EXHIBIT 10.1
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[JPMORGAN LOGO]
CREDIT AGREEMENT
dated as of
June 25, 2002
among
ADMINISTAFF SERVICES, L.P.
as the Borrower
ADMINISTAFF, INC.
as the Parent Company
and
JPMORGAN CHASE BANK
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS...........................................................................1
SECTION 1.01. Defined Terms.................................................................1
SECTION 1.02. Terms Generally..............................................................13
SECTION 1.05. References to Agreements and Laws............................................14
SECTION 1.03. Accounting Terms; GAAP.......................................................14
SECTION 1.04. Rounding.....................................................................14
ARTICLE II THE CREDITS..........................................................................14
SECTION 2.01. Commitment...................................................................14
SECTION 2.02. Loans and Interest Periods...................................................14
SECTION 2.03. Requests for Loans...........................................................14
SECTION 2.04. Funding of Loans.............................................................15
SECTION 2.05. Interest Elections...........................................................15
SECTION 2.06. Termination and Reduction of Commitment......................................16
SECTION 2.07. Repayment of Loans; Evidence of Debt.........................................16
SECTION 2.08. Prepayment of Loans..........................................................17
SECTION 2.09. Fees.........................................................................17
SECTION 2.10. Interest.....................................................................17
SECTION 2.11. Alternate Rate of Interest...................................................18
SECTION 2.12. Increased Costs..............................................................18
SECTION 2.13. Break Funding Payments.......................................................19
SECTION 2.14. Taxes........................................................................20
SECTION 2.15. Illegality...................................................................21
SECTION 2.16. Payments Generally; Pro Rata Treatment; Sharing of Set-offs..................21
ARTICLE III REPRESENTATIONS AND WARRANTIES.......................................................21
SECTION 3.01. Organization; Powers.........................................................22
SECTION 3.02. Authorization; Enforceability................................................22
SECTION 3.03. Governmental Approvals; No Conflicts.........................................22
SECTION 3.04. Financial Condition; No Material Adverse Change..............................22
SECTION 3.05. Subsidiaries.................................................................23
SECTION 3.06. Properties...................................................................23
SECTION 3.07. Litigation and Environmental Matters.........................................24
SECTION 3.08. Compliance with Laws and Agreements..........................................24
SECTION 3.09. Investment and Holding Company Status........................................25
SECTION 3.10. Taxes........................................................................25
SECTION 3.11. Insurance....................................................................25
SECTION 3.12. ERISA........................................................................25
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SECTION 3.13. Solvency.....................................................................25
SECTION 3.14. Disclosure...................................................................26
ARTICLE IV CONDITIONS PRECEDENT.................................................................26
SECTION 4.01. Effective Date...............................................................26
SECTION 4.02. Each Loan....................................................................28
ARTICLE V AFFIRMATIVE COVENANTS................................................................29
SECTION 5.01. Financial Statements; Ratings Change and Other Information...................29
SECTION 5.02. Notices of Material Events...................................................30
SECTION 5.03. Existence; Conduct of Business...............................................31
SECTION 5.04. Payment of Obligations.......................................................31
SECTION 5.05. Maintenance of Properties; Insurance.........................................31
SECTION 5.06. Books and Records; Inspection Rights.........................................31
SECTION 5.07. Compliance with Laws.........................................................32
SECTION 5.08. Taxes........................................................................32
SECTION 5.09. Compliance with ERISA........................................................32
SECTION 5.10. Use of Proceeds..............................................................32
SECTION 5.11. Security.....................................................................32
ARTICLE VI NEGATIVE COVENANTS...................................................................33
SECTION 6.01. Indebtedness.................................................................33
SECTION 6.02. Liens........................................................................34
SECTION 6.03. Fundamental Changes..........................................................35
SECTION 6.04. Investments, Loans, Advances, Guarantees and Acquisitions....................35
SECTION 6.05. Swap Agreements..............................................................36
SECTION 6.06. Dispositions.................................................................36
SECTION 6.07. Restricted Payments..........................................................37
SECTION 6.08. Transactions with Affiliates.................................................38
SECTION 6.09. Restrictive Agreements.......................................................38
SECTION 6.10. Subsidiary Indebtedness......................................................38
SECTION 6.11. Cash and Marketable Securities...............................................39
SECTION 6.12. Debt to EBITDA...............................................................39
ARTICLE VII EVENTS OF DEFAULT....................................................................39
ARTICLE VIII MISCELLANEOUS........................................................................42
SECTION 8.01. Notices......................................................................42
SECTION 8.02. Waivers; Amendments..........................................................43
SECTION 8.03. Expenses; Indemnity; Damage Waiver...........................................44
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SECTION 8.04. Successors and Assigns.......................................................45
SECTION 8.05. Survival.....................................................................46
SECTION 8.06. Payments Set Aside...........................................................46
SECTION 8.07. Counterparts; Integration; Effectiveness.....................................46
SECTION 8.08. Severability.................................................................47
SECTION 8.09. Right of Setoff..............................................................47
SECTION 8.10. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS...................47
SECTION 8.11. WAIVER OF JURY TRIAL.........................................................48
SECTION 8.12. Headings.....................................................................48
SECTION 8.13. Confidentiality..............................................................48
SECTION 8.14. Limitation of Interest.......................................................49
SECTION 8.15. RELEASE OF CLAIMS............................................................50
SECTION 8.16. ENTIRE AGREEMENT.............................................................50
SCHEDULES:
Schedule 1.01(f)- Investment Policy
Schedule 1.10(g)- Qualified Accounts
Schedule 3.05 -- Subsidiaries
Schedule 3.06 -- Disclosed Matters
Schedule 6.01 -- Existing Indebtedness
Schedule 6.02 -- Existing Liens
Schedule 6.04 -- Existing Investments
Schedule 6.09 -- Existing Restrictions
EXHIBITS:
Exhibit A -- Form of Note
Exhibit B-1 -- Form of Opinion of Xxxxx & Xxxxx L.L.P.
Exhibit B-2 -- Form of Opinion of Xxxx X. Xxxxxxx, XX
Exhibit C-1 -- Form of Guaranty (Parent Company and General Partner)
Exhibit C-2 -- Form of Guaranty (Other Subsidiaries)
Exhibit D -- Computation of Covenant Compliance
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CREDIT AGREEMENT
THIS
CREDIT AGREEMENT (this "Agreement"), dated as of June 25, 2002, is
made and entered into by and among ADMINISTAFF SERVICES, L.P., a Delaware
limited partnership ("Borrower"); ADMINISTAFF, INC., a Delaware corporation (the
"Parent Company"), and JPMORGAN CHASE BANK ("JPMCB").
In consideration of the mutual promises made herein, and for other good
and valuable consideration, the receipt and sufficiency of which are
acknowledged by the parties, the parties hereto agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"ABR", when used in reference to any Loan, refers to whether
such Loan is bearing interest at a rate determined by reference to the Alternate
Base Rate.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Loan for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"Administaff Client Services" means Administaff Client
Services, L.P., a Delaware limited partnership.
"Affiliate" means, with respect to any Person, any other
Person (a) that directly or indirectly, through one or more intermediaries,
Controls or is Controlled by, or is under common Control with, such Person; (b)
that directly or indirectly beneficially owns or holds five percent (5%) or more
of any class of voting security of such Person; or (c) five percent (5%) or more
of the voting securities of which is directly or indirectly beneficially owned
or held by the Person in question.
"Air Carrier Lease" means the Air Carrier Lease, Operations
and Management Agreement dated as of January 1, 2002, by and between the Parent
Company and Xxxx Aviation, Inc., d/b/a Tavaero Jet Charter.
"Air Carrier Lease Subordination and Attornment Agreement"
means the Air Carrier Lease Subordination and Attornment Agreement of even date
herewith by and among the Parent Company, Xxxx Aviation, Inc. d/b/a/ Tavaero Jet
Charter, and JPMCB.
"Aircraft" means that certain Israel Aircraft Industries Model
1125 Westwind Astra aircraft, bearing manufacturer's serial number 027 and U.S.
registration number N199HE; the engines thereon; together with all equipment
(loose or otherwise), accessories, appliances, avionics, instruments, galley
equipment, parts, fittings, and accessories related thereto, installed thereon
or affixed thereto.
"Aircraft Security Agreement" means the Aircraft Security
Agreement of even date herewith from the Parent Company to JPMCB as secured
party securing the Obligations.
"Alternate Base Rate" means, for any day, a rate per annum
equal to the greatest of (a) the Prime Rate in effect on such day, (b) the Base
CD Rate in effect on such day plus 1% and (c) the Federal Funds Effective Rate
in effect on such day plus 1/2 of 1%. Any change in the Alternate Base Rate due
to a change in the Prime Rate, the Base CD Rate or the Federal Funds Effective
Rate shall be effective from and including the effective date of such change in
the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate,
respectively.
"Applicable Margin" means (a) for ABR Loans, zero percent per
annum, and (b) for Eurodollar Loans, 90 basis points per annum.
"Assessment Rate" means, for any day, the annual assessment
rate in effect on such day for insurance by the Federal Deposit Insurance
Corporation of time deposits made in dollars at the offices of JPMCB.
"Availability Period" means the period from and including the
Effective Date to but excluding the earlier of the Maturity Date and the date of
termination of the Commitment.
"Base CD Rate" means the sum of (a) the Three-Month Secondary
CD Rate multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means Administaff Services, L.P., a Delaware
limited partnership.
"Borrowing Request" means a request by the Borrower for a Loan
in accordance with Section 2.03.
"Business Day" means a day (i) on which the main office of
JPMCB in Houston,
Texas, is open for the conduct of commercial lending business;
and (ii) with respect to Eurodollar Loans, on which dealings in United States
Dollar deposits are carried out in the applicable offshore Dollar market.
"Capital Lease Obligations" of any Person means the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Change in Control" means (a) the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Securities Exchange Act of 1934 and the rules of the
Securities and Exchange Commission thereunder as in effect on the date hereof)
of Equity Interests representing more than 30% of the aggregate ordinary voting
power represented by the issued and outstanding Equity Interests of the Parent
Company, the Borrower, or any other Subsidiary of the Parent Company; (b)
occupation of a majority of the seats (other than vacant seats) on the board of
directors of the Parent Company, the Borrower or any other Subsidiary of the
Parent Company by Persons who were neither (i) nominated by the board of
directors of such Person nor (ii) appointed by directors so nominated; or (c)
the acquisition of direct or indirect Control of the Parent Company, the
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Borrower, or any other Subsidiary of the Parent Company by any Person or group
(other than the Parent Company and its Subsidiaries).
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by JPMCB or by
JPMCB's holding company with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the
date of this Agreement.
"Code" means the Internal Revenue Code of 1986.
"Collateral" means all of the property of any kind or
character now or hereafter subject to the Security Documents, including the
Mortgaged Property, the Aircraft, the Air Carrier Lease, the Midway Note, and
the Liens securing the Midway Note.
"Commitment" means the commitment of JPMCB to make Loans
hereunder, as such commitment may be reduced from time to time pursuant to
Section 2.06. The initial amount of the Commitment is $30,000,000.
"Consolidated EBITDA" means, for any period, for the Parent
Company and its Subsidiaries on a consolidated basis, an amount equal to the sum
of (a) net income from continuing operations after extraordinary items
("Consolidated Net Income") for such period, (b) Consolidated Interest Expense,
(c) the amount of taxes, based on or measured by income, used or included in the
determination of such Consolidated Net Income, and (d) the amount of
depreciation and amortization expense deducted in determining such Consolidated
Net Income, provided that in determining Consolidated Net Income as used in this
definition the following shall be excluded, without duplication: (a) the income
of any Person accrued prior to the date such Person is merged into or
consolidated with the Parent Company or its Subsidiary or such Person's assets
are acquired by the Parent Company or its Subsidiary, (b) the proceeds of any
insurance policy, (c) gains or losses from the sale, exchange, transfer or other
disposition of property or assets of the Parent Company or any of its
Subsidiaries and related tax effects in accordance with GAAP, and (d) any
extraordinary or non-recurring gains of the Parent Company or any of its
Subsidiaries, and related tax effects in accordance with GAAP.
"Consolidated Interest Expense" means, for any period, for the
Parent Company and its Subsidiaries on a consolidated basis, the aggregate of
all interest expense, all prepayment charges and all amortization of debt
discount and expense, including, without limitation, all interest expense
attributable to Capital Lease Obligations, in each instance determined in
accordance with GAAP, paid or accrued by the Parent Company and its
Subsidiaries.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise. "Controlling" and "Controlled" have meanings correlative thereto.
"Default" means any event or condition which constitutes an
Event of Default or which upon notice, lapse of time or both would, unless cured
or waived, become an Event of Default.
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"Default Rate" means a rate per annum equal to 2% plus the
Alternate Base Rate.
"Disclosed Matters" means the actions, suits and proceedings
and the environmental matters disclosed in Schedule 3.06.
"Disposition" means "Disposition" or "Dispose" means the sale,
transfer, license or other disposition (including any sale and leaseback
transaction) of any property by any Person, regardless of the form of the
transaction, including any sale, assignment, transfer or other disposal, with or
without recourse, of any notes or accounts receivable or any rights and claims
associated therewith.
"dollars" or "$" refers to lawful money of the United States
of America.
"XXXXX System" means the Electronic Data Gathering, Analysis
and Retrieval System owned and operated by the United States Securities and
Exchange Commission or any replacement system.
"Effective Date" means the date on which the conditions
specified in Section 4.01 are satisfied (or waived in accordance with Section
8.02).
"Environmental Laws" means all laws, rules, regulations,
codes, ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Parent Company or any
Subsidiary directly or indirectly resulting from or based upon (a) violation of
any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any
Hazardous Materials, (d) the release or threatened release of any Hazardous
Materials into the environment or (e) any contract, agreement or other
consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.
"Equity Interests" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"ERISA" means the Employee Retirement Income Security Act of
1974.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Parent Company or any of its Subsidiaries,
is treated as a single employer under Section 414(b) or (c) of the Code or,
solely for purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a
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waiver of the minimum funding standard with respect to any Plan; (d) the
incurrence by the Parent Company or any of its Subsidiaries or any ERISA
Affiliate of any such Person of any liability under Title IV of ERISA with
respect to the termination of any Plan; (e) the receipt by the Parent Company or
any of its Subsidiaries or any ERISA Affiliate of any such Person from the PBGC
or a plan administrator of any notice relating to an intention to terminate any
Plan or Plans or to appoint a trustee to administer any Plan; (f) the incurrence
by the Parent Company or any of its Subsidiaries or any ERISA Affiliate of any
such Person of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the Parent
Company or any of its Subsidiaries or any ERISA Affiliate of any such Person of
any notice, or the receipt by any Multiemployer Plan from the Parent Company or
any of its Subsidiaries or any ERISA Affiliate of any such Person of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Eurodollar", when used in reference to any Loan, refers to
whether such Loan is bearing interest at a rate determined by reference to the
Adjusted LIBO Rate.
"Event of Default" has the meaning assigned to such term in
Article VII.
"Excluded Taxes" means, with respect to JPMCB or any other
recipient of any payment to be made by or on account of any obligation of the
Borrower, the Parent Company or any other Obligor hereunder or under any other
Loan Document, (a) income or franchise taxes imposed on (or measured by) its net
income by the United States of America or any other Governmental Authority, or
by the jurisdiction under the laws of which such recipient is organized or in
which its principal office is located, and (b) any branch profits taxes imposed
by the United States of America or any other Governmental Authority or any
similar tax imposed by any other jurisdiction in which such Obligor is located.
"Federal Funds Effective Rate" means, for any day, the
weighted average (rounded upwards, if necessary, to the next 1/100 of 1%) of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the quotations for
such day for such transactions received by JPMCB from three Federal funds
brokers of recognized standing selected by it.
"Financial Officer" means the chief financial officer,
principal accounting officer, treasurer or controller of the Parent Company or
the Borrower.
"Funded Debt" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money, (b) all obligations of such
Person evidenced by bonds, debentures, notes or similar instruments, (c) all
obligations of such Person upon which interest charges are customarily paid, and
(d) all Capital Lease Obligations of such Person. The Funded Debt of any Person
shall include the Funded Debt of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such Funded
Debt provide that such Person is not liable therefor.
"GAAP" means generally accepted accounting principles and
practices which are recognized as such by the Financial Accounting Standards
Board (or any generally recognized successor). If at any time any change in GAAP
would affect the computation of any financial ratio or requirement set forth in
any Loan Document, and either the Borrower or JPMCB shall so request,
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JPMCB and the Borrower shall negotiate in good faith to amend such ratio or
requirement to preserve the original intent thereof in light of such change in
GAAP; provided that, until so amended, (a) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(b) the Parent Company shall provide to JPMCB financial statements and other
documents required under this Agreement or as reasonably requested hereunder
setting forth a reconciliation between calculations of such ratio or requirement
made before and after giving effect to such change in GAAP.
"General Partner" means Administaff of
Texas, Inc., a Delaware
corporation, and its successors as the general partner of the Borrower.
"Governmental Authority" means the government of the United
States of America, any other nation, any political subdivision of the United
States of America or any other nation, whether state, provincial or local, and
any agency, department, commission, board, bureau, authority, instrumentality,
regulatory body, court, tribunal, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or
functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantor" means the Parent Company and each Subsidiary other
than the Borrower. "Guarantors" means all such Persons.
"Guaranty" means each Guaranty made by each of the Guarantors
in favor of JPMCB, substantially in the form of Exhibit C-1 (for the Parent
Company and the General Partner) or Exhibit C-2 (for the other Subsidiaries).
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Home Webpage" means the Parent Company's corporate home page
on the World Wide Web, accessible through the Internet via the universal
resource locator identified as xxxx://xxx.xxxxxxxxxxx.xxx or such other
universal source locator as Borrower shall designate in writing to JPMCB as the
Parent Company's corporate home page on the World Wide Web.
"Indebtedness" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under
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conditional sale or other title retention agreements relating to property
acquired by such Person, (e) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (f) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (g) all Guarantees by such Person of Indebtedness of others, (h)
all Capital Lease Obligations of such Person, (i) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty, (j) all obligations, contingent or otherwise, in
respect of Swap Agreements, and (k) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitees" has the meaning set forth in Section 8.03.
"Interest Election Request" means a request by the Borrower to
convert or continue a Loan in accordance with Section 2.05.
"Interest Payment Date" means (a) with respect to any ABR
Loan, the last day of each March, June, September and December, and (b) with
respect to any Eurodollar Loan, the last day of the Interest Period applicable
to such Loan and, in the case of a Eurodollar Loan with an Interest Period of
more than three months' duration, each day prior to the last day of such
Interest Period that occurs at intervals of three months' duration after the
first day of such Interest Period, and (c) the Maturity Date.
"Interest Period" means, with respect to any Eurodollar Loan,
the period commencing on the date such Loan is disbursed and ending on the
numerically corresponding day in the calendar month that is one, three or six
months thereafter, as the Borrower may elect; provided, that (i) if any Interest
Period would end on a day other than a Business Day, such Interest Period shall
be extended to the next succeeding Business Day unless, in the case of a
Eurodollar Loan only, such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day and (ii) any Interest Period pertaining to a Eurodollar
Loan that commences on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the last calendar month
of such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Loan initially
shall be the date on which such Loan is made and thereafter shall be the
effective date of the most recent conversion or continuation of such Loan.
"Investment" means (a) any purchase or other acquisition of
any Equity Interest in, evidence of Indebtedness of, or other securities of, any
other Person, (b) any making of any loan, advance, transfer of property or
capital contribution to, any guaranty of any debt of, or any purchase or other
acquisition of any other debt or any Equity Interest in, any other Person,
including any partnership or joint venture interest in such other Person, (c)
any incurrence, assumption or existence of any liability, contingent or
otherwise, with respect to any obligation or liability of any other Person, or
(d) any making of any commitment to make any of the foregoing. For purposes of
covenant compliance, the amount of any Investment shall be the amount actually
invested, without adjustment for subsequent increases or decreases in the value
of such Investment.
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"Laws" means, collectively, all international, foreign,
Federal, state and local statutes, treaties, rules, guidelines, regulations,
ordinances, codes and administrative or judicial precedents or authorities,
including the interpretation or administration thereof by any Governmental
Authority charged with the enforcement, interpretation or administration
thereof, and all applicable administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any Governmental
Authority, in each case whether or not having the force of law.
"LIBO Rate" means, with respect to any Eurodollar Loan for any
Interest Period, the rate appearing on Page 3750 of the Dow Xxxxx Market Service
(or on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by JPMCB from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Eurodollar Loan for such
Interest Period shall be the rate at which dollar deposits of $5,000,000 and for
a maturity comparable to such Interest Period are offered by the principal
London office of JPMCB in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, assignment, pledge, hypothecation, deposit arrangement,
encumbrance, negative pledge, charge or security interest in, on or of such
asset, whether based on common law, constitutional provision, statute or
contract, including the interest of a purchaser of accounts receivable, (b) the
interest of a vendor or a lessor under any conditional sale agreement, capital
lease or title retention agreement (or any financing lease having substantially
the same economic effect as any of the foregoing) relating to such asset and (c)
in the case of securities, any purchase option, call or similar right of a third
party with respect to such securities.
"Liquid Investments" means, to the extent held in Qualified
Accounts, Permitted Investments and cash and cash equivalents (as defined under
GAAP).
"Loan Documents" means this Agreement, the Note, the Security
Documents, each Guaranty, each Borrowing Request, and all other assignments,
deeds, guaranties, pledges, instruments, certificates and agreements now or
hereafter executed or delivered to JPMCB pursuant to any of the foregoing, and
any Swap Agreement now or hereafter existing between the Parent Company or any
of its Subsidiaries and JPMCB or any Affiliate of JPMCB.
"Loans" means the loans made by JPMCB to the Borrower pursuant
to this Agreement.
"Material Adverse Effect" means (a) a material adverse change
in, or a material adverse effect upon, the business, assets, property, or
condition (financial or otherwise) of the Parent Company and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of the Borrower, the
Parent Company or any other Obligor to perform its obligations under any Loan
Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability against the Borrower, the
Parent Company or any other Obligor of any Loan Document to which it is a party
or upon the rights of or benefits available to JPMCB under this Agreement or any
other Loan Document.
8
"Material Indebtedness" means Indebtedness (other than the
Loans), or obligations in respect of one or more Swap Agreements, of any one or
more of the Borrower, the Parent Company or any other Obligor in an aggregate
principal amount exceeding $1,000,000. For purposes of determining Material
Indebtedness, the "principal amount" of the obligations of an Obligor in respect
of any Swap Agreement at any time shall be the maximum aggregate amount (giving
effect to any netting agreements) that such Obligor would be required to pay if
such Swap Agreement were terminated at such time.
"Maturity Date" means the earlier of (a) the date the
Obligations become due pursuant to Article VII, or (b) December 23, 2002.
"Midway Consent" means a Consent and Agreement executed by
Midway Oakmont and Administaff Client Services in the form agreed to by the
parties and JPMCB.
"Midway Note" means that certain promissory note dated March
12, 2002, executed by Midway Oakmont as maker, payable to the order of
Administaff Client Services.
"Midway Oakmont" means Midway Oakmont Partners, L.P., a
Texas
limited partnership.
"Midway Property" means all of the property at any time
subject to the Mortgage (Illinois Form) dated as of March 12, 2002, executed by
Midway Oakmont to Administaff Client Services.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means (i) the Deed of Trust and Security Agreement
(With Assignment of Rents) of even date herewith from the Borrower to Xxxxx
Xxxxxx, Trustee, and JPMCB, and (ii) any mortgage, deed of trust or similar
document delivered pursuant to this Agreement.
"Mortgaged Property" means all of the real property and
related improvements, fixtures and other related property of the Borrower in and
around Kingwood,
Texas.
"Multiemployer Plan" means any employee benefit plan of the
type described in Section 4001(a)(3) of ERISA, to which the Borrower, the Parent
Company or any other Obligor or any ERISA Affiliate of the Borrower, the Parent
Company or any other Obligor makes or is obligated to make contributions, or
during the preceding three calendar years, has made or been obligated to make
contributions.
"Note" means a promissory note made by the Borrower payable to
the order of JPMCB, substantially in the form of Exhibit A.
"Obligations" means, as at any date of determination thereof,
the sum of (a) the aggregate principal amount of Loans outstanding on such date,
(b) all accrued and unpaid fees in connection with the Loan Documents on such
date, (c) all other indebtedness, liabilities, obligations, covenants,
indemnities and duties of, the Borrower, the Parent Company and the other
Obligors under the Loan Documents, (d) all indebtedness, liabilities, and
obligations under Swap Agreements with JPMCB, and (e) all accrued and unpaid
interest on the amounts described in clauses (a), (b), (c) or (d) on such date.
The term "Obligations" includes all expenses, attorneys' fees and disbursements,
and any other sum chargeable to the Borrower, the Parent Company or any other
Obligor under this Agreement or any other Loan Document and includes interest
that accrues after the commencement by or against the Borrower,
9
the Parent Company or any other Obligor or any Affiliate thereof of any
proceeding under any bankruptcy or insolvency laws.
"Obligor" means the Borrower, the Parent Company, each other
Guarantor, and any other Person who may now or hereafter be obligated to pay all
or any part of the Obligations or to perform any obligation under any of the
Loan Documents.
"Organizational Documents" means, (a) with respect to any
corporation, the certificate or articles of incorporation and the bylaws; (b)
with respect to any limited liability company, the articles of formation, the
regulations, the operating agreement, and the limited liability company
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership, joint venture or other
applicable agreement of formation and any agreement, instrument, filing or
notice with respect thereto filed in connection with its formation with the
secretary of state or other department in the state of its formation, in each
case including all modifications and supplements thereof as of the date of the
Loan Document referring to such Organizational Document and any and all future
modifications thereof which could not reasonably be expected to have a Material
Adverse Effect.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"Parent Company" means Administaff, Inc., a Delaware
corporation.
"Participant" has the meaning set forth in Section 8.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred
to and defined in ERISA and any successor entity performing similar functions.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 5.08;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the
ordinary course of business and securing obligations that are not yet
due or are being contested in compliance with Section 5.04;
(c) pledges and deposits made in the ordinary course of
business in compliance with workers' compensation, unemployment
insurance and other social security laws or regulations;
(d) deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case
in the ordinary course of business;
(e) judgment liens in respect of judgments that do not
constitute an Event of Default under clause (j) of Article VII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any
10
monetary obligations and do not materially detract from the value of
the affected property or interfere with the ordinary conduct of
business of the Parent Company or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States
of America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America),
in each case maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper maturing within 270 days
from the date of acquisition thereof and having, at such date of
acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments in certificates of deposit, banker's
acceptances and time deposits maturing within 180 days from the date of
acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any domestic office of
any commercial bank organized under the laws of the United States of
America or any State thereof which has a combined capital and surplus
and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of
not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria
described in clause (c) above;
(e) money market funds that (i) comply with the criteria set
forth in Securities and Exchange Commission Rule 2a-7 under the
Investment Company Act of 1940, (ii) have the highest credit rating
obtainable from S&P or from Moody's; and (iii) have portfolio assets of
at least $5,000,000,000; and
(f) Investments described on Schedule 1.01(f) that meet the
credit quality standards in Section 6.0 thereof.
"Person" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture, Governmental Authority, or other form of entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower,
the Parent Company or any other Obligor or any ERISA Affiliate of any of such
Persons is (or, if such plan were terminated, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" means the Security Agreement-Collateral
Assignment and Pledge of even date herewith from Administaff Client Services
pursuant to which the Midway Note and the Liens securing the Midway Note are
pledged to JPMCB as security for the Obligations.
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by JPMCB as its base rate in effect at its principal
office in New York City; each change in the Prime
11
Rate shall be effective from and including the date such change in such base
rate is publicly announced as being effective. The Prime Rate is a reference
rate and may not be JPMCB's lowest or best rate; JPMCB may make commercial loans
at rates of interest at, above or below the Prime Rate.
"Qualified Accounts" means the securities accounts listed on
Schedule 1.01(g) and such other securities accounts as the Borrower and JPMCB
shall from time to time agree.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers and employees of
such Person and such Person's Affiliates.
"Restricted Payment" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Parent Company or any Subsidiary, or any payment (whether in
cash, securities or other property), including any sinking fund or similar
deposit, on account of the purchase, redemption, retirement, acquisition,
cancellation or termination of any such Equity Interests in the Parent Company
or any Subsidiary or any option, warrant or other right to acquire any such
Equity Interests in the Parent Company or any Subsidiary.
"S&P" means Standard & Poors.
"Security Documents" means the Mortgage, the Aircraft Security
Agreement, the Air Carrier Lease Subordination and Attornment Agreement, the
Pledge Agreement, and any other security agreements, deeds of trust, mortgages,
chattel mortgages, pledges, guaranties, financing statements, continuation
statements, extension agreements and other agreements or instruments now,
heretofore, or hereafter delivered by any Person to JPMCB in connection with
this Agreement or the Transaction to secure or guarantee the payment of all or
any part of the Obligations.
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which JPMCB is subject (a) with respect
to the Base CD Rate, for new negotiable nonpersonal time deposits in dollars of
over $100,000 with maturities approximately equal to three months and (b) with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to JPMCB under
such Regulation D or any comparable regulation. The Statutory Reserve Rate shall
be adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"subsidiary" means, with respect to any Person (the "parent")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other Equity Interests
representing more than 50% of the Equity Interests or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, Controlled or held,
or (b) that is, as of such date, otherwise Controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries of
the parent.
12
"Subsidiary" means any direct or indirect subsidiary of the
Parent Company.
"Swap Agreement" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; provided that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Parent Company or the Subsidiaries shall be a Swap Agreement.
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Three-Month Secondary CD Rate" means, for any day, the
secondary market rate for three-month certificates of deposit reported as being
in effect on such day (or, if such day is not a Business Day, the next preceding
Business Day) by the Board through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day) or, if such rate is not so reported on such
day or such next preceding Business Day, the average of the secondary market
quotations for three-month certificates of deposit of major money center banks
in New York City received at approximately 10:00 a.m., New York City time, on
such day (or, if such day is not a Business Day, on the next preceding Business
Day) by JPMCB from three negotiable certificate of deposit dealers of recognized
standing selected by it.
"Transactions" means the execution, delivery and performance
by the Borrower, the Parent Company and the other Obligors of this Agreement and
the other Loan Documents, the borrowing of Loans, the granting of Collateral,
the making of the Guaranties, and the use of the proceeds of the Loans.
"Type", when used in reference to any Loan, refers to whether
the rate of interest on such Loan is determined by reference to the Adjusted
LIBO Rate or the Alternate Base Rate.
"Withdrawal Liability" means liability to a Multiemployer Plan
as a result of a complete or partial withdrawal from such Multiemployer Plan, as
such terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein
shall apply equally to the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
The word "will" shall be construed to have the same meaning and effect as the
word "shall". Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be
construed as referring to such agreement, instrument or other document as from
time to time amended, restated, extended, supplemented or otherwise modified
(subject to any restrictions on such amendments, supplements or modifications
set forth herein), (b) any reference herein to any Person shall be construed to
include such Person's successors and assigns, (c) the words "herein", "hereof"
and "hereunder", and words of similar import, shall be construed to refer to the
Loan Document in which they appear in its entirety and not to any particular
provision thereof, (d) all references in any Loan Document to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, that Loan Document, (e) references
to any Law shall include all statutory and regulatory
13
provisions consolidating, amending, replacing, supplementing or interpreting
such Law, and (f) the words "asset" and "property" shall be construed to have
the same meaning and effect and to refer to any and all tangible and intangible
assets and properties, including real estate, cash, securities, accounts and
contract rights.
SECTION 1.03. Accounting Terms; Rounding. Except as otherwise
expressly provided herein, all terms of an accounting or financial nature shall
be construed in accordance with GAAP. Any financial ratios required to be
maintained by the Parent Company and its Subsidiaries pursuant to this Agreement
shall be calculated by dividing the appropriate component by the other
component, carrying the result to one place more than the number of places by
which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number).
ARTICLE II
The Credits
SECTION 2.01. Commitment. Subject to the terms and conditions
set forth herein, JPMCB agrees to make Loans to the Borrower from time to time
during the Availability Period in an aggregate principal amount that will not
result in the aggregate outstanding principal balance of Loans at that time
exceeding the Commitment. Within the foregoing limits and subject to the terms
and conditions set forth herein, the Borrower may borrow, prepay and reborrow
Loans. Chapter 346 of the
Texas Finance Code (which governs certain revolving
loan accounts) will not apply to this Agreement, the Note or any Loan.
SECTION 2.02. Loans and Interest Periods.
(a) At the commencement of each Interest Period for any
Eurodollar Loan, such Loan shall be in an amount that is not less than $500,000
and an integral multiple of $50,000. At the time that each ABR Loan is made,
such Loan shall be in an aggregate amount that is not less than $100,000 and an
integral multiple of $50,000; provided that an ABR Loan may be in an aggregate
amount that is equal to the entire unused balance of the Commitment. There shall
not at any time be more than a total of eight Eurodollar Loans outstanding.
(b) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Loan as a Eurodollar Loan if a Default shall have occurred and be
continuing, or if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03. Requests for Loans. To request a Loan, the
Borrower shall notify JPMCB of such request by telephone (a) in the case of a
Eurodollar Loan, not later than 10:00 a.m., Houston time, three Business Days
before the date of the proposed Loan, or (b) in the case of an ABR Loan, not
later than 10:00 a.m., Houston time, on the Business Day of the proposed Loan.
Each such telephonic Borrowing Request shall be irrevocable and shall be
confirmed promptly by hand delivery or telecopy to JPMCB of a written Borrowing
Request in a form approved by JPMCB and signed by the Borrower. Each such
telephonic and written Borrowing Request shall specify the following information
in compliance with Section 2.02:
(i) the aggregate amount of the requested Loan;
14
(ii) the date of such Loan, which shall be a Business Day;
(iii) whether such Loan is to be an ABR Loan or a Eurodollar
Loan;
(iv) in the case of a Eurodollar Loan, the initial Interest
Period to be applicable thereto, which shall be a period
contemplated by the definition of the term "Interest Period";
and
(v) the location and number of the Borrower's account to which
funds are to be disbursed.
If no election as to the Type of Loan is specified, then the requested Loan
shall be an ABR Loan. If no Interest Period is specified with respect to any
requested Eurodollar Loan, the Borrower shall be deemed to have selected an
Interest Period of one month's duration.
SECTION 2.04. Funding of Loans. JPMCB shall make each Loan on
the proposed date thereof by crediting the amounts thereof to an account of the
Borrower maintained with JPMCB in Houston,
Texas and designated by the Borrower
in the applicable Borrowing Request.
SECTION 2.05. Interest Elections.
(a) Each Loan initially shall be of the Type specified in the
applicable Borrowing Request and, in the case of a Eurodollar Loan, shall have
an initial Interest Period as specified in such Borrowing Request. Thereafter,
subject to Section 2.02(b), the Borrower may elect to convert such Loan to a
different Type or to continue such Loan and may elect Interest Periods therefor,
all as provided in this Section.
(b) To make an election pursuant to this Section, the Borrower
shall notify JPMCB of such election by telephone by the time that a Borrowing
Request would be required under Section 2.03 if the Borrower were requesting a
Loan of the Type resulting from such election to be made on the effective date
of such election. Each such telephonic Interest Election Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to
JPMCB of a written Interest Election Request in a form approved by JPMCB and
signed by the Borrower.
(c) Each telephonic and written Interest Election Request
shall specify the following information in compliance with Section 2.02:
(i) the Loan to which such Interest Election Request
applies and, if different options are being elected with respect to
different portions thereof, the portions thereof to be allocated to
each resulting Loan (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Loan);
(ii) the effective date of the election made pursuant
to such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Loan is to be an ABR Loan
or a Eurodollar Loan; and
15
(iv) if the resulting Loan is a Eurodollar Loan, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the
term "Interest Period".
If any such Interest Election Request requests a Eurodollar Loan but does not
specify an Interest Period, the Borrower shall be deemed to have selected an
Interest Period of one month's duration.
(d) If the Borrower fails to deliver a timely Interest
Election Request with respect to a Eurodollar Loan prior to the end of the
Interest Period applicable thereto, then, unless such Loan is repaid as provided
herein, at the end of such Interest Period such Loan shall be converted to an
ABR Loan. Notwithstanding any contrary provision hereof, if a Default has
occurred and is continuing and JPMCB so notifies the Borrower, then, so long as
a Default is continuing (i) no outstanding Loan may be converted to or continued
as a Eurodollar Loan, and (ii) unless repaid, each Eurodollar Loan shall be
converted to an ABR Loan at the end of the Interest Period applicable thereto.
SECTION 2.06. Termination and Reduction of the Commitment.
Unless previously terminated, the Commitment shall terminate on the Maturity
Date. The Borrower may at any time terminate, or from time to time reduce, the
Commitment; provided that (a) each reduction of the Commitment shall be in an
amount that is an integral multiple of $50,000 and not less than $100,000, and
(b) the Borrower shall not terminate or reduce the Commitment if, after giving
effect to any concurrent prepayment of the Loans in accordance with Section
2.08, the unpaid principal balance of Loans outstanding would exceed the
Commitment. The Borrower shall notify JPMCB of any election to terminate or
reduce the Commitment under this Section at least three Business Days prior to
the effective date of such termination or reduction, specifying such election
and the effective date thereof. Each notice delivered by the Borrower pursuant
to this Section shall be irrevocable; provided, that a notice of termination of
the Commitment delivered by the Borrower may state that such notice is
conditioned upon the effectiveness of other credit facilities, in which case
such notice may be revoked by the Borrower by notice to JPMCB on or prior to the
specified effective date if such condition is not satisfied. Any termination or
reduction of the Commitment shall be permanent.
SECTION 2.07. Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to
JPMCB on the Maturity Date the aggregate principal amount of Loans then
outstanding, all accrued and unpaid fees in connection with the Loan Documents,
and all accrued and unpaid interest with respect to the Loan Documents. The
Loans shall be evidenced by the Note. Payment of the Loans and all other
Obligations shall, to the extent set forth therein, be secured by the Security
Documents and guaranteed by the Guarantors pursuant to the Guaranties.
(b) JPMCB shall maintain in accordance with its usual practice
an account or accounts in which it shall record (i) the date and amount of each
Loan made hereunder, the Type thereof and the Interest Period applicable
thereto, and (ii) the amount of any payment of Loan principal received by JPMCB
hereunder and the date such payment was received. The entries made in that
account shall be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided that the failure of JPMCB to maintain
such account or any error therein shall not in any manner affect the obligation
of the Borrower to repay the Loans and the other Obligations in accordance with
the terms of this Agreement or the obligations of any Guarantor under its
Guaranty.
16
SECTION 2.08. Prepayment of Loans.
(a) The Borrower shall have the right at any time and from
time to time to prepay any Loan in whole or in part, subject to prior notice in
accordance with paragraph (b) of this Section.
(b) The Borrower shall notify JPMCB by telephone (confirmed by
telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Loan, not later than 10:00 a.m., Houston time, three Business Days
before the date of prepayment, or (ii) in the case of prepayment of an ABR Loan,
not later than 10:00 a.m., Houston time, one Business Day before the date of
prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Loan or portion thereof to be
prepaid. Each partial prepayment of an ABR Loan shall be in an amount that is
not less than $100,000 and an integral multiple of $50,000; each partial
prepayment of a Eurodollar Loan shall be in an amount that is not less than
$500,000 and an integral multiple of $50,000. Prepayments shall be accompanied
by accrued and unpaid interest to the extent required by Section 2.10. The
Borrower shall reimburse JPMCB on demand for any loss, cost or expense incurred
or sustained as a result of any such prepayment in accordance with Section 2.13.
SECTION 2.09. Commitment Fee. In consideration of the
Commitment, the Borrower agrees to pay to JPMCB a commitment fee which shall
accrue at the rate of 25 basis points per annum on the daily unused amount of
the Commitment during the period from and including the Effective Date to but
excluding the date on which the Commitment terminates. Accrued and unpaid
commitment fees shall be due in arrears on the last day of March, June,
September and December of each year and on the date on which the Commitment
terminates, commencing on the first such date to occur after the date hereof.
All commitment fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day). Fees paid shall not be refundable under any
circumstances.
SECTION 2.10. Interest.
(a) ABR Loans shall bear interest at the Alternate Base Rate.
(b) Each Eurodollar Loan shall bear interest at the Adjusted
LIBO Rate for the Interest Period in effect for such Loan plus the Applicable
Margin.
(c) Notwithstanding the foregoing, but subject to Section
8.14, if any principal of or interest on any Loan or any fee or other amount
payable by the Borrower hereunder is not paid when due, whether at stated
maturity, upon acceleration or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% plus the rate otherwise applicable
to such Loan as provided in the preceding paragraphs of this Section or (ii) in
the case of any other amount, the Default Rate.
(d) Accrued and unpaid interest on each Loan shall be due in
arrears on each Interest Payment Date for such Loan and upon termination of the
Commitment; provided that (i) interest accrued pursuant to paragraph (c) of this
Section shall be due on demand, (ii) in the event of any repayment or prepayment
of any Loan (other than a prepayment of an ABR Loan prior to the end of the
Availability Period), accrued and unpaid interest on the principal amount repaid
or prepaid shall be due on the date of such repayment or prepayment, and (iii)
in the event of any conversion of any Eurodollar Loan prior to the end of the
current Interest Period therefor, accrued interest on such Loan shall be due on
the effective date of such conversion.
17
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate or
Adjusted LIBO Rate shall be determined by JPMCB, and such determination shall be
conclusive absent manifest error.
SECTION 2.11. Alternate Rate of Interest. If prior to the
commencement of any Interest Period for a Eurodollar Loan:
(a) Dollar deposits are not being offered to banks in the
applicable offshore Dollar market for the amount and Interest Period of
such Eurodollar Loan;
(b) JPMCB determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist
for ascertaining the Adjusted LIBO Rate or the LIBO Rate for such
Interest Period; or
(c) JPMCB determines that the Adjusted LIBO Rate for such
Interest Period will not adequately and fairly reflect the cost to
JPMCB of making or maintaining the Eurodollar Loan for such Interest
Period;
then JPMCB shall give notice thereof to the Borrower by telephone or telecopy as
promptly as practicable thereafter and, until JPMCB notifies the Borrower that
the circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Loan to, or continuation of
any Loan as, a Eurodollar Loan shall be ineffective, and (ii) if any Borrowing
Request requests a Eurodollar Loan, such Loan shall be made as an ABR Loan.
SECTION 2.12. Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, JPMCB (except any such reserve
requirement reflected in the Adjusted LIBO Rate); or
(ii) impose on JPMCB or the applicable offshore Dollar market
any other condition affecting this Agreement or any Eurodollar Loan;
and the result of any of the foregoing shall be to increase the cost to JPMCB of
making or maintaining any Eurodollar Loan (or of maintaining its obligation to
make any such Loan) or to reduce the amount of any sum received or receivable by
JPMCB hereunder (whether of principal, interest or otherwise), then, subject to
Section 8.14, the Borrower will pay to JPMCB such additional amount or amounts
as will compensate JPMCB for such additional costs incurred or reduction
suffered.
(b) If JPMCB determines that any Change in Law regarding
capital requirements has or would have the effect of reducing the rate of return
on JPMCB's capital or on the capital of JPMCB's holding company as a consequence
of this Agreement or the Loans made by JPMCB to a level below that which JPMCB
or JPMCB's holding company could have achieved but for such Change in Law
(taking into consideration JPMCB's policies and the policies of JPMCB's holding
company with respect to capital adequacy), then from time to time, subject to
Section 8.14, the Borrower will pay to JPMCB such
18
additional amount or amounts as will compensate JPMCB or JPMCB's holding company
for any such reduction suffered.
(c) A certificate of JPMCB setting forth the amount or amounts
necessary to compensate it or its holding company, as the case may be, as
specified in paragraph (a) or (b) of this Section shall be delivered to the
Borrower and shall be conclusive absent manifest error. The Borrower shall pay
JPMCB the amount shown as due on any such certificate within 15 days after
receipt thereof.
(d) Failure or delay on the part of JPMCB to demand
compensation pursuant to this Section shall not constitute a waiver of JPMCB's
right to demand such compensation; provided that the Borrower shall not be
required to compensate JPMCB pursuant to this Section for any increased costs or
reductions incurred more than 180 days prior to the date that JPMCB notifies the
Borrower of the Change in Law giving rise to such increased costs or reductions
and of JPMCB's intention to claim compensation therefor; provided further that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
(e) If JPMCB request compensation under this Section or
Section 2.11, JPMCB shall, upon the request of the Borrower, use reasonable
efforts to designate a different lending office for funding or booking its Loans
hereunder or to assign its rights and obligations hereunder to another of its
offices, branches or affiliates, if, in the sole judgment of JPMCB, such
designation or assignment (i) would eliminate or reduce the amounts payable
pursuant to either Section, in the future, and (ii) would not subject JPMCB to
any unreimbursed cost or expense and would not otherwise be disadvantageous to
JPMCB. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by JPMCB in connection with any such designation or assignment.
SECTION 2.13. Break Funding Payments. In the event of (a) the
payment of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the continuation or conversion of any Eurodollar Loan other than
on the last day of the Interest Period applicable thereto, or (c) the failure to
borrow, convert, continue or prepay any Eurodollar Loan on the date specified in
any notice delivered pursuant hereto, then, in any such event, subject to
Section 8.14, the Borrower shall compensate JPMCB for any loss of anticipated
profits and for the loss, cost and expense attributable to such event. In the
case of a Eurodollar Loan, such loss, cost or expense shall be deemed to include
an amount determined by JPMCB to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which JPMCB would bid were
it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the Eurodollar market. A
certificate of JPMCB setting forth any amount or amounts that JPMCB is entitled
to receive pursuant to this Section shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay JPMCB the amount
shown on any such certificate within 15 days after receipt thereof.
SECTION 2.14. Taxes.
(a) Any and all payments by or on account of any obligation of
the Borrower hereunder shall be made free and clear of and without deduction for
any Indemnified Taxes or Other
19
Taxes; provided that if the Borrower shall be required to deduct any Indemnified
Taxes or Other Taxes from such payments, then (i) the sum payable shall be
increased as necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section) JPMCB
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, and (iii)
the Borrower shall pay the full amount deducted to the relevant Governmental
Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify JPMCB, within 15 days after
written demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes paid by JPMCB on or with respect to any payment by or on account of any
obligation of the Borrower hereunder (including Indemnified Taxes or Other Taxes
imposed or asserted on or attributable to amounts payable under this Section)
and any penalties, interest and reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by JPMCB shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified
Taxes or Other Taxes by the Borrower to a Governmental Authority, the Borrower
shall deliver to JPMCB the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to JPMCB.
(e) If JPMCB determines, in its sole discretion, that it has
received a refund of any Taxes or Other Taxes as to which it has been
indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section 2.14, it shall pay over such refund
to the Borrower (but only to the extent of indemnity payments made, or
additional amounts paid, by the Borrower under this Section 2.14 with respect to
the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket
expenses of JPMCB and without interest (other than any interest paid by the
relevant Governmental Authority with respect to such refund); provided, that the
Borrower, upon the request of JPMCB, agrees to repay the amount paid over to the
Borrower (plus any penalties, interest or other charges imposed by the relevant
Governmental Authority) to JPMCB in the event JPMCB is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require JPMCB to make available its tax returns (or any other information
relating to its taxes which it deems confidential) to the Borrower or any other
Person.
SECTION 2.15. Illegality. If at any time JPMCB determines that
any Law has made it unlawful, or that any Governmental Authority has asserted
that it is unlawful, for JPMCB to make, maintain or fund Eurodollar Loans, or
materially restricts the authority of JPMCB to purchase or sell, or to take
deposits of, the applicable offshore Dollar market, or to determine or charge
interest rates based upon the Adjusted LIBO Rate, then, on notice thereof by
JPMCB to the Borrower, any obligation of JPMCB to make or continue Eurodollar
Loans or to convert ABR Loans to Eurodollar Loans shall be suspended until JPMCB
notifies the Borrower that the circumstances giving rise to such determination
no longer exist. Upon receipt of such notice, the Borrower shall, upon demand
from JPMCB, prepay or, if applicable, convert all Eurodollar Loans to ABR Loans,
either on the last day of the Interest Period thereof, if JPMCB may lawfully
continue to maintain such Eurodollar Loans to such day, or immediately, if JPMCB
may not lawfully continue to maintain such Eurodollar Loans. Upon any such
prepayment or conversion, the Borrower shall also pay interest on the amount so
prepaid or converted. If JPMCB gives a notice under this Section, JPMCB shall,
upon the request of the Borrower, use reasonable efforts to
20
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the sole judgment of JPMCB, such designation (i)
would eliminate the need for such notice and (ii) would not subject JPMCB to any
unreimbursed cost or expense and would not otherwise be disadvantageous to
JPMCB. The Borrower hereby agrees to pay all reasonable costs and expenses
incurred by JPMCB in connection with any such designation.
SECTION 2.16. Payments Generally.
(a) The Borrower shall make each payment required to be made
by it hereunder (whether of principal, interest, fees, or amounts payable under
Section 2.12, 2.13 or 2.14, or otherwise) prior to 11:00 a.m., Houston time, on
the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of JPMCB, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to JPMCB at its offices at 000 Xxxx Xxxxxx, Xxxxxxx, Xxxxx. If any
payment hereunder shall be due on a day that is not a Business Day, the date for
payment shall be extended to the next succeeding Business Day (unless the result
of such extension of time would be to extend the date of such payment into
another calendar month (in the case of a Eurodollar Loan) or (in the case of any
Loan) beyond the Maturity Date, and in either such event such payment shall be
due on the Business Day immediately preceding the day on which such payment
would otherwise have been due), and, in the case of any payment accruing
interest, interest thereon shall be due for the period of such extension. All
payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to JPMCB to pay fully all amounts of principal, interest and fees then
due hereunder, such funds shall be applied first, towards payment of interest
and fees then due hereunder, and then towards payment of principal then due
hereunder.
ARTICLE III
Representations and Warranties
The Borrower and the Parent Company jointly and severally
represent and warrant to JPMCB that:
SECTION 3.01. Organization; Powers. Each of the Parent Company
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has all
requisite power and authority and all governmental licenses, consents, approvals
and permits to carry on its business as currently conducted, and (c) except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect, is qualified to
do business in, and is in good standing in, every jurisdiction in which the
nature of the business conducted or the property owned by it requires such
qualification.
SECTION 3.02. Authorization; Enforceability. The Transactions
are within the organizational power and authority of the Borrower, the Parent
Company and each other Obligor and have been duly authorized by all necessary
corporate, partnership or other organizational action (and, if required,
stockholder or partner action) on the part of the Borrower, the Parent Company
and each other Obligor. This Agreement and the other Loan Documents have been
duly executed and delivered by each Obligor party thereto and constitute the
legal, valid and binding obligations of each Obligor party thereto,
21
enforceable in accordance with their respective terms, subject to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally and subject to general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
SECTION 3.03. Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, or any other Person, except such as
have been obtained or made and are in full force and effect, (b) do not and will
not violate any applicable Law or the Organizational Documents of the Borrower,
the Parent Company or any other Obligor or any order of any Governmental
Authority, (c) do not and will not violate or result in a default under any
Contractual Obligation binding upon the Borrower, the Parent Company or any
other Obligor or any of their respective assets, violation of which could,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, or give rise to a right thereunder to require any payment to be
made by the Borrower, the Parent Company or any other Obligor, and (d) except
for the Liens created by the Loan Documents, will not result in the creation or
imposition of any Lien on any asset of the Borrower, the Parent Company or any
other Obligor.
SECTION 3.04. Financial Condition; No Material Adverse Change.
(a) The Borrower has heretofore furnished to JPMCB the
consolidated balance sheet and statements of operations, stockholders' equity
and cash flows of the Parent Company and its consolidated Subsidiaries (i) as of
and for the fiscal year ended December 31, 2001, reported on by Ernst & Young
LLP, independent public accountants, and (ii) as of and for the fiscal quarter
and the portion of the fiscal year ended March 31, 2002, certified by one of the
Parent Company's Financial Officers. Such financial statements present fairly,
in all material respects, the financial position and results of operations and
cash flows of the Parent Company and its consolidated Subsidiaries as of the
dates and for the periods indicated in accordance with GAAP, subject to year-end
audit adjustments and the absence of footnotes in the case of the statements
referred to in clause (ii) above.
(b) The most recent consolidated balance sheet and statements
of operations and stockholders' equity and cash flows, together with the
respective notes thereto, delivered to JPMCB in accordance with the provisions
of Section 5.01(a) or (b), as the case may be, present fairly, in all material
respects, the financial position of the Parent Company and its consolidated
Subsidiaries as of the date thereof and the results of operations and cash flows
of the Parent Company and its consolidated Subsidiaries for the period then
ended in accordance with GAAP, subject to year-end adjustments and the absence
of footnotes in the case of statements referred to in Section 5.01(b).
(c) Since December 31, 2001, there has been no material
adverse change in the assets, liabilities, financial condition, business or
affairs of the Parent Company and its Subsidiaries, taken as a whole. Since
December 31, 2001, there has occurred no change, event, circumstance, or
condition in or with respect to the assets, liabilities, financial condition,
business or affairs of the Parent Company and its Subsidiaries which,
individually or in the aggregate with all other such changes, events,
circumstances and conditions occurring since December 31, 2001, could reasonably
be expected to result in a Material Adverse Effect.
(d) The Parent Company and the Borrower collectively have more
than $7,500,000 in Liquid Investments.
22
SECTION 3.05. Subsidiaries.
(a) The Parent Company has no Subsidiaries other than those
specifically disclosed in Schedule 3.05. All outstanding Equity Interests of
each Subsidiary have been and will be validly issued and are and will be fully
paid and nonassessable and are and will be owned, beneficially and of record, by
the Persons disclosed in Schedule 3.05, free and clear of any Liens. The
Borrower and each other Obligor (other than the Parent Company) is a
wholly-owned Subsidiary of the Parent Company and will remain a wholly-owned
Subsidiary of the Parent Company.
(b) The Parent Company and its Subsidiaries have no equity
investments in any other corporation or other Person other than (i) Permitted
Investments and (ii) those equity investments specifically disclosed in
Schedules 3.05 and 6.04.
SECTION 3.06. Properties.
(a) Each of the Parent Company and its Subsidiaries has good
and indefeasible title to, or valid leasehold interests in, all its real and
personal property material to its business, except for minor defects in title
that do not interfere with its ability to conduct its business as currently
conducted or to utilize such properties for their intended purposes. The Liens
of the Loan Documents constitute valid and perfected first and prior Liens on
the Collateral, subject to no Liens other than Liens permitted by the applicable
Loan Documents.
(b) Each of the Parent Company and its Subsidiaries possesses
all permits and licenses and owns, or is licensed to use, all trademarks,
tradenames, service marks, copyrights, patents and other intellectual property
required to conduct its business, except for such permits, licenses, patents,
trademarks and copyrights which the failure to posses could not, individually or
in the aggregate, reasonably be excepted to have a Material Adverse Effect,
without conflict with the rights of any other Person with respect thereto, and
the use thereof by the Parent Company and its Subsidiaries does not infringe
upon the rights of any other Person, except for any such infringements that,
individually or in the aggregate, have not had and could not reasonably be
expected to result in a Material Adverse Effect. No slogan or other advertising
device, product, process, method, substance, part, component or other material
employed or contemplated to be employed by the Parent Company or any of its
Subsidiaries infringes upon any rights of any other Person, no claim or
litigation regarding any of the foregoing is pending, or, to the actual
knowledge of the Borrower or the Parent Company, threatened, and no patent,
invention, device, application, principle or any statute, law, rule, regulation,
standard or code is pending or, to the actual knowledge of the Borrower or the
Parent Company, proposed, which, in either case, individually or in the
aggregate, has resulted in or could reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.07. Litigation and Environmental Matters.
(a) Except as disclosed in the Parent Company's Annual Report
on Form 10-K for the year ended December 31, 2001, as filed with the United
States Securities and Exchange Commission, and except for Disclosed Matters,
there are no actions, suits or proceedings by or before any arbitrator or
Governmental Authority pending against or, to the knowledge of the Borrower or
the Parent Company, threatened against or affecting the Parent Company or any of
its Subsidiaries (i) as to which there is a reasonable possibility of an adverse
determination and that, if adversely determined, could reasonably be expected,
individually or in the aggregate, to result in a Material Adverse Effect, or
(ii) that involve this Agreement, any of the other Loan Documents, the
Collateral, or the Transactions.
(b) Except for the Disclosed Matters and except with respect
to any other matters that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse
23
Effect, neither the Parent Company nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim or investigation with respect to any Environmental Liability, or (iv)
knows of any basis for any Environmental Liability.
(c) Since the date of this Agreement, there has been no change
in the status of the Disclosed Matters that, individually or in the aggregate,
has resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.08. Compliance with Laws and Agreements. Each of the
Parent Company and its Subsidiaries is in compliance with all Laws and orders of
any Governmental Authority applicable to it or its property and all Contractual
Obligations binding upon it or its property, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to result in
a Material Adverse Effect. No Default has occurred and is continuing. The
Borrower, the Parent Company and each other Obligor are in compliance with all
applicable Laws of each state employment commission, department of taxation, and
other Governmental Authority, except (a) as described in the Parent Company's
Annual Report on Form 10-K for the year ended December 31, 2001, as filed with
the U. S. Securities and Exchange Commission, or (b) where failure to be in such
compliance, individually or in the aggregate with all other such failures, could
not be reasonably be expected to have a Material Adverse Effect.
SECTION 3.09. Investment and Holding Company Status;
Regulation U. Neither the Parent Company nor any of its Subsidiaries is (a) an
"investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
None of the Obligors is engaged or will engage, principally or as one of its
important activities, in the business of purchasing or carrying margin stock
(within the meaning of Regulation U issued by the Board), or extending credit
for the purpose of purchasing or carrying margin stock. Margin stock does not
constitute more than 25% of the assets of any Obligor.
SECTION 3.10. Taxes. Each of the Parent Company and its
Subsidiaries has timely filed or caused to be filed all Tax returns and reports
required to have been filed and has paid or caused to be paid all Taxes required
to have been paid by it, except (a) Taxes for which extensions have been
obtained and Taxes that are being contested in good faith by appropriate
proceedings and for which the Parent Company or such Subsidiary, as applicable,
has set aside on its books adequate reserves, and (b) to the extent that failure
to do so could not, individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect. There is no proposed tax assessment against
the Parent Company or any Subsidiary that would, if made, have a Material
Adverse Effect.
SECTION 3.11. Insurance. The properties of the Parent Company
and its Subsidiaries are insured with financially sound and reputable insurance
companies that are not Affiliates of the Parent Company, in such amounts, with
such deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar properties in localities where
the Parent Company or its Subsidiaries operate.
SECTION 3.12. ERISA. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA
Events for which liability is reasonably expected to occur, could reasonably be
expected to result in a Material Adverse Effect. The present value of all
accumulated benefit obligations under each Plan (based on the assumptions used
for purposes
24
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed the fair
market value of the assets of such Plan.
SECTION 3.13. Solvency. Immediately following the making of
each Loan and after giving effect to the application of the proceeds thereof,
(a) the fair value of the assets of (i) the Borrower, and (ii) the Borrower and
the other Obligors taken as a whole, in each case of (i) and (ii) at a fair
valuation, will exceed the debts and liabilities of (x) the Borrower and (y) the
Borrower and the other Obligors taken as a whole, as the case may be, whether
such debts and liabilities be subordinated, contingent or otherwise; (b) the
present fair saleable value of the property of (i) the Borrower and (ii) the
Borrower and the other Obligors, taken as a whole, will, in each case of (i) and
(ii), be greater than the amount that will be required to pay the probable
liability of the debts and other liabilities of (x) the Borrower and (y) the
Borrower and the other Obligors, taken as a whole, as the case may be, whether
such debts and liabilities be subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) each of (i) the
Borrower, and (ii) the Borrower and the other Obligors, taken as a whole, will
be able to pay its debts and liabilities, subordinated, contingent or otherwise,
as such debts and liabilities become absolute and matured; and (d) neither (i)
the Borrower nor (ii) the Borrower and the other Obligors, taken as a whole,
will have unreasonably small capital with which to conduct the business in which
it is engaged as such business is now conducted and is proposed to be conducted
following the date of such Loan.
SECTION 3.14. Disclosure. The Borrower has disclosed to JPMCB
all agreements, instruments and corporate or other restrictions to which the
Parent Company or any of its Subsidiaries is subject, and all other matters
that, individually or in the aggregate, could reasonably be expected to result
in a Material Adverse Effect. None of the reports, financial statements,
certificates or other information furnished by or on behalf of the Borrower, the
Parent Company or any other Obligor to JPMCB in connection with the negotiation
of this Agreement or any other Loan Document or delivered hereunder or
thereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; provided that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions that were
reasonable at the time.
ARTICLE IV
Conditions Precedent
SECTION 4.01. Effective Date. The obligation of JPMCB to make
Loans shall not become effective until the date on which each of the following
conditions precedent is satisfied (or waived in accordance with Section 8.02):
(a) JPMCB (or its counsel) shall have received executed
counterparts of this Agreement, the Guaranties, and the Security
Documents, in form and in sufficient number of counterparts for the
prompt completion of all recording and filing of the Security Documents
as may be necessary or, in the opinion of JPMCB, desirable to create or
continue, as appropriate, a valid perfected first Lien against all of
the Collateral;
(b) JPMCB shall have received the Note, executed by the
Borrower and payable to the order of JPMCB in a principal amount equal
to the initial Commitment;
25
(c) JPMCB shall have received favorable written opinions
(addressed to JPMCB and dated the Effective Date) of Xxxxx & Xxxxx,
L.L.P., counsel for the Obligors, and Xxxx X. Xxxxxxx, XX, Vice
President, Legal, General Counsel and Secretary of the Borrower,
substantially in the forms of Exhibits B-1 and B-2, respectively. The
Borrower hereby requests such counsel to deliver such opinions;
(d) JPMCB shall have received such documents and certificates
as JPMCB or its counsel may reasonably request relating to the
organization, existence and good standing of the Borrower, the Parent
Company and the other Obligors, the authorization of the Transactions,
and any other legal matters relating to the Borrower, the Parent
Company, the other Obligors, this Agreement, the other Loan Documents,
the Collateral, or the Transactions, all in form and substance
satisfactory to JPMCB and its counsel;
(e) The Borrower shall have delivered to JPMCB a certificate
in respect of the name and signature of each officer of the Borrower,
the Parent Company and each other Obligor who (i) is authorized to sign
on its behalf this Agreement and the other Loan Documents to which the
Borrower, the Parent Company or such other Obligor is a party, and (ii)
will, until replaced by another officer or officers duly authorized for
that purpose, act as the representative of the Borrower, the Parent
Company or such other Obligor for the purposes of signing documents and
giving notices and other communications in connection with this
Agreement and the other Loan Documents. JPMCB may conclusively rely on
such certificates until they receive notice in writing from the
Borrower to the contrary;
(f) JPMCB shall have received a certificate signed by a
Financial Officer of the Parent Company certifying that the conditions
specified in Sections 4.02(b), (c) and (d) have been satisfied;
(g) JPMCB shall have received title and Lien information with
respect to the Aircraft, the Air Carrier Lease, the Mortgaged Property
and the Midway Property satisfactory to JPMCB in its sole discretion,
and such environmental information with respect to the Mortgaged
Property and the Midway Property as the Borrower, the Parent Company or
any other Obligor may have obtained before the date of this Agreement;
(h) JPMCB shall have received a satisfactory flood
determination with respect to the Mortgaged Property;
(i) JPMCB shall have received (a) a certificate of insurance
issued to JPMCB evidencing that the Parent Company is carrying the
insurance required by the Aircraft Security Agreement and that JPMCB
has been named as loss payee and additional named insured with respect
to such insurance, and (b) a certificate evidencing that the Parent
Company and its Subsidiaries are carrying insurance in accordance with
Section 5.05, and the insurance required by the Security Documents, and
that all of the insurance described in clauses (a) and (b) above is in
full force and effect;
(j) JPMCB shall have received proper financing statements
(Form UCC-1) naming the Borrower, the Parent Company, and Administaff
Client Services as debtors and JPMCB as secured party, describing all
of the Collateral in which the Borrower, the Parent Company or
Administaff Client Services has granted or purported to grant an
interest; together with copies of search reports in such jurisdictions
as JPMCB may reasonably request, listing all effective financing
statements that name the Borrower, the Parent Company or any of the
other Obligors as
26
debtor and any other documents or instruments as may be necessary or
desirable (in the opinion of JPMCB) to perfect JPMCB's interest in the
Collateral;
(k) JPMCB shall have received the documents required by the
Aircraft Security Agreement, a copy of the certificate of airworthiness
and the registration certificate issued by the FAA with respect to the
Aircraft, and evidence satisfactory to JPMCB that the Aircraft Security
Agreement has been filed for record with the FAA Aircraft Registry;
(l) JPMCB shall have received the Air Carrier Lease
Subordination and Attornment Agreement, duly executed by Xxxx Aviation,
Inc. and including the consent of Xxxx Aviation, Inc. to the Aircraft
Security Agreement;
(m) JPMCB shall have received the originally executed Midway
Note, duly indorsed to JPMCB; originally executed counterparts of each
of the instruments creating the Liens securing the Midway Note; the
Midway Consent; and the other documents required by the Pledge
Agreement;
(n) JPMCB shall have received such other assurances,
certificates, documents, consents or opinions as JPMCB reasonably may
require;
(o) JPMCB shall have received all fees and other amounts due
and payable on or prior to the Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by the Borrower hereunder.
(p) Due diligence of JPMCB shall not have disclosed any
information JPMCB believes has or could have a Material Adverse Effect.
(q) The
Credit Agreement dated as of May 25, 2001, by and
between the Borrower and JPMCB, as amended, shall have been terminated.
JPMCB shall notify the Borrower of the Effective Date, and such notice shall be
conclusive and binding. Notwithstanding the foregoing, the obligations of JPMCB
to make Loans hereunder shall not become effective unless each of the foregoing
conditions is satisfied (or waived pursuant to Section 8.02) at or prior to 3:00
p.m., Houston time, on June 28, 2002 (and, in the event such conditions are not
so satisfied or waived, the Commitment shall terminate at such time).
SECTION 4.02. Each Loan. The obligation of JPMCB to make any
Loan, including the first Loan, is subject to the satisfaction of the following
conditions precedent:
(a) JPMCB shall have received a Borrowing Request for such
Loan;
(b) Since December 31, 2001, there shall have been no material
adverse change in the assets, liabilities, financial condition,
business or affairs of the Parent Company and its Subsidiaries, taken
as a whole. Since December 31, 2001, there shall have occurred no
change, event, circumstance, or condition in or with respect to the
assets, liabilities, financial condition, business or affairs or the
Parent Company and its Subsidiaries, taken as a whole, which,
individually or in the aggregate with all other such changes, events,
circumstances and conditions occurring since December 31, 2001, could
reasonably be expected to result in a Material Adverse Effect;
27
(c) The representations and warranties of the Borrower, the
Parent Company and the other Obligors set forth in this Agreement and
in the other Loan Documents shall be true and correct on and as of the
date of such Loan;
(d) At the time of and immediately after giving effect to such
Loan, no Default shall have occurred and be continuing; and
(e) The making of such Loan shall not be prohibited by, or
subject JPMCB to any penalty under, any Law.
Each delivery of a Borrowing Request to JPMCB shall be deemed to constitute a
representation and warranty by the Borrower on the date thereof as to the
matters specified in paragraphs (b), (c) and (d) of this Section.
ARTICLE V
Affirmative Covenants
Until the Commitment has expired or been terminated and the
principal of and interest on each Loan and all fees and other Obligations
hereunder shall have been paid in full, the Borrower and the Parent Company
jointly and severally covenant and agree with JPMCB that:
SECTION 5.01. Financial Statements; Ratings Change and Other
Information. The Parent Company will furnish to JPMCB:
(a) within 90 days after the end of each fiscal year of the
Parent Company, its audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows as of the
end of and for such year, setting forth in each case in comparative
form the figures for the previous fiscal year, all reported on by Ernst
& Young LLP or other independent public accountants of recognized
national standing (without a "going concern" or like qualification or
exception and without any qualification or exception as to the scope of
such audit) to the effect that such consolidated financial statements
present fairly in all material respects the financial position and
results of operations of the Parent Company and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year of the Parent Company, its
consolidated balance sheet and related statements of operations,
stockholders' equity and cash flows as of the end of and for such
fiscal quarter and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for the
corresponding period or periods of (or, in the case of the balance
sheet, as of the end of) the previous fiscal year, all certified by one
of its Financial Officers as presenting fairly in all material respects
the financial position and results of operations of the Parent Company
and its consolidated Subsidiaries on a consolidated basis in accordance
with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(c) concurrently with any delivery of financial statements
under clause (a) or (b) above, a certificate of a Financial Officer of
the Parent Company (i) certifying as to whether a Default has occurred
and, if a Default has occurred, specifying the details thereof and any
action taken or proposed to be taken with respect thereto, (ii) setting
forth in the form of Exhibit D
28
reasonably detailed calculations demonstrating compliance with Sections
6.11 and 6.12, and (iii) stating whether any change in GAAP or in the
application thereof has occurred since the date of the audited
financial statements referred to in Section 3.04(a) and, if any such
change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) within 15 days after the end of each calendar month, a
certificate of a Financial Officer of the Parent Company setting forth
reasonably detailed calculations demonstrating compliance with Section
6.12 as of the end of such month;
(e) within three Business Days of the end of each month, and
within three Business Days after request therefor by JPMCB, a schedule
listing the securities held in the Qualified Accounts as of the end of
such month or the date of such request, as the case may be;
(f) promptly after such request is submitted to the
appropriate Governmental Authority, any request for waiver of any
funding standards or any extension of any amortization period with
respect to any employee benefit plan maintained for employees of the
Parent Company or any of its Affiliates;
(g) promptly after the same become publicly available, copies
of all periodic and other reports, proxy statements and other materials
filed by the Parent Company or any Subsidiary with the Securities and
Exchange Commission, or any Governmental Authority succeeding to any or
all of the functions of said Commission, or with any national
securities exchange, or distributed by the Parent Company to its
shareholders generally, as the case may be; and
(h) promptly following any request therefor, such other
information regarding the operations, business affairs and financial
condition of the Parent Company or any Subsidiary, the Mortgaged
Property, the Aircraft, the Midway Note, any other Collateral, or
compliance with the terms of this Agreement and the other Loan
Documents, as JPMCB may from time to time reasonably request.
The Borrower and the Parent Company shall be entitled to satisfy
clauses (a), (b) and (g) above insofar as the delivery of financial statements
is concerned by making available either on the XXXXX System or the Home Webpage
the financial statements specified therein within the times specified therein.
Each delivery of a financial statement pursuant to this Section shall
constitute republication of the representations and warranties set forth in
Article III (except the representation in Section 3.04(c) and the representation
set forth in the proviso at the end of Section 3.14; provided, however, that,
the foregoing notwithstanding, each delivery of a financial statement pursuant
to this Section shall constitute a representation by the Borrower and the Parent
Company that, with respect to projected financial information, such information
was prepared in good faith based upon assumptions that the Borrower and the
Parent Company believed to be reasonable at the time) and in the other Loan
Documents.
SECTION 5.02. Notices of Material Events. The Parent Company
will furnish to JPMCB prompt written notice of the following:
(a) the occurrence of any Default or Event of Default under
any Loan Document;
29
(b) the filing or commencement, or threatened filing or
commencement (known to the Parent Company), of any action, suit or
proceeding, or the assertion of any claim as a counterclaim, by or
before any arbitrator or Governmental Authority against or affecting
the Parent Company, any Subsidiary, or any Affiliate of the Parent
Company that, individually or in the aggregate, if adversely
determined, could reasonably be expected to result in a Material
Adverse Effect;
(c) the occurrence of any ERISA Event that, alone or together
with any other ERISA Events that have occurred, could reasonably be
expected to result in liability of the Parent Company and its
Subsidiaries in an aggregate amount exceeding $1,000,000;
(d) the creation or acquisition by the Parent Company or any
of its Subsidiaries of a subsidiary;
(e) the failure of the Qualified Accounts at any time to
include securities sufficient in value to permit the Borrower and the
Parent Company to comply with Section 6.11; and
(f) any development that has resulted in, or that results in,
or could reasonably be expected to result in, a Material Adverse
Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Parent Company setting
forth the details of the event or development requiring such notice and any
action taken or proposed to be taken with respect thereto.
SECTION 5.03. Existence; Conduct of Business. The Parent
Company will, and will cause each of its Subsidiaries to, do or cause to be done
all things necessary to preserve, renew and keep in full force and effect its
legal existence and its qualifications and rights in all jurisdictions in which
the nature of the business conducted or the property owned by it requires such
qualification, except where the failure to so to qualify, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect,
and the rights, licenses, permits, privileges and franchises material to the
conduct of its business; provided that the foregoing shall not prohibit any
merger, consolidation, liquidation or dissolution permitted under Section 6.03.
SECTION 5.04. Payment of Obligations. The Parent Company will,
and will cause each of its Subsidiaries to, pay its debts and obligations that,
if not paid, could reasonably be expected to result in a Material Adverse Effect
before the same shall become delinquent or in default, except where (a) the
validity or amount thereof is being contested in good faith by appropriate
proceedings, (b) the Parent Company or such Subsidiary has set aside on its
books adequate reserves with respect thereto in accordance with GAAP, and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.05. Maintenance of Properties; Insurance. The Parent
Company will, and will cause each of its Subsidiaries to, (a) keep and maintain,
or cause to be kept and maintained, all property material to the conduct of its
business in good working order and condition, ordinary wear and tear excepted,
and make all replacements and addition to its property material to its business
as may be reasonably necessary to conduct its business in the manner heretofore
conducted, and (b) maintain, or cause to be maintained, with such reputable and
financially sound insurance companies, insurance in such amounts, with such
deductibles, and against such risks, as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations, and furnish JPMCB
30
satisfactory evidence thereof promptly upon request. The insurance provisions
hereof are cumulative of the insurance provisions of the other Loan Documents.
SECTION 5.06. Books and Records; Inspection Rights. The Parent
Company will, and will cause each of its Subsidiaries to, keep proper books of
record and account in which full, true and correct entries are made of all
dealings and transactions in relation to its business and activities. The Parent
Company will, and will cause each of its Subsidiaries to, permit any
representatives designated by JPMCB, upon reasonable prior notice and during
normal business hours (at JPMCB's expense, or, if an Event of Default shall
exist, at the expense of the Borrower), to visit and inspect its properties, to
examine and make extracts from its books and records (other than confidential
records relating to employees of the Borrower), and to make and take away copies
thereof, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested; provided, that Borrower shall have the right to have a
representative present at all times, but failure or refusal by the Borrower to
provide such a representative shall not prevent or delay the exercise by JPMCB
of its rights under this Section.
SECTION 5.07. Compliance with Laws. The Parent Company will,
and will cause each of its Subsidiaries to, comply with all Laws applicable to
it or its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.08. Taxes. The Parent Company will, and will cause
each of its Subsidiaries to, file all Tax returns (including income Tax returns)
required to be filed in any jurisdiction and to pay when due all Taxes and
governmental charges of every kind upon it or against its income, profits or
property; provided, however, that nothing contained in this Section shall
require the payment or discharge of any such Tax where (a) the validity or
amount thereof is being contested in good faith by appropriate proceedings, (b)
the Parent Company or such Subsidiary has set aside on its books adequate
reserves with respect thereto in accordance with GAAP, and (c) the failure to
make payment pending such contest could not reasonably be expected to result in
a Material Adverse Effect.
SECTION 5.09. Compliance with ERISA. The Parent Company will
do, and will cause each of its Subsidiaries and each ERISA Affiliate to do, each
of the following: (a) maintain each Plan in compliance in all material respects
with the applicable provisions of ERISA, the Code and other Federal or state
law; (b) cause each Plan which is qualified under Section 401(a) of the Code to
maintain such qualification; and (c) make all required contributions to any Plan
subject to Section 412 of the Code.
SECTION 5.10. Use of Proceeds. The Borrower shall use the
proceeds of the Loans only to finance the construction of improvements that
comprise the Borrower's Centre III project located at 00000 Xxxxxxxx Xxxxxxx
Xxxxx, Xxxxxxxx, Xxxxx, and for general corporate purposes. No part of the
proceeds of any Loan will be used, whether directly or indirectly, to purchase
or carry any margin stock (as such term is used in Regulation U of the Board) or
for any other purpose which would make this credit a "purpose credit" within the
meaning of Regulation U of the Board, or for any purpose that entails a
violation of any of the Regulations of the Board, including Regulations T, U and
X. All Loans will be used for business, commercial, investment, agricultural or
other similar purpose and not for personal, family or household use.
SECTION 5.11. Security and Guaranties.
(a) The Security. The Obligations will, to the extent set
forth therein, be secured by the Security Documents.
31
(b) Agreement to Deliver Guaranties. Within five Business Days
after the creation or any permitted acquisition by the Parent Company or any of
its Subsidiaries of a Subsidiary, the Parent Company shall deliver, and cause
such Subsidiary to deliver, a Guaranty duly authorized and executed by such
Subsidiary, to the end that all Subsidiaries shall at all times (to the extent
set forth in such Guaranty) guarantee the Obligations. In connection therewith,
the Parent Company shall deliver, and shall cause each such Subsidiary to
deliver, to JPMCB with respect to each such Subsidiary, all of the materials
described in subsections (d), (e) and (j) of Section 4.01 and any other
documents or instruments as may be necessary or desirable (in the opinion of
JPMCB) in connection with such Guaranty.
(c) Perfection and Protection of Security Interests and Liens.
In addition and not by way of limitation of the foregoing, the Parent Company
will from time to time deliver, and cause each of its Subsidiaries to deliver,
to JPMCB any and all financing statements, continuation statements, extension
agreements and other documents, properly completed (and executed and
acknowledged when required) by the appropriate Person, in form and substance
satisfactory to JPMCB, which JPMCB reasonably requests for the purpose of
perfecting, confirming, or protecting any Liens or other rights in any
Collateral now or hereafter securing any Obligations. In addition to the
foregoing, the Parent Company hereby authorizes, and shall cause each of its
Subsidiaries to authorize, JPMCB to file in the appropriate filing office
pursuant to applicable Law such financing statements, assignments and
continuation statements as JPMCB shall deem necessary or desirable for the
purpose of perfecting, confirming, or protecting any Liens or other rights in
the Collateral without the signature of the Parent Company or any of its
Subsidiaries.
SECTION 5.12. Assurances. The Parent Company will, and will
cause each of its Subsidiaries to, promptly execute and deliver any and all
further agreements, documents, instruments, and other writings that JPMCB may
reasonably request to cure any defect in the execution and delivery of any one
or more of the Loan Documents or more fully to describe particular aspects of
the agreements set forth or intended to be set forth in the Loan Documents.
SECTION 5.13. Certain Changes. The Parent Company will, and
will cause each of its Subsidiaries to, notify JPMCB at least 30 days prior to
the date that the Borrower, the Parent Company or any other Obligor changes its
jurisdiction of formation or organization, its name, the location of its chief
executive office or principal place of business, or the place where it keeps its
books and records. The Parent Company will notify JPMCB at least 30 days prior
to the date that the Parent Company or any of its Subsidiaries creates or
acquires any Subsidiary.
ARTICLE VI
Negative Covenants
Until the Commitment has expired or been terminated and the
principal of and interest on each Loan and all fees and other Obligations
hereunder shall have been paid in full, the Borrower and the Parent Company
jointly and severally covenant and agree with JPMCB that:
SECTION 6.01. Indebtedness. The Parent Company will not, and
will not permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness under the Loan Documents or otherwise owing
to JPMCB;
32
(b) Indebtedness existing on the date hereof and set forth in
Schedule 6.01, and extensions, renewals, modifications and replacements
of any such Indebtedness that do not increase the outstanding principal
amount thereof;
(c) Indebtedness of the Parent Company to any Subsidiary and
of any Subsidiary to the Parent Company or any other Subsidiary; -
(d) Guarantees by the Parent Company of Indebtedness of any
Subsidiary and by any Subsidiary of Indebtedness of the Parent Company
or any other Subsidiary;
(e) Indebtedness of the Parent or any Subsidiary incurred to
finance the acquisition, construction or improvement of any fixed or
capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such
assets or secured by a Lien on any such assets prior to the acquisition
thereof, and extensions, renewals, modifications and replacements of
any such Indebtedness that do not increase the outstanding principal
amount thereof; provided that (i) such Indebtedness is incurred prior
to or within 90 days after such acquisition or the completion of such
construction or improvement and (ii) the aggregate principal amount of
Indebtedness permitted by this clause (e) shall not exceed $7,000,000
at any time outstanding;
(f) Indebtedness of the Parent Company or any Subsidiary in
connection with Swap Agreements permitted by Section 6.05;
(g) Indebtedness of the Parent Company or any Subsidiary as an
account party in respect of trade letters of credit; and
(h) other unsecured Indebtedness in an aggregate principal
amount not exceeding $5,000,000 at any time outstanding.
SECTION 6.02. Liens. The Parent Company will not, and will not
permit any Subsidiary to, create, incur, assume or permit to exist any Lien on
any property or asset now owned or hereafter acquired, or in any manner directly
or indirectly sell, assign, pledge or otherwise transfer any income or revenues
(including accounts receivable) or rights in respect of any thereof, except:
(a) Permitted Encumbrances;
(b) Liens, not for borrowed money, arising in the ordinary
course of business;
(c) Liens in favor of JPMCB or otherwise approved in writing
by JPMCB;
(d) any Lien on any property or asset of the Parent Company or
any Subsidiary existing on the date hereof and set forth in Schedule
6.02; provided that (i) such Lien shall not encumber any property or
asset of the Parent Company or any Subsidiary other than the property
or asset encumbered by it on the date of this Agreement, and (ii) such
Lien shall secure only those obligations which it secures on the date
hereof and extensions, renewals, modifications and replacements thereof
that do not increase the outstanding principal amount thereof;
(e) any Lien existing on any property or asset prior to the
acquisition thereof by the Parent Company or any Subsidiary; provided
that (i) such Lien is not created in contemplation of or in connection
with such acquisition, (ii) such Lien shall not encumber any property
or asset of
33
the Parent Company or any Subsidiary, other than the property or asset
being acquired; and (iii) such Lien shall secure only those obligations
which it secures on the date of such acquisition and extensions,
renewals, modifications and replacements thereof that do not increase
the outstanding principal amount thereof; and
(f) Liens on fixed or capital assets acquired, constructed or
improved by the Parent Company or any Subsidiary after the date hereof;
provided that (i) such Liens secure only Indebtedness permitted by
clause (e) of Section 6.01, (ii) such Liens and the Indebtedness
secured thereby are incurred prior to or within 90 days after such
acquisition or the completion of such construction or improvement,
(iii) the Indebtedness secured thereby does not exceed 100% of the cost
of acquiring, constructing or improving such fixed or capital assets,
and (iv) such Liens shall not encumber any property or assets of the
Parent Company or any Subsidiary, other than the property or asset
being acquired.
SECTION 6.03. Fundamental Changes.
(a) The Parent Company will not, and will not permit any
Subsidiary to, directly or indirectly, in any single transaction or series of
transactions,
(i) merge into or consolidate with any other Person,
(ii) permit any other Person to merge into or consolidate with
it,
(iii) sell, transfer or otherwise Dispose of (in one
transaction or in a series of transactions) any Equity Interest in any
of its Subsidiaries (in each case, whether now owned or hereafter
acquired), or any voting rights with respect to any of its
Subsidiaries, or permit any of its Subsidiaries to issue any additional
Equity Interests to any Person other than the Parent Company or the
Borrower, or
(iv) liquidate or dissolve,
provided, however, that, if at the time thereof and immediately after giving
effect thereto no Default shall have occurred and be continuing or would result
therefrom, (x) any Subsidiary may merge into or consolidate with the Borrower or
the Parent Company in a transaction in which the Borrower or the Parent Company
is the surviving entity, and (y) any Subsidiary may sell, transfer, lease or
otherwise Dispose of its assets to the Borrower or the Parent Company. No
Obligor (other than the Parent Company) shall cease to be a wholly-owned
Subsidiary. Promptly upon the request of JPMCB, the Parent Company shall deliver
to JPMCB in connection with any change permitted by this Section a written
confirmation by the Parent Company that such change, individually or in the
aggregate with all other such changes since the date of this Agreement, could
not reasonably be expected to result in a Material Adverse Effect.
(b) The Parent Company will not, and will not permit any of
its Subsidiaries to, change the nature of its business or enter into any
business which is substantially different from the business in which it is
engaged on the date of this Agreement.
SECTION 6.04. Investments. The Parent Company will not, and
will not permit any of its Subsidiaries to, make any Investment, except:
(a) Permitted Investments;
34
(b) Investments existing on the date of this Agreement
and listed on Schedule 6.04;
(c) Investments by the Parent Company or its Subsidiaries
in the Equity Interests of Subsidiaries existing on
the date of this Agreement;
(d) loans or advances made by the Parent Company to any
Subsidiary and made by any Subsidiary to the Parent
Company or any other Subsidiary;
(e) Guarantees constituting Indebtedness permitted by
Section 6.01;
(f) the acquisition or ownership by the Parent Company or
a Subsidiary of Equity Interests or debt or other
securities received in settlement of debt (created in
the ordinary course of business) owing to the Parent
Company or such Subsidiary;
(g) Loans and advances to officers and directors
permitted by Section 6.08 and loans and advances to
employees of the Parent Company and its Subsidiaries
for travel, entertainment, and moving or other
relocation expenses made in direct furtherance and in
the ordinary course of the business of the Parent
Company and its Subsidiaries;
(h) Investments consisting of payments to employee
benefit plans or compensation arrangements entered
into in the ordinary course of business of the Parent
Company and its Subsidiaries, or payments,
contributions or transactions relating to such plans;
provided, however, that the aggregate amount of
deposit payments related to the Parent Company's
health insurance plans shall not exceed, during the
term of this Agreement, $12,000,000 in the aggregate;
(i) Investments in any Person to the extent that the
consideration paid consists of capital stock of the
Parent Company; and
(j) other Investments not expressly permitted by clauses
(a) through (i) of this Section, so long as the
aggregate amount of such Investments since the date
of this Agreement does not exceed $1,000,000.
SECTION 6.05. Swap Agreements. The Parent Company will not,
and will not permit any of its Subsidiaries to, enter into any Swap Agreement,
except (a) Swap Agreements entered into to hedge or mitigate risks to which the
Parent Company or any Subsidiary has actual exposure (but not including any Swap
Agreement in respect of Equity Interests of the Parent Company or any of its
Subsidiaries), and (b) Swap Agreements entered into in order to effectively cap,
collar or exchange interest rates (from fixed to floating rates, from one
floating rate to another floating rate or otherwise) with respect to any
interest-bearing liability or investment of the Parent Company or any
Subsidiary.
SECTION 6.06. Dispositions. The Parent Company will not, and
will not permit any of its Subsidiaries to, make any Disposition or enter into
any agreement to make any Disposition, except:
(a) Dispositions of obsolete or worn out property,
whether now owned or hereafter acquired, in the
ordinary course of business;
(b) Dispositions of inventory in the ordinary course of
business;
35
(c) Dispositions of property by any Subsidiary to the
Parent Company or the Borrower, or Dispositions of
property other than Collateral by any Subsidiary
other than the Borrower to another Subsidiary;
(d) Dispositions permitted by Section 6.03;
(e) Dispositions consisting of deposit payments related
to the Parent Company's health insurance plans, not
to exceed, during the term of this Agreement,
$12,000,000 in the aggregate;
(f) if no Default or Event of Default exists either
before or after such Disposition or would result
therefrom, Dispositions for charitable purposes in an
aggregate amount not to exceed $100,000 before the
Maturity Date; and
(g) if no Default or Event of Default exists either
before or after such Disposition or would result
therefrom, other sales of assets (other than
Collateral) in an aggregate amount not to exceed
$2,500,000 in any twelve-month period;
provided, however, that any Disposition pursuant to clauses (a), (b), (d) or (g)
shall be for fair market value.
SECTION 6.07. Restricted Payments.
(a) The Parent Company will not, and will not permit any of
its Subsidiaries to, declare or make, or agree to pay or make, directly or
indirectly, any Restricted Payment or incur any obligation to do so, except (i)
the Parent Company may declare and pay dividends with respect to its Equity
Interests payable solely in additional shares of its common stock, (ii)
Subsidiaries may declare and pay dividends ratably with respect to their Equity
Interests, (iii) the Parent Company may make Restricted Payments pursuant to and
in accordance with stock option plans or other benefit plans for management or
employees of the Borrower and its Subsidiaries, and (iv) provided that no
Default has occurred and is continuing, the Parent Company may from time to time
repurchase shares of its capital stock, provided that the aggregate amount
expended for transactions permitted by this clause (iv) shall not exceed
$15,000,000 in any twelve-month period.
(b) The Parent Company will not, and will not permit any of
its Subsidiaries to, make or agree to pay or make, directly or indirectly, any
payment or other distribution (whether in cash, securities or other property) of
or in respect of principal of or interest on any Indebtedness, or any payment or
other distribution (whether in cash, securities or other property), including
any sinking fund or similar deposit, on account of the purchase, redemption,
retirement, acquisition, cancellation or termination of any Indebtedness,
except:
(i) payment of Indebtedness created under the Loan Documents;
(ii) payment of regularly scheduled interest and principal
payments as and when due in respect of any Indebtedness permitted by
the Loan Documents;
(iii) refinancings of Indebtedness to the extent permitted by
Section 6.01; and
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(iv) payment of secured Indebtedness that becomes due as a
result of the voluntary sale or transfer of the property or assets
securing such Indebtedness.
SECTION 6.08. Transactions with Affiliates. Except for
existing arrangements and modifications to such arrangements in the ordinary
course of business, the Parent Company will not, and will not permit any of its
Subsidiaries to, sell, lease or otherwise transfer any property or assets to, or
purchase, lease or otherwise acquire any property or assets from, or otherwise
engage in any other transactions with, any of its Affiliates, except (a) in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Parent Company or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions not otherwise
prohibited or restricted by this Agreement or the other Loan Documents between
or among the Parent Company and its Subsidiaries and not involving any other
Affiliate, (c) any Restricted Payment permitted by Section 6.07, (d)
transactions not otherwise prohibited or restricted by this Agreement or the
other Loan Documents between or among the Parent Company and its Subsidiaries
and their respective employee benefit plans and related trusts and not involving
any other Affiliate; and (e) transactions not otherwise prohibited or restricted
by this Agreement or the other Loan Documents among the Parent Company and its
consolidated Subsidiaries.
SECTION 6.09. Restrictive Agreements. The Parent Company will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the Parent
Company or any Subsidiary to create, incur or permit to exist any Lien upon any
of its property or assets, or (b) the ability of any Subsidiary to pay dividends
or other distributions with respect to any shares of its capital stock or other
Equity Interests or to make or repay loans or advances to the Parent Company or
any other Subsidiary or to Guarantee Indebtedness of the Parent Company or any
other Subsidiary; provided that (i) the foregoing shall not apply to
restrictions and conditions imposed by Law or by this Agreement or any other
Loan Document, (ii) the foregoing shall not apply to restrictions and conditions
existing on the date hereof identified on Schedule 6.09 (but shall apply to any
extension or renewal of, or any amendment or modification expanding the scope
of, any such restriction or condition), (iii) the foregoing shall not apply to
customary restrictions and conditions contained in agreements relating to the
sale of a Subsidiary pending such sale, provided such restrictions and
conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (iv) clause (a) of the foregoing shall not apply to
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or conditions
apply only to the property or assets securing such Indebtedness, and (v) clause
(a) of the foregoing shall not apply to customary provisions in leases and other
contracts restricting the assignment thereof.
SECTION 6.10. Subsidiary Indebtedness. The Parent Company will
not permit the aggregate principal amount of Indebtedness of its Subsidiaries
(excluding any Indebtedness of the Borrower and any Indebtedness of a Subsidiary
owed to the Parent Company or the Borrower, but including any Guarantee, other
than the Guaranties, by a Subsidiary of Indebtedness of the Parent Company or
the Borrower) outstanding at any time to exceed $1,000,000.
SECTION 6.11. Liquid Investments. The Parent Company shall
maintain, and shall cause the Borrower to maintain, at all times during each of
the months shown, an aggregate of Liquid Investments for both such Persons not
less than the following amount for such month:
June, July and August, 2002 $ 7,500,000
September and October, 2002 $12,000,000
November and December, 2002 $15,000,000
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SECTION 6.12. Funded Debt to Consolidated EBITDA. The Parent
Company shall not at any time permit the ratio of its Funded Debt to its
Consolidated EBITDA for the four fiscal quarter years then most recently ended
to exceed 1.50 to 1.00.
ARTICLE VII
Events of Default
Any of the following events shall constitute an Event of
Default:
(a) the Borrower shall fail to pay any principal of any Loan
when and as the same shall become due and payable, whether at the due
date thereof or at a date fixed for prepayment thereof or otherwise; or
the Borrower shall fail to pay any interest on any Loan or any fee or
other Obligation, or the Parent Company or any other Obligor shall fail
to pay any amount under its Guaranty or any other Obligation owing by
it, and, in each case, such failure shall continue for a period of
three days;
(b) any written representation or warranty made or deemed made
by or on behalf of the Borrower, the Parent Company, or any other
Obligor in or in connection with this Agreement or any other Loan
Document or any amendment or modification hereof or thereof or any
waiver hereunder or thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in
connection with this Agreement or any other Loan Document or any
amendment or modification hereof or thereof or any waiver hereunder or
thereunder, shall prove to have been incorrect, false or misleading in
any material respect when made or deemed made;
(c) the Borrower or the Parent Company shall fail to observe
or perform any covenant, condition or agreement contained in Section
5.01(d), Section 5.01(e), Section 5.02, Section 5.03 (with respect to
existence), Section 5.06 or Section 5.08, or in Article VI;
(d) the Borrower or the Parent Company shall fail to observe
or perform any covenant, condition or agreement contained in this
Agreement (other than those specified in clause (a), (b) or (c) of this
Article), and such failure shall continue unremedied for a period of 30
consecutive days after notice thereof from JPMCB to the Borrower;
(e) the Parent Company, the Borrower or any other Obligor
shall fail to make any payment (whether of principal or interest and
regardless of amount) in respect of any Material Indebtedness, when and
as the same shall become due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) and
such failure shall continue after the applicable grace period, if any,
specified in the agreement or instrument relating to such indebtedness;
(f) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity (other than
by a regularly scheduled required prepayment or as a result of the
giving of notice of a voluntary prepayment) or that enables or permits
(with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent
on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (f)
shall not apply to secured Indebtedness that
38
becomes due as a result of the voluntary sale or transfer of the
property or assets securing such Indebtedness;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed seeking (i) liquidation,
reorganization or other relief in respect of the Borrower, the Parent
Company or any Subsidiary or any of their respective debts, or of all
or any substantial part of their respective assets, under any Federal,
state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect or (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for
the Borrower, the Parent Company or any Subsidiary or for all or any
substantial part of the assets of the Borrower, the Parent Company or
any Subsidiary, and, in any such case described in clauses (i) or (ii),
the Borrower, the Parent Company or such Subsidiary shall indicate
approval thereof, consent thereto or acquiescence therein, or such
proceeding or petition shall continue undismissed for 60 days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Borrower, the Parent Company or any Subsidiary shall
(i) voluntarily commence any proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or
hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition
described in clause (g) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator,
conservator or similar official for the Borrower, the Parent Company or
any Subsidiary or for all or any substantial part of the assets of the
Borrower, the Parent Company or any Subsidiary, (iv) file an answer
admitting the material allegations of a petition filed against it in
any such proceeding, (v) make a general assignment for the benefit of
creditors, or (vi) take any action for the purpose of effecting any of
the foregoing;
(i) the Borrower, the Parent Company or any Subsidiary shall
become unable, admit in writing its inability or fail generally to pay
its debts as they become due; or suffer any writ of attachment or
execution or any similar process to be issued or levied against it or
any substantially part of its property which is not released, stayed,
bonded or vacated within 60 days after its issue or levy;
(j) one or more judgments for the payment of money in an
aggregate amount of $2,000,000 or more shall be rendered against the
Borrower, the Parent Company, any Subsidiary or any combination
thereof, and the same shall remain undischarged for a period of 30
consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to
attach or levy upon any assets of the Borrower, the Parent Company or
any Subsidiary to enforce any such judgment;
(k) an ERISA Event shall have occurred that, in the opinion of
JPMCB, when taken together with all other ERISA Events that have
occurred since the Effective Date, could reasonably be expected to
result in liability of the Parent Company and its Subsidiaries in an
aggregate amount exceeding $1,000,000;
(l) (x) the sale, transfer, conveyance, encumbrance,
abandonment, condemnation, partition or change in ownership (except as
otherwise expressly permitted by the relevant Security Documents) of
(i) any of the Collateral consisting of real estate or intangible
personal property, or (ii) any of the Collateral consisting of tangible
personal property (other than fixtures disposed of as permitted by
Section 6.06(a)) that (together with all other such
39
Collateral sold, transferred, conveyed, encumbered, abandoned,
condemned, or partitioned, or with respect to which a change in
ownership shall have occurred, since the date of this Agreement) has a
market value of $100,000 or more, whether in one transaction or a
series of transactions, without Secured Party's prior written consent,
or (y) the making of any levy, seizure, garnishment, sequestration or
attachment of any Collateral or on any Collateral;
(m) any order shall be entered in any proceeding against the
Borrower, the Parent Company or any Subsidiary decreeing the
dissolution, liquidation or split-up thereof, and such order shall
remain in effect for longer than the appeal time provided by applicable
law;
(n) the Borrower, the Parent Company or any other Obligor
shall be prevented or relieved by any Governmental Authority from
performing or observing any material term, covenant or condition of any
Loan Document;
(o) the Borrower, the Parent Company or any Subsidiary shall
be in violation of any Environmental Law, or any property of any such
Person shall be subject to any one or more remediation obligations or
Environmental Liabilities, which causes the Borrower, the Parent
Company and its Subsidiaries or any combination thereof to incur
Environmental Liabilities, individually or in the aggregate, in excess
of $1,000,000;
(p) the Borrower, the Parent Company or any Subsidiary shall
have concealed, removed, or permitted to be concealed or removed, any
part of its property, with intent to hinder, delay or defraud any of
its creditors, or made or suffered a transfer of any of its property
which may be fraudulent under any bankruptcy, fraudulent conveyance or
similar law, or shall have made any transfer of its property to or for
the benefit of a creditor at a time when other creditors similarly
situated have not been paid, or, while insolvent, shall have suffered
or permitted any creditor to obtain a lien upon any of its property
through legal proceedings or distraint which is not vacated within the
appeal time provided by applicable law;
(q) any event of default described in any Security Document,
any Guaranty, or any other Loan Document shall occur, or any material
provision of any Security Document, any Guaranty, or any other Loan
Document shall at any time for any reason cease to be valid, binding
and enforceable against any Obligor that is an obligor thereunder;
(r) any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of JPMCB or
satisfaction in full of all the Obligations, ceases to be in full force
and effect, or is declared by a court of competent jurisdiction to be
null and void, invalid or unenforceable in any respect; or the
Borrower, the Parent Company or any other Obligor takes any action in
furtherance of any of the foregoing or denies that it has any or
further liability or obligation under any Loan Document, or purports to
revoke, terminate or rescind any Loan Document; or
(s) a Change in Control shall occur.
If an Event of Default occurs, then, and in every such event (other than an
event with respect to the Borrower described in clause (g) or (h) of this
Article), and at any time thereafter during the continuance of such event, JPMCB
may take any or all of the following actions, at the same or different times:
(i) by notice to the Borrower, terminate the Commitment, and thereupon the
Commitment shall terminate immediately, (ii) without notice of any kind to the
Borrower, the Parent Company or any other Obligor,
40
and without notice of intention to accelerate or notice of acceleration, all of
which are WAIVED by the Borrower and the Parent Company, declare the Loans and
all other Obligations then outstanding to be due and payable in whole (or in
part, in which case any principal not so declared to be due and payable may
thereafter be declared to be due and payable), and thereupon the principal of
the Loans so declared to be due and payable, together with all accrued and
unpaid interest thereon and all accrued and unpaid fees and all other accrued
and unpaid Obligations of the Borrower, the Parent Company and the other
Obligors hereunder and under the other Loan Documents, shall become due and
payable immediately, without presentment, demand, protest or other notice of any
kind; (iii) without notice of any kind to the Borrower, the Parent Company or
any other Obligor, exercise all rights and remedies available to it under the
Loan Documents or applicable Law, including, without limitation, the enforcement
of its rights either by suit in equity, or by action at law, or by other
appropriate proceedings, whether for the specific performance (to the extent
permitted by law) or any covenant or agreement contained in this Agreement or in
the Note or any other Loan Document or in aid of the exercise of any power
granted in this Agreement or in the Note or any other Loan Document; and (iv)
without notice of any kind to the Borrower, the Parent Company or any other
Obligor, set off, in any order, against the Obligations any debt owing by JPMCB
to the Borrower, the Parent Company or any other Obligor (whether such debt is
owed individually or jointly), including but not limited to any deposit account,
which right is hereby granted by the Borrower and the Parent Company to JPMCB;
and in case of any event with respect to the Borrower described in clause (g) or
(h) of this Article, the Commitment shall automatically terminate and the
principal of the Loans then outstanding, together with all accrued and unpaid
interest thereon and all accrued and unpaid fees and other accrued and unpaid
Obligations of the Borrower, the Parent Company and the other Obligors hereunder
and under the other Loan Documents, shall automatically become due and payable,
without presentment, demand, protest or other notice of any kind, including but
not limited to notice of intent to accelerate and notice of acceleration, all of
which are hereby WAIVED by the Borrower and the Parent Company, and thereupon
JPMCB may exercise any or all of its rights referred to in clauses (iii) and
(iv) above.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Notices.
(a) Except in the case of notices and other communications
expressly permitted to be given by telephone (and subject to paragraph (b)
below), all notices and other communications provided for herein shall be in
writing and shall be delivered by hand or overnight courier service, mailed by
certified or registered mail, return receipt requested, or sent by facsimile
transmission, as follows:
(i) if to the Borrower or the Parent Company, to it at:
00000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000-0000
Fax: (000) 000-0000
Email: xxxxxxx_xxxxx@xxxxxxxxxxx.xxx
41
with a copy to:
Xxxx X. Xxxxxxx, XX
Vice President, Legal, General Counsel and Secretary
00000 Xxxxxxxx Xxxxxxx Xxxxx
Xxxxxxxx, Xxxxx 00000-0000
Fax: (000) 000-0000
Email: xxxx_xxxxxxx@xxxxxxxxxxx.xxx
(ii) if to JPMCB, to:
000 Xxxx Xxxxxx, X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attn: Mr. Xxxxx Xxxxx
Fax: (000) 000-0000
Email: xxxxxx.xxxxx@xxxxxxxx.xxx
(b) Except for notices required by Article II, which shall be
deemed given only when actually received by JPMCB, all such notices and other
communications shall be deemed to be made upon the earlier to occur of (i)
actual receipt by the intended recipient and (ii) (A) if delivered by hand, when
delivered; (B) if delivered by overnight courier, on the Business Day following
deposit with such courier; (C) if delivered by mail, three Business Days after
deposit in the mails, postage prepaid; and (D) if delivered by facsimile, when
sent and written confirmation of receipt has been received.
(c) Notices and other communications to JPMCB hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by JPMCB; provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by JPMCB. JPMCB or the Borrower
may, in its discretion, agree to accept notices and other communications to it
hereunder by electronic communications pursuant to procedures approved by it;
provided that approval of such procedures may be limited to particular notices
or communications.
(d) Any party hereto may change its address or telecopy number
for notices and other communications hereunder by notice to the other parties
hereto.
SECTION 8.02. Waivers; Amendments.
(a) No waiver of any Default or Event of Default shall be a
waiver of any other Default or Event of Default. No failure or delay by JPMCB in
exercising any right or power hereunder or under any other Loan Document shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such right or power, or any abandonment or discontinuance of steps to enforce
such a right or power, preclude any other or further exercise thereof or the
exercise of any other right or power. The rights and remedies of JPMCB hereunder
are cumulative and are not exclusive of any rights or remedies that it would
otherwise have. No waiver of any provision of this Agreement or any other Loan
Document or consent to any departure by the Borrower, the Parent Company or any
other Obligor therefrom shall in any event be effective unless the same shall be
permitted by paragraph (b) of this Section, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice to or demand on any Person shall entitle any Person to any or
notice or demand in similar or other circumstances. Without limiting the
generality of the foregoing, the making of a Loan shall not be construed as a
waiver of any Default, regardless of whether JPMCB may have had notice or
knowledge of such Default at the time.
42
(b) Neither this Agreement or any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except pursuant
to an agreement or agreements in writing by each Person to be bound thereby.
SECTION 8.03. Expenses; Indemnity; Damage Waiver.
(a) The Borrower shall pay on demand (i) all out-of-pocket
expenses incurred by JPMCB and its Affiliates, including the reasonable fees,
charges and disbursements of counsel for JPMCB, in connection with the
development, negotiation, preparation, execution, and administration of this
Agreement and the other Loan Documents or any amendments, modifications or
waivers of the provisions hereof or thereof (whether or not the transactions
contemplated hereby or thereby shall be consummated), and (ii) all out-of-pocket
expenses incurred by JPMCB, including the fees, charges and disbursements of any
counsel for JPMCB in connection with the enforcement or protection of its rights
in connection with this Agreement, including its rights under this Section, or
in connection with any other Loan Document, or in connection with the Loans made
hereunder, including all such out-of-pocket expenses incurred during any
workout, restructuring or negotiations in respect of such Loans. The obligations
of the Borrower under this Section shall survive the termination of this
Agreement.
(b) TO THE FULLEST EXTENT PERMITTED BY LAW, THE BORROWER AND
THE PARENT COMPANY, JOINTLY AND SEVERALLY, SHALL INDEMNIFY JPMCB AND EACH
RELATED PARTY OF JPMCB (EACH SUCH PERSON BEING CALLED AN "INDEMNITEE") FROM, AND
HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, COSTS,
EXPENSES (INCLUDING COSTS OF INVESTIGATION AND DEFENSE, LEGAL FEES AND AMOUNTS
PAID IN SETTLEMENT), CLAIMS OR DAMAGES TO WHICH ANY OF THEM MAY BECOME SUBJECT,
REGARDLESS OF AND INCLUDING LOSSES, LIABILITIES, COSTS, EXPENSES, CLAIMS AND
DAMAGES ARISING FROM THE SOLE, ORDINARY OR CONTRIBUTORY NEGLIGENCE OF THE PERSON
TO BE INDEMNIFIED, INCURRED BY OR ASSERTED AGAINST ANY INDEMNITEE ARISING OUT
OF, IN CONNECTION WITH, OR AS A RESULT OF (i) THE EXECUTION OR DELIVERY OF THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY AGREEMENT OR INSTRUMENT CONTEMPLATED
HEREBY OR THEREBY, THE PERFORMANCE BY THE PARTIES HERETO AND THE OTHER OBLIGORS
OF THEIR RESPECTIVE OBLIGATIONS HEREUNDER AND UNDER THE OTHER LOAN DOCUMENTS, OR
THE CONSUMMATION OF THE TRANSACTIONS OR ANY OTHER TRANSACTIONS CONTEMPLATED
HEREBY, (ii) ANY LOAN OR THE USE OF THE PROCEEDS THEREOF, (iii) ANY ACTUAL OR
ALLEGED PRESENCE OR RELEASE OF HAZARDOUS MATERIALS ON OR FROM ANY PROPERTY OWNED
OR OPERATED BY THE PARENT COMPANY OR ANY OF ITS SUBSIDIARIES, OR ENVIRONMENTAL
LIABILITY RELATED IN ANY WAY TO THE PARENT COMPANY OR ANY OF ITS SUBSIDIARIES,
ARISING IN CONNECTION WITH OR BY VIRTUE OF THE TRANSACTIONS, (iv) ANY ACTUAL OR
PROSPECTIVE CLAIM, LITIGATION, INVESTIGATION OR PROCEEDING RELATING TO ANY OF
THE FOREGOING, WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY AND
REGARDLESS OF WHETHER ANY INDEMNITEE IS A PARTY THERETO; PROVIDED THAT SUCH
INDEMNITY SHALL NOT, AS TO ANY INDEMNITEE, BE AVAILABLE TO THE EXTENT THAT SUCH
LOSSES, CLAIMS, DAMAGES, LIABILITIES OR RELATED EXPENSES ARE DETERMINED BY A
FINAL NONAPPEALABLE JUDGMENT OF A COURT OF COMPETENT JURISDICTION HAVE RESULTED
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNITEE.
(c) All amounts due under this Section shall be due not later
than 15 days after written demand therefor.
SECTION 8.04. Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby, except that neither the Borrower nor the Parent
Company may assign or otherwise transfer any of its rights or obligations
43
hereunder without the prior written consent of JPMCB (and any attempted
assignment or transfer by the Borrower or the Parent Company without such
consent shall be null and void). Nothing in this Agreement or any other Loan
Document, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, the other Obligors, the successors and assigns
of the parties to this Agreement and the other Loan Documents permitted hereby,
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of JPMCB) any
legal or equitable right, remedy or claim under or by reason of this Agreement.
(b) Except as provided elsewhere in this Section, JPMCB may
not assign its rights and obligations under this Agreement (including its
Commitment and the Loans and other Obligations at the time owing to it) and the
other Loan Documents without the consent of the Borrower, which consent shall
not be unreasonably withheld.
(c) (i) JPMCB may, without the consent of the Borrower, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of JPMCB's rights and obligations under this Agreement (including
all or a portion of its Commitment and the Loans and other Obligations owing to
it) and the other Loan Documents; provided that (A) JPMCB's obligations under
this Agreement shall remain unchanged by such sale, (B) JPMCB shall remain
solely responsible to the Borrower for the performance of such obligations, and
(C) the Borrower shall continue to deal solely and directly with JPMCB in
connection with this Agreement and the other Loan Documents. Any agreement or
instrument pursuant to which JPMCB sells such a participation shall provide that
JPMCB shall retain the sole right to enforce this Agreement and the other Loan
Documents and to approve any amendment, modification or waiver of any provision
of this Agreement and the other Loan Documents; provided that such agreement or
instrument may provide that JPMCB will not, without the consent of the
Participant, agree to any amendment, modification or waiver described in the
first proviso to Section 8.02(b) that affects such Participant. Subject to
paragraph (c)(ii) of this Section, the Borrower agrees that each Participant
shall be entitled to the benefits of Sections 2.12, 2.13 and 2.14 to the same
extent as if it were JPMCB. To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 8.09 as though it were JPMCB.
(ii) A Participant shall not be entitled to receive any
greater payment under Section 2.12 or 2.14 than JPMCB would have been entitled
to receive with respect to the participation sold to such Participant, unless
the sale of the participation to such Participant is made with the Borrower's
prior written consent.
(d) JPMCB may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement and the other Loan
Documents to secure obligations of JPMCB, including any pledge or assignment to
secure obligations to a Federal Reserve Bank, and this Section shall not apply
to any such pledge or assignment of a security interest; provided that no such
pledge or assignment of a security interest shall release JPMCB from any of its
obligations hereunder or substitute any such pledgee or assignee for JPMCB as a
party hereto.
(e) JPMCB may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section,
disclose to the assignee or participant or proposed assignee or participant any
information relating to the Borrower, the Parent Company or any other Obligor
furnished to JPMCB by or on behalf of the Borrower, the Parent Company or such
other Obligor.
(f) All transfers of any interest in any Loan shall be in
compliance with all federal and state securities laws, if applicable.
Notwithstanding the foregoing sentence, however, the parties to
44
this Agreement do not intend that any transfer under this Section be construed
as a "purchase" or "sale" of a "security" within the meaning of any applicable
federal or state securities laws.
SECTION 8.05. Survival. All covenants, agreements,
representations and warranties made by or on behalf of the Borrower, the Parent
Company or both in or in connection with this Agreement or any of the other Loan
Documents and in the certificates or other instruments delivered in connection
with or pursuant to this Agreement or made by the Borrower, the Parent Company
or any other Obligor in any Loan Document shall be considered to have been
relied upon by JPMCB and shall survive the execution and delivery of this
Agreement and the other Loan Documents and the making of any Loans, regardless
of any investigation made by JPMCB or on its behalf and notwithstanding that
JPMCB may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other Obligations under this
Agreement or any other Loan Document is outstanding and unpaid and so long as
the Commitment has not expired or terminated. The provisions of Sections 2.12,
2.13, 2.14, 8.03 and 8.06 shall survive and remain in full force and effect
regardless of the consummation of the Transactions contemplated hereby, the
repayment of the Loans and the other Obligations, the expiration or termination
of the Commitment or the termination of this Agreement or any provision hereof.
SECTION 8.06. Payments Set Aside. To the extent that the
Borrower, the Parent Company, or any other Obligor makes a payment to JPMCB, or
JPMCB exercises its right of set-off, or recovers any amount from the
Collateral, and such payment or the proceeds of such set-off or Collateral, or
any part thereof, is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required (including pursuant to any settlement
entered into by JPMCB in its discretion) to be repaid to a trustee, receiver or
any other party, in connection with any proceeding under any bankruptcy or
insolvency law or otherwise, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied shall be revived
and continued in full force and effect as if such payment had not been made or
such set-off had not occurred.
SECTION 8.07. Counterparts; Execution by Facsimile. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. Loan Documents may
be transmitted and/or signed by facsimile. The effectiveness of any such
documents and signatures shall, subject to applicable Law, have the same force
and effect as manually-signed originals and shall be binding on the Borrower,
the Parent Company and all other Obligors and JPMCB. JPMCB may also require that
any such documents and signatures be confirmed by a manually-signed original
thereof; provided, however, that the failure to request or deliver the same
shall not limit the effectiveness of any facsimile document or signature.
SECTION 8.08. Severability. Any provision of this Agreement
held to be invalid, illegal or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such invalidity, illegality
or unenforceability without affecting the validity, legality and enforceability
of the remaining provisions hereof; and the invalidity of a particular provision
in a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 8.09. Right of Setoff. Each of the Borrower and the
Parent Company grants to JPMCB a right of setoff against every deposit account
and all personal property at any time in JPMCB's possession, whether tangible or
intangible, and any claim of the Borrower or the Parent Company (whether
individual, joint, several or otherwise) against JPMCB, now or hereafter
existing. This right of setoff is not exclusive. In addition to JPMCB's right of
setoff and as further security for the
45
Obligations, each of the Borrower and the Parent Company hereby grants JPMCB a
security interest in all deposits and all other accounts and property of such
Person now or hereafter on deposit with or held by JPMCB and all other sums at
any time credited by or owing from JPMCB to such Person. These rights and
remedies of JPMCB are in addition to other rights and remedies (including,
without limitation, other rights of setoff) which JPMCB may have.
SECTION 8.10. GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
TEXAS
WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF LAW.
(b) EACH OF THE BORROWER AND THE PARENT COMPANY HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF THE DISTRICT COURTS OF THE STATE OF
TEXAS SITTING
IN XXXXXX COUNTY,
TEXAS, AND OF THE UNITED STATES DISTRICT COURT OF THE SOUTHERN
DISTRICT OF
TEXAS, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN SUCH TEXAS STATE OR, TO THE EXTENT PERMITTED BY LAW, IN SUCH
FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY
SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.
NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT JPMCB MAY OTHERWISE HAVE
TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE TRANSACTION AGAINST THE BORROWER, THE PARENT COMPANY OR ANY
OTHER OBLIGOR OR ANY OF THEIR RESPECTIVE PROPERTIES IN THE COURTS OF ANY
JURISDICTION.
(c) EACH OF THE BORROWER AND THE PARENT COMPANY HEREBY
IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT IT MAY LEGALLY AND
EFFECTIVELY DO SO, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTION IN ANY COURT
REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, THE DEFENSE OF AN
INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH
COURT.
(d) TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, NEITHER
JPMCB, THE BORROWER, THE PARENT COMPANY OR ANY OTHER OBLIGOR, NOR ANY RELATED
PARTY OF JPMCB, THE BORROWER, THE PARENT COMPANY OR ANY OTHER OBLIGOR, SHALL
HAVE ANY LIABILITY WITH RESPECT TO, AND JPMCB AND THE BORROWER, THE PARENT
COMPANY AND EACH OTHER OBLIGOR WAIVES, RELEASES, AND AGREES NOT TO XXX ANY OF
THEM UPON, ANY CLAIM FOR ANY SPECIAL, INDIRECT, INCIDENTAL AND CONSEQUENTIAL
DAMAGES SUFFERED OR INCURRED BY SUCH PERSON IN CONNECTION WITH, ARISING OUT OF,
OR IN ANY WAY RELATED TO, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
EACH OF JPMCB, THE BORROWER, THE PARENT COMPANY AND EACH OTHER OBLIGOR WAIVES,
RELEASES, AND AGREES NOT TO XXX EACH OTHER OR ANY OF THEIR RELATED PARTIES FOR
PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM IN CONNECTION WITH, ARISING OUT OF, OR
IN ANY WAY RELATED TO, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR ANY
OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.
(e) Nothing herein shall be considered a waiver of the right
or protections afforded Bank by 12 U.S.C. 91, Texas Banking Code Art. 342-609 or
any similar statute.
46
(f) Each party agrees that any other party may proceed against
any other liable Person, jointly or severally, or against one or more of them,
less than all, without impairing rights against any other liable Persons. A
party shall not be required to join the principal obligor or any other Person
(e.g., sureties or guarantors) in any proceeding against any Person. A party may
release or settle with one or more liable Persons as the party deems fit without
releasing or impairing right to proceed against any Persons not so released.
SECTION 8.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR
ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT
OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL
WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 8.12. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and shall not affect the construction of, or be taken
into consideration in interpreting, this Agreement.
SECTION 8.13. Confidentiality. JPMCB agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its and its Affiliates' directors, officers, employees
and agents, including accountants, legal counsel and other advisors (it being
understood that the Persons to whom such disclosure is made will be informed of
the confidential nature of such Information and instructed to keep such
Information confidential), (b) to the extent requested by any regulatory
authority, (c) to the extent required by applicable laws or regulations or by
any subpoena or similar legal process, (d) to any other party to this Agreement
or any other Loan Document, (e) in connection with the exercise of any remedies
hereunder or under any other Loan Document or any suit, action or proceeding
relating to this Agreement or any other Loan Document or the enforcement of
rights hereunder or thereunder, (f) subject to an agreement containing
provisions substantially the same as those of this Section, to any assignee of
or Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or any other Loan Document, or to a
Federal Reserve Bank in connection with a pledge pursuant to Section 8.04(d),
(g) with the consent of the Borrower or the Parent Company or (h) to the extent
such Information (i) becomes publicly available other than as a result of a
breach of this Section or (ii) becomes available to JPMCB on a nonconfidential
basis from a source other than the Parent Company or any of its Subsidiaries.
For the purposes of this Section, "Information" means all information received
from the Borrower or the Parent Company or any of its Subsidiaries relating to
the Borrower, the Parent Company, any Subsidiary, or any of their respective
businesses, other than any such information that is available to JPMCB on a
nonconfidential basis prior to disclosure by the Borrower, the Parent Company or
such Subsidiary; provided that, in the case of information received from the
Borrower, the Parent Company or a Subsidiary after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the
47
same degree of care to maintain the confidentiality of such Information as such
Person would accord to its own confidential information.
SECTION 8.14. Limitation of Interest. The parties to the Loan
Documents intend to strictly comply with all applicable laws, including
applicable usury laws. Accordingly, the provisions of this Section 8.14 shall
govern and control over every other provision of any Loan Document which
conflicts or is inconsistent with this Section 8.14, even if such provision
declares that it controls. As used in this Section 8.14, the term "interest"
includes the aggregate of all charges, fees, benefits or other compensation
which constitute interest under applicable law; provided that, to the maximum
extent permitted by applicable law, (a) any non-principal payment shall be
characterized as an expense or as compensation for something other than the use,
forbearance or detention of money and not as interest and (b) all interest at
any time contracted for, taken, reserved, retained, charged or received shall be
amortized, prorated, allocated and spread during the full term of the Loans and
the Commitment. In no event shall the Borrower or any other Person be obligated
to pay, or JPMCB have any right or privilege to reserve, take, receive or
retain, any interest in excess of the maximum amount of nonusurious interest
permitted under applicable law. None of the terms and provisions contained in
any Loan Document which directly or indirectly relate to interest shall ever be
construed without reference to this Section 8.14, or be construed to create a
contract to pay for the use, forbearance or detention of money at an interest
rate in excess of the maximum nonusurious rate from time to time permitted by
applicable law (the "Highest Lawful Rate"). On each day, if any, that the
interest rate (the "Stated Rate") called for under any Loan Document exceeds the
Highest Lawful Rate, the rate at which interest shall accrue shall automatically
be fixed by operation of this sentence at the Highest Lawful Rate for that day,
and shall remain fixed at the Highest Lawful Rate for each day thereafter until
the total amount of interest accrued equals the total amount of interest which
would have accrued if there were no such ceiling rate as imposed by this
sentence. Thereafter, interest shall accrue at the Stated Rate unless and until
the Stated Rate again exceeds the Highest Lawful Rate, whereupon the provisions
of the immediately preceding sentence shall again automatically operate to limit
the interest accrual rate. The daily interest rates to be used in calculating
interest at the Highest Lawful Rate shall be determined by dividing the
applicable Highest Lawful Rate per annum by the number of days in the calendar
year for which such calculation is being made. If the term of any of the Loans
is shortened by reason of acceleration of maturity as a result of any Default or
by any other cause, or by reason of any required or permitted prepayment, and if
for that (or any other) reason JPMCB at any time, including the stated maturity,
is owed or receives, reserves or takes (and/or has received, reserved or taken)
interest in excess of interest calculated at the Highest Lawful Rate, then and
in any such event all of any such excess interest shall be canceled
automatically as of the date of such acceleration, prepayment or other event
which produces the excess, and, if such excess interest has been paid to JPMCB,
it shall be credited pro tanto against the then-outstanding principal balance of
the Borrower's obligations to JPMCB, effective as of the date or dates when the
event occurs which causes it to be excess interest, until such excess is
exhausted or all of such principal has been fully paid and satisfied, whichever
occurs first, and any remaining balance of such excess shall be promptly
refunded to its payor.
SECTION 8.15. RELEASE OF CLAIMS. EACH OF THE BORROWER AND THE
PARENT COMPANY HEREBY RELEASES, DISCHARGES AND ACQUITS FOREVER JPMCB AND ITS
RELATED PARTIES (IN EACH CASE, PAST, PRESENT OR FUTURE) FROM ANY AND ALL CLAIMS
EXISTING AS OF THE DATE HEREOF. AS USED HEREIN, THE TERM "CLAIM" MEANS ANY AND
ALL LIABILITIES, CLAIMS, DEFENSES, DEMANDS, ACTIONS, CAUSES OF ACTION,
JUDGMENTS, DEFICIENCIES, INTEREST, LIENS, COSTS OR EXPENSES (INCLUDING COURT
COSTS, PENALTIES, ATTORNEYS' FEES AND DISBURSEMENTS, AND AMOUNTS PAID IN
SETTLEMENT) OF ANY KIND AND CHARACTER WHATSOEVER, INCLUDING CLAIMS FOR USURY,
BREACH OF CONTRACT, BREACH OF COMMITMENT, NEGLIGENT MISREPRESENTATION, FRAUD OR
FAILURE TO ACT IN GOOD FAITH, IN EACH CASE WHETHER NOW KNOWN OR
48
UNKNOWN, SUSPECTED OR UNSUSPECTED, ASSERTED OR UNASSERTED OR PRIMARY OR
CONTINGENT, AND WHETHER ARISING OUT OF WRITTEN DOCUMENTS, UNWRITTEN
UNDERTAKINGS, COURSE OF CONDUCT, TORT, VIOLATIONS OF LAWS OR REGULATIONS OR
OTHERWISE, IN EACH CASE TO THE EXTENT, BUT ONLY TO THE EXTENT, THAT THE SAME MAY
ARISE OUT OF OR IN CONNECTION WITH ANY OF THE TRANSACTIONS OR THE NEGOTIATION,
STRUCTURING, DOCUMENTATION, EXECUTION, DELIVERY, PERFORMANCE, ADMINISTRATION OR
COLLECTION OF THIS AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY TERM SHEET OR
COMMITMENT LETTER IN CONNECTION WITH THE TRANSACTIONS OF THIS AGREEMENT, OR ANY
CURRENT OR PRIOR EXTENSION OF CREDIT BY OR ON BEHALF OF JPMCB TO BORROWER,
PARENT COMPANY, OR ANY SUBSIDIARY.
SECTION 8.16. ENTIRE AGREEMENT. This Agreement, together with
the other Loan Documents, comprises the complete and integrated agreement of the
parties on the subject matter hereof and thereof and supersedes all prior
agreements, written or oral, on such subject matter. THIS AGREEMENT AND THE
WRITTEN OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.
49
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
ADMINISTAFF SERVICES, L. P., a Delaware
limited partnership
By: ADMINISTAFF OF TEXAS, INC.,
its sole General Partner
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President,
Administration, Chief Financial
Officer and Treasurer
ADMINISTAFF, INC.
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Xxxxxxx X. Xxxxxx
Executive Vice President,
Administration, Chief Financial
Officer and Treasurer
50
JPMORGAN CHASE BANK
By /s/ H. Xxxxx Xxxxx
-------------------------------------
H. Xxxxx Xxxxx, Vice President
