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[LOGO]
CREDIT AGREEMENT
Dated as of
June 6, 2001
Among
XXXXXXXX CORPORATION
as Borrower,
The Lenders Party Hereto,
THE CHASE MANHATTAN BANK
as Administrative Agent
and
Issuing Bank
and COMPASS BANK
as Syndication Agent
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JPMORGAN SECURITIES INC.
as Sole Book Runner and Lead Arranger
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS..............................................1
SECTION 1.02 TYPES OF LOANS AND BORROWINGS.............................18
SECTION 1.03 TERMS GENERALLY...........................................18
SECTION 1.04 ACCOUNTING TERMS; GAAP....................................18
ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS...............................................19
SECTION 2.02 LOANS AND BORROWINGS......................................19
SECTION 2.03 REQUESTS FOR BORROWINGS...................................20
SECTION 2.04 FUNDING OF BORROWINGS.....................................21
SECTION 2.05 INTEREST ELECTIONS........................................21
SECTION 2.06 TERMINATION AND REDUCTION OF COMMITMENTS..................22
SECTION 2.07 REPAYMENT OF LOANS; EVIDENCE OF DEBT......................23
SECTION 2.08 PREPAYMENT OF LOANS.......................................24
SECTION 2.09 FEES......................................................24
SECTION 2.10 INTEREST..................................................25
SECTION 2.11 ALTERNATE RATE OF INTEREST................................26
SECTION 2.12 INCREASED COSTS...........................................27
SECTION 2.13 BREAK FUNDING PAYMENTS....................................28
SECTION 2.14 TAXES.....................................................29
SECTION 2.15 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS..................................................29
SECTION 2.16 ILLEGALITY................................................31
SECTION 2.17 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS............32
SECTION 2.18 LETTERS OF CREDIT.........................................32
ARTICLE III
REPRESENTATIONS AND WARRANTIES
SECTION 3.01 ORGANIZATION; POWERS......................................37
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY.............................37
SECTION 3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS......................37
SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE...........37
SECTION 3.05 PROPERTIES................................................38
SECTION 3.06 LITIGATION AND ENVIRONMENTAL MATTERS......................38
SECTION 3.07 COMPLIANCE WITH LAWS AND AGREEMENTS.......................38
SECTION 3.08 INVESTMENT AND HOLDING COMPANY STATUS.....................39
SECTION 3.09 TAXES.....................................................39
SECTION 3.10 ERISA.....................................................39
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SECTION 3.11 DISCLOSURE................................................39
SECTION 3.12 SUBSIDIARIES..............................................40
SECTION 3.13 BURDENSOME OBLIGATIONS....................................40
SECTION 3.14 EMPLOYEE MATTERS..........................................40
SECTION 3.15 MARGIN STOCK..............................................40
SECTION 3.16 ACQUISITION...............................................41
ARTICLE IV
GUARANTIES AND COLLATERAL
SECTION 4.01 GUARANTIES................................................41
SECTION 4.02 COLLATERAL................................................41
SECTION 4.03 FUTURE LIENS..............................................42
SECTION 4.04 NEGATIVE PLEDGE...........................................42
SECTION 4.05 FOREIGN SUBSIDIARIES SECURITY.............................43
ARTICLE V
CONDITIONS
SECTION 5.01 EFFECTIVE DATE............................................44
SECTION 5.02 EACH CREDIT EVENT.........................................46
ARTICLE VI
AFFIRMATIVE COVENANTS
SECTION 6.01 FINANCIAL STATEMENTS AND OTHER INFORMATION................46
SECTION 6.02 NOTICES OF MATERIAL EVENTS................................48
SECTION 6.03 EXISTENCE; CONDUCT OF BUSINESS............................48
SECTION 6.04 PAYMENT OF OBLIGATIONS....................................48
SECTION 6.05 MAINTENANCE OF PROPERTIES; INSURANCE......................48
SECTION 6.06 BOOKS AND RECORDS; INSPECTION RIGHTS......................49
SECTION 6.07 COMPLIANCE WITH LAWS......................................49
SECTION 6.08 USE OF PROCEEDS...........................................49
ARTICLE VII
NEGATIVE COVENANTS
SECTION 7.01 INDEBTEDNESS..............................................49
SECTION 7.02 LIENS.....................................................50
SECTION 7.03 FUNDAMENTAL CHANGES.......................................52
SECTION 7.04 INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS..............................................52
SECTION 7.05 HEDGING AGREEMENTS........................................53
SECTION 7.06 RESTRICTED PAYMENTS.......................................53
SECTION 7.07 TRANSACTIONS WITH AFFILIATES..............................53
SECTION 7.08 RESTRICTIVE AGREEMENTS....................................53
SECTION 7.09 FINANCIAL COVENANTS.......................................54
SECTION 7.10 FISCAL YEAR...............................................54
SECTION 7.11 SALE-LEASEBACK FINANCINGS.................................54
SECTION 7.12 SALE OF ASSETS............................................54
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ARTICLE VIII
EVENTS OF DEFAULT
ARTICLE IX
ADMINISTRATIVE AGENT
ARTICLE X
MISCELLANEOUS
SECTION 10.01 NOTICES...................................................59
SECTION 10.02 WAIVERS; AMENDMENTS.......................................60
SECTION 10.03 EXPENSES; INDEMNITY; DAMAGE WAIVER........................60
SECTION 10.04 SUCCESSORS AND ASSIGNS....................................62
SECTION 10.05 SURVIVAL..................................................64
SECTION 10.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS..................65
SECTION 10.07 SEVERABILITY..............................................65
SECTION 10.08 RIGHT OF SETOFF...........................................65
SECTION 10.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS................................................65
SECTION 10.10 WAIVER OF JURY TRIAL......................................66
SECTION 10.11 HEADINGS..................................................66
SECTION 10.12 CONFIDENTIALITY...........................................66
SECTION 10.13 INTEREST RATE LIMITATION..................................67
SECTION 10.14 ARRANGER..................................................68
SECTION 10.15 NO ORAL AGREEMENTS........................................69
SCHEDULES:
Schedule 2.01 - Lenders and Commitments
Schedule 3.06 - Disclosed Matters
Schedule 3.12 - Subsidiaries
Schedule 3.14 - Employee Matters
Schedule 5.01(e) - Collateral Documents
Schedule 7.01 - Existing Indebtedness
Schedule 7.02 - Existing Liens
Schedule 7.04 - Loans and Advances to Officers and Employees
Schedule 7.08 - Existing Restrictions
EXHIBITS:
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Security Agreement
Exhibit C - Form of Subsidiary Guaranty
Exhibit D - Form of Borrowing Request
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Exhibit E - Form of Interest Election Request
Exhibit F-1 - Form of Opinion of Borrower's Counsel
Exhibit F-2 - Form of Opinion of Counsel to Foreign Subsidiaries
Exhibit F-3 - Form of Opinion of Local Counsel to Lenders
Exhibit G - Compliance Certificate
Exhibit H - Borrower's Corporate Investment Policy
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "AGREEMENT") is made and entered into as
of June 6, 2001, among XXXXXXXX CORPORATION, a Delaware corporation
("BORROWER"), THE CHASE MANHATTAN BANK, individually as a Lender and Issuing
Bank and as Administrative Agent, COMPASS BANK, as Syndication Agent, and each
of the lenders that is a signatory hereto or which hereafter becomes a party
hereto as provided in SECTION 10.04 (individually, a "LENDER" and collectively,
"LENDERS").
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ABR MARGIN" means, with respect to any ABR Loan, that rate of
interest equal to the Applicable Margin for ABR Loans, to be added to the
Alternate Base Rate to determine the rate of interest applicable to such ABR
Loan.
"ACQUISITION" means the acquisition of the Target.
"ACQUISITION AGREEMENT" means that certain Partnership Interest
Purchase Agreement, dated May 22, 2001, between Borrower and Check Consultants
Company of Tennessee, Inc. and IPSS Corporation, as "SELLERS", and International
Business Machines Corporation, First Tennessee Bank National Association, and
Check Consultants, Incorporated.
"ACQUISITION DOCUMENTS" has the meaning set forth in Section 3.16
hereof.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"ADDITIONAL ASSETS" shall have the meaning set forth in Section 4.03
hereof.
"ADMINISTRATIVE AGENT" means The Chase Manhattan Bank, in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
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"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"AGREEMENT" means this Credit Agreement, as it may be amended,
modified, restated or supplemented and in effect from time to time.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to
the greatest of (a) the Prime Rate in effect on such day, or (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective from and including the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"APPLICABLE MARGIN" means:
(i) on any date of determination occurring on or prior to the date
that a Compliance Certificate shall have been delivered hereunder, 0.50%
in the case of ABR Loans, 2.00% in the case of Eurodollar Loans, and 0.50%
in the case of Commitment Fees; and
(ii) on any date of determination occurring after the date that a
Compliance Certificate has been delivered hereunder, the percentage per
annum set forth in the table below for ABR Loans, Eurodollar Loans, and
commitment fees (as the case may be) that corresponds to the Leverage
Ratio at such date of determination, as calculated on the quarterly
Compliance Certificate of Borrower most recently delivered pursuant to
SECTION 6.01(c) hereof:
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Applicable Margin (Per Annum)
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Leverage Ratio ABR Loans Eurodollar Loans Commitment
Fees
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Less than
or equal to 0.00% 1.50% 0.25%
0.50
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Greater than 0.5
but less than or 0.25% 1.750% 0.375%
equal to 1.0
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Greater than 1.0
but less than or 0.50% 2.00% 0.50%
equal to 1.5
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Greater than 1.5
but less than or 0.75% 2.25% 0.50%
equal to 2.0
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"ARRANGER" means XX Xxxxxx Securities, Inc.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by SECTION 10.04), and accepted by the Administrative Agent,
in substantially the form of EXHIBIT A or any other form approved by the
Administrative Agent.
"AUTHORIZED OFFICER" means the Chairman, the President, the Chief
Financial Officer, any Executive Vice President, the Corporate Controller, or
the Treasurer of the Borrower or any Subsidiary, as applicable, or any other
officer of the Borrower or any Subsidiary specified to the Administrative Agent
in writing by any of the aforementioned officers of the Borrower or any
Subsidiary.
"AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the Revolving Commitment Termination Date.
"BOARD" means the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWER" shall have the meaning set forth in the initial paragraph
hereof.
"BORROWING" means Loans of the same Type, made, converted or
continued on the same date and, in the case of Eurodollar Loans, as to which a
single Interest Period is in effect.
"BORROWING REQUEST" means a request by the Borrower for a Borrowing
in accordance with SECTION 2.03, in substantially the form of EXHIBIT D or any
other form approved by the Administrative Agent.
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City or Dallas, Texas are authorized
or required by law to remain closed; PROVIDED that, when used in connection with
a Eurodollar Loan, the term "BUSINESS DAY" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
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"CAPITAL EXPENDITURES" means, as to any Person for any period, all
expenditures by such Person and its Subsidiaries during such period that, in
conformity with GAAP, are included in "capital expenditures," "additions to
property, plant or equipment" or comparable items on the consolidated financial
statements of such Person including without limitation, expenditures for
capitalized software, but excluding expenditures for the restoration, repair or
replacement of any fixed or capital asset that was destroyed or damaged, in
whole or in part, in an amount equal to any insurance proceeds received in
connection with such destruction or damage.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CHANGE IN CONTROL" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of shares
representing more than thirty percent (30)% of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower;
(b) the occupation of a majority of the seats (other than vacant seats) on the
board of directors of the Borrower by Persons who were neither (i) nominated by
the board of directors of the Borrower nor (ii) appointed by directors so
nominated; or (c) the acquisition of direct or indirect Control of the Borrower
by any Person or group.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation 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 Issuing Bank (or, for purposes of SECTION 2.12(b), by any lending office of
such Lender or by such Lender's or Issuing Bank'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.
"CHASE" means The Chase Manhattan Bank, in its individual capacity
as Lender, and not as Administrative Agent.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COLLATERAL" means all the items and types of property described as
"Collateral" in now existing or hereafter created Collateral Documents and all
cash and non-cash proceeds thereof.
"COLLATERAL DOCUMENTS" means the Security Agreements, and all other
security agreements, pledge agreements, financing statements, collateral
assignments, guaranties,
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mortgages, and deeds of trust at any time delivered to Administrative Agent to
create or evidence Liens securing the Obligations, together with all
reaffirmations, amendments, and modifications thereof or supplements thereto.
"COMMERCIAL JOINT VENTURE" means a transaction or series of related
transactions involving both (i) the acquisition or formation of a Person by
Borrower, which may initially be 100% owned by Borrower, but which is intended
to be owned jointly by Borrower and one or more of Borrower's customers or other
vendors to customers of Borrower ("CO-OWNERS"), and (ii) a commercial
arrangement with such customer or vendor Co-Owners pursuant to which Borrower or
its Subsidiaries provides management, consulting or technical services, or
licenses software, as part of a program of Borrower to provide management,
technical services or consulting to the Co-Owners and/or other customers in a
manner consistent with the ordinary course of business of Borrower; provided
that (a) any such Person formed by Borrower, or any Equity in such Person
acquired by Borrower, shall not require a cash investment of more than $300,000
by Borrower; and (b) the financial statements of such Person shall not be
consolidated with the financial statements of Borrower or any Subsidiary.
"COMMITMENT" means, with respect to each Lender, the commitment of
such Lender to make Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum aggregate amount of
such Lender's Revolving Credit Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.06 and (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
Section 10.04. The initial amount of each Lender's Commitment is set forth on
Schedule 2.01, or in the Assignment and Acceptance pursuant to which such Lender
shall have assumed its Commitment, as applicable. The initial aggregate amount
of the Lenders' Commitments shall be the Initial Commitment.
"COMPLIANCE CERTIFICATE" means a compliance certificate, in
substantially the form attached hereto as EXHIBIT "G", or other form
satisfactory to Administrative Agent, which is duly certified by a Financial
Officer of Borrower and delivered to Administrative Agent as required by Section
6.01(c) of this Agreement.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DEFAULT RATE" means a rate per annum of interest equal from day to
day to the lesser of (a) the sum of the Alternate Base Rate PLUS the highest ABR
Margin for ABR Borrowings PLUS 2% and (b) the Highest Lawful Rate.
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"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in SCHEDULE 3.06.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"DOMESTIC SUBSIDIARY" of any Person means a direct or indirect
Subsidiary of such Person that is organized or incorporated under the laws of a
jurisdiction of the United States, other than a direct or indirect Subsidiary of
a Foreign Subsidiary of such Person.
"EBITDA" means, as to any Person for any period, without
duplication, the amount equal to the following calculated for the Borrower and
its consolidated Subsidiaries on a consolidated basis: net income (excluding any
extraordinary gains or losses) determined in accordance with GAAP, PLUS to the
extent deducted from net income, Interest Expense, income tax expenses,
depreciation, and amortization, PLUS with respect to Borrower, restructuring and
other one-time charges relating to the acquisition of the Target.
"EFFECTIVE DATE" means the date on which the conditions specified in
SECTION 5.01 are satisfied (or waived in accordance with SECTION 10.02).
"ELIGIBLE ASSIGNEE" means (a) a Lender, (b) an Affiliate of a Lender
(so long as such assignment is not made in conjunction with the sale of such
Affiliate); (c) an Approved Fund of the assigning Lender; and (d) any other
Person approved by Administrative Agent (which approval will not be unreasonably
withheld or delayed by Administrative Agent) and, unless a Default has occurred
and is continuing at the time any assignment is effected in accordance with
Section 10.04, approved by Borrower, such approval not to be unreasonably
withheld or delayed by Borrower and such approval to be deemed given by Borrower
if no objection is received by the assigning Lender and Administrative Agent
from Borrower within ten (10) Business Days after notice of such proposed
assignment has been provided by the assigning Lender to Borrower; PROVIDED,
HOWEVER, that neither Borrower nor any Affiliate of Borrower shall qualify as an
Eligible Assignee. For purposes hereof, "APPROVED FUND" means, with respect to
any Lender that is a fund or commingled investment vehicle that invests in
loans, any other fund that invests in loans and is managed or advised by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract,
6
agreement or other consensual arrangement pursuant to which liability is
assumed or imposed with respect to any of the foregoing.
"EQUITY" means, with respect to any Person, shares of capital stock
of a corporation, or a partnership, profits, capital or member interest, or
options, warrants or any other right to substitute for or otherwise acquire the
capital stock or a partnership, profits, capital or member interest, of such
Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by the Borrower or any ERISA Affiliate
from the PBGC or a plan administrator of any notice relating to an intention to
terminate any Plan or Plans or to appoint a trustee to administer any Plan; (f)
the incurrence by the Borrower or any of its ERISA Affiliates of any liability
with respect to the withdrawal or partial withdrawal from any Plan or
Multiemployer Plan; or (g) the receipt by the Borrower or any ERISA Affiliate of
any notice, or the receipt by any Multiemployer Plan from the Borrower or any
ERISA Affiliate of any notice, concerning the imposition of Withdrawal Liability
or a determination that a Multiemployer Plan is, or is expected to be, insolvent
or in reorganization, within the meaning of Title IV of ERISA.
"EURODOLLAR" when used in reference to any Loan or Borrowing, refers
to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EURODOLLAR MARGIN" means with respect to any Eurodollar Loan, that
rate of interest equal to the Applicable Margin for Eurodollar Loans, to be
added to the Adjusted LIBO Rate to determine the rate of interest applicable to
such Eurodollar Loan.
"EVENT OF DEFAULT" has the meaning assigned to such term in ARTICLE
VIII.
"EXCLUDED TAXES" means, with respect to Administrative Agent, or the
Issuing Bank, or any Lender, or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by)
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its net income by the United States of America, or by the jurisdiction under
the laws of which such recipient is organized or in which its principal office
is located or, in the case of any Lender, in which its applicable lending
office is located, (b) any branch profits taxes imposed by the United States of
America or any similar tax imposed by any other jurisdiction in which the
Borrower is located and (c) in the case of a Foreign Lender (other than an
assignee pursuant to a request by the Borrower under SECTION 2.17(b)), any
withholding tax that is imposed on amounts payable to such Foreign Lender at
the time such Foreign Lender becomes a party to this Agreement (or designates a
new lending office) or is attributable to such Foreign Lender's failure to
comply with SECTION 2.14(e), except to the extent that such Foreign Lender (or
its assignor, if any) was entitled, at the time of designation of a new lending
office (or assignment), to receive additional amounts from the Borrower with
respect to such withholding tax pursuant to SECTION 2.14(a).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FEE LETTER" means that certain Fee Letter, dated as of May 23,
2001, by and among the Borrower, Chase and Arranger, as such letter may be
amended, supplemented, restated or otherwise modified from time to time.
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or corporate controller of the Borrower.
"FISCAL QUARTER" means a fiscal quarter of the Borrower, ending on
the last day of each April, July, October and January of each year.
"FISCAL YEAR" means a fiscal year of the Borrower, ending on January
31 of each year.
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FOREIGN SUBSIDIARY" of a Person means a Subsidiary of such Person
that is organized or incorporated under the laws of a jurisdiction other than a
jurisdiction of the United States.
"FUNDED DEBT" means, (without duplication), with respect to any
Person, (a) all indebtedness, obligations, and liabilities of such Person for
borrowed money, including without
8
limitation all debt for borrowed money which would be reflected on a balance
sheet of such Person, (b) all obligations of such Person in respect of any
letter of credit or bankers' acceptance, (c) all Capital Lease Obligations of
such Person, and (d) all obligations, indebtedness, and liabilities secured
by any lien or any security interest on any property or assets of such Person.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GOVERNMENTAL RULE" means any statute, law, regulation, ordinance,
rule, judgment, order, decree, permit, concession, grant, franchise, license,
agreement, directive, requirement of, or other governmental restriction or any
similar binding form of decision of or determination by, or any binding
interpretation or administration of any of the foregoing by, any Governmental
Authority, whether now or hereafter in effect.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
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 obligation, or (d) as an account party
in respect of any letter of guaranty issued to support such Indebtedness or
obligation; PROVIDED, that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"HEDGING AGREEMENT" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"HIGHEST LAWFUL RATE" has the meaning set forth in SECTION 10.13.
9
"INCREASED COMMITMENT" means an amount designated by Borrower
pursuant to SECTION 2.1(b) up to a maximum amount of $60,000,000.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of guaranty or letters of credit, (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances and
(k) net liabilities of such Person in respect of any Hedging Agreement to the
extent such liabilities are required by GAAP to be classified upon such Person's
balance sheet as liabilities. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INITIAL COMMITMENT" means $45,000,000.
"INFORMATION MEMORANDUM" means the Confidential Information
Memorandum dated June 2001 relating to the Borrower and the Transactions.
"INTEREST COVERAGE RATIO" means, on any day, the ratio of (a) (i)
EBITDA of the Borrower and its consolidated Subsidiaries PLUS (without
duplication) EBITDA of the Target for the Rolling Period ending on the then most
recent Quarterly Date MINUS (ii) Capital Expenditures of the Borrower and its
consolidated Subsidiaries PLUS (without duplication) Capital Expenditures of the
Target during such Rolling Period, to (b) Interest Expense of the Borrower and
its Subsidiaries on a consolidated basis, PLUS Interest Expense of the Target,
during such Rolling Period (except for the Fiscal Quarter ending July 31, 2001,
which shall be annualized based upon the three (3) month period then ended, the
Fiscal Quarter ending October 31, 2001, which shall be annualized based upon the
six (6) month period then ended, and the Fiscal Quarter ending January 31, 2002,
which shall be annualized based upon the nine (9) month period then ended).
EBITDA shall, for the purposes of the foregoing calculations, be adjusted to
give effect to the acquisition of the Target, as if such acquisition occurred on
the first (1st) day of such period, by increasing, if positive, or decreasing,
if negative, EBITDA by the EBITDA of the Target during such period of
calculation occurring prior to the date of such acquisition. Capital
Expenditures
10
and Interest Expense shall, for the purposes of the foregoing calculations,
be adjusted to give effect to the acquisition of the Target as if such
acquisition occurred on the first (1st) day of such period, by increasing
Capital Expenditures and Interest Expense by the Capital Expenditures and
Interest Expense of the Target during such period of calculation occurring
prior to the date of such acquisition.
"INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Borrowing in accordance with SECTION 2.05, in
substantially the form of EXHIBIT E or any other form approved by the
Administrative Agent.
"INTEREST EXPENSE" means, as to any Person for any period, without
duplication, total interest expense, whether paid or accrued as liabilities
(including the interest component of Capital Lease Obligations), with respect to
all outstanding Indebtedness, including, without limitation, all commissions,
discounts, and other fees and charges owed with respect to any financing and net
costs under any Hedging Agreement to the extent that such costs are included
within interest expense under GAAP.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan, the
last day of each March, June, September and December, and (b) with respect to
any Eurodollar Loan, the last day of the Interest Period applicable to the
Borrowing of which such Loan is a part and, in the case of a Eurodollar
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"INTEREST PERIOD" means with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; PROVIDED, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (ii) any
Interest Period pertaining to a Eurodollar Borrowing that commences on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the last calendar month of such Interest Period) shall end
on the last Business Day of the last calendar month of such Interest Period. For
purposes hereof, the date of a Borrowing initially shall be the date on which
such Borrowing is made and thereafter shall be the effective date of the most
recent conversion or continuation of such Borrowing.
"INVESTMENTS" has the meaning set forth in SECTION 7.04 hereof.
"ISSUING BANK" means The Chase Manhattan Bank, in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.18(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
11
"LC DISBURSEMENT" means a payment made by the Issuing Bank pursuant
to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"LENDER AFFILIATE" means (a) with respect to any Lender (i) an
Affiliate of such Lender, or (ii) any entity (whether a corporation,
partnership, trust or otherwise) that is engaged in making, purchasing, holding
or otherwise investing in bank loans and similar extensions of credit in the
ordinary course of its business and is administered or managed by a Lender or an
Affiliate of such Lender and (b) with respect to any Lender that is a fund which
invests in bank loans and similar extensions of credit, any other fund that
invests in bank loans and similar extensions of credit and is managed by the
same investment advisor as such Lender or by an Affiliate of such investment
advisor.
"LENDERS" means the Persons listed on SCHEDULE 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"LETTER OF CREDIT" means any letter of credit issued pursuant to
this Agreement.
"LEVERAGE RATIO" means, on any day, the ratio of (a) as of the date
of determination, Funded Debt of the Borrower and its Subsidiaries on a
consolidated basis, PLUS Funded Debt of the Target PLUS Funded Debt of any
Person acquired pursuant to a Permitted Acquisition, to (b) for the Rolling
Period ending on the most recent Quarterly Date as of the date of determination,
EBITDA of Borrower and its consolidated Subsidiaries on a consolidated basis
PLUS EBITDA of the Target PLUS EBITDA of any Person acquired pursuant to a
Permitted Acquisition. For purposes hereof, the Funded Debt of the Target and
any Person acquired pursuant to a Permitted Acquisition shall include the Funded
Debt of Target or such Person, as if the acquisition of Target or such Person
had occurred on the first day of the period in question. EBITDA shall, for
purposes of the foregoing calculations, be adjusted to give effect to the
acquisition of the Target or any Person acquired pursuant to a Permitted
Acquisition, as if such acquisition occurred on the first (1st) day of such
period, by increasing, if positive, or decreasing, if negative, EBITDA by the
EBITDA of the Target or such Person during such period of such calculation
occurring prior to the date of such acquisition.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of the Telerate Service (or on
any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the
Administrative Agent from time to time for purposes of providing quotations of
interest rates applicable to dollar deposits in the London interbank market) at
approximately 11:00 a.m.,
12
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time
for any reason, then the "LIBO RATE" with respect to such Eurodollar
Borrowing for such Interest Period shall be the rate (rounded upwards, if
necessary, to the next 1/16 of 1%) at which dollar deposits of $5,000,000 and
for a maturity comparable to such Interest Period are offered by the
principal London office of the Administrative Agent in immediately available
funds in the London interbank market at approximately 11:00 a.m., London
time, two Business Days prior to the commencement of such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Subsidiary
Guaranties, the Security Agreements and other Collateral Documents, any
Borrowing Request, any Interest Election Request, any Assignment and Acceptance,
any Letters of Credit and related applications for Letters of Credit, the Fee
Letter, and all other agreements (including Hedging Agreements) relating to this
Agreement entered into from time to time between or among the Borrower (or any
or all of its Subsidiaries) and the Administrative Agent or any Lender (or, with
respect to the Hedging Agreements, any Affiliates of any Lender), and any
document delivered by the Borrower or any of its Subsidiaries in connection with
the foregoing.
"LOANS" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower or any Subsidiary to perform any of its obligations under this
Agreement or any of the other Loan Documents, (c) the validity or enforceability
of this Agreement or any of the other Loan Documents or (d) the rights of or
benefits available to the Lenders under this Agreement or any of the other Loan
Documents.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans),
or obligations in respect of one or more Hedging Agreements, of any one or more
of the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$1,000,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of the Borrower or any Subsidiary in respect of any
Hedging Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that the Borrower or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.
"MATURITY DATE" means June 5, 2004.
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"MAXIMUM COMMITMENT" means (a) if the Initial Commitment is not
increased to the Increased Commitment pursuant to SECTION 2.01(b), the Initial
Commitment, and (b) if the Initial Commitment is increased to the Increased
Commitment pursuant to SECTION 2.01(b), then the Increased Commitment.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NEW YORK CITY" means New York, New York.
"NON-OPERATING SUBSIDIARIES" has the meaning set forth in SECTION
3.12 hereof.
"NOTE" means any promissory note of the Borrower payable to the
order of a Lender and issued hereunder pursuant to SECTION 2.07(e) (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the Borrower to such Lender
resulting from outstanding Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"OBLIGATION" means all present and future indebtedness, liabilities,
and obligations, and all renewals and extensions thereof, or any part thereof,
now or hereafter owed to Administrative Agent, any Lender, or any Affiliate of
any Lender by Borrower or any Subsidiary arising from, by virtue of, or pursuant
to any Loan Document, together with all interest accruing thereon, fees, costs,
and expenses (including, without limitation, all attorneys' fees and expenses
incurred in the enforcement or collection thereof) payable under the Loan
Documents.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"PERMITTED ACQUISITIONS" means:
(a) any acquisition by Borrower or any Subsidiary of 51% or more
of the Equity of any Person or all or substantially all of the assets or an
operating division of any Person (the "Acquired Entity") so long as each of the
following requirements shall have been satisfied:
(i) the Acquired Entity is engaged in substantially the same
business, or a related or complementary business, as the business
conducted by Borrower prior to such acquisition;
14
(ii) as of the closing of such acquisition, such acquisition has
been approved and recommended by the Board of Directors of the Acquired
Entity to be acquired or the Person from which the Acquired Entity is to
be acquired;
(iii) as of the closing of such acquisition, no Default shall exist
or occur as a result of, and after giving effect to, such acquisition;
(iv) the making and performance of the related acquisition agreement
with respect to such Acquisition, and all other agreements, documents, and
actions required thereunder, will not violate any provision of any legal
requirement, except where such violation could not have a Material Adverse
Effect, and will not violate any provisions of the constituent documents
of Borrower or any Subsidiary, or constitute a default under any agreement
by which Borrower or any Subsidiary or its respective property may be
bound, except where such default could not have a Material Adverse Effect;
and
(b) any other acquisition for which the prior written consent of
Administrative Agent has been obtained.
"PERMITTED ENCUMBRANCES" has the meaning set forth in Section 7.02
hereof.
"PERMITTED INVESTMENTS" means investments permitted by Borrower's
Corporate Investment Policy, a copy of which is attached hereto as EXHIBIT "H".
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by Chase as its prime rate in effect at its principal office
in New York City; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective.
"QUARTERLY DATES" means the last day of each April, July, October
and January in each year.
"QUARTERLY DATE" means any one of the Quarterly Dates.
"RECEIVABLES" means all present and future (a) accounts,
receivables, contract rights, chattel paper, documents, tax refunds, or rights
to payment of, or owned by, Borrower and each Subsidiary, (b) insurance
proceeds, patent rights, license rights, rights to refunds or
15
indemnification, and other general intangibles of every kind or nature of, or
owned by, Borrower and each Subsidiary, and (c) all forms of obligations
whatsoever owing to Borrower and each Subsidiary together with all
instruments and all documents of title representing any of the foregoing and
all right, title, and interest in, and all securities and guaranties with
respect to, each Receivable, as determined in accordance with GAAP.
"REGISTER" has the meaning set forth in SECTION 10.04.
"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 Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders having Revolving
Credit Exposures and unused Commitments representing not less than sixty-six and
two-thirds percent (66 2/3%) of the sum of the total Revolving Credit Exposures
and unused Commitments of all Lenders at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock of the Borrower or any Subsidiary, 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 shares of capital stock of
the Borrower or any Subsidiary or any option, warrant or other right to acquire
any such shares of capital stock of the Borrower or any Subsidiary.
"REVOLVING COMMITMENT" means, with respect to each Lender, the
commitment of such Lender to make Loans hereunder, as such commitment may be (a)
reduced from time to time pursuant to SECTION 2.06, (b) reduced or increased
from time to time pursuant to assignments by or to such Lender pursuant to
SECTION 10.04, and (c) terminated pursuant to ARTICLE VIII. The initial amount
of each Lender's Commitment is set forth on SCHEDULE 2.01, or in the Assignment
and Acceptance pursuant to which such Lender shall have assumed its Commitment,
as applicable. The initial aggregate amount of the Lenders' Commitments is
$45,000,000.
"REVOLVING COMMITMENT TERMINATION DATE" means the earliest of: (a)
the Maturity Date; (b) the date on which all of the Commitments are terminated
in full or reduced to zero pursuant to SECTION 2.06; and (c) the date on which
the Commitments otherwise are terminated in full and reduced to zero pursuant to
the terms of ARTICLE VIII. Upon the occurrence of any event described in
CLAUSE (h) or (i) of ARTICLE VIII, the Revolving Commitments shall terminate
automatically and without any further action.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Loans and its
LC Exposure at such time.
"ROLLING PERIOD" means any period of four consecutive Fiscal
Quarters.
16
"S&P" means Standard & Poor's.
"SECURITY AGREEMENTS" means one or more Security Agreements, in
substantially the form of EXHIBIT "B" attached hereto, covering the Collateral
described therein, to be executed by Borrower and the wholly-owned Domestic
Subsidiaries, except Non-Operating Subsidiaries, to secure the Obligation.
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the Equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Borrower, except any
Commercial Joint Ventures.
"SUBSIDIARY GUARANTIES" means the guaranties of the Indebtedness of
the Borrower arising under or in connection with this Agreement and the other
Loan Documents, executed and delivered pursuant to SECTION 4.01 or SECTION
5.01(c), substantially in the form of EXHIBIT C, given by each of the
Subsidiaries, except Non-Operating Subsidiaries, which are Domestic
Subsidiaries, as amended, supplemented, restated or otherwise modified from time
to time. "SUBSIDIARY GUARANTEE" shall mean any one of the Subsidiary Guaranties.
"SYNDICATION AGENT" means Compass Bank, in its capacity as
syndication agent for the Lenders hereunder.
"TARGET" means, for periods before the date hereof, Check Solutions
Company, a New York general partnership, comprised of IPSS Corporation and Check
Consultants
17
Tennessee, Inc., as its sole general partners, and for periods on or after
the date hereof means Xxxxxxxx Check Solutions LLC.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TRANSACTIONS" means the execution, delivery and performance by the
Borrower and its Subsidiaries of this Agreement and the other Loan Documents,
the borrowing of the Loans, and the Acquisition of the Target pursuant to the
Acquisition Agreement.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rates or the
Alternate Base Rate.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 TYPES OF LOANS AND BORROWINGS. For purposes of this
Agreement, Loans may be classified and referred to by Type (E.G., a
"EURODOLLAR LOAN" or an "ABR LOAN"). Borrowings also may be classified and
referred to by Type (E.G., a "EURODOLLAR BORROWING" or an "ABR BORROWING").
SECTION 1.03 TERMS GENERALLY. (a) The definitions of terms
herein shall apply equally to the singular and plural forms of the terms
defined. Whenever the context may require, any pronoun shall include the
corresponding masculine, feminine and neuter forms. The words "include",
"includes" and "including" shall be deemed to be followed by the phrase
"without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". Unless the context requires otherwise
(b) any definition of or reference to any agreement, instrument or other
document herein shall be construed as referring to such agreement, instrument
or other document as from time to time amended, supplemented or otherwise
modified (subject to any restrictions on such amendments, supplements or
modifications set forth herein), (c) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (d) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (e) all references herein to Articles, Sections,
Exhibits and Schedules shall be construed to refer to Articles and Sections
of, and Exhibits and Schedules to, this Agreement and (f) the words "asset"
and "property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature
shall be construed in accordance with GAAP, as in effect from time to time;
PROVIDED that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the
effect of any change occurring after the date hereof in GAAP or in the
application
18
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
herewith.
ARTICLE II
THE CREDITS
SECTION 2.01 COMMITMENTS. (a) Subject to the terms and conditions
set forth herein, each Lender agrees to make Loans to the Borrower from time to
time during the Availability Period in an aggregate principal amount that will
not result in (i) such Lender's Revolving Credit Exposure exceeding such
Lender's Commitment, or (ii) the sum of the total Revolving Credit Exposures
exceeding the total Commitments. Within the foregoing limits and subject to the
terms and conditions set forth herein, the Borrower may borrow, prepay and
reborrow Loans.
(b) INCREASE IN COMMITMENT. Borrower may, by written notice to
Administrative Agent, without the consent of the existing Lenders who are
parties to this Agreement prior to the increase in the Maximum Commitment (the
"ORIGINAL LENDERS") increase the Maximum Commitment from the Initial Commitment
up to the Increased Commitment by obtaining Commitments from additional Lenders;
provided that the Commitment of each of the Original Lenders will not be
increased. The increase in the Maximum Commitment is subject to the following
conditions:
(i) No Default exists at the time of or as a result of such
increase;
(ii) Borrower executes new Notes (as requested) payable to the order
of Lenders and such other documents as Administrative Agent shall
reasonably request to evidence the increase in the Initial Commitment; and
(iii) After giving effect to the increase in the Initial Commitment,
the Maximum Commitment does not exceed $60,000,000.
SECTION 2.02 LOANS AND BORROWINGS. (a) Each Loan shall be made as
part of a Borrowing consisting of Loans made by the Lenders ratably in
accordance with their respective Commitments. The failure of any Lender to make
any Loan required to be made by it shall not relieve any other Lender of its
obligations hereunder; PROVIDED that the Commitments of the Lenders are several
and no Lender shall be responsible for any other Lender's failure to make Loans
as required.
(b) Subject to SECTION 2.11, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan; PROVIDED that any exercise of such option shall
19
not affect the obligation of the Borrower to repay such Loan in accordance
with the terms of this Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is
an integral multiple of $500,000 and not less than $2,000,000. At the time
that each ABR Borrowing is made, such Borrowing shall be in an aggregate
amount that is an integral multiple of $500,000 and not less than $2,000,000;
PROVIDED that an ABR Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the total Commitments or that is required to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.18(e). Borrowings of more than one Type may be outstanding at the same time;
PROVIDED that there shall not at any time be more than a total of five
Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing after the Revolving
Commitment Termination Date, or to elect to convert or continue any Borrowing
if the Interest Period requested with respect thereto would end after the
Maturity Date.
SECTION 2.03 REQUESTS FOR BORROWINGS. To request a Borrowing,
the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 11:00
a.m., Dallas, Texas time, three Business Days before the date of the proposed
Borrowing or (b) in the case of an ABR Borrowing, not later than 11:00 a.m.,
Dallas, Texas time, one Business Day before the date of the proposed
Borrowing; PROVIDED that any such notice of an ABR Borrowing to finance the
reimbursement of an LC Disbursement as contemplated by Section 2.18(e) may be
given not later than 10:00 a.m., Dallas, Texas time, on the date of the
proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to
the Administrative Agent of a written Borrowing Request executed by an
Authorized Officer of the Borrower. Each such telephonic and written Borrowing
Request shall specify the following information in compliance with SECTION
2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "INTEREST PERIOD"; and
(v) the location and number of the Borrower's account to which
funds are to be disbursed, which shall comply with the requirements of
SECTION 2.04.
20
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this SECTION 2.03, the
Administrative Agent shall advise each Lender of the details thereof and of the
amount of such Lender's Loan to be made as part of the requested Borrowing.
SECTION 2.04 FUNDING OF BORROWINGS. (a) Each Lender shall make
each Loan to be made by it hereunder on the proposed date thereof by wire
transfer of immediately available funds by 12:00 noon, Dallas, Texas time, to
the account of the Administrative Agent most recently designated by it for
such purpose by notice to the Lenders. The Administrative Agent will make such
Loans available to the Borrower by promptly crediting the amounts so received,
in like funds, to an account of the Borrower maintained with the
Administrative Agent in Dallas, Texas and designated by the Borrower in the
applicable Borrowing Request; PROVIDED that ABR Loans made to finance the
reimbursement of an LC Disbursement as provided in Section 2.18(e) shall be
remitted by the Administrative Agent to the Issuing Bank.
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with PARAGRAPH (a) of this SECTION
2.04 and may, in reliance upon such assumption, make available to the Borrower
a corresponding amount. In such event, if a Lender has not in fact made its
share of the applicable Borrowing available to the Administrative Agent, then
the applicable Lender and the Borrower severally agree to pay to the
Administrative Agent forthwith on demand such corresponding amount with
interest thereon, for each day from and including the date such amount is made
available to the Borrower to but excluding the date of payment to the
Administrative Agent, at (i) in the case of such Lender, the greater of (A)
the Federal Funds Effective Rate and (B) a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Administrative Agent,
then such amount shall constitute such Lender's Loan included in such
Borrowing.
SECTION 2.05 INTEREST ELECTIONS. (a) Each Borrowing initially
shall be of the Type specified in the applicable Borrowing Request (or an ABR
Borrowing if no Type is specified) and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect to convert such Borrowing to a different
Type or to continue such Borrowing and, in the case of a Eurodollar Borrowing,
may elect Interest Periods therefor, all as provided in this SECTION 2.05. The
Borrower may elect different options with respect to different portions of the
affected Borrowing, in which case each such portion shall be allocated ratably
among the Lenders holding the Loans comprising such Borrowing, and the Loans
comprising each such portion shall be considered a separate Borrowing.
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(b) To make an election pursuant to this SECTION 2.05, the
Borrower shall notify the Administrative Agent of such election by telephone
by the time that a Borrowing Request would be required under SECTION 2.03 if
the Borrower were requesting a Borrowing of the Type resulting from such
election to be made on the effective date of such election. Each such
telephonic Interest Election Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to the Administrative Agent of
a written Interest Election Request executed by an Authorized Officer of the
Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with SECTION 2.02:
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to CLAUSES (iii) and (iv) below shall be specified for each
resulting Borrowing);
(ii) the effective date of the election made pursuant to such
Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing;
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "INTEREST PERIOD;" and
(v) if any such Interest Election Request requests a
Eurodollar Borrowing but does not specify an Interest Period, then the
Borrower shall be deemed to have selected an Interest Period of one
month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Administrative Agent shall advise each Lender of the details thereof and
of such Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the
Interest Period applicable thereto, then, unless such Borrowing is repaid as
provided herein, at the end of such Interest Period such Borrowing shall be
converted to an ABR Borrowing. Notwithstanding any contrary provision hereof,
if an Event of Default has occurred and is continuing and the Administrative
Agent, at the request of the Required Lenders, so notifies the Borrower, then,
so long as an Event of Default is continuing (i) no outstanding Borrowing may
be converted to or continued as a Eurodollar Borrowing and (ii) unless repaid,
each Eurodollar Borrowing shall be converted to an ABR Borrowing at the end of
the Interest Period applicable thereto.
22
SECTION 2.06 TERMINATION AND REDUCTION OF COMMITMENTS. (a)
Unless previously terminated, the Revolving Commitment of each Lender shall
terminate on the Revolving Commitment Termination Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Revolving Commitments; PROVIDED that (i) each reduction of the
Revolving Commitments shall be in an amount that is an integral multiple of
$500,000 and not less than $2,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Commitments if, after giving effect to any
concurrent prepayment of the Loans in accordance with SECTION 2.08, the
Revolving Credit Exposure would exceed the total Revolving Commitments.
(c) The Borrower shall notify the Administrative Agent of any
election to terminate or reduce the Revolving Commitments under PARAGRAPH (b)
of this SECTION 2.06 at least three Business Days prior to the effective date
of such termination or reduction, specifying such election and the effective
date thereof. Promptly following receipt of any notice, the Administrative
Agent shall advise the Lenders of the contents thereof. Each notice delivered
by the Borrower pursuant to this section shall be irrevocable; PROVIDED that a
notice of termination of the Revolving Commitments delivered by the Borrower
may state that such notice is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked by the Borrower
(by notice to the Administrative Agent on or prior to the specified effective
date) if such condition is not satisfied. Any termination or reduction of the
Revolving Commitments shall be permanent. Each reduction of the Revolving
Commitments shall be made ratably among the Lenders in accordance with their
respective Revolving Commitments.
SECTION 2.07 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The
Borrower hereby unconditionally promises to pay to the Administrative Agent
for the account of each Lender the then unpaid principal amount of each Loan
and Borrowing of such Lender on the Revolving Commitment Termination Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the
amounts of principal and interest payable and paid to such Lender from time to
time hereunder.
(c) The Administrative Agent shall maintain accounts in which it
shall record (i) the amount of each Loan made hereunder, the Type thereof and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to
each Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder for the account of the Lenders and each
Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
PARAGRAPH (b) or (c) of this SECTION 2.07 shall be PRIMA FACIE evidence of the
existence and amounts of the obligations recorded therein; PROVIDED that the
failure of any Lender or the Administrative Agent to maintain such accounts or
any error therein shall not in any manner affect the obligation of the
Borrower to repay the Loans in accordance with the terms of this Agreement.
23
(e) Any Lender may request that Loans made by it be evidenced by
a promissory note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a promissory note payable to the order of such Lender
(or, if requested by such Lender, to such Lender and its registered assigns)
and in a form approved by the Administrative Agent. Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to SECTION 10.04) be represented by one
or more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and
its registered assigns).
SECTION 2.08 PREPAYMENT OF LOANS. (a) The Borrower shall have
the right, at its option, at any time and from time to time, to prepay any
Borrowing in whole or in part; PROVIDED that (i) each prepayment pursuant to
this SECTION 2.08(a) shall be in an amount that is an integral multiple of
$500,000, or that is equal to the entire outstanding principal balance of all
Loans, (ii) each prepayment pursuant to this SECTION 2.08(a) shall be subject
to prior notice in accordance with PARAGRAPH (c) of this SECTION 2.08, and
(iii) the Borrower shall pay at the time of such prepayment to Administrative
Agent for the benefit of Lenders any and all accrued interest on the amounts
prepaid.
(b) The Borrower shall, from time to time, upon demand of the
Administrative Agent, prepay the Loans in such amounts as shall be necessary
so that at all times the aggregate outstanding principal balance of Loans by
the Lenders is equal to or less than the aggregate amount of the Commitments
of the Lenders.
(c) The Borrower shall notify the Administrative Agent by
telephone (confirmed by telecopy) of any prepayment hereunder (i) in the case
of prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., Dallas,
Texas time, three Business Days before the date of prepayment or (ii) in the
case of prepayment of an ABR Borrowing, not later than 11:00 a.m., Dallas,
Texas time, one Business Day before the date of prepayment. Each such notice
shall be irrevocable and shall specify the prepayment date and the principal
amount of each Borrowing or portion thereof to be prepaid (which amount shall
be in a principal that is an integral multiple of $500,000, or that is equal
to the entire outstanding principal balance of all Loans); PROVIDED that, if a
notice of prepayment is given in connection with a conditional notice of
termination of the Commitments as contemplated by SECTION 2.06(c), then such
notice of prepayment may be revoked if such notice of termination is revoked
in accordance with SECTION 2.06(c). Promptly following receipt of any such
notice relating to a Borrowing, the Administrative Agent shall advise the
Lenders of the contents thereof. Each prepayment of a Borrowing shall be
applied ratably to the Loans included in the prepaid Borrowing. Prepayments
shall be accompanied by accrued interest to the extent required by SECTION
2.10.
SECTION 2.09 FEES. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee, which
shall accrue at the Applicable Margin for commitment fees on the daily unused
amount of the Revolving Commitment of such Lender during the period from and
including the date of this Agreement to but excluding the Revolving Commitment
Termination Date. Accrued commitment fees shall be payable in arrears on the
last day of each March, June, September, and December of each year
24
and on the Revolving Commitment Termination Date, commencing on the first such
date to occur after the date hereof. All commitment fees shall be computed on
the basis of a year of 360 days and shall be payable for the actual number of
days elapsed.
(b) The Borrower agrees to pay (i) to the Administrative Agent
for the account of each Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin as interest on Eurodollar Loans on the average daily amount of such
Lender's LC Exposure (excluding any portion thereof attributable to
unreimbursed LC Disbursements) during the period from and including the
Effective Date to but excluding the later of the date on which such Lender's
Commitment terminates and the date on which such Lender ceases to have any LC
Exposure, and (ii) to the Issuing Bank a fronting fee, which shall accrue at
the rate of 0.125% per annum on the average daily amount of the LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date of termination of the Commitments and the date on which
there ceases to be any LC Exposure, as well as the Issuing Bank's standard
fees with respect to the issuance, amendment, renewal or extension of any
Letter of Credit or processing of drawings thereunder. Participation fees and
fronting fees accrued through and including the last day of March, June,
September and December of each year shall be payable on the third Business Day
following such last day, commencing on the first such date to occur after the
Effective Date; PROVIDED that all such fees shall be payable on the date on
which the Commitments terminate and any such fees accruing after the date on
which the Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be
computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
(c) The Borrower agrees to pay to the Administrative Agent, for
its own account, fees payable in the amounts and at the times separately
agreed upon between the Borrower and the Administrative Agent, including
without limitation the fees set forth in the Fee Letter.
(d) All fees payable hereunder shall be paid on the dates due,
in immediately available funds, to the Administrative Agent (or to the Issuing
Bank for fees payable to it) for distribution, in the case of commitment fees,
to the Lenders. Fees paid shall not be refundable under any circumstances.
SECTION 2.10 INTEREST. (a) Subject to SECTION 10.13, the Loans
comprising each ABR Borrowing shall bear interest at the Alternate Base Rate
PLUS the ABR Margin.
(b) Subject to SECTION 10.13, the Loans comprising each
Eurodollar Borrowing shall bear interest at the Adjusted LIBO Rate for the
Interest Period in effect for such Borrowing PLUS the Eurodollar Margin.
25
(c) Notwithstanding the foregoing, but subject to SECTION 10.13,
if any principal of or interest on any Loan or any fee or other amount payable
by the Borrower hereunder is not paid when due, whether at stated maturity,
upon acceleration or otherwise, such overdue amount shall bear interest, after
as well as before judgment, at a rate per annum equal to (i) in the case of
overdue principal of any Loan, 2% plus the rate otherwise applicable to such
Loan as provided in the preceding paragraphs of this SECTION 2.10, or (ii) in
the case of any other amount, 2% plus the rate applicable to ABR Loans as
provided in PARAGRAPH (a) of this SECTION 2.10. After the occurrence and
during the continuance of a Default, at the option of Required Lenders and to
the extent permitted by law, the Obligation shall bear interest at the Default
Rate.
(d) Subject to SECTION 10.13, accrued interest on each Loan
shall be payable in arrears on each Interest Payment Date for such Loan;
PROVIDED that (i) interest accrued pursuant to PARAGRAPH (c) of this SECTION
2.10 shall be payable on demand, (ii) in the event of any repayment or
prepayment of any Loan (other than a prepayment of an ABR Loan prior to the
end of the Availability Period), accrued interest on the principal amount
repaid or prepaid shall be payable on the date of such repayment or
prepayment, and (iii) in the event of any conversion of any Eurodollar Loan
prior to the end of the current Interest Period therefor, accrued interest on
such Loan shall be payable on the effective date of such conversion.
(e) Subject to SECTION 10.13, all interest hereunder shall be
computed on the basis of a year of 360 days, except that interest computed by
reference to the Alternate Base Rate at times when the Alternate Base Rate is
based on the Prime Rate shall be computed on the basis of a year of 365 days
(or 366 days in a leap year), and in each case shall be payable for the actual
number of days elapsed. The applicable Alternate Base Rate, Adjusted LIBO Rate
or LIBO Rate shall be determined by the Administrative Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.11 ALTERNATE RATE OF INTEREST. If prior to the
commencement of any Interest Period for a Eurodollar Borrowing:
(a) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and reasonable means
do not exist for ascertaining the Adjusted LIBO Rate or the LIBO Rate, as
applicable, for such Interest Period;
(b) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest
Period will not adequately and fairly reflect the cost to such Lenders of
making or maintaining their Loans included in such Borrowing for such Interest
Period; or
(c) the Administrative Agent determines that by reason of
circumstances affecting the interbank dollar market generally, deposits in
U.S. Dollars in the relevant interbank dollar market are not being offered for
the applicable Interest Period and in an amount equal to the amount of the
Eurodollar Loan requested by the Borrower;
26
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Borrowing to, or
continuation of any Borrowing as, a Eurodollar Borrowing shall be ineffective,
and (ii) if any Borrowing Request requests a Eurodollar Borrowing, such
Borrowing shall be made as an ABR Borrowing.
SECTION 2.12 INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the Issuing
Bank; or
(ii) impose on any Lender or the Issuing Bank or the London
interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any letter of credit or
participation therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender or the Issuing Bank of making or maintaining any Eurodollar Loan (or of
maintaining its obligation to make any such Loan) or to increase the cost to
such Lender or the Issuing Bank of participating in, issuing or maintaining any
Letter of Credit or to reduce the amount of any sum received or receivable by
such Lender or the Issuing Bank (whether of principal, interest or otherwise),
then the Borrower will pay to such Lender or the Issuing Bank such additional
amount or amounts as will compensate such Lender or the Issuing Bank for such
additional costs incurred or reduction suffered.
(b) If any Lender determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of
return on such Lender's or the Issuing Bank's capital or on the capital of
such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by such Lender, or the Letters of Credit
issued by the Issuing Bank to a level below that which such Lender or the
Issuing Bank could have achieved but for such Change in Law (taking into
consideration such Lender's policies and the policies of such Lender's or the
Issuing Bank's holding company with respect to capital adequacy), then from
time to time the Borrower will pay to such Lender or the Issuing Bank, such
additional amount or amounts as will compensate such Lender or the Issuing
Bank's or such Lender's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank
or its holding company, as the case may be, as specified in PARAGRAPH (a) or
(b) of this SECTION 2.12 shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender or the
Issuing Bank the amount shown as due on any such certificate within 10 days
after receipt thereof.
27
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this SECTION shall not constitute a
waiver of such Lender's or Issuing Bank's right to demand such compensation;
PROVIDED that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing
Bank, notifies the Borrower of the Change in Law giving rise to such increased
costs or reductions and of such Lender's or the Issuing Bank's intention to
claim compensation therefor; PROVIDED FURTHER that, if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
270-day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.13 BREAK FUNDING PAYMENTS. In the event of
(a) the payment of any principal of any Eurodollar Loan other
than on the last day of an Interest Period applicable thereto (including as a
result of an Event of Default),
(b) the conversion of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto,
(c) the failure to borrow, convert, continue or prepay any Loan
on the date specified in any notice delivered pursuant hereto (regardless of
whether such notice may be revoked under SECTION 2.06(c) and is revoked in
accordance therewith), or
(d) the assignment of any Eurodollar Loan other than on the last
day of the Interest Period applicable thereto as a result of a request by the
Borrower pursuant to SECTION 2.17, then, in any such event, the Borrower shall
compensate each Lender for the loss, cost and expense attributable to such
event. In the case of a Eurodollar Loan, such loss, cost or expense to any
Lender shall be deemed to include an amount determined by such Lender to be
the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan, for the period from
the date of such event to the last day of the then current Interest Period
therefor (or, in the case of a failure to borrow, convert or continue, for the
period that would have been the Interest Period for such Loan), over (ii) the
amount of interest which would accrue on such principal amount for such period
at the interest rate which such Lender would bid were it to bid, at the
commencement of such period, for dollar deposits of a comparable amount and
period from other banks in the eurodollar market. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section shall be delivered to the Borrower and shall be
conclusive absent manifest error. The Borrower shall pay such Lender the
amount shown as due on any such certificate within 10 days after receipt
thereof.
SECTION 2.14 TAXES. (a) Any and all payments by or on account
of any obligation of the Borrower hereunder shall be made free and clear of
and without deduction for any Indemnified Taxes or Other Taxes; PROVIDED that
if the Borrower shall be required to deduct any Indemnified Taxes or Other
Taxes from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
28
applicable to additional sums payable under this SECTION 2.14) the
Administrative Agent, each Lender, or Issuing Bank receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
Borrower shall make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant Governmental Authority in accordance with
applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each
Lender, and the Issuing Bank within 10 days after written demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes paid by the
Administrative Agent or such Lender or Issuing Bank, as the case may be, on or
with respect to any payment by or on account of any obligation of the Borrower
hereunder (including Indemnified Taxes or Other Taxes imposed or asserted on
or attributable to amounts payable under this SECTION 2.14) and any penalties,
interest and reasonable expenses arising therefrom or with respect thereto,
whether or not such Indemnified Taxes or Other Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority. A certificate as
to the amount of such payment or liability delivered to the Borrower by a
Lender or Issuing Bank, or by the Administrative Agent on its own behalf or on
behalf of a Lender or Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to the Administrative Agent the original or a certified copy of
a receipt issued by such Governmental Authority evidencing such payment, a
copy of the return reporting such payment or other evidence of such payment
reasonably satisfactory to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed
by applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate.
SECTION 2.15 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING
OF Set-offs. (a) The Borrower shall make each payment required to be made by
it hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under SECTION 2.12, 2.13 or 2.14, or
otherwise) prior to 12:00 noon, Dallas, Texas time, on the date when due, in
immediately available funds, without set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 0000 Xxxx Xxxxxx,
0xx Xxxxx, Xxxxxx, Xxxxx 00000, and except payments to be made directly to the
Issuing Bank, and except that payments pursuant to SECTIONS 2.12, 2.13, 2.14
and 10.03 shall
29
be made directly to the Persons entitled thereto. The Administrative Agent
shall distribute any such payments received by it for the account of any
other Person to the appropriate recipient promptly following receipt thereof.
If any payment hereunder shall be due on a day that is not a Business Day,
the date for payment shall be extended to the next succeeding Business Day,
and, in the case of any payment accruing interest, interest thereon shall be
payable for the period of such extension. All payments hereunder shall be
made in dollars.
(b) If at any time insufficient funds are received by and available
to the Administrative Agent to pay fully all amounts of principal, unreimbursed
LC Disbursements interest and fees then due hereunder, such funds shall be
applied (i) first, towards payment of interest and fees then due hereunder,
ratably among the parties entitled thereto in accordance with the amounts of
interest and fees then due to such parties, and (ii) second, towards payment of
principal and unreimbursed LC Disbursements then due hereunder, ratably among
the parties entitled thereto in accordance with the amounts of principal and
unreimbursed LC Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participation in LC Disbursements or resulting
in such Lender receiving payment of a greater proportion of the aggregate amount
of its Loans or participation in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans or participation in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans or participation in LC Disbursements;
PROVIDED that (i) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest, and (ii) the provisions of this SECTION 2.15(c)
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participation in LC Disbursements to any
assignee or participant, other than to the Borrower or any Subsidiary or
Affiliate thereof (as to which the provisions of this SECTION 2.15(c) shall
apply). The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank
the amount due. In such event, if the Borrower has not in fact made
30
such payment, then each of the Lenders or the Issuing Bank severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the Issuing Bank with interest thereon, for
each day from and including the date such amount is distributed to it to but
excluding the date of payment to the Administrative Agent, at the greater of
the Federal Funds Effective Rate and a rate determined by the Administrative
Agent in accordance with banking industry rules on interbank compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to SECTION 2.04(b) or 2.15(d), then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.16 ILLEGALITY. (a) Notwithstanding any other provision of
this Agreement, if (i) by reason of the adoption of any applicable Governmental
Rule or any change in any applicable Governmental Rule or in the interpretation
or administration thereof by any Governmental Authority or compliance by any
Lender with any request or directive (whether or not having the force of law) of
any central bank or other Governmental Authority or (ii) circumstances affecting
the London interbank dollar market or the position of a Lender therein shall at
any time make it unlawful or impracticable in the sole discretion of a Lender
exercised in good faith for such Lender or its applicable lending office to (A)
honor its obligation to make Eurodollar Loans either generally or for a
particular Interest Period provided for hereunder, or (B) maintain Eurodollar
Loans either generally or for a particular Interest Period provided for
hereunder, then such Lender shall promptly notify the Borrower thereof through
the Administrative Agent and such Lender's obligation to make or maintain
Eurodollar Loans having an affected Interest Period hereunder shall be suspended
until such time as such Lender may again make and maintain Eurodollar Loans
having an affected Interest Period (in which case the provisions of SECTION
2.16(b) hereof shall be applicable). Before giving such notice pursuant to this
SECTION 2.16(a), such Lender will designate a different available lending office
for the affected Eurodollar Loans of such Lender or take such other action as
the Borrower may request if such designation or action will avoid the need to
suspend such Lender's obligation to make Eurodollar Loans hereunder and will
not, in the sole opinion of such Lender exercised in good faith, be
disadvantageous to such Lender (PROVIDED, that such Lender shall have no
obligation to so designate a lending office for Eurodollar Loans located in the
United States of America).
(b) If the obligation of any Lender to make or maintain any
Eurodollar Loans shall be suspended pursuant to SECTION 2.16(a) hereof, all
Loans having an affected Interest Period which would otherwise be made by such
Lender as Eurodollar Loans shall be made instead as ABR Loans (and, if such
Lender so requests by notice to the Borrower with a copy to the Administrative
Agent, each Eurodollar Loan having an affected Interest Period of such Lender
then outstanding shall be automatically converted into an ABR Loan on the last
day of the Interest Period for such Eurodollar Loans unless earlier conversion
is required by applicable law) and, to the extent that Eurodollar Loans are so
made as (or converted into) ABR Loans, all payments of principal which would
otherwise be applied to such Eurodollar Loans shall be applied instead to such
ABR Loans.
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SECTION 2.17 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If
any Lender requests compensation under SECTION 2.12, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to SECTION 2.14, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to SECTION 2.12 or 2.14, as the case may be, in the
future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If (i) any Lender requests compensation under SECTION 2.12, (ii)
the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.14,
(iii) any Lender defaults in its obligation to fund Loans hereunder, or (iv) any
Lender suspends its obligation to maintain or fund Eurodollar Loans under
SECTION 2.16, then the Borrower may, at its sole expense and effort, upon notice
to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in SECTION 10.04), all its interests, rights and obligations under
this Agreement to an assignee that shall assume such obligations (which assignee
may be another Lender, if a Lender accepts such assignment); PROVIDED that (i)
the Borrower shall have received the prior written consent of the Administrative
Agent (and if a Commitment is being assigned, the Issuing Bank), which consent
shall not unreasonably be withheld, (ii) such Lender shall have received payment
of an amount equal to the outstanding principal of its Loans and participation
in LC Disbursements, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Borrower (in the
case of all other amounts) and (iii) in the case of any such assignment
resulting from a claim for compensation under SECTION 2.12 or payments required
to be made pursuant to SECTION 2.14, such assignment will result in a reduction
in such compensation or payments. A Lender shall not be required to make any
such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
SECTION 2.18 Letters of Credit. (a) GENERAL. Subject to the
terms and conditions set forth herein, the Borrower may request the issuance
of Letters of Credit for its own account, in a form reasonably acceptable to
the Administrative Agent and the Issuing Bank, at any time and from time to
time during the Availability Period. In the event of any inconsistency
between the terms and conditions of this Agreement and the terms and
conditions of any form of letter of credit application or other agreement
submitted by the Borrower to, or entered into by the Borrower with, the
Issuing Bank relating to any Letter of Credit, the terms and conditions of
this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an
32
outstanding Letter of Credit), the Borrower shall hand deliver or telecopy
(or transmit by electronic communication, if arrangements for doing so have
been approved by the Issuing Bank) to the Issuing Bank and the Administrative
Agent (reasonably in advance of the requested date of issuance, amendment,
renewal or extension) a notice requesting the issuance of a Letter of Credit,
or identifying the Letter of Credit to be amended, renewed or extended, and
specifying the date of issuance, amendment, renewal or extension (which shall
be a Business Day), the date on which such Letter of Credit is to expire
(which shall comply with paragraph (c) of this Section), the amount of such
Letter of Credit, the name and address of the beneficiary thereof and such
other information as shall be necessary to prepare, amend, renew or extend
such Letter of Credit. If requested by the Issuing Bank, the Borrower also
shall submit a letter of credit application on the Issuing Bank's standard
form in connection with any request for a Letter of Credit. A Letter of
Credit shall be issued, amended, renewed or extended only if (and upon
issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect
to such issuance, amendment, renewal or extension (i) the LC Exposure shall
not exceed $15,000,000 and (ii) the sum of the total Revolving Credit
Exposures shall not exceed the total Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior
to the close of business on the earlier of (i) the date one year after the date
of the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension), and (ii) the date
that is five Business Days prior to the Maturity Date.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Administrative Agent, for
the account of the Issuing Bank, such Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this paragraph in respect of Letters of Credit is absolute and unconditional
and shall not be affected by any circumstance whatsoever, including any
amendment, renewal or extension of any Letter of Credit or the occurrence and
continuance of a Default or reduction or termination of the Commitments. and
that each such payment shall be made without any offset, abatement. withholding
or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 12:00 noon, Dallas, Texas time, on the date that
such LC Disbursement is made, if the Borrower shall have received notice of such
LC Disbursement prior to 10:00 a.m., Dallas, Texas time, on such date, or, if
such notice has not been received by the Borrower prior to such time on such
date, then not
33
later than 12:00 noon, Dallas, Texas time, on (i) the Business Day that the
Borrower receives such notice, if such notice is received prior to 10:00
a.m., Dallas, Texas time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; PROVIDED
that the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with Section 2.03 that such payment be financed
with an ABR Borrowing in an equivalent amount and, to the extent so financed,
the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Borrowing. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Lender's Applicable Percentage thereof. Promptly following
receipt of such notice, each Lender shall pay to the Administrative Agent its
Applicable Percentage of the payment then due from the Borrower, in the same
manner as provided in Section 2.04 with respect to Loans made by such Lender
(and Section 2.04 shall apply, MUTATIS MUTANDIS, to the payment obligations
of the Lenders), and the Administrative Agent shall promptly pay to the
Issuing Bank the amounts so received by it from the Lenders. Promptly
following receipt by the Administrative Agent of any payment from the
Borrower pursuant to this paragraph, the Administrative Agent shall
distribute such payment to the Issuing Bank or, to the extent that Lenders
have made payments pursuant to this paragraph to reimburse the Issuing Bank,
then to such Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Lender pursuant to this paragraph to reimburse the Issuing
Bank for any LC Disbursement (other than the funding of ABR Loans as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; PROVIDED that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the Borrower to the extent of any direct damages
(as opposed to consequential damages, claims in respect of which
34
are hereby waived by the Borrower to the extent permitted by applicable law)
suffered by the Borrower that are caused by the Issuing Bank's failure to
exercise care when determining whether drafts and other documents presented
under a Letter of Credit comply with the terms thereof. The parties hereto
expressly agree that, in the absence of gross negligence or willful
misconduct on the part of the Issuing Bank (as finally determined by a court
of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing
and without limiting the generality thereof, the parties agree that, with
respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole discretion, either accept and make payment upon such
documents without responsibility for further investigation, regardless of any
notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed by
telecopy) of such demand for payment and whether the Issuing Bank has made or
will make an LC Disbursement thereunder; provided that any failure to give or
delay in giving such notice shall not relieve the Borrower of its obligation to
reimburse the Issuing Bank and the Lenders with respect to any such LC
Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.10(d) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Administrative
Agent, the replaced Issuing Bank and the successor Issuing Bank. The
Administrative Agent shall notify the Lenders of any such replacement of the
Issuing Bank. At the time any such replacement shall become effective, the
Borrower shall pay all unpaid fees accrued for the account of the replaced
Issuing Bank pursuant to Section 2.09(b). From and after the effective date of
any such replacement, (i) the successor Issuing Bank shall have all the rights
and obligations of the Issuing Bank under this Agreement with respect to Letters
of Credit to be issued thereafter and (ii) references herein to the term
"Issuing Bank" shall be deemed to refer to such successor or to any previous
Issuing Bank, or to such successor and all previous Issuing Banks, as the
context shall require. After the replacement of an Issuing Bank hereunder, the
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement
35
with respect to Letters of Credit issued by it prior to such replacement, but
shall not be required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and
be continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Required Lenders (or, if the maturity of the Loans
has been accelerated, Lenders with LC Exposure representing greater than
fifty-one percent (51%) of the total LC Exposure) demanding the deposit of cash
collateral pursuant to this paragraph, the Borrower shall deposit in an account
with the Administrative Agent, in the name of the Administrative Agent and for
the benefit of the Lenders, an amount in cash equal to the LC Exposure as of
such date plus any accrued and unpaid interest thereon; PROVIDED that the
obligation to deposit such cash collateral shall become effective immediately,
and such deposit shall become immediately due and payable, without demand or
other notice of any kind, upon the occurrence of any Event of Default with
respect to the Borrower described in clause (h) or (i) of Article VIII. Such
deposit shall be held by the Administrative Agent as collateral for the payment
and performance of the obligations of the Borrower under this Agreement. The
Administrative Agent shall have exclusive dominion and control, including the
exclusive right of withdrawal, over such account. Other than any interest earned
on the investment of such deposits, which investments shall be made at the
option and sole discretion of the Administrative Agent and at the Borrower's
risk and expense, such deposits shall not bear interest. Interest or profits, if
any, on such investments shall accumulate in such account. Moneys in such
account shall be applied by the Administrative Agent to reimburse the Issuing
Bank for LC Disbursements for which it has not been reimbursed and, to the
extent not so applied, shall be held for the satisfaction of the reimbursement
obligations of the Borrower for the LC Exposure at such time or, if the maturity
of the Loans has been accelerated (but subject to the consent of Lenders with LC
Exposure representing greater than fifty-one percent (51%) of the total LC
Exposure), be applied to satisfy other obligations of the Borrower under this
Agreement. If the Borrower is required to provide an amount of cash collateral
hereunder as a result of the occurrence of an Event of Default, such amount (to
the extent not applied as aforesaid) shall be returned to the Borrower within
three Business Days after all Events of Default have been cured or waived.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce the Administrative Agent, and the Lenders to
enter into this Agreement and to make Loans hereunder, the Borrower represents
and warrants to the Administrative Agent and the Lenders that:
SECTION 3.01 ORGANIZATION; POWERS. Each of the Borrower and its
Subsidiaries, other than Non-Operating Subsidiaries, is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has all requisite power and authority to carry on its business as
now conducted and, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
36
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The Transactions are
within the Borrower's and each Subsidiary's, other than any Non-Operating
Subsidiary's, corporate, partnership or limited liability company powers (as
applicable) and have been duly authorized by all necessary corporate,
partnership or limited liability company powers (as applicable) and, if
required, stockholder action. This Agreement and the other Loan Documents have
been duly executed and delivered by the Borrower and each Subsidiary (to the
extent a party thereto) and constitute the legal, valid and binding obligations
of the Borrower and each Subsidiary (as applicable), enforceable in accordance
with their respective terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium or other laws affecting creditors' rights generally
and subject to general principles of equity, regardless of whether considered in
a proceeding in equity or at law.
SECTION 3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or its assets which would cause a Material Adverse Effect, or give
rise to a right thereunder to require any payment to be made by the Borrower or
any of its Subsidiaries which would cause a Material Adverse Effect, and (d)
will not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries other than Liens in favor of Administrative
Agent.
SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. The
Borrower has heretofore furnished to the Lenders:
(a) its consolidated balance sheet and statements of income,
stockholders equity and cash flows as of and for the Fiscal Years ended January
31, 2000 and January 31, 2001, in each case audited by Ernst & Young, LLP,
independent public accountants, and
(b) consolidated statements of condition of Target and its
subsidiaries as of March 31, 2001, December 31, 2000 and December 31, 1999, and
the related consolidated statements of income, partners' capital and cash flows
for the three months ended March 31, 2001 and for each of the three years in the
period ended December 31, 2000, in each case audited by Xxxxxx Xxxxxxxx LLP,
independent public accountants. Such financial statements present fairly, in all
material respects, the consolidated financial position and results of operations
and cash flows of the Borrower, its consolidated Subsidiaries, and the Target
and its subsidiaries as of such dates and for such periods in accordance with
GAAP.
(c) Since January 31, 2001, there has been no Material Adverse Effect.
37
SECTION 3.05 PROPERTIES. (a) Each of the Borrower and its
Subsidiaries has good title to, or valid leasehold interests in, all its real
and personal property material to its business, except for (i) Permitted
Encumbrances and (ii) minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed
to use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06 LITIGATION AND ENVIRONMENTAL MATTERS. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.
(b) Except for the Disclosed Matters and except with respect to any
other matters that, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, neither the Borrower nor any of
its Subsidiaries (i) has failed to comply with any Environmental Law or to
obtain, maintain or comply with any permit, license or other approval required
under any Environmental Law, (ii) has become subject to any Environmental
Liability, (iii) has received notice of any claim with respect to any
Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07 COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 3.08 INVESTMENT AND HOLDING COMPANY STATUS. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 3.09 TAXES. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has
38
paid or caused to be paid all Taxes required to have been paid by it, except
(a) Taxes that are being contested in good faith by appropriate proceedings
and for which the Borrower or such Subsidiary, as applicable, has set aside
on its books adequate reserves or (b) to the extent that the failure to do so
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (in each case determined based on the
assumptions used for purposes of Statement of Financial Accounting Standards No.
87) as of the date of the most recent financial statements reflecting such
amounts, does not exceed the fair market value of the assets of such Plan (as of
the date of determination of such benefit obligation amount).
SECTION 3.11 DISCLOSURE. All agreements, instruments and corporate
or other restrictions to which the Borrower or any of its Subsidiaries is
subject, and all other matters known to it, that, in either case, individually
or in the aggregate, could reasonably be expected to result in a Material
Adverse Effect, (a) are disclosed or set forth in (or are exhibits to) the
Borrower's filings pursuant to the Securities Exchange Act of 1934, as amended,
(b) are disclosed in the Borrower's news releases available on its website from
time to time (on the Effective Date the website is at
XXXX://XXX.XXXXXXXX.XXX/XXXX/XXXX/XXX.XXXX), or (c) otherwise have been
disclosed to the Administrative Agent. Neither the Information Memorandum nor
any of the other reports, financial statements, certificates or other
information furnished by or on behalf of the Borrower to the Administrative
Agent or any Lender in connection with the negotiation of this Agreement or
delivered hereunder (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.
SECTION 3.12 SUBSIDIARIES. SCHEDULE 3.12 hereto accurately reflects
(i) the jurisdiction of incorporation or organization of the Borrower and each
of its Subsidiaries, (ii) each jurisdiction in which the Borrower and each of
its Subsidiaries is qualified to transact business as a foreign corporation,
foreign partnership or foreign limited liability company, (iii) the authorized,
issued and outstanding stock, limited partnership or limited liability company
interests of the Borrower and each of its Subsidiaries (and the legal and
beneficial owners of such capital stock and other Equity interests), and (iv)
all outstanding warrants, options, subscription rights, convertible securities
or other rights to purchase capital stock, limited partnership or limited
liability company interests of the Borrower and/or its Subsidiaries. The
Borrower has no Subsidiaries other than those listed on SCHEDULE 3.12. Schedule
3.12 identifies two inactive Subsidiaries which are to be dissolved as soon as
practicable (the "Non-Operating Subsidiaries").
SECTION 3.13 BURDENSOME OBLIGATIONS. Neither the Borrower nor any of
its Subsidiaries, nor any of their respective properties, is subject to any law
or any pending or
39
threatened Change in Law or subject to any restriction under its articles or
certificate of incorporation, bylaws, regulations, partnership agreement or
comparable charter or other organizational documents or under any agreement
or instrument to which the Borrower or any of its Subsidiaries, or any of
their respective properties, may be subject or bound, which is so unusual or
burdensome as to be likely in the foreseeable future to result in a Material
Adverse Effect.
SECTION 3.14 EMPLOYEE MATTERS. Except as set forth on SCHEDULE 3.14,
neither the Borrower nor any of its Subsidiaries, nor any of their respective
employees, is subject to any collective bargaining agreement. There are no
strikes, slowdowns, work stoppages or controversies pending or, to the knowledge
of the Borrower, threatened against the Borrower or any of its Subsidiaries, or
their respective employees, which could reasonably be expected to have a
Material Adverse Effect.
SECTION 3.15 MARGIN STOCK. None of the proceeds of the Loans will be
used for the purpose of, and neither the Borrower nor any Subsidiary of the
Borrower is engaged in the business of, extending credit for the purpose of (a)
purchasing or carrying any "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System (12 C.F.R. Part 221) or (b)
reducing or retiring any indebtedness which was originally incurred to purchase
or carry any margin stock, in either case in violation of Regulation U. Neither
the Borrower nor any Subsidiary of the Borrower is engaged principally in the
business of extending credit for the purpose of purchasing or carrying any
margin stock. Neither the Borrower nor any Subsidiary of the Borrower nor any
Person acting on behalf of the Borrower or any Subsidiary of the Borrower has
taken or will take any action which would cause any of the Loan Documents,
including this Agreement and any Subsidiary Guaranty, to violate Regulation U or
any other regulation of the Board of Governors of the Federal Reserve System, or
to violate any similar provision of the Securities Exchange Act of 1934 or any
rule or regulation under any such provision thereof.
SECTION 3.16 ACQUISITION The Acquisition Agreement previously
delivered to Administrative Agent is a true and correct copy of such agreement.
Borrower has delivered to Administrative Agent (i) true and correct copies of
all amendments, supplements, and modifications to the Acquisition Agreement,
including Schedules and Exhibits, (ii) a copy of the notice of early termination
under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act, and (iii) true and
correct copies of all material agreements and other documents relating to the
Acquisition (all the foregoing being herein referred to as the "Acquisition
Documents"). Borrower has provided to Administrative Agent all material
information regarding the Acquisition. All material conditions precedent to the
consummation of the Acquisition as set forth in the Acquisition Agreement have
been satisfied in all material respects. At the time of the consummation of the
Acquisition, the Acquisition shall have been consummated in accordance with the
terms of the Acquisition Agreement and all applicable laws. All necessary
consents and approvals of Governmental Authorities relating to the Acquisition
have been obtained.
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ARTICLE IV
GUARANTIES AND COLLATERAL
SECTION 4.01 GUARANTIES. As an inducement to Administrative Agent
and Lenders to enter into this Agreement, Borrower shall cause each wholly-owned
Domestic Subsidiary of Borrower, to execute and deliver to Administrative Agent
a Subsidiary Guaranty substantially in the form and upon the terms of EXHIBIT C,
providing for the guaranty of payment and performance of the Obligation. In
addition, promptly after the designation, formation, or acquisition of any
Person that is (or becomes) a wholly-owned Domestic Subsidiary of Borrower,
Borrower shall cause such new Domestic Subsidiary to execute and deliver to
Administrative Agent a Subsidiary Guaranty substantially in the form and upon
the terms of EXHIBIT C, providing for the guaranty of payment and performance of
the Obligation.
SECTION 4.02 COLLATERAL. (a) To secure the full and complete payment
and performance of the Obligation, Borrower shall, except as otherwise permitted
by SECTION 4.04 (and shall, except as otherwise permitted by SECTION 4.04. cause
each wholly-owned Domestic Subsidiary to) enter into a Security Agreement and
other Collateral Documents (in form and substance acceptable to Administrative
Agent and its counsel) pursuant to which, among other things, each such entity
shall, to the extent permitted by applicable law, grant, pledge, assign, and
create first priority Liens (except to the extent Permitted Liens affect such
priority) in favor of Administrative Agent (for the ratable benefit of the
holders of the Obligation) in and to: (i) 100% of each such entity's rights,
titles, and interests in the issued and outstanding stock, Equity, or other
investment securities of each Domestic Subsidiary of such entity; (ii) 65% of
each such entity's rights, titles, and interests in the issued and outstanding
stock, Equity, or other investment securities of each directly-owned Foreign
Subsidiary of Borrower or any Domestic Subsidiary; and (iii) all other assets
(tangible, intangible, real, or personal) of such entity, including without
limitation, 100% of each such entity's rights, titles, and interests in all
accounts receivable, inventory, equipment, intangibles, intellectual property
(including all patents, copyrights, trademarks and all interest therein), and
all real property or interests therein.
SECTION 4.03 FUTURE LIENS. Other than as permitted in SECTION 4.04,
promptly after (a) the acquisition of any material assets (real, personal,
tangible, or intangible) by Borrower or any wholly-owned Domestic Subsidiary,
(b) the removal, termination, or expiration of any prohibitions upon the
granting of a Lien in any asset (real, personal, tangible, or intangible) of
Borrower or wholly-owned Domestic Subsidiary, or (c) upon the designation,
formation, or acquisition of any new wholly-owned Domestic Subsidiary (the
assets described in CLAUSES (a) through (c) hereof are referred to herein as the
"ADDITIONAL ASSETS"), Borrower shall (or shall cause the appropriate
wholly-owned Domestic Subsidiary to) execute and deliver to Administrative Agent
all further instruments and documents (including, without limitation, a Security
Agreement and other Collateral Documents and all certificates and instruments
representing shares of stock or evidencing bonds, debentures, or other
Indebtedness of third parties, Indebtedness and any realty appraisals as
Administrative Agent may require with respect to any such Additional Assets),
and shall take all further action that may be necessary or desirable, or that
Administrative Agent may reasonably request, to grant, perfect, and protect
41
Liens in favor of Administrative Agent for the ratable benefit of the holders of
the Obligation in such Additional Assets, as security for the Obligation to the
extent Liens are required in such assets pursuant to SECTION 4.02; it being
expressly understood that the granting of such additional security for the
Obligation is a material inducement to the execution and delivery of this
Agreement by each Lender. Upon satisfying the terms and conditions hereof, such
Additional Assets shall be included in the "COLLATERAL" for all purposes under
the Loan Documents, and all references to the "COLLATERAL" in the Loan Documents
shall include the Additional Assets.
SECTION 4.04 NEGATIVE PLEDGE. Notwithstanding the provisions of
SECTIONS 4.02 or 4.03 hereof, until such time as Required Lenders otherwise
require upon an Event of Default, the Borrower and Domestic Subsidiaries shall
not be required to (i) perfect Liens on certain assets, including vehicles or
other equipment subject to registration under a certificate of title law, or
grant security interests in property constituting interests in third party
leases for offices, vehicles, fixtures, personal property or real estate, if the
consent of a third party or the filing or recordation in applicable real estate
or mortgage records is required, or grant a security interest in assets located
in foreign jurisdictions, or stock or Equity interests in Subsidiaries of
Foreign Subsidiaries, or (ii) grant specific assignments of easements, licenses,
permits, certificates of compliance, and certificates of approval issued by
regulatory authorities, franchises, or like grants of authority or service
agreements. To the extent contemplated by the first sentence of this SECTION
4.04 or to the extent Administrative Agent and Required Lenders otherwise agree
to delay the grant or perfection or attachment of any Lien contemplated by
SECTIONS 4.02 or 4.03 hereof, for whatever reason, the Borrower hereby covenants
and agrees not to, and agrees to cause each Domestic Subsidiary not to, directly
or indirectly create, incur, grant, suffer, or permit to be created or incurred
any Lien on any such assets, other than Permitted Encumbrances. As promptly as
practicable and in any event within sixty (60) days after the request of
Administrative Agent after an Event of Default, Borrower shall (or shall cause
each wholly-owned Domestic Subsidiary to) use commercially reasonable efforts to
execute and deliver to Administrative Agent all instruments and documents
(including, without limitation, certificates and instruments and documents
representing shares of stock or evidencing Indebtedness) and shall take all
further action that may be necessary or desirable, or that Administrative Agent
may reasonably request, to grant, perfect, and protect Liens in favor of
Administrative Agent for the benefit of Lenders, in such assets, as security for
the Obligation; it being expressly understood that the provisions of this
negative pledge are a material inducement to the execution and delivery of this
Agreement by each Lender.
SECTION 4.05 FOREIGN SUBSIDIARIES SECURITY. If the Code, or the
regulations, rules, rulings, notices or other official pronouncements issued or
promulgated thereunder, changes in such a manner that would allow (i) a pledge
of 66-2/3% or more of the total combined voting power of all classes of capital
stock of a Foreign Subsidiary entitled to vote and/or (ii) the entering into by
a Foreign Subsidiary of a guarantee in substantially the form of the Subsidiary
Guaranty and/or (iii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the Security Agreement without causing
the undistributed earnings of such Foreign Subsidiary as determined for Federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes in each case
as a result of such Foreign Subsidiary pledging its assets (directly or
42
indirectly) to secure the Obligation of the Borrower under the Loan Documents,
then, within sixty (60) days after a request from the Administrative Agent or
the Required Banks, (A) each Foreign Subsidiary of the Borrower which has not
already had all of its stock pledged pursuant to the Security Agreement or other
effective security, pledge, or share mortgage documents shall have as much of
its stock pledged pursuant to the Security Agreement or other effective
security, pledge, or share mortgage documents as may be pledged without causing
the undistributed earnings of such Foreign Subsidiary as determined for Federal
income tax purposes to be treated as a deemed dividend to such Foreign
Subsidiary's United States parent for Federal income tax purposes, and (B) such
Foreign Subsidiary shall execute and deliver a counterpart of the Security
Agreement (or another security or pledge agreement as may be requested by the
Administrative Agent), and a counterpart of the Subsidiary Guaranty (or another
guaranty in substantially similar form if needed) in each case if, and to the
extent that, the entering into by such Foreign Subsidiary of such security
agreement, pledge agreement and/or guaranty would not cause the undistributed
earnings of such Foreign Subsidiary as determined for Federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary's United
States parent for Federal income tax purposes. In determining the foregoing
matters in this Section 4.05, an opinion of counsel for the Borrower in form and
substance (and from counsel) reasonably satisfactory to the Administrative Agent
shall be determinative, provided that such opinion is delivered to the
Administrative Agent within sixty (60) days after any request is made by the
Administrative Agent or the Required Banks pursuant to this Section 4.05.
ARTICLE V
CONDITIONS
SECTION 5.01 EFFECTIVE DATE. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit shall not become
effective until the date on which each of the following conditions is satisfied
(or waived in accordance with SECTION 10.02):
(a) The Administrative Agent (or its counsel) shall have received
from each party hereto either (i) a counterpart of this Agreement signed on
behalf of such party or (ii) written evidence satisfactory to the Administrative
Agent (which may include telecopy transmission of a signed signature page of
this Agreement) that such party has signed a counterpart of this Agreement.
(b) The Administrative Agent (or its counsel) shall have received
from the Borrower a Note payable to the order of each Lender requesting same in
accordance with SECTION 2.07(e), each in the amount of such Lender's Commitment,
signed on behalf of the Borrower.
(c) The Administrative Agent (or its counsel) shall have received
from each Domestic Subsidiary, other than any Non-Operating Subsidiary, either
(i) a Subsidiary Guaranty signed on behalf of such party, or (ii) written
evidence satisfactory to the Administrative Agent (which may include telecopy
transmission of a signed signature page of such Subsidiary Guaranty) that such
party has signed such Subsidiary Guaranty.
43
(d) The Administrative Agent (or its counsel) shall have received
from Borrower and each Domestic Subsidiary, other than any Non-Operating
Subsidiary, either (i) a Security Agreement, granting to the Administrative
Agent for the benefit of the Lenders a Security Interest in all its assets,
signed on behalf of such party, or (ii) written evidence satisfactory to the
Administrative Agent (which may include telecopy transmission of a signed
signature page of such Security Agreement) that such party has signed such
Security Agreement.
(e) The Administrative Agent shall have received copies of such
Uniform Commercial Code financing statements and other security and Collateral
Documents as are listed on SCHEDULE 5.01(e) attached hereto, signed by Borrower
or its Subsidiaries, other than Non-Operating Subsidiaries, as indicated on such
SCHEDULE 5.01(e).
(f) The Administrative Agent shall have received a favorable written
opinion (addressed to each of Administrative Agent and the Lenders, and dated
the Effective Date) of (i) Xxxxx Xxxxxxx & Xxxx LLP, counsel for the Borrower
and the Subsidiaries, other than Non-Operating Subsidiaries, in substantially
the form of EXHIBIT "F-1" attached hereto, and (ii) counsel to each Foreign
Subsidiary, satisfactory to Administrative Agent and its counsel, in
substantially the form of EXHIBIT "F-2" attached hereto, and (iii) special local
counsel to Lenders in Canada, Australia, and England, in substantially the form
of EXHIBIT "F-3" attached hereto, with appropriate completions, each in form and
substance satisfactory to the Administrative Agent, and covering the matters set
forth therein and such other matters relating to the Borrower, the Subsidiaries,
other than Non-Operating Subsidiaries, this Agreement, the other Loan Documents
or the Transactions as the Administrative Agent or Required Lenders shall
reasonably request.
(g) The Administrative Agent shall have received such documents and
certificates as the Administrative Agent or its counsel may reasonably request
relating to the organization, existence and good standing of the Borrower and
its Subsidiaries, other than Non-Operating Subsidiaries, the authorization of
the Transactions and any other legal matters relating to the Borrower, its
Subsidiaries, other than Non-Operating Subsidiaries, this Agreement, the other
Loan Documents or the Transactions, all in form and substance satisfactory to
the Administrative Agent and its counsel.
(h) The Administrative Agent shall have received a certificate,
dated the Effective Date and signed by an Authorized Officer of the Borrower,
confirming compliance with the conditions set forth in PARAGRAPHS (a) and (b) of
SECTION 5.02.
(i) The Administrative Agent, the Arranger and the Lenders shall
have received all fees and other amounts due and payable pursuant to the Fee
Letter, this Agreement or any other Loan Document on or prior to the Effective
Date, including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder or under any other Loan Document.
(j) The Administrative Agent and its counsel shall have received all
information, approvals, documents or instruments as the Administrative Agent or
its counsel may reasonably request.
44
(k) The Acquisition shall have been consummated under the
Acquisition Agreement.
(l) Borrower shall have furnished to Administrative Agent copies of
all material Acquisition Documents, certified by an Authorized Officer to be
true, correct, and complete, in all material respects, copies of all material
Acquisition Documents.
(m) All material conditions precedent to the consummation of the
Acquisition as set forth in the Acquisition Agreement shall have been satisfied
in all material respects and not waived, except with the consent of the
Administrative Agent, to the satisfaction of the Administrative Agent.
All documents executed or submitted pursuant to this SECTION 5.01 by and on
behalf of the Borrower or any of its Subsidiaries shall be in form and substance
reasonably satisfactory to the Administrative Agent and its counsel. The
Administrative Agent shall notify the Borrower and the Lenders of the Effective
Date, and such notice shall be conclusive and binding. Notwithstanding the
foregoing, the obligations of the Lenders to make Loans and the Issuing Bank to
issue Letters of Credit shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to SECTION 10.02) at or prior to
2:00 p.m., Dallas, Texas time, on June 30, 2001 (and, in the event such
conditions are not so satisfied or waived, the Commitments shall terminate at
such time).
SECTION 5.02 EACH CREDIT EVENT. The obligation of each Lender to
make a Loan on the occasion of any Borrowing and the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
(a) The representations and warranties of each Person set forth in
the Loan Documents shall be true and correct in all material respects on and as
of the date of such Borrowing or the date of issuance, amendment, renewal or
extension of such Letter of Credit, as applicable.
(b) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter of
Credit, as applicable, no Default shall have occurred and be continuing.
(c) The Administrative Agent shall have received a Borrowing Request
for any Borrowing and an application for a Letter of Credit in connection with
the issuance of any Letter of Credit.
Each Borrowing and each issuance, amendment, renewal, or extension of a Letter
of Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in PARAGRAPHS (a) and
(b) of this SECTION 5.02.
45
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Administrative Agent and each Lender that:
SECTION 6.01 FINANCIAL STATEMENTS AND OTHER INFORMATION. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each Fiscal Year of the
Borrower, its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for such
year, setting forth in each case in comparative form the figures for the
previous Fiscal Year, all reported on by Ernst & Young, LLP or other independent
public accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception as to
the scope of such audit) to the effect that such consolidated financial
statements present fairly in all material respects the financial condition and
results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied along with any
management letters prepared by such accounting firm;
(b) within 45 days after the end of each of the first three Fiscal
Quarters of each Fiscal Year of the Borrower, its consolidated balance sheet and
related statements of operations, stockholders' equity and cash flows as of the
end of and for such Fiscal Quarter and the then elapsed portion of the Fiscal
Year, setting forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance sheet, as of
the end of) the previous Fiscal Year, all certified by one of its Financial
Officers as presenting fairly in all material respects the financial condition
and results of operations of the Borrower and its consolidated Subsidiaries on a
consolidated basis in accordance with GAAP consistently applied, subject to
normal year-end audit adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements under
CLAUSE (a) or (B) above, a certificate of a Financial Officer of the Borrower
(i) certifying as to whether a Default has occurred and, if a Default has
occurred, specifying the details thereof and any action taken or proposed to be
taken with respect thereto, (ii) setting forth reasonably detailed calculations
demonstrating compliance with SECTIONS 7.09(a), (b) and (c) and (iii) stating
whether any change in GAAP or in the application thereof has occurred since the
date of the audited financial statements referred to in SECTION 3.04 and, if any
such change has occurred, specifying the effect of such change on the financial
statements accompanying such certificate;
(d) On or prior to March 31 of each Fiscal Year, the financial
projections for such Fiscal Year, accompanied by a certificate executed by an
Authorized Officer of Borrower, certifying that such projections were prepared
based on assumptions which, in light of the historical performance of the
Borrower and Subsidiaries and their prospects for the future, are reasonable.
46
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by the
Borrower or any Subsidiary with the Securities and Exchange Commission, or any
Governmental Authority succeeding to any or all of the functions of said
Commission, or with any national securities exchange, or distributed by the
Borrower to its shareholders generally, as the case may be;
(f) promptly upon creation or acquisition of any Subsidiary which
has become a wholly-owned Domestic Subsidiary, a Subsidiary Guaranty and a
Security Agreement, Uniform Commercial Code financing statements, and such other
Collateral Documents as Administrative Agent or its counsel may reasonably
request, duly executed by such Domestic Subsidiary;
(g) promptly upon creation or acquisition of any Subsidiary which
has become a direct wholly-owned Foreign Subsidiary, an appropriate pledge
agreement or security agreement, accompanied by such certificates, assignments,
and other actions as may be necessary to perfect a Lien in 65% of the Equity of
such Foreign Subsidiary; and
(h) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement or
any other Loan Document, as the Administrative Agent or any Lender may
reasonably request.
SECTION 6.02 NOTICES OF MATERIAL EVENTS. The Borrower will furnish
to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting the
Borrower or any Affiliate thereof that, if adversely determined, could
reasonably be expected to result in a Material Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in a Material Adverse Effect; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this SECTION 6.02 shall be accompanied by a
statement of a Financial Officer or other Authorized Officer of the Borrower
setting forth the details of the event or development requiring such notice and
any action taken or proposed to be taken with respect thereto.
SECTION 6.03 EXISTENCE; CONDUCT OF BUSINESS. The Borrower will, and
will cause each of its Subsidiaries (except the Non-Operating Subsidiaries) to,
do or cause to be
47
done all things necessary to preserve, renew and keep in full force and effect
its legal existence and the rights, licenses, permits, privileges and
franchises material to the conduct of its business; PROVIDED that the foregoing
shall not prohibit any merger, consolidation, liquidation or dissolution
permitted under SECTION 7.03.
SECTION 6.04 PAYMENT OF OBLIGATIONS. The Borrower will, and will
cause each of its Subsidiaries to, pay its obligations, including liabilities
for Taxes, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, and the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (b)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.05 MAINTENANCE OF PROPERTIES; INSURANCE. The Borrower
will, and will cause each of its Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
SECTION 6.06 BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 6.07 COMPLIANCE WITH LAWS. The Borrower will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.08 USE OF PROCEEDS. The proceeds of the Loans will be used
only to finance the acquisition of the Target and related expenses, and for
working capital and general corporate purposes of the Borrower and Subsidiaries
in the ordinary course of business. No part of the proceeds of any Loan will be
used, whether directly or indirectly, for any purpose that entails a violation
of any of the Regulations of the Board, including without limitation Regulations
T, U and X.
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ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, the Borrower covenants and agrees with the Administrative
Agent and each Lender that:
SECTION 7.01 INDEBTEDNESS. The Borrower will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder or under the Loan Documents;
(b) Indebtedness existing on the date hereof and set forth in
SCHEDULE 7.01, and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount thereof;
(c) Indebtedness of the Borrower to any Subsidiary and of any
Domestic Subsidiary to the Borrower or any other Subsidiary and any Indebtedness
of any Foreign Subsidiary to another Foreign Subsidiary;
(d) Indebtedness allowed under Section 7.04;
(e) Guarantees by the Borrower of Indebtedness of any Domestic
Subsidiary and by any Domestic Subsidiary of Indebtedness of the Borrower or any
other Domestic Subsidiary (including pursuant to the Subsidiary Guaranties) and
any guarantees by a Foreign Subsidiary of the Indebtedness of Borrower or of
another Subsidiary;
(f) Indebtedness of the Borrower or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or capital
assets, including Capital Lease Obligations and any Indebtedness assumed in
connection with the acquisition of any such assets or secured by a Lien on any
such assets prior to the acquisition thereof, and extensions, renewals and
replacements of any such Indebtedness that do not increase the outstanding
principal amount thereof; PROVIDED that (i) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) shall not exceed $3,000,000 at any
time outstanding;
(g) Indebtedness of the Borrower or any Subsidiary as an account
party in respect of trade letters of credit;
(h) Indebtedness of any Foreign Subsidiary to the Borrower or any
Domestic Subsidiary which is permitted by Section 7.04(f); and
(i) other Indebtedness in an aggregate principal amount not
exceeding $3,000,000 at any time outstanding.
49
SECTION 7.02 LIENS. The Borrower will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on any property
or asset now owned or hereafter acquired by it, or assign or sell any income or
revenues (including accounts receivable) or rights in respect of any thereof,
except the following (collectively, "Permitted Encumbrances"):
(a) any Lien on any property or asset of the Borrower or any
Subsidiary existing on the date hereof and set forth in SCHEDULE 7.02; PROVIDED
that (i) such Lien shall not apply to any other property or asset of the
Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the date hereof and extensions, renewals and
replacements thereof that do not increase the outstanding principal amount
thereof;
(b) Liens imposed by law for Taxes that are not yet due or are being
contested in compliance with SECTION 6.04;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary course
of business and securing obligations that are not overdue by more than 30 days
or are being contested in compliance with SECTION 6.04;
(d) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(e) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(f) judgment Liens in respect of judgments that do not constitute an
Event of Default under clause (k) of ARTICLE VIII;
(g) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary;
(h) any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any Person that becomes a Subsidiary after the date hereof
prior to the time such Person becomes a Subsidiary; PROVIDED that (i) such Lien
is not created in contemplation of or in connection with such acquisition or
such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall not
apply to any other property or assets of the Borrower or any Subsidiary and
(iii) such Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as the case
may be, and extensions, renewals and replacements thereof that do not increase
the outstanding principal amount thereof;
50
(i) Liens on fixed or capital assets acquired, constructed or
improved by the Borrower or any Subsidiary; PROVIDED that (i) such security
interests secure Indebtedness permitted by CLAUSE (e) of SECTION 7.01, (ii) such
security interests and the Indebtedness secured thereby are incurred prior to or
within 90 days after such acquisition or the completion of such construction or
improvement, (iii) the Indebtedness secured thereby does not exceed 100% of the
cost of acquiring, constructing or improving such fixed or capital assets and
(iv) such security interests shall not apply to any other property or assets of
the Borrower or any Subsidiary;
(j) Liens securing other Indebtedness, so long as (i) no Default
exists on the date any such Lien is granted or created, and (ii) the aggregate
amount of all Indebtedness secured by such Liens does not exceed the aggregate
amount of secured Indebtedness permitted by SECTION 7.01(i); and
(k) Liens in favor of the Administrative Agent securing the
Obligation under the Loan Documents.
SECTION 7.03 FUNDAMENTAL CHANGES. (a) The Borrower will not, and
will not permit any Subsidiary to, merge into or consolidate with any other
Person, or permit any other Person to merge into or consolidate with it, or
sell, transfer, lease or otherwise dispose of (in one transaction or in a series
of transactions) all or substantially all of its assets, or all or substantially
all of the stock of any of its Subsidiaries (in each case, whether now owned or
hereafter acquired), or liquidate or dissolve, except that, if at the time
thereof and immediately after giving effect thereto no Default shall have
occurred and be continuing (i) any Subsidiary may merge into the Borrower in a
transaction in which the Borrower is the surviving corporation, (ii) any
Subsidiary may merge into any Subsidiary in a transaction in which the surviving
entity is a Subsidiary, (iii) any Subsidiary may sell, transfer, lease or
otherwise dispose of its assets to the Borrower or to another Subsidiary and
(iv) any Subsidiary may liquidate or dissolve if the Borrower determines in good
faith that such liquidation or dissolution is in the best interests of the
Borrower and is not materially disadvantageous to the Lenders; PROVIDED that any
such merger involving a Person that is not a wholly owned Subsidiary immediately
prior to such merger shall not be permitted unless also permitted by SECTION
7.04.
(b) The Borrower will not, and will not permit any of its
Subsidiaries to, engage to any material extent in any business other than
businesses of the type conducted by the Borrower and its Subsidiaries on the
date of execution of this Agreement and businesses reasonably related or
complementary thereto.
SECTION 7.04 INVESTMENTS, LOANS, ADVANCES, GUARANTEES AND
ACQUISITIONS. The Borrower will not, and will not permit any of its Subsidiaries
to, purchase, hold or acquire (including pursuant to any merger with any Person
that was not a wholly owned Subsidiary prior to such merger) any capital stock,
evidences of indebtedness or other securities (including any option, warrant or
other right to acquire any of the foregoing) of, make or permit to exist any
loans or advances to, Guarantee any obligations of, or make or permit to exist
any investment or any other interest in, any other Person, or purchase or
otherwise acquire (in one
51
transaction or a series of transactions) any assets of any other Person
constituting a business unit (all of the foregoing being collectively
referred to as "Investments"), except:
(a) Permitted Investments;
(b) Investments by the Borrower or any Subsidiary in the capital
stock of its Domestic Subsidiaries;
(c) Existing loans or advances made by Borrower to officers and
employees described on SCHEDULE 7.04 attached hereto; and other loans or
advances made by the Borrower or any Subsidiary to any officers or employees not
to exceed $1,000,000 in the aggregate outstanding at any time, or loans or
advances by Borrower to any Domestic Subsidiary and made by any Domestic
Subsidiary to the Borrower or any other Domestic Subsidiary;
(d) Investments constituting Indebtedness permitted by SECTION 7.01;
(e) Permitted Acquisitions, PROVIDED THAT the aggregate amount of
consideration paid in whatever form (cash, securities, or other property) for
all such Permitted Acquisitions does not exceed in the aggregate $15,000,000
during the term of this Agreement;
(f) Investments by Borrower or any Domestic Subsidiary in Foreign
Subsidiaries, not to exceed $5,000,000 in the aggregate on a cumulative basis
from and after the Closing Date;
(g) Investments of cash in Commercial Joint Ventures not to exceed
$600,000 annually in the aggregate from and after the Closing Date; and
(h) Non-cash Investments in Commercial Joint Ventures, provided that
no Default exists or would be created after giving effect to such Investment.
SECTION 7.05 HEDGING AGREEMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, enter into any Hedging Agreement, other than
Hedging Agreements entered into in the ordinary course of business to hedge or
mitigate risks to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.
SECTION 7.06 RESTRICTED PAYMENTS. The Borrower will not, and will
not permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except (a) the Borrower may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock, (b) Subsidiaries may declare and pay
dividends ratably with respect to their capital stock, and (c) the Borrower may
make Restricted Payments pursuant to and in accordance with stock option plans
or other benefit plans for management or employees of the Borrower and its
Subsidiaries.
SECTION 7.07 TRANSACTIONS WITH AFFILIATES. The Borrower will not,
and will not permit any of its Subsidiaries to, sell, lease or otherwise
transfer any property or assets
52
to, or purchase, lease or otherwise acquire any property or assets from, or
otherwise engage in any other transactions with, any of its Affiliates,
except (a) in the ordinary course of business at prices and on terms and
conditions not less favorable to the Borrower or such Subsidiary than could
be obtained on an arm's-length basis from unrelated third parties, (b)
transactions between or among the Borrower and its Subsidiaries not involving
any other Affiliate, and (c) any Restricted Payment permitted by SECTION 7.06.
SECTION 7.08 RESTRICTIVE AGREEMENTS. The Borrower will not, and will
not permit any of its Subsidiaries to, directly or indirectly, enter into, incur
or permit to exist any agreement or other arrangement that prohibits, restricts
or imposes any condition upon (a) the ability of the Borrower or any Subsidiary
to create, incur or permit to exist any Lien upon any of its property or assets,
or (b) the ability of any Subsidiary to pay dividends or other distributions
with respect to any shares of its capital stock or to make or repay loans or
advances to the Borrower or any other Subsidiary or to Guarantee Indebtedness of
the Borrower or any other Subsidiary; PROVIDED that (i) the foregoing shall not
apply to restrictions and conditions imposed by law or by this Agreement, (ii)
the foregoing shall not apply to restrictions and conditions existing on the
date hereof identified on SCHEDULE 7.08 (but shall apply to any extension or
renewal of, or any amendment or modification expanding the scope of, any such
restriction or condition), (iii) the foregoing shall not apply to customary
restrictions and conditions contained in agreements relating to the sale of a
Subsidiary pending such sale, provided such restrictions and conditions apply
only to the Subsidiary that is to be sold and such sale is permitted hereunder,
(iv) clause (a) of the foregoing shall not apply to restrictions or conditions
imposed by any agreement relating to secured Indebtedness permitted by this
Agreement if such restrictions or conditions apply only to the property or
assets securing such Indebtedness, and (v) clause (a) of the foregoing shall not
apply to customary provisions in leases and other contracts restricting the
assignment thereof.
SECTION 7.09 FINANCIAL COVENANTS. (a) The Borrower will not permit
the Interest Coverage Ratio to be less than 6.00 to 1.00 for each Rolling
Period, commencing with the Rolling Period ending April 30, 2001.
(b) The Borrower will not permit the Leverage Ratio to be greater
than 2.0 to 1.00 for each Rolling Period, commencing with the Rolling Period
ending April 30, 2001.
(c) The Borrower will not permit the ratio of (i) the sum of 80% of
Receivables of Borrower and its consolidated Subsidiaries PLUS cash of Borrower
and its consolidated Subsidiaries PLUS short term investments of Borrower and
its consolidated Subsidiaries, on a consolidated basis, DIVIDED BY (ii) Funded
Debt of Borrower and its consolidated Subsidiaries on a consolidated basis, to
be less than 1.30 at any time.
SECTION 7.10 FISCAL YEAR. The Borrower will not change its Fiscal
Year.
SECTION 7.11 SALE-LEASEBACK FINANCINGS. Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any sale-leaseback
arrangement with any Person pursuant to which Borrower or such Subsidiary shall
lease any asset (whether now owned or
53
hereafter acquired) if such asset has been or is to be sold or transferred by
Borrower or any Subsidiary to any other Person.
SECTION 7.12 SALE OF ASSETS. Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, assign, transfer, or otherwise dispose
of any of its assets, other than (a) sales of inventory in the ordinary course
of business; (b) the sale, discount, or transfer of delinquent accounts
receivable in the ordinary course of business for purposes of collection; (c)
occasional sales of immaterial assets for consideration not less than the fair
market value thereof; (d) dispositions of obsolete assets; (e) sale, leases, or
other disposition among Borrower and any Domestic Subsidiary which has executed
an effective Guaranty; (f) the sale or transfer of the stock of or other Equity
in a Commercial Joint Venture; (g) if no Default then exists or arises as a
result thereof, sales of other assets in the ordinary course of business;
provided that, the fair market value of all assets sold pursuant to this clause
(g) (x) in any calendar year does not exceed $2,000,000 in the aggregate and (y)
on a cumulative basis on and after the Closing Date does not exceed, in the
aggregate, more than $5,000,000.
ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay (including, but not limited to,
any failure to pay any mandatory prepayment required by SECTION 2.08(b)) any
principal of any Loan or any reimbursement obligation in respect of any LC
Disbursement when and as the same shall become due and payable, whether at the
due date thereof or at a date fixed for prepayment thereof or otherwise;
(b) the Borrower or any Subsidiary shall fail to pay any interest on
any Loan or any fee or any other amount (other than an amount referred to in
CLAUSE (a) of this ARTICLE VIII) payable under this Agreement or any other Loan
Document, when and as the same shall become due and payable, and such failure
shall continue unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on
behalf of the Borrower or any Subsidiary in or in connection with this Agreement
or any other Loan Document or any amendment or modification hereof or thereof,
or waiver hereunder or thereunder, or in any report, certificate, financial
statement or other document furnished pursuant to or in connection with this
Agreement or any other Loan Document, or any amendment or modification hereof or
thereof, or waiver hereunder or thereunder, shall prove to have been incorrect
in any material respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in SECTION 6.01, 6.02, 6.03 (with respect to
the Borrower's and its Subsidiaries' existence) or 6.08 or in ARTICLE VII;
(e) the Borrower or any Subsidiary (as applicable) shall fail to
observe or perform any covenant, condition or agreement contained in this
Agreement or any other Loan
54
Document (other than those specified in CLAUSE (a), (b) or (d) of this
ARTICLE VIII), and such failure shall continue unremedied for a period of 30
days after the earlier to occur of either (i) an Authorized Officer of the
Borrower becoming aware of such default or (ii) notice thereof having been
given to the Borrower by the Administrative Agent (which notice will be given
at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
maturity; PROVIDED that this CLAUSE (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence
any proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in CLAUSE (h) of this ARTICLE VIII, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower or any Subsidiary or for a
substantial part of its assets, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v) make a
general assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $2,000,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a
55
judgment creditor to attach or levy upon any assets of the Borrower or any
Subsidiary to enforce any such judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in a Material Adverse Effect;
or
(m) a Change in Control shall occur;
then, and in every such event (other than an event with respect to the Borrower
described in CLAUSE (h) or (i) of this ARTICLE VIII), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i)terminate the
Commitments, and thereupon the Commitments shall terminate immediately, and (ii)
declare the Loans then outstanding to be due and payable in whole (or in part,
in which case any principal not so declared to be due and payable may thereafter
be declared to be due and payable), and thereupon the principal of the Loans so
declared to be due and payable, together with accrued interest thereon and all
fees and other obligations of the Borrower accrued hereunder, shall become due
and payable immediately, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower; and in case of any
event with respect to the Borrower described in CLAUSE (h) or (i) of this
ARTICLE VIII, the Commitments shall automatically terminate and the principal of
the Loans then outstanding, together with accrued interest thereon and all fees
and other obligations of the Borrower accrued hereunder, shall automatically
become due and payable, without presentment, demand, protest or other notice of
any kind, all of which are hereby waived by the Borrower.
ARTICLE IX
ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
The Chase Manhattan Bank as Administrative Agent and authorizes Administrative
Agent to take such actions on its behalf and to exercise such powers as are
delegated to the Administrative Agent by the terms of the Loan Documents,
together with such actions and powers as are reasonably incidental thereto.
Any bank serving as Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth in the Loan Documents. Without limiting the
generality of the foregoing, (a) the Administrative Agent shall not be subject
to any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Administrative Agent shall not have any duty
to take any discretionary action or exercise any discretionary powers, except
56
discretionary rights and powers expressly contemplated by the Loan Documents
that the Administrative Agent is required to exercise in writing by the Required
Lenders (or such other number or percentage of the Lenders as shall be necessary
under the circumstances as provided in SECTION 10.02), and (c) except as
expressly set forth in the Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as the Administrative Agent or
any of its Affiliates in any capacity. The Administrative Agent shall not be
liable for any action taken or not taken by it with the consent or at the
request of the Required Lenders (or such other number or percentage of the
Lenders as shall be necessary under the circumstances as provided in SECTION
10.02) or in the absence of its own gross negligence or willful misconduct;
PROVIDED, HOWEVER, THAT IT IS THE INTENTION OF THE PARTIES HERETO THAT THE
ADMINISTRATIVE AGENT BE INDEMNIFIED IN THE CASE OF ITS OWN NEGLIGENCE (OTHER
THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE IS SOLE OR
CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until
written notice thereof is given to the Administrative Agent by the Borrower or a
Lender, and the Administrative Agent shall not be responsible for or have any
duty to ascertain or inquire into (i) any statement, warranty or representation
made in or in connection with any Loan Document, (ii) the contents of any
certificate, report or other document delivered hereunder or in connection
herewith, (iii) the performance or observance of any of the covenants,
agreements or other terms or conditions set forth in any Loan Document, (iv) the
validity, enforceability, effectiveness or genuineness of any Loan Document or
any other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in ARTICLE V or elsewhere in any Loan Document, other than
to confirm receipt of items expressly required to be delivered to the
Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower in an unrelated matter),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as the Administrative
Agent.
57
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank, and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, with the
prior written consent of the Borrower, to appoint a successor. If no successor
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may, on behalf
of the Lenders and the Issuing Bank, appoint a successor Administrative Agent
which shall be a bank with an office in Dallas, Texas, Houston, Texas or New
York City, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. The fees
payable by the Borrower to a successor Administrative Agent shall be the same as
those payable to its predecessor unless otherwise agreed between the Borrower
and such successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and SECTION 10.03 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while it was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document, any related agreement or any document furnished
hereunder or thereunder.
ARTICLE X
MISCELLANEOUS
SECTION 10.01 NOTICES. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower, to it at Xxxxxxxx Corporation, 0000 Xxxxxx
Xxxx Xxxx, Xxxxxx, Xxxxx 00000, Attention: Xxxxx Xxxx, Chief Financial Officer,
(Telecopy No. (000) 000-0000) with a copy to Xxx Xxxxxx, General Counsel
(Telecopy No. (000)000-0000);
(b) if to the Administrative Agent, to it at The Chase Manhattan
Bank, 0000 Xxxx Xxxxxx, 0xx Xxxxx, Xxxxxx, Xxxxx, Xxxxx 00000, Attention: Xxx
Xxxxxx (Telecopy No. (214-965-2884), with a copy to: Xxxxxxx Xxxxxxx, Loan and
Agency Services, Xxx Xxxxx
00
Xxxxxxxxx Xxxx, Xxx Xxxxx Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, XX 00000,
(Telecopy No. (000) 000-0000; and
(c) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All notices and
other communications given to any party hereto in accordance with the provisions
of this Agreement shall be deemed to have been given on the date of receipt.
SECTION 10.02 WAIVERS; AMENDMENTS. (a) No failure or delay by the
Administrative Agent, the Issuing Bank, or any Lender in exercising any right or
power hereunder or under any other Loan Document shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power, or
any abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank, and the Lenders hereunder and under the other Loan Documents are
cumulative and are not exclusive of any rights or remedies that they would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower therefrom shall in any
event be effective unless the same shall be permitted by PARAGRAPH (b) of this
Section, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. Without limiting the generality of
the foregoing, the making of a Loan or issuance of a Letter of Credit shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any of the Loan Documents nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing entered into by the Borrower and the
Required Lenders or by the Borrower and the Administrative Agent with the
consent of the Required Lenders; PROVIDED that no such agreement shall (i)
increase the Commitment of any Lender without the written consent of such
Lender, (ii) reduce the principal amount of any Loan or LC Disbursement or
reduce the rate of interest thereon, or reduce any fees payable hereunder,
without the written consent of each Lender affected thereby, (iii) postpone the
scheduled date of payment of the principal amount of any Loan or LC
Disbursement, or any interest thereon, or any fees payable hereunder, or reduce
the amount of, waive or excuse any such payment, or postpone the scheduled date
of expiration of any Commitment, without the written consent of each Lender
affected thereby, (iv) change SECTION 2.15(b), or (c) in a manner that would
alter the pro rata sharing of payments required thereby, without the written
consent of each Lender, (v) release all or substantially all of the Collateral
under the Collateral Documents, or (vi) change any of the provisions of this
SECTION 10.02(b) or the definition of "REQUIRED LENDERS" or any other provision
hereof specifying the number or percentage of Lenders required to waive, amend
or modify any rights hereunder or make any determination or grant any consent
hereunder, without the written consent of each Lender; PROVIDED FURTHER that no
such agreement shall amend, modify or otherwise affect the
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rights or duties of the Administrative Agent or the Issuing Bank hereunder
without the prior written consent of the Administrative Agent or the Issuing
Bank.
SECTION 10.03 EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Borrower
shall pay (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, the Syndication Agent, the Arranger and their respective
Affiliates, including the reasonable fees, charges and disbursements of counsel
for the Administrative Agent, in connection with the syndication of the credit
facilities provided for herein, the preparation and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), (ii) all reasonable
out-of-pocket expenses incurred by the Issuing Bank in connection with the
issuance, amendment, renewal or extension of any Letter of Credit or any demand
for payment thereunder, and (iii) all out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement and the other Loan Documents, including its rights under this
SECTION 10.03, or in connection with the Loans made hereunder, including all
such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans.
(b) The Borrower shall indemnify the Administrative Agent, the
Syndication Agent, the Arranger and each Lender, and each Related Party of any
of the foregoing Persons (each such Person being called an "INDEMNITEE")
against, and hold each Indemnitee harmless from, any and all losses, claims,
damages, liabilities and related expenses, including the fees, charges and
disbursements of any counsel for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any other Loan Document, the
performance by the parties to the Loan Documents of their respective obligations
hereunder or the consummation of the Transactions or any other transactions
contemplated hereby, (ii) any Loan or Letter of Credit or the use of the
proceeds therefrom (including any refusal by the Issuing Bank to honor a demand
for payment under a Letter of Credit if the documents presented in connection
with such demand do not strictly comply with the terms of such Letter of
Credit), (iii) any actual or alleged presence or release of Hazardous Materials
on or from any property owned or operated by the Borrower or any of its
Subsidiaries, or any Environmental Liability related in any way to the Borrower
or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation,
investigation or proceeding relating to any of the foregoing, whether based on
contract, tort or any other theory and regardless of whether any Indemnitee is a
party thereto; PROVIDED that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or
related expenses resulted from the gross negligence or willful misconduct of
such Indemnitee (IT BEING UNDERSTOOD THAT IT IS THE INTENTION OF THE PARTIES
HERETO THAT EACH OF THE INDEMNITIES BE INDEMNIFIED IN THE CASE OF ITS OWN
NEGLIGENCE (OTHER THAN GROSS NEGLIGENCE), REGARDLESS OF WHETHER SUCH NEGLIGENCE
IS SOLE OR CONTRIBUTORY, ACTIVE OR PASSIVE, IMPUTED, JOINT OR TECHNICAL). No
Indemnitee shall be liable for any damages arising from the use by others of any
information or other material obtained through the
60
Internet, Intralinks or other similar information transmission systems in
connection with the Loan Documents. The Borrower agrees that no Indemnitee
shall have any liability for any indirect or consequential damages in
connection with its activities related to the Loan Documents.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to the Administrative Agent or under PARAGRAPH (a) or (b) of
this SECTION 10.03, each Lender severally agrees to pay to the Administrative
Agent, such Lender's Applicable Percentage (determined as of the time that the
applicable unreimbursed expense or indemnity payment is sought) of such unpaid
amount; PROVIDED that the unreimbursed expense or indemnified loss, claim,
damage, liability or related expense, as the case may be, was incurred by or
asserted against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall
not assert, and hereby waives, any claim against any Indemnitee, on any theory
of liability, for special, indirect, consequential or punitive damages (as
opposed to direct or actual damages) arising out of, in connection with, or as a
result of, this Agreement or any agreement or instrument contemplated hereby,
any other Loan Document, the Transactions, any Loan or Letter of Credit or the
use of the proceeds thereof.
(e) All amounts due under this SECTION 10.03 shall be payable
promptly after written demand therefor.
SECTION 10.04 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 (including any
Affiliate of the Issuing Bank that issues any Letter of Credit), 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 any attempted
assignment or transfer by the Borrower without such consent 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 (including any Affiliate of the Issuing
Bank that issues any Letter of Credit) and, to the extent expressly contemplated
hereby, the Related Parties of the Administrative Agent) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may 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 at the time owing to it; PROVIDED that
(i) except in the case of an assignment to a Lender or a Lender Affiliate, each
of the Borrower and the Administrative Agent (and, in the case of an assignment
of all or a portion of a Commitment or any Lender's obligations in respect of
its LC Exposure, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld), (ii) except in
the case of an assignment to a Lender or a Lender Affiliate or an assignment of
the entire remaining amount of the assigning Lender's Commitment, the amount of
the Commitment of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall be in increments of
$500,000 and not
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be less than $2,000,000 unless each of the Borrower and the Administrative
Agent otherwise consent provided however, that after giving effect to such
assignment, the assigning Lender's Commitment shall be at least $2,000,000
(iii) 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, (iv) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $3,500, and (v) the assignee, if it shall
not be a Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; and PROVIDED FURTHER that any consent of the Borrower
otherwise required under this paragraph shall not be required if an Event of
Default has occurred and is continuing. Except as provided in SECTION
10.03(a)(i), Borrower shall not be responsible for payment of any fees,
expenses, or disbursements in connection with an assignment to an Eligible
Assignee under this SECTION 10.04. Subject to acceptance and recording
thereof pursuant to PARAGRAPH (d) of this SECTION 10.04, from and after the
effective date specified in each Assignment and Acceptance the assignee
thereunder shall be a party hereto and to the other Loan Documents and, to
the extent of the interest assigned by such Assignment and Acceptance, 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 Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of
the assigning Lender's rights and obligations under this Agreement and the
other Loan Documents, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of SECTIONS 2.12, 2.13, 2.14, 2.16
and 10.03). 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 (e)
of this SECTION 10.04.
(c) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices in Houston, Texas or Dallas,
Texas a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amount of the Loans and LC Disbursements owing to,
each Lender pursuant to the terms hereof from time to time (the "REGISTER"). The
entries in the Register shall be conclusive, 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 and the other Loan Documents, 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) Upon its receipt of a duly completed Assignment and Acceptance
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in PARAGRAPH (b) of
this SECTION 10.04 and any written consent to such assignment required by
PARAGRAPH (b) of this SECTION 10.04, the Administrative Agent shall accept such
Assignment and Acceptance and record the information contained therein in the
Register. No assignment shall be effective for purposes of this Agreement unless
it has been recorded in the Register as provided in this paragraph.
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(e) Any Lender may, without the consent of the Borrower, the
Administrative Agent, sell participations to one or more banks or other entities
(a "PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement (including all or a portion of its Commitment and the Loans
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, (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, and (iv) the foregoing shall be done at no
cost or expense to Borrower. 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 the Loan Documents and to approve any amendment,
modification or waiver of any provision of the Loan Documents; 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
described in the first proviso to SECTION 10.02(b) that affects such
Participant. Subject to PARAGRAPH (f) of this SECTION 10.04, the Borrower agrees
that each Participant shall be entitled to the benefits of Sections 2.12, 2.13
and 2.14 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to PARAGRAPH (b) of this SECTION 10.04. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
SECTION 10.08 as though it were a Lender, provided such Participant agrees to be
subject to SECTION 2.15(c) as though it were a Lender.
(f) A Participant shall not be entitled to receive any greater
payment under SECTION 2.12 or 2.14 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 2.16 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
2.14(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure obligations
of such Lender, including any pledge or assignment to secure obligations to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; PROVIDED that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such pledgee or assignee for such Lender as a party hereto.
SECTION 10.05 SURVIVAL. All covenants, agreements, representations
and warranties made by the Borrower and the Subsidiaries in the Loan Documents
and in the certificates or other instruments delivered in connection with or
pursuant to this Agreement or any other Loan Document shall be considered to
have been relied upon by the other parties hereto and shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making of any Loans, regardless of any investigation made by any such other
party or on its behalf and notwithstanding that Administrative Agent or any
Lender may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of
63
or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid or any Letter of Credit is
outstanding and so long as the Commitments have not expired or terminated.
The provisions of SECTIONS 2.12, 2.13, 2.14, 2.16 and 10.03 and ARTICLE IX
shall survive and remain in full force and effect regardless of the
consummation of the transactions contemplated hereby, the repayment of the
Loans, the expiration or termination the Commitments or the termination of
this Agreement or any provision hereof.
SECTION 10.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate letter agreements with respect to fees payable to the
Administrative Agent and the Arranger constitute the entire contract among the
parties relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in ARTICLE V, this Agreement shall become effective
when it shall have been executed by the Administrative Agent and when the
Administrative Agent shall have received counterparts hereof which, when taken
together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page of this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 10.07 SEVERABILITY. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08 RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted
by law, to set off and apply any and all deposits (general or special, time
or demand, provisional or final) at any time held and other obligations at
any time owing by such Lender or Affiliate to or for the credit or the
account of the Borrower against any of and all the obligations of the
Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under
this Agreement and although such obligations may be unmatured. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 10.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a) This Agreement and the other Loan Documents shall be construed in
accordance with and governed by the law of the State of Texas.
64
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the Courts of the
State of Texas and of the United States District Court for the Northern District
of Texas, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such Texas State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement or any other Loan Document shall
affect any right that the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement against the
Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to
the fullest extent it may legally and effectively do so, any objection which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in paragraph (b) of this SECTION 10.09. Each
of the parties hereto hereby irrevocably waives, to the fullest extent permitted
by law, the defense of an inconvenient forum to the maintenance of such action
or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in SECTION 10.01. Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 10.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH
PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY
OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS IN THIS SECTION 10.10.
SECTION 10.11 HEADINGS. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
65
SECTION 10.12 CONFIDENTIALITY. The Administrative Agent and each of
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that Information may be disclosed (a) to its and its
Affiliates' directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
Information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent required by
applicable laws or regulations or by any subpoena or similar legal process, (d)
to any other party to this Agreement, (e) in connection with the exercise of any
remedies hereunder or any suit, action or proceeding relating to this Agreement
or any other Loan Document or the enforcement of rights hereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
SECTION 10.12, to any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement, (g)
with the consent of the Borrower or (h) to the extent such Information (i)
becomes publicly available other than as a result of a breach of this SECTION
10.12 or (ii) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower. For the purposes of
this SECTION 10.12, "INFORMATION" means all information received from the
Borrower relating to the Borrower or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
SECTION 10.13 INTEREST RATE LIMITATION. It is the intention of the
parties hereto to conform strictly to applicable interest, usury and criminal
laws and, anything herein to the contrary notwithstanding, the obligations of
the Borrower or any Subsidiary to a Lender or the Administrative Agent under
this Agreement or any other Loan Document shall be subject to the limitation
that payments of interest shall not be required to the extent that receipt
thereof would be contrary to provisions of law applicable to such Lender or the
Administrative Agent limiting rates of interest which may be charged or
collected by such Lender or the Administrative Agent. Accordingly, if the
transactions contemplated hereby or thereby would be illegal, unenforceable,
usurious or criminal under laws applicable to a Lender or the Administrative
Agent (including the laws of any jurisdiction whose laws may be manditorily
applicable to such Lender or the Administrative Agent notwithstanding anything
to the contrary in this Agreement or any other Loan Document) then, in that
event, notwithstanding anything to the contrary in this Agreement or any other
Loan Document, it is agreed as follows:
(i) the provisions of this SECTION 10.13 shall govern and control;
(ii) the aggregate of all consideration which constitutes interest
under applicable law that is contracted for, taken, reserved, charged or
received under this Agreement, or under any of the other aforesaid
agreements or otherwise in connection with this Agreement or any other
Loan Document by such Lender or the Administrative Agent shall under no
circumstances exceed the maximum amount of interest allowed by
66
applicable law (such maximum lawful interest rate if any, with respect
to such Lender and the Administrative Agent herein called the "HIGHEST
LAWFUL RATE"), and any excess shall be canceled automatically and if
theretofore paid shall be credited to the Borrower by such Lender or the
Administrative Agent (or, if such consideration shall have been paid in
full, such excess refunded to the Borrower);
(iii) all sums paid, or agreed to be paid, to such Lender or the
Administrative Agent for the use, forbearance and detention of the
indebtedness of the Borrower to such Lender or the Administrative Agent
hereunder or under any Loan Document shall, to the extent permitted by
laws applicable to such Lender or the Administrative Agent, as the case
may be, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the actual rate of
interest is uniform throughout the full term thereof;
(iv) if at any time the interest provided pursuant to this SECTION
10.13 or any other clause of this Agreement or any other Loan Document,
together with any other fees or compensation payable pursuant to this
Agreement or any other Loan Document and deemed interest under laws
applicable to such Lender or the Administrative Agent, exceeds that amount
which would have accrued at the Highest Lawful Rate, the amount of
interest and any such fees or compensation to accrue to such Lender or the
Administrative Agent pursuant to this Agreement or such other Loan
Document shall be limited, notwithstanding anything to the contrary in
this Agreement or any other Loan Document, to that amount which would have
accrued at the Highest Lawful Rate, but any subsequent reductions, as
applicable, shall not reduce the interest to accrue to such Lender or the
Administrative Agent pursuant to this Agreement or such other Loan
Document below the Highest Lawful Rate until the total amount of interest
accrued pursuant to this Agreement or such other Loan Document, as the
case may be, and such fees or compensation deemed to be interest equals
the amount of interest which would have accrued to such Lender or the
Administrative Agent if a varying rate PER ANNUM equal to the interest
provided pursuant to any other relevant Section hereof (other than this
SECTION 10.13) or thereof as applicable, had at all times been in effect,
plus the amount of fees which would have been received but for the effect
of this SECTION 10.13; and
(v) with the intent that the rate of interest herein shall at all
times be lawful, and if the receipt of any funds owing hereunder or under
any other agreement related hereto (including any of the other Loan
Documents) by such Lender or the Administrative Agent would cause such
Lender or the Administrative Agent to charge the Borrower a criminal rate
of interest, the Lenders and the Administrative Agent agree that they will
not require the payment or receipt thereof or a portion thereof which
would cause a criminal rate of interest to be charged by such Lender or
the Administrative Agent, as applicable, and if received such affected
Lender or the Administrative Agent will return such funds to the Borrower
so that the rate of interest paid by the Borrower shall not exceed a
criminal rate of interest from the date this Agreement was entered into.
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SECTION 10.14 ARRANGER. The Arranger shall not have any right,
power, obligation, liability, responsibility or duty under this Agreement or any
other Loan Document. Without limiting the foregoing, the Arranger shall not have
or be deemed to have any fiduciary relationship with any Lender or the Borrower
or any of its Subsidiaries. The Borrower and each Lender acknowledge that it has
not relied, and will not rely, on the Arranger in deciding to enter into this
Agreement or in taking any action hereunder or under the Loan Documents.
SECTION 10.15 NO ORAL AGREEMENTS. THIS WRITTEN AGREEMENT AND THE
OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN OR AMONG THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE
PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
[SIGNATURE PAGES BEGIN ON NEXT PAGE]
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SIGNATURE PAGE TO
CREDIT AGREEMENT
BY AND AMONG
XXXXXXXX CORPORATION,
AS BORROWER, THE CHASE MANHATTAN BANK,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT,
AND THE LENDERS LISTED ON SCHEDULE 2.01 HERETO
XXXXXXXX CORPORATION
By: /s/ Xxxx X. Xxxxxxxx, Xx.
---------------------------------
Name: Xxxx X. Xxxxxxxx, Xx.
Title: Chief Executive Officer
[Signature Page]
SIGNATURE PAGE TO
CREDIT AGREEMENT
BY AND AMONG
XXXXXXXX CORPORATION,
AS BORROWER, THE CHASE MANHATTAN BANK,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT,
AND THE LENDERS LISTED ON SCHEDULE 2.01 HERETO
THE CHASE MANHATTAN BANK,
individually as a Lender and as
Administrative Agent
By: /s/ Xxx Xxxxxx
-----------------------------
Name: Xxx Xxxxxx
Title: Vice President
[Signature Page]
SIGNATURE PAGE TO
CREDIT AGREEMENT
BY AND AMONG
XXXXXXXX CORPORATION,
AS BORROWER, THE CHASE MANHATTAN BANK,
INDIVIDUALLY AND AS ADMINISTRATIVE AGENT,
AND THE LENDERS LISTED ON SCHEDULE 2.01 HERETO
COMPASS BANK, individually as a
Lender and as Syndication Agent
By: /s/ R. Xxxxx Xxxx
------------------------------
Name: R. Xxxxx Xxxx
Title: Vice President
[Signature Page]
