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EXHIBIT 10.4
CREDIT AGREEMENT
This Agreement, dated as of December 18, 2000, is among Daisytek,
Incorporated, a Delaware corporation, Daisytek International Corporation, a
Delaware corporation, the Lenders as defined herein, Citizens Bank of
Massachusetts, as Syndication Agent, Bank of America, N.A., as Documentation
Agent, Bank One, NA, as an LC Issuer and Bank One, Texas, NA, a national banking
association having its principal office in Chicago, Illinois, as an LC Issuer
and as Administrative Agent. The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Accounts" means all rights to payment for goods sold or leased or
services rendered by the Borrower and its Domestic Subsidiaries, whether or not
earned by performance, together with all security interests or other security
held by or granted to the Borrower or its Domestic Subsidiaries to secure such
rights to payment.
"Acquired Person" means any Person which becomes a Wholly-Owned
Subsidiary of the Borrower or any of its Subsidiaries as a result of a Permitted
Acquisition.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which a
Loan Party or any of its Subsidiaries (i) acquires any going business or all or
substantially all of the assets of any firm, corporation or limited liability
company, or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding ownership interests of a partnership or
limited liability company.
"Administrative Agent" means Bank One in its capacity as contractual
representative of the Lenders pursuant to Article X, and not in its individual
capacities as an LC Issuer and a Lender, and any successor Administrative Agent
appointed pursuant to Article X.
"Advance" means (a) a borrowing hereunder, (i) made by the Lenders on
the same Borrowing Date, or (ii) converted or continued by the Lenders on the
same date of conversion or continuation, consisting, in either case, of the
aggregate amount of the several Loans of the same Type and, in the case of
Eurodollar Loans, for the same Interest Period, (b) a Swing Line Advance, and
(c) a payment under a Facility LC.
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"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more (or in the case of the Guarantor, 15% or more) of any class of voting
securities (or other ownership interests) of the controlled Person or possesses,
directly or indirectly, the power to direct or cause the direction of the
management or policies of the controlled Person, whether through ownership of
stock, by contract or otherwise.
"Agents" means, collectively, the Administrative Agent, the Syndication
Agent and the Documentation Agent.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders, as reduced from time to time pursuant to the terms hereof.
"Aggregate Outstanding Credit Exposure" means, at any time, the
aggregate of the Outstanding Credit Exposure of all the Lenders.
"Agreement" means this credit agreement, as it may be amended or
modified and in effect from time to time.
"Agreement Accounting Principles" means generally accepted accounting
principles as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 5.4(b).
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of the
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Fee Rate" means, at any time, the percentage rate per annum
at which Facility Fees are accruing on the Aggregate Commitment (without regard
to usage) at such time as set forth in the Pricing Schedule.
"Applicable Margin" means, with respect to Advances of any Type at any
time, the percentage rate per annum which is applicable at such time with
respect to Advances of such Type as set forth in the Pricing Schedule.
"Arrangers" means Banc One Capital Markets, Inc., a Delaware
corporation, Banc of America Securities LLC, a Delaware limited liability
company, their successors, in their capacities as Co-Lead Arrangers and Co-Book
Runners.
"Article" means an article of this Agreement unless another document is
specifically referenced.
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"Authorized Officer" means any of the chief executive officer,
president, chief financial officer, or any other officer of the Borrower
designated in writing by any of the foregoing to the Administrative Agent,
acting singly.
"Available Aggregate Commitment" means, at any time, the Aggregate
Commitment then in effect minus the Aggregate Outstanding Credit Exposure at
such time.
"Bank One" means Bank One, Texas, NA, a national banking association
having its principal office in Dallas, Texas, in its individual capacity, and
its successors.
"Borrower" means Daisytek, Incorporated, a Delaware corporation, and
its successors and assigns.
"Borrowing Base" means, at any time, an amount equal to the sum of (a)
80% of Consolidated Eligible Accounts, plus (b) 50% of Consolidated Eligible
Inventory. In the event the Borrower closes the financing transaction permitted
under Section 6.13(iii), the amount of availability under the Borrowing Base
shall be reduced by the amount of Indebtedness the Borrower and its Domestic
Subsidiaries are permitted to incur in connection with such financing
transaction.
"Borrowing Base Certificate" means a certificate in the form of Exhibit
F attached hereto.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.8.
"BSD" means Business Supplies Distributors, Inc.
"BSD Business" means the line of business conducted by BSD and related
Subsidiaries.
"BSD Facility" means an inventory and working capital financing
agreement, as the same may be amended or modified and in effect from time to
time, between a Wholly-Owned Subsidiary of the Guarantor formed to be the
holding company of the BSD Business and a commercial lending institution, on
terms and conditions satisfactory to the Administrative Agent in its sole
discretion.
"BSD Restructure Requirements" is defined in Section 6.12(y).
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Dallas and New York for the conduct of
substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Dallas for the conduct of substantially all of their commercial lending
activities and interbank wire transfers can be made on the Fedwire system.
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"Capital Expenditures" means, without duplication, any expenditures for
any purchase or other acquisition of any asset which would be classified as a
fixed or capital asset on a Person's balance sheet prepared in accordance with
Agreement Accounting Principles.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with Agreement Accounting Principles.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with
Agreement Accounting Principles.
"Cash Equivalent Investments" means (i) short-term obligations of, or
fully guaranteed by, the United States of America, (ii) commercial paper rated
A-1 or better by S&P or P-1 or better by Moody's, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.
"Change" is defined in Section 3.2.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange Commission under the Securities Exchange
Act of 1934) of 20% or more of the outstanding shares of voting stock of the
Guarantor; or (ii) the Guarantor shall cease to own, free and clear of all Liens
or other encumbrances, 100% of the outstanding shares of voting stock of the
Borrower on a fully diluted basis.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Collateral Documents" means, collectively, the Pledge Agreement, the
Parent Guarantee, the Subsidiary Guarantee, the pledge agreements pursuant to
which 65% of the capital stock of the Borrower's Material Foreign Subsidiaries
are pledged in favor of the Administrative Agent for the ratable benefit of the
LC Issuer, the Lenders and the other holders of Secured Obligations, the
Security Agreement, related UCC-1 financing statements and all documents
hereafter executed as security for, or to ensure repayment of, the Secured
Obligations.
"Collateral Shortfall Amount" is defined in Section 8.1.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans to, and participate in Facility LCs issued upon the application of
the Borrower, in an aggregate amount not exceeding the amount set forth opposite
its signature below, as it may be modified as a result of any
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assignment that has become effective pursuant to Section 12.3.2 or as otherwise
modified from time to time pursuant to the terms hereof.
"Consolidated Capital Expenditures" means, with reference to any
period, the Capital Expenditures of the Borrower and its Subsidiaries calculated
on a consolidated basis for such period.
"Consolidated EBITDA" means Consolidated Net Income plus, to the extent
deducted from revenues in determining Consolidated Net Income, (i) Consolidated
Interest Expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization, (v) $375,000 for the quarter ended December 31, 1999,
$1,325,000 for the quarter ended March 31, 2000, $634,000 for the quarter ended
June 30, 2000 and $1,555,000 for the quarter ended September 30, 2000; (vi) for
the quarters ending December 31, 2000 and March 31, 2001, actual non-recurring
charges, not to exceed $1,500,000 in the aggregate, related to the physical
separation of assets and related activities resulting from the spinoff of
PFSweb, Inc. and actual non-recurring, non-cash charges, not to exceed $500,000
in the aggregate, incurred as a result of the proposed restructure of the Tape
Company line of business, (vii) extraordinary losses incurred other than in the
ordinary course of business, to the extent approved by the Administrative Agent
in its sole and absolute discretion, minus, to the extent included in
Consolidated Net Income, extraordinary gains realized other than in the ordinary
course of business, as determined by the Administrative Agent in its sole
discretion, all calculated for the Borrower and its Subsidiaries on a
consolidated basis. Notwithstanding anything herein to the contrary,
Consolidated EBITDA shall be inclusive of the EBITDA (calculated on a basis
consistent with this definition of Consolidated EBITDA) of any Acquired Person
for the period of determination to the extent such EBITDA is (A) included in its
four most recent audited fiscal quarters and (B) is reflected in audited
financial statements of such Acquired Person. Consolidated EBITDA shall exclude
all EBITDA of Foreign Subsidiaries with Qualified Foreign Financings.
"Consolidated Eligible Accounts" means, at any time, Accounts created
in the ordinary course of business that meet the following requirements at the
time they come into existence and continue to meet the same until collected in
full:
(a) it complies with all applicable laws, rules, and
regulations, including, without limitation, usury laws, the Federal
Truth in Lending Act, and Regulation Z of the Board of Governors of the
Federal Reserve System;
(b) it is genuine and in all respects what it purports to be;
(c) it has not been outstanding for more than ninety (90) days
past the original date of invoice;
(d) it was created in connection with (i) the sale of goods by
the Loan Party in the ordinary course of business and such sale has
been consummated and such goods have been shipped f.o.b. or delivered
and received by the account debtor or its designee, or (ii) the
performance of services by the Loan Party in the ordinary course of
business and such services have been completed and accepted by the
account debtor or its designee;
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(e) it arises from an enforceable contract, the performance of
which has been completed by the Loan Party for the portion billed and
included in Consolidated Eligible Accounts;
(f) it does not arise from the sale of any good that is on a
xxxx-and-hold, guaranteed sale, sale-or-return, sale on approval,
consignment, or any other repurchase or return basis that makes payment
conditional;
(g) the Loan Party has good and indefeasible title to the
Account and the Account is not subject to any Lien except Liens in
favor of the Administrative Agent;
(h) it does not arise out of a contract with or order from, an
account debtor that, by its terms, prohibits or makes void or
unenforceable the grant of a security interest by the Loan Party to the
Administrative Agent in and to such account;
(i) except for return credits and disputed amounts deducted
from the amount thereof included in Consolidated Eligible Accounts, it
is not subject to any setoff, counterclaim, defense, dispute,
recoupment, or adjustment other than normal discounts for prompt
payment;
(j) the account debtor is not insolvent or the subject of any
bankruptcy or insolvency proceeding and has not made an assignment for
the benefit of creditors, suspended normal business operations,
dissolved, liquidated, terminated its existence, ceased to pay its
debts as they become due, or suffered a receiver or trustee to be
appointed for any of its assets or affairs;
(k) it is not evidenced by chattel paper or an instrument,
except to the extent the same has been deposited with the
Administrative Agent as collateral;
(l) it is not owed by an Affiliate of the Loan Party;
(m) it is payable in U. S. dollars by the account debtor;
(n) the account debtor is located in the United States of
America;
(o) the aggregate balances then outstanding on accounts owed
by such account debtor and its known Affiliates to any Loan Party
comprise less than 10% of total Consolidated Eligible Accounts or such
accounts shall be disqualified, to the extent of the excess;
(p) at the time the account arose, fewer than 20% of the
aggregate balances then outstanding on Accounts owed by such account
debtor and its known Affiliates to the Loan Parties are ineligible
hereunder, or all of the Accounts of such account debtor shall be
considered ineligible;
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(q) there is no agreement on the part of any Loan Party to
extend payment terms beyond 90 days with respect to such Account; and
(r) The account debtor is not a governmental agency,
authority, instrumentality, or political subdivision of any government.
The amount of Consolidated Eligible Accounts owed by an account debtor to the
Loan Party shall be reduced by the amount of all "contra accounts" and other
obligations owed by the Loan Party to such account debtor.
"Consolidated Eligible Inventory" means, at any time, all inventory of
finished goods then owned by (and in the possession or under the control of) the
Borrower and its Domestic Subsidiaries that strictly complies with all of the
Loan Parties' representations and warranties contained in the Loan Documents,
which is held for sale or disposition in the ordinary course of the Borrower's
business, in which no party other than the Administrative Agent has a security
interest, valued at the lower of actual cost or fair market value. Consolidated
Eligible Inventory shall not include (a) inventory that has been shipped or
delivered to a customer or other party on consignment, a sale-or-return basis,
or on the basis of any similar understanding, (b) inventory with respect to
which a claim exists disputing the Borrower's title to or right to possession of
such inventory, (c) work-in-process inventory, (d) obsolete inventory, (e)
inventory that is damaged or not otherwise in good condition, or is in the
process of being returned to the Loan Party, (f) inventory which does not comply
with any applicable law, rule, or regulation or any legal standard imposed by
any governmental authority with respect to its manufacture, use, or sale, (g)
inventory which is not located within the United States of America, and (h)
inventory that for any other reason is not readily saleable in the ordinary
course of business.
"Consolidated Indebtedness" means at any time the Indebtedness of the
Borrower and its Subsidiaries calculated on a consolidated basis as of such
time.
"Consolidated Intangible Assets" means at any time goodwill (including
any amounts, however designated, representing the excess of the purchase price
paid for assets or stock acquired subsequent to the date of this Agreement over
the value assigned thereto on the books of the Guarantor and its Subsidiaries),
patents, trademarks, trade names, copyrights, and all other intangible assets of
the Guarantor and its Subsidiaries calculated on a consolidated basis as of such
time.
"Consolidated Interest Expense" means, with reference to any period,
(a) for purpose of determining Consolidated EBITDA, interest expense and (b) for
purposes of determining Fixed Charge Coverage Ratio, cash interest expense, in
each case of the Borrower and its Subsidiaries calculated on a consolidated
basis for such period. Consolidated Interest Expense shall exclude all interest
expense of Foreign Subsidiaries attributable to Qualified Foreign Financings.
"Consolidated Net Income" means, with reference to any period, the net
income (or loss) of the Borrower and its Subsidiaries calculated on a
consolidated basis for such period.
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"Consolidated Net Worth" means at any time the consolidated
stockholders' equity of the Guarantor and its Subsidiaries calculated on a
consolidated basis as of such time.
"Consolidated Tangible Net Worth" means at any time the difference
between (i) Consolidated Net Worth and (ii) Consolidated Intangible Assets.
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any comfort letter, operating
agreement, take-or-pay contract or the obligations of any such Person as general
partner of a partnership with respect to the liabilities of the partnership;
provided, however, that Contingent Obligations shall not include a Loan Party's
guarantees of payment of its Wholly-Owned Subsidiary's accounts payable or
Operating Leases arising in the ordinary course of such Wholly-Owned
Subsidiary's business payable on terms customary in the trade.
"Conversion/Continuation Notice" is defined in Section 2.9.
"Controlled Group" means all members of a controlled group of
corporations or other business entities and all trades or businesses (whether or
not incorporated) under common control which, together with the Guarantor or any
of its Subsidiaries, are treated as a single employer under Section 414 of the
Code.
"Credit Extension" means the making of an Advance or the issuance of a
Facility LC hereunder.
"Credit Extension Date" means the Borrowing Date for an Advance or the
issuance date for a Facility LC.
"Default" means an event described in Article VII.
"Dollar" and "$" means lawful money of the United States of America.
"Domestic Subsidiaries" means all Subsidiaries of the Borrower
organized under the laws of the United States of America or a state thereof.
"Environmental Laws" means any and all federal, state, local and
foreign statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating to
(i) the protection of the environment, (ii) the effect of the environment on
human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water or
land, or (iv) the manufacture, processing, distribution, use,
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treatment, storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Eurodollar Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Base Rate" means, with respect to a Eurodollar Advance for
the relevant Interest Period, the applicable British Bankers' Association
Interest Settlement Rate for deposits in U.S. dollars appearing on Reuters
Screen FRBD as of 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, and having a maturity equal to such Interest
Period, provided that, (i) if Reuters Screen FRBD is not available to the
Administrative Agent for any reason, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the applicable British Bankers'
Association Interest Settlement Rate for deposits in U.S. dollars as reported by
any other generally recognized financial information service as of 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period,
and having a maturity equal to such Interest Period, and (ii) if no such British
Bankers' Association Interest Settlement Rate is available to the Administrative
Agent, the applicable Eurodollar Base Rate for the relevant Interest Period
shall instead be the rate determined by the Administrative Agent to be the rate
at which Bank One or one of its Affiliate banks offers to place deposits in U.S.
dollars with first-class banks in the London interbank market at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period, in the approximate amount of Bank One's relevant Eurodollar
Loan and having a maturity equal to such Interest Period.
"Eurodollar Loan" means a Loan which, except as otherwise provided in
Section 2.11, bears interest at the applicable Eurodollar Rate.
"Eurodollar Rate" means, with respect to a Eurodollar Advance for the
relevant Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base
Rate applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.
"Excluded Taxes" means, in the case of each Lender or applicable
Lending Installation and the Administrative Agent, taxes imposed on its overall
net income, and franchise taxes imposed on it, by (i) the jurisdiction under the
laws of which such Lender or the Administrative Agent is incorporated or
organized or (ii) the jurisdiction in which the Administrative Agent's or such
Lender's principal executive office or such Lender's applicable Lending
Installation is located.
"Exhibit" refers to an exhibit to this Agreement, unless another
document is specifically referenced.
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"Existing Credit Agreement" means that certain Credit Agreement dated
as of May 22, 1995, among the Borrower, the Guarantor, the other Subsidiaries
party thereto, Chase Bank of Texas, N.A., as Administrative Agent, and the
Lenders party thereto, as amended.
"Facility LC" is defined in Section 2.19.1.
"Facility LC Application" is defined in Section 2.19.3.
"Facility LC Collateral Account" is defined in Section 2.19.11.
"Facility Termination Date" means December 19, 2003, or any earlier
date on which the Aggregate Commitment is reduced to zero or otherwise
terminated pursuant to the terms hereof.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Fee Letter" means the Fee Letter from Bank One, individually and as
the Administrative Agent, to the Borrower dated September 12, 2000.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics or (ii) any Rate Management Transaction.
"Fixed Charge Coverage Ratio" means, as of the end of each fiscal
quarter of the Borrower, for the Borrower and its Subsidiaries on a consolidated
basis for the four consecutive quarters ending on such date, the ratio of (i)
Consolidated EBITDA for the applicable period minus cash expense for Taxes paid
to (ii) the sum of (a) Consolidated Interest Expense for the applicable period,
plus (b) all scheduled payments of principal of Indebtedness for the applicable
period, plus (c) all dividends or other distributions paid by the Guarantor to
its stockholders in cash during the applicable period, plus (d) Consolidated
Capital Expenditures for the applicable period (net of any insurance proceeds,
if applicable).
"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) the Applicable Margin, in each case
changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which, except as otherwise
provided in Section 2.11, bears interest at the Floating Rate.
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"Floating Rate Loan" means a Loan which, except as otherwise provided
in Section 2.11, bears interest at the Floating Rate.
"Foreign Subsidiaries" means all Subsidiaries of the Borrower or the
Guarantor organized under the laws of a jurisdiction located outside the United
States.
"Guarantor" means Daisytek International Corporation, a Delaware
corporation.
"Indebtedness" of a Person means such Person's (i) obligations for
borrowed money, (ii) obligations representing the deferred purchase price of
Property or services (other than accounts payable arising in the ordinary course
of such Person's business payable on terms customary in the trade), (iii)
obligations, whether or not assumed, secured by Liens or payable out of the
proceeds or production from Property now or hereafter owned or acquired by such
Person, (iv) obligations which are evidenced by notes, acceptances, or other
instruments, (v) obligations of such Person to purchase securities or other
Property arising out of or in connection with the sale of the same or
substantially similar securities or Property, (vi) Capitalized Lease
Obligations, (vii) Contingent Obligations, (viii) Off-Balance Sheet Liabilities,
(ix) indebtedness incurred under the trade accounts receivable conduit financing
arrangement permitted by Section 6.13(iii), (x) LC Obligations and (xi) any
other obligation for borrowed money or other financial accommodation which in
accordance with Agreement Accounting Principles would be shown as a liability on
the consolidated balance sheet of such Person. For purposes of computing the
financial covenants hereunder, Qualified Foreign Financings shall not be
considered Indebtedness.
"Interest Period" means, with respect to a Eurodollar Advance, a period
of one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on the day
which corresponds numerically to such date one, two, three or six months
thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth succeeding month, such
Interest Period shall end on the last Business Day of such next, second, third
or sixth succeeding month. If an Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the next
succeeding Business Day, provided, however, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"Investment" of a Person means any loan, advance (other than
commission, travel and similar advances to officers and employees made in the
ordinary course of business), extension of credit (other than accounts
receivable arising in the ordinary course of business on terms customary in the
trade) or contribution of capital by such Person; stocks, bonds, mutual funds,
partnership interests, notes, debentures or other securities owned by such
Person; any deposit accounts and certificate of deposit owned by such Person;
and structured notes, derivative financial instruments and other similar
instruments or contracts owned by such Person.
"LC Fee" is defined in Section 2.19.4.
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"LC Issuer" means Bank One or Bank One, NA (or any subsidiary or
Affiliate of Bank One designated by Bank One) in its capacity as issuer of
Facility LCs hereunder.
"LC Obligations" means, at any time, the sum, without duplication, of
(i) the aggregate undrawn stated amount under all Facility LCs outstanding at
such time plus (ii) the aggregate unpaid amount at such time of all
Reimbursement Obligations.
"LC Payment Date" is defined in Section 2.19.5.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, the office, branch, subsidiary or affiliate of such Lender
or the Administrative Agent listed on the signature pages hereof or on a
Schedule or otherwise selected by such Lender or the Administrative Agent
pursuant to Section 2.17.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, Capitalized Lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's loan made
pursuant to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, the Facility LC Applications,
any Notes issued pursuant to Section 2.13, and the Collateral Documents.
"Loan Party" means each of the Borrower, the Guarantor, each Subsidiary
Guarantor and each Subsidiary that is required to guarantee the Secured
Obligations pursuant to the requirements hereof and "Loan Parties" means all of
the foregoing, collectively.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of any Loan Party to perform its obligations under the Loan Documents to
which it is a party, or (iii) the validity or enforceability of any of the Loan
Documents or the rights or remedies of the Administrative Agent, the LC Issuer
or the Lenders thereunder.
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"Material Foreign Subsidiary" means Daisytek Australia Pty. Ltd.,
Daisytek Canada, Inc., Daisytek de Mexico S.A. de C.V., Business Supplies
Distributors Europe B.V., and any other Foreign Subsidiary having, as of any
date of determination, net assets in excess of $20,000,000.
"Material Indebtedness" is defined in Section 7.5.
"Maximum Rate" means, at any time and with respect to any Lender, the
maximum rate of interest under applicable law that such Lender may charge the
Borrower. The Maximum Rate shall be calculated in a manner that takes into
account any and all fees, payments, and other charges in respect of the Loan
Documents that constitute interest under applicable law. Each change in any
interest rate provided for herein based upon the Maximum Rate resulting from a
change in the Maximum Rate shall take effect without notice to the Borrowers at
the time of such change in the Maximum Rate. For purposes of determining the
Maximum Rate under Texas law, the applicable rate ceiling shall be the weekly
rate ceiling described in, and computed in accordance with, Chapter 303 of the
Texas Finance Code, as amended from time to time.
"Modify" and "Modification" are defined in Section 2.19.1.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer or
disposition of any asset of any Person or issuance of any Indebtedness or equity
of any Person, the aggregate amount of cash received by such Person in
connection with such transaction minus reasonable fees, costs and expenses,
related taxes paid or payable, and repayment of any Indebtedness secured by the
assets sold, leased, transferred or disposed of which is required to be repaid
as a result of such transaction.
"Net Xxxx-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions. "Unrealized
losses" means the fair market value of the cost to such Person of replacing such
Rate Management Transaction as of the date of determination (assuming the Rate
Management Transaction were to be terminated as of that date), and "unrealized
profits" means the fair market value of the gain to such Person of replacing
such Rate Management Transaction as of the date of determination (assuming such
Rate Management Transaction were to be terminated as of that date).
"Non-U.S. Lender" is defined in Section 3.5(iv).
"Note" is defined in Section 2.13.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Loans, the LC Obligations, all accrued and unpaid fees and all
expenses, reimbursements, indemnities and
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other obligations of the Borrower or any Loan Party to the Lenders or to any
Lender, the Administrative Agent, the LC Issuer or any indemnified party arising
under the Loan Documents.
"Off-Balance Sheet Liability" of a Person means (i) any repurchase
obligation or liability of such Person with respect to accounts or notes
receivable sold by such Person, (ii) any liability under any Sale and Leaseback
Transaction which is not a Capitalized Lease, (iii) any liability under any
so-called "synthetic lease" transaction entered into by such Person, or (iv) any
obligation arising with respect to any other transaction which is the functional
equivalent of or takes the place of borrowing but which does not constitute a
liability on the balance sheets of such Person, but excluding from this clause
(iv) Operating Leases.
"Operating Lease" of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.
"Operating Lease Obligations" means, as at any date of determination,
the amount obtained by aggregating the present values, determined in the case of
each particular Operating Lease by applying a discount rate (which discount rate
shall equal the discount rate which would be applied under Agreement Accounting
Principles if such Operating Lease were a Capitalized Lease) from the date on
which each fixed lease payment is due under such Operating Lease to such date of
determination, of all fixed lease payments due under all Operating Leases of the
Borrower and its Subsidiaries.
"Other Taxes" is defined in Section 3.5(ii).
"Outstanding Credit Exposure" means, as to any Lender at any time, the
sum of (i) the aggregate principal amount of its Loans outstanding at such time,
plus (ii) an amount equal to its Pro Rata Share of the LC Obligations at such
time.
"Parent Guaranty" means that certain Parent Guaranty dated the date
hereof, executed by the Guarantor in favor of the Administrative Agent, for the
ratable benefit of the holders of the Secured Obligations, as it may be amended
or modified and in effect from time to time.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the 1st day of each calendar quarter.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Permitted Acquisition" means an Acquisition which meets the following
criteria:
(i) the acquisition target is in the same line of business as
the Borrower;
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(ii) the Borrower has completed due diligence on the
acquisition target exercising reasonable business judgment;
(iii) if the proposed Acquisition is of stock or other
ownership interests, the Acquisition will be structured so that the
acquisition target becomes a Subsidiary of the Borrower or of one of
the Borrower's Subsidiaries and complies with Section 6.24 of this
Agreement;
(iv) the interests being acquired shall not be subject to any
contingent liabilities, unsatisfied judgments, or any pending or
threatened action, charge, claim, demand, suit, proceeding, or
governmental investigation that could reasonably be expected to have a
Material Adverse Effect;
(v) the Borrower shall have provided to the Administrative
Agent and each Lender (a) copies of the financial statements of the
acquisition target received by it and (b) a pro forma financial
statement as of the closing date of such Acquisition reflecting the
consolidation of the acquired assets and liabilities which reflects pro
forma compliance with the financial covenants contained in Section 6.21
together with a certificate of an Authorized Officer of the Borrower
confirming such calculations both before and after giving effect to the
Acquisition;
(vi) the total purchase price (including cash consideration
paid however classified, including noncompete payments and consulting
payments and whether such amount is paid at closing or over time, and
the dollar value of all assets to be transferred by the purchaser to
the seller in connection with such Acquisition and assumed debt) to be
paid to acquire the equity interests or assets in any single
Acquisition does not exceed $20,000,000;
(vii) the name of the acquisition target and a summary
description of the terms of the Acquisition shall have been provided to
the Lenders at least five Business Days prior to the date that the
proposed Acquisition is to be consummated;
(viii) no Unmatured Default or Default has occurred and is
continuing immediately prior to the closing of such Acquisition or
would arise as a result of such Acquisition; and
(ix) if the target of such Acquisition is publicly traded,
such Acquisition has been approved by the board of directors of the
target.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
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"Pledge Agreement" means that certain Pledge and Security Agreement
dated the date hereof executed by the Borrower and Steadi-Systems, Ltd. pursuant
to which all of the outstanding capital stock of the Borrower's Domestic
Subsidiaries are pledged in favor of the Administrative Agent to secure the
Secured Obligations as it may be amended or modified and in effect from time to
time.
"Pricing Schedule" means the Schedule attached hereto identified as
such.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.
"Principal Lines of Business" is defined in Section 6.1(iii).
"Pro Rata Share" means, with respect to a Lender, a portion equal to a
fraction the numerator of which is such Lender's Commitment and the denominator
of which is the Aggregate Commitment.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Qualified Foreign Financing" means Indebtedness of Foreign
Subsidiaries for which there is no recourse to any Loan Party or any commitment
by a Loan Party to contribute capital, provide a keep-well agreement or
otherwise support such Person, except as otherwise expressly permitted
hereunder.
"Rate Management Obligations" of a Person means any and all obligations
of such Person, whether absolute or contingent and howsoever and whensoever
created, arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into between
the Borrower and any Lender or Affiliate thereof which is a rate swap, basis
swap, forward rate transaction, commodity swap, commodity option, equity or
equity index swap, equity or equity index option, bond option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction, collar
transaction, forward transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions) or any combination
thereof, whether linked to one or more interest rates, foreign currencies,
commodity prices, equity prices or other financial measures.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official
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interpretation of said Board of Governors relating to reserve requirements
applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Advances" is defined in Section 2.19.6.
"Reimbursement Obligations" means, at any time, the aggregate of all
obligations of the Borrower then outstanding under Section 2.19 to reimburse the
LC Issuer for amounts paid by the LC Issuer in respect of any one or more
drawings under Facility LCs.
"Related Company" means a Person who, after the date of the initial
Credit Extension, either (a) becomes a Subsidiary of the Borrower, or (b) whose
financial statements shall be included in the preparation of the combined
financial statements of the Borrowers for financial reporting purposes.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Reports" is defined in Section 9.6.
"Required Lenders" means Lenders in the aggregate having at least
66 2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66 2/3% of the Aggregate
Outstanding Credit Exposure.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities.
"Response Date" is defined in Section 2.19.
"Revolving Advance" means an Advance under the Revolving Facility.
"Revolving Facility" means the revolving credit facility described in
Section 2.1.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
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"Schedule" refers to a specific schedule to this Agreement, unless
another document is specifically referenced.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Secured Obligations" means, collectively, (i) the Obligations and (ii)
all Rate Management Obligations owing to one or more Lenders or their
Affiliates.
"Security Agreement" means that certain Security Agreement executed by
the Borrower and its Domestic Subsidiaries pursuant to which such Loan Parties
grant a springing security interest in all of the inventory and accounts
receivable of such parties arising upon and after the occurrence of a Default
and continuing thereafter until all of the Secured Obligations are paid in full
and the Commitment of each Lender is terminated, as the same may be amended,
supplemented or restated from time to time.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, limited liability company, association, joint venture or
similar business organization more than 50% of the ownership interests having
ordinary voting power of which shall at the time be so owned or controlled.
Unless otherwise expressly provided herein, all references herein to a
"Subsidiary" shall mean a Subsidiary of the Borrower or the Guarantor (excluding
(x) any Subsidiary conducting the BSD Business following the restructure of the
BSD Business permitted pursuant to the provisions of Section 6.12(y) provided
the BSD Restructure Requirements continue to be satisfied and (y) any Foreign
Subsidiary which has incurred Qualified Foreign Financing Indebtedness and is
not a Material Foreign Subsidiary).
"Subsidiary Guarantor" means each Subsidiary which is a party to the
Subsidiary Guaranty.
"Subsidiary Guaranty" means that certain Subsidiary Guaranty dated the
date hereof, executed by each Domestic Subsidiary of the Borrower in favor of
the Administrative Agent, for the ratable benefit of the holders of the Secured
Obligations, as it may be amended or modified and in effect from time to time.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which, as of the date of determination,
(i) represents more than 10% of the consolidated assets of the Borrower and its
Subsidiaries, or (ii) is responsible for more than 10% of the consolidated net
sales or of the consolidated net income of the Borrower and its Subsidiaries as
reflected in the latest financial statements.
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"Swing Line Advance" means any Advance under the Swing Line
Subfacility.
"Swing Line Subfacility" means a subfacility under the Revolving
Facility described in Section 2.20.
"Taxes" means any and all present or future taxes, duties, levies,
imposts, deductions, charges or withholdings, and any and all liabilities with
respect to the foregoing, but excluding Excluded Taxes and Other Taxes.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a Eurodollar Advance.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization 100% of the
ownership interests having ordinary voting power of which shall at the time be
so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to (i) make Loans (other than
Swing Line Advances) to the Borrower under the Revolving Facility and (ii)
participate in Facility LCs issued upon the request of the Borrower, provided
that, after giving effect to the making of each such Loan and the issuance of
each such Facility LC, (x) such Lender's Outstanding Credit Exposure shall not
exceed its Commitment and (y) and all Lenders' Outstanding Credit Exposure with
respect to the Revolving Advances shall not
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exceed the Borrowing Base. Subject to the terms of this Agreement, the Borrower
may borrow, repay and reborrow at any time prior to the Facility Termination
Date. The Commitments to extend credit hereunder shall expire on the Facility
Termination Date. The LC Issuer will issue Facility LCs hereunder on the terms
and conditions set forth in Section 2.19.
2.2. Required Payments; Termination. The Aggregate Outstanding Credit
Exposure and all other unpaid Obligations shall be paid in full by the Borrower
on the Facility Termination Date.
2.3. Ratable Loans. Each Advance hereunder (other than Swing Line
Advances) shall consist of Loans made from the several Lenders ratably in
proportion to their respective Pro Rata Shares.
2.4. Types of Advances. The Advances (other than Swing Line Advances)
may be Floating Rate Advances or Eurodollar Advances, or a combination thereof,
selected by the Borrower in accordance with Sections 2.8 and 2.9.
2.5. Facility Fee; Administrative Fee; Reductions in Aggregate
Commitment. The Borrower agrees to pay to the Administrative Agent for the
account of each Lender a facility fee at a per annum rate equal to the
Applicable Fee Rate on such Lender's Commitment from the date hereof to and
including the Facility Termination Date, payable on each Payment Date hereafter
and on the Facility Termination Date. The Borrower shall pay to the
Administrative Agent the annual administrative fee set out in the Fee Letter.
The Borrower may permanently reduce the Aggregate Commitment in whole, or in
part ratably among the Lenders in integral multiples of $10,000,000, upon at
least ten Business Days' written notice to the Administrative Agent, which
notice shall specify the amount of any such reduction, provided, however, that
the amount of the Aggregate Commitment may not be reduced below the Aggregate
Outstanding Credit Exposure. All accrued facility fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Credit Extensions hereunder.
2.6. Minimum Amount of Each Advance. Each Eurodollar Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $1,000,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$1,000,000 (and in multiples of $1,000,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the Available
Aggregate Commitment.
2.7. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances, or, in
a minimum aggregate amount of $1,000,000 or any integral multiple of $1,000,000
in excess thereof, any portion of the outstanding Floating Rate Advances upon
two Business Days' prior notice to the Administrative Agent. The Borrower may
from time to time pay, subject to the payment of any funding indemnification
amounts required by Section 3.4 but without penalty or premium, all outstanding
Eurodollar Advances, or, in a minimum aggregate amount of $1,000,000 or any
integral multiple of $1,000,000 in excess thereof, any portion of the
outstanding Eurodollar Advances upon three Business Days' prior notice to the
Administrative Agent.
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2.8. Method of Selecting Types and Interest Periods for New Advances.
Except with respect to Swing Line Advances, the Borrower shall select the Type
of Advance and, in the case of each Eurodollar Advance, the Interest Period
applicable thereto from time to time. The Borrower shall give the Administrative
Agent irrevocable notice (a "Borrowing Notice") not later than 11:00 a.m.
(Dallas time) at least one Business Day before the Borrowing Date of each
Floating Rate Advance and not later than 11:00 a.m. three Business Days before
the Borrowing Date for each Eurodollar Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each Eurodollar Advance, the Interest
Period applicable thereto.
Not later than noon (Dallas time) on each Borrowing Date, each Lender shall make
available its Loan or Loans in funds immediately available in Chicago to the
Administrative Agent at its address specified pursuant to Article XIII. The
Administrative Agent will make the funds so received from the Lenders available
to the Borrower at the Administrative Agent's aforesaid address.
2.9. Conversion and Continuation of Outstanding Advances. Floating Rate
Advances shall continue as Floating Rate Advances unless and until such Floating
Rate Advances are converted into Eurodollar Advances pursuant to this Section
2.9 or are repaid in accordance with Section 2.7. Each Eurodollar Advance shall
continue as a Eurodollar Advance until the end of the then applicable Interest
Period therefor, at which time such Eurodollar Advance shall be automatically
converted into a Floating Rate Advance unless (x) such Eurodollar Advance is or
was repaid in accordance with Section 2.7 or (y) the Borrower shall have given
the Administrative Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such Eurodollar Advance
continue as a Eurodollar Advance for the same or another Interest Period.
Subject to the terms of Section 2.6, the Borrower may elect from time to time to
convert all or any part of a Floating Rate Advance into a Eurodollar Advance.
The Borrower shall give the Administrative Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Floating Rate Advance
into a Eurodollar Advance or continuation of a Eurodollar Advance not later than
11:00 a.m. (Dallas time) at least three Business Days prior to the date of the
requested conversion or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount and Type of the Advance which is to
be converted or continued, and
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(iii) the amount of such Advance which is to be converted into
or continued as a Eurodollar Advance and the duration of the Interest
Period applicable thereto.
2.10. Changes in Interest Rate, etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is automatically converted from a
Eurodollar Advance into a Floating Rate Advance pursuant to Section 2.9, to but
excluding the date it is paid or is converted into a Eurodollar Advance pursuant
to Section 2.9 hereof, at a rate per annum equal to the lesser of (a) the
Maximum Rate or (b) the Floating Rate for such day. Changes in the rate of
interest on that portion of any Advance maintained as a Floating Rate Advance
will take effect simultaneously with each change in the Alternate Base Rate. If
at any time the Floating Rate shall exceed the Maximum Rate, thereby causing the
interest accruing on an Advance to be limited to the Maximum Rate, then any
subsequent reduction in the Floating Rate for such Advance shall not reduce the
rate of interest on such Advance below the Maximum Rate until the aggregate
amount of interest accrued on such Advance equals the aggregate amount of
interest which would have accrued on such Advance if the Floating Rate had at
all times been in effect. Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Administrative Agent as
applicable to such Eurodollar Advance based upon the Borrower's selections under
Sections 2.8 and 2.9 and otherwise in accordance with the terms hereof. No
Interest Period may end after the Facility Termination Date.
2.11. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.8 or 2.9, during the continuance of a Default or
Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower, declare that no Advance may be made as, converted into or continued as
a Eurodollar Advance. During the continuance of a Default the Required Lenders
may, at their option, by notice to the Borrower, declare that (i) each
Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum,
and (iii) the LC Fee shall be increased by 2% per annum, provided that, during
the continuance of a Default under Section 7.6 or 7.7, the interest rates set
forth in clauses (i) and (ii) above and increase in the LC fee set forth in
clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Administrative Agent or any Lender,
subject in all events to the limitations of the Maximum Rate.
2.12. Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Administrative Agent at the Administrative Agent's
address specified pursuant to Article XIII, or at any other Lending Installation
of the Administrative Agent specified in writing by the Administrative Agent to
the Borrower, by noon (local time) on the date when due and shall (except in the
case of Reimbursement Obligations for which the LC Issuer has not been fully
indemnified by the Lenders, or as otherwise specifically required hereunder) be
applied ratably by the Administrative Agent among the Lenders. Each payment
delivered to the Administrative Agent for the account of any
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Lender shall be delivered promptly by the Administrative Agent to such Lender in
the same type of funds that the Administrative Agent received at its address
specified pursuant to Article XIII or at any Lending Installation specified in a
notice received by the Administrative Agent from such Lender. The Administrative
Agent is hereby authorized to charge the account of the Borrower maintained with
Bank One for each payment of principal, interest and fees as it becomes due
hereunder. Each reference to the Administrative Agent in this Section 2.12 shall
also be deemed to refer, and shall apply equally, to the LC Issuer, in the case
of payments required to be made by the Borrower to the LC Issuer pursuant to
Section 2.19.6.
2.13. Noteless Agreement; Evidence of Indebtedness.
(i) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender
from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(ii) The Administrative Agent shall also maintain accounts in
which it will record (a) the amount of each Loan made hereunder, the
Type thereof and the Interest Period with respect thereto, (b) the
amount of any principal or interest due and payable or to become due
and payable from the Borrower to each Lender hereunder, (c) the
original stated amounts of each Facility LC and the amount of LC
Obligations outstanding at any time, and (d) the amount of any sum
received by the Administrative Agent hereunder from the Borrower and
each Lender's share thereof.
(iii) The entries maintained in the accounts maintained
pursuant to paragraphs (i) and (ii) above shall be prima facie evidence
of the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Administrative Agent or any
Lender to maintain such accounts or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Obligations
in accordance with their terms.
(iv) Any Lender may request that its Loans be evidenced by a
promissory note in substantially the form of Exhibit E (a "Note"). In
such event, the Borrower shall prepare, execute and deliver to such
Lender such Note payable to the order of such Lender. Thereafter, the
Loans evidenced by such Note and interest thereon shall at all times
(including after any assignment pursuant to Section 12.3) be
represented by one or more Notes payable to the order of the payee
named therein or any assignee pursuant to Section 12.3, except to the
extent that any such Lender or assignee subsequently returns any such
Note for cancellation and requests that such Loans once again be
evidenced as described in paragraphs (i) and (ii) above.
2.14. Telephonic Notices. The Borrower hereby authorizes the Lenders
and the Administrative Agent to extend, convert or continue Advances, effect
selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Administrative Agent or any Lender in
good faith believes to be an Authorized Officer of the Borrower, it being
understood that the foregoing authorization is specifically intended to allow
Borrowing Notices and Conversion/Continuation Notices
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to be given telephonically. The Borrower agrees to deliver promptly to the
Administrative Agent a written confirmation, if such confirmation is requested
by the Administrative Agent or any Lender, of each telephonic notice signed by
an Authorized Officer. If the written confirmation differs in any material
respect from the action taken by the Administrative Agent and the Lenders, the
records of the Administrative Agent and the Lenders shall govern absent manifest
error.
2.15. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
the Floating Rate Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest accrued on that portion of the outstanding principal
amount of any Floating Rate Advance converted into a Eurodollar Advance on a day
other than a Payment Date shall be payable on the date of conversion. Interest
accrued on each Eurodollar Advance shall be payable on the last day of its
applicable Interest Period, on any date on which the Eurodollar Advance is
prepaid, whether by acceleration or otherwise, and at maturity. Interest accrued
on each Eurodollar Advance having an Interest Period longer than three months
shall also be payable on the last day of each three-month interval during such
Interest Period. Interest, facility fees and LC Fees shall be calculated for
actual days elapsed on the basis of a 360-day year. Interest shall be payable
for the day an Advance is made but not for the day of any payment on the amount
paid if payment is received prior to noon (local time) at the place of payment.
If any payment of principal of or interest on an Advance shall become due on a
day which is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a principal payment, such extension
of time shall be included in computing interest in connection with such payment.
2.16. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Administrative Agent
will notify each Lender of the contents of each Aggregate Commitment reduction
notice, Borrowing Notice, Conversion/Continuation Notice, and repayment notice
received by it hereunder. Promptly after notice from the LC Issuer, the
Administrative Agent will notify each Lender of the contents of each request for
issuance of a Facility LC hereunder. The Administrative Agent will notify each
Lender of the interest rate applicable to each Eurodollar Advance promptly upon
determination of such interest rate and will give each Lender prompt notice of
each change in the Alternate Base Rate.
2.17. Lending Installations. Subject to Section 3.6, each Lender may
book its Loans and its participation in any LC Obligations and the LC Issuer may
book the Facility LCs at any Lending Installation selected by such Lender or the
LC Issuer, as the case may be, and may change its Lending Installation from time
to time. All terms of this Agreement shall apply to any such Lending
Installation and the Loans, Facility LCs, participations in LC Obligations and
any Notes issued hereunder shall be deemed held by each Lender or the LC Issuer,
as the case may be, for the benefit of any such Lending Installation. Each
Lender and the LC Issuer may, by written notice to the Administrative Agent and
the Borrower in accordance with Article XIII, designate replacement or
additional Lending Installations through which Loans will be made by it or
Facility LCs will be issued by it and for whose account Loan payments or
payments with respect to Facility LCs are to be made.
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2.18. Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment has been made.
The Administrative Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption. If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Administrative Agent, the recipient of such payment
shall, on demand by the Administrative Agent, repay to the Administrative Agent
the amount so made available together with interest thereon in respect of each
day during the period commencing on the date such amount was so made available
by the Administrative Agent until the date the Administrative Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.
2.19. Facility LCs.
2.19.1. Issuance. The LC Issuer hereby agrees, on the terms
and conditions set forth in this Agreement, to issue standby and
commercial letters of credit (each, a "Facility LC") and to renew,
extend, increase, decrease or otherwise modify each Facility LC
("Modify," and each such action a "Modification"), from time to time
from and including the date of this Agreement and prior to the Facility
Termination Date upon the request of the Borrower; provided that
immediately after each such Facility LC is issued or Modified, (i) the
aggregate amount of the outstanding LC Obligations shall not exceed
$10,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall
not exceed the Aggregate Commitment. No Facility LC shall have an
expiry date later than the earlier of (x) the fifth Business Day prior
to the Facility Termination Date and (y) one year after its issuance;
provided that any Facility LC with a one year tenor may provide for the
renewal thereof for additional one year periods, so long as the
ultimate expiry date is on or before the fifth Business Day prior to
the Facility Termination Date .
2.19.2. Participations. Upon the issuance or Modification by
the LC Issuer of a Facility LC in accordance with this Section 2.19,
the LC Issuer shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably sold to each Lender,
and each Lender shall be deemed, without further action by any party
hereto, to have unconditionally and irrevocably purchased from the LC
Issuer, a participation in such Facility LC (and each Modification
thereof) and the related LC Obligations in proportion to its Pro Rata
Share.
2.19.3. Notice. Subject to Section 2.19.1, the Borrower shall
give the LC Issuer notice prior to 10:00 a.m. (Dallas time) at least
five Business Days prior to the proposed date of issuance or
Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification) and the expiry date of such
Facility LC, and describing the proposed terms of such Facility LC and
the nature of the transactions proposed to be supported thereby. Upon
receipt of such notice, the LC Issuer shall promptly notify the
Administrative Agent, and the
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Administrative Agent shall promptly notify each Lender, of the contents
thereof and of the amount of such Lender's participation in such
proposed Facility LC. The issuance or Modification by the LC Issuer of
any Facility LC shall, in addition to the conditions precedent set
forth in Article IV (the satisfaction of which the LC Issuer shall have
no duty to ascertain), be subject to the conditions precedent that such
Facility LC shall be satisfactory to the LC Issuer and that the
Borrowers shall have executed and delivered such application agreement
and/or such other instruments and agreements relating to such Facility
LC as the LC Issuer shall have reasonably requested (each, a "Facility
LC Application"). In the event of any conflict between the terms of
this Agreement and the terms of any Facility LC Application, the terms
of this Agreement shall control.
2.19.4. LC Fees. The Borrower shall pay to the Administrative
Agent, for the account of the Lenders ratably in accordance with their
respective Pro Rata Shares, (i) with respect to each standby Facility
LC, a letter of credit fee at a per annum rate equal to the Applicable
Margin for Eurodollar Loans in effect from time to time on the average
daily undrawn stated amount under such standby Facility LC, such fee to
be payable in arrears on each Payment Date, and (ii) with respect to
each commercial Facility LC, a letter of credit fee in an amount equal
to the Applicable Margin for Eurodollar Loans in effect from time to
time on the initial stated amount (or, with respect to a Modification
of any such commercial Facility LC which increases the stated amount
thereof, such increase in the stated amount) thereof, such fee to be
payable on the date of such issuance or increase (each such fee
described in this sentence an "LC Fee"). The Borrower shall also pay to
the LC Issuer for its own account (x) at the time of issuance of each
Facility LC, a fronting fee in an amount equal to 1/8% of the initial
stated amount and (y) documentary and processing charges in connection
with the issuance or Modification of and draws under Facility LCs in
accordance with the LC Issuer's standard schedule for such charges as
in effect from time to time.
2.19.5. Administration; Reimbursement by Lenders. Upon receipt
from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the LC Issuer shall notify the Administrative Agent
and the Administrative Agent shall promptly notify the Borrower and
each other Lender as to the amount to be paid by the LC Issuer as a
result of such demand and the proposed payment date (the "LC Payment
Date"). The responsibility of the LC Issuer to the Borrower and each
Lender shall be only to determine that the documents (including each
demand for payment) delivered under each Facility LC in connection with
such presentment shall be in conformity in all material respects with
such Facility LC. The LC Issuer shall endeavor to exercise the same
care in the issuance and administration of the Facility LCs as it does
with respect to letters of credit in which no participations are
granted, it being understood that in the absence of any gross
negligence or willful misconduct by the LC Issuer, each Lender shall be
unconditionally and irrevocably liable without regard to the occurrence
of any Default or any condition precedent whatsoever, to reimburse the
LC Issuer on demand for (i) such Lender's Pro Rata Share of the amount
of each payment made by the LC Issuer under each Facility LC to the
extent such amount is not reimbursed by the Borrower pursuant to
Section 2.19.6 below, plus (ii) interest on the foregoing amount to be
reimbursed by such Lender, for each day from the date of the LC
Issuer's demand for such reimbursement (or, if such demand is made
after 11:00 a.m.
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(Dallas time) on such date, from the next succeeding Business Day) to
the date on which such Lender pays the amount to be reimbursed by it,
at a rate of interest per annum equal to the Federal Funds Effective
Rate for the first three days and, thereafter, at a rate of interest
equal to the rate applicable to Floating Rate Advances.
2.19.6. Reimbursement by Borrower. The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on
or before the applicable LC Payment Date for any amounts to be paid by
the LC Issuer upon any drawing under any Facility LC, without
presentment, demand, protest or other formalities of any kind; provided
that neither the Borrower nor any Lender shall hereby be precluded from
asserting any claim for direct (but not consequential) damages suffered
by the Borrower or such Lender to the extent, but only to the extent,
caused by (i) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC
issued by it complied with the terms of such Facility LC or (ii) the LC
Issuer's failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and
conditions of such Facility LC. In the event the Borrower does not
reimburse the LC Issuer on or before the applicable LC Payment Date for
any amounts to be paid by the LC Issuer upon any drawing under any
Facility LC on the date when due pursuant to the preceding sentence,
the LC Issuer shall give to the Lenders notice of the amount so due not
later than 3:00 p.m. Chicago time on such date, which notice shall, on
behalf of the Borrower (and for such purpose the Borrower hereby
irrevocably directs the LC Issuer to act on its behalf), request each
Lender to make, and each Lender hereby agrees to make, a Revolving
Advance in an amount equal to such Lender's Pro Rata Share of the
aggregate amount of the payment so due (the "Reimbursement Advances")
on the date of such notice, to repay the LC Issuer. Each Lender shall
make the amount of such Advance available to the Administrative Agent
in immediately available funds, not later than 11:00 a.m. Dallas time
one Business Day after the date of such notice. The proceeds of such
Advance shall be immediately made available to the LC Issuer for
application by the LC Issuer to the repayment of the Reimbursement
Advances. The Borrower irrevocably authorizes the Administrative Agent
to charge the Borrower's accounts with the Administrative Agent in
order to immediately pay the amount of such Reimbursement Advances to
the extent amounts received from the Lenders are not sufficient to
repay in full such Reimbursement Advances (with notice of such charge
being provided to the Borrower, provided that the failure to give such
notice shall not affect the validity of such charge). All such
Reimbursement Advances shall be subject to all provisions of this
Agreement concerning Advances (including the requirement that there
exist no Default or Unmatured Default on the date of such Advance). All
such amounts paid by the LC Issuer and remaining unpaid by the Borrower
shall bear interest, payable on demand, for each day until paid at a
rate per annum equal to (x) the rate applicable to Floating Rate
Advances for such day if such day falls on or before the applicable LC
Payment Date and (y) the sum of 2% plus the rate applicable to Floating
Rate Advances for such day if such day falls after such LC Payment
Date. The LC Issuer will pay to each Lender ratably in accordance with
its Pro Rata Share all amounts received by it from the Borrower for
application in payment, in whole or in part, of the Reimbursement
Obligation in respect of any Facility LC issued by the LC Issuer, but
only to the extent such Lender has made payment to the LC Issuer in
respect of such Facility LC pursuant to Section 2.19.5. Subject to the
terms and conditions of this Agreement (including without
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limitation the submission of a Borrowing Notice in compliance with
Section 2.8 and the satisfaction of the applicable conditions precedent
set forth in Article IV), the Borrower may request an Advance hereunder
for the purpose of satisfying any Reimbursement Obligation.
2.19.7. Obligations Absolute. The Borrower's obligations under
this Section 2.19 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense
to payment which the Borrower may have or have had against the LC
Issuer, any Lender or any beneficiary of a Facility LC. The Borrower
further agrees with the LC Issuer and the Lenders that the LC Issuer
and the Lenders shall not be responsible for, and the Borrower's
Reimbursement Obligation in respect of any Facility LC shall not be
affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even if such documents should
in fact prove to be in any or all respects invalid, fraudulent or
forged, or any dispute between or among the Borrower, any of its
Affiliates, the beneficiary of any Facility LC or any financing
institution or other party to whom any Facility LC may be transferred
or any claims or defenses whatsoever of the Borrower or of any of its
Affiliates against the beneficiary of any Facility LC or any such
transferee. The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Facility
LC. The Borrower agrees that any action taken or omitted by the LC
Issuer or any Lender under or in connection with each Facility LC and
the related drafts and documents, if done without gross negligence or
willful misconduct, shall be binding upon the Borrower and shall not
put the LC Issuer or any Lender under any liability to the Borrower.
Nothing in this Section 2.19.7 is intended to limit the right of the
Borrower to make a claim against the LC Issuer for damages as
contemplated by the proviso to the first sentence of Section 2.19.6.
2.19.8. Actions of LC Issuer. The LC Issuer shall be entitled
to rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit,
letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants and other experts selected by the LC Issuer. The LC Issuer
shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first have received such advice or
concurrence of the Required Lenders as it reasonably deems appropriate
or it shall first be indemnified to its reasonable satisfaction by the
Lenders against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action.
Notwithstanding any other provision of this Section 2.19, the LC Issuer
shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement in accordance with a request of the
Required Lenders, and such request and any action taken or failure to
act pursuant thereto shall be binding upon the Lenders and any future
holders of a participation in any Facility LC.
2.19.9. Indemnification. The Borrower hereby agrees to
indemnify and hold harmless each Lender, the LC Issuer and the Agents,
and their respective directors, officers, agents and employees from and
against any and all claims and damages, losses, liabilities, costs or
expenses
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which such Lender, the LC Issuer or the Agents may incur (or which may
be claimed against such Lender, the LC Issuer or the Agents by any
Person whatsoever) by reason of or in connection with the issuance,
execution and delivery or transfer of or payment or failure to pay
under any Facility LC or any actual or proposed use of any Facility LC,
including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason
of or in connection with (i) the failure of any other Lender to fulfill
or comply with its obligations to the LC Issuer hereunder (but nothing
herein contained shall affect any rights the Borrower may have against
any defaulting Lender) or (ii) by reason of or on account of the LC
Issuer issuing any Facility LC which specifies that the term
"Beneficiary" included therein includes any successor by operation of
law of the named Beneficiary, but which Facility LC does not require
that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that the Borrower
shall not be required to indemnify any Lender, the LC Issuer or the
Agents for any claims, damages, losses, liabilities, costs or expenses
to the extent, but only to the extent, caused by (x) the willful
misconduct or gross negligence of the LC Issuer in determining whether
a request presented under any Facility LC complied with the terms of
such Facility LC or (y) the LC Issuer's failure to pay under any
Facility LC after the presentation to it of a request strictly
complying with the terms and conditions of such Facility LC. Nothing in
this Section 2.19.9 is intended to limit the obligations of the
Borrower under any other provision of this Agreement.
2.19.10. Lenders' Indemnification. Each Lender shall, ratably
in accordance with its Pro Rata Share, indemnify the LC Issuer, its
affiliates and their respective directors, officers, agents and
employees (to the extent not reimbursed by the Borrower) against any
cost, expense (including reasonable counsel fees and disbursements),
claim, demand, action, loss or liability (except such as result from
such indemnitees' gross negligence or willful misconduct or the LC
Issuer's failure to pay under any Facility LC after the presentation to
it of a request strictly complying with the terms and conditions of the
Facility LC) that such indemnitees may suffer or incur in connection
with this Section 2.19 or any action taken or omitted by such
indemnitees hereunder.
2.19.11. Facility LC Collateral Account. The Borrower agrees
that it will, upon the request of the Administrative Agent or the
Required Lenders and until the final expiration date of any Facility LC
and thereafter as long as any amount is payable to the LC Issuer or the
Lenders in respect of any Facility LC, maintain a special collateral
account pursuant to arrangements satisfactory to the Administrative
Agent (the "Facility LC Collateral Account") at the Administrative
Agent's office at the address specified pursuant to Article XIII, in
the name of the Borrower but under the sole dominion and control of the
Administrative Agent, for the benefit of the holders of Secured
Obligations and in which the Borrower shall have no interest other than
as set forth in Section 8.1. The Borrower hereby pledges, assigns and
grants to the Administrative Agent, on behalf of and for the ratable
benefit of the Secured Parties, a security interest in all of the
Borrower's right, title and interest in and to all funds which may from
time to time be on deposit in the Facility LC Collateral Account to
secure the prompt and complete payment and performance of the
Obligations. The Administrative Agent will invest, any funds
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on deposit from time to time in the Facility LC Collateral Account in
certificates of deposit of Bank One having a maturity not exceeding 30
days. Nothing in this Section 2.19.11 shall either obligate the
Administrative Agent to require the Borrower to deposit any funds in
the Facility LC Collateral Account or limit the right of the
Administrative Agent to release any funds held in the Facility LC
Collateral Account in each case other than as required by Section 8.1.
The Borrower shall be required to deposit funds in the Facility LC
Collateral Account only as required in Section 8.1.
2.19.12. Rights as a Lender. In its capacity as a Lender, the
LC Issuer shall have the same rights and obligations as any other
Lender.
2.20. Swing Line Subfacility.
2.20.1. Conditions. For the convenience of the parties,
Administrative Agent, solely for its own account, may make any
requested Advance under the Revolving Facility (which request must be
made before 2:00 p.m. (Dallas time) on the Business Day the Advance is
to be made and may be telephonic if confirmed in writing within two
Business Days) directly to Borrower as a Swing Line Advance without
requiring each other Lender to fund its Pro Rata Share thereof on such
Business Day. Swing Line Advances are subject to the following
conditions:
(i) Each Swing Line Advance must occur on a Business Day
before the Facility Termination Date;
(ii) The aggregate principal outstanding of all Swing Line
Advances may not exceed $15,000,000; the aggregate principal
outstanding of all Swing Line Advances, all Revolving Advances under
the Revolving Facility, and all LC Obligations may not exceed the
Aggregate Commitment; and no Swing Line Advance shall be made which
would cause the aggregate principal outstanding of all Loans (including
Swing Line Advances) and LC Obligations of Bank One to exceed the
Administrative Agent's Commitment; and
(iii) Each Swing Line Advance shall be paid in full by the
Borrower upon demand by the Swing Line Lender and in any event on the
Termination Date; and
(iv) Each Swing Line Advance is a Floating Rate Advance.
2.20.2. Lenders' Funding of Swing Line Advances as Revolving
Advances. In the event the Borrower does not repay a Swingline Advance
on the date when due pursuant to Section 2.20.1(iii), the
Administrative Agent shall give to the Lenders notice of the amount of
the Swing Line Advance not later than 3:00 p.m. Dallas time on such
date, which notice shall, on behalf of the Borrower (and for such
purpose the Borrower hereby irrevocably direct the Administrative Agent
to act on its behalf), request each Lender to make, and each Lender
hereby agrees to make, a Revolving Advance in an amount equal to such
Lender's Pro Rata Share of the aggregate amount of the Swing Line
Advance (the "Refunded Swing Line Advances") outstanding on the date of
such notice, to repay the Administrative Agent. Each Lender shall make
the amount of
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such Advance available to the Administrative Agent in immediately
available funds, not later than 11:00 a.m. Chicago time one Business
Day after the date of such notice. The proceeds of such Advance shall
be immediately made available to the Administrative Agent for
application by the Administrative Agent to the repayment of the
Refunded Swing Line Advances. The Borrower irrevocably authorizes the
Administrative Agent to charge the Borrowers' accounts with the
Administrative Agent in order to immediately pay the amount of such
Refunded Swing Line Advances to the extent amounts received from the
Lenders are not sufficient to repay in full such Refunded Swing Line
Advances (with notice of such charge being provided to the Borrower,
provided that the failure to give such notice shall not affect the
validity of such charge). All such Refunded Swing Line Advances shall
be subject to all provisions of this Agreement concerning Advances,
except that such Advances shall be made without regard to satisfaction
of the conditions precedent to Advances (including the existence of a
Default or Unmatured Default). If prior to the time an Advance would
otherwise have been made pursuant to this paragraph, Advances may not
be made as contemplated by this paragraph, each Lender shall
irrevocably and unconditionally purchase and receive from
Administrative Agent a ratable participation in such Swing Line Advance
and shall make available to Administrative Agent in immediately
available funds its Pro Rata Share of such unpaid amount, together with
interest from the date when its payment was due to, but not including,
the date of payment. If a Lender does not promptly pay its amount upon
Administrative Agent's demand, and until such Lender makes the required
payment, Administrative Agent is deemed to continue to have outstanding
a Swing Line Advance in the amount of such Lender's unpaid obligation.
The Borrower shall make each payment of all or any part of any Swing
Line Advance to Administrative Agent for the ratable benefit of
Administrative Agent and those Lenders who have funded their
participations in Swing Line Advances under this section (but all
interest accruing on Swing Line Advances before the funding date of any
Advance to repay such Swing Line Advance or any participation is
payable solely to Administrative Agent for its own account).
2.21. Prepayments from Sales of Assets. Concurrently with the receipt
of Net Cash Proceeds by any Loan Party or any of their respective Subsidiaries
from the sale or disposition of any assets which constitute 5% or more of the
consolidated net assets of the Loan Parties and their Subsidiaries in the
aggregate as of the date of sale and which are permitted to be sold or disposed
of pursuant to Section 6.13(ii) of this Agreement, the Borrower shall prepay
Advances in a principal amount equal to 100% of such Net Cash Proceeds, which
prepayment shall be applied first to the Floating Rate Advances and second to
the Eurodollar Advances (but such prepayment shall not reduce the Commitments in
such amount).
2.22. Prepayment from Sales Of Capital Stock. Concurrently with the
receipt of Net Cash Proceeds from the sale, issuance or disposition by any Loan
Party or any of its Subsidiaries to any Person of any capital stock or other
equity interests (excluding transactions under any employee benefit plans), the
Borrower shall prepay Advances in an aggregate principal amount equal to 100% of
such Net Cash Proceeds, which prepayment shall be applied first to the Floating
Rate Advances and second to the Eurodollar Advances (but such prepayment shall
not reduce the Commitments in such amount).
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2.23. Prepayment due to Revolving Advances Exceeding the Borrowing
Base. Without notice or demand, if the outstanding principal balance of the
Revolving Advances shall at any time exceed the Borrowing Base (whether due to a
permitted adjustment of the Borrowing Base pursuant to the definition thereof or
otherwise), the Borrower shall immediately prepay the Revolving Advances to the
extent necessary to eliminate such excess.
2.24. Prepayments Generally. Any prepayments made under Sections 2.21,
2.22 and 2.23 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 Section 2.7; provided that 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 3.4 hereof if any
prepayment results in a Eurodollar Advance being paid on a day other than the
last day of an Interest Period for such Eurodollar Advance, and (iii) be applied
first to Floating Rate Advances, if any, and then to Eurodollar Advances.
2.25. Replacement of Lender. If the Borrower is required pursuant to
Section 3.1, 3.2 or 3.5 to make any additional payment to any Lender or if any
Lender's obligation to make or continue, or to convert Floating Rate Advances
into, Eurodollar Advances shall be suspended pursuant to Section 3.3 (any Lender
so affected an "Affected Lender"), the Borrower may elect, if such amounts
continue to be charged or such suspension is still effective, to replace such
Affected Lender as a Lender party to this Agreement, provided that no Default or
Unmatured Default shall have occurred and be continuing at the time of such
replacement, and provided further that, concurrently with such replacement, (i)
another bank or other entity which is reasonably satisfactory to the Borrower
and the Administrative Agent shall agree, as of such date, to purchase for cash
the Advances and other Obligations due to the Affected Lender pursuant to an
assignment substantially in the form of Exhibit C and to become a Lender for all
purposes under this Agreement and to assume all obligations of the Affected
Lender to be terminated as of such date and to comply with the requirements of
Section 12.3 applicable to assignments, and (ii) the Borrower shall pay to such
Affected Lender in same day funds on the day of such replacement (A) all
interest, fees and other amounts then accrued but unpaid to such Affected Lender
by the Borrower hereunder to and including the date of termination, including
without limitation payments due to such Affected Lender under Sections 3.1, 3.2
and 3.5, and (B) an amount, if any, equal to the payment which would have been
due to such Lender on the day of such replacement under Section 3.4 had the
Loans of such Affected Lender been prepaid on such date rather than sold to the
replacement Lender.
2.26. Increase in Aggregate Commitment.
(i) So long as (a) no Default or Unmatured Default has
occurred and is continuing or will result therefrom, and (b) the
Borrower has not terminated or reduced in part any unused portion of
the Commitments at any time pursuant to Section 2.5, the Borrower may,
at any time and from time to time, by notice to the Administrative
Agent, request an increase in the aggregate amount of the Commitments
within the limitations hereafter described, which notice shall set
forth the amount of such increase. In accordance with Section 2.26(iv),
the aggregate amount of the Commitments may be so increased either by
having one or more new Lenders that have been approved by the Borrower
become Lenders (the "New Lenders") and/or by having any one or more of
the then existing Lenders (at their respective election in their sole
discretion) increase the
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amount of their Commitment ("Increasing Lenders"), provided that (A)
the Commitment of any New Lender shall not be less than $10,000,000 and
the sum of the Commitments of the New Lenders and the increases in the
Commitments of the Increasing Lenders shall not exceed $50,000,000; (B)
the Borrower, each New Lender and/or each Increasing Lender shall have
executed and delivered to the Administrative Agent a commitment and
acceptance (the "Commitment and Acceptance") in the form approved by
the Administrative Agent, and the Administrative Agent shall have
accepted and executed the same, (C) the Borrower shall have executed
and delivered to the Administrative Agent a Note or Notes payable to
the order of each New Lender to the extent required pursuant to Section
2.13(iv) and/or each Increasing Lender, each such Note to be in the
amount of such New Lender's Commitment or such Increasing Lender's
Commitment (as applicable); (D) the Borrower shall have delivered to
the Administrative Agent opinions of counsel (substantially similar to
the forms of opinions provided for in Section 4.1(v), modified to apply
to the increase in the Commitments and each new Note and Commitment and
Acceptance executed and delivered in connection therewith); (E) the
Loan Parties shall have consented in writing to the new Commitments or
increases in Commitments (as applicable) and shall have agreed that the
Collateral Documents to which each is a party continue in full force
and effect, and (F) the Borrower, each New Lender and/or each
Increasing Lender shall otherwise have executed and delivered such
other instruments and documents as the Administrative Agent shall have
reasonably requested in connection with such new Commitment or increase
in the Commitment (as applicable). The form and substance of the
documents required under clauses (B) through (F) above shall be
reasonably acceptable to the Administrative Agent. The Administrative
Agent shall provide written notice to all of the Lenders hereunder of
the admission of any New Lender or the increase in the Commitment of
any Increasing Lender hereunder and shall furnish to each of the
Lenders copies of the documents required under clause (B) through (F)
above.
(ii) Upon the effective date of any increase in the aggregate
amount of Commitments pursuant to the provisions hereof ("Increase
Date"), which Increase Date shall be mutually agreed upon by the
Borrower, each New Lender, each Increasing Lender and the
Administrative Agent, each New Lender and/or Increasing Lender shall
make a payment to the Administrative Agent in an amount sufficient,
upon the application of such payments by all New Lenders and Increasing
Lenders to the reduction of the Outstanding Credit Exposure held by the
Lenders (including the Increasing Lenders) to cause the amount of
Outstanding Credit Exposure made by each Lender to be equal to each
Lender's Pro Rata Share of the aggregate amount of Commitments as so
increased. The Borrower hereby irrevocably authorizes each New Lender
and/or each Increasing Lender to fund to the Administrative Agent the
payment required to be made pursuant to the immediately preceding
sentence for application to the reduction of the Outstanding Credit
Exposure held by the other Lenders, and each such payment shall
constitute a Revolving Advance hereunder. If, as a result of the
repayment of the Revolving Advance provided for in this Section
2.26(ii), any payment of a Eurodollar Advance occurs on a day which is
not the last day of the applicable Interest Period, the Borrower will
pay to the Administrative Agent for the benefit of any of the Lenders
(including any Increasing Lender to the extent of Eurodollar Loans held
by such Increasing Bank prior to such Increase Date) holding a
Eurodollar Loan any loss or cost incurred by such Lender resulting
therefrom in accordance with Section 3.4.
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Upon the Increase Date, all Revolving Advances outstanding hereunder
(including any Revolving Advances made by the New Lenders and/or
Increasing Lenders on the Increase Date) shall be Floating Rate
Advances, subject to the Borrower's right to convert the same to
Eurodollar Advances on or after such date in accordance with the
provisions of Section 2.9.
(iii) Upon the Increase Date and the making of the Revolving
Loans by the New Lenders and/or Increasing Lenders in accordance with
the provisions of Section 2.26(ii), each New Lender and/or each
Increasing Lender shall also be deemed to have irrevocably and
unconditionally purchased and received without recourse or warranty,
from the Lenders immediately prior to the Increase Date, an undivided
interest and participation in any Facility LC then outstanding,
ratably, such that each Lender (including each New Lender) holds a
participation interest in each such Facility LC in proportion to such
Lender's Pro Rata Share.
(iv) Upon the notice by the Borrower to the Administrative
Agent pursuant to Section 2.26(i) hereof, each of the then existing
Lenders shall have the right (at its election) to increase its
Commitment by an amount equal to such Lender's Pro Rata Share of the
proposed increase in the aggregate Commitments. If less than all of the
proposed increase in aggregate Commitments is elected by the existing
Lenders, then any of the then existing Lenders shall have the right to
increase its Commitment in an amount greater than such Lender's Pro
Rata Share of the proposed increase in the aggregate Commitments with
the Administrative Agent's approval. If the entire amount of the
proposed increase in aggregate Commitments is still not obtained,
Administrative Agent shall use its best efforts with Borrower's full
cooperation to add New Lenders, acceptable to the Borrower and to the
Administrative Agent, with new Commitments which when added to the
increase in Commitments of the Increasing Lenders, shall equal the
requested increase in the aggregate amount of the Commitments. In the
event the sum of each New Lender's Commitment and the increase in each
Increasing Lender's Commitment is less than the requested increase in
the aggregate amount of Commitments, the Borrower may elect to accept
the increase in the aggregate amount of the Commitments to be equal to
such lesser amount. Notwithstanding anything to the contrary,
Administrative Agent shall not be liable for any failure to obtain
Increasing Lenders or New Lenders hereunder or any failure to increase
the aggregate amount of Commitments by the amount so requested by the
Borrower pursuant to Section 2.26(i).
(v) Nothing contained herein shall constitute, or otherwise be
deemed to be a commitment or agreement on the part of any Lender to
increase its Commitment hereunder at any time. No Lender (except only
for itself) shall have the right to decline Borrower's request pursuant
to Section 2.26(i) for an increase in the aggregate amount of
Commitments.
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ARTICLE III
YIELD PROTECTION; TAXES
3.1. Yield Protection. If, on or after the date of this Agreement, the
adoption of any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law), or any
change in the interpretation or administration thereof by any governmental or
quasi-governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender or
applicable Lending Installation or the LC Issuer with any request or directive
(whether or not having the force of law) of any such authority, central bank or
comparable agency:
(i) subjects any Lender or any applicable Lending Installation
or the LC Issuer to any Taxes, or changes the basis of taxation of
payments (other than with respect to Excluded Taxes) to any Lender or
the LC Issuer in respect of its Eurodollar Loans, Facility LCs or
participations therein, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation or the
LC Issuer (other than reserves and assessments taken into account in
determining the interest rate applicable to Eurodollar Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable Lending Installation
or the LC Issuer of making, funding or maintaining its Eurodollar
Loans, or of issuing or participating in Facility LCs, or reduces any
amount receivable by any Lender or any applicable Lending Installation
or the LC Issuer in connection with its Eurodollar Loans, Facility LCs
or participations therein, or requires any Lender or any applicable
Lending Installation or the LC Issuer to make any payment calculated by
reference to the amount of Eurodollar Loans, Facility LCs or
participations therein held or interest or LC Fees received by it, by
an amount deemed material by such Lender or the LC Issuer as the case
may be,
and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, of making
or maintaining its Eurodollar Loans or Commitment or of issuing or participating
in Facility LCs or to reduce the return received by such Lender or applicable
Lending Installation or the LC Issuer, as the case may be, in connection with
such Eurodollar Loans, Commitment, Facility LCs or participations therein, then,
within 15 days of demand by such Lender or the LC Issuer, as the case may be,
the Borrower shall pay such Lender or the LC Issuer, as the case may be, such
additional amount or amounts as will compensate such Lender or the LC Issuer, as
the case may be, for such increased cost or reduction in amount received.
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3.2. Changes in Capital Adequacy Regulations. If a Lender or the LC
Issuer determines the amount of capital required or expected to be maintained by
such Lender or the LC Issuer, any Lending Installation of such Lender or the LC
Issuer, or any corporation controlling such Lender or the LC Issuer is increased
as a result of a Change, then, within 15 days of demand by such Lender or the LC
Issuer, the Borrower shall pay such Lender or the LC Issuer the amount necessary
to compensate for any shortfall in the rate of return on the portion of such
increased capital which such Lender or the LC Issuer determines is attributable
to this Agreement, its Outstanding Credit Exposure or its Commitment to make
Loans and issue or participate in Facility LCs, as the case may be, hereunder
(after taking into account such Lender's or the LC Issuer's policies as to
capital adequacy). "Change" means (i) any change after the date of this
Agreement in the Risk-Based Capital Guidelines, or (ii) any adoption of or
change in any other law, governmental or quasi-governmental rule, regulation,
policy, guideline, interpretation, or directive (whether or not having the force
of law) after the date of this Agreement which affects the amount of capital
required or expected to be maintained by any Lender or the LC Issuer or any
Lending Installation or any corporation controlling any Lender or the LC Issuer.
"Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in
effect in the United States on the date of this Agreement, including transition
rules, and (ii) the corresponding capital regulations promulgated by regulatory
authorities outside the United States implementing the July 1988 report of the
Basle Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
3.3. Availability of Types of Advances. If any Lender determines that
maintenance of its Eurodollar Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation, or directive, whether or not
having the force of law, or if the Required Lenders determine that (i) deposits
of a type and maturity appropriate to match fund Eurodollar Advances are not
available or (ii) the interest rate applicable to Eurodollar Advances does not
accurately reflect the cost of making or maintaining Eurodollar Advances, then
the Administrative Agent shall suspend the availability of Eurodollar Advances
and require any affected Eurodollar Advances to be repaid or converted to
Floating Rate Advances, subject to the payment of any funding indemnification
amounts required by Section 3.4.
3.4. Funding Indemnification. If any payment of a Eurodollar Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment or otherwise, or a Eurodollar
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, the Borrower will indemnify each Lender for any
loss or cost incurred by it resulting therefrom, including, without limitation,
any loss or cost in liquidating or employing deposits acquired to fund or
maintain such Eurodollar Advance.
3.5. Taxes.
(i) All payments by the Borrower to or for the account of any
Lender, the LC Issuer or the Administrative Agent hereunder or under
any Note or Facility LC Application shall be made free and clear of and
without deduction for any and all Taxes. If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum
payable hereunder to any Lender, the LC Issuer or the Administrative
Agent, (a) the sum payable shall be increased as
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necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.5) such Lender, the LC Issuer or the Administrative Agent (as the
case may be) receives an amount equal to the sum it would have received
had no such deductions been made, (b) the Borrower shall make such
deductions, (c) the Borrower shall pay the full amount deducted to the
relevant authority in accordance with applicable law and (d) the
Borrower shall furnish to the Administrative Agent the original copy of
a receipt evidencing payment thereof within 30 days after such payment
is made.
(ii) In addition, the Borrower hereby agrees to pay any
present or future stamp or documentary taxes and any other excise or
property taxes, charges or similar levies which arise from any payment
made hereunder or under any Note or Facility LC Application or from the
execution or delivery of, or otherwise with respect to, this Agreement
or any Note or Facility LC Application ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the
Administrative Agent, the LC Issuer and each Lender for the full amount
of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed on amounts payable under this Section 3.5) paid by
the Administrative Agent, the LC Issuer or such Lender and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto. Payments due under this
indemnification shall be made within 30 days of the date the
Administrative Agent, the LC Issuer or such Lender makes demand
therefor pursuant to Section 3.6.
(iv) Each Lender that is not incorporated under the laws of
the United States of America or a state thereof (each a "Non-U.S.
Lender") agrees that it will, not more than ten Business Days after the
date of this Agreement, (i) deliver to each of the Borrower and the
Administrative Agent two duly completed copies of United States
Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either
case that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal
income taxes, and (ii) deliver to each of the Borrower and the
Administrative Agent a United States Internal Revenue Form W-8 or W-9,
as the case may be, and certify that it is entitled to an exemption
from United States backup withholding tax. Each Non-U.S. Lender further
undertakes to deliver to each of the Borrower and the Administrative
Agent (x) renewals or additional copies of such form (or any successor
form) on or before the date that such form expires or becomes obsolete,
and (y) after the occurrence of any event requiring a change in the
most recent forms so delivered by it, such additional forms or
amendments thereto as may be reasonably requested by the Borrower or
the Administrative Agent. All forms or amendments described in the
preceding sentence shall certify that such Lender is entitled to
receive payments under this Agreement without deduction or withholding
of any United States federal income taxes, unless an event (including
without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise
be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form
or amendment with respect to it and such Lender advises the Borrower
and the Administrative Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal
income tax.
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(v) For any period during which a Non-U.S. Lender has failed
to provide the Borrower with an appropriate form pursuant to clause
(iv), above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration
thereof by any governmental authority, occurring subsequent to the date
on which a form originally was required to be provided), such Non-U.S.
Lender shall not be entitled to indemnification under this Section 3.5
with respect to Taxes imposed by the United States; provided that,
should a Non-U.S. Lender which is otherwise exempt from or subject to a
reduced rate of withholding tax become subject to Taxes because of its
failure to deliver a form required under clause (iv), above, the
Borrower shall take such steps as such Non-U.S. Lender shall reasonably
request to assist such Non-U.S. Lender to recover such Taxes.
(vi) Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant jurisdiction
or any treaty shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable
law, such properly completed and executed documentation prescribed by
applicable law as will permit such payments to be made without
withholding or at a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other
governmental authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Administrative
Agent did not properly withhold tax from amounts paid to or for the
account of any Lender (because the appropriate form was not delivered
or properly completed, because such Lender failed to notify the
Administrative Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason not
under the control of the Administrative Agent), such Lender shall
indemnify the Administrative Agent fully for all amounts paid, directly
or indirectly, by the Administrative Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and including
taxes imposed by any jurisdiction on amounts payable to the
Administrative Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time charges of
attorneys for the Administrative Agent, which attorneys may be
employees of the Administrative Agent). The obligations of the Lenders
under this Section 3.5(vii) shall survive the payment of the
Obligations and termination of this Agreement.
3.6. Lender Statements; Survival of Indemnity. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its Eurodollar Loans to reduce any liability of the Borrower to such
Lender under Sections 3.1, 3.2 and 3.5 or to avoid the unavailability of
Eurodollar Advances under Section 3.3, so long as such designation is not, in
the judgment of such Lender, disadvantageous to such Lender. Each Lender shall
deliver a written statement of such Lender to the Borrower (with a copy to the
Administrative Agent) as to the amount due, if any, under Section 3.1, 3.2, 3.4
or 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a
Eurodollar Loan shall be calculated as though each Lender funded its Eurodollar
Loan through the purchase of a deposit of the type and maturity corresponding to
the deposit used as a reference in
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determining the Eurodollar Rate applicable to such Loan, whether in fact that is
the case or not. Unless otherwise provided herein, the amount specified in the
written statement of any Lender shall be payable on demand after receipt by the
Borrower of such written statement. The obligations of the Borrower under
Sections 3.1, 3.2, 3.4 and 3.5 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Credit Extension. The Lenders shall not be required to
make the initial Credit Extension hereunder unless the Borrower has furnished to
the Administrative Agent with sufficient copies for the Lenders and/or the
following has occurred:
(i) Copies of the articles or certificate of incorporation or
other organization document of the Borrower and the Guarantor, together
with all amendments, and a certificate of good standing, each certified
by the appropriate governmental officer in its jurisdiction of
incorporation.
(ii) Copies, certified by the Secretary or Assistant
Secretary, of (a) a certificate of good standing of each Domestic
Subsidiary which is a Loan Party and (b) of the Board of Directors'
resolutions and of resolutions or actions of any other body authorizing
the execution of the Loan Documents to which each Loan Party is a
party.
(iii) An incumbency certificate, executed by the Secretary or
Assistant Secretary of each Loan Party which shall identify by name and
title and bear the signatures of the Authorized Officers and any other
officers of each Loan Party authorized to sign the Loan Documents to
which the each is a party, upon which certificate the Administrative
Agent and the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower.
(iv) A certificate, signed by the chief financial officer of
the Borrower, stating that on the initial Credit Extension Date no
Default or Unmatured Default has occurred and is continuing.
(v) A written opinion of counsel to the Loan Parties,
addressed to the Lenders in substantially the form of Exhibit A.
(vi) Any Notes requested by a Lender pursuant to Section 2.13
payable to the order of each such requesting Lender.
(vii) Written money transfer instructions, in substantially
the form of Exhibit D, addressed to the Administrative Agent and signed
by an Authorized Officer, together with such other related money
transfer authorizations as the Administrative Agent may have reasonably
requested.
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(viii) Evidence that all outstanding obligations under the
Existing Credit Agreement shall have been paid in full and the
commitment thereunder terminated.
(ix) The Collateral Documents executed by the parties thereto.
(x) If the initial Credit Extension will be the issuance of a
Facility LC, a properly completed Facility LC Application.
(xi) A properly completed Borrowing Base Certificate.
(xii) The Administrative Agent shall have received all fees
due and payable under the Fee Letter or Section 2.5 hereof and Banc of
America Securities LLC has received its fee as Co-Lead Arranger set
forth in its separate fee letter to the Borrower.
(xiii) The pro-forma financial statements for the period ended
September 30, 2000, for the Borrower and its Subsidiaries excluding the
PFSWeb business which shall be satisfactory to the Administrative Agent
in its sole discretion.
(xiv) Opinions of foreign counsel to the Borrower regarding
the pledges of stock in the Material Foreign Subsidiaries.
(xv) Tax, judgment and lien searches covering the Loan Parties
and its Subsidiaries for each jurisdiction in which they have material
assets, which shall be satisfactory to the Administrative Agent in its
sole discretion.
(xvi) Such other documents as any Lender or its counsel may
have reasonably requested.
4.2. Each Credit Extension. The Lenders shall not be required to make
any Credit Extension unless on the applicable Credit Extension Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V
are true and correct as of such Credit Extension Date except to the
extent any such representation or warranty is stated to relate solely
to an earlier date, in which case such representation or warranty shall
have been true and correct on and as of such earlier date.
(iii) All legal matters incident to the making of such Credit
Extension shall be satisfactory to the Lenders and their counsel.
(iv) If the Credit Extension will be the issuance of a
Facility LC, a properly completed Facility LC Application shall have
been executed and delivered to the LC Issuer.
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Each Borrowing Notice or request for issuance of a Facility LC with
respect to each such Credit Extension shall constitute a representation and
warranty by the Borrower that the conditions contained in Sections 4.2(i) and
(ii) have been satisfied. Any Lender may require a duly completed compliance
certificate in substantially the form of Exhibit B as a condition to making a
Credit Extension.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and the Guarantor, jointly and severally,
represents and warrants to the Lenders that:
5.1. Existence and Standing. Except as set forth in Schedule 1, each of
the Loan Parties and each Subsidiary is a corporation or limited liability
company duly and properly incorporated or organized, as the case may be, validly
existing and (to the extent such concept applies to such entity) in good
standing under the laws of its jurisdiction of incorporation or organization and
has all requisite authority to conduct its business in each jurisdiction in
which its business is conducted.
5.2. Authorization and Validity. Each Loan Party has the power and
authority and legal right to execute and deliver the Loan Documents to which it
is a party and to perform its obligations thereunder. The execution and delivery
by each Loan Party of the Loan Documents to which it is a party and the
performance of its obligations thereunder have been duly authorized by proper
corporate proceedings, and the Loan Documents to which each Loan Party is a
party constitute legal, valid and binding obligations of each Loan Party
enforceable against each Loan Party in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by each Loan Party of the Loan Documents to which it is a party, nor
the consummation of the transactions therein contemplated, nor compliance with
the provisions thereof will violate (i) any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Loan Party or any of its
Subsidiaries or (ii) the Loan Party's articles or certificate of incorporation,
by-laws, or operating or other management agreement or organizational documents,
as the case may be, or (iii) the provisions of any indenture, instrument or
agreement to which such Loan Party or any of its Subsidiaries is a party or is
subject, or by which it, or its Property, is bound, or conflict with or
constitute a default thereunder, or result in, or require, the creation or
imposition of any Lien in, of or on the Property of such Loan Party pursuant to
the terms of any such indenture, instrument or agreement. No order, consent,
adjudication, approval, license, authorization, or validation of, or filing,
recording or registration with, or exemption by, or other action in respect of
any governmental or public body or authority, or any subdivision thereof, which
has not been obtained by such Loan Party, is required to be obtained by such
Loan Party in connection with the execution and delivery of the Loan Documents,
the borrowings under this Agreement, the payment and performance by such Loan
Party of the Obligations or the legality, validity, binding effect or
enforceability of any of the Loan Documents.
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5.4. Financial Statements.
(a) The Borrower has delivered to the Lenders an unaudited
historical financial presentation of the Borrower's principal lines of
business, excluding PFSweb, Inc., for the first fiscal quarter of 2001
and 2000. This information is supplemental and is not intended to be
presented in accordance with generally accepted accounting principles.
The presentation takes into account certain one-time costs of
reorganization activities as a result of the planned separation of the
Borrower and PFSweb, Inc., which the Borrower believes are incremental
to normal operations. This presentation also included the estimated
impact of the transaction management services agreement between the
Borrower and PFSweb, Inc. for all periods presented. The presentation
excludes acquisition related costs and minority interest and was based
on available information and certain assumptions. The Borrower believes
that such assumptions provide a reasonable basis for presenting such
historical results, excluding PFSweb, Inc. and adjusting for such
transactions. This financial information does not reflect what the
Borrower's or any Loan Parties' results of operations may be in the
future.
(b) The September 30, 2000 consolidated financial statements
of the Guarantor and its consolidated Subsidiaries heretofore delivered
to the Lenders were prepared in accordance with generally accepted
accounting principles in effect on the date such statements were
prepared and fairly present the consolidated financial condition and
operations of each such Person at such date and the consolidated
results of their operations for the period then ended.
5.5. Material Adverse Change. Since the date of the most recent
financial statement delivered pursuant to Section 6.1, there has been no change
in the business, Property, condition (financial or otherwise) or results of
operations of any Loan Party and its Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
5.6. Taxes. The Loan Parties and their Subsidiaries have filed all
United States federal tax returns and all other tax returns which are required
to be filed and have paid all taxes due pursuant to said returns or pursuant to
any assessment received by the Loan Parties and their Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which adequate
reserves have been provided in accordance with Agreement Accounting Principles
and as to which no Lien exists. No tax liens have been filed and no claims are
being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of the Loan Parties and their Subsidiaries in respect of
any taxes or other governmental charges are adequate as of date of most recent
financial statement delivered pursuant to Section 6.1.
5.7. Litigation and Contingent Obligations. Except as set forth in
Schedule 2, as of the date of this Agreement, there is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting any Loan
Parties or any of its Subsidiaries which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extension. Other than any liability incident to any litigation,
arbitration or proceeding which (i) could not reasonably be expected to have a
Material
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Adverse Effect or (ii) is set forth on Schedule 2, no Loan Party has material
Contingent Obligations not provided for or disclosed in the most recent
financial statements delivered pursuant to Section 6.1.
5.8. Subsidiaries. Schedule 1 contains an accurate list of all
Subsidiaries of the Guarantor and the Borrower as of the date of this Agreement,
setting forth their respective jurisdictions of organization and the percentage
of their respective capital stock or other ownership interests owned by the
Guarantor, the Borrower or other Subsidiaries. All of the issued and outstanding
shares of capital stock or other ownership interests of such Subsidiaries have
been (to the extent such concepts are relevant with respect to such ownership
interests) duly authorized and issued and are fully paid and non-assessable.
5.9. ERISA. The Loan Parties have no Unfunded Liabilities of any Single
Employer Plans. Neither any Loan Party nor any other member of the Controlled
Group has incurred, or is reasonably expected to incur, any withdrawal liability
to Multiemployer Plans. Each Plan complies in all material respects with all
applicable requirements of law and regulations, no Reportable Event has occurred
with respect to any Plan, neither any Loan Party nor any other member of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and no
steps have been taken to reorganize or terminate any Plan.
5.10. Accuracy of Information. No information, exhibit or report
furnished by any Loan Party to the Administrative Agent, the LC Issuer or to any
Lender in connection with the negotiation of, or compliance with, the Loan
Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading; provided, however, that with respect to materials delivered by the
Sellers in connection with Permitted Acquisitions, this Section constitutes only
a warranty by the Borrower and the Guarantor.
5.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of the value of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12. Material Agreements. No Loan Party is a party to any agreement or
instrument or subject to any charter or other corporate restriction which could
reasonably be expected to have a Material Adverse Effect. No Loan Party is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any agreement to which it is a party, which
default could reasonably be expected to have a Material Adverse Effect.
5.13. Compliance With Laws. The Loan Parties have complied with all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property except for any failure to comply with any of the
foregoing which could not reasonably be expected to have a Material Adverse
Effect.
5.14. Ownership of Properties. Except as set forth on Schedule 2, on
the date of this Agreement, the Loan Parties will have good title, free of all
Liens other than those permitted by
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Section 6.15, to all of the Property and assets reflected in the most recent
consolidated financial statements provided to the Administrative Agent as owned
by the Loan Parties.
5.15. Plan Assets; Prohibited Transactions. The Loan Parties are not
entities deemed to hold "plan assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of Section
4975 of the Code), and neither the execution of this Agreement nor the making of
Credit Extensions hereunder gives rise to a prohibited transaction within the
meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16. Environmental Matters. No Loan Party's or any Subsidiary's
failure to comply with Environmental Laws will have a Material Adverse Effect.
Neither the Guarantor, the Borrower nor any Subsidiary has received any notice
to the effect that its operations are not in material compliance with any of the
requirements of applicable Environmental Laws or are the subject of any federal
or state investigation evaluating whether any remedial action is needed to
respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.
5.17. Investment Company Act. No Loan Party is an "investment company"
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
5.18. Public Utility Holding Company Act. No Loan Party is a "holding
company" or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.19. Solvency.
(i) Immediately after the consummation of the transactions to
occur on the date hereof and immediately following the making of each
Loan, if any, made on the date hereof and after giving effect to the
application of the proceeds of such Loans, (a) the fair value of the
assets of the Loan Parties on a consolidated basis, at a fair
valuation, will exceed the debts and liabilities, subordinated,
contingent or otherwise, of the Loan Parties on a consolidated basis;
(b) the present fair saleable value of the Property of the Loan Parties
on a consolidated basis will be greater than the amount that will be
required to pay the probable liability of the Loan Parties on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become
absolute and matured; (c) the Loan Parties on a consolidated basis will
be able to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured;
and (d) the Loan Parties on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in
which they are engaged as such businesses are now conducted and are
proposed to be conducted after the date hereof.
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(ii) The Loan Parties do not intend to, or to permit any of
their Subsidiaries to, and no Loan Party believes that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such debts as
they mature, taking into account the timing of and amounts of cash to
be received by it or any such Subsidiary and the timing of the amounts
of cash to be payable on or in respect of its Indebtedness or the
Indebtedness of any such Subsidiary.
ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1. Financial Reporting. Each Loan Party will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and the Guarantor or
the Borrower, as applicable, will furnish (or cause to be furnished) to the
Lenders:
(i) As soon as available, but in any event within 90 days
after the close of each of its fiscal years (commencing with the fiscal
year ended March 31, 2001), a copy of the consolidated balance sheet of
the Guarantor and its consolidated Subsidiaries as at the end of such
fiscal year and the related statements of income and retained earnings
and of cash flows of the Guarantor and its consolidated Subsidiaries
for such year plus consolidating balance sheet and income statements
for the Borrower and its Principal Lines of Business, which
consolidated statements will have been audited by a firm of independent
certified public accountants of nationally recognized standing
reasonably acceptable to the Administrative Agent, setting forth in
each case in comparative form the figures for the previous year,
reported on without a "going concern" or like qualification or
exception, or qualification indicating that the scope of the audit was
inadequate to permit such independent certified public accountants to
certify such financial statements without such qualification, which
report shall state that such consolidated financial statements present
fairly the financial position of the Guarantor and its consolidated
Subsidiaries for the period indicated in conformity with generally
accepted accounting principles applied on a consistent basis.
(ii) Within 45 days after the close of the first three
quarterly periods of each of its fiscal years, for the Guarantor and
its Consolidated Subsidiaries, consolidated unaudited balance sheets as
at the close of each such period and consolidated profit and loss and
reconciliation of surplus statements and a statement of cash flows for
the period from the beginning of such fiscal year to the end of such
quarter plus consolidating balance sheets and income statements for the
Borrower and its Principal Lines of Business, all certified by the
chief financial officer of the Guarantor, together with (a)
consolidated unaudited balance sheets as at the close of each such
period for the prior fiscal year and consolidated profit and loss and
reconciliation of surplus statements and a statement of cash flows for
the same period of the prior fiscal year and (b)
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year-to-date actual results versus the plan and forecast most recently
submitted for such quarter.
(iii) As soon as available thereafter, but in any event within
30 days after the beginning of each of its fiscal years a copy of the
plan and forecast (including a projected consolidated balance sheet,
income statement and funds flow statement) of the Loan Parties and
their Subsidiaries for such fiscal year. Such plan and forecast must
include relevant information concerning the projected business and
operations of the Loan Parties and their Subsidiaries, including,
without limitation, a detailed quarterly breakdown of projected
financial results by major business segment encompassing at a minimum
the following segments: U.S. Supplies, International Supplies,
Pro-Tape, Virtual Demand, and any major new line of business added
after the date hereof ("Principal Lines of Business").
(iv) Together with the financial statements required under
Sections 6.1(i) and (ii), a compliance certificate in substantially the
form of Exhibit B signed by the chief financial officer of the Borrower
and the Guarantor showing the calculations necessary to determine
compliance with this Agreement and stating that no Default or Unmatured
Default exists, or if any Default or Unmatured Default exists, stating
the nature and status thereof.
(v) Within 30 days after the end of each fiscal month, a
Borrowing Base Certificate, signed by an Authorized Officer of the
Borrower.
(vi) Within 90 days after the end of each fiscal year, a
certificate of an Authorized Officer setting forth for the Loan Parties
and their Subsidiaries for the prior fiscal year the aggregate amount
of all asset dispositions made outside of the ordinary course of
business, equity and debt issuances and the Net Cash Proceeds received
in connection therewith.
(vii) Within 270 days after the close of each fiscal year, a
statement of the Unfunded Liabilities of each Single Employer Plan,
certified as correct by an actuary enrolled under ERISA.
(viii) As soon as possible and in any event within 10 days
after it knows that any Reportable Event has occurred with respect to
any Plan, a statement, signed by its chief financial officer describing
said Reportable Event and the action which it proposes to take with
respect thereto.
(ix) As soon as possible and in any event within 10 days after
receipt, a copy of (a) any written notice or claim to the effect that
the Loan Party or any of its Subsidiaries is or may be liable to any
Person as a result of the release by it, any of its Subsidiaries, or
any other Person of any toxic or hazardous waste or substance into the
environment, and (b) any written notice alleging any violation of any
federal, state or local environmental, health or safety law or
regulation by it or any of its Subsidiaries, which, in either case,
could reasonably be expected to have a Material Adverse Effect.
(x) Promptly upon the furnishing thereof to its stockholders,
copies of all financial statements, reports and proxy statements so
furnished.
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(xi) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly, monthly or other regular
reports which any Loan Party files with the Securities and Exchange
Commission.
(xii) Such other information (including non-financial
information) as the Administrative Agent or any Lender may from time to
time reasonably request.
6.2. Use of Proceeds. The Borrower will, and will cause each Subsidiary
to, use the proceeds of the Credit Extensions for general corporate purposes
including Permitted Acquisitions. The Borrower will not, nor will it permit any
Subsidiary to, (x) use any of the proceeds of the Advances to purchase or carry
any "margin stock" (as defined in Regulation U) or (y) following the restructure
of the BSD Business permitted pursuant to the provisions of Section 6.12(y), no
proceeds of the Credit Extensions shall be used, directly or indirectly, for or
in connection with the BSD Business, except as expressly permitted hereunder.
6.3. Notice of Default. Each Loan Party will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence of
any Default or Unmatured Default and of any other development, financial or
otherwise, which could reasonably be expected to have a Material Adverse Effect.
6.4. Conduct of Business. Except as permitted in Section 6.12, each
Loan Party will, and will cause each Subsidiary to, carry on and conduct its
business in substantially the same manner and in substantially the same fields
of enterprise as it is presently conducted and do all things necessary to remain
duly incorporated or organized, validly existing and (to the extent such concept
applies to such entity) in good standing as a domestic corporation, partnership
or limited liability company in its jurisdiction of incorporation or
organization, as the case may be, and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
6.5. Taxes. Each Loan Party will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable foreign,
state and local tax returns required by law and pay when due all taxes,
assessments and governmental charges and levies upon it or its income, profits
or Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.
6.6. Insurance. Each Loan Party will, and will cause each Subsidiary
to, maintain with financially sound and reputable insurance companies insurance
on all their Property in such amounts and covering such risks as is consistent
with sound business practice, and the Borrower will furnish to any Lender upon
request full information as to the insurance carried.
6.7. Compliance with Laws. Each Loan Party will, and will cause each of
its Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject including,
without limitation, all Environmental Laws, to the extent that the failure to so
comply may reasonably be expected to have a Material Adverse Effect.
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6.8. Maintenance of Properties. Each Loan Party will, and will cause
each of its Subsidiaries to, do all things necessary to maintain, preserve,
protect and keep its Property in good repair, working order and condition, and
make all necessary and proper repairs, renewals and replacements so that its
business carried on in connection therewith may be properly conducted at all
times.
6.9. Inspection. Each Loan Party will, and will cause each of its
Subsidiaries to, permit the Administrative Agent and the Lenders, by their
respective representatives and agents, to inspect any of the Property, books and
financial records of such Loan Party and each Subsidiary, to examine and make
copies of the books of accounts and other financial records of such Loan Party
and each Subsidiary, and to discuss the affairs, finances and accounts of such
Loan Party and each Subsidiary with, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Administrative
Agent or any Lender may designate upon reasonable prior notice; provided,
however, that no advance notice shall be required during any period in which a
Default or Unmatured Default has occurred and is continuing.
6.10. Dividends. No Loan Party will, nor will it permit any Subsidiary
to, declare or pay any dividends or make any distributions on its capital stock
(other than dividends payable in its own capital stock) or redeem, repurchase or
otherwise acquire or retire any of its capital stock at any time outstanding,
except (A) that any Subsidiary may declare and pay dividends or make
distributions to the Borrower or to a Wholly-Owned Subsidiary of the Borrower
and (B) the Borrower may declare and pay dividends to the Guarantor in order to
provide funds to carry out its share repurchases permitted by the following
clause of this Section 6.10, for Investments permitted under Section 6.14, and
for ordinary and necessary expenses related to its status as a company with
publicly traded securities; provided, however, that the Guarantor may purchase
shares of its common stock, provided that the aggregate amount thereof on a
cumulative basis commencing on June 30, 2000, does not exceed $25,000,000.
6.11. Indebtedness. No Loan Party will, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans and the Reimbursement Obligations.
(ii) Indebtedness existing on the date hereof and described in
Schedule 2.
(iii) Indebtedness arising under Rate Management Transactions
having a Net Xxxx-to-Market Exposure not exceeding $10,000,000.
(iv) Indebtedness arising in connection with transactions
permitted by Section 6.13(iii).
(v) unsecured Indebtedness of Foreign Subsidiaries which, in
the aggregate, does not exceed $40,000,000.
(vi) Capitalized Lease Obligations and other unsecured
Indebtedness of the Borrower and its Domestic Subsidiaries which, in
the aggregate, does not exceed $20,000,000; provided,
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however, that none of the Indebtedness referred to in this clause (vi)
may be used, directly or indirectly, for the benefit of Foreign
Subsidiaries or for business activities outside the United States.
(vii) Qualified Foreign Financings.
(viii) Indebtedness owing to a Seller in connection with a
Permitted Acquisition not to exceed $20,000,000 in the aggregate at any
one time.
(ix) Indebtedness secured as permitted by Section 6.15(ix) and
(x).
6.12. Stock Transfers and Mergers. No Loan Party will, nor will it
permit any Subsidiary to transfer its capital stock to, merge or consolidate
with or into any other Person, except (x) that the capital stock of a Subsidiary
may be transferred to and a Subsidiary may merge with or into the Borrower or a
Wholly-Owned Subsidiary of the Borrower (other than a Foreign Subsidiary), (y)
the Borrower may restructure the BSD Business such that all Subsidiaries
conducting the BSD Business are transferred to a separate Wholly-Owned
Subsidiary of the Guarantor incorporated to be the holding company of the BSD
Business which is (A) separately financed pursuant to a BSD Facility and (B) no
Loan Party has any contractual liability for the debts and obligations of such
Subsidiary, except as expressly permitted hereunder (collectively, the "BSD
Restructure Requirements") and (z) for Permitted Acquisitions, provided that the
Borrower or a Subsidiary shall be the surviving entity thereof.
6.13. Sale of Assets. No Loan Party will, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property (which shall not
be deemed to include any write-off of goodwill or other intangible assets) to
any other Person, except:
(i) Sales of inventory in the ordinary course of business.
(ii) Leases, sales or other dispositions of its Property when
no Default or Unmatured Default has occurred and is continuing or will
result therefrom that, together with all other Property of the Borrower
and its Subsidiaries previously leased, sold , exchanged or disposed of
(other than inventory in the ordinary course of business) as permitted
by this Section during the twelve-month period ending with the month in
which any such lease, sale or other disposition occurs, do not
constitute a Substantial Portion of the Property of the Borrower and
its Subsidiaries, and for which the Borrower provides to the
Administrative Agent at least 30 days prior written notice to the
closing thereof.
(iii) Any transfer of an interest in accounts or notes
receivable on a limited recourse basis made in connection with and
pursuant to the terms and provisions of a trade accounts receivable
conduit financing arrangement acceptable to the Administrative Agent,
provided that such transfer qualifies as a sale under Agreement
Accounting Principles and that the amount of such financing does not
exceed $50,000,000 at any one time outstanding.
(iv) Sales or other dispositions of used, worn-out or obsolete
equipment in the
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ordinary course of business, when no Default has occurred and is
continuing or will result therefrom.
6.14. Investments and Acquisitions. No Loan Party will, nor will it
permit any Subsidiary to, make or suffer to exist any Investments (including
without limitation, loans and advances to, and other Investments in,
Subsidiaries), or commitments therefor, or to create any Subsidiary or to become
or remain a partner in any partnership or joint venture, or to make any
Acquisition of any Person, except:
(i) Cash Equivalent Investments.
(ii) Existing Investments in Subsidiaries and other
Investments in existence on the date hereof and described in Schedule
1.
(iii) So long as no Default or Unmatured Default has occurred
or will result therefrom, Permitted Acquisitions (subject to compliance
with Section 6.24 hereof).
(iv) The Guarantor may make Investments to capitalize a
separate Wholly-Owned Subsidiary of the Guarantor incorporated to be
the holding company of the BSD Business in the aggregate amount of
$7,500,000 provided the BSD Restructure Requirements continue to be
satisfied at the time of such Investment.
(v) Other Investments in Foreign Subsidiaries of the Borrower
in an aggregate amount made on or after the date hereof not to exceed
the lesser of (x) 10% of Consolidated Tangible Net Worth or (y)
$20,000,000.
(vi) Investments in Domestic Subsidiaries that are or become
Loan Parties.
(vii) Loans or advances made to officers or employees,
provided the aggregate amount outstanding at any time (excluding
ordinary travel or similar advances) does not exceed $3,000,000.
(viii) Other Investments not to exceed at any one time
$1,000,000 in the aggregate.
6.15. Liens. No Loan Party will, nor will it permit any Subsidiary to,
create, incur, or suffer to exist any Lien in, of or on the Property of the Loan
Parties or any of their Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or
levies on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves in accordance with Agreement Accounting Principles shall have
been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's
and mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations
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not more than 60 days past due or which are being contested in good
faith by appropriate proceedings and for which adequate reserves shall
have been set aside on its books.
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property of the Borrower and its
Subsidiaries as are of a nature generally existing with respect to
properties of a similar character and which do not in any material way
affect the marketability of the same or interfere with the use thereof
in the business of the Borrower or its Subsidiaries.
(v) Liens existing on the date hereof and described in
Schedule 2.
(vi) Liens in favor of the Administrative Agent, for the
benefit of the LC Issuer and the Lenders, granted pursuant to any
Collateral Document.
(vii) Liens incurred in connection with any transfer of an
interest in accounts or notes receivable which is permitted pursuant to
Section 6.13(iii).
(viii) Capitalized Lease Obligations, to the extent the same
are Liens hereunder.
(ix) Liens on real or tangible personal property securing the
purchase price thereof or securing Indebtedness incurred to pay such
purchase price or to finance the construction thereof or existing at
the time of acquisition thereof; provided, however, (A) no such lien
shall extend to any Property other than such Property and fixed
improvements thereon and (B) the aggregate amounts of Indebtedness of
all Loan Parties at any one time outstanding secured by all such Liens
shall not exceed $5,000,000.
(x) Liens on Property of a Subsidiary other than the Guarantor
or the Borrower; provided, however, that (A) no such Lien shall extend
to any Property other than such Property and fixed improvements thereon
and (B) the aggregate amount of all such Indebtedness of all such
Subsidiaries at any one time outstanding shall not exceed $1,000,000.
(xi) Liens granted on assets of a Foreign Subsidiary to secure
a Qualified Foreign Financing.
6.16. Affiliates. No Loan Party will, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Loan Party's or such Subsidiary's
business and upon fair and reasonable terms no less favorable to the Loan Party
or such Subsidiary than the Loan Party or such Subsidiary
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would obtain in a comparable arms-length transaction and except for transactions
permitted by Section 6.14(vi).
6.17. Sale of Accounts. No Loan Party will, nor will it permit any
Subsidiary to, sell or otherwise dispose of any notes receivable or accounts
receivable, with or without recourse except (x) to the extent permitted by
Section 6.13(iii) and (y) for the compromise, settlement, or discount thereof in
the ordinary course of business.
6.18. Sale and Leaseback Transactions and other Off-Balance Sheet
Liabilities. No Loan Party will, nor will it permit any Subsidiary to, enter
into or suffer to exist any (i) Sale and Leaseback Transaction or (ii) any other
transaction pursuant to which it incurs or has incurred Off-Balance Sheet
Liabilities, except for Rate Management Obligations permitted to be incurred
under the terms of Section 6.11(iii).
6.19. Letters of Credit. No Loan Party will, nor will it permit any
Subsidiary to, apply for or become liable upon or in respect of any Letter of
Credit other than the Facility LCs.
6.20. Financial Contracts. No Loan Party will, nor will it permit any
Subsidiary to, enter into or remain liable upon any Financial Contract, except
Rate Management Transactions permitted under Section 6.11(iii) or as set forth
on Schedule 2.
6.21. Financial Covenants.
6.21.1. Consolidated Indebtedness to Consolidated EBITDA. The
Borrower will not permit the ratio of (i) Consolidated Indebtedness to
(ii) Consolidated EBITDA, determined as of the last day of each fiscal
quarter of the Borrower for the four consecutive fiscal quarters ending
on such date, to be greater than 3.00 to 1.0.
6.21.2. Fixed Charge Coverage Ratio. The Fixed Charge Coverage
Ratio, as of the last day of each fiscal quarter of the Borrower, shall
be greater than or equal to 1.50 to 1.00.
6.21.3. Minimum Net Worth. The Guarantor will for each of its
fiscal quarters determined on the last day of each fiscal quarter
maintain Consolidated Net Worth of not less than $148,955,000, plus (i)
75% of Consolidated Net Income of the Guarantor and its Subsidiaries on
a cumulative basis beginning with the fiscal quarter ended December 31,
2000, plus (ii) the Guarantor's Net Cash Proceeds from the issuance of
equity interests, minus (iii) the amount of the Guarantor's treasury
stock purchases subsequent to September 30, 2000, to the extent
permitted by Section 6.10.
6.22. Related Company. Within ten days after a Person becomes a Related
Company following the date of the initial Credit Extension, each of the Borrower
and Guarantor shall cause such Person to execute such documents, instruments,
and agreements as the Administrative Agent deems necessary or appropriate, in
form and substance satisfactory to the Administrative Agent, to (x) cause such
Related Company to become a party to the Subsidiary Guaranty and the outstanding
shares of such Related
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Company to be subject to the Pledge Agreement if the Related Person is a
Domestic Subsidiary on a basis substantially the same as the existing Subsidiary
Guarantors and (y) the Borrower will (and, as applicable, will cause such
Related Person) to execute such documents or instruments as may be required to
pledge 65% of the capital stock of the Related Person (if it is a Material
Foreign Subsidiary) to the Administrative Agent for the ratable benefit of the
LC Issuer and the Lenders as a first priority security interest as collateral
security for the Secured Obligations.
6.23. Prohibition on Granting Negative Pledges. Except for this
Agreement, neither the Borrower nor the Guarantor will enter into or become
bound by any agreement, understanding or arrangement, nor permit its Domestic
Subsidiaries to do so (other than this Agreement) that limits, restricts or
impairs in any way the right of any Loan Party or its Domestic Subsidiaries to
create, assume or suffer to exist any Lien on its Properties or assets in favor
of the Administrative Agent (or any successor Administrative Agent) for the
benefit of the Lenders.
6.24. Prohibition on Granting Restrictions on Distributions. Except for
this Agreement, neither the Borrower nor the Guarantor will enter into or become
bound by any agreement, arrangement or understanding or permit its Subsidiaries
to do so (including, without limitation, their respective articles of
incorporation, bylaws or other charter documents) that limits, restricts,
subordinates or impairs in any way the right or ability of any of Subsidiaries
to make dividends or distributions to or Investments in the Borrower or to repay
any Indebtedness or obligation owed to the Borrower.
6.25. Inventory and Accounts Receivable Audit/Appraisal. Upon the
request of the Administrative Agent, the Loan Parties shall procure and furnish
the Administrative Agent an appraisal or audit of the inventory and/or accounts
receivable of the Loan Parties, in scope and substance satisfactory to the
Administrative Agent, by a qualified appraiser or auditor selected by the
Administrative Agent; provided, however, that the Loan Parties shall only be
required to pay (or reimburse the Administrative Agent for paying) the cost of
appraisals or audits under this Section 6.27 if a Default or Unmatured Default
has occurred and is continuing.
6.26. Further Assurances. Within ten days after the request of the
Administrative Agent, the Loan Parties shall promptly perform or cause to be
performed any and all acts and execute or cause to be executed any and all
documents, instruments, and agreements which are necessary or advisable to carry
out the provisions and purposes of this Agreement and the Collateral Documents,
including, without limitation, the execution and delivery of any and all
documents for filing under the provisions of the Uniform Commercial Code or any
other applicable law which are necessary or advisable to create or maintain in
favor of the Administrative Agent, for the ratable benefit of the Administrative
Agent and the Lenders, Liens on the collateral granted pursuant to the
Collateral Documents that are perfected and of first priority in accordance with
all applicable requirements of law.
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ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1. Any representation or warranty made or deemed made by or on behalf
of the Borrower or the Guarantor or any of its Subsidiaries to the Lenders or
the Administrative Agent under or in connection with this Agreement, any Credit
Extension, or any certificate or information delivered in connection with this
Agreement or any other Loan Document shall be materially false on the date as of
which made.
7.2. Nonpayment of principal of any Loan when due, nonpayment of any
Reimbursement Obligation with one Business Day after the same becomes due, or
nonpayment of interest upon any Loan or of any facility fee, LC Fee or other
obligations under any of the Loan Documents within five days after the same
becomes due.
7.3. The breach by any Loan Party of any of the terms or provisions of
Sections 6.2, 6.3, 6.9, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.17, 6.18, 6.19,
6.20, 6.21, 6.23, or 6.24.
7.4. The breach by the Borrower or the Guarantor (other than a breach
which constitutes a Default under another Section of this Article VII) of any of
the terms or provisions of this Agreement which is not remedied within 30 days
after written notice from the Administrative Agent or any Lender.
7.5. Failure of any Loan Party or any of its Subsidiaries to pay when
due any Indebtedness aggregating in excess of $1,000,000 ("Material
Indebtedness"); or the default by any Loan Party in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any agreement under which any such Material Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which default or event is to cause, or to permit the holder or
holders of such Material Indebtedness to cause, such Material Indebtedness to
become due prior to its stated maturity; or any Material Indebtedness of any
Loan Party shall be declared to be due and payable or required to be prepaid or
repurchased (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the Borrower or any of its Subsidiaries shall not pay, or
admit in writing its inability to pay, its debts generally as they become due.
7.6. Any Loan Party or any of its Subsidiaries shall (i) have an order
for relief entered with respect to it under any bankruptcy or debtor protection
laws as now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the appointment
of a receiver, custodian, trustee, examiner, liquidator or similar official for
it or any Substantial Portion of its Property, (iv) institute any proceeding
seeking an order for relief under bankruptcy or debtor protection laws as now or
hereafter in effect or seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file an
answer or other pleading denying the material allegations of any such proceeding
filed against it,
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(v) take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.
7.7. Without the application, approval or consent of any Loan Party or
any of its Subsidiaries, a receiver, trustee, examiner, liquidator or similar
official shall be appointed for any Loan Party or any of its Subsidiaries or any
Substantial Portion of its Property, or a proceeding described in Section
7.6(iv) shall be instituted against any Loan Party or any of its Subsidiaries
and such appointment continues undischarged or such proceeding continues
undismissed or unstayed for a period of 30 consecutive days.
7.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of, all or any portion of
the Property of any Loan Party and its Subsidiaries which, when taken together
with all other Property of such Loan Party so condemned, seized, appropriated,
or taken custody or control of, during the twelve-month period ending with the
month in which any such action occurs, constitutes a Substantial Portion.
7.9. Any Loan Party or any of its Subsidiaries shall fail within 30
days to pay, bond or otherwise discharge one or more (i) judgments or orders for
the payment of money in excess of $500,000 (or the equivalent thereof in
currencies other than U.S. Dollars) in the aggregate, or (ii) nonmonetary
judgments or orders which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, which judgment(s), in any such case,
is/are not stayed on appeal or otherwise being appropriately contested in good
faith.
7.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $250,000 or any Reportable Event shall occur in
connection with any Plan.
7.11. Any Loan Party shall (i) be the subject of any proceeding or
investigation pertaining to the release by the Borrower, any of its Subsidiaries
or any other Person of any toxic or hazardous waste or substance into the
environment, or (ii) violate any Environmental Law, which, in the case of an
event described in clause (i) or clause (ii), could reasonably be expected to
have a Material Adverse Effect.
7.12. Any Change in Control shall occur.
7.13. The occurrence of any "default", as defined in any Loan Document
(other than this Agreement) or the breach of any of the terms or provisions of
any Loan Document (other than this Agreement), which default or breach continues
beyond any period of grace therein provided.
7.14. The Subsidiary Guaranty or the Parent Guaranty shall fail to
remain in full force or effect or any action shall be taken to discontinue or to
assert the invalidity or unenforceability of the Subsidiary Guaranty or the
Parent Guaranty, or any guarantor under the Subsidiary Guaranty or the Parent
Guaranty shall fail to comply with any of the terms or provisions set forth
therein, or any guarantor thereunder shall deny that it has any further
liability under the Subsidiary Guaranty or the Parent Guaranty to which it is a
party, or shall give notice to such effect.
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7.15. Any Collateral Document shall for any reason fail to create a
valid and perfected first priority security interest in any collateral purported
to be covered thereby, except as permitted by the terms of any Collateral
Document, or any Collateral Document shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the invalidity
or unenforceability of any Collateral Document, or any Loan Party shall fail to
comply with any of the terms or provisions of any Collateral Document.
ARTICLE VIII
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1. Acceleration; Facility LC Collateral Account.
(i) If any Default described in Section 7.6 or 7.7 occurs, the
obligations of the Lenders to make Loans hereunder and the obligation
and power of the LC Issuer to issue Facility LCs shall automatically
terminate and the Obligations shall immediately become due and payable
without any election or action on the part of the Administrative Agent,
the LC Issuer or any Lender and the Borrower will be and become thereby
unconditionally obligated, without any further notice, act or demand,
to pay to the Administrative Agent an amount in immediately available
funds, which funds shall be held in the Facility LC Collateral Account,
equal to the difference of (x) the amount of LC Obligations at such
time, less (y) the amount on deposit in the Facility LC Collateral
Account at such time which is free and clear of all rights and claims
of third parties and has not been applied against the Obligations (such
difference, the "Collateral Shortfall Amount"). If any other Default
occurs, the Required Lenders (or the Administrative Agent with the
consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation
and power of the LC Issuer to issue Facility LCs, or declare the
Obligations to be due and payable, or both, whereupon the Obligations
shall become immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which the Borrower hereby
expressly waives, and (b) upon notice to the Borrower and in addition
to the continuing right to demand payment of all amounts payable under
this Agreement, make demand on the Borrower to pay, and the Borrower
will, forthwith upon such demand and without any further notice or act,
pay to the Administrative Agent the Collateral Shortfall Amount, which
funds shall be deposited in the Facility LC Collateral Account.
(ii) If at any time while any Default is continuing, the
Administrative Agent determines that the Collateral Shortfall Amount at
such time is greater than zero, the Administrative Agent may make
demand on the Borrower to pay, and the Borrower will, forthwith upon
such demand and without any further notice or act, pay to the
Administrative Agent the Collateral Shortfall Amount, which funds shall
be deposited in the Facility LC Collateral Account.
(iii) The Administrative Agent may at any time or from time to
time after funds are deposited in the Facility LC Collateral Account,
apply such funds to the payment of the
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Obligations and any other amounts as shall from time to time have
become due and payable by the Borrower to the Lenders or the LC Issuer
under the Loan Documents.
(iv) At any time while any Default is continuing, neither the
Borrower nor any Person claiming on behalf of or through the Borrower
shall have any right to withdraw any of the funds held in the Facility
LC Collateral Account. After all of the Obligations have been
indefeasibly paid in full and the Aggregate Commitment has been
terminated, any funds remaining in the Facility LC Collateral Account
shall be returned by the Administrative Agent to the Borrower or paid
to whomever may be legally entitled thereto at such time.
(v) If, within 30 days after acceleration of the maturity of
the Obligations or termination of the obligations of the Lenders to
make Loans and the obligation and power of the LC Issuer to issue
Facility LCs hereunder as a result of action of the Required Lenders
(or the Administrative Agent with the consent of the Required Lenders)
under Section 8.1(i) after any Default (other than any Default as
described in Section 7.6 or 7.7 with respect to the Borrower) and
before any judgment or decree for the payment of the Obligations due
shall have been obtained or entered, the Required Lenders (in their
sole discretion) shall so direct, the Administrative Agent shall, by
notice to the Borrower, rescind and annul such acceleration and/or
termination.
8.2. Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Administrative Agent with the consent in writing of the
Required Lenders) and the Borrower may enter into agreements supplemental hereto
for the purpose of adding or modifying any provisions to the Loan Documents
(including modifying or amending any covenant herein) or changing in any manner
the rights of the Lenders or the Borrower hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement shall, without
the consent of all of the Lenders:
(i) Extend the final maturity of any Loan or postpone any
regularly scheduled payment of principal of any Loan or forgive all or
any portion of the principal amount thereof or any Reimbursement
Obligation related thereto, or reduce the rate or extend the time of
payment of interest or fees thereon.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Extend the Facility Termination Date, or reduce the
amount or extend the payment date for, the mandatory payments required
under Section 2.2, or increase the amount of the Aggregate Commitment
or of the Commitment of any Lender hereunder or the commitment to issue
Facility LCs, or permit the Borrower to assign its rights under this
Agreement.
(iv) Increase the Aggregate Commitments other than pursuant to
Section 2.26.
(v) Amend this Section 8.2.
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No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent, and no amendment of any provision relating to the LC Issuer shall be
effective without the consent of the LC Issuer. The Administrative Agent may
waive payment of the fee required under Section 12.3.2 without obtaining the
consent of any other party to this Agreement.
8.3. Preservation of Rights. No delay or omission of the Lenders, the
LC Issuer or the Administrative Agent to exercise any right under the Loan
Documents shall impair such right or be construed to be a waiver of any Default
or an acquiescence therein, and the making of a Credit Extension notwithstanding
the existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Credit Extension shall not constitute any waiver or
acquiescence. Any single or partial exercise of any such right shall not
preclude other or further exercise thereof or the exercise of any other right,
and no waiver, amendment or other variation of the terms, conditions or
provisions of the Loan Documents whatsoever shall be valid unless in writing
signed by the Lenders required pursuant to Section 8.2, and then only to the
extent in such writing specifically set forth. All remedies contained in the
Loan Documents or by law afforded shall be cumulative and all shall be available
to the Administrative Agent, the LC Issuer and the Lenders until the Obligations
have been paid in full.
ARTICLE IX
GENERAL PROVISIONS
9.1. Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive the making of the Credit
Extensions herein contemplated.
9.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, neither the LC Issuer nor any Lender shall be
obligated to extend credit to the Borrower in violation of any limitation or
prohibition provided by any applicable statute or regulation.
9.3. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.4. ENTIRE AGREEMENT. THE LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT
AND UNDERSTANDING AMONG THE LOAN PARTIES, THE AGENT, THE LC ISSUER AND THE
LENDERS AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS AMONG THE
BORROWER, THE AGENTS, THE LC ISSUER AND THE LENDERS RELATING TO THE SUBJECT
MATTER THEREOF. THE LOAN DOCUMENTS MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE
OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO.
9.5. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other
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(except to the extent to which the Administrative Agent is authorized to act as
such). The failure of any Lender to perform any of its obligations hereunder
shall not relieve any other Lender from any of its obligations hereunder. This
Agreement shall not be construed so as to confer any right or benefit upon any
Person other than the parties to this Agreement and their respective successors
and assigns, provided, however, that the parties hereto expressly agree that the
Arrangers shall enjoy the benefits of the provisions of Sections 9.6, 9.10 and
10.11 to the extent specifically set forth therein and shall have the right to
enforce such provisions on its own behalf and in its own name to the same extent
as if it were a party to this Agreement.
9.6. Expenses; Indemnification.
(i) The Borrower shall reimburse the Administrative Agent and
the Arrangers for any costs, and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Administrative
Agent, which attorneys may be employees of the Administrative Agent)
paid or incurred by the Administrative Agent or the Arranger in
connection with the preparation, negotiation, execution, delivery,
syndication, review, amendment, modification, and administration of the
Loan Documents. The Borrower also agrees to reimburse the
Administrative Agent, the LC Issuer, the Arrangers and the Lenders for
any costs, internal charges and out-of-pocket expenses (including
attorneys' fees and time charges of attorneys for the Administrative
Agent, the Arrangers and the Lenders, which attorneys may be employees
of the Administrative Agent, the Arranger or the Lenders) paid or
incurred by the Administrative Agent, the LC Issuer, the Arrangers or
any Lender in connection with the collection and enforcement of the
Loan Documents. Expenses being reimbursed by the Borrower under this
Section include, without limitation, costs and expenses incurred in
connection with the Reports described in the following sentence that
are prepared after Default. The Borrower acknowledges that from time to
time Bank One may prepare and may distribute to the Lenders (but shall
have no obligation or duty to prepare or to distribute to the Lenders)
certain audit reports (the "Reports") pertaining to the Borrower's
assets for internal use by Bank One from information furnished to it by
or on behalf of the Borrower, after Bank One has exercised its rights
of inspection pursuant to this Agreement.
(ii) THE BORROWER HEREBY FURTHER AGREES TO INDEMNIFY THE
AGENTS, THE LC ISSUER, THE ARRANGERS, EACH LENDER, THEIR RESPECTIVE
AFFILIATES, AND EACH OF THEIR DIRECTORS, OFFICERS AND EMPLOYEES AGAINST
ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND
EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR
PREPARATION THEREFOR WHETHER OR NOT THE AGENTS, THE LC ISSUER, THE
ARRANGERS, ANY LENDER OR ANY AFFILIATE IS A PARTY THERETO) WHICH ANY OF
THEM MAY PAY OR INCUR ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, THE TRANSACTIONS CONTEMPLATED HEREBY OR THE
DIRECT OR INDIRECT APPLICATION OR PROPOSED APPLICATION OF THE PROCEEDS
OF ANY EXTENSION OF CREDIT HEREUNDER EXCEPT TO THE EXTENT THAT THEY ARE
DETERMINED IN A FINAL NON-APPEALABLE JUDGMENT BY A COURT OF
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COMPETENT JURISDICTION TO HAVE RESULTED FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF THE PARTY SEEKING INDEMNIFICATION. THE
OBLIGATIONS OF THE BORROWER UNDER THIS SECTION 9.6 SHALL SURVIVE THE
TERMINATION OF THIS AGREEMENT.
9.7. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.
9.8. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles, except that any calculation or determination which is to be made on
a consolidated basis shall be made for the Borrower and all its Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the Borrower's
audited financial statements.
9.9. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.10. Nonliability of Lenders. The relationship between the Borrower on
the one hand and the Lenders, the LC Issuer, and the Administrative Agent on the
other hand shall be solely that of borrower and lender. Neither the
Administrative Agent, the LC Issuer, the Arrangers nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Administrative Agent,
the LC Issuer, the Arrangers nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations. The Borrower agrees that neither
the Administrative Agent, the LC Issuer, the Arrangers nor any Lender shall have
liability to the Borrower (whether sounding in tort, contract or otherwise) for
losses suffered by the Borrower in connection with, arising out of, or in any
way related to, the transactions contemplated and the relationship established
by the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined in a final non-appealable judgment by a court
of competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought. Neither the
Administrative Agent, the LC Issuer, the Arrangers nor any Lender shall have any
liability with respect to, and the Borrower hereby waives, releases and agrees
not to xxx for, any special, indirect or consequential damages suffered by the
Borrower in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.
9.11. Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement in
confidence, except for disclosure (i) to its Affiliates and to other Lenders and
their respective Affiliates, (ii) to legal counsel, accountants, and other
professional advisors to such Lender or to a Transferee, (iii) to regulatory
officials, (iv) to any Person as requested pursuant to or as required by law,
regulation, or legal process, (v) to any Person in connection with any legal
proceeding to which such Lender is a party, (vi) to such Lender's direct or
indirect
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contractual counterparties in swap agreements or to legal counsel, accountants
and other professional advisors to such counterparties, and (vii) permitted by
Section 12.4.
9.12. Nonreliance. Each Lender hereby represents that it is not relying
on or looking to any margin stock (as defined in Regulation U of the Board of
Governors of the Federal Reserve System) for the repayment of the Credit
Extensions provided for herein.
9.13. Disclosure. The Borrower and each Lender hereby acknowledge and
agree that Bank One and/or its Affiliates from time to time may hold investments
in, make other loans to or have other relationships with the Borrower and its
Affiliates.
9.14. Maximum Interest Rate. No provision of this Agreement or of any
other Loan Document shall require the payment or the collection of interest in
excess of the maximum amount permitted by applicable law. If any excess of
interest in such respect is hereby provided for, or shall be adjudicated to be
so provided, in any Loan Document or otherwise in connection with this loan
transaction, the provisions of this Section shall govern and prevail and neither
the Borrower nor the sureties, guarantors, successors, or assigns of the
Borrower shall be obligated to pay the excess amount of such interest or any
other excess sum paid for the use, forbearance, or detention of sums loaned
pursuant hereto. In the event any Lender or the Administrative Agent ever
receives, collects, or applies as interest any such sum, such amount which would
be in excess of the maximum amount permitted by applicable law shall be applied
as a payment and reduction of the principal of the indebtedness owing under this
Agreement; and, if the principal owing has been paid in full, any remaining
excess shall forthwith be paid to the Borrower. In determining whether or not
the interest paid or payable exceeds the Maximum Rate, the Borrower, the
Administrative Agent, and each Lender shall, to the extent permitted by
applicable law, (a) characterize any non-principal payment as an expense, fee,
or premium rather than as interest, (b) exclude voluntary prepayments and the
effects thereof, and (c) amortize, prorate, allocate, and spread in equal or
unequal parts the total amount of interest throughout the entire contemplated
term of the indebtedness owing pursuant to this Agreement so that interest for
the entire term does not exceed the Maximum Rate.
9.15. Non-Application of Chapter 346 of Texas Finance Code. The
provisions of Chapter 346 of the Texas Credit Code, as amended from time to
time, are specifically declared by the parties hereto not to be applicable to
this Agreement or any of the other Loan Documents or to the transactions
contemplated hereby.
ARTICLE X
THE AGENT
10.1. Appointment; Nature of Relationship. Bank One is hereby appointed
by each of the Lenders as its contractual representative (herein referred to as
the "Administrative Agent") hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Administrative Agent to act as
the contractual representative of such Lender with the rights and duties
expressly set forth herein and in the other Loan Documents. The Administrative
Agent agrees to act as such contractual
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representative upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term "Administrative Agent," it is
expressly understood and agreed that the Administrative Agent shall not have any
fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Administrative Agent is merely acting as the
contractual representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders' contractual representative, the Administrative Agent
(i) does not hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9.105 of the
Uniform Commercial Code as in effect in the State of Texas from time to time and
(iii) is acting as an independent contractor, the rights and duties of which are
limited to those expressly set forth in this Agreement and the other Loan
Documents. Each of the Lenders hereby agrees to assert no claim against the
Administrative Agent on any agency theory or any other theory of liability for
breach of fiduciary duty, all of which claims each Lender hereby waives.
10.2. Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
10.3. General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.
10.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(a) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Administrative
Agent; (d) the existence or possible existence of any Default or Unmatured
Default; (e) the validity, enforceability, effectiveness, sufficiency or
genuineness of any Loan Document or any other instrument or writing furnished in
connection therewith; (f) the value, sufficiency, creation, perfection or
priority of any Lien in any collateral security; or (g) the financial condition
of the Borrower or any guarantor of any of the Obligations or of any of the
Borrower's or any such guarantor's respective Subsidiaries. The Administrative
Agent shall have no duty to disclose to the Lenders information that is not
required to be furnished by the Borrower to the Administrative Agent at such
time, but is voluntarily furnished by the Borrower to the Administrative Agent
(either in its capacity as Administrative Agent or in its individual capacity).
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10.5. Action on Instructions of Lenders. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders. The Lenders hereby acknowledge that the Administrative Agent shall be
under no duty to take any discretionary action permitted to be taken by it
pursuant to the provisions of this Agreement or any other Loan Document unless
it shall be requested in writing to do so by the Required Lenders. The
Administrative Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6. Employment of Agents and Counsel. The Administrative Agent may
execute any of its duties as Administrative Agent hereunder and under any other
Loan Document by or through employees, agents, and attorneys-in-fact and shall
not be answerable to the Lenders, except as to money or securities received by
it or its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent
shall be entitled to advice of counsel concerning the contractual arrangement
between the Administrative Agent and the Lenders and all matters pertaining to
the Administrative Agent's duties hereunder and under any other Loan Document.
10.7. Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
10.8. Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably
according to their respective Pro Rata Shares (or, if the Commitments have been
terminated, in proportion to their respective Pro Rata Shares immediately prior
to such termination) (i) for any amounts not reimbursed by the Borrower for
which the Administrative Agent is entitled to reimbursement by the Borrower
under the Loan Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders) and (iii) for any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever which may be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of the Loan Documents or any other document delivered
in connection therewith or the transactions contemplated thereby (including,
without limitation, for any such amounts incurred by or asserted against the
Administrative Agent in connection with any dispute between the Administrative
Agent and any Lender or between two or more of the Lenders), or the enforcement
of any of the terms of the Loan Documents or of any such other documents,
provided that (i) no Lender shall be liable for any of the foregoing to the
extent any of the foregoing is found in a final non-appealable judgment by a
court of competent jurisdiction to have
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resulted from the gross negligence or willful misconduct of the Administrative
Agent and (ii) any indemnification required pursuant to Section 3.5(vii) shall,
notwithstanding the provisions of this Section 10.8, be paid by the relevant
Lender in accordance with the provisions thereof. The obligations of the Lenders
under this Section 10.8 shall survive payment of the Obligations and termination
of this Agreement.
10.9. Notice of Default. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the Administrative Agent has received written notice
from a Lender or the Borrower referring to this Agreement describing such
Default or Unmatured Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Lenders.
10.10. Rights as a Lender. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document with respect to its Commitment and its Loans
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the term "Lender" or "Lenders" shall, at any time when the
Administrative Agent is a Lender, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent and its Affiliates may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which the Borrower or such Subsidiary is
not restricted hereby from engaging with any other Person. The Administrative
Agent, in its individual capacity, is not obligated to be a Lender.
10.11. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the LC Issuer,
the Arrangers or any other Lender and based on the financial statements prepared
by the Borrower and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and the other Loan Documents. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent, the LC
Issuer, the Arrangers or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement and the
other Loan Documents.
10.12. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower, such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five days after the retiring Administrative Agent gives notice
of its intention to resign. The Administrative Agent may be removed at any time
with or without cause by written notice received by the Administrative Agent
from the Required Lenders, such removal to be effective on the date specified by
the Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent, subject to the consent of the Borrower (so long
as no Default or Unmatured Default then exists and is continuing), which consent
shall not be unreasonably withheld or delayed. If no successor Administrative
Agent shall have been so appointed by the Required Lenders within thirty days
after the resigning
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Administrative Agent's giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. Notwithstanding the previous
sentence, the Administrative Agent may at any time without the consent of the
Borrower or any Lender, appoint any of its Affiliates which is a commercial bank
as a successor Administrative Agent hereunder. If the Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Borrower shall make all payments in respect of the Obligations
to the applicable Lender and for all other purposes shall deal directly with the
Lenders. No successor Administrative Agent shall be deemed to be appointed
hereunder until such successor Administrative Agent has accepted the
appointment. Any such successor Administrative Agent shall be a U.S. commercial
bank having capital and retained earnings of at least $100,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Administrative Agent. Upon the effectiveness of the
resignation or removal of the Administrative Agent, the resigning or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder and under the Loan Documents. After the effectiveness of the
resignation or removal of an Administrative Agent, the provisions of this
Article X shall continue in effect for the benefit of such Administrative Agent
in respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents. In the
event that there is a successor to the Administrative Agent by merger, or the
Administrative Agent assigns its duties and obligations to an Affiliate pursuant
to this Section 10.12, then the term "Prime Rate" as used in this Agreement
shall mean the prime rate, base rate or other analogous rate of the new
Administrative Agent.
10.13. Delegation to Affiliates. The Borrower and the Lenders agree
that the Administrative Agent may delegate any of its duties under this
Agreement to any of its Affiliates. Any such Affiliate (and such Affiliate's
directors, officers, agents and employees) which performs duties in connection
with this Agreement shall be entitled to the same benefits of the
indemnification, waiver and other protective provisions to which the
Administrative Agent is entitled under Articles IX and X.
10.14. Administrative Agent and Arranger Fees. The Borrower agrees to
pay to the Administrative Agent and the Arrangers, for their respective
accounts, the fees agreed to by the Borrower, the Administrative Agent and the
Arrangers pursuant to the Fee Letter, or as otherwise agreed from time to time.
10.15. Co-Agents, Documentation Agent, Syndication Agent, etc. Neither
any of the Lenders identified in this Agreement as a "co-agent" nor the
Documentation Agent or the Syndication Agent shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none of
such Lenders shall have or be deemed to have a fiduciary relationship with any
Lender. Each Lender hereby makes the same acknowledgments with respect to such
Lenders as it makes with respect to the Administrative Agent in Section 10.11.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender or
any Affiliate of any Lender to or for the credit or account of the Borrower may
be offset and applied toward the payment of the Secured Obligations owing to
such Lender, whether or not the Secured Obligations, or any part thereof, shall
then be due.
11.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Outstanding Credit Exposure (other than payments
received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater proportion than
that received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Aggregate Outstanding Credit Exposure Loans held by
the other Lenders so that after such purchase each Lender will hold its ratable
proportion of the Aggregate Outstanding Credit Exposure. If any Lender, whether
in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their Aggregate Outstanding
Credit Exposure. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. The parties to this Agreement acknowledge that clause (ii) of
this Section 12.1 relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank; provided, however, that
no such pledge or assignment creating a security interest shall release the
transferor Lender from its obligations hereunder unless and until the parties
thereto have complied with the provisions of Section 12.3. The Administrative
Agent may treat the Person which made any Credit Extension or which holds any
Note as the owner thereof for all purposes hereof unless and until such Person
complies with Section 12.3; provided, however, that the Administrative Agent may
in its discretion (but shall not be required to) follow instructions from the
Person which made any Credit Extension or which holds any Note to direct
payments relating to such
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Credit Extension or Note to another Person. Any assignee of the rights to any
Credit Extension or any Note agrees by acceptance of such assignment to be bound
by all the terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the owner of the rights to any Credit Extension (whether
or not a Note has been issued in evidence thereof), shall be conclusive and
binding on any subsequent holder or assignee of the rights to such Credit
Extension.
12.2. Participations.
12.2.1. Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities
("Participants") participating interests in any Credit Extension owing
to such Lender, any Note held by such Lender, any Commitment of such
Lender or any other interest of such Lender under the Loan Documents.
In the event of any such sale by a Lender of participating interests to
a Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, such
Lender shall remain the owner of its Outstanding Credit Exposure and
the holder of any Note issued to it in evidence thereof for all
purposes under the Loan Documents, all amounts payable by the Borrower
under this Agreement shall be determined as if such Lender had not sold
such participating interests, and the Borrower and the Administrative
Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan
Documents.
12.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Credit
Extension or Commitment in which such Participant has an interest which
forgives principal, interest, fees or any Reimbursement Obligation or
reduces the interest rate or fees payable with respect to any such
Credit Extension or Commitment, extends the Facility Termination Date,
postpones any date fixed for any regularly-scheduled payment of
principal of or interest on any Loan in which such Participant has an
interest, or any regularly-scheduled payment of fees on any such Credit
Extension or Commitment, releases any guarantor of any such Credit
Extension or releases any collateral held in the Facility LC Collateral
Account (except in accordance with the terms hereof) or all or
substantially all of any other collateral, if any, securing any such
Credit Extension.
12.2.3. Benefit of Setoff. The Borrower agrees that each
Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
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Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender.
12.3. Assignments.
12.3.1. Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any
time assign to one or more banks or other entities ("Purchasers") all
or any part of its rights and obligations under the Loan Documents.
Such assignment shall be substantially in the form of Exhibit C or in
such other form as may be agreed to by the parties thereto. The consent
of the Borrower, the Administrative Agent and the LC Issuer shall be
required prior to an assignment becoming effective with respect to a
Purchaser which is not a Lender or an Affiliate thereof; provided,
however, that if a Default has occurred and is continuing, the consent
of the Borrower shall not be required. Such consent shall not be
unreasonably withheld or delayed. Each such assignment with respect to
a Purchaser which is not a Lender or an Affiliate thereof shall (unless
each of the Borrower and the Administrative Agent otherwise consents)
be in an amount not less than the lesser of (i) $5,000,000 or (ii) the
remaining amount of the assigning Lender's Commitment (calculated as at
the date of such assignment) or outstanding Credit Extensions (if the
applicable Commitment has been terminated).
12.3.2. Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of an assignment, together with any consents
required by Section 12.3.1, and (ii) payment by the selling Lender of a
$3,500 fee to the Administrative Agent for processing such assignment
(unless such fee is waived by the Administrative Agent), such
assignment shall become effective on the effective date specified in
such assignment. The assignment shall contain a representation by the
Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Outstanding Credit Exposure under the
applicable assignment agreement constitutes "plan assets" as defined
under ERISA and that the rights and interests of the Purchaser in and
under the Loan Documents will not be "plan assets" under ERISA. On and
after the effective date of such assignment, such Purchaser shall for
all purposes be a Lender party to this Agreement and any other Loan
Document executed by or on behalf of the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect
to the percentage of the Aggregate Commitment and Outstanding Credit
Exposure assigned to such Purchaser. Upon the consummation of any
assignment to a Purchaser pursuant to this Section 12.3.2, the
transferor Lender, the Administrative Agent and the Borrower shall, if
the transferor Lender or the Purchaser desires that its Loans be
evidenced by Notes, make appropriate arrangements so that new Notes or,
as appropriate, replacement Notes are issued to such transferor Lender
and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.
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12.4. Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries, including
without limitation any information contained in any Reports; provided that each
Transferee and prospective Transferee agrees to be bound by Section 9.11 of this
Agreement.
12.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 3.5(iv).
ARTICLE XIII
NOTICES
13.1. Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications to
any party hereunder shall be in writing (including electronic transmission,
facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower, the Administrative Agent, or the LC Issuer at its
address or facsimile number set forth on the signature pages hereof, (y) in the
case of any Lender, at its address or facsimile number set forth below its
signature hereto or (z) in the case of any party, at such other address or
facsimile number as such party may hereafter specify for the purpose by notice
to the Administrative Agent and the Borrower in accordance with the provisions
of this Section 13.1. Each such notice, request or other communication shall be
effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of receipt is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid, or (iii)
if given by any other means, when delivered (or, in the case of electronic
transmission, received) at the address specified in this Section; provided that
notices to the Administrative Agent under Article II shall not be effective
until received.
13.2. Change of Address. The Borrower, the Administrative Agent, the LC
Issuer and any Lender may each change the address for service of notice upon it
by a notice in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
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Administrative Agent, the LC Issuer and the Lenders and each party has notified
the Administrative Agent by facsimile transmission or telephone that it has
taken such action.
ARTICLE XV
CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
15.1. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS ( WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS) OF THE
STATE OF TEXAS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS).
15.2. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE
COURT SITTING IN DALLAS, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED
IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER
HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT
THE RIGHT OF THE AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST
THE BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF
THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DALLAS, TEXAS.
15.3. WAIVER OF JURY TRIAL. THE BORROWER, THE LC ISSUER, THE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
{The Remainder of this Page Intentionally Left Blank}
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IN WITNESS WHEREOF, the Borrower, the LC Issuer, the Lenders and the
Administrative Agent have executed this Agreement as of the date first above
written.
DAISYTEK, INCORPORATED
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Executive Vice President-Finance
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
Commitments
$25,000,000 BANK ONE, TEXAS, NA,
as a Lender, LC Issuer and as Administrative
Agent
By: /s/ Xxxxxxxxx XxXxx Xxxxxx
--------------------------------------------
Name: Xxxxxxxxx XxXxx Xxxxxx
Title: First Vice President
0000 Xxxx Xxxxxx-0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
72
DAISYTEK INTERNATIONAL CORPORATION
By: /s/ Xxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Executive Vice President-Finance
0000 Xxxxxxx Xxxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
73
BANK ONE, NA
as an LC Issuer
By: /s/ Xxxxxxxxx XxXxx Xxxxxx
--------------------------------------------
Name: Xxxxxxxxx XxXxx Xxxxxx
Title: Director
0000 Xxxx Xxxxxx-0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
74
$25,000,000 BANK OF AMERICA, N.A., as a Lender and as
Documentation Agent
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxxxx
Title: Senior Vice President
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
75
$10,000,000 COMERICA BANK
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
0000 Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
76
$15,000,000 COMPASS BANK
By: /s/ Xxxx Xxxxxx
--------------------------------------------
Name: Xxxx Xxxxxx
Title:
0000 X. Xxxxxxx Xxxxxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
77
$20,000,000 IBM CREDIT CORPORATION
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Manager of Credit
Xxxxx Xxxxxx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxx X'Xxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
78
$25,000,000 CITIZENS BANK OF MASSACHUSETTS, as a
Lender and as Syndication Agent
By: /s/ Xxxxxxx St. Xxxx
--------------------------------------------
Name: Xxxxxxx St. Xxxx
Title: Vice President
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000
Attention: Xxxxxxx St. Xxxx
Telephone: (000) 000-0000
FAX: (000) 000-0000
