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EXHIBIT 10.60
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 14, 1999,
among KEVCO , INC., a Texas corporation (the "Borrower"), the Lenders from time
to time party hereto, and BANK OF AMERICA, N.A., formerly known as NationsBank,
N.A., a national banking association, as administrative agent for the Lenders.
BACKGROUND
The Lenders have been requested to restructure the terms of the debt
of the Borrower outstanding pursuant to the terms of that certain Second
Amended and Restated Credit Agreement, dated as of December 1, 1997, among the
Borrower, the lenders party thereto, and NationsBank, N.A., successor by merger
to NationsBank of Texas, N.A., as the Administrative Agent (as amended through
the date hereof, the "Existing Credit Agreement"). The Lenders have agreed to
such restructuring, subject to the terms and conditions set forth below.
In consideration of the mutual covenants and agreements contained
herein, and other good and valuable consideration hereby acknowledged, the
parties hereto agree that the Existing Credit Agreement shall be amended,
restated and superseded in its entirety as follows:
ARTICLE 1
Definitions
Section 1.1 Defined Terms. For purposes of this Agreement:
"Acquisitions" means any transaction pursuant to which the Borrower or
any of its Subsidiaries, (a) whether by means of a capital contribution or
purchase or other acquisition of stock or other securities or other equity
participation or interest, (i) acquires more than 50% of the equity interest in
any Person pursuant to a solicitation by the Borrower or such Subsidiary of
tenders of equity securities of such Person, or through one or more negotiated
block, market, private or other transactions not involving a tender offer, or a
combination of any of the foregoing, (ii) except as permitted by Section 7.3(j)
hereof with respect to a newly-formed corporation and Section 7.4(b) hereof
with respect to an existing Subsidiary of the Borrower, makes any corporation a
Subsidiary of the Borrower or such Subsidiary, or causes any corporation, other
than a Subsidiary of the Borrower or such Subsidiary, to be merged into the
Borrower or such Subsidiary (or agrees to be merged into any other corporation
other than a wholly-owned Subsidiary of the Borrower or such Subsidiary), or
(iii) agrees to purchase all or substantially all of the assets of any
corporation, pursuant to a merger, purchase of assets or other reorganization
providing for the delivery or issuance to the holders of such corporation's
then outstanding securities, in exchange for such securities, of cash or
securities of the Borrower or such Subsidiary, or any combination thereof, or
(b) purchases all or substantially all of the business or assets of any Person
or of any operating division of any Person.
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"Acquisition Consideration" means the consideration given by the
Borrower or any of its Subsidiaries for an Acquisition, including but not
limited to the sum of (without duplication) (a) the fair market value of any
cash, property or services given, plus (b) consideration paid with the proceeds
of Indebtedness permitted pursuant to this Agreement, plus (c) the amount of
any Indebtedness and Operating Leases (calculated to be the product of annual
rentals multiplied by six) assumed, incurred or guaranteed in connection with
such Acquisition by the Borrower or any of its Subsidiaries that is a
Subsidiary immediately prior to such Acquisition.
"Adjusted LIBOR Rate" means, for any LIBOR Advance for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100th of 1%) determined by the Administrative Agent to be equal to
the quotient obtained by dividing (a) the LIBOR Rate for such LIBOR Advance for
such Interest Period by (b) 1 minus the Reserve Requirement for such LIBOR
Advance for such Interest Period.
"Adjustment Date" means, for purposes of the Applicable Base Rate
Margin, the Applicable LIBOR Rate Margin, the commitment fees payable pursuant
to Section 2.4 hereof and the Letter of Credit fees payable pursuant to Section
2.16(f)(i) hereof, the date which is two Business Days after the date of
receipt by the Administrative Agent of the financial statements required to be
delivered pursuant to Section 6.1 or 6.2 hereof, as applicable, and the
Compliance Certificate required pursuant to Section 6.3 hereof.
"Administrative Agent" means Bank of America, N.A., formerly known as
NationsBank, N.A., a national banking association, as administrative agent for
Lenders, or such successor administrative agent appointed pursuant to Section
10.1(b) hereof.
"Advance" means any amount advanced by the Lenders to the Borrower
pursuant to Article 2 hereof on the occasion of any borrowing.
"Affiliate" means any Person that, directly or indirectly, through one
or more Persons, Controls or is Controlled By or Under Common Control with such
Person, or in the case of any Lender which is an investment fund, the
investment advisor thereof and any investment fund having the same investment
advisor.
"Agreement" means this Third Amended and Restated Credit Agreement, as
amended, modified, supplemented or restated from time to time to the extent
remitted pursuant hereto.
"Agreement Date" means the date of this Agreement.
"Applicable Base Rate Margin" means the following per annum
percentages, applicable in the following situations:
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Facility A Term
Loan Advances
and Revolving Facility B
Applicability Advances Term Loan
------------- --------------- Advances
----------
(a) The Leverage Ratio is greater than or equal 1.500 2.000
to 5.75 to 1
(b) The Leverage Ratio is greater than or equal 0.750 1.250
to 4.50 to 1 but less than 5.75 to 1
(c) The Leverage Ratio is greater than or equal 0.250 0.750
to 3.75 to 1 but less than 4.50 to 1
(d) The Leverage Ratio is less than 3.75 to 1 0.000 0.500
The Applicable Base Rate Margin payable by the Borrower on the Base Rate
Advances outstanding hereunder shall be adjusted on each Adjustment Date as
tested by using the Leverage Ratio for the most recent four fiscal quarters. If
the financial statements required pursuant to Section 6.1 or 6.2 hereof, as
applicable, and the related Compliance Certificate are not received by the
Administrative Agent by the date required, the Applicable Base Rate Margin
shall be determined as if the Leverage Ratio is greater than or equal to 5.75
to 1 until such time as such financial statements and Compliance Certificate
are received. Notwithstanding the foregoing, the Applicable Base Rate Margin
from and after the Closing Date until and including two Business Days following
the date of receipt of the financial statements for the most recently ended
fiscal quarter and the related Compliance Certificate shall be determined as if
the Leverage Ratio is greater than or equal to 5.75 to 1.
"Applicable Environmental Laws" means applicable laws pertaining to
health or the environment, including without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (as amended from time
to time, "CERCLA"), the Resource Conservation and Recovery Act of 1976, as
amended by the Used Oil Recycling Act of 1980, the Solid Waste Disposal Act
amendments of 1980, and the Hazardous and Solid Waste Amendments of 1984 (as
amended from time to time, "RCRA"), the Texas Water Code, and the Texas Solid
Waste Disposal Act.
"Applicable Law" means (a) in respect of any Person, all provisions of
constitutions, statutes, rules, regulations and orders of governmental bodies
or regulatory agencies applicable to such Person and its properties, including,
without limiting the foregoing, all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a
party, and (b) in respect of contracts relating to interest or finance charges
that are made or performed in the State of Texas, "Applicable Law" shall mean
the laws of the United States of America, including without limitation 12 USC
Sections 85 and 86, as amended from time to time, and any other statute of the
United States of
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America now or at any time hereafter prescribing the maximum rates of interest
on loans and extensions of credit, and the laws of the State of Texas,
including, without limitation, Article 5069-IH, Title 79, Revised Civil
Statutes of Texas, 1925, as amended ("Art. IH"), if applicable, and if Art. IH
is not applicable, Article 5069-ID, Title 79, Revised Civil Statutes, 1925, as
amended ("Art. ID"), and any other statute of the State of Texas now or at any
time hereafter prescribing maximum rates of interest on loans and extensions of
credit; provided that the parties hereto agree that the provisions of Chapter
346 of the Texas Finance Code, as amended, shall not apply to Advances, this
Agreement, the Notes or any other Loan Documents.
"Applicable LIBOR Rate Margin" means the following per annum
percentages, applicable in the following situations:
Facility A Term
Loan Advances Facility B
and Revolving Term Loan
Applicability Advances Advances
------------- --------------- ----------
(a) The Leverage Ratio is greater than or equal to 3.000 3.500
5.75 to 1
(b) The Leverage Ratio is greater than or equal to 2.250 2.750
4.50 to 1 but less than 5.75 to 1
(c) The Leverage Ratio is greater than or equal to 1.750 2.250
3.75 to 1 but less than 4.50 to 1
(d) The Leverage Ratio is greater than or equal to 1.500 2.000
3.00 to 1 but less than 3.75 to 1
(e) The Leverage Ratio is less than 3.00 to 1 1.250 1.750
The Applicable LIBOR Rate Margin payable by the Borrower on the LIBOR Advances
outstanding hereunder shall be adjusted on each Adjustment Date as tested by
using the Leverage Ratio for the most recent four fiscal quarters. If the
financial statements required pursuant to Section 6.1 or 6.2 hereof, as
applicable, and the related Compliance Certificate are not received by the
Administrative Agent by the date required, the Applicable LIBOR Rate Margin
shall be determined as if the Leverage Ratio is greater than or equal to 5.75
to 1 until such time as such financial statements and Compliance Certificate
are received. Notwithstanding the foregoing, the Applicable LIBOR Rate Margin
from and after the Closing Date until and including two Business Days following
the date of receipt of the financial statements for the most recently ended
fiscal quarter and the related Compliance Certificate shall be determined as if
the Leverage Ratio is greater than or equal to 5.75 to 1.
"Applicable Specified Percentages" means the Revolving Credit
Specified Percentage, the Facility A Term Loan Specified Percentage, the
Facility B Term Loan Specified Percentage, or the Total Specified Percentage,
as applicable in the context used.
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"Asset Sale Proceeds Report" means a report, certified and signed by
an Authorized Signatory, in substantially the form of Exhibit B, appropriately
completed.
"Assignees" means any assignee of a Lender pursuant to an Assignment
Agreement.
"Assignment Agreement" shall have the meaning specified in Section
11.6(d) hereof.
"Authorized Signatory" means such senior personnel of the Borrower or
any of its Subsidiaries as may be duly authorized and designated in writing by
the Borrower, or any of its Subsidiaries to execute documents, agreements and
instruments on behalf of the Borrower or any Subsidiary, and to request
Advances hereunder.
"Available Asset Sale Proceeds" means all Net Cash Proceeds received
from the sale or disposition (other than Permitted Asset Sales) by the Borrower
or any of its Subsidiaries of any assets (including the Capital Stock of any
Subsidiary) sold or disposed of at any time and not required, upon receipt
thereof, to be used to prepay Advances under Section 2.5(c)(i).
"Base Cash Flow" means, for any period, determined in accordance with
GAAP on a consolidated basis for the Borrower and its Subsidiaries, the sum of
(a) EBITDA minus (b) Capital Expenditures.
"Base Rate Advance" means any Advance bearing interest at the Base
Rate Basis.
"Base Rate Basis" means, for any day, a per annum interest rate equal
to the higher of (a) the sum of (i) 0.50% plus (ii) the Federal Funds Rate on
such day plus (iii) the Applicable Base Rate Margin, or (b) the sum of (i) the
Prime Rate on such day plus (ii) the Applicable Base Rate Margin. The Base Rate
Basis shall be adjusted automatically as of the opening of business on the
effective date of each change in the Prime Rate or Federal Funds Rate, as
applicable, to account for such change.
"BofA" means Bank of America, N.A., a national banking association, in
its capacity as a Lender.
"Borrower" means Kevco, Inc., a Texas corporation.
"Borrower Intellectual Property Security Agreement" means the Borrower
Intellectual Property Security Agreement and Assignment executed by the
Borrower and dated as of December 1, 1997, as amended, modified, renewed,
supplemented or restated from time to time.
"Borrower Pledge Agreement" means that certain Borrower Pledge
Agreement executed by the Borrower and as dated as of December 1, 1997, as
amended, renewed, supplemented or restated from time to time.
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"Borrower Security Agreement" means that certain Borrower Security
Agreement executed by the Borrower and dated as of December 1, 1997, as
amended, modified, renewed, supplemented or restated from time to time.
"Borrowing Base" means for the Borrower and each of its Subsidiaries
which have executed a Subsidiary Security Agreement, on a consolidated basis,
(a) at any time before January 1, 2001, the sum of (i) 85% of book value of
accounts receivable, minus, to the extent not deducted in arriving at book
value, the portion of any account not paid within 90 days of when due, plus
(ii) 65% of book value of inventory (including goods in transit backed by
Letters of Credit) net of reserves as determined by Borrower, plus (iii) 60% of
book value of owned real property, equipment and other fixed assets, net of
depreciation, plus (iv) 100% of Cash and Cash Equivalents (excluding amounts in
the Restricted Account), and (b) at any time on or after January 1, 2001, the
sum of (i) 80% of book value of accounts receivable, minus, to the extent not
deducted in arriving at book value, the portion of any account not paid within
90 days of when due, plus (ii) 60% of book value of inventory (including goods
in transit backed by Letters of Credit), net of reserves as determined by
Borrower, plus (iii) 50% of book value of owned real property, equipment and
other fixed assets, net of depreciation, plus (iv) 100% of Cash and Cash
Equivalents (excluding amounts in the Restricted Account). For purposes of this
definition, "book value" means the value of an asset as reflected in the
Borrower's or the appropriate Subsidiary's accounting books and records,
determined in accordance with GAAP.
"Borrowing Base Deficiency" means, as of the date of determination,
the failure of the Borrowing Base to exceed the sum of (i) the then outstanding
Advances owing by the Borrower at such time plus (ii) the then outstanding
Reimbursement Obligations owing by the Borrower at such time.
"Borrowing Base Report" means a report, certified and signed by an
Authorized Signatory, in substantially the form of Exhibit C, appropriately
completed.
"Business Day" means a day on which commercial banks are open (a) for
the transaction of business in Dallas, Texas and (b) with respect to any LIBOR
Advance, for the transaction of international business (including dealings in
Dollar deposits) in London, England.
"Capital Expenditures" means, for any period, expenditures made by the
Borrower and its Subsidiaries to acquire or construct fixed assets, plant and
equipment (including renewals, improvements and replacements during such period
and the aggregate amount of items leased or acquired under Capital Leases at
the cost of the item, but excluding any such asset acquired (i) in connection
with normal replacement and maintenance programs properly expensed in
accordance with GAAP or (ii) with the proceeds of any casualty insurance or
condemnation award) computed in accordance with GAAP, consistently applied,
other than (a) one-time expenditures made on or before June 30, 2001 in
connection with systems integration and Year 2000 issues which do not exceed an
aggregate amount of $8,000,000, (b) up to $4,100,000 made from available
insurance proceeds to replace the Duoform building and equipment therein which
was destroyed by fire in
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August, 1998, and (c) expenditures made as Acquisitions or as reinvestments of
proceeds from asset dispositions, as permitted under Sections 7.5 and 7.6 of
this Agreement.
"Capital Leases" means capital leases and subleases, as defined in the
Financial Accounting Standards Board Statement of Financial Accounting
Standards No. 13, dated November 1976, as amended.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of Capital
Stock in any Person that is a corporation, each class of partnership interest
in any Person that is a partnership, and each class of membership interest in
any Person that is a limited liability company.
"Capitalized Lease Obligations" means that portion of any obligation
of the Borrower or any of its Subsidiaries as lessee under a lease which at the
time would be required to be capitalized on a balance sheet prepared in
accordance with GAAP.
"Cash and Cash Equivalents" means with respect to the Borrower and
each of its Subsidiaries (a) cash, (b) securities issued or directly and fully
guaranteed or insured by the United States Government or any agency or
instrumentality thereof having maturities of not more than one year from the
date of acquisition, (c) certificates of deposit and eurodollar time deposits
with maturities of one year or less from the date of acquisition, bankers'
acceptances with maturities not exceeding one year and overnight bank deposits,
in each case with any Lender or with any domestic commercial bank having
capital and surplus in excess of $500,000,000, (d) repurchase obligations with
a term of not more than seven days for underlying securities of the types
described in clauses (b) and (c) entered into with any financial institution
meeting the qualifications specified in clause (c) above, and (e) commercial
paper issued by any Lender or the Borrower corporation of any Lender, and
commercial paper rated A-1 or the equivalent thereof by Standard & Poor's
Ratings Group, a Division of XxXxxx-Xxxx, Inc., a New York corporation or P-1
or the equivalent thereof by Xxxxx'x Investors Service, Inc. and in each case
maturing within six months after the date of acquisition.
"CERCLA" has the meaning specified in the definition of Applicable
Environmental Laws.
"Change of Control" means the occurrence of any of the following: (a)
the sale, lease or transfer of all or substantially all of the Borrower's
assets to any Person or Group (as such term is used in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended), (b) the adoption of a plan
relating to the liquidation or dissolution of the Borrower, (c) the acquisition
by any Person or Group (other than Xxxxxxx and its Affiliates) of a direct or
indirect majority in interest (more than 50%) of the voting power of the voting
stock of the Borrower by way of merger or consolidation or otherwise, (d)
Xxxxxxx and its Affiliates shall fail to own at least 75% of the voting power
of the voting stock of the Borrower which Xxxxxxx and its Affiliates own on the
date of this Agreement (after giving effect to the Xxxxxxx Stock Acquisition),
(e) any Person or Group (other than Xxxxx X. Xxxxxx, his spouse or his lineal
descendants, or a trust for the primary benefit of Xxxxx X. Xxxxxx, his spouse
or his lineal descendants) shall own a percentage of the voting power of the
voting stock
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of the Borrower which is greater than or equal to the percentage owned by
Xxxxxxx and its Affiliates (after giving effect to the conversion of the
Xxxxxxx Subordinated Debt into the Borrower's common stock), (f) Xxxxxxxxx X.
Xxxx, Xx., or any other Xxxxxxx representative reasonably acceptable to the
Majority Lenders, shall cease to be the Chairman of the Borrower or shall cease
to be active in the management of Borrower, or (g) any "change in control" or
"change of control" or similar term howsoever defined or designated in any
agreement governing any Institutional Debt or Subordinated Debt of the Borrower
or any of its Subsidiaries.
"Closing Date" means the date upon which all of the conditions
precedent to the effectiveness of this Agreement are satisfied, which date must
occur, if at all, no later than October 31, 1999.
"COBRA" shall have the meaning specified in Section 4.1(1) hereof.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral" means any collateral granted by any Person to the
Administrative Agent to secure the Obligations.
"Collateral Document" means any document under which Collateral is
granted and any document related thereto.
"Comdisco Lease" means that certain Master Lease Agreement dated as of
March 18, 1998, by and between Kevco Delaware, Inc., as lessee, and Comdisco,
Inc., as lessor, as may be amended, renewed, or otherwise modified from time to
time.
"Commercial Letter of Credit" means any Letter of Credit issued by the
Issuing Bank pursuant to Section 2.16(a) hereof, which is drawable upon
presentation of documents evidencing the sale or shipment of goods purchased by
the Borrower or any of its Subsidiaries in the ordinary course of its business.
"Commitments" means, collectively, the Revolving Credit Commitment,
the Facility A Term Loan Commitment and the Facility B Term Loan Commitment.
"Compliance Certificate" means a certificate, signed by an Authorized
Signatory, in substantially the form of Exhibit A, appropriately completed.
"Confidential Information" has the meaning specified in Section 11.19
hereof.
"Control" or "Controlled By" or "Under Common Control" means
possession, directly or indirectly, of power to direct or cause the direction
of management or policies (whether through ownership of voting securities, by
contract or otherwise); provided, however, that in any event any Person which
beneficially owns, directly or indirectly, 20% or more (in number of votes) of
the
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securities having ordinary voting power for the election of directors of a
corporation shall be conclusively presumed to control such corporation.
"Controlled Group" means as of the applicable date, as to any Person
not an individual, all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) which are under common
control with such Person and which, together with such Person, are treated as a
single employer under Section 414(b), (c), (m) or (o) of the Code; provided,
however, that the Subsidiaries of the Borrower shall be deemed to be members of
the Borrower's Controlled Group.
"Current Assets" means, for the Borrower and its Subsidiaries
determined in accordance with GAAP on a consolidated basis, all current assets.
"Current Liabilities" means, for the Borrower and its Subsidiaries
determined in accordance with GAAP on a consolidated basis, all current
liabilities.
"Debtor Relief Laws" means any applicable liquidation,
conservatorship, bankruptcy, moratorium, rearrangement, insolvency,
reorganization or similar debtor relief laws affecting the rights of creditors
generally from time to time in effect.
"Deed of Trust" means any leasehold or fee simple Deed of Trust or
Mortgage, as applicable, relating to the real property and leasehold interests
in real property of the Borrower and each of its Subsidiaries required to be
pledged by the Administrative Agent, in substantially the form set forth in
Exhibit L-1 and Exhibit L-2 to the Existing Credit Agreement, as amended,
modified, renewed, supplemented or restated from time to time.
"Default" means an Event of Default and/or any of the events specified
in Section 8.1, regardless of whether there shall have occurred any passage of
time or giving of notice that would be necessary in order to constitute such
event an Event of Default.
"Default Application Notice" has the meaning specified in Section
2.10(d)(ii) hereof.
"Default Rate" means a simple per annum interest rate equal to (a)
with respect to Base Rate Advances the lesser of (i) the Highest Lawful Rate or
(ii) the Base Rate Basis plus two percent and (b) with respect to LIBOR
Advances, the lesser of (i) the Highest Lawful Rate or (ii) the LIBOR Basis
plus two percent.
"Determining Lenders" means, on any date of determination, any
combination of Lenders whose Total Specified Percentages aggregate at least
66 2/3%; provided, however, in the event that all of the Commitments have been
terminated, "Determining Lenders" means, on any date of determination, any
combination of Lenders having at least 66 2/3% of the Advances then outstanding.
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"Dividend" means, as to any Person, (a) any declaration or payment of
any dividend (other than a stock dividend) on, or the making of any
distribution, loan, advance or investment to or in any holder of, any shares of
Capital Stock of such Person (other than salaries and bonuses paid in the
ordinary course of business), and (b) any purchase, redemption or other
acquisition or retirement for value by such Person of any shares of Capital
Stock of such Person.
"Dollar" or "$" means the lawful currency of the United States of
America.
"EBITDA" means, for any period, determined in accordance with GAAP on
a consolidated basis for the Borrower and its Subsidiaries, the sum of, without
duplication, (a) Pretax Net Income (excluding therefrom, to the extent included
in determining Pretax Net Income, any items of extraordinary gain, including
net gains on the sale of assets other than asset sales in the ordinary course
of business, and adding thereto, to the extent deducted in determining Pretax
Net Income, any items of extraordinary loss, including net losses on the sale
of assets other than asset sales in the ordinary course of business), plus (b)
to the extent deducted in calculating Pretax Net Income, interest and dividend
expense whether paid in cash or in kind, plus (c) to the extent deducted in
calculating Pretax Net Income, depreciation and amortization, plus (d) to the
extent deducted in calculating Pretax Net Income, one-time restructuring
charges not to exceed an aggregate amount of $13,800,000 (of which $1,500,000
associated with the Comdisco Lease deducted from Pretax Net Income in 1998
shall be added back to Pretax Net Income for the fiscal quarter ending December
31, 1998) incurred in connection with the matters described on Schedule 3 and
taken by Borrower on or before September 30, 1999, plus (e) to the extent
deducted in calculating Pretax Net Income, one-time restructuring charges not
to exceed an aggregate amount of $20,000,000 incurred in connection with the
matters described on Schedule 4 and taken by Borrower on or before December 31,
2000 (except for the initial write-off of up to $12,800,000 of goodwill, which
must be taken, if at all, on or before September 30, 1999 (subject to auditor's
approval of such timing)), plus (f) to the extent deducted in calculating
Pretax Net Income, costs incurred after January 1, 1999 and on or before June
30, 2001 in connection with systems integration and Year 2000 issues not to
exceed an aggregate amount of $8,000,000, plus (g) to the extent deducted in
calculating Pretax Net Income, one-time warehouse consolidation costs not to
exceed an aggregate amount of $3,419,000 and taken on or before December 31,
1998, and $230,000 taken on or before December 31, 1999, plus (h) to the extent
deducted or added back in 1998 in calculating Pretax Net Income, timing
adjustments taken in connection with selling, general and administrative
normalization of certain line items on Borrower's financial statements, plus
(i) to the extent deducted in 1998 (equal to $783,000) or 1999 in calculating
Pretax Net Income, any and all fees and expenses incurred by Borrower in
connection with the preparation, documentation, negotiation and closing of this
Agreement and the transactions contemplated herein, including the Xxxxxxx
Subordinated Debt and the Xxxxxxx Stock Acquisition, the aggregate amount of
which shall not exceed $7,000,000. The actual timing for taking the charges
described in clauses (g) through (i) above is set forth in Schedule 5.
"Eligible Assignee" means (a) any Lender; (b) a commercial bank
organized under the laws of the United States, or any state thereof, and having
total assets in excess of $1,000,000,000; (c) a savings and loan association or
savings bank organized under the laws of the United States, or any
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state thereof, having total assets in excess of $500,000,000, and not in
receivership or conservatorship; (d) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development, or a political subdivision of any such country,
and having total assets in excess of $1,000,000,000, provided that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is described in this clause; (e) the central
bank of any country which is a member of the Organization for Economic
Cooperation and Development; (f) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership, trust or
other entity) that is engaged in making, purchasing or otherwise investing in
commercial loans in the ordinary course of its business and having a combined
capital and surplus or total assets of at least $100,000,000, (g) any other
entity (other than a natural person) that is an "accredited investor" (as
defined in Regulation D under the Securities Act of 1933) which extends credit
or buys loans as one of its businesses, and (h) any other entity approved by
the Administrative Agent (and when required, the Borrower), provided that no
Affiliate of the Borrower shall qualify as an Eligible Assignee.
"Equity Offering" means any offering, sale or issuance of Capital
Stock of the Borrower other than in respect of (a) the exercise of stock
options of such Capital Stock, (b) the Xxxxxxx Stock Acquisition and (c) the
conversion of the Xxxxxxx Subordinated Debt to Capital Stock (regardless of
whether a conversion to preferred stock or common stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any regulation promulgated thereunder.
"ERISA Event" means, with respect to the Borrower and its
Subsidiaries, (a) a Reportable Event (other than a Reportable Event not subject
to the provision for 30-day notice to the PBGC under regulations issued under
Section 4043 of ERISA), (b) the withdrawal of any such Person or any member of
its Controlled Group from a Plan subject to Title IV of ERISA during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, (c) the filing of a notice of intent to terminate under Section
4041(c) of ERISA, (d) the institution of proceedings to terminate a Plan by the
PBGC, (e) the failure to make required contributions which could result in the
imposition of a lien under Section 412 of the Code or Section 302 of ERISA, or
(f) any other event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan or the imposition of any
liability under Title IV of ERISA other than PBGC premiums due but not
delinquent under Section 4007 of ERISA; provided, however, that ERISA Event
shall not include the termination by Service Supply of its employee stock
option plan.
"Escrow Agreement" has the meaning given to such term in the Senior
Subordinated Notes Indenture.
"Event of Default" means any of the events specified in Section 8.1,
provided that any requirement for notice or lapse of time has been satisfied.
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"Excess Cash Flow" means, for the Borrower and its Subsidiaries on a
consolidated basis for any period, an amount equal to (a) EBITDA for such
period minus, (b) the sum of (without duplication) (i) scheduled payments of
Indebtedness for such period, (ii) cash interest expense for such period, (iii)
cash income taxes for such period, (iv) actual Capital Expenditures during such
period, (v) prepayments, whether voluntary or involuntary, of Indebtedness
during such period, and (vi) Working Capital Adjustment.
"Existing Credit Agreement" has the meaning given to such term in the
first recital hereto.
"Existing Letters of Credit" means those Letters of Credit outstanding
on the Closing Date, as described on Schedule 12 hereto.
"Facility A Term Loan Advance" means one of the Advances described in
Section 2.1(b) hereof.
"Facility A Term Loan Commitment" means $36,916,835.15, as reduced by
the repayment of Facility A Term Loan Advances pursuant to the terms hereof.
"Facility A Term Loan Maturity Date" means December 31, 2003, or the
earlier date of acceleration of the Facility A Term Loan Advances pursuant to
Section 8.2 hereof.
"Facility A Term Loan Notes" means the promissory notes of the
Borrower evidencing Facility A Term Loan Advances hereunder, together with any
extension, renewal or amendment thereof, or substitution therefor.
"Facility A Term Loan Specified Percentage" means, as to any Lender,
the percentage indicated beside its name on Schedule 1 hereto as its Facility A
Term Loan Specified Percentage, or as adjusted or specified in any amendment to
this Agreement or in any Assignment Agreement.
"Facility B Term Loan Advance" means one of the Advances described in
Section 2.1(c) hereof.
"Facility B Term Loan Commitment" means $38,805,548.09, as reduced by
the repayment of Facility B Term Loan Advances pursuant to the terms hereof.
"Facility B Term Loan Maturity Date" means December 31, 2004, or the
earlier date of acceleration of the Facility B Term Loan Advances pursuant to
Section 8.2 hereof.
"Facility B Term Loan Notes" means the promissory notes of the
Borrower evidencing Facility B Term Loan Advances hereunder, together with any
extension, renewal or amendment thereof, or substitution therefor.
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"Facility B Term Loan Specified Percentage" means, as to any Lender,
the percentage indicated beside its name on Schedule 1 hereto as its Facility B
Term Loan Specified Percentage, or as adjusted or specified in any amendment to
this Agreement or in any Assignment Agreement.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of Dallas on the Business Day next
succeeding such day, provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such rate is so published on such next succeeding Business
Day, the Federal Funds Rate for such day shall be the average rate quoted to
the Administrative Agent on such day on such transactions as determined by the
Administrative Agent.
"Fixed Charges" means, for any period, calculated for the Borrower and
its Subsidiaries on a consolidated basis, the sum of, without duplication and
excluding any mandatory or voluntary prepayments of Indebtedness, (a) interest
expense (including interest expense pursuant to Capitalized Lease Obligations,
but excluding interest expense in connection with Subordinated Debt), net of
interest income from cash deposits (including interest income from the
Restricted Account), plus (b) scheduled principal payments of Indebtedness, in
each case for the applicable period immediately preceding the date of
calculation, plus (c) interest on Subordinated Debt actually paid in cash.
"Fixed Charge Coverage Ratio" means the ratio of Base Cash Flow to
Fixed Charges.
"GAAP" means generally accepted accounting principles applied on a
consistent basis, set forth in the Opinions of the Accounting Principles Board
of the American Institute of Certified Public Accountants, or their successors
which are applicable in the circumstances as of the date in question. The
requisite that such principles be applied on a consistent basis shall mean that
the accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period.
"Guaranty" or "Guaranteed," means (a) as applied to an obligation of
another Person, (i) a guaranty, direct or indirect, in any manner, of any part
or all of such obligation, and (ii) an agreement, direct or indirect,
contingent or otherwise, the practical effect of which is to assure in any way
the payment or performance (or payment of damages in the event of
nonperformance) of any part or all of such obligation, including, without
limiting the foregoing, any reimbursement obligations with respect to amounts
which may be drawn by beneficiaries of outstanding letters of credit and (b) an
agreement, direct or indirect, contingent or otherwise, to maintain net worth,
working capital, earnings or other financial performance of another Person;
provided, however, that the term "Guaranty" or "Guaranteed" shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guaranty of any guaranteeing person shall be deemed
to be the lower of (i) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guaranty is made and (ii) the
maximum amount for which such
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guaranteeing person may be liable pursuant to the terms of the instrument
embodying such Guaranty, unless such primary obligation and the maximum amount
for which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guaranty shall be such
guaranteeing person's maximum reasonably anticipated liability in respect
thereof as determined by such guaranteeing person in good faith.
"Highest Lawful Rate" means at the particular time in question the
maximum rate of interest which, under Applicable Law, the Lenders are then
permitted to charge on the Obligations. If the maximum rate of interest which,
under Applicable Law, the Lenders are permitted to charge on the Obligations
shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to the Borrower. For purposes of determining the Highest Lawful Rate under the
Applicable Law of the State of Texas, the applicable rate ceiling shall be (a)
the weekly rate ceiling described in and computed in accordance with the
provisions of Art. ID, or (b) if the parties subsequently contract as allowed
by Applicable Law, the quarterly ceiling or the annualized ceiling computed
pursuant to Art. ID.
"Indebtedness" means, with respect to any Person, (a) all items which
in accordance with GAAP would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person, (b) all
obligations secured by any Lien on any property or asset owned by such Person
(other than accounts payable arising in the ordinary course of business),
whether or not the obligation secured thereby shall have been assumed, (c) to
the extent not otherwise included, all Capitalized Lease Obligations of such
Person, all obligations in respect of letters of credit, bankers' acceptances
and similar instruments, and all obligations under Interest Hedge Agreements,
(d) any "withdrawal liability" of such Person, as such term is defined under
Part I of Subtitle E of Title IV of ERISA, (e) any Guaranty of such Person of
any obligation of another Person constituting obligations of a type set forth
above, and (f) all preferred stock issued by such Person and required by the
terms thereof to be redeemed, or for which mandatory sinking fund payments are
due, by a fixed date.
"Indemnified Matters" has the meaning specified in Section 5.10(a)
hereof.
"Indemnitees" has the meaning specified in Section 5.10(a) hereof.
"Institutional Debt" means unsecured Indebtedness for borrowed money
which may be raised by the Borrower or any of its Subsidiaries in the private
placement or public debt markets pursuant to terms satisfactory to the
Determining Lenders, but which shall exclude Subordinated Debt.
"Intellectual Property Security Agreements" mean, collectively, the
Borrower Intellectual Property Security Agreement and each Subsidiary
Intellectual Property Security Agreement.
"Interest Hedge Agreements" means any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange
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rates or forward rates applicable to such party's assets, liabilities or
exchange transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, as the same may be
amended or modified and in effect from time to time, and any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"Interest Period" means the period beginning on the day any LIBOR
Advance is made and ending one, two, three or six months thereafter (as the
Borrower shall select); provided, however, that all of the foregoing provisions
are subject to the following:
(a) if any Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day, unless the result of such extension
would be to extend such Interest Period into another calendar mouth,
in which event such Interest Period shall end on the immediately
preceding Business Day;
(b) any Interest Period that begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month;
(c) the Borrower may not select any Interest Period in
respect of Advances having an aggregate principal amount less than
$1,000,000; and
(d) there shall be outstanding at any one time no more than
six Interest Periods in the aggregate.
"Investment" means any acquisition of assets of any Person which is
not an Acquisition, or any direct or indirect purchase or other acquisition of,
or beneficial interest in, Capital Stock or other securities of any other
Person which is not an Acquisition, or any direct or indirect loan, advance
(other than advances to employees for moving and travel expenses, drawing
accounts and similar expenditures in the ordinary course of business) or
capital contribution to, or investment in any other Person, including without
limitation the occurrence or sufferance of Indebtedness or the purchase of
accounts receivable of any other Person that are not current assets or do not
arise in the ordinary course of business.
"Issuing Bank" means Bank of America, N.A. in its capacity as issuer
of the Letters of Credit.
"Landlord's Waivers" means, collectively, the Landlord's Agreement and
Landlord's Waiver and Consent relating to leasehold interests of the Borrower
and each of its Subsidiaries, in substantially the form set forth in Exhibit
M-1 and Exhibit M-2 to the Existing Credit Agreement, as amended, modified,
renewed, supplemented, or restated from time to time.
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"Lender" means each financial institution shown on the signature pages
hereof so long as such financial institution maintains a portion of any of the
Commitments or is owed any part of the Obligations (including the
Administrative Agent in its individual capacity), and each Assignee that
hereafter becomes party hereto pursuant to Section 11.6 hereof, subject to the
limitations set forth therein.
"L/C Cash Collateral Account" has the meaning specified in Section
2.16(g)(i) hereof.
"L/C Related Documents" has the meaning specified in Section 2.16(e)
hereof.
"Letter of Credit" has the meaning specified in Section 2.16(a)
hereof.
"Letter of Credit Agreement" has the meaning specified in Section
2.16(b)(i) hereof.
"Letter of Credit Facility" has the meaning specified in Section
2.16(a) hereof.
"Leverage Ratio" means, for any date of determination (which shall be
as of the first day of any fiscal quarter), the ratio of (a) Total Debt as of
the date of determination (excluding the Xxxxxxx Subordinated Debt), less all
cash deposit balances (including amounts in the Restricted Account), to (b)
EBITDA for the immediately preceding four fiscal quarters. For purpose of
calculation of the Leverage Ratio only, with respect to assets not owned at all
times during the four fiscal quarters immediately preceding the date of
calculation of EBITDA, there shall be (i) included in EBITDA the pro forma
EBITDA of any assets acquired during any such four fiscal quarters for the
twelve months preceding the date of calculation, adjusted to (A) include all
expenses deducted in such calculation of EBITDA for such period which will be
eliminated in the future as a result of such acquisition (which expenses must
be verified by a nationally recognized accounting firm acceptable to the
Administrative Agent) and (B) exclude all income or gains added in such
calculation of EBITDA for such period which will be eliminated in the future as
a result of such acquisition and (ii) excluded from EBITDA the EBITDA of any
assets disposed of during any of such fiscal quarters for the twelve months
preceding the date of calculation.
"LIBOR Advance" means an Advance which the Borrower requests to be
made as a LIBOR Advance or which is reborrowed as a LIBOR Advance, in
accordance with the provisions of Section 2.2 hereof.
"LIBOR Basis" means a simple per annum interest rate equal to the
lesser of (a) the Highest Lawful Rate, or (b) the sum of the Adjusted LIBOR
Rate plus the Applicable LIBOR Rate Margin. Once determined, the LIBOR Basis
shall remain unchanged during the applicable Interest Period.
"LIBOR Lending Office" means, with respect to a Lender, the office
designated as its LIBOR Lending Office on Schedule 2 attached hereto, and such
other office of the Lender or any of its affiliates hereafter designated by
notice to the Borrower and the Administrative Agent.
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"LIBOR Rate" means, for any Interest Period the rate per annum
(rounded upwards, if necessary, to the nearest 1/100th of 1%) appearing on
Telerate Page 3750 (or any successor page) as the London interbank offered rate
for deposits in Dollars at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period for a term comparable to
such Interest Period. If for any reason such rate is not available, the term
"LIBOR Rate" shall mean, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100th of 1%) appearing on Reuters Screen LIBO Page as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If more than one rate is specified on
Telerate Page 3750 or Reuters Screen LIBO Page, as the case may be, the
applicable rate shall be the arithmetic mean of all such rates (rounded
upwards, if necessary, to the nearest 1/100th of 1%).
"Lien" means, with respect to any property, any mortgage, lien,
pledge, collateral assignment, hypothecation, charge, security interest, title
retention agreement, levy, execution, seizure, attachment, garnishment or other
encumbrance of any kind in respect of such property, whether or not xxxxxx,
vested or perfected.
"Loan Documents" means this Agreement, the Notes, the Security
Agreements, any Interest Hedge Agreements entered into with any Lender or any
Affiliate of any Lender, each Subsidiary Guaranty, the Restricted Account
Agreement, the Pledge Agreements, the Deeds of Trust, and any other agreement
executed, delivered or performable by any Obligor in connection herewith or as
security for the Obligations.
"Majority Lenders" means, on any date of determination, any
combination of Lenders whose Total Specified Percentages aggregate at least
51%; provided, however, in the event that all of the Commitments have been
terminated, "Majority Lenders" means, on any date of determination, any
combination of Lenders having at least 51% of the Advances then outstanding.
"Material Adverse Effect" means any act or circumstance or event that
(a) causes a Default, (b) otherwise could reasonably be expected to be material
and adverse to the business, assets, liabilities, financial condition, results
of operations, business or prospects of the Borrower and its Subsidiaries taken
as a whole, or (c) in any manner whatsoever does or could reasonably be
expected to materially and adversely affect the validity or enforceability of
any Loan Documents.
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, the Lenders are permitted to charge on the Obligations.
"Maximum Redeployment Amount" means, as of any date of determination,
an amount equal to (a) the aggregate amount of Available Asset Sale Proceeds
received by the Borrower and its Subsidiaries through such date, minus (b) the
amount of such Available Asset Sale Proceeds in the Restricted Account.
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"Monthly Date" means the last day of each month during the term of
this Agreement.
"Multiemployer Plan" means, as to any Person, at any time, a
"multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which such Person or any member of its Controlled Group is making, or is
obligated to make contributions or has made, or been obligated to make,
contributions.
"Necessary Authorization" means any right, franchise, license, permit,
consent, approval or authorization from, or any filing or registration with,
any governmental or other regulatory authority or any Person necessary or
appropriate to enable the Borrower or any of its Subsidiaries to maintain and
operate its business and properties.
"Negative Pledge" means any agreement, contract or other arrangement
whereby the Borrower or any of its Subsidiaries are prohibited from, or would
otherwise be in default as a result of, creating, assuming, incurring or
suffering to exist, directly or indirectly, any Lien on any of its assets.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or disposition of any asset by or Indebtedness or Capital Stock of any Person,
the aggregate amount of Cash and Cash Equivalents received by such Person in
connection with such transaction minus reasonable fees, costs and expenses and
related taxes paid or payable as a result of such transaction.
"Net Income" means net profit (or loss) after taxes of the Borrower
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP.
"Net Worth" means, for the Borrower and its Subsidiaries, on a
consolidated basis, determined in accordance with GAAP, the sum of the
following as of the date of determination, without duplication (a) Capital
Stock taken at stated or par value, plus (b) capital surplus plus (c) retained
earnings plus (d) 100% of the Net Cash Proceeds of the Xxxxxxx Subordinated
Debt minus (e) treasury stock plus (f) to the extent deducted (net of effective
taxes) in calculating Net Worth, one-time restructuring charges not to exceed
an aggregate amount of $13,800,000 incurred in connection with the matters
described on Schedule 3 and taken by Borrower on or before September 30, 1999,
plus (g) to the extent deducted (net of effective taxes) in calculating Net
Worth, one-time restructuring charges not to exceed an aggregate amount of
$20,000,000 incurred in connection with the matters described on Schedule 4 and
taken by Borrower on or before December 31, 2000 (except for the initial
write-off of up to $12,800,000 of goodwill, which must be taken, if at all, on
or before September 30, 1999 (subject to auditor's approval of such timing)),
plus (h) to the extent deducted (net of effective taxes) in calculating Net
Worth, the amount of any paid-in-kind interest payment or paid-in-kind dividend
made in connection with the Xxxxxxx Subordinated Debt or preferred stock, minus
(i) Capital Stock received by Xxxxxxx in connection with the issuance or
conversion of the Xxxxxxx Subordinated Debt or the payment of any paid-in-kind
interest thereon.
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"1999 Proceeds" means Available Asset Sale Proceeds received in
connection with any asset sale occurring on or after June 15, 1999 and on or
before December 31, 1999.
"Notes" means, collectively, the Revolving Credit Notes, the Facility
A Term Loan Notes and the Facility B Term Loan Notes.
"Notice of Issuance" has the meaning specified in Section 2.16(b)(i)
hereof.
"Obligations" means (a) all obligations of any nature (whether matured
or unmatured, fixed or contingent, including the Reimbursement Obligations) of
the Borrower or any of its Subsidiaries to any Lender or any Affiliate of any
Lender under the Loan Documents as they may be amended from time to time, and
(b) all obligations of the Borrower or any Subsidiary for losses, damages,
expenses or any other liabilities of any kind that any Lender or any Affiliate
of any Lender may suffer by reason of a breach by the Borrower or any of its
Subsidiaries of any obligation, covenant or undertaking with respect to any
Loan Document.
"Obligor" means the Borrower and each of its Subsidiaries.
"Operating Lease" means any operating lease, as defined in the
Financial Accounting Standard Board Statement of Financial Accounting Standards
No. 13, dated November 1976 or otherwise in accordance with GAAP.
"Other Taxes" has the meaning specified in Section 2.15(b) hereof.
"Ownership Information" has the meaning specified in Section 11.6(j)
hereof.
"Participant" has the meaning specified in Section 11.6(c) hereof.
"Participation" has the meaning specified in Section 11.6(c) hereof.
"Payment Date" means the last day of the Interest Period for any LIBOR
Advance.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Asset Sales" means (a) the sale of inventory and other
assets sold in the ordinary course of business, (b) the sale or other
disposition of worn out or obsolete assets, (c) the sale or discount of
accounts receivable arising in the ordinary course of business in connection
with the compromise or collection thereof, (d) subject to the other terms and
provisions hereof, leases or subleases (or assignments of leases or subleases)
or licenses or sublicenses (or assignments of licenses or sublicenses) of any
assets in the ordinary course of business and (e) the sale or other disposition
of Cash Equivalents in the ordinary course of business.
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"Permitted Liens" means, as applied to any Person:
(a) Any Lien in favor of the Lenders or the Administrative
Agent to secure the Obligations hereunder;
(b) (i) Liens on real estate for ad valorem taxes not yet
delinquent, and other sums not yet due thereunder, (ii) Liens on
leasehold interests created by the lessor in favor of any mortgagee of
the leased premises, and (iii) Liens for taxes, assessments,
governmental charges, levies or claims that are being diligently
contested in good faith by appropriate proceedings and for which
adequate reserves shall have been set aside on such Person's books,
but only so long as no foreclosure, restraint, sale or similar
proceedings have been commenced with respect thereto;
(c) Liens of carriers, landlords, warehousemen, mechanics,
laborers and materialmen and other similar Liens incurred in the
ordinary course of business for sums not yet due or being contested in
good faith, if such reserve or appropriate provision, if any, as shall
be required by GAAP shall have been made therefor;
(d) Liens incurred in the ordinary course of business in
connection with worker's compensation, unemployment insurance or
similar legislation;
(e) Easements, right-of-way, restrictions, covenants, minor
exceptions to title and other similar encumbrances on the use of real
property which do not interfere with the ordinary conduct of the
business of such Person;
(f) Liens created to secure the purchase price of assets
(which includes, but is not limited to, equipment and leased
equipment) acquired by such Person or created to secure Indebtedness
permitted by Section 7.1(c) hereof, which is incurred solely for the
purpose of financing the acquisition of such assets and incurred at
the time of acquisition, so long as each such Lien shall at all times
be confined solely to the asset or assets so acquired (and proceeds
thereof), and refinancings, refundings, renewals or extensions thereof
so long as any such Lien remains solely on the asset or assets
acquired and the amount of Indebtedness related thereto is not
increased;
(g) Liens in respect of judgments or awards for which appeals
or proceedings for review are being prosecuted and in respect of which
a stay of execution upon any such appeal or proceeding for review
shall have been secured, provided that (i) such Person shall have
established adequate reserves for such judgments or awards, (ii) such
judgments or awards shall be fully insured and the insurer shall not
have denied coverage, or (iii) such judgments or awards shall have
been bonded to the satisfaction of the Determining Lenders;
(h) Deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, insurance contracts, surety and appeal bonds,
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performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(i) Any interest or title of a lessor under any lease entered
into by the Borrower or any of its Subsidiaries in the ordinary course
of its business and covering only the assets so leased;
(j) Liens arising from precautionary Uniform Commercial Code
financing statement filings with respect to Operating Leases or
consignment arrangements entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business;
(k) Liens in favor of a banking institution arising by
operation of law encumbering deposits (including the right of set-off)
held by such banking institution incurred in the ordinary course of
business and which are within the general parameters customary in the
banking industry;
(l) Liens arising by operation of law on property of the
Borrower or any of its Subsidiaries in favor of landlords securing
licenses, subleases and leases permitted hereunder and not interfering
in any material respect with the business of the Borrower or any of
its Subsidiaries;
(m) Any Liens which are described on Schedule 6 hereto, and
Liens resulting from the refinancing, refunding, renewal or extension
of the related Indebtedness, provided that the Indebtedness secured
thereby shall not be increased and the Liens shall not cover
additional assets of the Borrower; and
(n) Liens on proceeds of the Senior Subordinated Notes with
respect to the Escrow Agreement.
"Permitted Management Fees" means (a) fees for management services
paid by Borrower to Xxxxxxx or its Affiliates which do not exceed, for any
fiscal year of Borrower, (i) from the date of this Agreement through July 14,
2001, $500,000, and (ii) commencing on July 14, 2001, and at all times
thereafter, the sum of (A) $200,000, plus (B) the Variable Management Fee, if
permitted to be paid under Section 7.17, and (b) fees for investment advisory
services paid by the Borrower pursuant to that certain Financial Advisory
Agreement dated as of the Agreement Date between the Borrower and Xxxxxxx
Management Limited, L.L.C., a Delaware limited liability company, so long as
such fees are paid only upon successful completion of the applicable
Extraordinary Transaction (as defined therein).
"Person" means an individual, corporation, partnership, limited
liability company, trust or unincorporated organization, or a government or any
agency or political subdivision thereof.
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"Plan" means an employee benefit plan as defined in Section 3(3) of
ERISA (including a Multiemployer Plan) pursuant to which any employees of the
Borrower, its Subsidiaries or any member of their Controlled Group participate.
"Pledge Agreements" mean, collectively, the Borrower Pledge Agreement
and each Subsidiary Pledge Agreement.
"Pretax Net Income" means net profit (or loss) before taxes of the
Borrower and its Subsidiaries, on a consolidated basis, determined in
accordance with GAAP.
"Prime Rate" means, at any time, the prime interest rate announced or
published by the Reference Lender from time to time as its reference rate for
the determination of interest rates for loans of varying maturities in Dollars
to United States residents of varying degrees of creditworthiness and being
quoted at such time by the Reference Lender as its "prime rate;" it being
understood that such rate may not be the lowest rate of interest charged by the
Reference Lender.
"Quarterly Date" means the last day of each March, June, September and
December, beginning on the first such date to occur after the Closing Date.
"RCRA" has the meaning specified in the definition of Applicable
Environmental Laws.
"Reference Lender" means BofA; provided that if BofA's portion of the
Commitments shall terminate and it shall have no Advances outstanding
hereunder, BofA shall cease to be the Reference Lender, and the Administrative
Agent (after consultation with Borrower) shall, with notice to the Borrower and
the Lenders, designate another Lender as the Reference Lender.
"Register" has the meaning specified in Section 11.6(j) hereof.
"Reimbursement Obligations" means, in respect of any Letter of Credit
as at any date of determination, the sum of (a) the maximum aggregate amount
which is then available to be drawn under such Letter of Credit plus (b) the
aggregate amount of all drawings under such Letter of Credit and not
theretofore reimbursed by the Borrower.
"Reinvestment Period" means (a) with respect to 1999 Proceeds, the
period beginning on the effective date of the subject asset sale and ending on
December 31, 2000, and (b) with respect to Available Asset Sale Proceeds other
than 1999 Proceeds, the 12 month period beginning on the effective date of the
subject asset sale.
"Related Fund" means, with respect to any Lender that is a fund that
invests in commercial loans, any other fund that invests in commercial loans
and is managed or advised by the same investment advisor as such Lender or by
an Affiliate of such investment advisor.
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"Release Date" means the date on which the Notes have been paid, all
other Obligations due and owing have been paid and performed in full, and the
Commitments have been terminated.
"Reportable Event" shall have the meaning set forth in Section 4043(b)
of ERISA.
"Reserve Requirement" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the
effect of the foregoing, the Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks with respect to (i) any
category of liabilities which includes deposits by reference to which the
Adjusted LIBOR Rate (as the case may be) is to be determined, or (ii) any
category of extensions of credit or other assets which include LIBOR Advances.
The Adjusted LIBOR Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"Restricted Account" means the "Restricted Account" described in the
Restricted Account Agreement.
"Restricted Account Agreement" means that certain Restricted Account
Agreement executed by the Borrower and the Administrative Agent, substantially
in the form of Exhibit D, as amended, renewed, supplemented or restated from
time to time.
"Restricted Payments" means, collectively, (a) Dividends, (b) loans to
directors, officers and employees of the Borrower and its Subsidiaries and (c)
any (i) payment or prepayment of principal, premium or penalty on any
Subordinated Debt of the Borrower or any of its Subsidiaries or any defeasance,
redemption, purchase, repurchase or other acquisition or retirement for value,
in whole or in part, of any Subordinated Debt (including, without limitation,
the setting aside of assets or the deposit of funds therefor) of the Borrower
or any of its Subsidiaries, or (ii) payment of liquidated damages or payment or
prepayment of interest on any Subordinated Debt.
"Revolving Commitment Fee" has the meaning specified in Section 2.4
hereof.
"Revolving Commitment Maturity Date" means December 31, 2003, or the
earlier date of termination in whole of the Revolving Credit Commitment
pursuant to Section 2.6 or 8.2 hereof.
"Revolving Credit Advance" means an Advance made pursuant to Section
2.1(a) hereof.
"Revolving Credit Commitment" means $45,000,000.00, as reduced or
terminated pursuant to Sections 2.6 or 8.2 hereof.
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"Revolving Credit Notes" means the promissory notes of the Borrower
evidencing Revolving Credit Advances hereunder, together with any extension,
renewal, or amendment thereof, or substitution therefor.
"Revolving Credit Specified Percentage" means, as to any Lender, the
percentage indicated beside its name on Schedule 1 hereto as its Revolving
Credit Specified Percentage, or as adjusted or specified in any amendment to
this Agreement or in any Assignment Agreement.
"Security Agreements" mean, collectively, the Borrower Security
Agreement and each Subsidiary Security Agreement.
"Senior Subordinated Notes" means (a) those certain 10 3/8% Senior
Subordinated Notes Due December 1, 2007 issued by the Borrower under the Senior
Subordinated Notes Indenture and (b) all senior subordinated notes of the
Borrower issued in exchange for the Senior Subordinated Notes on terms
substantially identical to the terms of the Senior Subordinated Notes.
"Senior Subordinated Notes Indenture" means that certain Indenture,
dated as of December 1, 1997, by and among the Borrower, certain of its
Subsidiaries as guarantors, and United States Trust Company of New York, as
Trustee.
"Solvent" means, with respect to any Person, that the fair value of
the assets of such Person (both at fair valuation and at present fair saleable
value) is, on the date of determination, greater than the total amount of
liabilities (including contingent and unliquidated liabilities) of such Person
as of such date and that, as of such date, such Person is able to pay all
liabilities of such Person as such liabilities mature and such Person does not
have unreasonably small capital with which to carry on its business. In
computing the amount of contingent or unliquidated liabilities at any time,
such liabilities will be computed at the amount which, in light of all the
facts and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability discounted to
present value at rates believed to be reasonable by such Person.
"Special Counsel" means the law firm of Xxxxxxxx Xxxxxxxx & Xxxxxx
P.C., or such other legal counsel as the Administrative Agent may select.
"Specified Percentage" means, as applicable or as the context
requires, the Revolving Credit Specified Percentage, the Facility A Term Loan
Specified Percentage or the Facility B Term Loan Specified Percentage.
"Standby Letter of Credit" means any letter of credit issued by the
Issuing Bank pursuant to Section 2.16(a) hereof to support obligations of the
Borrower or its Subsidiaries, contingent or otherwise, and which is not a
Commercial Letter of Credit.
"Subordinated Debt" means (a) the Senior Subordinated Notes, (b) the
Xxxxxxx Subordinated Debt, and (c) any other Indebtedness of the Borrower or
any Subsidiary having maturities and terms,
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and which is subordinated to payment of the Obligations in a manner, approved
in writing by the Administrative Agent and the Determining Lenders, with only
such changes or amendments as are approved by the Administrative Agent and the
Determining Lenders.
"Subsidiary" of any Person means any corporation, partnership, limited
liability company, joint venture, trust or estate or other Person of which (or
in which) more than 50% of:
(a) the outstanding Capital Stock having voting power to
elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time Capital Stock of any other class
or classes of such corporation shall or might have voting power upon
the occurrence of any contingency),
(b) the interest in the capital or profits of such
partnership or joint venture,
(c) the beneficial interest of such trust or estate, or
(d) the equity interest of such other Person,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"Subsidiary Intellectual Property-Security Agreement" means that
certain Subsidiary Intellectual Property Security Agreement and Assignment
executed by each Subsidiary of the Borrower, substantially in the form of
Exhibit O to the Existing Credit Agreement, as amended, renewed, supplemented
or restated from time to time.
"Subsidiary Guaranty" means that certain Subsidiary Guaranty executed
by each Subsidiary of the Borrower, substantially in the form of Exhibit G to
the Existing Credit Agreement, as amended, modified, renewed, supplemented or
restated from time to time.
"Subsidiary Pledge Agreement" means that certain Subsidiary Pledge
Agreement executed by each Subsidiary of the Borrower, substantially in the
form of Exhibit K to the Existing Credit Agreement, as amended, renewed,
supplemented or restated from time to time.
"Subsidiary Security Agreement" means that certain Subsidiary Security
Agreement executed by each Subsidiary of Borrower, substantially in the form of
Exhibit I to the Existing Credit Agreement, as amended, renewed, supplemented
or restated from time to time.
"Taxes" has the meaning specified in Section 2.15 hereof.
"Term Loan Advance" means a Facility A Term Loan Advance or a Facility
B Term Loan Advance.
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"Total Debt" means, as of any date of determination, determined for
the Borrower and its Subsidiaries on a consolidated basis (a) Indebtedness for
borrowed money, (b) obligations evidenced by bonds, debentures, notes or other
similar instruments, (c) obligations to pay the deferred purchase price of
property or services other than trade payables incurred in the ordinary course
of business, and (d) Capitalized Lease Obligations.
"Total Specified Percentage" means, for any Lender on any date of
determination (and expressed as a percentage), (a) the sum of (i) the principal
amount outstanding under such Lender's Facility A Term Loan Advances and
Facility B Term Loan Advances, and (ii) such Lender's portion of the Revolving
Credit Commitment, or if the Revolving Credit Commitment has been terminated,
such Lender's portion of the principal amount outstanding under all Revolving
Credit Advances (according to its Revolving Credit Specified Percentage)
divided by (b) the sum of (i) the principal amount outstanding under all
Facility A Term Loan Advances and all Facility B Term Loan Advances, and (ii)
the Revolving Credit Commitment, or if the Revolving Credit Commitment has been
terminated, the principal amount outstanding under all Revolving Credit
Advances.
"Tribunal" shall mean any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government.
"UCC" means the Uniform Commercial Code as in effect in the State of
Texas, as amended from time to time.
"Unused Portion" means an amount equal to the result of (a) the
Revolving Credit Commitment minus, (b) the sum of (i) the outstanding Revolving
Credit Advances plus (ii) outstanding Reimbursement Obligations in respect of
the Letters of Credit.
"Variable Management Fee" means an amount equal to 2.40% of Pretax Net
Income.
"Xxxxxxx" means Xxxxxxx Partners II, L.P., a Delaware limited
partnership.
"Xxxxxxx Stock Acquisition" means the purchase by Xxxxxxx or one of
its Affiliates of up to $13,500,000 of Borrower's voting common stock.
"Xxxxxxx Subordinated Debt" means Borrower's 11.5% Senior Subordinated
Exchangeable Notes due 2006 in the original principal amount of $23,500,000.
"Working Capital" means an amount equal to Current Assets minus
Current Liabilities.
"Working Capital Adjustment" means, for any period, an amount equal to
Working Capital at the end of such period minus Working Capital at the
beginning of such period.
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Section 1.2 Amendments and Renewals. Each definition of an agreement
in this Article 1 shall include such agreement as amended to date, and as
amended or renewed from time to time in accordance with its terms.
Section 1.3 Construction. The terms defined in this Article 1 (except
as otherwise expressly provided in this Agreement) for all purposes shall have
the meanings set forth in Section 1.1 hereof, and the singular shall include
the plural, and vice versa, unless otherwise specifically required by the
context. All accounting terms used in this Agreement which are not otherwise
defined herein shall be construed in accordance with GAAP on a consolidated
basis for the Borrower and its Subsidiaries, unless otherwise expressly stated
herein. Notwithstanding anything in this Agreement to the contrary, for
purposes of calculation of the financial covenants herein and the definitions
related thereto, the financial results of any Subsidiary prior to its
acquisition shall be included in such calculation to the extent that fiscal
quarters occurring prior to such acquisition are included in any such
calculation.
ARTICLE 2
Advances
Section 2.1 The Advances.
(a) Revolving Credit Advances. Each Lender with a Revolving Credit
Specified Percentage severally agrees, upon the terms and subject to the
conditions of this Agreement, to make Revolving Credit Advances to the Borrower
from time to time in an aggregate amount not to exceed its Revolving Credit
Specified Percentage less its Revolving Credit Specified Percentage of the
aggregate amount of all Reimbursement Obligations then outstanding (assuming
compliance with all conditions to drawing) for the purposes set forth in
Section 5.9 hereof. Subject to Section 2.9 hereof, Revolving Credit Advances
may be repaid and then reborrowed. Notwithstanding any provision in any Loan
Document to the contrary, in no event shall (i) the principal amount of all
outstanding Revolving Credit Advances and Reimbursement Obligations exceed the
Revolving Credit Commitment, or (ii) the principal amount of all outstanding
Revolving Credit Advances, Reimbursement Obligations, Facility A Term Loan
Advances, and Facility B Term Loan Advances exceed the lesser of (A) the total
Commitments or (B) the Borrowing Base. The "Revolving Credit Advances"
currently outstanding under the Existing Credit Agreement are hereby confirmed
and renewed.
(b) Facility A Term Loan Advances. The "Facility A Term Loan Advances"
currently outstanding under the Existing Credit Agreement are hereby confirmed
and renewed and are deemed to be Facility A Term Loan Advances under this
Agreement. The Facility A Term Loan Advances may be prepaid and shall be repaid
in accordance with the terms of this Agreement, but may not be reborrowed, and
no further Facility A Term Loan Advances shall be made on or after the date of
this Agreement.
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(c) Facility B Term Loan Advances. The "Facility B Term Loan Advances"
currently outstanding under the Existing Credit Agreement are hereby confirmed
and renewed and are deemed to be Facility B Term Loan Advances under this
Agreement. The Facility B Term Loan Advances may be prepaid and shall be repaid
in accordance with the terms of this Agreement, but may not be reborrowed, and
no further Facility B Term Loan Advances shall be made on or after the date of
this Agreement.
(d) Type and Number of Advances. Any Advance shall, at the option of
the Borrower as provided in Section 2.2 hereof (and, in the case of LIBOR
Advances, subject to availability and to the provisions of Article 9 hereof),
be made as a Base Rate Advance or a LIBOR Advance; provided that there shall
not be outstanding to any Lender, at any one time, more than six LIBOR
Advances.
Section 2.2 Manner of Borrowing and Disbursement.
(a) Base Rate Advances. In the case of Base Rate Advances, the
Borrower, through an Authorized Signatory, shall give the Administrative Agent
prior to 11:00 a.m., Dallas, Texas time, on the date of any proposed Base Rate
Advance irrevocable written notice, or irrevocable telephonic notice followed
immediately by written notice (provided, however, that the Borrower's failure
to confirm any telephonic notice in writing shall not invalidate any notice so
given), of its intention to borrow or reborrow a Base Rate Advance hereunder.
Such notice of borrowing shall specify the requested funding date, which shall
be a Business Day, and the amount of the proposed aggregate Base Rate Advances
to be made by the Lenders.
(b) LIBOR Advances. In the case of LIBOR Advances, the Borrower,
through an Authorized Signatory, shall give the Administrative Agent at least
three Business Days' irrevocable written notice, or irrevocable telephonic
notice followed immediately by written notice (provided, however, that the
Borrower's failure to confirm any telephonic notice in writing shall not
invalidate any notice so given), of its intention to borrow or reborrow a LIBOR
Advance hereunder. Notice shall be given to the Administrative Agent prior to
11:00 a.m., Dallas, Texas time, in order for such Business Day to count toward
the minimum number of Business Days required. LIBOR Advances shall in all cases
be subject to availability and to Article 9 hereof. For LIBOR Advances, the
notice of borrowing shall specify the requested funding date, which shall be a
Business Day, the amount of the proposed aggregate LIBOR Advances to be made by
Lenders, and the Interest Period selected by the Borrower, provided that no
such Interest Period shall extend past the Revolving Commitment Maturity Date
or prohibit or impair the Borrower's ability to comply with Section 2.5 or 2.8
hereof.
(c) Continuation/Conversion.
(i) Subject to Section 2.1 and 2.9 hereof, the Borrower may
elect from time to time to convert Base Rate Advances to LIBOR
Advances by giving the Administrative Agent irrevocable notice of such
election prior to 11:00 A.M., Dallas, Texas time, three Business Days
prior to the date of conversion through an Authorized Signatory, or
irrevocable
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telephonic notice followed immediately by written notice (provided,
however, that the Borrower's failure to confirm any telephonic notice
in writing shall not invalidate any notice so given). Any such notice
of conversion to a LIBOR Advance shall specify the length of the
initial Interest Period or Interest Periods therefor. Upon receipt of
any such notice the Administrative Agent shall promptly notify each
affected Lender thereof. All or any part of outstanding LIBOR Advances
and Base Rate Advances may be converted as provided herein, provided
that (A) no Base Rate Advance may be converted into a LIBOR Advance
when any Default exists and (B) no Base Rate Advance may be converted
into a LIBOR Advance after the date that is one month prior to the
Revolving Commitment Maturity Date, the Facility A Term Loan Maturity
Date or the Facility B Term Loan Maturity Date, as applicable.
(ii) Subject to Section 2.1 and 2.9 hereof, any LIBOR
Advances may be continued as such upon the expiration of the then
current Interest Period with respect thereto by the Borrower giving
the Administrative Agent irrevocable notice of such election prior to
11:00 A.M., Dallas, Texas time, three Business Days prior to the
expiration of such Interest Period, through an Authorized Signatory,
or irrevocable telephonic notice followed immediately by written
notice (provided, however, that the Borrower's failure to confirm any
telephonic notice in writing shall not invalidate any notice so
given), which notice shall set forth the length of the next Interest
Period to be applicable to such LIBOR Advance, provided that no LIBOR
Advance may be continued as such (A) when any Default exists or (B)
after the date that is one month prior to the Revolving Commitment
Maturity Date, the Facility A Term Loan Maturity Date or the Facility
B Term Loan Maturity Date, as applicable, and provided further, that
if the Borrower shall fail to give such notice or if such continuation
is not permitted such LIBOR Advances shall be automatically converted
to Base Rate Advances on the last day of such then expiring Interest
Period. Upon receipt of any notice pursuant to this Section 2.2(c),
the Administrative Agent shall notify each affected Lender thereof.
(d) Minimum Amounts. The aggregate amount of Base Rate Advances to be
made by the Lenders on any day shall be in a principal amount which is at least
$500,000 and which is an integral multiple of $100,000; provided, however, that
such amount may equal the unused amount of the applicable commitment. The
aggregate amount of LIBOR Advances having the same Interest Period and to be
made by the Lenders on any day shall be in a principal amount which is at least
$1,000,000 and which is an integral multiple of $500,000.
(e) Notice and Disbursement. The Administrative Agent shall promptly
notify the Lenders of each notice received from the Borrower pursuant to this
Section. Each Lender shall, not later than noon, Dallas, Texas time, on the
date of any Advance, deliver to the Administrative Agent, at its address set
forth herein, such Lender's Revolving Credit Specified Percentage, of such
Advance in immediately available funds in accordance with the Administrative
Agent's instructions. Prior to 2:00 p.m., Dallas, Texas time, on the date of
any Advance hereunder, the Administrative Agent shall, subject to satisfaction
of the conditions set forth in Article 3, disburse the amounts made available
to the Administrative Agent by the Lenders by (i) transferring such amounts by
wire transfer pursuant to the Borrower's instructions, or (ii) in the absence
of such instructions, crediting such amounts to
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the account of the Borrower maintained with the Administrative Agent.
All Revolving Credit Advances shall be made by each Lender according
to its Revolving Credit Specified Percentage.
Section 2.3 Interest.
(a) On Base Rate Advances.
(i) The Borrower shall pay interest on the outstanding unpaid
principal amount of the Base Rate Advances outstanding from time to
time, until such Base Rate Advances are due (whether at maturity, by
reason of acceleration, by scheduled reduction, or otherwise) and
repaid at a simple interest rate per annum equal to the Base Rate
Basis for the Base Rate Advances as in effect from time to time,
provided that interest on the Base Rate Advances shall not exceed the
Maximum Amount. If at any time the Base Rate Basis would exceed the
Highest Lawful Rate, interest payable on the Base Rate Advances shall
be limited to the Highest Lawful Rate, but the Base Rate Basis shall
not thereafter be reduced below the Highest Lawful Rate until the
total amount of interest accrued on the Base Rate Advances equals the
amount of interest that would have accrued if the Base Rate Basis had
been in effect at all times.
(ii) Interest on the Base Rate Advances shall be computed on
the basis of a year of 365 or 366 days, as applicable, for the number
of days actually elapsed, and shall be payable in arrears on each
Quarterly Date and on the Revolving Commitment Maturity Date, the
Facility A Term Loan Maturity Date or the Facility B Term Loan
Maturity Date, as appropriate.
(b) On LIBOR Advances.
(i) The Borrower shall pay interest on the unpaid principal
amount of each LIBOR Advance, from the date such Advance is made until
it is due (whether at maturity, by reason of acceleration, by
scheduled reduction, or otherwise) and repaid, at a rate per annum
equal to the LIBOR Basis for such Advance. The Administrative Agent,
whose determination shall be controlling in the absence of manifest
error, shall determine the LIBOR Basis on the second Business Day
prior to the applicable funding date and shall notify the Borrower and
the Lenders of such LIBOR Basis.
(ii) Subject to Section 11.9 hereof, interest on each LIBOR
Advance shall be computed on the basis of a 360-day year for the
actual number of days elapsed, and shall be payable in arrears on the
applicable Payment Date and on the Revolving Commitment Maturity Date,
the Facility A Term Loan Maturity Date and the Facility B Term Loan
Maturity Date, as appropriate; provided, however, that if the Interest
Period for such Advance exceeds three months, interest shall be due
and payable in arrears on each three-month anniversary of the
commencement of such Interest Period during such Interest Period.
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(c) Interest if No Notice of Selection of Interest Rate Basis. If the
Borrower fails to give the Administrative Agent timely notice of its selection
of a LIBOR Basis or an Interest Period for a LIBOR Advance, or if for any
reason a determination of a LIBOR Basis for any Advance is not timely concluded
due to the fault of the Borrower, the appropriate Base Rate Basis shall apply
to the applicable Advance.
(d) Interest After an Event of Default. (i) After an Event of Default
(other than an Event of Default specified in Section 8.1(f) or (g) hereof) and
during any continuance thereof, at the option of Determining Lenders, and (ii)
after an Event of Default specified in Section 8.1(f) or (g) hereof and during
any continuance thereof, automatically and without any action by the
Administrative Agent or any Lender, the Obligations shall bear interest at a
rate per annum equal to the Default Rate. Such interest shall be payable on the
earlier of demand or the Revolving Commitment Maturity Date, the Facility A
Term Loan Maturity Date or the Facility B Term Loan Maturity Date, as
appropriate, and shall accrue until the earlier of (i) waiver or cure (to the
satisfaction of the Determining Lenders) of the applicable Event of Default,
(ii) agreement by the Lenders to rescind the charging of interest at the
Default Rate, or (iii) payment in full of the Obligations. The Lenders shall
not be required to accelerate the maturity of the Advances, to exercise any
other rights or remedies under the Loan Documents, or to give notice to the
Borrower of the decision to charge interest at the Default Rate. The Lenders
will undertake to notify the Borrower, after the effective date, of the
decision to charge interest at the Default Rate.
Section 2.4 Revolving Commitment Fee. Subject to Section 11.9 hereof,
the Borrower agrees to pay to the Administrative Agent, for the ratable account
of the Lenders, a commitment fee (the "Revolving Commitment Fee") on the daily
average Unused Portion at the following per annum percentages, applicable in
the following situations:
Applicability Percentage
------------- ----------
(i) The Leverage Ratio is greater than or equal to 3.00 to 1 0.500%
(ii) The Leverage Ratio is less than 3.00 to 1 0.375%
The Revolving Commitment Fee shall be payable in arrears on each Quarterly Date
and on the Revolving Commitment Maturity Date. The Revolving Commitment Fee
shall be adjusted on each Adjustment Date. If the financial statements required
pursuant to Section 6.1 or 6.2 hereof, as applicable, and the Compliance
Certificate required pursuant to Section 6.3 hereof are not received by the
Administrative Agent by the date required, the Revolving Commitment Fee shall
be determined as if the Leverage Ratio is greater than or equal to 3.00 to 1
until such time as such financial statements and Compliance Certificate are
received. Notwithstanding the foregoing, from and including the Closing Date to
and including two Business Days following the date of receipt by the
Administrative Agent of the financial statements for the then current fiscal
quarter and the related Compliance Certificate, the Revolving Commitment Fee
shall be determined as if the Leverage Ratio is greater than or equal to 3.00
to 1. Subject to Section 11.9 hereof, the commitment fee shall be calculated on
the basis of a 360-day year for the actual number of days elapsed.
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Section 2.5 Prepayment and Payments.
(a) Voluntary LIBOR Advance Prepayments. Upon three Business Days'
prior telephonic notice (to be promptly followed by written notice) by an
Authorized Signatory to the Administrative Agent, LIBOR Advances may be
voluntarily prepaid but only so long as the Borrower concurrently reimburses
the Lenders in accordance with Section 2.9 hereof. Any notice of prepayment
shall be irrevocable.
(b) Mandatory Prepayments.
(i) At any time a Borrowing-Base Deficiency exists, the
Borrower shall promptly prepay outstanding Advances in an amount
necessary so that a Borrowing-Base Deficiency no longer exists. Any
prepayment made under this Section 2.5(b)(i) shall be applied to repay
outstanding Revolving Credit Advances (provided, however, if at any
time there are no Revolving Credit Advances outstanding, then such
prepayment shall be applied pro rata to the then outstanding balances
of the Facility A Term Loan Advances and the Facility B Term Loan
Advances, in each case pro rata based upon the respective principal
amounts of the installment payments then unpaid in respect of the
Facility A Term Loan Advances and the Facility B Term Loan Advances,
pro rata based upon the respective principal amounts of Facility A
Term Loan Advances and the Facility B Term Loan Advances, as the case
may be); provided further, that, to the extent any Borrowing Base
Report delivered to the Administrative Agent pursuant to Section 6.9
reflects a Borrowing Base Deficiency as at the end of the preceding
month, no prepayment shall be required to the extent the Borrower
shall have otherwise cured such Borrowing Base Deficiency on or before
the date of delivery of such Borrowing Base Report and has delivered
an updated Borrowing Base Report reflecting such cure. To the extent
required under this Section 2.5(b)(i), the Borrower shall first prepay
all Base Rate Advances and shall thereafter prepay LIBOR Advances. To
the extent that any such prepayment requires that a LIBOR Advance be
repaid on a date other than the last day of its Interest Period, the
Borrower shall reimburse each Lender in accordance with Section 2.9
hereof.
(ii) At any time when the limitation in Section 2.1(a)(i) or
Section 2.1(a)(ii)(A) is exceeded, whether because the Revolving
Credit Commitment has been fully or partially terminated, canceled or
reduced or for any other reason, Borrower shall promptly prepay
applicable outstanding Revolving Credit Advances in an amount
necessary to reduce the sum of outstanding Revolving Credit Advances
and Reimbursement Obligations to an amount less than or equal to the
Revolving Credit Commitment. To the extent required by the preceding
sentence, the Borrower shall first prepay all Base Rate Advances and
shall thereafter prepay LIBOR Advances. To the extent that any
prepayment requires that a LIBOR Advance be repaid on a date other
than the last day of its Interest Period, the Borrower shall reimburse
each Lender in accordance with Section 2.9 hereof.
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(c) Prepayments from Sales of Assets.
(i) Concurrently with the receipt of Net Cash Proceeds from
the sale or disposition by the Borrower or any of its Subsidiaries of
any assets (including the Capital Stock of any Subsidiary) sold or
disposed of (other than Permitted Asset Sales) at any time, to the
extent the Borrower has not previously paid an aggregate prepayment of
$3,750,000 pursuant to this clause (i), the Borrower shall prepay
Facility A Term Loan Advances in a principal amount equal to 100% of
the amount by which aggregate Net Cash Proceeds received from such
asset sales exceeds $5,000,000 but does not exceed $8,750,000, up to a
maximum prepayment of $3,750,000.
(ii) Concurrently with the receipt of Net Cash Proceeds from
the sale or disposition by the Borrower or any of its Subsidiaries of
any assets (including the Capital Stock of any Subsidiary) sold or
disposed of (other than Permitted Asset Sales) at any time during any
12 month period, the Borrower shall deposit into the Restricted
Account an amount equal to 100% of the amount by which aggregate Net
Cash Proceeds received from such asset sales during such 12 month
period (and not required to be used to prepay Advances under clause
(i) of this Section 2.5(c)), exceeds $30,000,000 (which proceeds will
be subject in all respects to the terms and conditions of the
Restricted Account Agreement). Upon expiration of the applicable
Reinvestment Period, the Borrower shall withdraw any Available Asset
Sale Proceeds from the Restricted Account that have not been
reinvested pursuant to Section 7.6 in accordance with the Restricted
Account Agreement and prepay the Advances with all funds so withdrawn
in accordance with Section 2.5(c)(v)(B).
(iii) All Available Asset Sale Proceeds not required to be
deposited into the Restricted Account shall be used to prepay
Revolving Credit Advances (which prepayments shall not reduce the
Revolving Credit Commitment); provided that at any time there shall be
no principal amounts outstanding under Revolving Credit Advances, such
Available Asset Sale Proceeds shall be used to fund Investments
permitted under Section 7.3.
(iv) Any prepayment made under this Section 2.5(c) shall (A)
include accrued interest to the date of such prepayment on the
principal amount prepaid, (B) not be subject to the notice and minimum
payment provisions of this Section 2.5; provided, however, the
Borrower shall be required to reimburse each Lender for any loss cost
or expense incurred by such Lender in connection with any such
prepayment as set forth in Section 2.9 hereof if any prepayment
results in a LIBOR Advance being paid on a day other than the last day
of an Interest Period for such LIBOR Advance, and (C) be applied first
to Base Rate Advances, if any, and then to LIBOR Advances.
(v) (A) Any prepayment made under Section 2.5(c)(i) shall be
applied to all of the unpaid scheduled installment payments of the
Facility A Term Loan Advances, in inverse order of maturity (provided,
however, if at any time there are no Facility A Term Loan Advances
outstanding, no such prepayment shall be required.
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(B) Twenty-five percent of any prepayment made under
Section 2.5(c)(ii) shall be applied to repay outstanding
Revolving Credit Advances, which prepayment shall not reduce
the Revolving Credit Commitment (provided that at any time
there shall be no principal amounts outstanding under
Revolving Credit Advances, such amounts may be used to fund
Investments permitted under Section 7.3) and 75% of any such
prepayment shall be applied to all of the unpaid scheduled
installment payments of the Facility A Term Loan Advances and
the Facility B Term Loan Advances, in inverse order of
maturity, pro rata based upon the respective principal
amounts of the Facility A Term Loan Advances and Facility B
Term Loan Advances outstanding at the time of such prepayment
(provided, however, if at any time that there are no Facility
A Term Loan Advances and Facility B Term Loan Advances
outstanding, 100% of any such prepayment shall be applied to
repay outstanding Revolving Credit Advances but not to
permanently reduce the Revolving Credit Commitment).
(d) Prepayments from Excess Cash Flow. Commencing on March 31, 2001
and on each March 31 thereafter, the Borrower shall prepay Facility A Term Loan
Advances and Facility B Term Loan Advances in an aggregate principal amount
equal to 75% of Excess Cash Flow, if any, for the fiscal year ending
immediately preceding each such March 31. Any such prepayments shall (i)
include accrued interest to the date of such prepayment on the principal amount
prepaid, (ii) be applied to all of the unpaid scheduled installment payments of
the Facility A Term Loan Advances and the Facility B Term Loan Advances, in
inverse order of maturity, pro rata based upon the respective principal amounts
of the Facility A Term Loan Advances and Facility B Term Loan Advances
outstanding at the time of such prepayment, (iii) not be subject to the notice
and minimum payment provisions of this Section 2.5; provided, however, the
Borrower shall be required to reimburse each Lender for any loss cost or
expense incurred by each Lender in connection with any such prepayment as set
forth in Section 2.9 hereof if any prepayment results in a LIBOR Advance being
paid on a day other than the last day of an Interest Period for such LIBOR
Advance, and (iv) be applied first to Base Rate Advances, if any, and then to
LIBOR Advances.
(e) Prepayment from Sales Of Capital Stock. Concurrently with the
receipt of Net Cash Proceeds from the sale or disposition by the Borrower or
any of its Subsidiaries to any Person of any Capital Stock of the Borrower
(other than (i) sales or dispositions to the Borrower or any of its
Subsidiaries, (ii) the Xxxxxxx Stock Acquisition and (iii) other sales or
dispositions to Xxxxxxx or its Affiliates pursuant to a private placement of
equity in connection with which Xxxxxxx or its Affiliates contribute at least
10% of the Net Cash Proceeds), the Borrower shall prepay the Facility A Term
Loan Advances and the Facility B Term Loan Advances in an aggregate principal
amount equal to 50% of such Net Cash Proceeds. Any such prepayments shall (i)
include accrued interest to the date of such prepayment on the principal amount
prepaid, (ii) be applied to all of the unpaid scheduled installment payments of
the Facility A Term Loan Advances and the Facility B Term Loan Advances, in
inverse order of maturity, pro rata based upon the respective principal amounts
of the Facility A Term Loan Advances and
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Facility B Term Loan Advances outstanding at the time of such prepayment
(provided, however, if at any time there are no Facility A Term Loan Advances
and Facility B Term Loan Advances outstanding, any such prepayment shall be
applied to repay outstanding Revolving Credit Advances and to permanently
reduce the Revolving Credit Commitment by the amount of such prepayment), (iii)
not be subject to the notice and minimum payment provisions of this Section
2.5; provided, however, the Borrower shall be required to reimburse each Lender
for any loss, cost or expense incurred by such Lender in connection with any
such prepayment as set forth in Section 2.9 hereof if any prepayment results in
a LIBOR Advance being paid on a day other than the last day of an Interest
Period for such LIBOR Advance, and (iv) be applied first to Base Rate Advances,
if any, and then to LIBOR Advances.
(f) Prepayment from Issuance of Institutional Debt and Subordinated
Debt. Concurrently with the receipt of Net Cash Proceeds from the issuance of
Institutional Debt and Subordinated Debt (excluding the Senior Subordinated
Notes and the Xxxxxxx Subordinated Debt, and, upon written consent of the
Majority Lenders, refundings of the Xxxxxxx Subordinated Debt following the
conversion of the Xxxxxxx Subordinated Debt into Capital Stock) by the Borrower
or any of its Subsidiaries to any Person, the Borrower shall prepay the
Facility A Term Loan Advances and the Facility B Term Loan Advances in an
aggregate principal amount equal to 100% of such Net Cash Proceeds. Any such
prepayments shall be applied to all of the unpaid scheduled installment
payments of the Facility A Term Loan Advances and the Facility B Term Loan
Advances, in inverse order of maturity, pro rata based upon the respective
principal amounts of the Facility A Term Loan Advances and Facility B Term Loan
Advances outstanding at the time of such prepayment (provided, however, if at
any time there are no Facility A Term Loan Advances and Facility B Term Loan
Advances outstanding, any such prepayment shall be applied to repay outstanding
Revolving Credit Advances and to permanently reduce the Revolving Credit
Commitment by the amount of such prepayment). Any prepayment made under this
Section 2.5(f) shall (i) include accrued interest to the date of such
prepayment on the principal amount prepaid, (ii) not be subject to the notice
and minimum payment provisions of this Section 2.5; provided, however, the
Borrower shall be required to reimburse each Lender for any loss cost or
expense incurred by such Lender in connection with any such prepayment as set
forth in Section 2.9 hereof if any prepayment results in a LIBOR Advance being
paid on a day other than the last day of an Interest Period for such LIBOR
Advance, and (iii) be applied first to Base Rate Advances, if any, and then to
LIBOR Advances.
(g) Payments, Generally. Any partial payment of a (i) Base Rate
Advance shall be in a principal amount which is at least $100,000 and which is
an integral multiple of $100,000 and (ii) a LIBOR Rate Advance shall be in a
principal amount which is at least $1,000,000 and which is an integral multiple
of $500,000, and to the extent that any payment of a LIBOR Advance is made on a
date other than the last day of its Interest Period, the Borrower shall
reimburse each Lender (to the extent required) in accordance with Section 2.9
hereof. Any voluntary prepayment of any Term Loan Advance shall be applied to
all of the unpaid scheduled installment payments of the Facility A Term Loan
Advances and the Facility B Term Loan Advances, in inverse order of maturity,
pro rata based upon the respective principal amounts of the Facility A Term
Loan Advances and Facility B Term Loan Advances outstanding at the time of such
prepayment.
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Section 2.6 Reduction of Commitments.
(a) Voluntary Reduction. The Borrower shall have the right, upon not
less than 10 Business Days' notice by an Authorized Signatory to the
Administrative Agent (if telephonic, to be confirmed by telex or in writing on
or before the date of reduction or termination), which shall promptly notify
the Lenders to terminate or reduce the Revolving Credit Commitment, in whole or
in part. Each partial termination shall be in an aggregate amount which is at
least $5,000,000 and which is an integral multiple of $100,000, and no
voluntary reduction in the Revolving Credit Commitment shall cause any LIBOR
Advance to be repaid prior to the last day of its Interest Period, unless the
Borrower shall reimburse each Lender (to the extent required) in accordance
with Section 2.9 hereof.
(b) Mandatory Reduction. On the Revolving Commitment Maturity Date,
the Revolving Credit Commitment shall automatically reduce to zero. In
addition, the Revolving Credit Commitment shall be permanently reduced by the
amount of any prepayment of Revolving Credit Advances pursuant to Sections
2.5(e) and (f) hereof.
(c) General Requirements. Upon any reduction of the Revolving Credit
Commitment pursuant to this Section, the Borrower shall immediately make a
repayment of applicable Advances in accordance with Section 2.5(b) hereof. The
Borrower shall reimburse each Lender for any loss or out-of-pocket expense
incurred by such Lender in connection with any such payment, as set forth in
Section 2.9 hereof to the extent applicable. The Borrower shall not have any
right to rescind any termination or reduction. Once reduced, the Revolving
Credit Commitment may not be increased or reinstated.
Section 2.7 Non-Receipt of Funds by the Administrative Agent. Unless
the Administrative Agent shall have been notified by a Lender prior to the date
of any proposed Advance (which notice shall be effective upon receipt) that
such Lender does not intend to make the proceeds of such Advance available to
the Administrative Agent, the Administrative Agent may assume that such Lender
has made such proceeds available to the Administrative Agent on such date, and
the Administrative Agent may in reliance upon such assumption (but shall not be
required to) make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Administrative Agent
by such Lender, the Administrative Agent shall be entitled to recover such
amount on demand from such Lender (or, if such Lender fails to pay such amount
forthwith upon such demand, from the Borrower) together with interest thereon
in respect of each day during the period commencing on the date such amount was
available to the Borrower and ending on (but excluding) the date the
Administrative Agent receives such amount from the Lender, with interest
thereon at a per annum rate equal to the lesser of (i) the Highest Lawful Rate
or (ii) the Federal Funds Rate. No Lender shall be liable for any other
Lender's failure to fund an Advance hereunder.
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Section 2.8 Payment of Principal of Advances.
(a) Revolving Credit Advances. To the extent not otherwise required to
be paid earlier as provided herein, the principal amount of the Revolving
Credit Advances shall be due and payable on the Revolving Commitment Maturity
Date.
(b) Facility A Term Loan Advances. To the extent not otherwise
required to be paid earlier as provided herein, the principal amount of the
Facility A Term Loan Advances shall be repaid on each Quarterly Date and on the
Facility A Term Loan Maturity Date in such amounts as set forth next to each
such date below:
Amount of Reduction of Facility A
Quarterly Date Term Loan Advances as of each Date
-------------- ----------------------------------
March 31, 2000 $1,250,000
June 30, 2000 $1,250,000
September 30, 2000 $1,250,000
December 31, 2000 $1,875,000
March 31, 2001 $1,875,000
June 30, 2001 $1,875,000
September 30, 2001 $1,875,000
December 31, 2001 $1,875,000
March 31, 2002 $1,875,000
June 30, 2002 $1,875,000
September 30, 2002 $1,875,000
December 31, 2002 $2,500,000
March 31, 2003 $2,500,000
June 30, 2003 $5,000,000
September 30, 2003 $5,000,000
December 31, 2003 $5,000,000
or such other amount of Facility A
Term Loan Advances then outstanding
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(c) Facility B Term Loan Advances. To the extent not otherwise
required to be paid earlier as provided herein, the principal amount of the
Facility B Term Loan Advances shall be repaid on each Quarterly Date and on the
Facility B Term Loan Maturity Date in such amounts as set forth next to each
such date below:
Amount of Reduction of Facility B
Quarterly Date Term Loan Advances as of each Date
-------------- ----------------------------------
June 30, 1999 $100,000
September 30, 1999 $100,000
December 31, 1999 $100,000
March 30, 2000 $100,000
June 30, 2000 $100,000
September 30, 2000 $100,000
December 31, 2000 $100,000
March 31, 2001 $100,000
June 30, 2001 $100,000
September 30, 2001 $100,000
December 31, 2001 $100,000
March 31, 2002 $100,000
June 30, 2002 $100,000
September 30, 2002 $100,000
December 31, 2002 $100,000
March 31, 2003 $100,000
June 30, 2003 $100,000
September 30, 2003 $100,000
December 31, 2003 $100,000
March 31, 2004 $9,400,000
June 30, 2004 $9,400,000
September 30, 2004 $9,400,000
December 31, 2004 $9,400,000
or such other amount of Facility B
Term Loan Advances then outstanding
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Section 2.9 Reimbursement. Whenever any Lender shall sustain or incur
any losses or reasonable out-of-pocket expenses in connection with (a) failure
by the Borrower to borrow any LIBOR Advance after having given notice of its
intention to borrow in accordance with Section 2.2 hereof (whether by reason of
the Borrower's election not to proceed or the nonfulfillment of any of the
conditions set forth in Article 3 hereof), (b) any prepayment for any reason of
any LIBOR Advance in whole or in part (including a prepayment pursuant to
Section 9.3(b) hereof) on other than the last day of an Interest Period
applicable to such LIBOR Advance, or (c) any prepayment of any of its LIBOR
Advances that is not made on any date specified in a notice of prepayment given
by the Borrower, the Borrower agrees to pay to any such Lender, upon its
demand, an amount sufficient to compensate such Lender for all such losses and
out-of-pocket expenses. Such Lender's good faith determination of the amount of
such losses or out-of-pocket expenses, calculated in its usual fashion, absent
manifest error, shall be controlling. Such losses shall include, without
limiting the generality of the foregoing, lost profits and reasonable expenses
incurred by such Lender in connection with the re-employment of funds prepaid,
repaid, converted or not borrowed, converted or paid, as the case may be. Upon
request of the Borrower, such Lender shall provide a certificate setting forth
the amount to be paid to it by the Borrower hereunder and calculations
therefor.
Section 2.10 Manner of Payment.
(a) Payment Timing and Type. Each payment (including prepayments) by
the Borrower of the principal of or interest on the Advances, fees, and any
other amount owed under this Agreement or any other Loan Document shall be made
not later than 12:00 noon (Dallas, Texas time) on the date specified for
payment under this Agreement to the Administrative Agent at the
Administrative Agent's office, in lawful money of the United States of America
constituting immediately available funds.
(b) Non-Business Day Payments. If any payment under this Agreement or
any other Loan Document shall be specified to be made upon a day which is not a
Business Day, it shall be made on the next succeeding day which is a Business
Day, unless, with respect to a payment due in respect of a LIBOR Advance, such
Business Day falls in another calendar month, in which case payment shall be
made on the preceding Business Day. Any extension of time shall in such case be
included in computing interest and fees, if any, in connection with such
payment.
(c) Payments Without Deduction. The Borrower agrees to pay principal,
interest, fees and all other amounts due under the Loan Documents without
deduction for set-off or counterclaim or any deduction whatsoever.
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(d) Apportionment of Payments.
(i) Prior to (A) the occurrence of an Event of Default and
(B) delivery by the Determining Lenders of the Default Application
Notice, all payments in respect of the Obligations shall be applied in
the following order:
(1) first, to pay the Administrative Agent's fees and
expenses incurred on behalf of the Lenders then due
and payable;
(2) second, to pay all other fees then due and payable
under the Loan Documents;
(3) third, to pay all other amounts other than principal
and interest (including, without limitation, expense
reimbursements and indemnities) not otherwise
referred in clauses (1) and (2) immediately
preceding then due and payable under the Loan
Documents;
(4) fourth, to pay interest then due and payable on the
remaining Advances, to be applied in accordance with
the Applicable Specified Percentages; and
(5) fifth, to pay principal then due and payable on the
remaining Advances, to be applied in accordance with
the Applicable Specified Percentages.
(ii) After (A) the occurrence of an Event of Default and (B)
the Determining Lenders shall have delivered the notice to the
Administrative Agent to apply payments in respect of the Obligations
as provided in this Section 2.10(d)(ii) (the "Default Application
Notice"), all payments in respect of the Obligations shall be applied
in the following order:
(1) first, to pay the Administrative Agent's fees and
expenses incurred on behalf of the Lenders then due
and payable;
(2) second, to pay all other fees then due and payable
under the Loan Documents;
(3) third, to pay all other amounts other than principal
and interest (including; without limitation, expense
reimbursements and indemnities) not otherwise
referred to in claims (1) and (2) immediately
preceding then due and payable under the Loan
Documents;
(4) fourth, to pay interest then due and payable on the
remaining Advances, to be applied pro rata among the
Lenders according to each Lender's pro rata portion
of the remaining Obligations; and
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(5) fifth, to pay principal then due and payable on the
remaining Advances to be applied pro rata among the
Lenders according to each Lender's pro rata portion
of the remaining Obligations.
Section 2.11 LIBOR Lending Offices. Each Lender's initial LIBOR
Lending Office is set forth opposite its name in Schedule 2 attached hereto.
Each Lender shall have the right at any time and from time to time to designate
a different office of itself or of any Affiliate as such Lender's LIBOR Lending
Office, and to transfer any outstanding LIBOR Advance to such LIBOR Lending
Office. No such designation or transfer shall result in any liability on the
part of the Borrower for increased costs or expenses resulting solely from such
designation or transfer (except any such transfer which is made by a Lender
pursuant to Section 9.2 or 9.3 hereof, or otherwise for the purpose of
complying with Applicable Law). Increased costs for expenses resulting from a
change in law occurring subsequent to any such designation or transfer shall be
deemed not to result solely from such designation or transfer.
Section 2.12 Sharing of Payments. Any Lender obtaining a payment
(whether voluntary or involuntary, due to the exercise of any right of set-off,
or otherwise) on account of its Advances (other than pursuant to Section 2.15,
2.16(d), 9.3 or 9.5) in excess of its share of payments made by the Borrower
according to (a) before the Determining Lenders have delivered the Default
Application Notice its Applicable Specified Percentage, and (b) after the
occurrence of an Event of Default and provided that the Determining Lenders
have delivered the Default Application Notice, its Total Specified Percentage,
then in each case, such Lender shall purchase from each other Lender such
participation in the Advances made by such other Lender as shall be necessary
to cause such purchasing Lender to share a ratable portion of the excess
payment with each other Lender (based on its Applicable Specified Percentage so
long as there does not exist an Event of Default, and based on its Total
Specified Percentage if there exists an Event of Default and the Determining
Lenders have delivered a Default Application Notice to the Administrative
Agent; provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest. The Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section, to the fullest
extent permitted by law, may exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if such Lender
were the direct creditor of the Borrower in the amount of such participation.
Section 2.13 Calculation of LIBOR Rate. The provisions of this
Agreement relating to calculation of the LIBOR Rate are included only for the
purpose of determining the rate of interest or other amounts to be paid
hereunder that are based upon such rate, it being understood that each Lender
shall be entitled to fund and maintain its funding of all or any part of a
LIBOR Advance as it sees fit.
Section 2.14 Booking Loans. Any Lender may make, carry or transfer
Advances at, to or for the account of any of its branch offices or the office
of any Affiliate. No such action shall result in any liability on the part of
the Borrower from such action (except any such action which is made
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by a Lender pursuant to Section 9.2 or 9.3 hereof, or otherwise for the purpose
of complying with Applicable Law).
Section 2.15 Taxes.
(a) Any and all payments by the Borrower and each other Obligor
hereunder and under the other Loan Documents shall be made, in accordance with
Section 2.10, free and clear of and without deduction for any and all present
or future taxes, levies, imposts, deductions, charges and withholdings, and all
liabilities with respect thereto, excluding, in the case of each Lender and the
Administrative Agent, taxes imposed on, based upon or measured by its overall
net income, net worth or capital, and franchise taxes, doing business taxes or
minimum taxes imposed on it, (i) by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized and
in which it has its applicable lending office or any political subdivision
thereof; (ii) by any other jurisdiction, or any political subdivision thereof,
other than those imposed by reason of (A) an asserted relation of such
jurisdiction to the transactions contemplated by this Agreement, (B) the
activities of the Borrower in such jurisdiction, or (C) the activities in
connection with the transactions contemplated by this Agreement of a Lender or
the Administrative Agent; (iii) by reason of failure by the Lender or the
Administrative Agent to comply with the requirements of paragraph (e) of this
Section 2.15; and (iv) in the case of any Lender, any Taxes in the nature of
transfer, stamp, recording or documentary taxes resulting from a transfer
(other than as a result of foreclosure) by such Lender of all or any portion of
its interest in this Agreement, the Notes or any other Loan Documents (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder to any Lender or the Administrative Agent, (x) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
2.15) such Lender or the Administrative Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been
made, (y) the Borrower shall make such deductions and (z) the Borrower shall
pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any and all stamp and
documentary taxes and any and all other excise and property taxes, charges and
similar levies (other than Taxes described in clause (iv) of the first sentence
of Section 2.15(a)) that arise from any payment made hereunder or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any other Loan Document (hereinafter referred to as "Other
Taxes").
(c) The Borrower will indemnify each Lender and the Administrative
Agent for the full amount of Taxes and Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on amounts
payable under this Section 2.15) paid by such Lender or the Administrative
Agent (as the case may be) and all liabilities (including penalties, additions
to tax, interest and reasonable expenses) arising therefrom or with respect
thereto whether or not such Taxes or Other Taxes were correctly or legally
asserted, other than penalties, additions to tax, interest and
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expenses arising as a result of gross negligence on the part of such Lender or
the Administrative Agent, provided, however, that the Borrower shall have no
obligation to indemnify such Lender or the Administrative Agent (i) for any
such amounts payable to any Lender that is not organized under the laws of the
United States of America or a state thereof if such Lender fails to comply with
the requirements of Section 2.15(e), and (ii) unless and until such Lender or
the Administrative Agent shall have delivered to the Borrower a certificate
setting forth in reasonable detail the basis of the Borrower's obligation to
indemnify such Lender or the Administrative Agent pursuant to this Section
2.15. This indemnification shall be made within 30 days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor.
(d) Within 30 days after the date of any payment of Taxes, the
Borrower will furnish to the Administrative Agent the original or a certified
copy of a receipt evidencing payment thereof. If no Taxes are payable in
respect of any payment hereunder, the Borrower will furnish to the
Administrative Agent a certificate from each appropriate taxing authority, or
an opinion of counsel acceptable to the Administrative Agent, in either case
stating that such payment is exempt from or not subject to Taxes, provided,
however, that such certificate or opinion need only be given if: (i) the
Borrower makes any payment from any account located outside the United States,
or (ii) the payment is made by a payor that is not a United States Person. For
purposes of this Section 2.15 the terms "United States" and "United States
Person" shall have the meanings set forth in Section 7701 of the Code.
(e) Each Lender which is not a United States Person hereby agrees
that:
(i) it shall, no later than the Agreement Date (or, in the
case of a Lender which becomes a party hereto pursuant to Section 11.6
after the Agreement Date, the date upon which such Lender becomes a
party hereto) deliver to the Borrower through the Administrative
Agent, with a copy to the Administrative Agent:
(A) if any lending office is located in the United
States of America, two (2) accurate and complete signed
originals of Internal Revenue Service Form 4224 or any
successor thereto ("Form 4224"),
(B) if any lending office is located outside the
United States of America, two (2) accurate and complete
signed originals of Internal Revenue Service Form 1001 or any
successor thereto ("Form 1001").
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees
for the account of such lending office or lending offices under this
Agreement free from withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office or
lending offices or selects an additional lending office it shall, at
the same time or reasonably promptly thereafter but only to the extent
the forms previously delivered by it hereunder are no longer
effective,
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deliver to the Borrower through the Administrative Agent, with a copy
to the Administrative Agent, in replacement for the forms previously
delivered by it hereunder:
(A) if such changed or additional lending office is
located in the United States of America, two (2) accurate and
complete signed originals of Form 4224; or
(B) otherwise, two (2) accurate and complete signed
originals of Form 1001, in each case indicating that such
Lender is on the date of delivery thereof entitled to receive
payments of principal, interest and fees for the account of
such changed or additional lending office under this
Agreement free from withholding of United States Federal
income tax;
(iii) it shall, before or promptly after the occurrence of
any event (including the passing of time but excluding any event
mentioned in clause (ii) above) requiring a change in the most recent
Form 4224 or Form 1001 previously delivered by such Lender and if the
delivery of the same be lawful, deliver to the Borrower through the
Administrative Agent with a copy to the Administrative Agent, two (2)
accurate and complete original signed copies of Form 4224 or Form 1001
in replacement for the forms previously delivered by such Lender;
(iv) it shall, promptly upon the request of the Borrower to
that effect, deliver to the Borrower such other forms or similar
documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Lender's
tax status for withholding purposes;
(v) it shall notify the Borrower within 30 days after any
event (including an amendment to, or a change in any applicable law or
regulation or in the written interpretation thereof by any regulatory
authority or any judicial authority, or by ruling applicable to such
Lender of any governmental authority charged with the interpretation
or administration of any law) shall occur that results in such Lender
no longer being capable of receiving payments without any deduction or
withholding of United States federal income tax; and
(vi) if such Lender is not a "bank" or other person described
in Section 881(c)(3) of the Code and cannot deliver either Form 4224
or Form 1001, a statement that such Lender is not a "bank" under
Section 881(c)(3)(A) of the Code and two original copies of Internal
Revenue Service Form W-8 (or any successor form), properly completed
and duly executed by such Lender.
(f) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 2,15 shall survive the payment in full of principal and interest
hereunder.
(g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.15 shall use its reasonable best efforts (consistent with its
internal policy and legal and regulatory
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restrictions) to change the jurisdiction of its lending office, if the making
of such a change would avoid the need for, or reduce the amount of, any such
additional amounts which may thereafter accrue and would not, in the reasonable
judgment of such Lender, be materially disadvantageous to such Lender.
(h) Each Lender (and the Administrative Agent with respect to payments
to the Administrative Agent for its own account) agrees that (i) it will take
all reasonable actions by all usual means to maintain all exemptions, if any,
available to it from United States withholding taxes (whether available by
treaty, existing administrative waiver, by virtue of the location of any
Lender's lending office) and (ii) otherwise cooperate with the Borrower to
minimize amounts payable by the Borrower under this Section 2.15; provided,
however, the Lenders and the Administrative Agent shall not be obligated by
reason of this Section 2.15(h) to contest the payment of any Taxes or Other
Taxes or to disclose any information regarding its tax affairs or tax
computations or reorder its tax or other affairs or tax or other planning.
Subject to the foregoing, to the extent the Borrower pays sums pursuant to this
Section 2.15 and any Lender that has received such sums or the Administrative
Agent receives a refund of any or all of such sums, such refund shall be
applied to reduce any amounts then due and owing under this Agreement or, to
the extent that no amounts are due and owing under this Agreement at the time
such refunds are received, the party receiving such refund shall promptly pay
over all such refunded sums to the Borrower, provided that no Default or Event
of Default is in existence at such time.
Section 2.16 Letters of Credit.
(a) The Letter of Credit Facility. The Borrower may request the
Issuing Bank, on the terms and conditions hereinafter set forth, to issue, and
the Issuing Bank shall, if so requested, issue, letters of credit (including
the Existing Letters of Credit, the "Letters of Credit") for the account of the
Borrower or for the joint account of the Borrower and any of its Subsidiaries
from time to time on any Business Day from the date of the initial Advance
until the Revolving Commitment Maturity Date in an aggregate maximum amount
(assuming compliance with all conditions to drawing) not to exceed, at any time
outstanding, the lesser of (i) $10,000,000 (the "Letter of Credit Facility")
and (ii) the sum of (A) the Revolving Credit Commitment minus (B) the aggregate
principal amount of Revolving Credit Advances then outstanding. No Letter of
Credit shall have an expiration date (including all rights of renewal) later
than the earlier of (i) 45 days before the Revolving Commitment Maturity Date
or (ii) eighteen months after the date of issuance thereof. Immediately upon
the issuance of each Letter of Credit (or upon satisfaction of the conditions
precedent set forth in Sections 3.1 and 3.2 hereof with respect to the Existing
Letters of Credit), the Issuing Bank shall be deemed to have sold and
transferred to each Lender, and each Lender shall be deemed to have purchased
and received from the Issuing Bank, in each case irrevocably and without any
further action by any party, an undivided interest and participation in such
Letter of Credit, each drawing thereunder and the obligations of the Borrower
under this Agreement in respect thereof in an amount equal to the product of
(x) such Lender's Specified Percentage times (y) the maximum amount available
to be drawn under such Letter of Credit (assuming compliance with all
conditions to drawing). Within the limits of the Letter of Credit Facility, and
subject to the limits referred to above,
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the Borrower may request the issuance of Letters of Credit under this Section
2.16(a), repay any Revolving Credit Advances resulting from drawings thereunder
pursuant to Section 2.16(c) and request the issuance of additional Letters of
Credit under this Section 2.16(a).
(b) Request for Issuance.
(i) Each Letter of Credit shall be issued upon notice, given
not later than 11:00 a.m. (Dallas time) on the third Business Day
prior to the date of the proposed issuance of such Letter of Credit,
by the Borrower to the Issuing Bank. Each Letter of Credit shall be
issued upon notice given in accordance with the terms of any separate
agreement between the Borrower and the Issuing Bank in form and
substance reasonably satisfactory to the Borrower and the Issuing Bank
providing for the issuance of Letters of Credit pursuant to this
Agreement and containing terms and conditions not inconsistent with
this Agreement (a "Letter of Credit Agreement"), provided that if any
such terms and conditions are inconsistent with this Agreement, this
Agreement shall control. Each such notice of issuance of a Letter of
Credit by the Borrower (a "Notice of Issuance") shall be by telex,
telecopier or cable, specifying therein, the requested (A) date of
such issuance (which shall be a Business Day), (B) maximum amount of
such Letter of Credit, (C) expiration date of such Letter of Credit,
(D) name and address of the beneficiary of such Letter of Credit, (E)
form of such Letter of Credit and (F) such other information as shall
be required pursuant to the relevant Letter of Credit Agreement. If
the requested terms of such Letter of Credit are acceptable to the
Issuing Bank in its reasonable discretion, the Issuing Bank will, upon
fulfillment of the applicable conditions set forth in Article 3
hereof, make such Letter of Credit available to the Borrower at its
office referred to in Section 11.1 or as otherwise agreed with the
Borrower in connection with such issuance.
(ii) The Issuing Bank shall furnish to each Lender after each
Quarterly Date (or each Monthly Date, if requested by any Lender) a
(A) written report summarizing issuance and expiration dates of
Letters of Credit issued during the preceding fiscal quarter and
drawings during such fiscal quarter under all Letters of Credit and
setting forth Lender's participation therein and (B) if requested by
any Lender, a copy of each Letter of Credit issued during the
preceding fiscal quarter.
(c) Drawing and Reimbursement. The payment by the Issuing Bank of a
draft drawn under any Letter of Credit shall constitute for all purposes of
this Agreement the making by the Issuing Bank of an Revolving Credit Advance,
which shall bear interest at the Base Rate Basis, in the amount of such draft
(but without any requirement for compliance with the conditions set forth in
Article 3 hereof). In the event that a drawing under any Letter of Credit is
not reimbursed by the Borrower by 11:00 a.m. (Dallas time) on the first
Business Day after such drawing, the Issuing Bank shall promptly notify the
Administrative Agent and each other Lender. Each such Lender shall, on the
first Business Day following such notification, make a Revolving Credit
Advance, which shall bear interest at the Base Rate Basis, and shall be used to
repay the applicable portion of the Issuing Bank's Advance with respect to such
Letter of Credit, in an amount equal to the amount of its participation
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in such drawing for application to reimburse the Issuing Bank (but without any
requirement for compliance with the applicable conditions set forth in Article
3 hereof) and shall make available to the Administrative Agent for the account
of the Issuing Bank, by deposit at the Administrative Agent's office, in same
day funds, the amount of such Advance. In the event that any Lender fails to
make available to the Administrative Agent for the account of the Issuing Bank
the amount of such Advance, the Issuing Bank shall be entitled to recover such
amount on demand from such Lender together with interest thereon at a rate per
annum equal to the lesser of (i) the Highest Lawful Rate or (ii) the Federal
Funds Rate.
(d) Increased Costs. If any change in any law or regulation or in the
interpretation thereof by any court or administrative or governmental authority
charged with the administration thereof shall either (i) impose, modify or deem
applicable any reserve, special deposit or similar requirement against letters
of credit or guarantees issued by, or assets held by, or deposits in or for the
account of, the Issuing Bank or any Lender or (ii) impose on the Issuing Bank
or any Lender any other condition regarding this Agreement or such Lender or
any Letter of Credit, and the result of any event referred to in the preceding
clause (i) or (ii) shall be to increase the cost to the Issuing Bank of issuing
or maintaining any Letter of Credit or to any Lender of purchasing any
participation therein or making any Advance pursuant to Section 2.16(c), then,
upon demand by the Issuing Bank or such Lender, the Borrower shall, subject to
Section 11.9 hereof, pay to the Issuing Bank or such Lender, from time to time
as specified by the Issuing Bank or such Lender, additional amounts that shall
be sufficient to compensate the Issuing Bank or such Lender for such increased
cost. A certificate as to the amount of such increased cost, submitted to the
Borrower by the Issuing Bank or such Lender, shall include in reasonable detail
the basis for the demand for additional compensation and shall be controlling
for all purposes, absent manifest error. The obligations of the Borrower under
this Section 2.16(d) shall survive termination of this Agreement. The Issuing
Bank or any Lender claiming any additional compensation under this Section
2.16(d) shall use reasonable efforts (consistent with legal and regulatory
restrictions) to reduce or eliminate any such additional compensation which may
thereafter accrue and which efforts would not, in the sole discretion of the
Issuing Bank or such Lender, be otherwise disadvantageous.
(e) Obligations Absolute. The obligations of the Borrower under this
Agreement with respect to any Letter of Credit, any Letter of Credit Agreement
and any other agreement or instrument relating to any Letter of Credit or any
Revolving Credit Advance pursuant to Section 2.16(c) shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the
following circumstances:
(i) any lack of validity or enforceability of this Agreement,
any other Loan Document, any Letter of Credit Agreement, any Letter of
Credit or any other agreement or instrument relating thereto
(collectively, the "L/C Related Documents");
(ii) (A) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations of the
Borrower in respect of the Letters of Credit or
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any Revolving Credit Advance pursuant to Section 2.16(c) or (B) any
other amendment or waiver of or any consent to departure from all or
any of the L/C Related Documents;
(iii) the existence of any claim, set-off, defense or other
right that the Borrower may have at any time against any beneficiary
or any transferee of a Letter of Credit (or any Persons for whom any
such beneficiary or any such transferee may be acting), the Issuing
Bank, any Lender or any other Person, whether in connection with this
Agreement, the transactions contemplated hereby or by the L/C Related
Documents or any unrelated transaction;
(iv) any statement or any other document presented under a
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(v) payment by the Issuing Bank under a Letter of Credit
against presentation of a draft or certificate that does not comply
with the terms of the Letter of Credit, except for any payment made
upon the Issuing Bank's gross negligence or willful misconduct;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or consent to
departure from any guarantee, for all or any of the Obligations of the
Borrower in respect of the Letters of Credit or any Revolving Credit
Advance pursuant to Section 2.16(c); or
(vii) any other circumstance or happening whatsoever, whether
or not similar to any of the foregoing, including, without limitation,
any other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Borrower or a guarantor, other
than the Issuing Bank's gross negligence or willful misconduct.
(f) Compensation for Letters of Credit.
(i) Letter of Credit Fee. Subject to Section 11.9 hereof, the
Borrower shall pay to the Administrative Agent for the account of each
Lender a fee (which shall be payable quarterly in arrears on each
Quarterly Date and on the Revolving Commitment Maturity Date) equal to
(A) with respect to Standby Letters of Credit, the product of 100% of
the applicable LIBOR Rate Margin for Revolving Credit Advances in
effect from time to time multiplied by the average daily amount
available for drawing under all Standby Letters of Credit, and (B)
with respect to Commercial Letters of Credit, the product of 50% of
the Applicable LIBOR Rate Margin for Revolving Credit Advances in
effect from time to time multiplied by the average daily amount
available for drawings under all Commercial Letters of Credit.
(ii) Issuance Fee. Subject to Section 11.9 hereof, the
Borrower shall pay to the Administrative Agent for the account of the
Issuing Bank an issuance fee (which shall be payable on the date of
issuance of each Letter of Credit) in an amount equal to the greater
of
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(a) $250 or (b) the product of (x) 0.125% times (y) the face amount of
the Letter of Credit being issued.
(g) L/C Cash Collateral Account.
(i) Upon the occurrence of an Event of Default and demand by
the Administrative Agent pursuant to Section 8.2(c) (but in the case
of an Event of Default specified in Section 8.1(f) or (g) hereof
without any demand or taking of any other action by the Administrative
Agent or any Lender), the Borrower will promptly pay to the
Administrative Agent in immediately available funds an amount equal to
the maximum amount then available to be drawn under the Letters of
Credit then outstanding. Any amounts so received by the Administrative
Agent shall be deposited by the Administrative Agent in a deposit
account maintained by the Issuing Bank (the "L/C Cash Collateral
Account").
(ii) As security for the payment of all Reimbursement
Obligations and for any other Obligations, the Borrower hereby grants,
conveys, assigns, pledges, sets over and transfers to the
Administrative Agent (for the benefit of the Issuing Bank and
Lenders), and creates in the Administrative Agent's favor (for the
benefit of the Issuing Bank and Lenders) a Lien in, all money,
instruments and securities at any time held in or acquired in
connection with the L/C Cash Collateral Account, together with all
proceeds thereof. The L/C Cash Collateral Account shall be under the
sole dominion and control of the Administrative Agent and the Borrower
shall have no right to withdraw or to cause the Administrative Agent
to withdraw any funds deposited in the L/C Cash Collateral Account. At
any time and from time to time, upon the Administrative Agent's
request, the Borrower promptly shall execute and deliver any and all
such further instruments and documents, including UCC financing
statements, as may be necessary, appropriate or desirable in the
Administrative Agent's judgment to obtain the full benefits (including
perfection and priority) of the security interest created or intended
to be created by this paragraph (ii) and of the rights and powers
herein granted. The Borrower shall not create or suffer to exist any
Lien on any amounts or investments held in the L/C Cash Collateral
Account other than the Lien granted under this paragraph (ii) and
Liens arising by operation of law and not by contract which secure
amounts not yet due and payable.
(iii) The Administrative Agent shall (A) apply any funds in
the L/C Cash Collateral Account on account of Reimbursement
Obligations when the same become due and payable if and to the extent
that the Borrower shall fail directly to pay such Reimbursement
Obligations and (B) after the Revolving Commitment Maturity Date,
apply any proceeds remaining in the L/C Cash Collateral Account first
to pay any unpaid Obligations then outstanding hereunder and then to
refund any remaining amount to the Borrower.
(iv) The Borrower, no more than once in any calendar month,
may direct the Administrative Agent to invest the funds held in the
L/C Cash Collateral Account (so long as the aggregate amount of such
funds exceeds any relevant minimum investment requirement)
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in (A) direct obligations of the United States or any agency
thereof, or obligations guaranteed by the United States or any agency
thereof and (B) one or more other types of investments permitted by
the Determining Lenders, in each case with such maturities as the
Borrower, with the consent of the Determining Lenders, may specify,
pending application of such funds on account of Reimbursement
Obligations or on account of other Obligations, as the case may be. In
the absence of any such direction from the Borrower, the
Administrative Agent shall invest the funds held in the L/C Cash
Collateral Account (so long as the aggregate amount of such funds
exceeds any relevant minimum investment requirement) in one or more
types of investments with the consent of the Determining Lenders with
such maturities as the Borrower, with the consent of the Determining
Lenders, may specify, pending application of such funds on account of
Reimbursement Obligations or on account of other Obligations, as the
case may be. All such investments shall be made in the Administrative
Agent's name for the account of the Lenders, subject to the ownership
interest therein of the Borrower. The Borrower recognizes that any
losses or taxes with respect to such investments shall be borne solely
by the Borrower, and the Borrower agrees to hold the Administrative
Agent and the Lenders harmless from any and all such losses and taxes.
Administrative Agent may liquidate any investment held in the L/C Cash
Collateral Account in order to apply the proceeds of such investment
on account of the Reimbursement Obligations (or on account of any
other Obligation then due and payable, as the case may be) without
regard to whether such investment has matured and without liability
for any penalty or other fee incurred (with respect to which the
Borrower hereby agrees to reimburse the Administrative Agent) as a
result of such application.
(v) After the establishment of the L/C Cash Collateral
Account pursuant to Section 2.16(g)(i) hereof, the Borrower shall pay
to the Administrative Agent the fees customarily charged by the
Issuing Bank with respect to the maintenance of accounts similar to
the L/C Cash Collateral Account.
ARTICLE 3
Conditions Precedent
Section 3.1 Conditions Precedent to Refinancing of the Existing Credit
Agreement, the Loan Documents, the Initial Advances and the Initial Letters of
Credit. The effectiveness of this Agreement, the amendments to each other Loan
Document (as defined in the Existing Credit Agreement), the Restricted Account
Agreement, and the obligation of each Lender to make the initial Advance and
the obligations of the Issuing Bank to issue the initial Letters of Credit, is
subject to receipt by the Administrative Agent of each of the following on or
before October 31, 1999, in form and substance satisfactory to each Lender and
Special Counsel, with a copy for each Lender:
(a) A loan certificate of each Obligor certifying as to the accuracy
of its representations and warranties in the Loan Documents, certifying that no
Default has occurred, and including a certificate of incumbency with respect to
each Authorized Signatory, and including (i) a copy of the
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Articles or Certificate of Incorporation of such Obligor certified to be true,
complete and correct by the secretary of state of its state of incorporation,
(ii) a copy of the Bylaws of such Obligor, as in effect on the Closing Date,
(iii) a copy of the resolutions of such Obligor authorizing it to execute,
deliver and perform the Loan Documents to which it is a party, and (iv) a
schedule evidencing existence and good standing for its state of incorporation
and each state in which the nature of its business requires it to be qualified
to do business;
(b) a duly executed and completed Restricted Account Agreement,
executed by the Borrower and the Administrative Agent;
(c) an opinion of counsel to the Borrower and each Subsidiary
addressed to the Lenders and in form and substance satisfactory to the
Administrative Agent, dated as of the Closing Date, and covering the matters
set forth in Sections 4.1(a), (b), (c), (h), (m), (n) and (p) and such other
matters incident to the transactions contemplated hereby as the Administrative
Agent or Special Counsel may reasonably request;
(d) reimbursement for the reasonable expenses of each Lender
(including attorneys' fees and financial consultants' fees) incurred through
the date hereof in connection with the Existing Credit Agreement and this
Agreement;
(e) evidence that all corporate proceedings of each Obligor taken in
connection with the transactions contemplated by this Agreement and the other
Loan Documents shall be reasonably satisfactory in form and substance to the
Lenders and Special Counsel; and the Lenders shall have received copies of all
documents or other evidence which the Administrative Agent, Special Counsel or
any Lender may reasonably request in connection with such transactions;
(f) payment of a facility fee from the Borrower, for the pro rata
benefit of the Lenders, in the amount of $125,000.
(g) evidence that the Administrative Agent, for the benefit of the
Lenders, has a first priority perfected lien in all Collateral covered by the
Deeds of Trust, Security Agreements, Intellectual Property Security Agreements
and Pledge Agreements executed by the Borrower and each of its Subsidiaries in
connection with the Existing Credit Agreement;
(h) duly executed and completed Deeds of Trusts, together with such
surveys, environmental reports, and title insurance policies or commitments as
are required under the Existing Credit Agreement and have not been obtained
before the Closing Date;
(i) evidence satisfactory to the Administrative Agent that all
conditions precedent to (i) the effectiveness of the Xxxxxxx Stock Acquisition
and (ii) the issuance of the Xxxxxxx Subordinated Debt shall have been
satisfied (other than the effectiveness of this Agreement);
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(j) repayment of all "Liquidity Advances" outstanding under the terms
of the Existing Credit Agreement;
(k) repayment of outstanding Revolving Credit Advances in an amount of
not less than $32,500,000; and
(l) in form and substance reasonably satisfactory to the Lenders and
Special Counsel, such other documents, instruments and certificates as the
Administrative Agent or any Lender may reasonably require in connection with
the transactions contemplated hereby.
Section 3.2 Conditions Precedent to All Advances and Letters of
Credit. The obligation of each Lender to make each Advance hereunder (including
the initial Advance) and the obligation of the Issuing Bank to issue each
Letter of Credit (including the initial Letter of Credit) is subject to
fulfillment of the following conditions immediately prior to or
contemporaneously with each such Advance:
(a) With respect to each Advance and each issuance of a Letter of
Credit, all of the representations and warranties of the Borrower under this
Agreement, which, pursuant to Section 4.2 hereof, are made at and as of the
time of such Advance or Letter of Credit, shall be true and correct at such
time in all material respects, both before and after giving effect to the
application of the proceeds of such Advance or Letter of Credit except for any
representation and warranty which is expressly made as of an earlier date,
which representation and warranty shall have been true and correct in all
material respects as of such earlier date;
(b) The incumbency of the Authorized Signatories shall be as stated in
the certificate of incumbency delivered in the Borrower's loan certificate
pursuant to Section 3.1(a) or as subsequently modified and reflected in a
certificate of incumbency delivered to the Administrative Agent. The Lenders
may, without waiving this condition, consider it fulfilled and a representation
by the Borrower made to such effect if no written notice to the contrary, dated
on or before the date of such Advance or Letter of Credit, is received by the
Administrative Agent from the Borrower prior to the making of such Advance;
(c) There shall not exist a Default or Event of Default hereunder;
(d) The aggregate Advances and Letters of Credit, after giving effect
to such proposed Advance or Letter of Credit, shall not exceed the maximum
principal amount then permitted to be outstanding hereunder;
(e) No order, judgment, injunction or decree of any Tribunal shall
purport to enjoin or restrain any Lender or the Issuing Bank from making any
Advance or issuing any Letter of Credit;
(f) There shall be no action, suit or proceeding pending against, or,
to the Borrower's current actual knowledge, threatened against the Borrower or
any of its Subsidiaries, or in any of
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their respective properties, in any court or before any arbitrator of any kind
or before or by any governmental body which could reasonably be expected to
have a Material Adverse Effect; and
(g) There shall have occurred no material adverse change in the
business, assets, condition (financial or otherwise) or results of operations
of the Borrower and its Subsidiaries, taken as a whole since March 31, 1999.
Notwithstanding the above, the obligation of each Lender to make a
Revolving Credit Advance pursuant to Section 2.16(c) shall be absolute and
unconditional and shall not be affected by any circumstances, including,
without limitation, (i) the occurrence of any Default or Event of Default,
unless the Issuing Bank had actual knowledge of such Default or Event of
Default prior to the issuance of such, (ii) the failure of the Borrower to
satisfy any condition set forth in this Section 3.2 if waived by the Lenders
having Revolving Credit Specified Percentages aggregating at least 51% or the
Issuing Bank did not have actual knowledge that such condition had not been
met, or (iii) any other circumstance, happening or event whatsoever.
Section 3.3 Conditions Precedent to Conversions and Continuations. The
obligation of the Lenders to convert any existing Base Rate Advance into a
LIBOR Advance or to continue any existing LIBOR Advance as provided in Section
2.2(c) is subject to the condition precedent that on the date of such
conversion or continuation no Default or Event of Default shall have occurred
and be continuing or would result from the making of such conversion or
continuation. The acceptance of the benefits of each such conversion and
continuation shall constitute a representation and warranty by the Borrower to
each of the Lenders that no Default or Event of Default shall have occurred and
be continuing or would result from the making of such conversion or
continuation.
ARTICLE 4
Representations and Warranties
Section 4.1 Representations and Warranties. The Borrower hereby
represents and warrants to each Lender as follows:
(a) Organization; Power; Qualification. As of the Agreement Date, the
respective jurisdiction of incorporation or organization and percentage
ownership by the Borrower or another Subsidiary of the Subsidiaries listed on
Schedule 8 are true and correct. Each of the Borrower and its Subsidiaries is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its state of organization. Each
of the Borrower and its Subsidiaries has the corporate or other legal power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted. Each of the Borrower and its Subsidiaries
is authorized to do business, duly qualified and in good standing as set forth
in Schedule 11 and no qualification or authorization is necessary in any other
jurisdictions in which the
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character of its properties or the nature of its business requires such
qualification or authorization except where the failure to be so qualified or
authorized would not have a Material Adverse Effect.
(b) Authorization. The Borrower has corporate power and has taken all
necessary corporate action to authorize it to borrow hereunder. Each Obligor
has corporate or other legal power and has taken all necessary corporate or
other legal action to execute, deliver and perform the Loan Documents to which
it is party in accordance with the terms thereof, and to consummate the
transactions contemplated thereby. Each Loan Document has been duly executed
and delivered by the Obligor executing it. Each of the Loan Documents to which
an Obligor is a party is a legal, valid and binding respective obligation of
such Obligor, enforceable in accordance with its terms, subject, to enforcement
of remedies, to the following qualifications: (i) equitable principles
generally, and (ii) Debtor Relief Laws (insofar as any such law relates to the
bankruptcy, insolvency or similar event of the Borrower or any Subsidiary).
(c) Compliance with Other Loan Documents and Contemplated
Transactions. The execution, delivery and performance by each Obligor of the
Loan Documents to which it is a party and all documents, instruments,
indentures, and other agreements in connection with the Xxxxxxx Stock
Acquisition and the Xxxxxxx Subordinated Debt to which it is a party, and the
consummation of the transactions contemplated thereby, do not and will not (i)
require any consent or approval not already obtained, (ii) violate any
Applicable Law, (iii) conflict with, result in a breach of, or constitute a
default under the certificate of incorporation, bylaws, partnership agreement,
operating agreement or other similar governing document or agreement of such
Obligor, (iv) conflict with, result in a breach of, or constitute a default
under any Necessary Authorization, indenture, agreement or other instrument, to
which such Obligor is a party or by which they or their respective properties
may be bound which could reasonably be expected to have a Material Adverse
Effect, (v) conflict with, result in a breach of, or constitute a default under
the Senior Subordinated Notes or the Senior Subordinated Notes Indenture, or
(vi) result in or require the creation or imposition of any Lien upon or with
respect to any property now owned or hereafter acquired by such Obligor, except
Permitted Liens.
(d) Business. The Borrower and its Subsidiaries are engaged primarily
in the business of the manufacture and distribution of plumbing and building
products for manufactured housing and recreational vehicles and activities
directly related thereto.
(e) Licenses, etc. All Necessary Authorizations have been duly
obtained, and are in full force and effect without any known conflict with the
rights of others and free from any unduly burdensome restrictions, unless the
failure to obtain or have in effect such Necessary Authorizations would not
result in a Material Adverse Effect. The Borrower and its Subsidiaries are and
will continue to be in compliance in all material respects with all provisions
thereof. No circumstance exists which might impair the utility of any Necessary
Authorization or the right to renew such Necessary Authorization the effect of
which would have a Material Adverse Effect. No Necessary Authorization is the
subject of any pending or, to the best of the Borrower's knowledge, threatened
challenge, suspension, cancellation or revocation.
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(f) Compliance with Law. The Borrower and its Subsidiaries are in
compliance in all respects with all Applicable Laws, except where the failure
to so comply would not have a Material Adverse Effect, taken as a whole.
(g) Title to Properties. The Borrower and its Subsidiaries have good
and indefeasible title to, or a valid leasehold interest in, all of their
material assets. None of their assets are subject to any Liens, except
Permitted Liens. No financing statement or other Lien filing (except relating
to Permitted Liens) is on file in any state or jurisdiction that names the
Borrower or any of its Subsidiaries as debtor or covers (or purports to cover)
any assets of the Borrower or any of its Subsidiaries. The Borrower and its
Subsidiaries have not signed any such financing statement or filing, nor any
security agreement authorizing any Person to file any such financing statement
or filing (except relating to Permitted Liens).
(h) Litigation. Except as reflected on Schedule 7 hereto, there is no
action, suit or proceeding pending against, or, to the Borrower's current
actual knowledge, threatened against the Borrower, or in any other manner
relating directly and adversely to the Borrower or any of its Subsidiaries, or
any of their properties, in any court or before any arbitrator of any kind or
before or by any governmental body, which, if determined adversely to the
Borrower or such Subsidiary, would have a Material Adverse Effect.
(i) Taxes. All federal, state and other tax returns of the Borrower
and its Subsidiaries required by law to be filed have been duly filed or
extensions have been timely filed, and all federal, state and other taxes,
assessments and other governmental charges or levies upon the Borrower, its
Subsidiaries or any of their properties, income, profits and assets, which are
due and payable, have been paid, unless the same are being diligently contested
in good faith by appropriate proceedings, with adequate reserves established
therefor, and no Lien (other than a Permitted Lien) has attached and no
foreclosure, distraint, sale or similar proceedings have been commenced that
have not been vacated, discharged, bonded or stayed. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of their
taxes are, in the judgment of the Borrower, adequate.
(j) Financial Statements; Material Liabilities. The Borrower has
furnished or caused to be furnished to the Lenders copies of its December 31,
1998 annual financial statements and the Borrower has furnished or caused to be
furnished copies of its March 31, 1999 quarterly financial statements, which
were prepared in good faith and are complete in all material respects and
present fairly in accordance with GAAP the financial position of the Borrower
and its Subsidiaries, as appropriate, as at such dates and the results of
operations for the periods then ended. The Borrower and its Subsidiaries, taken
as a whole, have no material liabilities, contingent or otherwise, nor material
losses, except as set forth in said annual financial statements and quarterly
financial statements, as appropriate.
(k) No Adverse Change. Since March 31, 1999 no event or circumstance
has occurred or arisen that constitutes as a Material Adverse Effect.
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(l) ERISA. None of the Borrower or its Controlled Group maintains or
contributes to any Plan other than those disclosed to the Administrative Agent
in writing. Each such Plan (other than any Multiemployer Plan) is in compliance
in all material respects with the applicable provisions of ERISA, the Code, and
any other applicable Federal or state law, rule or regulation. With respect to
each Plan (other than any Multiemployer Plan) of the Borrower and each member of
its Controlled Group, all reports required under ERISA or any other Applicable
Law to be filed with any governmental authority, the failure of which to file
could reasonably result in liability of the Borrower or any member of its
Controlled Group in excess of $50,000, have been duly filed. All such reports
are true and correct in all material respects as of the date given. No Plan of
the Borrower or any member of its Controlled Group has been terminated under
Section 4041(c) of ERISA nor has any accumulated funding deficiency (as defined
in Section 412(a) of the Code) been incurred (without regard to any waiver
granted under Section 412 of the Code), nor has any funding waiver from the
Internal Revenue Service been received or requested the result of which could
reasonably be expected to have Material Adverse Effect. None of the Borrower or
any member of its Controlled Group has failed to make any contribution or pay
any amount due or owing as required under the terms of any such Plan, or by
Section 412 of the Code or Section 302 of ERISA by the due date under Section
412 of the Code and Section 302 of ERISA the result of which could reasonably be
expected to have Material Adverse Effect. There has been no ERISA Event or any
event requiring disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with
respect to any Plan or its related trust of the Borrower or any member of its
Controlled Group since the effective date of ERISA. The present value of the
benefit liabilities, as defined in Title IV of ERISA, of each Plan subject to
Title IV of ERISA (other than a Multiemployer Plan) of the Borrower and each
member of its Controlled Group does not exceed by more than $50,000 the present
value of the assets of each such Plan as of the most recent valuation date using
each such Plan's actuarial assumptions at such date. There are no pending, or to
the best of the Borrower's knowledge threatened, claims, lawsuits or actions
(other than routine claims for benefits in the ordinary course) asserted or
instituted against, and neither the Borrower nor any member of its Controlled
Group has knowledge of any threatened litigation or claims against, the assets
of any Plan or its related trust or against any fiduciary of a Plan with respect
to the operation of such Plan the result of which could reasonably be expected
to have Material Adverse Effect. None of the Borrower or, to the best of the
Borrower's knowledge, any member of its Controlled Group has engaged in any
prohibited transactions, within the meaning of Section 406 of ERISA or Section
4975 of the Code, in connection with any Plan the result of which could
reasonably be expected to have Material Adverse Effect. None of the Borrower or
any member of its Controlled Group has withdrawn from any Multiemployer Plan,
nor has incurred or reasonably expects to incur (A) any liability under Title IV
of ERISA (other than premiums due under Section 4007 of ERISA to the PBGC), (B)
any withdrawal liability (and no event has occurred which with the giving of
notice under Section 4219 of ERISA would result in such liability) under Section
4201 of ERISA as a result of a complete or partial withdrawal (within the
meaning of Section 4203 or 4205 of ERISA) from a Multiemployer Plan, or (C) any
liability under Section 4062 of ERISA to the PBGC or to a trustee appointed
under Section 4042 of ERISA. None of the Borrower, any member of its Controlled
Group, or any organization to which the Borrower or any member of its Controlled
Group is a successor or parent corporation within the meaning of ERISA Section
4069(b), has engaged in a transaction within the meaning of ERISA Section 4069
the result of
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which could reasonably be expected to have Material Adverse Effect. None of the
Borrower or any member of its Controlled Group maintains or has established any
Plan, which is a welfare benefit plan within the meaning of Section 3(l) of
ERISA and which provides for continuing benefits or coverage for any participant
or any beneficiary of any participant after such participant's termination of
employment, except as may be required by the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended ("COBRA"). Each of Borrower and its
Controlled Group which maintains a Plan which is a welfare benefit plan within
the meaning of Section 3(1) of ERISA has complied in all material respects with
any applicable notice and continuation requirements of COBRA and the regulations
thereunder. None of the Borrower or any member of its Controlled Group
maintains, has established, or has ever participated in a multiemployer welfare
benefit arrangement within the meaning of Section 3(40)(A) of ERISA.
(m) Compliance with Regulations T, U and X. The Borrower is not
engaged principally or as one of its important activities in the business of
extending credit for the purpose of purchasing or carrying any margin stock
within the meaning of Regulations T, U and X of the Board of Governors of the
Federal Reserve System. No more than 25% of the assets of the Borrower and its
Subsidiaries will be margin stock. None of the Borrower and its Subsidiaries
nor any agent acting on their behalf, have taken or will knowingly take any
action which might cause this Agreement or any other Loan Documents to violate
any regulation of the Board of Governors of the Federal Reserve System or to
violate the Securities Exchange Act of 1934, in each case as in effect now or
as the same may hereafter be in effect. Neither the making of any Advances, the
issuance of any Letters of Credit nor the application of any proceeds thereof
will violate, or be inconsistent with, the provisions of Regulations T, U and X
of the Board of Governors of the Federal Reserve System.
(n) Governmental Regulation. The Borrower and its Subsidiaries are not
required to obtain any Necessary Authorization that has not already been
obtained from, or effect any material filing or registration that has not
already been effected with, any federal, state or local regulatory authority in
connection with the execution and delivery of this Agreement or any other Loan
Document, or the performance thereof, in accordance with their respective
terms, including any borrowing hereunder; provided, however, an assignment of
accounts will need to be filed pursuant to the Assignment of Claims Act with
respect to accounts in which the account debtor in respect thereof is the
United States or any department, or agency or instrumentality thereof, and
certain other filings and assignments may be necessary to comply with
governmental rules concerning accounts in which the account debtor in respect
thereof is any state of the United States or any county, city, town,
municipality or division of such State.
(o) Absence of Default. The Borrower and its Subsidiaries are in
compliance in all material respects with all of the provisions of their
articles or certificate of incorporation and bylaws, and no event has occurred
or failed to occur, which has not been remedied or waived, the occurrence or
non-occurrence of which constitutes, or which with the passage of time or
giving of notice or both would constitute, (i) an Event of Default or (ii) a
default by the Borrower or any of its Subsidiaries under any material
indenture, agreement or other instrument, or any judgment, decree or order to
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which the Borrower or any of its Subsidiaries or by which they or any of their
material properties is bound.
(p) Investment Company Act. The Borrower is not required to register
under the provisions of the Investment Company Act of 1940, as amended. Neither
the entering into or performance by the Borrower of this Agreement nor the
issuance of the Notes violates any provision of such act or requires any
consent, approval, or authorization of, or registration with, the Securities
and Exchange Commission or any other governmental or public body of authority
pursuant to any provisions of such act.
(q) Environmental Matters. Neither the Borrower nor any of its
Subsidiaries has any current actual knowledge that any substance deemed
hazardous by any Applicable Environmental Law, has been installed (i) on any
real property fee title to which is now owned by the Borrower or any of its
Subsidiaries or (ii) by Borrower or any of its Subsidiaries on any real
property leased by the Borrower or any of its Subsidiaries, in either case in a
manner which does not comply with Applicable Environmental Laws, where such
noncompliance would have a Material Adverse Effect. The Borrower and its
Subsidiaries are not in material violation of or subject to any existing,
pending or, to the Borrower's current actual knowledge, threatened
investigation or inquiry by any governmental authority or to any material
remedial obligations under any Applicable Environmental Laws. The Borrower and
its Subsidiaries have not obtained and are not required to obtain any permits,
licenses or similar authorizations other than certificates of occupancy and
building permits to construct, occupy, operate or use any buildings,
improvements, fixtures, and equipment forming a part of any real property owned
or leased by the Borrower or any Subsidiary by reason of any Applicable
Environmental Laws, where failure to obtain such permits, licenses or similar
authorizations would have a Material Adverse Effect. The Borrower and its
Subsidiaries undertook, at the time of acquisition of fee title to any real
property, reasonable inquiry into the previous ownership and uses of such real
property consistent with good commercial or customary practice. The Borrower
and its Subsidiaries have taken reasonable steps to determine, and the Borrower
and its Subsidiaries have no current actual knowledge, that any hazardous
substances or solid wastes have been disposed of or otherwise released (i) on
or to the real property fee title to which is owned by the Borrower or any of
its Subsidiaries or (ii) by Borrower or any of its Subsidiaries on or to any
real property leased by Borrower or any of its Subsidiaries, all within the
meaning of the Applicable Environmental Laws, except for such disposals or
releases which could not reasonably be expected to have a Material Adverse
Effect.
(r) Certain Fees. No broker's, finder's or other fee or commission
will be payable by the Borrower (other than to the Lenders hereunder) with
respect to the making of the Commitments or the Advances hereunder. The
Borrower agrees to indemnify and hold harmless the Administrative Agent and
each Lender from and against any claims, demand, liability, proceedings, costs
or expenses asserted with respect to or arising in connection with any such
fees or commissions.
(s) Necessary Authorizations. No event has occurred which permits (or
with the passage of time would permit) the revocation or termination of any
Necessary Authorization, or which could
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result in the imposition of any restriction thereon of such a nature that could
reasonably be expected to be classified as a Material Adverse Effect.
(t) Patents, Etc. The Borrower and its Subsidiaries have collectively
obtained or applied for all patents, trademarks, service marks, trade names,
copyrights, licenses and other rights, free from burdensome restrictions, that
are necessary for the operation of their business as presently conducted and as
proposed to be conducted. Nothing has come to the current actual knowledge of
the Borrower or any of its Subsidiaries to the effect that (i) any process,
method, part or other material presently contemplated to be employed by the
Borrower or any Subsidiary may infringe any patent, trademark, service xxxx,
trade name, copyright, license or other right owned by any other Person, or
(ii) there is pending or overtly threatened any claim or litigation against or
affecting the Borrower or any Subsidiary contesting its right to sell or use
any such process, method, part or other material, which if determined adversely
to the Borrower or any Subsidiary could reasonably be expected to be classified
as a Material Adverse Effect.
(u) Disclosure. Neither this Agreement nor any other document,
certificate or statement which has been furnished to any Lender by or on behalf
of the Borrower or any Subsidiary in connection herewith contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statement contained herein and therein not misleading at the
time it was furnished. There is no fact known to the Borrower and not known to
the public generally that could reasonably be expected to materially adversely
affect the assets or business of the Borrower and its Subsidiaries, or in the
future could reasonably be expected (so far as the Borrower can now foresee) to
have a Material Adverse Effect, which has not been set forth in this Agreement
or in the documents, certificates and statements furnished to the Lenders by or
on behalf of the Borrower prior to the date hereof in connection with the
transaction contemplated hereby.
(v) Solvency. The Borrower is, and Borrower and its Subsidiaries on a
consolidated basis are, Solvent.
(w) Labor Relations. Except as set forth on Schedule 13 hereto,
neither the Borrower nor any of its Subsidiaries is a party to a collective
bargaining agreement or similar agreement, and the Borrower and each of its
Subsidiaries is in compliance in all material respects with all laws respecting
employment and employment practices, terms and conditions of employment, wages
and hours and other laws related to the employment of its employees, except
where the failure to comply could not reasonably be expected to result in a
Material Adverse Effect, and there are no arrears in the payment of wages,
withholding or social security taxes, unemployment insurance premiums or other
similar obligations of the Borrower or any of its Subsidiaries or for which the
Borrower or any such Subsidiary may be responsible other than in the ordinary
course of business, except for such unpaid or unwithheld arrears which could
not reasonably be expected to result in a Material Adverse Effect. There is no
strike, work stoppage or labor dispute with any union or group of employees
pending or overtly threatened involving the Borrower or any of its Subsidiaries
that could reasonably be expected to have a Material Adverse Effect.
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(x) Common Enterprise. The Borrower and its Subsidiaries are engaged
in the businesses set forth in Section 4.1(d) hereof. These operations require
financing on a basis such that the credit supplied can be made available from
time to time to the Borrower and various of its Subsidiaries, as required for
the continued successful operation of the Borrower and its Subsidiaries as a
whole. The Borrower and its Subsidiaries expect to derive benefit (and the
boards of directors of the Borrower and its Subsidiaries have determined that
the Borrower and its Subsidiaries may reasonably be expected to derive
benefit), directly or indirectly, from the credit extended by the Lenders
hereunder, both in their separate capacities and as members of the group of
companies, since the successful operation and condition of the Borrower and its
Subsidiaries is dependent on the continued successful performance of the
functions of the group as a whole.
(y) Year 2000. The Borrower has (i) initiated a review and assessment
of all areas within its business and operations that could be adversely
affected by the "Year 2000 Problem" (that is, the risk that computer
applications used by the Borrower and its Subsidiaries (or their respective
suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and a timeline for addressing the
Year 2000 Problem on a timely basis, and (iii) to date, implemented that plan
in accordance with that timetable. The Borrower reasonably believes that all of
its computer applications that, based upon successful implementation of the
plan and timeline, are material to its business and operations will on a timely
basis be able to perform properly date-sensitive functions for all dates before
and after January 1, 2000 (that is, be "Year 2000 compliant"), except to the
extent that a failure to do so could not reasonably be expected to have a
Material Adverse Effect on Borrower's or any of its Subsidiaries' business or
operations.
Section 4.2 Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement and the other Loan
Documents shall be deemed to be made at and as of the Agreement Date and at and
as of the date of each Advance, and each shall be true and correct in all
material respects when made, except to the extent (a) previously fulfilled in
accordance with the terms hereof, (b) applicable to a specific date or
otherwise subsequently inapplicable, or (c) previously waived in writing by the
Determining Lenders with respect to any particular factual circumstance. All
such representations and warranties shall survive, and not be waived by, the
execution hereof by any Lender, any investigation or inquiry by any Lender, or
by the making of any Advance under this Agreement.
ARTICLE 5
General Covenants
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section 5.1 Preservation of Existence and Similar Matters. Subject to
Section 7.4, the Borrower shall, and shall cause each Subsidiary to:
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(a) preserve and maintain, or timely obtain and thereafter preserve
and maintain, its existence, rights, franchises, licenses, authorizations,
consents, privileges and all other Necessary Authorizations from federal, state
and local governmental bodies and any tribunal (regulatory or otherwise), the
loss of which could have a Material Adverse Effect; and
(b) qualify and remain qualified and authorized to do business in each
jurisdiction in which the character of its properties or the nature of its
business requires such qualification or authorization, unless the failure to do
so could not have a Material Adverse Effect.
Section 5.2 Business; Compliance with Applicable Law. The Borrower and
its Subsidiaries shall (a) engage primarily in the businesses set forth in
Section 4.1(d) hereof, and (b) comply in all material respects with the
requirements of all Applicable Law.
Section 5.3 Maintenance of Properties. The Borrower shall, and shall
cause each Subsidiary to, maintain or cause to be maintained all its material
properties (whether owned or held under lease) in reasonably good repair,
working order and condition, taken as a whole, and from time to time make or
cause to be made all appropriate (in the reasonable judgment of the Borrower)
repairs, renewals, replacements, additions, betterment and improvements
thereto.
Section 5.4 Accounting Methods and Financial Records. The Borrower
shall, and shall cause each Subsidiary to, maintain a system of accounting
established and administered in accordance with GAAP, keep adequate records and
books of account in which complete entries will be made and all transactions
reflected in accordance with GAAP, and keep accurate and complete records of
its respective assets. The Borrower and each of its Subsidiaries shall maintain
a fiscal year ending on the last day of December.
Section 5.5 Insurance. The Borrower shall, and shall cause each
Subsidiary to, maintain insurance from responsible companies in such amounts
and against such risks as shall be customary and usual in the industry for
companies of similar size and capability, but in no event less than the amount
and types insured as of the Agreement Date. Each insurance policy shall provide
for at least 30 days' prior notice to the Administrative Agent of any proposed
termination or cancellation of such policy, whether on account of default or
otherwise.
Section 5.6 Payment of Taxes and Claims. The Borrower shall, and shall
cause each Subsidiary to, pay and discharge all taxes, assessments and
governmental charges or levies imposed upon it or its income or properties
prior to the date on which penalties attach thereto, and all lawful material
claims for labor, materials and supplies which, if unpaid, might become a Lien
upon any of its properties; except that no such tax, assessment, charge, levy
or claim need be paid which is being diligently contested in good faith by
appropriate proceedings and for which adequate reserves shall have been set
aside on the appropriate books, but only so long as no Lien (other than a
Permitted Lien) shall attach with respect thereto and no foreclosure,
distraint, sale or similar proceedings shall have been commenced that have not
been vacated, discharged, bonded or stayed. The Borrower
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shall, and shall cause each of its Subsidiaries to, timely file all information
returns (or extensions of such filing deadlines) required by federal, state or
local tax authorities.
Section 5.7 Visits and Inspections. The Borrower shall, and shall
cause each of its Subsidiaries to, promptly permit representatives of the
Administrative Agent or any Lender from time to time after notice by the
Administrative Agent or any Lender no later than the previous Business Day to
(a) visit and inspect the properties of the Borrower and its Subsidiaries as
often as the Administrative Agent or any Lender shall reasonably deem
advisable, (b) audit, inspect and make extracts from and copies of the
Borrower's and each such Subsidiary's books and records, and (c) discuss with
the Borrower's and each such Subsidiary's directors, officers, employees and
auditors its business, assets, liabilities, financial positions, results of
operations and business prospects. The Borrower shall pay the reasonable
expenses related to inspections and audits performed by the Administrative
Agent or any Lender. Prior to the occurrence of an Event of Default, all such
visits and inspections shall be conducted during normal business hours and
shall not be conducted more often than once per fiscal quarter. Following the
occurrence and during the continuance of an Event of Default, such visits and
inspections shall be conducted at any time requested by the Administrative
Agent or any Lender without any requirement for advance notice.
Section 5.8 Payment of Indebtedness. Subject to Section 5.6 hereof,
the Borrower shall, and shall cause each of its Subsidiaries to, pay its
Indebtedness when and as the same becomes due, other than amounts (other than
the Obligations) duly and diligently disputed in good faith.
Section 5.9 Use of Proceeds. The Borrower shall use the proceeds of
Advances and the Letters of Credit to finance the ongoing working capital and
general corporate requirements of the Borrower and its Subsidiaries.
SECTION 5.10 INDEMNITY.
(a) THE BORROWER AGREES TO DEFEND, PROTECT, INDEMNIFY AND HOLD
HARMLESS THE ADMINISTRATIVE AGENT, EACH LENDER, THE ISSUING BANK, EACH OF THEIR
RESPECTIVE AFFILIATES, AND EACH OF THEIR RESPECTIVE (INCLUDING SUCH
AFFILIATES') OFFICERS, DIRECTORS, TRUSTEES, EMPLOYEES, AGENTS, ATTORNEYS,
SHAREHOLDERS, FINANCIAL CONSULTANTS AND OTHER CONSULTANTS (INCLUDING, WITHOUT
LIMITATION, THOSE RETAINED IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED
SATISFACTION OF ANY OF THE CONDITIONS SET FORTH HEREIN) OF EACH OF THE
FOREGOING (COLLECTIVELY, "INDEMNITEES") FROM AND AGAINST ANY AND ALL
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, CLAIMS, REASONABLE COSTS, REASONABLE EXPENSES AND REASONABLE
DISBURSEMENTS OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION,
THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL FOR SUCH INDEMNITEES IN
CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL PROCEEDING,
WHETHER
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OR NOT SUCH INDEMNITEES SHALL BE DESIGNATED A PARTY THERETO), IMPOSED ON,
INCURRED BY, OR ASSERTED AGAINST SUCH INDEMNITEES (WHETHER DIRECT, INDIRECT OR
CONSEQUENTIAL AND, WHETHER BASED ON ANY FEDERAL, STATE OR LOCAL LAWS AND
REGULATIONS, UNDER COMMON LAW OR AT EQUITABLE CAUSE, OR ON CONTRACT, TORT OR
OTHERWISE, ARISING FROM OR CONNECTED WITH THE PAST, PRESENT OR FUTURE
OPERATIONS OF THE BORROWER, OR ANY OF ITS SUBSIDIARIES OR THEIR RESPECTIVE
PREDECESSORS IN INTEREST, OR THE PAST, PRESENT OR FUTURE ENVIRONMENTAL
CONDITION OF PROPERTY OF THE BORROWER OR ANY OF ITS SUBSIDIARIES), IN ANY
MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT, THE LOAN DOCUMENTS, OR ANY
ACT, EVENT OR TRANSACTION OR ALLEGED ACT, EVENT OR TRANSACTION RELATING OR
ATTENDANT THERETO, THE MANAGEMENT OF THE ADVANCES, INCLUDING IN CONNECTION
WITH, OR AS A RESULT, IN WHOLE OR IN PART, OF ANY NEGLIGENCE OF ADMINISTRATIVE
AGENT OR ANY LENDER (OTHER THAN THOSE MATTERS RAISED EXCLUSIVELY BY A
PARTICIPANT AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER AND NOT THE
BORROWER), OR THE USE OR INTENDED USE OF THE PROCEEDS OF THE ADVANCES
HEREUNDER, OR IN CONNECTION WITH ANY INVESTIGATION OF ANY POTENTIAL MATTER
COVERED HEREBY, BUT EXCLUDING (I) ANY CLAIM OR LIABILITY THAT ARISES AS THE
RESULT OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY INDEMNITEE, AS
FINALLY JUDICIALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, AND (II)
MATTERS RAISED BY ONE LENDER AGAINST ANOTHER LENDER OR BY ANY SHAREHOLDERS OF A
LENDER AGAINST A LENDER OR ITS MANAGEMENT (COLLECTIVELY, "INDEMNIFIED
MATTERS"). TO THE EXTENT THAT ANY INDEMNIFIED MATTER INVOLVES ONE OR MORE
INDEMNITEES, SUCH INDEMNITEES SHALL USE THE SAME LEGAL COUNSEL UNLESS ANY
INDEMNITEE, IN ITS REASONABLE DISCRETION DETERMINES THAT CONFLICTS EXIST OR MAY
ARISE IN CONNECTION WITH SUCH REPRESENTATION.
(b) IN ADDITION, THE BORROWER SHALL PERIODICALLY, UPON REQUEST,
REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL REASONABLE
EXPENSES (INCLUDING THE REASONABLE COST OF ANY INVESTIGATION AND PREPARATION)
INCURRED IN CONNECTION WITH ANY INDEMNIFIED MATTER; PROVIDED, HOWEVER, THAT
PRIOR TO THE OCCURRENCE OF A DEFAULT, THE ADMINISTRATIVE AGENT OR LENDERS, AS
APPLICABLE, SHALL OBTAIN THE BORROWER'S PREVIOUS CONSENT BEFORE THE INCURRENCE
OF ANY LEGAL AND OTHER EXPENSES OTHER THAN THOSE INCURRED IN CONNECTION WITH
THE DOCUMENTATION OF THIS CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS AND
THOSE INCURRED IN CONNECTION WITH THE EXERCISE OF ANY RIGHTS UNDER SECTION 5.7
HEREOF. THE REIMBURSEMENT, INDEMNITY AND CONTRIBUTION OBLIGATIONS UNDER THIS
SECTION SHALL BE IN ADDITION TO ANY LIABILITY
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WHICH THE BORROWER MAY OTHERWISE HAVE, SHALL EXTEND UPON THE SAME TERMS AND
CONDITIONS TO EACH INDEMNITEE, AND SHALL BE BINDING UPON AND INURE TO THE
BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL REPRESENTATIVES OF THE
BORROWER, THE ADMINISTRATIVE AGENT, THE LENDERS AND ALL OTHER INDEMNITEES. THIS
SECTION SHALL SURVIVE ANY TERMINATION OF THIS AGREEMENT AND PAYMENT OF THE
OBLIGATIONS.
Section 5.11 Environmental Law Compliance. The use which the Borrower
or any of its Subsidiaries intends to make of any real property which is owned
or leased by it will not result in the disposal or other release of any
hazardous substance or solid waste on or to such real property which is in
violation of Applicable Environmental Laws. As used herein, the terms
"hazardous substance" and "release" as used in this Section shall have the
meanings specified in CERCLA (as defined in the definition of Applicable
Environmental Laws), and the terms "solid waste" and "disposal" shall have the
meanings specified in RCRA (as defined in the definition of Applicable
Environmental Laws); provided, however, that if CERCLA or RCRA is amended so as
to broaden or lessen the meaning of any term defined thereby, such broader or
lesser meaning shall apply subsequent to the effective date of such amendment;
and provided further, to the extent that any other law applicable to the
Borrower, any of its Subsidiaries or any of their properties establishes a
meaning for "hazardous substance," "release," "solid waste," or "disposal"
which is broader or lesser than that specified in either CERCLA or RCRA, such
broader or lesser meaning shall apply. The Borrower agrees to indemnify and
hold the Administrative Agent and each Lender harmless from and against, and to
reimburse them with respect to, any and all claims, demands, causes of action,
loss, damage, liabilities, reasonable costs and reasonable expenses (including
reasonable attorneys' fees and courts costs) of any kind or character, known or
unknown, fixed or contingent, asserted against or incurred by any of them at
any time and from time to time by reason of or arising out of (a) the failure
of the Borrower or any Subsidiary to perform any of their obligations hereunder
regarding asbestos or Applicable Environmental Laws, (b) any violation on or
before the Release Date of any Applicable Environmental Law in effect on or
before the Release Date, and (c) any act, omission, event or circumstance
existing or occurring on or prior to the Release Date (including without
limitation the presence on such real property or release from such real
property of hazardous substances or solid wastes disposed of or otherwise
released on or prior to the Release Date), resulting from or in connection with
the ownership of the real property, regardless of whether the act, omission,
event or circumstance constituted a violation of any Applicable Environmental
Law at the time of its existence or occurrence; provided that, the Borrower
shall not be under any obligation to indemnify the Administrative Agent or any
Lender to the extent that any such liability arises as the result of the gross
negligence or willful misconduct of such Person, as finally judicially
determined by a court of competent jurisdiction. The provisions of this
paragraph shall survive the Release Date and shall continue thereafter in full
force and effect.
Section 5.12 Further Assurances. At any time or from time to time upon
the reasonable request by the Administrative Agent, the Borrower or any
Subsidiary of the Borrower shall execute and deliver such further documents and
do such other acts and things as the Administrative Agent
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may reasonably request in order to effect fully the purposes of this Agreement
and the other Loan Documents and to provide for payment of the Obligations in
accordance with the terms of this Agreement and the other Loan Documents.
Without limiting the generality of the foregoing, the Borrower agrees to (a)
update and deliver to the Administrative Agent Schedule 7 hereto at the time of
delivery of the financial statements set forth in Sections 6.1 and 6.2 hereof
if the information provided therein is not complete and correct in all material
respects, (b) update and deliver to the Administrative Agent Schedule 1 to the
Security Agreements promptly upon discovery if the information provided therein
is not complete and correct in all material respects, and (c) subject to
Section 5.14, execute and deliver to the Administrative Agent Deeds of Trust
with respect to any real property hereafter acquired by the Borrower or any of
its Subsidiaries, as applicable, together with surveys and environmental
reports in form satisfactory to the Administrative Agent and title insurance
thereon in form and amounts satisfactory to the Administrative Agent, and such
board resolutions, officer's certificates, corporate and other documents and
opinions of counsel as the Administrative Agent shall reasonably request with
respect thereto.
Section 5.13 Subsidiaries. At any time that any Person becomes a
Subsidiary, (a) such Subsidiary shall execute a Subsidiary Guaranty of the
Obligations and Collateral Documents granting a first priority Lien in all its
assets to secure the Obligations, (b) 100% of such Subsidiary's Capital Stock
shall be pledged to secure the Obligations; provided, however, that with
respect to any Subsidiary of the Borrower that domiciled in a jurisdiction
outside of the United States, only 65% of such foreign Subsidiary's Capital
Stock shall be required to be pledged to secure the Obligations, and (c) the
Lenders shall receive such documents, board resolutions, officer's certificates
and opinions of counsel as the Administrative Agent shall reasonably request in
connection with the actions described in clauses (a) and (b) above.
Section 5.14 Deeds of Trust. If the Determining Lenders shall so
request in writing, the Borrower shall, and shall cause each Subsidiary to,
within five Business Days of such request, create and deliver to the
Administrative Agent (a) any Deeds of Trust, together with related fixture
filings and financing statements, concerning any real property owned by the
Borrower or such Subsidiary not previously pledged hereunder, (b) such other
documents and instruments as the Administrative Agent shall deem necessary in
its sole judgment to grant or assure the Lenders a first priority, perfected
Lien in any real property owned by the Borrower or such Subsidiary, and (c)
opinions of counsel to the Borrower and each Subsidiary, in form and substance
reasonably satisfactory to the Administrative Agent, with respect to the
execution and enforceability of the Deeds of Trust and related documents. As an
accommodation to the Borrower, to the extent that any mortgage or similar tax
is required to be paid in connection with the filing and recordation of any
Deed of Trust, Lenders agree to limit the amount of Debt secured by such Deed
of Trust to an amount not in excess of 120% of the fair market value of the
Collateral subject to such Deed of Trust determined at the time of filing of
such Deed of Trust.
Section 5.15 Landlord's Waivers. The Borrower shall use best efforts
to obtain and deliver to the Agent duly executed and completed Landlord's
Waivers, in form and substance satisfactory to
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the Agent, related to leasehold interests of the Borrower and each of its
Subsidiaries as of the Closing Date.
Section 5.16 Title Insurance. The Borrower shall deliver to the Agent,
within 120 days after the Closing Date, mortgagee policies of title insurance,
in form and substance satisfactory to the Agent, relating to all real property
owned by the Borrower and/or any of its Subsidiaries as of the Closing Date
with respect to which Deeds of Trust have been recorded.
ARTICLE 6
Information Covenants
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled), the Borrower shall furnish or cause to be furnished to
each Lender, subject to such Lender having executed a Confidentiality
Agreement:
Section 6.1 Quarterly Financial Statements and Information. Within 45
days after the end of each fiscal quarter, a consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such fiscal quarter and the
related consolidated statement of income for such fiscal quarter and for the
elapsed portion of the year ended with the last day of such fiscal quarter, and
consolidated statement of cash flow of the Borrower and its Subsidiaries for
the elapsed portion of the year ended with the last day of such fiscal quarter;
all of which shall be certified by the president or chief financial officer or
other officer of the Borrower acceptable to the Administrative Agent, to be, in
his or her opinion acting solely in his or her capacity as an officer of the
Borrower, complete and correct in all material respects and to present fairly,
in accordance with GAAP, the financial position and results of operations of
the Borrower and its Subsidiaries as at the end of and for such fiscal quarter,
and for the elapsed portion of the year ended with the last day of such fiscal
quarter, subject only to normal year-end adjustments.
Section 6.2 Annual Financial Statements and Information; Certificate
of No Default.
(a) Within 90 days after the end of each fiscal year, (i) a copy of
the consolidated balance sheets of the Borrower and its Subsidiaries, as of the
end of the current and prior fiscal years and (ii) the consolidated statements
of earnings of the Borrower and its Subsidiaries and consolidated statements of
changes in shareholders' equity of the Borrower and its Subsidiaries, and
statements of changes in cash flow of the Borrower and its Subsidiaries as of
and through the end of such fiscal year, all of which are prepared in
accordance with GAAP, and certified by independent certified public accountants
acceptable to the Lenders, whose opinion shall be in scope and substance in
accordance with generally accepted auditing standards and shall be unqualified.
(b) Simultaneously with the delivery of the statements required by
this Section 6.2, a letter from the Borrower's public accountants certifying
that in making its examination necessary therefor
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no knowledge was obtained of any Default or Event of Default relating to the
covenants contained in Sections 7.10, 7.11, and 7.12, except as may be
specified in such certificate.
Section 6.3 Compliance Certificate. At the time financial statements
are furnished pursuant to Sections 6.1 and Section 6.2 hereof, the Compliance
Certificate, completed as provided therein.
Section 6.4 Copies of Other Reports and Notices.
(a) Promptly upon their becoming available, a copy of (i) all material
reports or letters submitted to any Obligor by accountants in connection with
any annual, interim or special audit, including without limitation any report
prepared in connection with the annual audit referred to in Section 6.2 hereof,
and, if requested by the Administrative Agent, any other comment letter
submitted to management in connection with any such audit, (ii) each financial
statement, report, notice or proxy statement sent by any Obligor to
stockholders generally, (iii) each regular, periodic or other report and any
registration statement (other than statements on Form S-8) or prospectus (or
material written communication in respect of any thereof) filed by any Obligor
with any securities exchange, with the Securities and Exchange Commission or
any successor agency, and (iv) all press releases concerning material financial
aspects of any Obligor;
(b) Promptly upon becoming aware that (i) the holder(s) of any note(s)
or other evidence of indebtedness or other security of any Obligor in excess of
$1,000,000 in the aggregate has given notice or taken any action with respect
to a breach, failure to perform, claimed default or event of default
thereunder, (ii) any occurrence or non-occurrence of any event which
constitutes or which with the passage of time or giving of notice or both could
constitute a material breach by any Obligor under any material agreement or
instrument other than this Agreement to which any Obligor is a party or by
which any of their properties may be bound, or (iii) any event, circumstance or
condition which could reasonably be expected to have a Material Adverse Effect,
a written notice specifying the details thereof (or the nature of any claimed
default or event of default) and what action is being taken or is proposed to
be taken with respect thereto;
(c) Promptly upon becoming aware that any party to any Capitalized
Lease Obligations or any other lease obligations of any Obligor, in each case,
in excess of $1,000,000, has given notice or taken any action with respect to a
material breach, failure to perform, claimed default or event of default
thereunder, a written notice specifying the details thereof (or the nature of
any claimed default or event of default) and what action is being taken or is
proposed to be taken with respect thereto;
(d) Promptly upon receipt thereof, information with respect to and
copies of any notices received from any federal, state or local regulatory
agencies or any tribunal relating to any order, ruling, law, information or
policy that relates to a breach of or noncompliance with any law by any
Obligor, or might result in the payment of money by any Obligor in an amount of
$1,000,000 or more in the aggregate, or otherwise have a Material Adverse
Effect, or result in the loss or suspension of any Necessary Authorization;
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(e) Promptly upon receipt from any governmental agency, or any
government, political subdivision or other entity, any material notice,
correspondence, hearing, proceeding or order regarding or affecting any
Obligor, or any of their respective properties or businesses; and
(f) From time to time and promptly upon each request, such data,
certificates, reports, statements, documents or further information regarding
the assets, business, liabilities, financial position, projections, results of
operations or business prospects of any Obligor, as the Administrative Agent or
any Lender may reasonably request.
Section 6.5 Notice of Litigation, Default and Other Matters. Prompt
notice of the following events after the Borrower has knowledge or notice
thereof:
(a) The commencement of all proceedings and investigations by or
before any governmental body, and all actions and proceedings in any court or
before any arbitrator involving claims for damages (including punitive damages)
in excess of $1,000,000 (after deducting the amount with respect to any Obligor
is insured), against or in any other way relating directly to any Obligor, or
any of their respective properties or businesses;
(b) Promptly upon the happening of any condition or event of which the
Borrower has current actual knowledge which constitutes a Default, a written
notice specifying the nature and period of existence thereof and what action is
being taken or is proposed to be taken with respect thereto; and
(c) Any material adverse change with respect to the business, assets,
liabilities, financial position, results of operations or prospective business
of any Obligor, other than changes in the ordinary course of business which
have not had and are not likely to have a Material Adverse Effect.
Section 6.6 ERISA Reporting Requirements.
(a) Promptly and in any event (i) within 30 days after the Borrower or
any member of its Controlled Group has current actual knowledge that any ERISA
Event described in clause (a) of the definition of ERISA Event or any event
described in Section 4063(a) of ERISA with respect to any Plan of the Borrower
or any member of its Controlled Group has occurred, and (ii) within 10 days
after the Borrower or any member of its Controlled Group has current actual
knowledge that any other ERISA Event with respect to any Plan of the Borrower
or any member of its Controlled Group has occurred or a request for a minimum
funding waiver under Section 412 of the Code with respect to any Plan of the
Borrower or any member of its Controlled Group, a written notice describing
such event and describing what action is being taken or is proposed to be taken
with respect thereto, together with a copy of any notice of event that is given
to the PBGC;
(b) Promptly and in any event within three Business Days after receipt
thereof by the Borrower or any member of its Controlled Group from the PBGC,
copies of each notice received by
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the Borrower or any member of its Controlled Group of the PBGC's intention to
terminate any Plan or to have a trustee appointed to administer any Plan;
(c) Promptly and in any event within 30 days after the filing thereof
by the Borrower or any member of its Controlled Group with the United States
Department of Labor or the Internal Revenue Service, copies of each annual
report (including Schedule B thereto, if applicable) with respect to each Plan
of which the Borrower or any member of its Controlled Group is the "plan
sponsor";
(d) Promptly, and in any event within 10 Business Days after receipt
thereof, a copy of any correspondence the Borrower or any member of its
Controlled Group receives from the Plan Sponsor (as defined by Section
4001(a)(10) of ERISA) of any Plan concerning potential withdrawal liability
pursuant to Section 4219 or 4202 of ERISA, and a statement from the chief
financial officer of the Borrower or such member of its Controlled Group
setting forth details as to the events giving rise to such potential withdrawal
liability and the action which the Borrower or such member of its Controlled
Group is taking or proposes to take with respect thereto;
(e) Notification within 30 days of any material increases in the
benefits of any existing Plan which is not a Multiemployer Plan, or the
establishment of any new Plans, or the commencement of contributions to any
Plan to which the Borrower or any member of its Controlled Group was not
previously contributing which would in either case result in a material
liability to the Borrower;
(f) Notification within three Business Days after the Borrower or any
member of its Controlled Group knows that the Borrower or any such member of
its Controlled Group has filed or intends to file a notice of intent to
terminate any Plan under a distress termination within the meaning of Section
4041(c) of ERISA and a copy of such notice; and
(g) Within three Business Days after receipt of written notice of
commencement thereof, notice of all actions, suits and proceedings before any
court or governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, affecting the Borrower or any member of
its Controlled Group with respect to any Plan, except those which, in the
aggregate, if adversely determined could not have a Material Adverse Effect.
Section 6.7 Monthly Financial Statements and Information. Within 30
days after the end of each month, a consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such month and the related consolidated
statement of income for such month and for the elapsed portion of the year
ended with the last day of such month; all of which shall be certified by the
president or chief financial officer or other officer of the Borrower
acceptable to the Administrative Agent, to be, in his or her opinion acting
solely in his or her capacity as an officer of the Borrower, complete and
correct in all material respects and to present fairly, in accordance with
GAAP, the financial position and results of operations of the Borrower and its
Subsidiaries as at the end of and for such month, and for the elapsed portion
of the year ended with the last day of such month, subject only to normal
year-end adjustments.
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Section 6.8 Asset Sale Proceeds Report. Within 30 days after the end
of each month, an Asset Sale Proceeds Report, certified by an Authorized
Signatory of the Borrower, to be, in his or her opinion acting solely in his or
her capacity as an officer of the Borrower, complete and correct in all
material respects and to present fairly the status of asset sale proceeds
subject to the terms of the Restricted Account Agreement and Section 2.5(c) of
this Agreement and of the Borrower's compliance therewith.
Section 6.9 Borrowing Base Report. Within 30 days after the end of
each month, a Borrowing Base Report. In addition to the monthly Borrowing Base
Report required to be delivered hereunder, the Borrower may provide the Lenders
with a Borrowing Base Report reflecting information as of any date subsequent
to the previously required Borrowing Base Report, and the Borrowing Base
reflected in such updated Borrowing Base Report shall be effective until the
Borrower delivers another Borrowing Base Report.
Section 6.10 Year 2000. Within 30 days after the end of each month, a
status report on the Borrower's and its Subsidiaries' efforts to address Year
2000 issues, which report shall be in form and detail acceptable to the
Administrative Agent.
ARTICLE 7
Negative Covenants
So long as any of the Obligations are outstanding and unpaid or any
Commitment is outstanding (whether or not the conditions to borrowing have been
or can be fulfilled):
Section 7.1 Indebtedness. The Borrower shall not, and shall not permit
any of its Subsidiaries to, create, assume, incur or otherwise become or remain
obligated in respect of, or permit to be outstanding, or suffer to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents;
(b) Accounts payable, accrued liabilities and deferred taxes incurred
in the ordinary course of business;
(c) Indebtedness, including, in respect of Capitalized Lease
Obligations, incurred to purchase, or to finance the purchase of, assets which
constitute property, plant and equipment, not to exceed $10,000,000 in
aggregate principal amount outstanding at any time;
(d) Interest hedging obligations under Interest Hedge Agreements
entered into with any Lender or any of their respective Affiliates;
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(e) Indebtedness existing on the Agreement Date which is described on
Schedule 10 hereto, including refundings, renewals or extensions (but no
increases in the principal amount thereof);
(f) Indebtedness in respect of endorsement of negotiable instruments
in the ordinary course of business;
(g) Indebtedness in respect of the Senior Subordinated Notes and the
Xxxxxxx Subordinated Debt, and, upon written consent of the Majority Lenders,
refundings of the Xxxxxxx Subordinated Debt following the conversion of the
Xxxxxxx Subordinated Debt into Capital Stock;
(h) Other Institutional Debt and Subordinated Debt, provided that the
Net Cash Proceeds of such Institutional Debt and Subordinated Debt are applied
in accordance with Section 2.5(f) hereof; and
(i) Other Indebtedness not to exceed $2,500,000 in aggregate amount
outstanding at any time.
Section 7.2 Liens. The Borrower shall not, and shall not permit any of
its Subsidiaries to, create, assume, incur, permit or suffer to exist, directly
or indirectly, any Lien on any of its assets, whether now owned or hereafter
acquired, except Permitted Liens. Except with respect to the Senior
Subordinated Notes, the Borrower shall not, and shall not permit any of its
Subsidiaries to, agree with any other Person that it shall not create, assume,
incur, permit or suffer to exist or to be created, assumed, incurred or
permitted to exist, directly or indirectly, any Lien on any of its assets.
Section 7.3 Investments. The Borrower shall not, and shall not permit
any of its Subsidiaries to, make any Investment, except that the Borrower may
purchase or otherwise acquire and own:
(a) Cash and Cash Equivalents;
(b) loans and advances by the Borrower or any of its Subsidiaries to
their respective directors, officers and employees in the ordinary course of
business and otherwise permitted by Section 7.7 in an aggregated principal
amount not exceeding $50,000 at any one time outstanding;
(c) Investments in Interest Hedge Agreements in the ordinary course of
the business of the Borrower or any of its Subsidiaries and not for the
purposes of speculation;
(d) Investments (including debt obligations and Capital Stock)
received in connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other disputes
with, customers and suppliers arising in the ordinary course of business;
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(e) deposits made in the ordinary course of business in connection
with the purchase price of goods or services;
(f) Investments permitted by Section 7.1(c);
(g) Investments received as consideration in connection with any asset
sale or other disposition of assets permitted under Section 7.5;
(h) Accounts receivable that arise in the ordinary course of business
and are payable on standard terms;
(i) Investments in existence on the Agreement Date which are described
on Schedule 9 hereto;
(j) Investments in Subsidiaries (including new Subsidiaries) when no
Default exists; provided that (i) such Subsidiary shall have executed a
Subsidiary Guaranty of the Obligations and Collateral Documents granting a
first priority Lien in all its assets to secure the Obligations and (ii) 100%
of such Subsidiary's Capital Stock (or 65% in the case of a foreign Subsidiary)
shall be pledged to secure the Obligations; and
(k) Other Investments not to exceed $250,000 in aggregate amount.
Section 7.4 Liquidation, Merger, New Subsidiaries. The Borrower shall
not, and shall not permit any of its Subsidiaries to, at any time:
(a) liquidate or dissolve itself (or suffer any liquidation or
dissolution) or otherwise wind up; or
(b) enter into any merger or consolidation (i) unless with respect to
a merger or consolidation, the Borrower shall be the surviving corporation,
unless the merger or consolidation involves a Subsidiary of the Borrower and
the Borrower is not merging or consolidating with another Person, and either
(A) such Subsidiary shall be the surviving corporation, (B) the survivor of the
merger becomes a Subsidiary of the Borrower that becomes a party to a
Subsidiary Security Agreement (and any other appropriate Collateral Documents)
and a Subsidiary Guaranty and 100% of whose Capital Stock is pledged to secure
the Obligations (unless such Subsidiary is domiciled outside of the United
States, in which case 65% of its Capital Stock shall be pledged) or (C) the
entity formed becomes a party to a Subsidiary Security Agreement (and any other
appropriate Collateral Documents) and a Subsidiary Guaranty and has 100% of its
Capital Stock pledged to secure the Obligations (unless such Subsidiary is
domiciled outside of the United States, in which case 65% of its Capital Stock
shall be pledged), such Subsidiary shall be the surviving corporation, (ii) if
such transaction shall be utilized to circumvent compliance with any term or
provision herein and (iii) unless no Default or Event of Default shall then be
in existence or occur as a result of such transaction.
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Section 7.5 Sale of Assets. The Borrower shall not, and shall not
permit any of its Subsidiaries to, sell, lease, abandon, transfer or otherwise
dispose of assets in an aggregate amount during any fiscal year in excess of
$500,000, except for the following, so long as (a) no Default exists
immediately prior to or after the contemplated transaction, and (b) the
consideration received by the Borrower and its Subsidiaries in connection with
such transaction is greater than or equal to the fair market value of such
assets as determined in good faith by Borrower: (i) Permitted Asset Sales; (ii)
asset sales, the Net Cash Proceeds of which are subject to Section 2.5(c)
hereof; (iii) transfers resulting from any casualty or condemnation of property
or assets; and (iv) intercompany sales or transfers of assets among
Subsidiaries made in the ordinary course of business.
Section 7.6 Acquisitions. The Borrower shall not, and shall not permit
any of its Subsidiaries to, make any Acquisition without the prior written
consent of Majority Lenders; provided, however, if immediately prior to and
after giving effect to the proposed Acquisition there shall not exist a Default
or Event of Default, then the Borrower or any of its Subsidiaries may make
Acquisitions without the consent of the Lenders so long as (i) such Acquisition
shall not be opposed by the board of directors of the Person being acquired,
(ii) the Lenders shall have received written notice at least 15 Business Days
prior to the date of such Acquisition, (iii) the Administrative Agent shall
have received at least 15 Business Days prior to the date of such Acquisition a
Compliance Certificate setting forth the covenant calculations both immediately
prior to and after giving effect to the proposed Acquisition, (iv) the assets,
property or business acquired shall be in the business described in Section
4.1(d) hereof and the Administrative Agent for the benefit of the Lenders shall
have a first priority Lien in such assets, subject only to Permitted Liens, (v)
if the Acquisition results in a Subsidiary, (A) such Subsidiary shall execute a
Subsidiary Guaranty of the Obligations and Collateral Documents granting a
first priority Lien in all its assets to secure the Obligations, (B) 100% of
such Subsidiary's Capital Stock shall be pledged to secure the Obligations
(unless such Subsidiary is domiciled outside of the United States, in which
case 65% of its Capital Stock shall be pledged), and (C) the Lenders receive
such documents, board resolutions, officer's certificates and opinions of
counsel as the Administrative Agent shall reasonably request in connection with
the actions described in clauses (A) and (B) above, and (vi) the aggregate
amount of the Acquisition Consideration in connection with such Acquisitions
does not exceed (A) at any time on or before December 31, 1999, the lesser of
(1) the Maximum Redeployment Amount, and (2) $5,000,000, (B) at any time during
the period beginning January 1, 2000, and ending on December 31, 2000, the
Maximum Redeployment Amount minus the amount of 1999 Proceeds used for
Acquisitions permitted hereunder on or before December 31, 1999, provided that
the Leverage Ratio at the time of any such Acquisition is less than 6.75 to
1.00, and (C) at any time thereafter, the Maximum Redeployment Amount minus
amounts required to be used to prepay Advances pursuant to the Restricted
Account Agreement, provided that the Leverage Ratio at the time of such
Acquisition is less than the maximum ratio applicable in accordance with the
following table:
PERIOD DURING WHICH ACQUISITION OCCURS MAXIMUM RATIO
======================================================== =========================
01/01/01 through 12/31/01 6.00 to 1.00
-------------------------------------------------------- -------------------------
All times thereafter 5.25 to 1.00
======================================================== =========================
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In addition to Acquisitions permitted above, the Borrower or any of its
Subsidiaries may make Acquisitions at any time on or after January 1, 2000, so
long as (a) the conditions set forth in Section 7.6(i) through (v), above, are
satisfied, (b) there shall not exist a Default or Event of Default immediately
prior to and after giving effect to the proposed Acquisition, and (c) the
aggregate amount of the Acquisition Consideration in connection with all such
Acquisitions does not exceed an aggregate amount of $5,000,000 at any time,
provided that such Dollar limitation may be waived or increased upon prior
written consent of the Majority Lenders.
For purposes of this Section 7.6, the term "Acquisitions" shall be deemed to
include Investments by the Borrower and its Subsidiaries in assets (including,
without limitation, Investments in inventory, accounts receivable, equipment
and other property) in connection with a new product line expansion reasonably
related to the business described in Section 4.1(d) hereof.
Section 7.7 Restricted Payments. The Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly declare, pay or make
any Restricted Payments, except (a) Dividends payable by a Subsidiary to the
Borrower or another Subsidiary, (b) Dividends and regularly scheduled payments
of interest on the Xxxxxxx Subordinated Debt, in each case payable in stock and
not cash, (c) liquidated damages with respect to the Senior Subordinated Notes,
(d) regularly scheduled payments of interest on Subordinated Debt other than
the Xxxxxxx Subordinated Debt, and (e) loans to directors, officers and
employees of the Borrower and its Subsidiaries not to exceed $50,000 in
aggregate amount during any fiscal year; provided, further, however, the
Borrower shall not pay or make any Restricted Payments permitted by this
Section 7.7 unless there shall exist no Default prior to or after giving effect
to any such proposed Restricted Payment. Notwithstanding the foregoing, the
Borrower may, after first obtaining the written consent of the Administrative
Agent and any combination of Lenders whose Total Specified Percentages
aggregate at least 75% (or if all of the Commitments have been terminated, any
combination of Lenders having at least 75% of the Advances then outstanding),
pay (i) interest on the Xxxxxxx Subordinated Debt in accordance with the terms
thereof or (ii) dividends on preferred stock as set forth in the terms of such
preferred stock.
Section 7.8 Affiliate Transactions. Except as otherwise expressly
permitted herein to the contrary, the Borrower shall not, and shall not permit
any Subsidiary to, at any time engage in any transaction with an Affiliate
(other than the Borrower or any of its Subsidiaries), nor make an assignment or
other transfer of any of its assets or properties to any Affiliate (other than
the Borrower or any of its Subsidiaries), on terms materially less advantageous
to the Borrower or any of its Subsidiaries than would be the case if such
transaction had been effected with a non-Affiliate (other than advances to
employees in the ordinary course of business).
In addition, notwithstanding the foregoing, the Borrower and its
Subsidiaries shall be entitled to make the following payments and/or to enter
into the following transactions:
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(i) the payment of reasonable and customary fees and
reimbursement of expenses payable to directors of the Borrower;
(ii) the payment to Xxxxxxx or an Affiliate of Xxxxxxx of
Permitted Management Fees otherwise permitted under Section 7.17;
(iii) the payment to Xx. Xxxxx Xxxxxx of fees and expenses
pursuant to a consulting agreement approved by the Board of Directors
of the Borrower; and
(iv) employment arrangements with respect to the procurement
of services of directors, officers and employees in the ordinary
course of business and the payment of reasonable fees in connection
therewith.
The Borrower shall not, and shall not permit any of its Subsidiaries
to, in any event incur or suffer to exist any Indebtedness or Guaranty in favor
of any Affiliate, unless such Affiliate shall subordinate the payment and
performance thereof to the Obligations on terms, conditions and documentation
satisfactory to the Determining Lenders.
Section 7.9 Compliance with ERISA. The Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly, or permit any
member of its Controlled Group to directly or indirectly, (a) terminate any
Plan so as to result in any material (in the opinion of the Determining
Lenders) liability to the Borrower or any member of its Controlled Group taken
as a whole, (b) permit to exist any ERISA Event, or any other event or
condition which presents the risk of a material (in the opinion of the
Determining Lenders) liability of the Borrower or any member of its Controlled
Group taken as a whole, (c) make a complete or partial withdrawal (within the
meaning of Section 4201 of ERISA) from any Multiemployer Plan so as to result
in any material (in the reasonable opinion of the Determining Lenders)
liability to the Borrower or any member of its Controlled Group taken as a
whole, (d) enter into any new Plan or modify any existing Plan so as to
increase its obligations thereunder except in the ordinary course of business
consistent with past practice which could result in any material (in the
opinion of the Determining Lenders) liability to the Borrower or any member of
its Controlled Group taken as a whole, or (e) permit the present value of all
benefit liabilities, as defined in Title IV of ERISA, under each Plan of the
Borrower or any member of its Controlled Group (using the actuarial assumptions
utilized by each such Plan) to exceed the fair market value of Plan assets
allocable to such benefits, all determined as of the most recent valuation date
for each such Plan, by $50,000.
Section 7.10 Leverage Ratio. The Borrower shall not permit the
Leverage Ratio to be greater than (a) 8.25 to 1 at the end of any fiscal
quarter occurring during the period from the Closing Date through and including
December 31, 1999, (b) 8.00 to 1 at the end of any fiscal quarter occurring
during the period from and including January 1, 2000, through and including
December 31, 2000, (c) 7.50 to 1 at the end of any fiscal quarter occurring
during the period from and including January 1, 2001, through and including
Xxxxxxxx 00, 0000, (x) 6.75 to 1 at the end of any fiscal
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quarter occurring during the period from and including January 1, 2002, through
and including December 31, 2002, and (d) 6.00 to 1 at the end of any fiscal
quarter thereafter.
Section 7.11 Fixed Charge Coverage Ratio. The Borrower shall not
permit the Fixed Charge Coverage Ratio to be less than (a) 0.70 to 1 at the end
of any fiscal quarter occurring during the period from and including March 31,
2000, through and including December 31, 2000, calculated in each case from
January 1, 2000 through and including each such fiscal quarter, (b) 0.70 to 1
at the end of any fiscal quarter occurring during the period from and including
January 1, 2001, through and including December 31, 2001, calculated for the
four fiscal quarters preceding the date of determination, (c) 1.00 to 1 at the
end of any fiscal quarter occurring during the period from and including
January 1, 2002, through and including March 31, 2003, calculated for the four
fiscal quarters preceding the date of determination, and (d) 0.90 to 1 at the
end of any fiscal quarter thereafter, calculated for the four fiscal quarters
preceding the date of determination.
Section 7.12 Net Worth. The Borrower shall not permit the Net Worth at
any time to be less than the sum of (a) $37,914,000, plus (b) 50% of cumulative
Net Income for the period from and including April 1, 1999 (but excluding from
the calculation of such cumulative Net Income the effect, if any, of any fiscal
quarter (or portion of a fiscal quarter not yet ended) for which Net Income was
a negative number), plus (c) 50% of the Net Cash Proceeds from the Xxxxxxx
Subordinated Debt and the Xxxxxxx Stock Acquisition and from any other Equity
Offering.
Section 7.13 Sale and Leaseback. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any arrangement whereby it sells
or transfers any of its assets, and thereafter rents or leases such assets.
Section 7.14 Sale or Discount of Receivables. The Borrower shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly, sell,
with or without recourse, for discount or otherwise, any notes or accounts
receivable, other than sales of overdue accounts in the ordinary course of
business.
Section 7.15 Capital Expenditures. The Borrower shall not permit the
Capital Expenditures (exclusive of Acquisitions) to be paid or incurred by it
and its Subsidiaries to exceed 1% of cumulative net revenues of the Borrower
and its Subsidiaries from and after January 1, 1999.
Section 7.16 Amendments and Waivers of Institutional Debt or
Subordinated Debt. The Borrower shall not, and shall not permit any Subsidiary
to, change or amend (or take any action or fail to take any action the result
of which is an effective amendment or change) or accept any waiver or consent
with respect to, any document, instrument or agreement relating to any
Institutional Debt or Subordinated Debt that would result in (a) an increase in
the principal, interest, overdue interest, fees or other amounts payable under
the Institutional Debt or Subordinated Debt, (b) an acceleration in any date
fixed for payment or prepayment of principal, interest, fees or other amounts
payable under the Institutional Debt or Subordinated Debt (including, without
limitation, as a result of any redemption), (c) a reduction in any percentage
of holders of the Institutional Debt or Subordinated
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Debt required under the terms of the Institutional Debt or Subordinated Debt to
take (or refrain from taking) any action under the Institutional Debt or
Subordinated Debt, (d) a change in the definition of "Change of Control" or
"Change in Control" or similar event or circumstance, however defined or
designated, as provided in the Institutional Debt or Subordinated Debt which
would result in such definition being more restrictive than such definition in
this Agreement, (e) a change in any of the subordination provisions of the
Institutional Debt or Subordinated Debt, (f) a change in any covenant, term or
provision in the Institutional Debt or Subordinated Debt which would result in
such term or provision being more restrictive than the terms of this Agreement
and the other Loan Documents or (g) a change in any term or provision of the
Institutional Debt or Subordinated Debt that could have, in any material
respect, an adverse effect on the interest of the Lenders.
Section 7.17 Management Fees. The Borrower shall not, and shall not
permit any of its Subsidiaries to, pay any management fees to any Person, other
than Permitted Management Fees, provided that the Variable Management Fee shall
not be permitted to be paid at any time after the occurrence and during the
continuance of a Default or Event of Default (although interest at a reasonable
market rate may accrue on the amount of the Variable Management Fees not paid
due to the requirement in this Section 7.17); provided that the Borrower shall
at all times be permitted to reimburse Xxxxxxx and its Affiliates for its
"Reimbursable Expenses" pursuant to and as defined in the Monitoring and
Oversight Agreement as in effect on the Agreement Date. Notwithstanding
anything in this Agreement to the contrary, the definitions of "Permitted
Management Fees" and "Variable Management Fees" and the provisions of this
Section 7.17 may be amended or waived, as the case may be, with the written
consent of Majority Lenders.
ARTICLE 8
Default
Section 8.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event, and whether voluntary,
involuntary, or effected by operation of law or pursuant to any judgment or
order of any court or any order, rule or regulation of any governmental or
non-governmental body:
(a) Any representation or warranty made under any Loan Document shall
prove to have been incorrect or misleading in any material respect when made;
(b) The Borrower shall default in the payment of any (i) principal
under any Note when due and (ii) interest under any Note or under any other
Loan Document or any fees payable hereunder or any other costs, fees, expenses
or other amounts payable hereunder or under the other Loan Documents, when due,
which Default with respect to clause (ii) above is not cured within five
Business Days after the occurrence thereof;
(c) The Borrower or any of its Subsidiaries shall default in the
performance or observance of any agreement or covenant contained in Section 5.1
or Article 7 hereof, provided that the
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Borrower's failure to comply with Section 7.11 of this Agreement with respect
to fiscal quarters ending on or before December 31, 2000, shall only constitute
an Event of Default if such noncompliance shall occur in two consecutive fiscal
quarters;
(d) The Borrower or any of its Subsidiaries shall default in the
performance or observance of any other agreement or covenant contained in this
Agreement not specifically referred to elsewhere in this Section 8.1, and such
default shall not be cured within a period of 30 days after the earlier of
notice from the Administrative Agent thereof or actual notice thereof by the
Borrower or such Subsidiary;
(e) Any Obligor shall default or breach in the performance or
observance of any agreement or covenant (after the expiration of any applicable
notice and cure or grace period) in any of the Loan Documents (other than this
Agreement);
(f) There shall be commenced an involuntary proceeding or an
involuntary petition shall be filed in a court having competent jurisdiction
seeking (i) relief in respect of any Obligor or a substantial part of the
property or assets of such Obligor under Title 11 of the United States Code, as
now constituted or hereafter amended, or any other applicable Federal or state
bankruptcy law or other similar law, (ii) the appointment of a receiver,
liquidator, assignee, trustee, custodian, sequestrator or similar official of
any Obligor, or of any substantial part of its property or assets, or (iii) the
winding-up or liquidation of the affairs of any Obligor, and any such
proceeding or petition shall continue unstayed and in effect for a period of 60
consecutive days;
(g) Any Obligor shall (i) file a petition, answer or consent seeking
relief under Title 11 of the United States Code, as now constituted or
hereafter amended, or any other applicable Federal or state bankruptcy law or
other similar law, (ii) consent to the institution of proceedings thereunder or
to the filing of any such petition or to the appointment or taking of
possession of a receiver, liquidator, assignee, trustee, custodian,
sequestrator or other similar official of any Obligor or of any substantial
part of their respective properties, (iii) file an answer admitting the
material allegations filed against it in any such proceeding, (iv) make a
general assignment for the benefit of creditors, (v) fail generally to pay its
debts as they become due, or (vi) take any action in furtherance of any such
action;
(h) A final judgment or judgments shall be entered by any court
against any Obligor for the payment of money which exceeds $1,000,000 in the
aggregate, or a warrant of attachment or execution or similar process shall be
issued or levied against property of any Obligor which, together with all other
such property of such Obligor subject to other such process, exceeds in value
$1,000,000 in the aggregate, and if such judgment or award is not insured or,
within 60 days after the entry, issue or levy thereof, such judgment, warrant
or process shall not have been paid or discharged or stayed pending appeal, or
if, after the expiration of any such stay, such judgment, warrant or process
shall not have been paid or discharged;
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(i) With respect to any Plan of the Borrower or any member of its
Controlled Group: (i) the Borrower, any such member, or any other
party-in-interest or disqualified person shall engage in transactions which in
the aggregate would reasonably result in a direct or indirect liability to the
Borrower or any member of its Controlled Group in excess of $1,000,000 under
Section 409 or 502 of ERISA or Section 4975 of the Code; (ii) the Borrower or
any member of its Controlled Group shall incur any accumulated funding
deficiency, as defined in Section 412 of the Code, in the aggregate in excess
of $1,000,000, or request a funding waiver from the Internal Revenue Service
for contributions in the aggregate in excess of $1,000,000; (iii) the Borrower
or any member of its Controlled Group shall incur any withdrawal liability in
the aggregate in excess of $1,000,000 as a result of a complete or partial
withdrawal within the meaning of Section 4203 or 4205 of ERISA, or any other
liability with respect to a Plan in excess of $1,000,000, unless the amount of
such liability has been funded within the Plan or pursuant to one or more
insurance contracts; (iv) the Borrower or any member of its Controlled Group
shall fail to make a required contribution by the due date under Section 412 of
the Code or Section 302 of ERISA which would result in the imposition of a lien
under Section 412 of the Code or Section 302 of ERISA; (v) the Borrower, any
member of its Controlled Group or any Plan sponsor shall notify the PBGC of an
intent to terminate, or the PBGC shall institute proceedings to terminate, or
the PBGC shall institute proceedings to terminate, any Plan subject to Title IV
of ERISA; (vi) a Reportable Event shall occur with respect to a Plan subject to
Title IV of ERISA, and within 15 days after the reporting of such Reportable
Event to the Administrative Agent, the Administrative Agent shall have notified
the Borrower in writing that the Determining Lenders have made a determination
that, on the basis of such Reportable Event, there are reasonable grounds for
the termination of such Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such Plan
and as a result thereof an Event of Default shall have occurred hereunder;
(vii) a trustee shall be appointed by a court of competent jurisdiction to
administer any Plan or the assets thereof; (viii) the benefits of any Plan
shall be increased, or the Borrower or any member of its Controlled Group shall
begin to maintain, or begin to contribute to, any Plan, without the prior
written consent of the Determining Lenders; or (ix) any ERISA Event with
respect to a Plan subject to Title IV of ERISA shall have occurred, and 30 days
thereafter (A) such ERISA Event, other than such event described in clause (f)
of the definition of ERISA Event herein, (if correctable) shall not have been
corrected and (B) the then present value of such Plan's benefit liabilities, as
defined in Title IV of ERISA, shall exceed the then current value of assets
accumulated in such Plan; provided, however, that the events listed in
subsections (v) through (ix) shall constitute Events of Default only if, as of
the date thereof or any subsequent date, the amount of liability that the
Borrower or any member of its Controlled Group reasonably is likely to incur in
the aggregate under Section 4062, 4063, 4064, 4219 or 4023 of ERISA or any
other provision of law with respect to all such Plans, computed by the actuary
of the Plan taking into account any applicable rules and regulations of the
PBGC at such time, and based on the actuarial assumptions used by the Plan,
resulting from or otherwise associated with such event exceeds $1,000,000;
(j) All or any material portion of the Collateral or the Loan
Documents shall be the subject of any proceeding instituted by any Person other
than a Lender (except in connection with any Lender's exercise of any remedies
under the Loan Documents), or there shall exist any litigation
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with respect to all or any material portion of the Collateral or the Loan
Documents, or any Person shall challenge in any manner whatsoever the validity
or enforceability of all or any portion of the Loan Documents or the
Collateral; provided, however, that during any such time any such circumstance
shall be bonded or stayed in accordance with Applicable Law and to the
satisfaction of each Lender, such circumstance shall not be an Event of
Default;
(k) Any Obligor shall default in the payment of any Indebtedness or
any lease obligations in an aggregate amount of $1,000,000 or more beyond any
grace period provided with respect thereto, or shall default in the performance
of any agreement or instrument under which such Indebtedness is created or
evidenced beyond any applicable grace period, or any other event or condition
shall occur in respect of such Indebtedness, if the effect of such default,
event or condition is to permit or cause the holder of such Indebtedness (or a
trustee on behalf of any such holder) to cause such Indebtedness to become due,
repurchased or redeemed prior to its date of maturity;
(l) Any lease of any Obligor shall terminate or cease to be effective,
and termination or cessation thereof, together with all other leases, if any,
which have been terminated or cease to be effective, could reasonably be
expected to have a Material Adverse Effect; provided, however, that termination
or cessation of a lease shall not constitute an Event of Default if another
lease reasonably satisfactory to each Lender is contemporaneously substituted
therefor;
(m) Any provision of any Loan Document shall for any reason cease to
be valid and binding on or enforceable against any party to it (other than the
Administrative Agent or any Lender) in all material respects, or any such party
shall so state in writing;
(n) Any Collateral Document shall for any reason (other than pursuant
to the terms thereof) cease to create a valid and perfected first priority Lien
in any Collateral; or
(o) A Change of Control shall have occurred.
Section 8.2 Remedies. If an Event of Default shall have occurred and
shall be continuing:
(a) With the exception of an Event of Default specified in Section
8.1(f) or (g) hereof, the Administrative Agent shall, (i) upon the direction of
the Lenders whose Revolving Credit Specified Percentages aggregate at least
51%, terminate the Revolving Credit Commitment, and/or (ii) upon the direction
of the Determining Lenders, terminate the Commitments and/or declare the
principal of and interest on the Advances and all Obligations and other amounts
owed under the Loan Documents to be forthwith due and payable without
presentment, demand, protest or notice of any kind, all of which are hereby
expressly waived, anything in the Loan Documents to the contrary
notwithstanding.
(b) Upon the occurrence of an Event of Default specified in Section
8.1(f) or (g) hereof, such principal, interest and other amounts shall
thereupon and concurrently therewith become due and payable and the Commitments
shall forthwith terminate, all without any action by the
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Administrative Agent, any Lender or any holders of the Notes and without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in the Loan Documents to the contrary
notwithstanding.
(c) If any Letter of Credit shall be then outstanding, the
Administrative Agent may make demand upon the Borrower to, and forthwith upon
such demand (but in the case of an Event of Default specified in Section 8.1(f)
or (g) hereof, without any demand or taking of any other action by the
Administrative Agent or any Lender), the Borrower shall, pay to the
Administrative Agent in same day funds at the office of the Administrative
Agent in such demand for deposit in the L/C Cash Collateral Account, an amount
equal to the maximum amount available to be drawn under the Letters of Credit
then outstanding.
(d) The Administrative Agent, and the Lenders may exercise all of the
post-default rights granted to them under the Loan Documents or under
Applicable Law.
(e) The rights and remedies of the Administrative Agent and the
Lenders hereunder shall be cumulative, and not exclusive.
ARTICLE 9
Changes in Circumstances
Section 9.1 LIBOR Basis Determination Inadequate. If with respect to
any proposed LIBOR Advance for any Interest Period, any Lender determines that
(i) deposits in dollars (in the applicable amount) are not being offered to
that Lender in the relevant market for such Interest Period or (ii) the LIBOR
Rate for such proposed LIBOR Advance does not adequately cover the cost to such
Lender of making and maintaining such proposed LIBOR Advance for such Interest
Period, such Lender shall forthwith give notice thereof to the Borrower,
whereupon until such Lender notifies the Borrower that the circumstances giving
rise to such situation no longer exist, the obligation of such Lender to make
LIBOR Advances shall be suspended.
Section 9.2 Illegality. If any applicable law, rule or regulation, or
any change therein or adoption thereof, or interpretation or administration
thereof by any governmental authority, central bank or comparable agency
charged with the interpretation or administration thereof, or compliance by any
Lender (or its LIBOR Lending Office) with any request or directive (whether or
not having the force of law) of any such authority, central bank or comparable
agency, shall make it unlawful or impossible for such Lender (or its LIBOR
Lending Office) to make, maintain or fund its LIBOR Advances, such Lender shall
so notify the Borrower and the Administrative Agent. Before giving any notice
to the Borrower pursuant to this Section, the notifying Lender shall designate
a different LIBOR Lending Office or other lending office if such designation
will avoid the need for giving such notice and will not, in the sole judgment
of the Lender, be materially disadvantageous to the Lender. Upon receipt of
such notice, notwithstanding anything contained in Article 2 hereof, the
Borrower shall repay in full the then outstanding principal amount of each
LIBOR Advance owing to the
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notifying Lender, together with accrued interest thereon, on either (a) the
last day of the Interest Period applicable to such Advance, if the Lender may
lawfully continue to maintain and fund such Advance to such day, or (b)
immediately, if the Lender may not lawfully continue to fund and maintain such
Advance to such day. Concurrently with repaying each affected LIBOR Advance
owing to such Lender if the Borrower does not terminate this Agreement,
notwithstanding anything contained in Article 2 hereof, the Borrower shall
borrow a Base Rate Advance from such Lender, and such Lender shall make such
Base Rate Advance, in an amount such that the outstanding principal amount of
the Advances owing to such Lender shall equal the outstanding principal amount
of the Advances owing immediately prior to such repayment.
Section 9.3 Increased Costs.
(a) If any applicable law, rule or regulation, or any change in or
adoption of any law, rule or regulation, or any interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof or
compliance by any Lender (or its LIBOR Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or compatible agency:
(i) shall subject a Lender (or its LIBOR Lending Office) to
any Tax (net of any tax benefit engendered thereby and excluding Taxes
referred to in clauses (i) through (iv) of Section 2.15(a)) with
respect to its LIBOR Advances or its obligation to make such Advances,
or shall change the basis of taxation of payments to a Lender (or to
its LIBOR Lending Office) of the principal of or interest on its LIBOR
Advances or in respect of any other amounts due under this Agreement,
as the case may be, or its obligation to make such Advances (except
for changes in the rate of tax on the overall net income, net worth or
capital of the Lender and franchise taxes, doing business taxes or
minimum taxes imposed upon such Lender); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors
of the Federal Reserve System), special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, a Lender's LIBOR Lending Office or shall impose on the
Lender (or its LIBOR Lending Office) or on the United States market
for certificates of deposit or the London interbank market any other
condition affecting its LIBOR Advances or its obligation to make such
Advances;
and the result of any of the foregoing is to increase the cost to a Lender (or
its LIBOR Lending Office) of making or maintaining any LIBOR Advances, or to
reduce the amount of any sum received or receivable by a Lender (or its LIBOR
Lending Office) with respect thereto, by an amount deemed by a Lender to be
material, then, within 15 days after demand by such Lender, the Borrower agrees
to pay to such Lender such additional amount as will compensate such Lender for
such increased costs or reduced amounts, subject to Section 11.9 hereof. The
affected Lender will as soon as practicable notify the Borrower of any event of
which it has knowledge, occurring after the date
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hereof, which will entitle such Lender to compensation pursuant to this Section
and will designate a different LIBOR Lending Office or other lending office if
such designation will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole judgment of the affected Lender made in
good faith, be disadvantageous to such Lender.
(b) A certificate of any Lender claiming compensation under this
Section and setting forth the additional amounts to be paid to it hereunder and
calculations therefor shall be controlling in the absence of manifest error. In
determining such amount, a Lender may use any reasonable averaging and
attribution methods. If a Lender demands compensation under this Section, the
Borrower may at any time, upon at least five Business Days' prior notice to the
Lender, after reimbursement to the Lender by the Borrower in accordance with
this Section of all costs incurred, prepay in full the then outstanding LIBOR
Advances of the Lender, together with accrued interest thereon to the date of
prepayment, along with any reimbursement required under Section 2.9 hereof.
Concurrently with prepaying such LIBOR Advances, the Borrower shall borrow a
Base Rate Advance from the Lender, and the Lender shall make such Base Rate
Advance, in an amount such that the outstanding principal amount of the
Advances owing to such Lender shall equal the outstanding principal amount of
the Advances owing immediately prior to such prepayment.
Section 9.4 Effect On Base Rate Advances. If notice has been given
pursuant to Section 9.1, 9.2 or 9.3 hereof suspending the obligation of a
Lender to make LIBOR Advances, or requiring LIBOR Advances of a Lender to be
repaid or prepaid, then, unless and until the Lender notifies the Borrower that
the circumstances giving rise to such repayment no longer apply, all Advances
which would otherwise be made by such Lender as LIBOR Advances shall be made
instead as Base Rate Advances.
Section 9.5 Capital Adequacy. If either (a) the introduction of or any
change in or in the interpretation of any law, rule or regulation or (b)
compliance by a Lender with any law, rule or regulation or any guideline or
request from any central bank or other governmental authority (whether or not
having the force of law) affects or would affect the amount of capital required
or expected to be maintained by a Lender or any corporation controlling such
Lender, and such Lender determines that the amount of such capital is increased
by or based upon the existence of such Lender's commitment or Advances
hereunder and other commitments or advances of such Lender of this type, then,
within 30 days after written notice and demand by such Lender, subject to
Section 11.9, the Borrower shall pay to such Lender, from time to time as
specified by such Lender, additional amounts sufficient to compensate such
Lender with respect to such circumstances, to the extent that such Lender
reasonably determines in good faith such increase in capital to be allocable to
the existence of such Lender's portion of the Commitments hereunder. A
certificate as to such amounts submitted to the Borrower by a Lender hereunder,
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
Section 9.6 Replacement Lender. If the Borrower becomes obligated to
pay additional amounts to any Lender described in Section 9.2, 9,3 or 9.5, the
Borrower may designate a financial institution reasonably acceptable to the
Administrative Agent to replace such Lender by purchasing
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for cash and receiving an assignment of such Lender's obligations under the
Loan Documents and the rights of such Lender under the Loan Documents without
recourse to or warranty by, or expense to, such Lender, for a purchase price
equal to the outstanding amounts owing to such Lender (including such
additional amounts owing to such Lender pursuant to Section 9.2, 9.3 or 9.5)
and such Lender shall be deemed released from all of its obligations under the
Loan Documents. Upon execution of an Assignment Agreement, such other financial
institution shall be deemed to be a "Lender" for all purposes of this Agreement
as set forth in Section 11.6 hereof.
ARTICLE 10
Agreement Among Lenders
Section 10.1 Agreement Among Lenders. The Lenders agree among
themselves that:
(a) Administrative Agent. Each Lender hereby appoints the
Administrative Agent as its nominee in its name and on its behalf; to act as
nominee for and on behalf of all Lenders under the Loan Documents; to, except
as otherwise expressly set forth herein, take such action as may be requested
by the Determining Lenders, provided that, unless and until the Administrative
Agent shall have received such requests, the Administrative Agent may take such
administrative action, or refrain from taking such administrative action, as it
may deem advisable and in the best interests of the Lenders; to arrange the
means whereby the proceeds of the Advances of the Lenders are to be made
available to the Borrower; to distribute promptly to each Lender each payment
(in like funds received) with respect to any of such Lender's Advances, fee or
other amount; and to deliver to the Borrower requests, demands, approvals and
consents received from the Lenders. The Administrative Agent agrees to promptly
distribute to each Lender, at such Lender's address set forth below, payments
received from the Borrower. The Administrative Agent shall have no fiduciary
relationship in respect of any Lender by reason of this Agreement or any other
Loan Document. The Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement. The duties
of the Administrative Agent are mechanical and administrative in nature.
(b) Replacement of Administrative Agent. Should the Administrative
Agent or any successor Administrative Agent ever cease to be a Lender
hereunder, or should the Administrative Agent or any successor Administrative
Agent ever resign as Administrative Agent, or should the Administrative Agent
or any successor Administrative Agent ever be removed with cause or without
cause by the action of all Lenders (other than the Administrative Agent), then
the Lender appointed by the other Lenders (provided that no Event of Default
exists, with the consent of the Borrower, which consent shall not be
unreasonably withheld) shall forthwith become the Administrative Agent, and the
Borrower and the Lenders shall execute such documents as any Lender may
reasonably request to reflect such change. If the Administrative Agent also
then serves in the capacity of the Issuing Bank, such resignation or removal
shall constitute resignation or removal of the Issuing Bank and the successor
Administrative Agent shall serve in the capacity of the Issuing Bank; provided,
however, if the Administrative Agent also serves in the capacity of the Issuing
Bank and no successor Administrative Agent is appointed, the retiring
Administrative Agent shall remain as the Issuing Bank.
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Any resignation or removal of the Administrative Agent or any successor
Administrative Agent shall become effective upon the appointment by the Lenders
of a successor Administrative Agent; provided, however, if no successor
Administrative Agent shall have been so appointed and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation or the Lenders' removal of the retiring Administrative
Agent, then the retiring Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent, which shall be a commercial bank
organized under the Laws of the United States of America or of any State
thereof and having a combined capital and surplus of at least $500,000,000.
Upon the acceptance of any appointment as the Administrative Agent hereunder by
a successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations under the Loan Documents, provided
that if the retiring or removed Administrative Agent is unable to appoint a
successor Administrative Agent, the Administrative Agent shall, after the
expiration of a 60 day period from the date of notice, be relieved of all
obligations as Administrative Agent hereunder. Notwithstanding any
Administrative Agent's resignation or removal hereunder, the provisions of this
Article shall continue to inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement.
(c) Expenses. Each Lender shall pay its pro rata share, based on its
Total Specified Percentage, of any expenses (including without limitation fees
and expenses of counsel and financial consultants) paid by the Administrative
Agent directly and solely in connection with any of the Loan Documents if
Administrative Agent does not receive reimbursement therefor from other sources
within 60 days after the date incurred, unless payment of such fees is being
diligently disputed by such Lender or the Borrower in good faith. Any amount so
paid by the Lenders to the Administrative Agent shall be returned by the
Administrative Agent pro rata to each paying Lender to the extent later paid by
the Borrower or any other Person on the Borrower's behalf to the Administrative
Agent.
(d) Delegation of Duties. The Administrative Agent may execute any of
its duties hereunder by or through officers, directors, employees, attorneys or
agents, and shall be entitled to (and shall be protected in relying upon)
advice of counsel concerning all matters pertaining to its duties hereunder.
(e) Reliance by Administrative Agent. The Administrative Agent and its
officers, directors, employees, attorneys and agents shall be entitled to rely
and shall be fully protected in relying on any writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telex or teletype
message, statement, order, or other document or conversation reasonably
believed by it or them in good faith to be genuine and correct and to have been
signed or made by the proper Person and, with respect to legal matters, upon
opinions of counsel selected the Administrative Agent. The Administrative Agent
may, in its reasonable judgment, deem and treat the payee of any Note as the
owner thereof for all purposes hereof.
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(f) Limitation of Administrative Agent's Liability. Neither the
Administrative Agent nor any of its officers, directors, employees, attorneys
or agents shall be liable for any action taken or omitted to be taken by it or
them hereunder in good faith and believed by it or them to be within the
discretion or power conferred to it or them by the Loan Documents or be
responsible for the consequences of any error of judgment, except for its or
their own gross negligence or willful misconduct. Except as aforesaid, the
Administrative Agent shall be under no duty to enforce any rights with respect
to any of the Advances, or any security therefor. The Administrative Agent
shall not be compelled to do any act hereunder or to take any action towards
the execution or enforcement of the powers hereby created or to prosecute or
defend any suit in respect hereof, unless indemnified to its satisfaction
against loss, cost, liability and expense. The Administrative Agent shall not
be responsible in any manner to any Lender for the effectiveness,
enforceability, genuineness, validity or due execution of any of the Loan
Documents, or for any representation, warranty, document, certificate, report
or statement made herein or furnished in connection with any Loan Documents, or
be under any obligation to any Lender to ascertain or to inquire as to the
performance or observation of any of the terms, covenants or conditions of any
Loan Documents on the part of the Borrower. TO THE EXTENT NOT REIMBURSED BY THE
BORROWER, EACH LENDER HEREBY SEVERALLY INDEMNIFIES AND HOLDS HARMLESS THE
ADMINISTRATIVE AGENT, PRO RATA ACCORDING TO ITS TOTAL SPECIFIED PERCENTAGE,
FROM AND AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES AND/OR DISBURSEMENTS OF
ANY KIND OR NATURE WHATSOEVER WHICH MAY BE IMPOSED ON, ASSERTED AGAINST, OR
INCURRED BY THE ADMINISTRATIVE AGENT IN ANY WAY WITH RESPECT TO ANY LOAN
DOCUMENTS OR ANY ACTION TAKEN OR OMITTED BY THE ADMINISTRATIVE AGENT UNDER THE
LOAN DOCUMENTS (INCLUDING ANY NEGLIGENT ACTION OF THE ADMINISTRATIVE AGENT),
EXCEPT TO THE EXTENT THE SAME RESULT FROM GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT BY THE ADMINISTRATIVE AGENT.
(g) Liability Among Leaders. No Lender shall incur any liability
(other than the sharing of expenses and other matters specifically set forth
herein and in the other Loan Documents) to any other Lender, except for acts or
omissions in bad faith.
(h) Rights as Lender. With respect to its commitment hereunder, the
Advances made by it and the Notes issued to it, the Administrative Agent shall
have the same rights as a Lender and may exercise the same as though it were
not the Administrative Agent, and the term "Lender" or "Lenders" shall, unless
the context otherwise indicates, include the Administrative Agent in its
individual capacity. The Administrative Agent or any Lender may accept deposits
from, act as trustee under indentures of, and generally engage in any kind of
business with, the Borrower and any of its Affiliates, and any Person who may
do business with or own securities of the Borrower or any of its Affiliates,
all as if the Administrative Agent were not the Administrative Agent hereunder
and without any duty to account therefor to the Lenders.
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Section 10.2 Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or any
other Lender and based upon the financial statements referred to in Sections
4.1(j), 6.1 and 6.2 hereof, and such other 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
upon such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.
Section 10.3 Benefits of Article. None of the provisions of this
Article shall inure to the benefit of any Person other than Lenders;
consequently, no Person shall be entitled to rely upon, or to raise as a
defense, in any manner whatsoever, the failure of the Administrative Agent or
any Lender to comply with such provisions.
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ARTICLE 11
Miscellaneous
Section 11.1 Notices.
(a) All notices and other communications under this Agreement shall be
in writing (except in those cases where giving notice by telephone is expressly
permitted) and shall be deemed to have been given on the date personally
delivered or sent by telecopy (answerback received), or three days after
deposit in the mail, designated as certified mail, return receipt requested,
postage-prepaid, or one day after being entrusted to a reputable commercial
overnight delivery service, or one day after being delivered to the telegraph
office or sent out by telex addressed to the party to which such notice is
directed at its address determined as provided in this Section. All notices and
other communications under this Agreement shall be given to the parties hereto
at the following addresses:
(i) If to the Borrower, at:
Kevco, Inc.
University Centre I, Suite 200
0000 Xxxxx Xxxxxxxxxx
Xxxx Xxxxx, Xxxxx 00000
Attn.: Xxxxx X. Xxxxxx
with a copy to:
Xxxxxxx Xxxxxx L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxxx
Phone: 817/000-0000
Fax: 817/000-0000
with a copy to (which shall not constitute notice):
Xxxxxxx Partners II, L.P.
000 Xxxxx Xx. Xxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx X. Xxxx, Xx.
Xxxxx X. Xxxxxxx
Phone: 214/000-0000
Fax: 214/000-0000
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00
Xxxx, Xxxxxxx & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xxxx X. Xxxxx, Esq.
Phone: 214/000-0000
Fax: 214/000-0000
(ii) If to the Administrative Agent, at:
Bank of America, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxxxxxx, XX, Managing Director
(iii) If to a Lender, at its address shown below its name
on the signature pages hereof, or if applicable, set
forth in its Assignment Agreement.
(b) Any party hereto may change the address to which notices shall be
directed by giving 10 days' written notice of such change to the other parties.
Section 11.2 Expenses. The Borrower shall promptly pay:
(a) all reasonable out-of-pocket expenses of each Lender in connection
with the preparation, negotiation, execution and delivery of this Agreement and
the other Loan Documents, the transactions contemplated hereunder and
thereunder, and the making of Advances hereunder, including without limitation
the reasonable fees and expenses of Special Counsel and Xxxxxx Xxxxxxxx, LLP;
(b) all reasonable out-of-pocket expenses and attorneys' fees of the
Administrative Agent in connection with the administration of the transactions
contemplated in this Agreement and the other Loan Documents and the
preparation, negotiation, execution and delivery of any waiver, amendment or
consent by the Administrative Agent relating to this Agreement or the other
Loan Documents, including without limitation the reasonable fees and expenses
of counsel and financial consultants for the Administrative Agent.
(c) after the occurrence of an Event of Default, all costs,
out-of-pocket expenses and attorneys' fees of the Administrative Agent and each
Lender incurred for enforcement, collection, restructuring, refinancing and
"work-out," or otherwise incurred in obtaining performance under the Loan
Documents, which in each case shall include without limitation fees and
expenses of counsel and financial consultants for the Administrative Agent and
any Lender, and administrative fees for the Administrative Agent.
Notwithstanding anything to the contrary contained herein, unless an Event of
Default shall have occurred and be continuing, the Borrower shall have no
obligation to pay legal
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fees or expenses of any Lender other than the reasonable legal fees and
expenses of the Administrative Agent.
Section 11.3 Waivers. The rights and remedies of the Lenders under
this Agreement and the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which they would otherwise have. No failure
or delay by the Administrative Agent or any Lender in exercising any right
shall operate as a waiver of such right. The Lenders expressly reserve the
right to require strict compliance with the terms of this Agreement in
connection with any funding of a request for an Advance. In the event that any
Lender decides to fund an Advance at a time when the Borrower is not in strict
compliance with the terms of this Agreement, such decision by such Lender shall
not be deemed to constitute an undertaking by the Lender to fund any further
requests for Advances or preclude the Lenders from exercising any rights
available under the Loan Documents or at law or equity. Any waiver or
indulgence granted by the Lenders shall not constitute a modification of this
Agreement, except to the extent expressly provided in such waiver or
indulgence, or constitute a course of dealing by the Lenders at variance with
the terms of the Agreement such as to require further notice by the Lenders of
the Lenders' intent to require strict adherence to the terms of the Agreement
in the future. Any such actions shall not in any way affect the ability of the
Administrative Agent or the Lenders, in their discretion, to exercise any
rights available to them under this Agreement or under any other agreement,
whether or not the Administrative Agent or any of the Lenders are a party
thereto, relating to the Borrower.
Section 11.4 Determination by the Lenders Conclusive and Binding. Any
calculation or material determination required or expressly permitted to be
made by the Administrative Agent or any Lender under this Agreement shall be
made in its reasonable judgment and in good faith, and shall when made, absent
manifest error, be controlling.
Section 11.5 Set-Off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon the occurrence of an Event of Default, each Lender and any subsequent
holder of any Note, and any assignee or participant in any Note is hereby
authorized by the Borrower at any time or from time to time, without notice to
the Borrower or any other Person, any such notice being hereby expressly
waived, to set-off, appropriate and apply any deposits (general or special
(except trust and escrow accounts), time or demand, including without
limitation Indebtedness evidenced by certificates of deposit, in each case
whether matured or unmatured) and any other Indebtedness at any time held or
owing by such Lender or holder to or for the credit or the account of the
Borrower, against and on account of the Obligations and other liabilities of
the Borrower to such Lender or holder, irrespective of whether or not (a) the
Lender or holder shall have made any demand hereunder, or (b) the Lender or
holder shall have declared the principal of and interest on the Advances and
other amounts due hereunder to be due and payable as permitted by Section 8.2.
Any sums obtained by any Lender or by any assignee, participant or subsequent
holder of any Note shall be subject to pro rata treatment of all Obligations
and other liabilities hereunder.
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Section 11.6 Assignment.
(a) The Borrower may not assign or transfer any of its rights or
obligations hereunder or under the other Loan Documents without the prior
written consent of all of the Lenders.
(b) No Lender shall be entitled to assign its interest in this
Agreement, its Notes or its Advances, except as hereinafter set forth.
(c) Any Lender may at any time sell participations in all or any part
of its Advances (collectively, "Participations") to any bank or other financial
institution ("Participants") provided that such Participation shall not confer
on any Person (other than the parties hereto) any right to vote on, approve or
sign amendments or waivers, or any other independent benefit or any legal or
equitable right, remedy or other claim under this Agreement or any other Loan
Documents, other than the right to vote on, approve, or sign amendments or
waivers or consents with respect to items that would result in (i) any increase
in the commitment of any Participant; or (ii)(A) the extension of the date of
maturity of, or (B) the extension of the due date for any payment of principal,
interest or fees respecting, or (C) the reduction of the amount of any
installment of principal or interest on or the change or reduction of any
mandatory reduction required hereunder, or (D) a reduction of the rate of
interest on, the Advances, the Letters of Credit, or the Reimbursement
Obligations; or (iii) the release of security for the Obligations, including
without limitation any guarantee; or (iv) the reduction of any fees payable
hereunder. Notwithstanding the foregoing, any Lender may sell a Participation
to any of its Affiliates which is a bank or financial institution without the
consent of the Borrower, provided that such Participation shall not confer any
Person (other than the parties hereto) any right to vote on, approve or sign
amendments or waivers, or any other independent benefit or any legal or
equitable right, remedy or other claim under this Agreement or any other Loan
Documents. Notwithstanding the foregoing, the Borrower agrees that the
Participants shall be entitled to the benefits of Article 9 and Section 11.5
hereof as though they were Lenders and the Lenders may provide copies of all
financial information received from the Borrower to such Participants. To the
fullest extent it may effectively do so under Applicable Law, the Borrower
agrees that any Participant may exercise any and all rights of banker's lien,
set-off and counterclaim with respect to this Participation as fully as if such
Participant were the holder of the Advances in the amount of its Participation.
(d) Each Lender may assign to one or more Eligible Assignees its
rights and obligations under this Agreement and the other Loan Documents;
provided, however, that (i) each such assignment shall be subject to the prior
written consent of the Administrative Agent and Borrower, which consent shall
not be unreasonably withheld (provided, however, notwithstanding anything
herein to the contrary, no consent of the Borrower is required for any
assignment (A) during any time that any Event of Default has occurred and is
continuing, (B) to an Affiliate of a Lender or (C) to an existing Lender
hereunder), (ii) the applicable Lender, the Administrative Agent and Eligible
Assignee shall execute and deliver to the Administrative Agent an Assignment
and Acceptance Agreement (an "Assignment Agreement") in substantially the form
of Exhibit F to the Existing Credit Agreement, together with the Notes subject
to such assignment, (iii) the Eligible Assignee or the assigning
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Lender, as the case may be, shall deliver to the Administrative Agent a
processing fee of $3,000; and (iv) no such Assignment shall be in an amount of
less than $5,000,000.00, unless the portion of the Commitment of a Lender is
less than $5,000,000, in which case such assignment may be in the total amount
of such Lender's portion of the Commitment. Upon such execution, delivery and
acceptance from and after the effective date specified in each Assignment,
which effective date shall be at least three Business Days after the execution
thereof and the recordation of the information therein in the Register pursuant
to Section 11.6(j) hereof, (A) the Eligible Assignee thereunder shall be party
hereto and, to the extent that rights and obligations hereunder have been
assigned to it pursuant to such Assignment, have the rights and obligations of
a Lender hereunder and (B) the applicable Lender shall, to the extent that
rights and obligations hereunder have been assigned by it pursuant to such
Assignment, relinquish such rights and be released from such obligations under
this Agreement.
(e) Notwithstanding anything in clause (d) above to the contrary, any
Lender that is a fund that invests in commercial loans may at any time assign
all or any portion of its rights under this Agreement to a Related Fund.
(f) Notwithstanding anything in clause (d) above to the contrary, (i)
any Lender may assign and pledge all or any portion of its Advances and Notes
to any Federal Reserve Bank as collateral security pursuant to Regulation A of
F.R.S. Board and any Operating Circular issued by such Federal Reserve Bank and
(ii) any Lender that is a fund may at any time assign or pledge all or any
portion of its rights under this Agreement to secure such Lender's
Indebtedness; provided, however, that no such assignment under this clause (f)
shall release the assignor Lender from its obligations hereunder.
(g) Upon its receipt of an Assignment Agreement executed by a Lender
and an Eligible Assignee, and any Note or Notes subject to such assignment, the
Borrower shall, within five Business Days after its receipt of such Assignment
Agreement, at no expense to the Borrower, execute and deliver to the
Administrative Agent in exchange for the surrendered Notes new Notes to the
order of such Eligible Assignee in an amount equal to the portion of the
Advances and Commitments assigned to it pursuant to such Assignment Agreement
and new Notes to the order of the Administrative Agent in an amount equal to
the portion of the Advances and Commitments retained by it hereunder. Such new
Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Notes, shall be dated the effective date
of such Assignment Agreement and shall otherwise be in form and substance
satisfactory to Administrative Agent and Special Counsel.
(h) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 11.6, disclose
to the Eligible Assignee or Participant or proposed assignee or participant,
any information relating to the Borrower furnished to such Lender by or on
behalf of the Borrower, provided such Person has executed a Confidentiality
Agreement.
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(i) Except as specifically set forth in this Section 11.6, nothing in
this Agreement or any other Loan Documents, expressed or implied, is intended
to or shall confer on any Person other than the respective parties hereto and
thereto and their successors and assignees permitted hereunder and thereunder
any benefit or any legal or equitable right, remedy or other claim under this
Agreement or any other Loan Documents.
(j) Notwithstanding anything in this Section 11.6 to the contrary, no
Eligible Assignee or Participant shall be entitled to receive any greater
payment under Section 2.15, or Section 9.3 than such assigning or participating
Lender or any other Lender would have been entitled to receive with respect to
the interest assigned or participated to such Eligible Assignee or Participant.
(k) The Register. The Administrative Agent shall maintain at its
address referred to in Section 11.1 a copy of each Assignment Agreement
delivered to and accepted by it a register (the "Register") for the recordation
of the names and addresses of the Lenders, any U.S. taxpayer identification
number, the Specified Percentages of the Lenders whether such Lender is an
original Lender or the assignee of another Lender pursuant to an Assignment
Agreement and the effective date and amount of each Assignment Agreement
delivered to and accepted by it and the parties thereto (the "Ownership
Information"). Any transfer of an ownership interest in any Advance, including
any right to principal or interest payable with respect to such Advance, shall
be subject to and conditioned upon the due recordation of such transfer and
Ownership Information with respect to the transferee in the Register and such
transfer shall be effective only upon such recordation (and not prior thereto).
The entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and the Borrower, the Administrative Agent and the
Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes hereof. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time
to time upon reasonable prior notice.
Section 11.7 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but
all such separate counterparts shall together constitute but one and the same
instrument.
Section 11.8 Severability. Any provision of this Agreement which is
for any reason prohibited or found or held invalid or unenforceable by any
court or governmental agency shall be ineffective to the extent of such
prohibition or invalidity or unenforceability without invalidating the
remaining provisions hereof in such jurisdiction or affecting the validity or
enforceability of such provision in any other jurisdiction.
Section 11.9 Interest and Charges. It is not the intention of any
parties to this Agreement to make an agreement in violation of the laws of any
applicable jurisdiction relating to usury. Regardless of any provision in any
Loan Documents, no Lender shall ever be entitled to receive, collect or apply,
as interest on the Obligations, any amount in excess of the Maximum Amount. If
any Lender or participant ever receives, collects or applies, as interest, any
such excess, such amount which would be excessive interest shall be deemed a
partial repayment of principal and treated
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hereunder as such; and if principal is paid in full, any remaining excess shall
be paid to the Borrower. In determining whether or not the interest paid or
payable, under any specific contingency, exceeds the Maximum Amount, the
Borrower and the Lenders shall, to the maximum extent permitted under
Applicable Law, (a) characterize any nonprincipal payment as an expense, fee or
premium rather than as interest, (b) exclude voluntary prepayments and the
effect thereof, and (c) amortize, prorate, allocate and spread in equal parts,
the total amount of interest throughout the entire contemplated term of the
Obligations so that the interest rate is uniform throughout the entire term of
the Obligations; provided, however, that if the Obligations are paid and
performed in full prior to the end of the full contemplated term thereof, and
if the interest received for the actual period of existence thereof exceeds the
Maximum Amount, the Lenders shall refund to the Borrower the amount of such
excess or credit the amount of such excess against the total principal amount
of the Obligations owing, and, in such event, the Lenders shall not be subject
to any penalties provided by any laws for contracting for, charging or
receiving interest in excess of the Maximum Amount. This Section shall control
every other provision of all agreements pertaining to the transactions
contemplated by or contained in the Loan Documents.
Section 11.10 Headings. Headings used in this Agreement are for
convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 11.11 Amendment and Waiver. Except as otherwise expressly
stated in this Agreement, the provisions of this Agreement may not be amended,
modified or waived except by the written agreement of the Borrower and the
Determining Lenders; provided, however, that no such amendment, modification or
waiver shall be made (a) without the consent of all Lenders, if it would (i)
increase any Specified Percentage or commitment of any Lender, or (ii) extend
the date of maturity of, extend the due date for any payment of principal or
interest on, reduce the amount of any installment of principal or interest on,
or reduce the rate of interest on, any Advance, the Reimbursement Obligations
or other amount owing under any Loan Documents, or (iii) release any security
for or guaranty of the Obligations (except pursuant to this Agreement), or (iv)
reduce the fees payable hereunder, or (v) revise this Section 11.11, or (vi)
waive the date for payment of any of the Obligations, or (vii) amend the
definition of "Borrowing Base," "Determining Lenders," "Majority Lenders,"
"Revolving Credit Percentage," "Facility A Term Loan Specified Percentage,"
"Facility B Term Loan Specified Percentage" or "Total Specified Percentage";
(b) without the consent of the Administrative Agent, if it would alter the
rights, duties or obligations of the Administrative Agent; or (c) without the
consent of the Issuing Bank, if it would alter the rights, duties or
obligations of the Issuing Bank. Notwithstanding anything in this Agreement to
the contrary, no amendment, waiver or consent that changes the allocations of
payments between the Facility A Term Loan Advances and the Facility B Term Loan
Advances may be without the express written consent of the following: Lenders
holding more than 50% of all outstanding Facility A Term Loan Advances and the
Lenders holding more than 50% of all outstanding Facility B Term Loan Advances.
Neither this Agreement nor any term hereof may be amended orally, nor may any
provision hereof be waived orally but only by an instrument in writing signed
by the Administrative Agent and, in the case of an amendment, by the Borrower.
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Section 11.12 Exception to Covenants. Neither the Borrower nor any
Subsidiary shall be deemed to be permitted to take any action or fail to take
any action which is permitted as an exception to any of the covenants contained
herein or which is within the permissible limits of any of the covenants
contained herein if such action or omission would result in the breach of any
other covenant contained herein.
Section 11.13 No Liability of Issuing Bank. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter
of Credit with respect to its use of such Letter of Credit. Neither the Issuing
Bank nor any Lender nor any of their respective officers or directors shall be
liable or responsible for: (a) the use that may be made of any Letter of Credit
or any acts or omissions of any beneficiary or transferee in connection
therewith; (b) the validity, sufficiency or genuineness of documents, or of any
endorsement thereon, even if such documents should prove to be in any or all
respects invalid, insufficient, fraudulent or forged; (c) payment by the
Issuing Bank against presentation of documents that do not comply with the
terms of a Letter of Credit, including failure of any documents to bear any
reference or adequate reference to the Letter of Credit, except for any payment
made upon the Issuing Bank's gross negligence or willful misconduct; or (d) any
other circumstances whatsoever in making or failing to make payment under any
Letter of Credit, except that the Borrower shall have a claim against the
Issuing Bank, and the Issuing Bank shall be liable to the Borrower, to the
extent of any direct, but not consequential, damages suffered by the Borrower
that the Borrower proves were caused by (i) the Issuing Bank's willful
misconduct or gross negligence in determining whether documents presented under
any Letter of Credit comply with the terms of the Letter of Credit or (ii) the
Issuing Bank's willful failure to make lawful payment under a Letter of Credit
after the presentation to it of a draft and certificates strictly complying
with the terms and conditions of the Letter of Credit. In furtherance and not
in limitation of the foregoing, the Issuing Bank may accept documents that
appear on their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary.
Section 11.14 Amendment, Restatement, Extension, Renewal and Increase.
This Agreement is a renewal, extension, amendment, increase and restatement of
the Existing Credit Agreement, and is not a novation of the "Obligations" (as
defined in the Existing Credit Agreement). All terms and provisions of this
Agreement supersede in their entirety the Existing Credit Agreement. All Liens
covering the Collateral, or any part thereof, executed in connection with the
Existing Credit Agreement shall remain valid, binding and enforceable Liens
against the Persons which granted such Liens.
SECTION 11.15 GOVERNING LAW. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS; PROVIDED, HOWEVER, THAT IT IS AGREED THAT THE PROVISIONS OF
CHAPTER 346 OF THE TEXAS FINANCE CODE, AS AMENDED, SHALL NOT APPLY TO THE
ADVANCES, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS. THE LOAN DOCUMENTS ARE
PERFORMABLE IN DALLAS, DALLAS COUNTY, TEXAS, AND BORROWER AND EACH SURETY,
GUARANTOR, ENDORSER AND ANY OTHER PARTY EVER LIABLE
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FOR PAYMENT OF ANY MONEY PAYABLE WITH RESPECT TO THE LOAN DOCUMENTS, JOINTLY
AND SEVERALLY WAIVE THE RIGHT TO BE SUED ELSEWHERE. THE BORROWER AND EACH
LENDER AGREE THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS,
TEXAS SHALL HAVE EXCLUSIVE JURISDICTION OVER PROCEEDINGS IN CONNECTION WITH
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 11.16 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY
AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO
ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS
PROVISION IS A MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THIS AGREEMENT
AND MAKING ANY ADVANCES HEREUNDER.
Section 11.17 Release. The Borrower hereby expressly acknowledges and
agrees that, as of the date of this Agreement, it has no setoffs,
counterclaims, adjustments, recoupments, defenses, claims or actions of any
character, whether contingent, non-contingent, liquidated, unliquidated, fixed,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured, known or unknown, against any Lender or the Administrative Agent or
any grounds or cause for reduction, modification or subordination of the
Obligations or any liens or security interests of any Lender or the
Administrative Agent. To the extent the Borrower possesses, as of the date of
this Agreement, any such setoffs, counterclaims, adjustments, recoupments,
claims, actions, grounds or causes, the Borrower hereby waives, and hereby
releases each Lender and the Administrative Agent from, any and all of such
setoffs, counterclaims, adjustments, recoupments, claims, actions, grounds and
causes, such waiver and release being with full knowledge and understanding of
the circumstances and effects of such waiver and release and after having
consulted counsel with respect thereto.
SECTION 11.18 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS
BETWEEN THE PARTIES.
Section 11.19 Confidentiality. Each of the Administrative Agent and
the Lenders agrees to keep confidential all information provided to it by the
Borrower or the Administrative Agent pursuant to or in connection with this
Agreement that is designated by the Borrower in writing as confidential (the
"Confidential Information"); provided that nothing herein shall prevent any
Lender or the Administrative Agent from disclosing any such Confidential
Information (i) to the Administrative Agent or any other Lender, (ii) to any
transferee or prospective transferee which receives such Confidential
Information having been made aware of the confidential nature thereof and which
has
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agreed in writing to be bound by the terms of this Section 11.19, (iii) to its
directors, officers, employees, employees of affiliates, examiners and
professional advisers who have a need to know such Confidential Information in
accordance with customary banking practices and who receive such Confidential
Information having been made aware of the restrictions of this subsection, (iv)
upon the request or demand of any Tribunal having jurisdiction over such
Person, (v) in response to any order of any court or other Tribunal or as may
otherwise be required pursuant to any Applicable Law, (vi) in connection with
the exercise of any remedy hereunder, (vii) which now or hereafter becomes
generally available to the public other than as a result of a disclosure by
such Lender or the Administrative Agent or a disclosure known to such Lender or
the Administrative Agent to have been made by any person or entity to which
such Lender or the Administrative Agent has delivered such Confidential
Information, (viii) which was available to such Lender or the Administrative
Agent prior to its disclosure to such Lender or the Administrative Agent by the
Borrower, or (ix) which becomes available to such Lender or the Administrative
Agent from a source other than the Borrower, provided that such source is not
(1) known to such Lender or the Administrative Agent to be bound by a
confidentiality agreement with the Borrower or (2) known to such Lender or the
Administrative Agent to be otherwise prohibited from transmitting the
information to such Lender or the Administrative Agent by a contractual, legal
or fiduciary obligation.
===============================================================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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98
IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
BORROWER: KEVCO, INC.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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99
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A., formerly known as
NationsBank, N.A., as Administrative Agent
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, XX
Managing Director
LENDERS: BANK OF AMERICA, N.A., formerly known as
NationsBank, N.A., as a Lender
By:
----------------------------------------
Xxxxxxx X. Xxxxxxxxxxx, XX
Managing Director
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, Xxxxx 00000
Attn.: Xxxxxxx X. Xxxxxxxxxxx, XX
Managing Director
NATIONAL CITY BANK KENTUCKY
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
000 Xxxxx 0xx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
GUARANTY FEDERAL BANK, F.S.B.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
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100
XXXXX FARGO BANK, N.A.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
PILGRIM PRIME RATE TRUST
By: Pilgrim Investments, Inc., as its
Investment Manager
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Two Renaissance Square
00 Xxxxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
ARCHIMEDES FUNDING, L.L.C.
By: ING Capital Advisors, Inc., as
Collateral Manager
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
c/o ING Capital Advisors, Inc.
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
-100-
101
ALLIANCE CAPITAL FUNDING, L.L.C.
By: Alliance Capital Management, L.P., as
Manager on behalf of ALLIANCE CAPITAL
FUNDING, L.L.C.
By: ALLIANCE CAPITAL
MANAGEMENT CORPORATION
General Partner of Alliance
Capital Management, L.P.
By:
---------------------------------
Name:
---------------------------
Title:
--------------------------
Alliance Capital Management, L.P.
1345 Avenue of the Americas - 38th Floor
New York, New York 10105
XXXXXXX XXXXX DEBT STRATEGIES PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Xxxxxxx Xxxxx Global Investment Series:
INCOME STRATEGIES PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P.,
as Investment Advisor
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
000 Xxxxxxxx Xxxx Xxxx-Xxxx 0X
Xxxxxxxxxx, Xxx Xxxxxx 00000
-101-
000
XXXX XXX, XXXXX, N.A.
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
0000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, Xxxxx 00000
XXX CAPITAL FUNDING LP
By: Highland Capital Management, L.P.,
as Collateral Manager
By:
----------------------------------------
Name:
----------------------------------
Title:
---------------------------------
c/o Highland Capital Management, L.P.
1150 Two Galleria Tower
00000 Xxxx Xxxx, XX #00
Xxxxxx, Xxxxx 00000
-102-
