 1.25 to 1.0? Yes/No
VI. SECTION 7.19(e) - Leverage Ratio
A. Consolidated Net Debt for Subject Period (see Credit Agreement $___________
definition of "CONSOLIDATED NET DEBT"):
B. Consolidated EBITDA for four Subject Period: $___________
C. Is ratio of VI.A. to VI. B. no more than 3.50 to 1.0 for periods ending
on Yes/No or before September 30, 2006 and no more than 3.25 to 1.0 for
periods ending on or after December 31, 2006?
Exhibit C-1 - Page 4
EXHIBIT C-2
FORM OF BORROWING BASE REPORT
Borrowing Base Report
XXXXX-XXXXXXXX ENERGY INC.
Monthly Borrowing Base Report
For the Month Ending _______
Calculation of Monthly Borrowing Base and Excess Revolver Facility Availability
A. Eligible Accounts Receivable $__________ X 85% $__________
B. Eligible Inventory $__________ X 50% $__________
C. Total Eligible Accounts Receivable and Inventory (A+B) $__________
D. Borrowing Base (lower of (i) C and (ii) Revolving Commitment (maximum $13,000,000) $__________
E. Outstanding Amount of Revolving Loans $__________
F. Outstanding Amount of L/C Obligations $__________
G. Revolver Facility Usage (E+F) $__________
H. Excess Revolver Facility Availability (D minus G) $__________
- BORROWER CERTIFICATION -
Attached hereto as SCHEDULE 1 is (i) a detailed aged schedule of all
Accounts Receivable as of the date specified in this Borrowing Base Report,
listing face amounts and dates of invoices of each such Accounts Receivable and
the name and address of each account debtor obligated on such Accounts
Receivable (and, if requested by Administrative Agent, copies of invoices,
credit reports, and any other matters and information relating to the Accounts
Receivable) and (ii) a detailed aged schedule of all Eligible Accounts
Receivable as of the date specified in this Borrowing Base Report, listing face
amounts and dates of invoices of each such Accounts Receivable and the name and
address of each account debtor obligated on such Accounts Receivable.
Attached hereto as SCHEDULE 2 is a current perpetual Inventory report,
setting forth the location, type and cost of all such Inventory.
Attached hereto as SCHEDULE 3 is a summary aged listing of Borrower's
accounts payable and an aged list of the ten (10) largest accounts payable.
Exhibit C-2 - Page 1
The undersigned hereby warrants to Royal Bank of Canada, as
Administrative Agent, that this Borrowing Base Report is a correct statement
regarding the Accounts Receivable and Inventory of Borrower and its Domestic
Subsidiaries and that the reconciliation figures are fully and correctly set
forth. Capitalized terms used but not defined herein shall have the meanings
given such terms in the Credit Agreement dated July 11, 2005 among
Xxxxx-Xxxxxxxx Energy Inc., the lenders party thereto and Royal Bank of Canada,
as Administrative Agent.
XXXXX-XXXXXXXX ENERGY INC.
By: ____________________________
Name:
Title: Chief Financial Officer
Exhibit C-2 - Page 2
EXHIBIT D
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (the "ASSIGNMENT AND ASSUMPTION") is
dated as of the Effective Date set forth below and is entered into by and
between [INSERT NAME OF ASSIGNOR] (the "ASSIGNOR") and [INSERT NAME OF ASSIGNEE]
(the "ASSIGNEE"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as may be
amended, the "CREDIT AGREEMENT"), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in
Annex I attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below and (ii) to the extent permitted to be assigned
under applicable law, all claims, suits, causes of action and any other right of
the Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including, but not limited to, contract claims, tort claims, malpractice claims,
statutory claims and all other claims at law or in equity related to the rights
and obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as, the "ASSIGNED INTEREST"). Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Assumption, without representation or warranty by the
Assignor.
1. Assignor:
2. Assignee:
[and is an Affiliate/Approved Fund of
[IDENTIFY LENDER]
3. Borrower(s): Xxxxx-Xxxxxxxx Energy Inc.
4. Administrative Agent: Royal Bank of Canada, as the administrative
agent under the Credit Agreement
5. Credit Agreement: The $55,000,000 Credit Agreement dated as of
July 11, 2005 among Xxxxx-Xxxxxxxx Energy
Inc., the Lenders parties thereto, and Royal
Bank of Canada, as Administrative Agent.
Exhibit D - Page 1
6. Assigned Interest:
-------------------- ------------------------ ----------------- ------------------------
Aggregate Amount of Amount of Percentage Assigned of
Commitment/Loans for Commitment/Loans Commitment/Loans
all Lenders* Assigned*
-------------------- ------------------------ ----------------- ------------------------
Revolving Loans: $ $ %
-------------------- ------------------------ ----------------- ------------------------
Term Loans:
-------------------- ------------------------ ----------------- ------------------------
Acquisition Loans:
-------------------- ------------------------ ----------------- ------------------------
Total: $ $ %
-------------------- ------------------------ ----------------- ------------------------
[7. Trade Date: ________________ ]
Effective Date: __________ ____, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
----------------------------------
Title:
ASSIGNEE
[NAME OF ASSIGNEE]
By:
----------------------------------
Title:
*Amount to be adjusted by the counterparties to take into account any payments
or prepayments made between the Trade Date and the Effective Date.
Exhibit D - Page 2
Consented to and Accepted:
[NAME OF ADMINISTRATIVE AGENT], as
Administrative Agent
By
---------------------------------------------------
Title:
[Consented to:]
XXXXX-XXXXXXXX ENERGY INC.
a Delaware corporation
By
---------------------------------------------------
Name:
Title:
Exhibit D - Page 3
ANNEX 1
TO ASSIGNMENT AND ASSUMPTION
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
-------------------------------
1.1 ASSIGNOR. The Assignor (a) represents and warrants that
(i) it is the legal and beneficial owner of the Assigned Interest, (ii) the
Assigned Interest is free and clear of any lien, encumbrance or other adverse
claim and (iii) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Assumption and to
consummate the transactions contemplated hereby; and (b) assumes no
responsibility with respect to (i) any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any collateral thereunder, (iii) the financial
condition of the Borrower, any of its Subsidiaries or Affiliates or any other
Person obligated in respect of any Loan Document or (iv) the performance or
observance by the Borrower, any of its Subsidiaries or Affiliates or any other
Person of any of their respective obligations under any Loan Document.
1.2. ASSIGNEE. The Assignee (a) represents and warrants that
(i) it has full power and authority, and has taken all action necessary, to
execute and deliver this Assignment and Assumption and to consummate the
transactions contemplated hereby and to become a Lender under the Credit
Agreement, (ii) it meets all requirements of an Eligible Assignee under the
Credit Agreement (subject to receipt of such consents as may be required under
the Credit Agreement), (iii) from and after the Effective Date, it shall be
bound by the provisions of the Credit Agreement as a Lender thereunder and, to
the extent of the Assigned Interest, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Credit Agreement, together with
copies of the most recent financial statements delivered pursuant to SECTION
6.01 thereof, as applicable, and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Assumption and to purchase the Assigned Interest on the
basis of which it has made such analysis and decision independently and without
reliance on the Administrative Agent or any other Lender, and (v) if it is a
Foreign Lender, attached to the Assignment and Assumption is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.
2. PAYMENTS. From and after the Effective Date, the Administrative
Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) to the Assignor for
amounts which have accrued to but excluding the Effective Date and to the
Assignee for amounts which have accrued from and after the Effective Date.
Exhibit D - Page 4
3. GENERAL PROVISIONS. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of Texas.
Exhibit D - Page 5
