CREDIT AGREEMENT
Dated as of March 22, 1999
among
PRECEPT BUSINESS SERVICES, INC.
THE INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO AS LENDERS
and
BANK ONE, TEXAS, NA
as Agent
and
FIRST CHICAGO CAPITAL MARKETS, INC.
as Arranger
TABLE OF CONTENTS
Section Page
------- ----
ARTICLE I: DEFINITIONS 1
1.1 CERTAIN DEFINED TERMS 1
1.2 REFERENCES 24
ARTICLE II: THE LOAN FACILITIES 24
2.1 REVOLVING LOANS 24
2.2 RATE OPTIONS FOR ALL ADVANCES 24
2.3 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS 24
(A) OPTIONAL PAYMENTS 24
(B) MANDATORY PREPAYMENTS 25
2.4 CHANGES IN COMMITMENTS 25
2.5 METHOD OF BORROWING 27
2.6 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES 27
2.7 MINIMUM AMOUNT OF EACH ADVANCE 28
2.8 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR
CONVERSION AND CONTINUATION OF ADVANCES 28
(A) RIGHT TO CONVERT 28
(B) AUTOMATIC CONVERSION AND CONTINUATION 29
(C) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT 29
(D) CONVERSION/CONTINUATION NOTICE 29
2.9 DEFAULT RATE 29
2.10 METHOD OF PAYMENT 29
2.11 REVOLVING NOTES, TELEPHONIC NOTICES 29
2.12 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST
PAYMENT DATES; INTEREST AND FEE BASIS; TAXES; LOAN AND
CONTROL ACCOUNTS 30
(A) PROMISE TO PAY 30
(B) INTEREST PAYMENT DATES 30
(C) COMMITMENT FEES 30
(D) INTEREST AND FEE BASIS; APPLICABLE EURODOLLAR MARGIN,
APPLICABLE FLOATING RATE MARGIN AND APPLICABLE
COMMITMENT FEE PERCENTAGE 31
(F) LOAN ACCOUNT 35
(G) CONTROL ACCOUNT 35
(H) ENTRIES BINDING 35
2.13 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND
AGGREGATE COMMITMENT REDUCTIONS 35
2.14 LENDING INSTALLATIONS 35
2.15 NON-RECEIPT OF FUNDS BY THE AGENT 35
2.16 TERMINATION DATE 36
2.17 REPLACEMENT OF CERTAIN LENDERS 36
2.18 COLLECTION ACCOUNT ARRANGEMENTS 37
ARTICLE III: THE LETTER OF CREDIT FACILITY 38
3.1 OBLIGATION TO ISSUE 38
3.2 TYPES AND AMOUNTS 38
3.3 CONDITIONS. 38
3.4 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT 39
3.5 LETTER OF CREDIT PARTICIPATION 39
3.6 REIMBURSEMENT OBLIGATION 40
3.7 LETTER OF CREDIT FEES 40
3.8 ISSUING BANK REPORTING REQUIREMENTS. 40
3.9 INDEMNIFICATION; EXONERATION 41
3.10 CASH COLLATERAL 42
ARTICLE IV: CHANGE IN CIRCUMSTANCES 42
4.1 YIELD PROTECTION 42
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS 43
4.3 AVAILABILITY OF TYPES OF ADVANCES 44
4.4 FUNDING INDEMNIFICATION 44
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY 44
ARTICLE V: CONDITIONS PRECEDENT 45
5.1 INITIAL ADVANCES AND LETTERS OF CREDIT 45
5.2 EACH ADVANCE AND LETTER OF CREDIT 46
ARTICLE VI: REPRESENTATIONS AND WARRANTIES 47
6.1 ORGANIZATION; CORPORATE POWERS 47
6.2 AUTHORITY 47
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS 48
6.4 FINANCIAL STATEMENTS 48
6.5 NO MATERIAL ADVERSE CHANGE 48
6.6 TAXES 49
(A) TAX EXAMINATIONS 49
(B) PAYMENT OF TAXES 49
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS 49
6.8 SUBSIDIARIES 49
6.9 ERISA 50
6.10 ACCURACY OF INFORMATION 51
6.11 SECURITIES ACTIVITIES 51
6.12 MATERIAL AGREEMENTS 51
6.13 COMPLIANCE WITH LAWS 51
6.14 ASSETS AND PROPERTIES 52
6.15 STATUTORY INDEBTEDNESS RESTRICTIONS 52
6.16 INSURANCE 52
6.17 LABOR MATTERS 52
6.18 ENVIRONMENTAL MATTERS. 53
6.19 BENEFITS 53
6.20 YEAR 2000 ISSUES 53
6.21 SUBORDINATED INDEBTEDNESS 54
ARTICLE VII : COVENANTS 54
7.1 REPORTING 54
(A) FINANCIAL REPORTING 54
(B) NOTICE OF DEFAULT 55
(C) LAWSUITS 55
(D) ERISA NOTICES 56
(E) LABOR MATTERS 57
(F) OTHER INDEBTEDNESS 57
(G) OTHER REPORTS 58
(H) ENVIRONMENTAL NOTICES 58
(I) YEAR 2000 INFORMATION 58
(J) OTHER INFORMATION 58
7.2 AFFIRMATIVE COVENANTS 58
(A) CORPORATE EXISTENCE, ETC. 58
(B) CORPORATE POWERS; CONDUCT OF BUSINESS 58
(C) COMPLIANCE WITH LAWS, ETC. 59
(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION 59
(E) INSURANCE 59
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS 60
(G) ERISA COMPLIANCE 60
(H) MAINTENANCE OF PROPERTY 60
(I) ENVIRONMENTAL COMPLIANCE 60
(J) USE OF PROCEEDS 61
(K) ADDITION OF GUARANTORS; ADDITION OF PLEDGED CAPITAL
STOCK AND OTHER COLLATERAL 61
(L) YEAR 2000 ISSUES 61
(M) INSURANCE AND CONDEMNATION PROCEEDS 62
(N) COLLATERAL DOCUMENTS 62
(O) POST-CLOSING REQUIREMENTS 63
7.3 NEGATIVE COVENANTS 63
(A) INDEBTEDNESS 63
(B) SALES OF ASSETS 65
(C) LIENS 65
(D) INVESTMENTS 66
(E) NON-GUARANTOR SUBSIDIARIES 67
(F) RESTRICTED PAYMENTS 67
(G) CONDUCT OF BUSINESS; SUBSIDIARIES; ACQUISITIONS 68
(H) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES 70
(I) RESTRICTION ON FUNDAMENTAL CHANGES 70
(J) SALES AND LEASEBACKS 71
(K) MARGIN REGULATIONS 71
(L) XXXXX 00
(X) XXXXXXXX OF EQUITY INTERESTS 72
(N) CORPORATE DOCUMENTS 72
(O) FISCAL YEAR 72
(P) SUBSIDIARY COVENANTS 72
(Q) HEDGING OBLIGATIONS 72
(R) SUBORDINATED INDEBTEDNESS 73
7.4 FINANCIAL COVENANTS 73
(A) INTEREST COVERAGE RATIO 73
(B) LEVERAGE RATIO 74
(C) MINIMUM CONSOLIDATED NET WORTH 74
(D) CAPITAL EXPENDITURES 74
ARTICLE VIII: DEFAULTS 74
8.1 DEFAULTS 74
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND
REMEDIES 77
9.1 TERMINATION OF COMMITMENTS; ACCELERATION 77
9.2 DEFAULTING LENDER 77
9.3 AMENDMENTS 79
9.4 PRESERVATION OF RIGHTS 80
ARTICLE X: GENERAL PROVISIONS 80
10.1 SURVIVAL OF REPRESENTATIONS 80
10.2 GOVERNMENTAL REGULATION 80
10.3 PERFORMANCE OF OBLIGATIONS 80
10.4 HEADINGS 81
10.5 ENTIRE AGREEMENT 81
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT 81
10.7 EXPENSES; INDEMNIFICATION 81
(A) EXPENSES 81
(B) INDEMNITY 82
(C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS 83
(D) SURVIVAL OF AGREEMENTS 83
10.8 NUMBERS OF DOCUMENTS 83
10.9 ACCOUNTING 83
10.10 SEVERABILITY OF PROVISIONS 83
10.11 NONLIABILITY OF LENDERS 83
10.12 GOVERNING LAW 83
10.13 CONSENT TO JURISDICTION 84
(B) SERVICE OF PROCESS 84
(C) WAIVER OF JURY TRIAL 85
(D) WAIVER OF BOND 85
(E) ADVICE OF COUNSEL 85
10.14 NO STRICT CONSTRUCTION 85
10.15 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS 85
10.16 USURY NOT INTENDED 86
10.17 BUSINESS LOANS 87
ARTICLE XI: THE AGENT 88
11.1 APPOINTMENT; NATURE OF RELATIONSHIP 88
11.2 POWERS 88
11.3 GENERAL IMMUNITY 88
11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL,
RECITALS, ETC. 88
11.5 ACTION ON INSTRUCTIONS OF LENDERS 89
11.6 EMPLOYMENT OF AGENTS AND COUNSEL 89
11.7 RELIANCE ON DOCUMENTS; COUNSEL 89
11.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION 89
11.9 RIGHTS AS A LENDER 90
11.10 LENDER CREDIT DECISION 90
11.11 SUCCESSOR AGENT 90
11.12 COLLATERAL DOCUMENTS 91
ARTICLE XII: SETOFF; RATABLE PAYMENTS 92
12.1 SETOFF 92
12.2 RATABLE PAYMENTS 92
12.3 APPLICATION OF PAYMENTS 92
12.4 RELATIONS AMONG LENDERS 93
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS 93
13.1 SUCCESSORS AND ASSIGNS 93
13.2 PARTICIPATIONS 94
(A) PERMITTED PARTICIPANTS; EFFECT 94
(B) VOTING RIGHTS 94
(C) BENEFIT OF SETOFF 94
13.3 ASSIGNMENTS 95
(A) PERMITTED ASSIGNMENTS 95
(B) EFFECT; CLOSING DATE 95
(C) THE REGISTER 95
13.4 CONFIDENTIALITY 96
13.5 DISSEMINATION OF INFORMATION 96
ARTICLE XIV: NOTICES 96
14.1 GIVING NOTICE 96
14.2 CHANGE OF ADDRESS 96
ARTICLE XV: COUNTERPARTS 97
EXHIBITS AND SCHEDULES
EXHIBITS
EXHIBIT A -- Form of Assignment Agreement
(Definitions, Sections 2.17 and 13.3)
EXHIBIT B -- Commitments
(Definitions)
EXHIBIT C -- Form of Guaranty Supplement
(Definitions; Section 7.3(G)(ii))
EXHIBIT C-1 -- Form of Security Agreement Supplement
(Definitions; Section 7.2(K))
EXHIBIT D -- Form of Revolving Note
(Definitions)
EXHIBIT E -- Form of Borrowing Notice (Section 2.6)
EXHIBIT F -- Form of Request for Letter of Credit
(Section 3.3)
EXHIBIT G -- Form of Borrower's Counsel's Opinion
(Section 5.1)
EXHIBIT H -- List of Closing Documents
(Section 5.1)
EXHIBIT I -- Form of Officer's Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT J -- Form of Compliance Certificate
(Sections 5.2 and 7.1(A)(iii))
EXHIBIT K -- Form of Opinion in respect of Increases
in Aggregate Commitment (Section 2.4(b))
EXHIBIT L -- Commitment and Acceptance
(Section 2.4(b))
SCHEDULES
Schedule 1.1.1 -- Permitted Existing Indebtedness
(Definitions)
Schedule 1.1.2 -- Permitted Existing Investments
(Definitions)
Schedule 1.1.3 -- Permitted Existing Liens
(Definitions)
Schedule 3.1 -- Existing Letters of Credit
(Definitions;Section 3.1)
Schedule 6.5 -- Material Adverse Change (Section 6.5)
Schedule 6.7 -- Disclosed Litigation (Section 6.7)
Schedule 6.8 -- Subsidiaries (Section 6.8)
Schedule 6.16 -- Insurance (Sections 6.16, 7.2(E))
Schedule 6.17 -- Labor Matters (Section 6.17)
Schedule 7.3(A)(iii) -- Form of Subordination Agreement
(Section 7.3(A)(iii))
Schedule 7.3(H) -- Transactions with Affiliates
(Section 7.3(H))
CREDIT AGREEMENT
This Credit Agreement dated as of March 22, 1999 is entered into among
PRECEPT BUSINESS SERVICES, INC., a Texas corporation, the institutions from time
to time parties hereto as Lenders, whether by execution of this Agreement or an
Assignment Agreement pursuant to SECTION 13.3, and BANK ONE, TEXAS, NA, in its
capacity as contractual representative for itself and the other Lenders. The
parties hereto agree as follows:
ARTICLE I: DEFINITIONS
1.1 CERTAIN DEFINED TERMS. In addition to the terms defined above, the
following terms used in this Agreement shall have the following meanings,
applicable both to the singular and the plural forms of the terms defined.
As used in this Agreement:
"ACQUISITION" means any transaction, or any series of related transactions,
consummated on or after the Closing Date, by which the Borrower or any of its
Subsidiaries (i) acquires any going business or all or substantially all of the
assets of any firm, corporation or division thereof or other Person, whether
through purchase of assets, merger or otherwise or (ii) directly or indirectly
acquires (in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage of voting power) of the outstanding
equity interests of another Person.
"ADJUSTED EBITDA" means, for any period, on a consolidated basis for the
Borrower and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:
(i) EBITDA;
PLUS (ii) for any acquisitions consummated prior to the Closing
Date, the PRO FORMA adjustments (a) which are
consistent with the Commission's regulations and
practices as of the Closing Date (whether or not
applicable) to account for adjustments to historical
EBITDA and (b) which are described in the Offering
Memorandum,
PLUS (iii) for any Permitted Acquisitions where the consent of the
Required Lenders is not required pursuant to the
provisions of SECTION 7.3(G)(iii), any PRO FORMA
adjustments (a) which are
consistent with the Commission's regulations and
practices as of the Closing Date (whether or not
applicable) to account for adjustments to historical
EBITDA for an acquired entity, or which shall otherwise
be approved by the Agent in its reasonable discretion,
(b) which are realizable as a result of negotiated and
executed contractual arrangements and (c) which are
detailed in the acquisition compliance package for such
Permitted Acquisition delivered pursuant to such
SECTION 7.3(G)(iii); and
PLUS (iv) for any Permitted Acquisitions where the consent of the
Required Lenders is required pursuant to the provisions
of SECTION 7.3(G)(iii), any PRO FORMA adjustments (a)
which are consistent with the Commission's regulations
and practices as of the Closing Date (whether or not
applicable) to account for adjustments to historical
EBITDA for an acquired entity, or which shall otherwise
be approved by the Agent in its reasonable discretion,
(b) which are realizable as a result of negotiated and
executed contractual arrangements, (c) which are
detailed in the acquisition consent request submitted
for such Acquisition delivered pursuant to such SECTION
7.3(G)(iii) and (d) which are approved by the Required
Lenders; and
Adjusted EBITDA shall be calculated for any period by including the actual
amount for the applicable period ending on such day, including the amounts
attributable to acquisitions which occurred prior to the Closing Date and
Permitted Acquisitions occurring during such period on a PRO FORMA basis
for the period from the first day of the applicable period through the date
of the closing of each such prior acquisition or Permitted Acquisition,
utilizing (a) where available or required pursuant to the terms of this
Agreement, historical audited and/or reviewed unaudited financial
statements obtained from the seller, broken down by fiscal quarter in the
Borrower's reasonable judgment or (b) unaudited financial statements (where
no audited financial statements are required pursuant to the terms of this
Agreement) reviewed internally by the Borrower, broken down by fiscal
quarter in the Borrower's reasonable judgment.
"ADVANCE" means a borrowing hereunder consisting of the aggregate amount of
the several Revolving Loans made by the Lenders to the Borrower of the same Type
and, in the case of Eurodollar Rate Advances, for the same Interest Period.
"AFFECTED LENDER" is defined in SECTION 2.17 hereof.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person is the
"beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of greater than ten percent (10%) or more of any class of voting
securities (or other voting interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of Capital Stock, by contract or otherwise.
"AGENT" means Bank One in its capacity as contractual representative for
itself and the Lenders pursuant to ARTICLE XI hereof and any successor Agent
appointed pursuant to ARTICLE XI hereof.
"AGGREGATE COMMITMENT" means the aggregate of the Commitments of all the
Lenders, as amended from time to time pursuant to the terms hereof. The initial
Aggregate Commitment is Forty Million and 00/100 Dollars ($40,000,000.00).
"AGREEMENT" means this Credit Agreement, as it may be amended, restated or
otherwise modified and in effect from time to time.
"AGREEMENT ACCOUNTING PRINCIPLES" means generally accepted accounting
principles as in effect in the United States from time to time, applied in a
manner consistent with that used in preparing the financial statements of the
Borrower referred to in SECTION 6.4(A) hereof, PROVIDED, HOWEVER, that with
respect to the calculation of financial ratios and other financial tests
required by this Agreement, "Agreement Accounting Principles" means generally
accepted accounting principles as in effect in the United States as of the date
of this Agreement, applied in a manner consistent with that used in preparing
the financial statements of the Borrower referred to in SECTION 6.4(A) hereof;
PROVIDED, FURTHER, HOWEVER, all PRO FORMA financial statements reflecting
Acquisitions shall be prepared in accordance with the requirements established
by the Commission for acquisition accounting for reporting acquisitions by
public companies (whether or not such Acquisitions are required to be publicly
reported).
"ALTERNATE BASE RATE" means, for any day, a fluctuating interest rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) as shall be in
effect from time to time, which rate per annum shall at all times be equal to
the greater of (a) the Prime Rate in effect on such day; or (b) the sum of
one-half of one percent (0.50%) and the Federal Funds Effective Rate in effect
on such day. For purposes hereof, "PRIME RATE" shall mean the rate of interest
per annum publicly announced from time to time by Bank One as its prime rate (it
being acknowledged that such announced rate may not necessarily be the lowest
rate charged by the Agent to any of its customers) in effect at its office in
Dallas, Texas, each change in the Prime Rate shall be effective on the date such
change is publicly announced as being effective. "FEDERAL FUNDS EFFECTIVE RATE"
shall mean, for any day, a fluctuating interest rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, 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 which is a Business Day,
the average of the quotations for such day on such transactions received by Bank
One from three Federal funds brokers of recognized standing selected by the
Agent. If for any reason the Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable to ascertain the
Federal Funds
Effective Rate for any reason, including the inability or failure of the Agent
to obtain sufficient quotations in accordance with the terms hereof, the
Alternate Base Rate shall be determined without regard to CLAUSE (b) of the
first sentence of this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, as at any date of
determination, the rate per annum then applicable in the determination of the
amount payable under SECTION 2.12(C)(i) hereof, determined in accordance with
the provisions of SECTION 2.12(D)(ii) hereof.
"APPLICABLE EURODOLLAR MARGIN" means, as at any date of determination, the
rate per annum then applicable to Eurodollar Rate Loans, determined in
accordance with the provisions of SECTION 2.12(D)(ii) hereof.
"APPLICABLE FLOATING RATE MARGIN" means, as at any date of determination,
the rate per annum then applicable to Floating Rate Loans, determined in
accordance with the provisions of SECTION 2.12(D)(ii) hereof.
"APPLICABLE L/C FEE PERCENTAGE" means, with respect to any Letter of Credit
and as at any date of determination, a rate per annum equal to the Applicable
Eurodollar Margin in effect on such date.
"ARRANGER" means First Chicago Capital Markets, Inc., in its capacity as
the arranger for the loan transaction evidenced by this Agreement.
"ASSET SALE" means, with respect to any Person, the sale, lease,
conveyance, disposition or other transfer by such Person of any of its assets
(including by way of a sale-leaseback transaction and including the sale or
other transfer of any of the Equity Interests of any Subsidiary of such Person).
"ASSIGNMENT AGREEMENT" shall mean an assignment and acceptance agreement
entered into in connection with an assignment pursuant to SECTION 13.3 hereof in
substantially the form of EXHIBIT A.
"AUTHORIZED OFFICER" means any of the chief executive officer, president,
chief financial officer or treasurer of the Borrower, acting singly.
"BANK ONE" means Bank One, Texas, NA, in its individual capacity, and its
successors.
"BENEFIT PLAN" means a defined benefit plan as defined in Section 3(35) of
ERISA (other than a Multiemployer Plan) in respect of which the Borrower or any
other member of the Controlled Group is, or within the immediately preceding six
(6) years was, an "employer" as defined in Section 3(5) of ERISA.
"BORROWER" means Precept Business Services, Inc., a Texas corporation,
together with its successors and assigns, including a debtor-in-possession on
behalf of the Borrower.
"BORROWING DATE" means a date on which an Advance is made hereunder.
"BORROWING NOTICE" is defined in SECTION 2.6 hereof.
"BUSINESS DAY" means (i) with respect to any borrowing, payment or rate
selection of Loans bearing interest at the Eurodollar Rate, a day (other than a
Saturday or Sunday) on which banks are open for business in Dallas, Texas and on
which dealings in Dollars are carried on in the London interbank market and (ii)
for all other purposes a day (other than a Saturday or Sunday) on which banks
are open for business in Dallas, Texas.
"BUYING LENDER(S)" is defined in SECTION 2.4(c) hereof.
"CAPITAL EXPENDITURES" means, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities, including
Capitalized Leases and Permitted Purchase Money Indebtedness) (other than in
connection with Permitted Acquisitions) by the Borrower and its Subsidiaries
during that period that, in conformity with Agreement Accounting Principles, are
required to be included in or reflected by the property, plant, equipment or
similar fixed asset accounts reflected in the consolidated balance sheet of the
Borrower and its Subsidiaries.
"CAPITAL STOCK" means (i) in the case of a corporation, corporate stock,
(ii) in the case of an association or business entity, any and all shares,
interests, participations, rights or other equivalents (however designated) of
corporate stock, (iii) in the case of a partnership, partnership interests
(whether general or limited) and (iv) any other interest or participation that
confers on a Person the right to receive a share of the profits and losses of,
or distributions of assets of, the issuing Person.
"CAPITALIZED LEASE" of a Person means any lease of property by such Person
as lessee which would be capitalized on a balance sheet of such Person prepared
in accordance with Agreement Accounting Principles.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be capitalized
on a balance sheet of such Person prepared in accordance with Agreement
Accounting Principles.
"CASH EQUIVALENTS" means (i) marketable direct obligations issued or
unconditionally guaranteed by the United States government and backed by the
full faith and credit of the United States government; (ii) domestic and
Eurodollar certificates of deposit and time deposits, bankers' acceptances and
floating rate certificates of deposit issued by any commercial bank organized
under the laws of the United States, any state
thereof, the District of Columbia, any foreign bank, or its branches or agencies
(fully protected against currency fluctuations for any such deposits with a term
of more than ten (10) days); (iii) shares of money market, mutual or similar
funds having assets in excess of $100,000,000 and the investments of which are
limited to investment grade securities (i.e., securities rated at least Baa by
Xxxxx'x Investors Service, Inc. or at least BBB by Standard & Poor's Ratings
Group); (iv) commercial paper of United States and foreign banks and bank
holding companies and their subsidiaries and United States and foreign finance,
commercial industrial or utility companies which, at the time of acquisition,
are rated A-1 (or better) by Standard & Poor's Ratings Group or P-1 (or better)
by Xxxxx'x Investors Services, Inc.; PROVIDED that the maturities of such Cash
Equivalents shall not exceed 365 days.
"CHANGE" is defined in SECTION 4.2 hereof.
"CHANGE OF CONTROL" means an event or series of events by which:
(i) Xxxxxx Xxxxxx is or becomes the "beneficial owner" (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person shall
be deemed to have "beneficial ownership" of all securities that such person
has the right to acquire, whether such right is exercisable immediately or
only after the passage of time), directly or indirectly, of less than
thirty percent (30%) of the combined voting power of the Borrower's Capital
Stock ordinarily having the right to vote at an election of directors; or
(ii) any "person" or "group" (as such terms are used in SECTIONS
13(d) and 14(d) of the Exchange Act) is or becomes the "beneficial owner"
(as defined in CLAUSE (ii) above), directly or indirectly, of an equal or
greater percentage than Xxxxxx Xxxxxx of the combined voting power of the
Borrower's Capital Stock ordinarily having the right to vote at an election
of directors;
(iii) during any period of 12 consecutive calendar months,
individuals:
(a) who were directors of the Borrower on the first
day of such period, or
(b) whose election or nomination for election to
the board of directors of the Borrower was recommended or
approved by at least a majority of the directors then still in
office who were directors of the Borrower on the first day of
such period, or whose election or nomination for election was
so approved,
shall cease to constitute a majority of the board of directors of the
Borrower;
(iv) the Borrower consolidates with or merges into another
corporation or conveys, transfers or leases all or substantially all of its
property to any Person, or any corporation consolidates with or merges into
the Borrower, in either event
pursuant to a transaction in which the outstanding Capital Stock of the
Borrower is reclassified or changed into or exchanged for cash, securities
or other property; or
(v) other than as a result of a transaction permitted under the
terms of this Agreement, the Borrower shall cease to own, of record and
beneficially, with sole voting and dispositive power, (a) 100% of the
outstanding shares of Capital Stock of each of the Guarantors or (b) shall
cease to have the power, directly or indirectly, to elect a majority of the
members of the board of directors of each of the Guarantors.
"CLOSING DATE" shall mean March 22, 1999.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time, or any successor statute.
"COLLATERAL" means any property owned by the Borrower or any of its
Subsidiaries in or upon which a security interest or lien or mortgage is granted
to the Agent, for the benefit of the Holders of Secured Obligations, or to the
Agent, for the benefit of the Lenders, whether under the Security Agreements,
the Mortgages, the Pledge Agreements, the Intellectual Property Documents, the
Collateral Assignments, all Collection Account Agreements or under any of the
other Collateral Documents or under any of the other Loan Documents.
"COLLATERAL ASSIGNMENTS" shall mean collateral assignments of lease
encumbering the leasehold interest of the Borrower or any of the Guarantors in
each real property asset as required pursuant to the Security Agreements.
"COLLATERAL DOCUMENTS" means all agreements, instruments and documents
executed in connection with this Agreement that are intended to create or
evidence Liens to secure the Secured Obligations, including, without limitation,
the Security Agreements, the Pledge Agreements, Mortgages, the Collateral
Assignments, the Intellectual Property Documents, the Collection Account
Agreements, and all other security agreements, mortgages, deeds of trust, loan
agreements, notes, guarantees, subordination agreements, pledges, powers of
attorney, consents, assignments, vehicle titles, contracts, fee letters,
notices, leases, financing statements and all other written matter whether
heretofore, now, or hereafter executed by or on behalf of the Borrower or any of
its Subsidiaries and delivered to the Agent or any of the Lenders, together with
all agreements and documents referred to therein or contemplated thereby.
"COLLECTION ACCOUNT" means each lock-box and blocked depository account
maintained by the Borrower and the Guarantors, subject to a Collection Account
Agreement, for the collection of Receivables and other proceeds of Collateral.
"COLLECTION ACCOUNT AGREEMENT" means a written agreement among the Borrower
or any Guarantor, as applicable, the Agent, and, as applicable, each of the
banks at which the Borrower or such Guarantor maintains a Collection Account in
substantially the form attached as EXHIBIT C to the Security Agreements or such
other form as may be reasonably acceptable to the Agent.
"COLLECTION ACCOUNT BLOCKAGE DATE" means the date, following the occurrence
and during the continuance of a Default, on which the Agent or the Required
Lenders, in the Agent's or the Required Lenders' discretion, instruct(s) any
financial institution party to a Collection Account as described in the
applicable Collection Account Agreement to remit, during the continuance of such
Default, all amounts deposited in the Collection Account to the Agent or as the
Agent shall direct.
"COMMISSION" means the Securities and Exchange Commission and any Person
succeeding to the functions thereof.
"COMMITMENT" means, for each Lender, the obligation of such Lender to make
Revolving Loans and to purchase participations in Letters of Credit not
exceeding the amount set forth on EXHIBIT B to this Agreement opposite its name
thereon under the heading "Commitment" or on Schedule 1 of the Assignment
Agreement by which it became a Lender or as set forth in the Commitment and
Acceptance pursuant to which it became a Lender, as such amount may be modified
from time to time pursuant to the terms of this Agreement or to give effect to
any applicable Assignment Agreement or Commitment and Acceptance.
"COMMITMENT AND ACCEPTANCE" is defined in SECTION 2.4(b).
"COMMITMENT INCREASE NOTICE" is defined in SECTION 2.4(b).
"CONSOLIDATED NET WORTH" means, at a particular date, all amounts which
would be included under shareholders' equity for the Borrower and its
consolidated Subsidiaries determined in accordance with Agreement Accounting
Principles.
"CONSOLIDATED REVENUES" means, as of any date of calculation, revenues of
the Borrower and its consolidated Subsidiaries for the twelve-month period ended
immediately prior to such calculation date; PROVIDED, the revenues for all
entities which are Subsidiaries as of such calculation date shall be included,
even though some of such revenues were earned prior to such entity becoming a
Subsidiary of the Borrower.
"CONSOLIDATED TANGIBLE ASSETS" means the total assets of the Borrower and
its Subsidiaries on a consolidated basis, but excluding therefrom all items that
are treated as intangible assets under Agreement Accounting Principles.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, asbestos, polychlorinated biphenyls ("PCBS"), or any
constituent of any such substance or waste, and includes but is not limited to
these terms as defined in Environmental, Health or Safety Requirements of Law.
"CONTINGENT OBLIGATION", as applied to any Person, means any Contractual
Obligation, contingent or otherwise, of that Person with respect to any
Indebtedness of another or other obligation or liability of another, including,
without limitation, any such Indebtedness, obligation or liability of another
directly or indirectly guaranteed, endorsed (otherwise than for collection or
deposit in the ordinary course of business), co-made or discounted or sold with
recourse by that Person, or in respect of which that Person is otherwise
directly or indirectly liable, including Contractual Obligations (contingent or
otherwise) arising through any agreement to purchase, repurchase, or otherwise
acquire such Indebtedness, obligation or liability or any security therefor, or
to provide funds for the payment or discharge thereof (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise), or to
maintain solvency, assets, level of income, or other financial condition, or to
make payment other than for value received.
"CONTRACTUAL OBLIGATION", as applied to any Person, means any provision of
any equity or debt securities issued by that Person or any indenture, mortgage,
deed of trust, security agreement, pledge agreement, guaranty, contract,
undertaking, agreement or instrument, in each case in writing, to which that
Person is a party or by which it or any of its properties is bound, or to which
it or any of its properties is subject.
"CONTROLLED GROUP" means the group consisting of (i) any corporation which
is a member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower; (ii) a partnership or other trade
or business (whether or not incorporated) which is under common control (within
the meaning of Section 414(c) of the Code) with the Borrower; and (iii) a member
of the same affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, any corporation described in CLAUSE (i) above or any
partnership or trade or business described in CLAUSE (ii) above.
"CONTROLLED SUBSIDIARY" of any Person means a Subsidiary of such Person (i)
90% or more of the total Equity Interests or other ownership interests of which
(other than directors' qualifying shares) shall at the time be owned by such
Person or by one or more wholly-owned Subsidiaries of such Person and (ii) of
which such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies, whether through the ownership
of voting securities, by agreement or otherwise.
"CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.8(D) hereof.
"CURE LOAN" is defined in SECTION 9.2(iii) hereof.
"CUSTOMARY PERMITTED LIENS" means:
(i) Liens (other than Environmental Liens and Liens in favor of the
PBGC) with respect to the payment of taxes, assessments or governmental
charges in all cases which are not yet due or (if foreclosure, distraint,
sale or other similar proceedings shall not have been commenced) which are
being contested in good
faith by appropriate proceedings properly instituted and diligently
conducted and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;
(ii) statutory Liens of landlords and Liens of suppliers, mechanics,
carriers, materialmen, warehousemen or workmen and other similar Liens
imposed by law created in the ordinary course of business for amounts not
yet due or which are being contested in good faith by appropriate
proceedings properly instituted and diligently conducted and with respect
to which adequate reserves or other appropriate provisions are being
maintained in accordance with Agreement Accounting Principles;
(iii) Liens (other than Environmental Liens and Liens in favor of the
PBGC) incurred or deposits made, in each case, in the ordinary course of
business in connection with worker's compensation, unemployment insurance
or other types of social security benefits or to secure the performance of
bids, tenders, sales, contracts (other than for the repayment of borrowed
money), surety, appeal and performance bonds; PROVIDED that (A) all such
Liens do not in the aggregate materially detract from the value of the
Borrower's or such Subsidiary's assets or property taken as a whole or
materially impair the use thereof in the operation of the businesses taken
as a whole, and (B) with respect to Liens securing bonds to stay judgments
or in connection with appeals do not secure at any time an aggregate amount
which if paid at such time would result in the occurrence or existence of a
Default;
(iv) Liens arising with respect to zoning restrictions, easements,
licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar charges or encumbrances on the use
of real property which do not in any case materially detract from the value
of the property subject thereto or interfere with the ordinary conduct of
the business of the Borrower or any of its Subsidiaries;
(v) Liens of attachment or judgment with respect to judgments, writs
or warrants of attachment, or similar process against the Borrower or any
of its Subsidiaries which do not constitute a Default under SECTION 8.1(h)
hereof; and
(vi) any interest or title of the lessor in the property subject to
any operating lease entered into by the Borrower or any of its Subsidiaries
in the ordinary course of business.
"DEFAULT" means an event described in ARTICLE VIII hereof.
"DISCLOSED LITIGATION" is defined in SECTION 6.7 hereof.
"DISQUALIFIED STOCK" means any Capital Stock that, by its terms (or by the
terms of any security into which it is convertible or for which it is
exchangeable), or upon the
happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is 91 days after the
Termination Date.
"DOL" means the United States Department of Labor and any Person succeeding
to the functions thereof.
"DOLLAR" and "$" means dollars in the lawful currency of the United States.
"EBITDA" means, for any period, on a consolidated basis for the Borrower
and its Subsidiaries, the sum of the amounts for such period, without
duplication, of:
(i) Net Income,
PLUS (ii) charges against income for foreign, federal, state and
local taxes, to the extent deducted in computing Net Income,
PLUS (iii) Interest Expense,
PLUS (iv) depreciation expense, to the extent deducted in
computing Net Income,
PLUS (v) amortization expense, including, without limitation,
amortization of goodwill, other intangible assets and
Transaction Costs, to the extent deducted in computing Net
Income,
MINUS (vi) Net Extraordinary Gains.
As used herein "NET EXTRAORDINARY GAINS" shall mean the sum of, but only if
positive, extraordinary gains (and any nonrecurring unusual gains arising in or
outside of the ordinary course of business not included in extraordinary gains
determined in accordance with Agreement Accounting Principles which have been
included in the determination of Net Income) MINUS extraordinary losses (and
any nonrecurring unusual losses arising in or outside of the ordinary course of
business not included in extraordinary losses determined in accordance with
Agreement Accounting Principles). EBITDA shall be calculated for any period by
including the actual amount for the applicable period ending on such day,
WITHOUT taking into account any PRO FORMA adjustments for any amounts
attributable to the period prior to when an acquisition is consummated.
"EFFECTIVE COMMITMENT AMOUNTS" is defined in SECTION 2.4(b) hereof.
"ENVIRONMENTAL, HEALTH OR SAFETY REQUIREMENTS OF LAW" means all
Requirements of Law derived from or relating to federal, state and local laws or
regulations relating to or addressing pollution or protection of the
environment, or protection of worker health or safety, including, but not
limited to, the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601 ET SEQ., the
Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 ET SEQ., and
the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901 ET
SEQ., in each case including any amendments thereto, any successor statutes, and
any regulations or guidance promulgated thereunder, and any state or local
equivalent thereof.
"ENVIRONMENTAL LIEN" means a lien in favor of any Governmental Authority
for (a) any liability under Environmental, Health or Safety Requirements of Law,
or (b) damages arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into the
environment.
"ENVIRONMENTAL PROPERTY TRANSFER ACT" means any applicable requirement of
law that conditions, restricts, prohibits or requires any notification or
disclosure triggered by the closure of any property or the transfer, sale or
lease of any property or deed or title for any property for environmental
reasons, including, but not limited to, any so-called "Industrial Site Recovery
Act" or "Responsible Property Transfer Act."
"EQUITY INTERESTS" means Capital Stock and all warrants, options or other
rights to acquire Capital Stock (but excluding any debt security that is
convertible into, or exchangeable for, Capital Stock).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time including (unless the context otherwise requires) any
rules or regulations promulgated thereunder.
"EURODOLLAR BASE RATE" means, with respect to a Eurodollar Rate Loan for
the relevant Interest Period, the rate determined by the Agent to be the
arithmetic average of the respective rates at which deposits in Dollars are
offered by Bank One to first-class banks in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, in the approximate amounts of the portions of the
relevant Eurodollar Rate Loan of Bank One, and having a maturity approximately
equal to such Interest Period, as adjusted for Reserves.
"EURODOLLAR RATE" means, with respect to a Eurodollar Rate Loan for the
relevant Interest Period, the Eurodollar Base Rate applicable to such Interest
Period PLUS the then Applicable Eurodollar Margin. The Eurodollar Rate shall be
rounded to the next higher multiple of 1/100 of 1% if the rate is not such a
multiple.
"EURODOLLAR RATE ADVANCE" means an Advance which bears interest at the
Eurodollar Rate.
"EURODOLLAR RATE LOAN" means a Loan, or portion thereof, which bears
interest at the Eurodollar Rate.
"EXISTING LETTERS OF CREDIT" means those letters of credit described on
SCHEDULE 3.1 hereto.
"FAIR VALUE" means (a) with respect to the Capital Stock of the Borrower,
the closing price for such Capital Stock on the trading date immediately
preceding the date of the applicable acquisition agreement and (b) with respect
to other assets, the value of the relevant asset as of the date of acquisition
or sale determined in an arm's-length transaction conducted in good faith
between an informed and willing buyer and an informed and willing seller under
no compulsion to buy.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m. (Dallas
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"FLOATING RATE" means, for any day for any Loan, a rate per annum equal to
the Alternate Base Rate for such day PLUS the then Applicable Floating Rate
Margin, changing and as the Alternate Base Rate or Applicable Floating Rate
Margin changes.
"FLOATING RATE ADVANCE" means an Advance which bears interest at the
Floating Rate.
"FLOATING RATE LOAN" means a Loan, or portion thereof, which bears interest
at the Floating Rate.
"GOVERNMENTAL ACTS" is defined in SECTION 3.9(a) hereof.
"GOVERNMENTAL AUTHORITY" means any nation or government, any federal,
state, local or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"GROSS NEGLIGENCE" means recklessness, the absence of the slightest care or
the complete disregard of consequences. Gross Negligence does not mean the
absence of ordinary care or diligence, or an inadvertent act or inadvertent
failure to act. If the term "gross negligence" is used with respect to the
Agent or any Lender or any indemnitee in any of the other Loan Documents, it
shall have the meaning set forth herein.
"GUARANTORS" means (i) all of the Borrower's Subsidiaries as of the Closing
Date and (ii) any other New Subsidiaries which have satisfied the provisions of
SECTION 7.3(G)(ii) hereof, and their respective successors and assigns.
"GUARANTY" means that certain Subsidiary Guaranty dated as of the date
hereof, executed by the Guarantors in favor of the Agent, for the ratable
benefit of the Lenders, as it may be amended, modified, supplemented (including
as a result of the Guaranty
Supplement) and/or restated (including to add new Guarantors), and as in effect
from time to time.
"GUARANTY SUPPLEMENT" shall mean a supplement to the guaranty entered into
in pursuant to the terms of SECTION 7.3(G) in substantially the form of
EXHIBIT C.
"HEDGING AGREEMENT" means any contract with respect to Hedging Obligations
entered into by the Borrower or any of its Subsidiaries with any Lender (or
Affiliate thereof).
"HEDGING OBLIGATIONS" of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all
agreements, devices or arrangements designed to protect at least one of the
parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collar protection agreements, forward rate
currency or interest rate options, puts and warrants, and (ii) any and all
cancellations, buy backs, reversals, terminations or assignments of any of the
foregoing.
"HOLDERS OF SECURED OBLIGATIONS" means the holders of the Secured
Obligations from time to time and shall refer to (i) each Lender in respect of
its Loans, (ii) the Issuing Bank in respect of Reimbursement Obligations, (iii)
the Agent, the Lenders and the Issuing Bank in respect of all other present and
future obligations and liabilities of the Borrower or any of its Subsidiaries of
every type and description arising under or in connection with this Agreement or
any other Loan Document, (iii) each Indemnitee in respect of the obligations and
liabilities of the Borrower to such Person hereunder, (iv) each Lender (or
affiliate thereof), in respect of all Hedging Obligations of the Borrower to
such Lender (or such affiliate) as exchange party or counterparty under any
Hedging Agreement, and (v) their respective successors, transferees and assigns.
"INDEBTEDNESS" of any Person means, without duplication, such Person's (a)
obligations for borrowed money, (b) obligations representing the deferred
purchase price of property or services (other than (i) accounts payable arising
in the ordinary course of such Person's business payable on terms customary in
the trade and (ii) earn-outs and other similar forms of contingent purchase
price payments in connection with acquisitions completed prior to the date
hereof and Permitted Acquisitions), (c) obligations, whether or not assumed,
secured by Liens or payable out of the proceeds or production from property or
assets now or hereafter owned or acquired by such Person, (d) obligations which
are evidenced by notes, acceptances or other instruments, (e) Capitalized Lease
Obligations, (f) reimbursement obligations with respect to letters of credit
(other than commercial letters of credit) issued for the account of such Person,
(g) Hedging Obligations, (h) Off Balance Sheet Liabilities and (i) Contingent
Obligations in respect of obligations of another Person of the type described in
the foregoing clauses (a)
through (h). The amount of Indebtedness of any Person at any date shall be
without duplication (i) the outstanding balance at such date of all
unconditional obligations as described above and the maximum liability of any
such Contingent Obligations at such date and (ii) in the case of Indebtedness of
others secured by a Lien to which the property or assets owned or held by such
Person is subject, the lesser of the fair market value at such date of any asset
subject to a Lien securing the Indebtedness of others and the amount of the
Indebtedness secured.
"INDEMNIFIED MATTERS" is defined in SECTION 10.7(B) hereof.
"INDEMNITEES" is defined in SECTION 10.7(B) hereof.
"INTELLECTUAL PROPERTY DOCUMENTS" means (i) (a) those certain Patent
Security Agreements, and (b) Trademark Security Agreements each of even date
herewith executed by the Borrower and its Subsidiaries in favor of the Agent for
the benefit of the holders of Secured Obligations as amended, restated or
otherwise modified from time to time and (ii) (a) those certain Patent Security
Agreements, and (b) Trademark Security Agreements or amendments thereto
executed pursuant to SECTION 7.2(K) by the Borrower and its Subsidiaries.
"INTEREST COVERAGE RATIO" is defined in SECTION 7.4(A) hereof.
"INTEREST EXPENSE" means, for any period, the total interest expense of the
Borrower and its consolidated Subsidiaries, whether paid or accrued (including
the interest component of Capitalized Leases, commitment and letter of credit
fees), but excluding interest expense not payable in cash (including
amortization of discount), all as determined in conformity with Agreement
Accounting Principles.
"INTEREST PERIOD" means, with respect to a Eurodollar Rate Loan, a period
of one (1), two (2), three (3), or six (6) months commencing on a Business Day
selected by the Borrower pursuant to this Agreement. Such Interest Period shall
end on (but exclude) the day which corresponds numerically to such date one,
two, three or six months thereafter; PROVIDED, HOWEVER, that if there is no such
numerically corresponding day in such next, second, third or sixth succeeding
month, such Interest Period shall end on the last Business Day of such next,
second, third or sixth succeeding month. If an Interest Period would otherwise
end on a day which is not a Business Day, such Interest Period shall end on the
next succeeding Business Day, PROVIDED, HOWEVER, that if said next succeeding
Business Day falls in a new calendar month, such Interest Period shall end on
the immediately preceding Business Day.
"INVESTMENT" means, with respect to any Person, (i) any purchase or other
acquisition by that Person of any Indebtedness, Equity Interests or other
securities, or of a beneficial interest in any Indebtedness, Equity Interests or
other securities, issued by any other Person, (ii) any purchase by that Person
of all or substantially all of the assets of a business conducted by another
Person, and (iii) any loan, advance (other than deposits with financial
institutions available for withdrawal on demand, prepaid expenses,
accounts receivable, advances to employees and similar items made or incurred in
the ordinary course of business) or capital contribution by that Person to any
other Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business.
"IRS" means the Internal Revenue Service and any Person succeeding to the
functions thereof.
"ISSUING BANK(S)" means (i) either Bank One or Xxxxx Fargo Bank, N.A., as
applicable, and each of their respective successors and assigns, in each of
their respective and separate capacities as an issuer of Letters of Credit
pursuant to SECTION 3.1 and (ii) in respect of the Existing Letters of Credit,
Xxxxx Fargo Bank, N.A.
"L/C DRAFT" means a draft drawn on an Issuing Bank pursuant to a Letter of
Credit.
"L/C INTEREST" shall have the meaning ascribed to such term in SECTION 3.5
hereof.
"L/C OBLIGATIONS" means, without duplication, an amount equal to the sum of
(i) the aggregate of the amount then available for drawing under each of the
Letters of Credit, (ii) the face amount of all outstanding L/C Drafts
corresponding to the Letters of Credit, which L/C Drafts have been accepted by
the applicable Issuing Bank, (iii) the aggregate outstanding amount of all
Reimbursement Obligations at such time and (iv) the aggregate face amount of all
Letters of Credit requested by the Borrower but not yet issued (unless the
request for an unissued Letter of Credit has been denied).
"LENDER INCREASE NOTICE" is defined in SECTION 2.4(b).
"LENDERS" means the lending institutions listed on the signature pages of
this Agreement and each Proposed New Lender which becomes a Lender hereto
pursuant to the provisions of SECTION 2.4(b) and their respective successors and
assigns.
"LENDING INSTALLATION" means, with respect to a Lender or the Agent, any
office, branch, subsidiary or affiliate of such Lender or the Agent.
"LETTERS OF CREDIT" means (a) the Existing Letters of Credit and (b) the
letters of credit issued by the Issuing Bank pursuant to SECTION 3.1 hereof.
"LEVERAGE RATIO" is defined in SECTION 7.4(B) hereof.
"LIEN" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, the interest of a vendor or lessor
under any conditional sale, Capitalized Lease or other title retention
agreement).
"LOAN(S)" means, with respect to a Lender, such Lender's portion of any
Advance made pursuant to SECTION 2.1 hereof (individually a "REVOLVING LOAN" and
collectively, the "REVOLVING LOANS"), and collectively all such Revolving Loans,
whether made or continued as or converted to Floating Rate Loans or Eurodollar
Rate Loans.
"LOAN ACCOUNT" is defined in SECTION 2.12(F) hereof.
"LOAN DOCUMENTS" means this Agreement, the Revolving Notes, the Guaranty,
the Collateral Documents, and all other documents, instruments and agreements
executed in connection therewith or contemplated thereby, as the same may be
amended, restated or otherwise modified and in effect from time to time.
"MARGIN STOCK" shall have the meaning ascribed to such term in Regulation
U.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower, or the Borrower and its Subsidiaries,
taken as a whole, (b) the ability of the Borrower or any of its Subsidiaries to
perform their respective obligations under the Loan Documents in any material
respect or (c) the ability of the Lenders or the Agent to enforce in any
material respect their rights with respect to the Collateral.
"MATERIAL SUBSIDIARY" means (a) any "Significant Subsidiary" as defined in
Regulation S-X issued pursuant to the Securities Act and the Exchange Act and
(b) any other Subsidiary of the Borrower which accounts for ten percent (10%) or
more of the Borrower's Consolidated Tangible Assets or ten percent (10%) or more
of the Borrower's Adjusted EBITDA.
"MAXIMUM RATE" means at the particular time in question the maximum rate of
interest which, under applicable law, may then be charged hereunder or under the
Revolving Notes. If such a maximum rate of interest changes after the date
hereof, the Maximum Rate shall be automatically increased or decreased, as the
case may be, without notice to the Borrower, from time to time as of the
effective date of each change in such maximum rate. If applicable law ceases to
provide for such a maximum rate of interest, the Maximum Rate shall be equal to
eighteen percent (18%) per annum.
"MORTGAGE(S)" means those certain mortgages or deeds of trust executed on
the date hereof or from time to time hereafter in accordance with the terms of
this Agreement or the other Collateral Documents by the Borrower and its
Subsidiaries in favor of the Agent as amended, restated or otherwise modified
from time to time with respect to any real property owned by the Borrower or any
of its Subsidiaries.
"MULTIEMPLOYER PLAN" means a "Multiemployer Plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by either the Borrower or any member of the Controlled
Group.
"NET INCOME" means, for any period, the net earnings (or loss) after taxes
of the Borrower and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with Agreement
Accounting Principles.
"NEW SUBSIDIARY" is defined in SECTION 7.3(G)(ii).
"NON PRO RATA LOAN" is defined in SECTION 9.2 hereof.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3(B) hereof.
"OBLIGATIONS" means all Loans, advances, debts, liabilities, obligations,
covenants and duties owing by the Borrower to the Agent, any Lender, the
Arranger, any Affiliate of the Agent or any Lender, or any Indemnitee, of any
kind or nature, present or future, arising under this Agreement, the Revolving
Notes or any other Loan Document, whether or not evidenced by any note, guaranty
or other instrument, whether or not for the payment of money, whether arising by
reason of an extension of credit, loan, guaranty, indemnification, or in any
other manner, whether direct or indirect (including those acquired by
assignment), absolute or contingent, due or to become due, now existing or
hereafter arising and however acquired. The term includes, without limitation,
all interest, charges, expenses, fees, attorneys' fees and disbursements,
paralegals' fees (in each case whether or not allowed), and any other sum
chargeable to the Borrower under this Agreement or any other Loan Document.
"OFF BALANCE SHEET LIABILITIES" of a Person means (a) any repurchase
obligation or liability of such Person or any of its Subsidiaries with respect
to accounts or notes receivable sold by such Person or any of its Subsidiaries,
(b) any liability under any sale and leaseback transactions which do not create
a liability on the consolidated balance sheet of such Person, (c) any liability
under any financing lease or so-called "synthetic" lease transaction or tax
retention operating lease transaction, or (d) any obligations arising with
respect to any other transaction which is the functional equivalent of or takes
the place of borrowing and which has an implied, attributable or actual interest
component which is deductible for federal tax purposes but which does not
constitute a liability on the consolidated balance sheets of such Person and its
Subsidiaries. "OFF BALANCE SHEET LIABILITIES" for any Person shall not include
any obligations of such Person arising with respect to an operating lease of any
property or asset (other than a Capitalized Lease) by such Person as lessee
which does not include any attributable interest component which is deductible
for federal tax purposes.
"OFFERING MEMORANDUM" means the Confidential Offering Memorandum dated
February 1999 and distributed to the Agent and the Lenders by the Borrower.
"OTHER TAXES" is defined in SECTION 2.12(E)(ii) hereof.
"PARTICIPANTS" is defined in SECTION 13.2(A) hereof.
"PAYMENT DATE" means the last Business Day of each March, June, September
and December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"PERMITTED ACQUISITION" is defined in SECTION 7.3(G)(iii) hereof.
"PERMITTED EXISTING INDEBTEDNESS" means the Indebtedness of the Borrower
and its Subsidiaries identified as such on SCHEDULE 1.1.1 to this Agreement.
"PERMITTED EXISTING INVESTMENTS" means the Investments of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.2 to this Agreement.
"PERMITTED EXISTING LIENS" means the Liens on assets of the Borrower and
its Subsidiaries identified as such on SCHEDULE 1.1.3 to this Agreement.
"PERMITTED PURCHASE MONEY INDEBTEDNESS" is defined in SECTION 7.3(A)(ix)
hereof.
"PERMITTED REFINANCING INDEBTEDNESS" means any replacement, renewal,
refinancing or extension of any Indebtedness permitted by this Agreement that
(i) does not exceed the aggregate principal amount (plus associated fees and
expenses) of the Indebtedness being replaced, renewed, refinanced or extended,
(ii) does not rank at the time of such replacement, renewal, refinancing or
extension senior to the Indebtedness being replaced, renewed, refinanced or
extended, (iii) does not have a Weighted Average Life to Maturity at the time of
such replacement, renewal, refinancing or extension that is less than the
Weighted Average Live to Maturity of the Indebtedness being replaced, renewed,
refinanced ro extended and (iv) does not contain terms (including, without
limitation, terms relating to security, amortization, interest rate, premiums,
fees, covenants, event of default and remedies) materially less favorable to the
Borrower or to the Lenders than those applicable to the Indebtedness being
replaced, renewed, refinanced or extended.
"PERMITTED SUBORDINATED INDEBTEDNESS" is defined in SECTION 7.3(A)(iii)
hereof.
"PERSON" means any individual, corporation, firm, enterprise, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company or other entity of any kind, or any
government or political subdivision or any agency, department or instrumentality
thereof.
"PLAN" means an employee benefit plan defined in Section 3(3) of ERISA in
respect of which the Borrower or any member of the Controlled Group is, or
within the immediately preceding six (6) years was, an "employer" as defined in
Section 3(5) of ERISA.
"PLEDGE AGREEMENTS" means (a) the Pledge Agreement dated as of the date
hereof executed by the Borrower in favor of the Agent with respect to 100% of
the Capital Stock
of each of Precept Business Products, Inc., a Delaware corporation, Creative
Acquisition Corp., a Texas corporation, Wingtip Couriers, Inc., a Texas
corporation, Precept Transportation Services of Texas, Inc., a Texas
corporation, Garden State Acquisition Corporation, a Texas corporation, Precept
Holdings, Inc., a Texas corporation, Precept Financial Group, Inc., a Texas
corporation, Precept Property Management, Inc., a Texas corporation, ACS
Municipal Brokers, Inc., a Texas corporation, ACS Capital, Inc., a Delaware
corporation, and Precept Acquisition Corporation, a Texas corporation, and 100%
of the Equity Interests owned by it of Precept Transportation Services, LLC, a
Nevada limited liability company; (b) the Pledge Agreement dated as of the date
hereof executed by Precept Business Products, Inc., a Delaware corporation, in
favor of the Agent with respect to 100% of the Capital Stock owned by it of MBF
Corporation, a Louisiana corporation, InfoGraphix, Inc., a Massachusetts
corporation, and Mail/Source, Inc., a Louisiana corporation; (c) the Pledge
Agreement dated as of the date hereof executed by Precept Transportation
Services, LLC, a Nevada limited liability company, in favor of the Agent with
respect to 100% of the Capital Stock owned by it of Xxxxxxxx River Rouge, Inc.,
a Michigan corporation, Jetport Express, Inc., a Kentucky corporation, and
Transportation Systems Corp., a Nevada corporation; (e) the Pledge Agreement
dated as of the date hereof executed by Wingtip Couriers, Inc., a Texas
corporation, in favor of the Agent with respect to 100% of the Capital Stock
owned by it of Relay Couriers, Inc., a Texas corporation; and (f) any pledge
agreement executed by any Subsidiary with respect to the Capital Stock of any
other Subsidiary executed pursuant to the terms of SECTION 7.2(k), in each case,
as amended, modified, supplemented and/or restated (including to add additional
pledged Capital Stock of additional Subsidiaries.
"PRO RATA SHARE" means, with respect to any Lender, the percentage obtained
by dividing (A) such Lender's Commitment at such time (as adjusted from time to
time in accordance with the provisions of this Agreement) by (B) the sum of the
Aggregate Commitments at such time; PROVIDED, HOWEVER, if the Commitments are
terminated pursuant to the terms of this Agreement, then "Pro Rata Share" means
the percentage obtained by dividing (x) the sum of such Lender's L/C Obligations
and Revolving Loans by (y) the aggregate amount of all Revolving Loans and L/C
Obligations.
"PROPOSED NEW LENDER" is defined in SECTION 2.4(b).
"PURCHASERS" is defined in SECTION 13.3(A) hereof.
"RATE OPTION" means the Eurodollar Rate or the Floating Rate.
"RECEIVABLE(S)" means, for any Person, all of such Person's presently
existing and hereafter arising or acquired accounts, accounts receivable, and
all present and future rights of such Person to payment for goods sold or leased
or for services rendered (except those evidenced by instruments or chattel
paper), whether or not they have been earned by performance, and all rights in
any merchandise or goods which any of the same may represent, and all rights,
title, security and guaranties with respect to each of the foregoing, including,
without limitation, any right of stoppage in transit.
"REGISTER" is defined in SECTION 13.3(C) hereof.
"REGULATION T" means Regulation T of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by and to brokers and dealers of securities for the purpose
of purchasing or carrying margin stock (as defined therein).
"REGULATION U" means Regulation U of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying Margin
Stock applicable to member banks of the Federal Reserve System.
"REGULATION X" means Regulation X of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by foreign lenders for the purpose of purchasing or carrying
margin stock (as defined therein).
"REIMBURSEMENT OBLIGATION" is defined in SECTION 3.6 hereof.
"RELEASE" means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching or migration into the indoor
or outdoor environment, including the movement of Contaminants through or in the
air, soil, surface water or groundwater.
"REPLACEMENT LENDER" is defined in SECTION 2.17 hereof.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days after
such event occurs, PROVIDED, HOWEVER, that a failure to meet the minimum funding
standards of Section 412 of the Code and of Section 302 of ERISA shall be a
Reportable Event regardless of the issuance of any such waiver of the notice
requirement in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"REQUIRED LENDERS" means Lenders whose Pro Rata Shares, in the aggregate,
are equal to or greater than sixty-six and two-thirds percent (66- %); PROVIDED,
HOWEVER, that, if any of the Lenders shall have failed to fund its Pro Rata
Share of any Revolving Loan requested by the Borrower which such Lenders are
obligated to fund under the terms of this Agreement and any such failure has not
been cured, then for so long as such failure continues, "REQUIRED LENDERS" means
Lenders (excluding all Lenders whose failure to fund their respective Pro Rata
Shares of such Revolving Loans has not been so cured) whose Pro Rata Shares
represent sixty-six and two-thirds percent (66- %) or more of the
aggregate Pro Rata Shares of such Lenders; PROVIDED FURTHER, HOWEVER, that,
if the Commitments have been terminated pursuant to the terms of this
Agreement, "REQUIRED LENDERS" means Lenders (without regard to such Lenders'
performance of their respective obligations hereunder) whose aggregate
ratable shares (stated as a percentage) of the aggregate outstanding
principal balance of all Loans and L/C Obligations are equal to or greater
than sixty-six and two-thirds percent (66- %); PROVIDED, FURTHER, HOWEVER,
notwithstanding anything in this Agreement to the contrary, at no time shall
any action be taken by the Required Lenders hereunder or under any of the
other Loan Documents unless at least two (2) Lenders shall have consented
thereto.
"REQUIREMENTS OF LAW" means, as to any Person, the charter and by-laws or
other organizational or governing documents of such Person, and any law, rule or
regulation, or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject including,
without limitation, the Securities Act of 1933, the Securities Exchange Act of
1934, Regulations T, U and X, ERISA, the Fair Labor Standards Act, the Worker
Adjustment and Retraining Notification Act, Americans with Disabilities Act of
1990, and any certificate of occupancy, zoning ordinance, building,
environmental or land use requirement or permit or environmental, labor,
employment, occupational safety or health law, rule or regulation, including
Environmental, Health or Safety Requirements of Law.
"RESERVES" shall mean the maximum reserve requirement, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) with respect
to "Eurocurrency liabilities" or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on Eurodollar
Rate Loans is determined or category of extensions of credit or other assets
which includes loans by a non-United States office of any Lender to United
States residents.
"RESTRICTED PAYMENT" means (i) any dividend or other distribution, direct
or indirect, on account of any Equity Interests of the Borrower now or hereafter
outstanding, except a dividend payable solely in the Borrower's Capital Stock
(other than Disqualified Stock) or in options, warrants or other rights to
purchase such Capital Stock, (ii) any redemption, retirement, purchase or other
acquisition for value, direct or indirect, of any Equity Interests of the
Borrower or any of its Subsidiaries now or hereafter outstanding, other than in
exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Borrower) of other Equity Interests of the
Borrower (other than Disqualified Stock), (iii) any redemption, purchase,
retirement, defeasance, prepayment or other acquisition for value, direct or
indirect, of any Indebtedness (other than the Secured Obligations), and (iv) any
payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any Indebtedness other
than the Secured Obligations or any Equity Interests of the Borrower or any of
the Borrower's Subsidiaries, or of a claim for reimbursement, indemnification or
contribution arising out of or related to any such claim for damages or
rescission.
"REVOLVING CREDIT AVAILABILITY" means, at any particular time, the amount
by which the Aggregate Commitment at such time exceeds the Revolving Credit
Obligations at such time.
"REVOLVING CREDIT OBLIGATIONS" means, at any particular time, the sum of
(i) the outstanding principal amount of the Loans at such time, PLUS (ii) the
L/C Obligations at such time.
"REVOLVING LOAN" is defined in the definition of "Loans" above.
"REVOLVING NOTE" means a promissory note, in substantially the form of
EXHIBIT D hereto, duly executed by the Borrower and payable to the order of a
Lender in the amount of its Commitment, including any amendment, restatement,
modification, renewal or replacement of such Revolving Note.
"RISK-BASED CAPITAL GUIDELINES" is defined in SECTION 4.2 hereof.
"SECURED OBLIGATIONS" means, collectively, (i) the Obligations and (ii) all
Hedging Obligations owing to any Lender or any affiliate of any Lender under
agreements with respect thereto entered into with any Lender or any affiliate of
any Lender.
"SECURITY AGREEMENTS" means (a) the Security Agreement dated as of the date
hereof executed by the Borrower in favor of the Agent, (b) the Security
Agreement dated as of the date hereof executed by each of the Borrower's
Subsidiaries as of the Closing Date in favor of the Agent, in each case, as
amended, modified, supplemented and/or restated.
"SECURITY AGREEMENT SUPPLEMENT" means a supplement to the Security
Agreement entered into pursuant to the terms of SECTIONS 7.2(K) and 7.3(G) in
substantially the form of EXHIBIT C-1.
"SELLING LENDER(S)" is defined in SECTION 2.4(c) hereof.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"SUBSIDIARY" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its Subsidiaries or by such Person and one or more of its Subsidiaries, or
(ii) any partnership, association, joint venture or similar business
organization more than 50% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled. Unless otherwise
expressly provided, all references herein to a "Subsidiary" shall mean a
Subsidiary of the Borrower.
"SYNDICATION PERIOD" is defined in SECTION 2.2 hereof.
"TAXES" is defined in SECTION 2.12(E)(i) hereof.
"TERMINATION DATE" means the earlier of (a) March 22, 2002 and (b) the date
of termination of the Aggregate Commitment pursuant to SECTION 2.4 hereof or the
Commitments pursuant to SECTION 9.1 hereof.
"TERMINATION EVENT" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any member of the
Controlled Group from a Benefit Plan during a plan year in which the Borrower or
such Controlled Group member was a "substantial employer" as defined in Section
4001(a)(2) of ERISA or the cessation of operations which results in the
termination of employment of twenty percent (20%) of Benefit Plan participants
who are employees of the Borrower or any member of the Controlled Group; (iii)
the imposition of an obligation on the Borrower or any member of the Controlled
Group under Section 4041 of ERISA to provide affected parties written notice of
intent to terminate a Benefit Plan in a distress termination described in
Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which might constitute
grounds under Section 4042 of ERISA for the Termination of, or the appointment
of a trustee to administer, any Benefit Plan; or (vi) the partial or complete
withdrawal of the Borrower or any member of the Controlled Group from a
Multiemployer Plan.
"TOTAL DEBT" means, at any date or for any period, on a consolidated basis
for the Borrower and its Subsidiaries, the sum of Indebtedness of the Borrower
and its Subsidiaries, other than Hedging Obligations.
"TRANSACTION COSTS" means the fees, costs and expenses payable by the
Borrower in connection with the execution, delivery and performance of the Loan
Documents.
"TRANSFEREE" is defined in SECTION 13.5 hereof.
"TRANSPORTATION BUSINESS" means the limousine, corporate transportation and
on-demand package delivery services business conducted by the Borrower and its
Subsidiaries.
"TYPE" means, with respect to any Loan, its nature as a Floating Rate Loan
or a Eurodollar Rate Loan.
"UNFUNDED LIABILITIES" means (i) in the case of Single Employer Plans, the
amount (if any) by which the present value of all vested nonforfeitable benefits
under all Single Employer Plans exceeds the fair market value of all such Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Plans, and (ii) in the case of Multiemployer Plans, the
withdrawal liability that would be incurred by
the Controlled Group if all members of the Controlled Group completely withdrew
from all Multiemployer Plans.
"UNMATURED DEFAULT" means an event which, but for the lapse of time or the
giving of notice, or both, would constitute a Default.
"WEIGHTED AVERAGE LIFE TO MATURITY" means when applied to any Indebtedness
at any date, the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payments of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment, by (ii) the then outstanding principal
amount of such Indebtedness.
"YEAR 2000 ISSUES" means the anticipated costs, problems and uncertainties
associated with the inability of certain computer applications to effectively
handle dates on and after January 1, 2000, as such inability affects the
business, operations, and financial condition of the Borrower, or the Borrower
and its Subsidiaries or of the Borrower's and its Subsidiaries' material
customers, suppliers and vendors.
Any accounting terms used in this Agreement which are not specifically
defined herein shall have the meanings customarily given them in accordance with
generally accepted accounting principles in existence as of the Closing Date
hereof.
1.2 REFERENCES. The existence throughout the Agreement of references to
the Borrower's Subsidiaries is for a matter of convenience only. Any references
to Subsidiaries of the Borrower set forth herein shall (i) with respect to
representations and warranties which deal with historical matters be deemed to
include each of the Subsidiaries acquired and/or established prior to the
Closing Date and their respective subsidiaries, together with the businesses
acquired pursuant to any acquisitions consummated prior to the Closing Date
through a transaction structure other than a stock purchase; and (ii) shall not
in any way be construed as consent by the Agent or any Lender to the
establishment, maintenance or acquisition of any Subsidiary, except as may
otherwise be permitted hereunder.
ARTICLE II: THE LOAN FACILITIES
2.1 REVOLVING LOANS Upon the satisfaction of the conditions precedent set
forth in SECTIONS 5.1 and 5.2, from and including the Closing Date and prior to
the Termination Date, each Lender severally and not jointly agrees, on the terms
and conditions set forth in this Agreement, to make Revolving Loans to the
Borrower from time to time, in Dollars, in an amount not to exceed such Lender's
Pro Rata Share of Revolving Credit Availability at such time; PROVIDED, HOWEVER,
at no time shall the Revolving Credit Obligations exceed the Aggregate
Commitment at such time. Subject to the terms of this Agreement, the Borrower
may borrow, repay and reborrow Revolving Loans at any time prior to the
Termination Date. The Revolving Loans made on the Closing Date shall
initially be Floating Rate Loans and thereafter may be continued as Floating
Rate Loans or converted into Eurodollar Rate Loans in the manner provided in
SECTION 2.8 and subject to the other conditions and limitations therein set
forth and set forth in this ARTICLE II. On the Termination Date, the Borrower
shall repay in full the outstanding principal balance of the Loans. Each
Advance under this SECTION 2.1 shall consist of Revolving Loans made by each
Lender ratably in proportion to such Lender's respective Pro Rata Share.
2.2 RATE OPTIONS FOR ALL ADVANCES. The Revolving Loans may be Floating
Rate Advances or Eurodollar Rate Advances, or a combination thereof, selected by
the Borrower in accordance with SECTION 2.8. The Borrower may select, in
accordance with SECTION 2.8, Rate Options and Interest Periods applicable to
portions of the Revolving Loans; PROVIDED that there shall be no more than six
(6) Interest Periods in effect with respect to all of the Revolving Loans at any
time; and PROVIDED, FURTHER, HOWEVER, notwithstanding anything herein to the
contrary, the Borrower may not select the Eurodollar Rate for any Loans without
the Agent's consent during the period from the Closing Date through the earlier
to occur of (i) the date that is sixty (60) days after the Closing Date and (ii)
the date on which the Arranger notifies the Borrower that the primary
syndication of the Loans and Commitments has been completed (the "SYNDICATION
PERIOD").
2.3 OPTIONAL PAYMENTS; MANDATORY PREPAYMENTS.
(A) OPTIONAL PAYMENTS. The Borrower may from time to time repay or
prepay, without penalty or premium all or any part of outstanding Floating Rate
Advances in a minimum amount of $1,000,000 (or, if less, the outstanding balance
of such Floating Rate Advance) and in increments of $100,000 in excess thereof;
PROVIDED, that the Borrower may not so prepay Floating Rate Advances unless it
shall have provided at least one Business Day's written notice to the Agent of
such prepayment. Eurodollar Rate Advances may be voluntarily repaid or prepaid
in whole (but not in part) prior to the last day of the applicable Interest
Period, subject to the indemnification provisions contained in SECTION 4.4,
PROVIDED, that the Borrower may not so prepay Eurodollar Rate Advances unless it
shall have provided at least three (3) Business Days' written notice to the
Agent of such prepayment.
(B) MANDATORY PREPAYMENTS. If at any time and for any reason the
Revolving Credit Obligations are greater than the Aggregate Commitment, the
Borrower shall immediately make a mandatory prepayment of the Obligations in an
amount equal to such excess. In addition, if Revolving Credit Availability is
at any time less than the amount of contingent L/C Obligations outstanding at
any time, the Borrower shall deposit within five (5) Business Days after notice
thereof from the Agent cash collateral with the Agent in an amount equal to the
amount by which such L/C Obligations exceed such Revolving Credit Availability.
All of the mandatory prepayments made under this SECTION 2.3(B) shall be applied
first to Floating Rate Loans and to any Eurodollar Rate Loans maturing on such
date and then to subsequently maturing Eurodollar Rate Loans in order of
maturity.
2.4 CHANGES IN COMMITMENTS. (a) REDUCTION OF COMMITMENTS. The Borrower
may permanently reduce the Aggregate Commitment in whole, or in part ratably
among the Lenders, in an aggregate minimum amount of $5,000,000 and integral
multiples of $5,000,000 in excess of that amount (unless the Aggregate
Commitment is reduced in whole), upon at least three (3) Business Days' written
notice to the Agent, which notice shall specify the amount of any such
reduction; PROVIDED, HOWEVER, that the amount of the Aggregate Commitment may
not be reduced below the aggregate principal amount of the outstanding Revolving
Credit Obligations. All accrued commitment fees shall be payable on the
effective date of any partial or complete termination of the obligations of the
Lenders to make Revolving Loans hereunder.
(b) INCREASES OF COMMITMENTS. At any time, the Borrower may request
that the Aggregate Commitment be increased; PROVIDED that, without the prior
written consent of all of the Lenders, (i) the Aggregate Commitment shall at no
time exceed $50,000,000 MINUS the aggregate amount of all reductions in the
Aggregate Commitment previously made pursuant to SECTION 2.4(A) and (ii) the
Borrower shall not make any such request during the six month period following
any reduction in the Aggregate Commitment occurring under SECTION 2.4(A). Such
request shall be made in a written notice given to the Agent and the Lenders by
the Borrower not less than twenty (20) Business Days prior to the proposed
effective date of such increase, which notice (a "COMMITMENT INCREASE NOTICE")
shall specify the amount of the proposed increase in the Aggregate Commitment
and the proposed effective date of such increase. On or prior to the date that
is fifteen (15) Business Days after receipt of the Commitment Increase Notice,
each Lender shall submit to the Agent a notice indicating the maximum amount by
which it is willing to increase its Commitment in connection with such
Commitment Increase Notice (any such notice to the Agent being herein a "LENDER
INCREASE NOTICE"). Any Lender which does not submit a Lender Increase Notice to
the Agent prior to the expiration of such fifteen (15) Business Day period shall
be deemed to have denied any increase in its Commitment. In the event that the
increases of Commitments set forth in the Lender Increase Notices exceed the
amount requested by the Borrower in the Commitment Increase Notice, the Agent
and the Arranger shall have the right, in consultation with the Borrower, to
allocate the amount of increases necessary to meet the Borrower's Commitment
Increase Notice. In the event that the Lender Increase Notices are less than
the amount requested by the Borrower, the Agent and the Arranger shall assist
the Borrower in attempting to identify financial institutions which may have an
interest in becoming Lenders under this Agreement. Not later than three (3)
Business Days prior to the proposed effective date the Borrower may notify the
Agent of any financial institution that shall have agreed to become a "Lender"
party hereto (a "PROPOSED NEW LENDER") in connection with the Commitment
Increase Notice. Any Proposed New Lender shall be consented to by the Agent
(which consent shall not be unreasonably withheld). If the Borrower, the Agent
and the Arranger shall not have arranged any Proposed New Lender(s) to commit to
the shortfall from the Lender Increase Notices, then the Borrower shall be
deemed to have reduced the amount of its Commitment Increase Notice to the
aggregate amount set forth in the Lender Increase Notices. Based upon the
Lender Increase Notices, any allocations made in connection
therewith and any notice regarding any Proposed New Lender, if applicable, the
Agent shall notify the Borrower and the Lenders on or before the Business Day
immediately prior to the proposed effective date of the amount of each Lender's
and Proposed New Lenders' Commitment (such new amounts being the "EFFECTIVE
COMMITMENT AMOUNTS") and the amount of the Aggregate Commitment, which amounts
shall be effective on the following Business Day. Any increase in the
Aggregate Commitment shall be subject to the following conditions precedent: (A)
the Borrower shall have obtained the consent thereto of each Guarantor and its
reaffirmation of the Loan Document(s) executed by it, which consent and
reaffirmation shall be in writing and in form and substance reasonably
satisfactory to the Agent, (B) as of the date of the Commitment Increase Notice
and as of the proposed effective date of the increase in the Aggregate
Commitment, no event shall have occurred and then be continuing which
constitutes a Default or Unmatured Default, (C) the Borrower, the Agent and each
Proposed New Lender or Lender that shall have agreed to provide a "Commitment"
in support of such increase in the Aggregate Commitment shall have executed and
delivered a "COMMITMENT AND ACCEPTANCE" substantially in the form of EXHIBIT L
hereto, (D) counsel for the Borrower and for the Guarantors shall have provided
to the Agent supplemental opinions substantially in the form (and limited to the
matters) set forth in EXHIBIT K hereto and (E) the Borrower and the Proposed New
Lender shall otherwise have executed and delivered such other instruments and
documents as may be required under SECTION 2.12(E)(vi) or that the Agent shall
have reasonably requested in connection with such increase. If any fee shall be
charged by the Lenders in connection with any such increase, such fee shall be
in accordance with then prevailing market conditions, which market conditions
shall have been reasonably documented by the Agent to the Borrower. Upon
satisfaction of the conditions precedent to any increase in the Aggregate
Commitment, the Agent shall promptly advise the Borrower and each Lender of the
effective date of such increase. Upon the effective date of any increase in the
Aggregate Commitment that is supported by a Proposed New Lender, such Proposed
New Lender shall be a party hereto as a Lender and shall have the rights and
obligations of a Lender hereunder. Nothing contained herein shall constitute,
or otherwise be deemed to be, a commitment on the part of any Lender to increase
its Commitment hereunder at any time. Upon the effective date of any increase
in the Aggregate Commitment, the Lenders (including Proposed New Lenders
allocated a Commitment) shall be bound by the terms of the following CLAUSE (c).
(c) MASTER ASSIGNMENT IN CONNECTION WITH COMMITMENT INCREASES. For
purposes of this CLAUSE (c), the term "BUYING LENDER(S)" shall mean (1) each
Lender the Effective Commitment Amount of which is greater than its Commitment
prior to the effective date of any increase in the Aggregate Commitment and (2)
each Proposed New Lender that is allocated an Effective Commitment Amount in
connection with any Commitment Increase Notice and the term "SELLING LENDER(S)"
shall mean each Lender whose Commitment under this Agreement is not being
increased from that in effect prior to such increase in the Aggregate
Commitment. Effective on the effective date of any increase in the Aggregate
Commitment pursuant to CLAUSE (b) above, each Selling Lender hereby sells,
grants, assigns and conveys to each Buying Lender, without recourse, warranty,
or representation of any kind, except as specifically provided herein, an
undivided
percentage in such Selling Lender's right, title and interest in and to its
outstanding Loans and L/C Obligations in the respective dollar amounts and
percentages necessary so that, from and after such sale, each such Selling
Lender's outstanding Loans and L/C Obligations shall equal such Selling Lender's
Pro Rata Share (calculated based upon the Effective Commitment Amounts) of the
outstanding Loans and L/C Obligations under this Agreement. Effective on the
effective date of the increase in the Aggregate Commitment pursuant to CLAUSE
(b) above, each Buying Lender hereby purchases and accepts such grant,
assignment and conveyance from the Selling Lenders. Each Buying Lender hereby
agrees that its respective purchase price for the portion of the outstanding
Loans and L/C Obligations purchased hereby shall equal the respective dollar
amount necessary so that, from and after such payments, each Buying Lender's
outstanding Loans and L/C Obligations shall equal such Buying Lender's Pro Rata
Share (calculated based upon the Effective Commitment Amounts) of the
outstanding Loans and L/C Obligations under this Agreement. Such amount shall
be payable on the effective date of the increase in the Aggregate Commitment by
wire transfer of immediately available funds to the Agent. The Agent, in turn,
shall wire transfer any such funds received to the Selling Lenders, in same day
funds, for the sole account of the Selling Lenders. Each Selling Lender hereby
represents and warrants to each Buying Lender that such Selling Lender owns the
Loans and L/C Obligations being sold and assigned hereby for its own account and
has not sold, transferred or encumbered any or all of its interest in such Loans
or L/C Obligations, except for participations which will be extinguished upon
payment to Selling Lender of an amount equal to the portion of the outstanding
Loans and L/C Obligations being sold by such Selling Lender. Each Buying Lender
hereby acknowledges and agrees that, except for each Selling Lender's
representations and warranties contained in the foregoing sentence, each such
Buying Lender has entered into its Commitment and Acceptance with respect to
such increase on the basis of its own independent investigation and has not
relied upon, and will not rely upon, any explicit or implicit written or oral
representation, warranty or other statement of the Lenders or the Agent
concerning the authorization, execution, legality, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or the other Loan
Documents. The Borrower hereby agres to compensate each Selling Lender for all
losses, expenses and liabilities incurred by each Lender in connection with the
sale and assignment of any Eurodollar Rate Loans hereunder on the terms and in
the manner as set forth in SECTION 4.4.
2.5 METHOD OF BORROWING. Not later than 1:00 p.m. (Dallas time) on each
Borrowing Date, each Lender shall make available its Revolving Loan, in funds
immediately available in Dallas, Texas to the Agent at its address specified
pursuant to ARTICLE XIV. The Agent will promptly make the funds so received
from the Lenders available to the Borrower at the Agent's aforesaid address.
2.6 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR ADVANCES. The
Borrower shall select the Type of Advance and, in the case of each Eurodollar
Rate Advance, the Interest Period applicable to each Advance from time to time.
The Borrower shall give the Agent irrevocable notice in substantially the form
of EXHIBIT E hereto (a "BORROWING NOTICE") not later than 11:00 a.m. (Dallas
time) (a) on the Borrowing Date of each
Floating Rate Advance and (b) three Business Days before the Borrowing Date for
each Eurodollar Rate Advance, specifying: (i) the Borrowing Date (which shall
be a Business Day) of such Advance; (ii) the aggregate amount of such Advance;
(iii) the Type of Advance selected; and (iv) in the case of each Eurodollar Rate
Advance, the Interest Period applicable thereto. Each Floating Rate Advance and
all Obligations other than Eurodollar Rate Loans shall bear interest from and
including the date of the making of such Advance to (but not including) the date
of repayment thereof at the lesser of (A) the Maximum Rate and (B) the Floating
Rate, each change in the rate to be charged on a Floating Rate Advance to become
effective without notice to the Borrower on the effective date of each change in
the Maximum Rate or the Floating Rate, as the case may be; PROVIDED, HOWEVER,
that if at any time the Floating Rate shall exceed the Maximum Rate, thereby
causing the interest on a Floating Rate Advance to be limited to the Maximum
Rate, then any subsequent reduction in the Floating Rate shall not reduce the
rate of interest on a Floating Rate Advance below the Maximum Rate until the
total amount of interest accrued on each Floating Rate Advance equals the amount
of interest which would have accrued on such Floating Rate Advances if the
Floating Rate had at all times been in effect. Changes in the rate of interest
on that portion of any Advance maintained as a Floating Rate Loan will take
effect simultaneously with each change in the Alternate Base Rate, the Maximum
Rate or the applicable Floating Rate Margin. Each Eurodollar Rate Advance shall
bear interest from and including the first day of the Interest Period applicable
thereto to (but not including) the last day of such Interest Period at the
lesser of (A) the Maximum Rate and (B) the Eurodollar Rate determined as
applicable to such Eurodollar Rate Advance, changing when and as the applicable
Eurodollar Margin or Maximum Rate changes, as the case may be; PROVIDED,
HOWEVER, that if at any time the Eurodollar Rate applicable to a Eurodollar Rate
Advance shall exceed the Maximum Rate, thereby causing the interest on a
Eurodollar Rate Advance to be limited to the Maximum Rate, then any subsequent
reduction in the Eurodollar Rate shall not reduce the rate of interest on a
Eurodollar Rate Advance below the Maximum Rate until the total amount of
interest accrued on each Eurodollar Rate Advance equals the amount of interest
which would have accrued on such Eurodollar Rate Advances if the Eurodollar
Rate had at all times been in effect.
2.7 MINIMUM AMOUNT OF EACH ADVANCE. Each Eurodollar Rate Advance shall be
in the minimum amount of $1,000,000 (and in multiples of $100,000 if in excess
thereof). Each Floating Rate Advance shall be in the minimum amount of $100,000
(and in multiples of $100,000 if in excess thereof) (other than an Advance to
repay a Reimbursement Obligation pursuant to SECTION 3.6), PROVIDED, HOWEVER,
that any Floating Rate Advance may be in the amount of the unused Aggregate
Commitment.
2.8 METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR CONVERSION AND
CONTINUATION OF ADVANCES.
(A) RIGHT TO CONVERT. The Borrower may elect from time to time, subject
to the provisions of SECTION 2.2 and this SECTION 2.8, and, for any conversion
of a Eurodollar Rate Advance other than at the end of an Interest Period,
subject to payment of amounts payable under SECTION 4.4, to convert all or any
part of a Revolving Loan of any Type into any other Type or Types of Loans.
(B) AUTOMATIC CONVERSION AND CONTINUATION. Floating Rate Loans shall
continue as Floating Rate Loans unless and until such Floating Rate Loans are
converted into Eurodollar Rate Loans. Eurodollar Rate Loans shall continue as
Eurodollar Rate Loans until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Rate Loans shall be automatically
converted into Floating Rate Loans unless the Borrower shall have given the
Agent notice in accordance with SECTION 2.8(D) requesting that, at the end of
such Interest Period, such Eurodollar Rate Loans continue as a Eurodollar Rate
Loan.
(C) NO CONVERSION POST-DEFAULT OR POST-UNMATURED DEFAULT. Notwithstanding
anything to the contrary contained in SECTION 2.8(A) or SECTION 2.8(B), no
Revolving Loan may be converted into or continued as a Eurodollar Rate Loan
(except with the consent of the Required Lenders) when any Default or Unmatured
Default has occurred and is continuing.
(D) CONVERSION/CONTINUATION NOTICE. The Borrower shall give the Agent
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of a
Floating Rate Loan into a Eurodollar Rate Loan or continuation of a Eurodollar
Rate Loan not later than 11:00 a.m. (Dallas time) three (3) Business Days prior
to the date of the requested conversion or continuation, specifying: (1) the
requested date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and Type of the Loan to be converted or continued;
and (3) the amount of Eurodollar Rate Loan(s) into which such Loan is to be
converted or continued and the duration of the Interest Period applicable
thereto.
2.9 DEFAULT RATE. After the occurrence and during the continuance of a
Default, at the option of the Agent or at the direction of the Required Lenders,
the interest rate applicable to all of the Obligations shall be equal to the
Floating Rate PLUS two percent (2.0%) per annum and fees payable under SECTION
3.7 with respect to standby Letters of Credit shall be increased by two percent
(2.0%) per annum.
2.10 METHOD OF PAYMENT. All payments of principal, interest, and fees
hereunder shall be made, without setoff, deduction or counterclaim, in
immediately available funds to the Agent at the Agent's address specified
pursuant to ARTICLE XIV, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by 1:00 p.m. (Dallas time) on
the date when due and shall be made ratably among the
Lenders (unless such amount is not to be shared ratably in accordance with the
terms hereof). Each payment delivered to the Agent for the account of any
Lender shall be delivered promptly by the Agent to such Lender in the same type
of funds which the Agent received at its address specified pursuant to ARTICLE
XIV or at any Lending Installation specified in a notice received by the Agent
from such Lender. The Borrower authorizes the Agent to charge the account of
the Borrower maintained with Bank One for each payment of principal, interest,
fees and other amounts as it becomes due hereunder.
2.11 REVOLVING NOTES, TELEPHONIC NOTICES. Each Lender is authorized to
record the principal amount of each of its Revolving Loans and each repayment
with respect to its Revolving Loans on the schedule attached to its respective
Revolving Note; PROVIDED, HOWEVER, that the failure to so record shall not
affect the Borrower's obligations under any such Revolving Note. The Borrower
authorizes the Lenders and the Agent to extend Advances, effect selections of
Types of Advances and to transfer funds based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be an
Authorized Officer of the Borrower. The Borrower agrees to deliver promptly to
the Agent a written confirmation, signed by an Authorized Officer, if such
confirmation is requested by the Agent or any Lender, of each telephonic notice.
If the written confirmation differs in any material respect from the action
taken by the Agent and the Lenders, (i) the telephonic notice shall govern
absent manifest error and (ii) the Agent or the Lender, as applicable, shall
promptly notify the Authorized Officer who provided such confirmation of such
difference.
2.12 PROMISE TO PAY; INTEREST AND COMMITMENT FEES; INTEREST PAYMENT DATES;
INTEREST AND FEE BASIS; TAXES; LOAN AND CONTROL ACCOUNTS.
(A) PROMISE TO PAY. The Borrower unconditionally promises to pay when due
the principal amount of each Loan and all other Obligations incurred by it, and
to pay all unpaid interest accrued thereon, in accordance with the terms of this
Agreement and the Revolving Notes.
(B) INTEREST PAYMENT DATES. Interest accrued on each Floating Rate Loan
shall be payable on each Payment Date, commencing with the first such date to
occur after the date hereof and at maturity (whether by acceleration or
otherwise). Interest accrued on each Eurodollar Rate Loan shall be payable on
the last day of its applicable Interest Period, on any date on which the
Eurodollar Rate Loan is prepaid, whether by acceleration or otherwise, and at
maturity; PROVIDED, HOWEVER, interest accrued on each Eurodollar Rate Loan
having an Interest Period longer than three months shall also be payable on the
last day of each three-month interval during such Interest Period. Interest
accrued on the principal balance of all other Obligations shall be payable in
arrears (i) on the last day of each calendar month, commencing on the first such
day following the incurrence of such Obligation, (ii) upon repayment thereof in
full or in part, and (iii) if not theretofore paid in full, at the time such
other Obligation becomes due and payable (whether by acceleration or otherwise).
(C) COMMITMENT FEES. (i) The Borrower shall pay to the Agent, for the
account of the Lenders in accordance with their Pro Rata Shares, from and after
the Closing Date until the date on which the Aggregate Commitment shall be
terminated in whole, a commitment fee accruing at the rate of the then
Applicable Commitment Fee Percentage, on the amount by which (A) the Aggregate
Commitment in effect from time to time exceeds (B) the sum of (i) the
outstanding principal amount of the Loans PLUS (ii) the L/C Obligations at such
time outstanding from time to time. All such commitment fees payable under this
CLAUSE (C) shall be payable quarterly in arrears on each Payment Date occurring
after the Closing Date (with the first such payment being calculated for the
period from the Closing Date and ending on such Payment Date), and, in addition,
on the date on which the Aggregate Commitment shall be terminated in whole.
(ii) The Borrower agrees to pay to the Agent for the sole account of the
Agent and the Arranger (unless otherwise agreed between the Agent or the
Arranger and any Lender) the fees set forth in the letter agreements between the
Agent and the Borrower dated March 22, 1999, payable at the times and in the
amounts set forth therein.
(D) INTEREST AND FEE BASIS; APPLICABLE EURODOLLAR MARGIN, APPLICABLE
FLOATING RATE MARGIN AND APPLICABLE COMMITMENT FEE PERCENTAGE.
(i) Interest on all Obligations and all Fees shall be calculated for actual
days elapsed on the basis of a 360-day year. Interest shall be payable for the
day an Obligation is incurred but not for the day of any payment on the amount
paid if payment is received prior to 1:00 p.m. (Dallas time) at the place of
payment. If any payment of principal of or interest on a Loan or any payment of
any other Obligations shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.
(ii) The Applicable Eurodollar Margin, Applicable Floating Rate Margin and
Applicable Commitment Fee Percentage shall be determined as of the last day of
each fiscal quarter as set forth below by reference to the table set forth
below, on the basis of the then applicable Leverage Ratio as described in this
SECTION 2.12(D)(ii); PROVIDED, HOWEVER, for the period from the Closing Date
until the Applicable Eurodollar Margins, Applicable Floating Rate Margin and
Applicable Commitment Fee Percentage are first adjusted pursuant to this CLAUSE
(D), it shall be assumed that the Leverage Ratio is greater than 2.25 to 1.00
and less than or equal to 2.50 to 1.00; PROVIDED, FURTHER, HOWEVER, if utilizing
the Leverage Ratio instead of the "Adjusted Leverage Ratio" (as defined below)
would result in lowering the Applicable Eurodollar Margin, Applicable Floating
Rate Margin and Applicable Commitment Fee Percentage by more than one Level as
set forth in the table below, then the Applicable Eurodollar Margin, Applicable
Floating Rate Margin and Applicable Commitment Fee Percentage shall be the Level
that is one Level lower than the Level determined using the Adjusted Leverage
Ratio. For purposes hereof "Adjusted Leverage Ratio" shall mean the Leverage
Ratio calculated utilizing EBITDA WITHOUT taking into account the adjustments
set forth in the definition of Adjusted EBITDA.
Level I Level II Level III Level IV Level V Level VI
----------------------------------------------------------------------------------------------------------------------------
Leverage Ratio 1.50 to 1.00 > 1.50 to 1.00 > 2.00 to 1.00 > 2.25 to 1.00 > 2.50 to 1.00 > 2.75 to 1.00
and and and and
2.00 to 1.00 2.25 to 1.00 2.50 to 1.00 2.75 to 1.00
----------------------------------------------------------------------------------------------------------------------------
Applicable
Commitment Fee 0.150% 0.175% 0.200% 0.250% 0.275% 0.300%
Percentage
Applicable
----------------------------------------------------------------------------------------------------------------------------
Eurodollar 1.50% 1.75% 2.00% 2.50% 2.75% 3.00%
Rate Margin and
Applicable L/C
Fee Percentage
----------------------------------------------------------------------------------------------------------------------------
Applicable
Floating Rate 0% 0.25% 050% 1.00% 1.25% 1.50%
Margin
----------------------------------------------------------------------------------------------------------------------------
For purposes of this SECTION 2.12(D)(ii), the Leverage Ratio shall be determined
as of the last day of each fiscal quarter based upon (1) for Total Debt, Total
Debt as of the last day of each such fiscal quarter and (2) for Adjusted EBITDA,
Adjusted EBITDA for the twelve-month period ending on such day, calculated as
set forth in the definition thereof. Upon receipt of the financial statements
delivered pursuant to SECTIONS 7.1(A)(i) (subject to adjustment upon receipt of
the financial statements delivered pursuant to SECTION 7.1(A)(ii)), the
Applicable Eurodollar Margin, Applicable Floating Rate Margin and Applicable
Commitment Fee Percentage shall be adjusted, such adjustment being effective
five (5) Business Days following the Agent's receipt of such financial
statements and the compliance certificate required to be delivered in connection
therewith pursuant to SECTION 7.1(A)(iii); PROVIDED, that if the Borrower shall
not have timely delivered its financial statements in accordance with
SECTION 7.1(A)(i) or (ii), as applicable, then commencing on the date upon which
such financial statements should have been delivered and continuing until such
financial statements are actually delivered, it shall be assumed for purposes of
determining the Applicable Eurodollar Margin, Applicable Floating Rate Margin
and Applicable Commitment Fee Percentage that the Leverage Ratio was greater
than 2.75 to 1.0.
(E) TAXES.
(i) Any and all payments by the Borrower hereunder shall be made free
and clear of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings or any liabilities
with respect thereto including those arising after the Closing Date hereof
as a result of the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a Governmental Authority or any
change in the interpretation or application thereof by a Governmental
Authority but excluding, in the case of each Lender and the Agent, such
taxes (including income taxes, franchise taxes and branch profit
taxes) as are imposed on or measured by such Lender's or Agent's, as the
case may be, income by the United States of America or any Governmental
Authority of the jurisdiction under the laws of which such Lender or Agent,
as the case may be, is organized (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings, and liabilities which the Agent
or a Lender determines to be applicable to this Agreement, the other Loan
Documents, the Commitments, the Loans or the Letters of Credit being
hereinafter referred to as "TAXES"). If the Borrower shall be required by
law to deduct any Taxes from or in respect of any sum payable hereunder or
under the other Loan Documents to any Lender or the Agent, (i) the sum
payable shall be increased as may be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this SECTION 2.12(E)) such Lender or the Agent (as the case
may be) 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
taxation authority or other authority in accordance with applicable law.
If a withholding tax of the United States of America or any other
Governmental Authority shall be or become applicable (y) after the Closing
Date, to such payments by the Borrower made to the Lending Installation or
any other office that a Lender may claim as its Lending Installation, or
(z) after such Lender's selection and designation of any other Lending
Installation, to such payments made to such other Lending Installation,
such Lender shall use reasonable efforts to make, fund and maintain its
Loans through another Lending Installation of such Lender in another
jurisdiction so as to reduce the Borrower's liability hereunder, if the
making, funding or maintenance of such Loans through such other Lending
Installation of such Lender does not, in the judgment of such Lender,
otherwise adversely affect such Loans, or obligations under the Commitments
or such Lender.
(ii) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges,
or similar levies which arise from any payment made hereunder, from the
issuance of Letters of Credit hereunder, or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement, the other
Loan Documents, the Commitments, the Loans or the Letters of Credit
(hereinafter referred to as "OTHER TAXES").
(iii) The Borrower indemnifies each Lender and the Agent for the full
amount of Taxes and Other Taxes (including, without limitation, any Taxes
or Other Taxes imposed by any Governmental Authority on amounts payable
under this SECTION 2.12(E)) paid by such Lender or the Agent (as the case
may be) and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto, whether or not such Taxes or
Other Taxes were correctly or legally asserted. This indemnification shall
be made within thirty (30) days after the date such Lender or the Agent (as
the case may be) makes written demand therefor. A certificate as to any
additional amount payable to any Lender or the Agent under this SECTION
2.12(E) submitted to the Borrower and the Agent (if a Lender is so
submitting) by such Lender or the Agent shall show in reasonable
detail the amount payable and the calculations used to determine such
amount and shall, absent manifest error, be final, conclusive and binding
upon all parties hereto. With respect to such deduction or withholding for
or on account of any Taxes and to confirm that all such Taxes have been
paid to the appropriate Governmental Authorities, the Borrower shall
promptly (and in any event not later than thirty (30) days after receipt)
furnish to each Lender and the Agent such certificates, receipts and other
documents as may be required (in the judgment of such Lender or the Agent)
to establish any tax credit to which such Lender or the Agent may be
entitled.
(iv) Within thirty (30) days after the date of any payment of Taxes
or Other Taxes by the Borrower, the Borrower shall furnish to the Agent the
original or a certified copy of a receipt evidencing payment thereof.
(v) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this SECTION 2.12(E) shall survive the payment in full of
principal and interest hereunder, the termination of the Letters of Credit
and the termination of this Agreement.
(vi) Without limiting the obligations of the Borrower under this
SECTION 2.12(E), each Lender that is not created or organized under the
laws of the United States of America or a political subdivision thereof
shall deliver to the Borrower and the Agent on or before the Closing Date,
or, if later, the date on which such Lender becomes a Lender pursuant to
SECTION 13.3, a true and accurate certificate executed in duplicate by a
duly authorized officer of such Lender, in a form satisfactory to the
Borrower and the Agent, to the effect that such Lender is capable under the
provisions of an applicable tax treaty concluded by the United States of
America (in which case the certificate shall be accompanied by two executed
copies of Form 1001 of the IRS) or under Section 1442 of the Code (in which
case the certificate shall be accompanied by two copies of Form 4224 of the
IRS) of receiving payments of interest hereunder without deduction or
withholding of United States federal income tax. Each such Lender further
agrees to deliver to the Borrower and the Agent from time to time a true
and accurate certificate executed in duplicate by a duly authorized officer
of such Lender substantially in a form satisfactory to the Borrower and the
Agent, before or promptly upon the occurrence of any event requiring a
change in the most recent certificate previously delivered by it to the
Borrower and the Agent pursuant to this SECTION 2.12(E)(vi). Further, each
Lender which delivers a certificate accompanied by Form 1001 of the IRS
covenants and agrees to deliver to the Borrower and the Agent within
fifteen (15) days prior to January 1, 2000, and every third (3rd)
anniversary of such date thereafter on which this Agreement is still in
effect, another such certificate and two accurate and complete original
signed copies of Form 1001 (or any successor form or forms required under
the Code or the applicable regulations promulgated thereunder), and each
Lender that delivers a certificate accompanied by Form 4224 of the IRS
covenants and agrees
to deliver to the Borrower and the Agent within fifteen (15) days prior to
the beginning of each subsequent taxable year of such Lender during which
this Agreement is still in effect, another such certificate and two
accurate and complete original signed copies of IRS Form 4224 (or any
successor form or forms required under the Code or the applicable
regulations promulgated thereunder). Each such certificate shall certify
as to one of the following:
(a) that such Lender is capable of receiving payments of
interest hereunder without deduction or withholding of United
States of America federal income tax;
(b) that such Lender is not capable of receiving payments
of interest hereunder without deduction or withholding of United
States of America federal income tax as specified therein but is
capable of recovering the full amount of any such deduction or
withholding from a source other than the Borrower and will not
seek any such recovery from the Borrower; or
(c) that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of
a Governmental Authority or any change in the interpretation or
application thereof by a Governmental Authority after the date
such Lender became a party hereto, such Lender is not capable of
receiving payments of interest hereunder without deduction or
withholding of United States of America federal income tax as
specified therein and that it is not capable of recovering the
full amount of the same from a source other than the Borrower.
Each Lender shall promptly furnish to the Borrower and the Agent such
additional documents as may be reasonably required by the Borrower or the
Agent to establish any exemption from or reduction of any Taxes or Other
Taxes required to be deducted or withheld and which may be obtained without
undue expense to such Lender.
(F) LOAN ACCOUNT. Each Lender shall maintain in accordance with its usual
practice an account or accounts (a "LOAN ACCOUNT") evidencing the Obligations of
the Borrower to such Lender owing to such Lender from time to time, including
the amount of principal and interest payable and paid to such Lender from time
to time hereunder and under the Revolving Notes.
(G) CONTROL ACCOUNT. The Register maintained by the Agent pursuant to
SECTION 13.3(C) shall include a control account, and a subsidiary account for
each Lender, in which accounts (taken together) shall be recorded (i) the date
and amount of each Advance made hereunder, the type of Loan comprising such
Advance and any Interest Period applicable thereto, (ii) the effective date and
amount of each Assignment Agreement delivered to and accepted by it and the
parties thereto pursuant to SECTION
13.3, (iii) the amount of any principal or interest due and payable or to become
due and payable from the Borrower to each Lender hereunder or under the
Revolving Notes, (iv) the amount of any sum received by the Agent from the
Borrower hereunder and each Lender's share thereof (v) the amount of any
increase of the Aggregate Commitment pursuant to SECTION 2.4(b) and the
applicable Lenders with respect thereto and (vi) all other appropriate debits
and credits as provided in this Agreement, including, without limitation, all
fees, charges, expenses and interest.
(H) ENTRIES BINDING. The entries made in the Register and each Loan
Account shall be conclusive and binding for all purposes, absent manifest error,
unless the Borrower objects to information contained in the Register and each
Loan Account within thirty (30) days of the Borrower's receipt of such
information.
2.13 NOTIFICATION OF ADVANCES, INTEREST RATES, PREPAYMENTS AND AGGREGATE
COMMITMENT REDUCTIONS. Promptly after receipt thereof, the Agent will notify
each Lender of the contents of each Aggregate Commitment reduction notice,
Commitment Increase Notice, Borrowing Notice, Continuation/Conversion Notice,
and repayment notice received by it hereunder. The Agent will notify each
Lender of the interest rate applicable to each Eurodollar Rate Loan promptly
upon determination of such interest rate and will give each Lender prompt notice
of each change in the Alternate Base Rate.
2.14 LENDING INSTALLATIONS. Subject to the provisions of SECTION 2.12(E),
each Lender may book its Loans at any Lending Installation selected by such
Lender and may change its Lending Installation from time to time. All terms of
this Agreement shall apply to any such Lending Installation and the Revolving
Notes shall be deemed held by each Lender for the benefit of such Lending
Installation. Each Lender may, by written or facsimile notice to the Agent and
the Borrower, designate a Lending Installation through which Loans will be made
by it and for whose account Loan payments are to be made.
2.15 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Borrower or a Lender,
as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption.
If such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.16 TERMINATION DATE. This Agreement shall be effective until the
Termination Date. Notwithstanding the termination of this Agreement on the
Termination Date, until all of the Secured Obligations (other than contingent
indemnity obligations) shall have been fully and indefeasibly paid and
satisfied, all financing arrangements among the Borrower and its Subsidiaries
and the Lenders shall have been terminated and all of the Letters of Credit
shall have expired, been canceled or terminated, all of the rights and remedies
under this Agreement and the other Loan Documents shall survive and the Agent
shall be entitled to retain its security interest in and to all existing and
future Collateral.
2.17 REPLACEMENT OF CERTAIN LENDERS. In the event a Lender ("AFFECTED
LENDER") shall have: (i) failed to fund its Pro Rata Share of any Advance
requested by the Borrower, which such Lender is obligated to fund under the
terms of this Agreement and which failure has not been cured, (ii) requested
compensation from the Borrower under SECTIONS 2.12(E), 4.1 or 4.2 to recover
Taxes, Other Taxes or other additional costs incurred by such Lender which are
not being incurred generally by the other Lenders, (iii) delivered a notice
pursuant to SECTION 4.3 claiming that such Lender is unable to extend Eurodollar
Rate Loans to the Borrower for reasons not generally applicable to the other
Lenders or (iv) has invoked SECTION 10.2, then, in any such case, the Borrower
or the Agent may make written demand on such Affected Lender (with a copy to the
Agent in the case of a demand by the Borrower and a copy to the Borrower in the
case of a demand by the Agent) for the Affected Lender to assign, and such
Affected Lender shall use its best efforts to assign pursuant to one or more
duly Assignment Agreements five (5) Business Days after the date of such demand,
to one or more financial institutions that comply with the provisions of SECTION
13.3(A) which the Borrower or the Agent, as the case may be, shall have engaged
for such purpose ("REPLACEMENT LENDER"), all of such Affected Lender's rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, its Commitment, all Loans owing to it, all of its
participation interests in existing Letters of Credit, and its obligation to
participate in additional Letters of Credit hereunder) in accordance with
SECTION 13.3. The Agent agrees, upon the occurrence of such events with respect
to an Affected Lender and upon the written request of the Borrower, to use its
reasonable efforts to obtain the Commitments from one or more financial
institutions to act as a Replacement Lender. The Agent is authorized to execute
one or more of such assignment agreements as attorney-in-fact for any Affected
Lender failing to execute and deliver the same within five (5) Business Days
after the date of such demand. Further, with respect to such assignment the
Affected Lender shall have concurrently received, in cash, all amounts due and
owing to the Affected Lender hereunder or under any other Loan Document,
including, without limitation, the aggregate outstanding principal amount of the
Loans owed to such Lender, together with accrued interest thereon through the
date of such assignment, amounts payable under SECTIONS 2.12(E), 4.1, and 4.2
with respect to such Affected Lender and compensation payable under SECTION
2.12(C) in the event of any replacement of any Affected Lender under CLAUSE (ii)
or CLAUSE (iii) of this SECTION 2.17; PROVIDED that upon such Affected Lender's
replacement, such Affected Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of SECTIONS 2.12(E), 4.1, 4.2, 4.4, and
10.7, as well as to any fees accrued for its account hereunder and not yet
paid, and shall continue to be obligated under SECTION 11.8. Upon the
replacement of any Affected Lender pursuant to this SECTION 2.17, the provisions
of SECTION 9.2 shall continue to apply with respect to Advances which are then
outstanding with respect to which the Affected Lender failed to fund its Pro
Rata Share and which failure has not been cured.
2.18 COLLECTION ACCOUNT ARRANGEMENTS.
(a) ESTABLISHMENT OF COLLECTION ACCOUNTS. Within ninety (90) days after
the date hereof (or, in the case of any Subsidiary that becomes a Guarantor
after the date hereof, within ninety (90) days after the date such Subsidiary
becomes a Guarantor), the Borrower shall and shall have caused each of the
Guarantors to have entered into and shall thereafter maintain (and cause the
Guarantors to maintain) lock-box services agreements, cash collection account
arrangements and/or similar arrangements for the collection of Receivables
included in the Collateral and other proceeds of Collateral into one or more
Collection Accounts, in form and substance reasonably acceptable to the Agent,
and in connection with such arrangements, the Borrower shall have entered into
and caused each of the Guarantors to have entered into and shall thereafter
maintain (and cause the Guarantors to maintain) in effect Collection Account
Agreements for each of such Collection Accounts. Within ninety (90) days after
the date hereof (or, in the case of any Subsidiary that becomes a Guarantor
after the date hereof, within ninety (90) days after the date such Subsidiary
becomes a Guarantor), the Borrower has and has caused each of the Guarantors to
put in place arrangements so that its Account Debtors directly remit all
payments on Receivables to the Collection Accounts (or lock boxes established in
connection therewith). Any of the foregoing collections received by the
Borrower or any Guarantor and not deposited in the Collection Accounts, shall be
deemed to have been received by the Borrower and/or Guarantor as the Agent's
trustee and, upon the receipt thereof, the Borrower shall promptly transfer or
cause such Guarantor to promptly transfer all such amounts into a Collection
Account in their original form. All deposits in any Collection Account shall be
remitted to the Borrower, the Agent or as the Agent may direct, all in
accordance with the provisions of the Collection Account Agreements.
(b) COLLECTION ACCOUNT BLOCKAGE. Following any Collection Account
Blockage Date and during the continuance of the Default giving rise thereto,
(i) all payments received by the Agent, all collection of Receivables received
by the Agent and all proceeds of other Collateral received by the Agent, whether
through payment or otherwise, will be the sole property of the Agent for the
benefit of the Holders of Secured Obligations and will be deemed to be received
by the Agent for application to the Obligations.
ARTICLE III: THE LETTER OF CREDIT FACILITY
3.1 OBLIGATION TO ISSUE. Subject to the terms and conditions of this
Agreement and in reliance upon the representations, warranties and covenants of
the Borrower herein set forth, each Issuing Bank hereby agrees to issue for the
account of the Borrower through such Issuing Bank's branches as it and the
Borrower may jointly agree, one or more Letters of Credit in accordance with
this ARTICLE III, from time to time during the period, commencing on the Closing
Date and ending on the Business Day prior to the Termination Date. SCHEDULE 3.1
contains a schedule of certain letters of credit issued for the account of the
Borrower prior to the Closing Date. Subject to the satisfaction of the
conditions contained in SECTION 5.1 and 5.2 and from and after the Closing Date,
such letters of credit shall be deemed to be Letters of Credit issued pursuant
to this ARTICLE III, and the issuer thereof shall be deemed to be the Issuing
Bank with respect thereto with all of the rights and indemnities afforded to the
Issuing Bank hereunder.
3.2 TYPES AND AMOUNTS. No Issuing Bank shall have any obligation to and
no Issuing Bank shall:
(i) issue any Letter of Credit if on the date of issuance,
before or after giving effect to the Letter of Credit requested
hereunder, (a) the Revolving Credit Obligations at such time would
exceed the Aggregate Commitment at such time, or (b) the aggregate
outstanding amount of the L/C Obligations would exceed $5,000,000; or
(ii) issue any Letter of Credit which has an expiration date
later than the date which is the earlier of one (1) year after the
date of issuance thereof or five (5) Business Days immediately
preceding the Termination Date.
3.3 CONDITIONS. In addition to being subject to the satisfaction of the
conditions contained in SECTIONS 5.1 and 5.2, the obligation of an Issuing Bank
to issue any Letter of Credit is subject to the satisfaction in full of the
following conditions:
(i) the Borrower shall have delivered to the applicable Issuing
Bank at such times and in such manner as such Issuing Bank may
reasonably prescribe, a request for issuance of such Letter of Credit
in substantially the form of EXHIBIT F hereto, duly executed
applications for such Letter of Credit, and such other documents,
instructions and agreements as may be reasonably required pursuant to
the terms thereof, with copies of the foregoing delivered to the
Agent, and the proposed Letter of Credit shall be reasonably
satisfactory to such Issuing Bank as to form and content; and
(ii) as of the date of issuance no order, judgment or decree of
any court, arbitrator or Governmental Authority shall purport by its
terms to
enjoin or restrain the applicable Issuing Bank from issuing such Letter of
Credit and no law, rule or regulation applicable to such Issuing Bank and
no request or directive (whether or not having the force of law) from a
Governmental Authority with jurisdiction over such Issuing Bank shall
prohibit or request that such Issuing Bank refrain from the issuance of
Letters of Credit generally or the issuance of that Letter of Credit.
If any provision in a letter of credit application delivered in connection with
the foregoing is inconsistent with or more restrictive than a provision
contained in this Agreement, the provisions contained in this Agreement shall
control.
3.4 PROCEDURE FOR ISSUANCE OF LETTERS OF CREDIT. (a) Subject to the
terms and conditions of this ARTICLE III and provided that the applicable
conditions set forth in SECTIONS 5.1 and 5.2 hereof have been satisfied, the
applicable Issuing Bank shall, on the requested date, issue a Letter of Credit
on behalf of the Borrower in accordance with such Issuing Bank's usual and
customary business practices and, in this connection, such Issuing Bank may
assume that the applicable conditions set forth in SECTION 5.2 hereof have been
satisfied unless it shall have received notice to the contrary from the Agent or
a Lender or has knowledge that the applicable conditions have not been met.
(b) The applicable Issuing Bank shall give the Agent written, or facsimile
notice, or telephonic notice confirmed promptly thereafter in writing, of the
issuance of a Letter of Credit, PROVIDED, HOWEVER, that the failure to provide
such notice shall not result in any liability on the part of such Issuing Bank.
(c) No Issuing Bank shall extend or amend any Letter of Credit unless the
requirements of this SECTION 3.4 are met as though a new Letter of Credit was
being requested and issued.
3.5 LETTER OF CREDIT PARTICIPATION. Unless a Lender shall have notified
the Issuing Bank, prior to its issuance of a Letter of Credit, that any
applicable condition precedent set forth in SECTIONS 5.1 and 5.2 had not then
been satisfied, (a) upon the Closing Date with respect to the Existing Letters
of Credit and (b) immediately upon the issuance of each other Letter of Credit
hereunder, each Lender shall be deemed to have automatically, irrevocably and
unconditionally purchased and received from the applicable Issuing Bank an
undivided interest and participation in and to such Letter of Credit, the
obligations of the Borrower in respect thereof, and the liability of such
Issuing Bank thereunder (collectively, an "L/C INTEREST") in an amount equal to
the amount available for drawing under such Letter of Credit multiplied by such
Lender's Pro Rata Share. Each Issuing Bank will notify each Lender promptly
upon presentation to it of an L/C Draft or upon any other draw under a Letter of
Credit. On or before the Business Day on which an Issuing Bank makes payment of
each such L/C Draft or, in the case of any other draw on a Letter of Credit, on
demand by the Agent, each Lender shall make payment to the Agent, for the
account of the applicable Issuing Bank, in immediately available funds in an
amount equal to such Lender's Pro Rata Share of the amount of such payment or
draw. The obligation of each Lender to reimburse the Issuing Bank under this
SECTION 3.5 shall
be unconditional, continuing, irrevocable and absolute. In the event that any
Lender fails to make payment to the Agent of any amount due under this SECTION
3.5, the Agent shall be entitled to receive, retain and apply against such
obligation the principal and interest otherwise payable to such Lender hereunder
until the Agent receives such payment from such Lender or such obligation is
otherwise fully satisfied; PROVIDED, HOWEVER, that nothing contained in this
sentence shall relieve such Lender of its obligation to reimburse the applicable
Issuing Bank for such amount in accordance with this SECTION 3.5.
3.6 REIMBURSEMENT OBLIGATION. The Borrower agrees unconditionally,
irrevocably and absolutely to pay immediately to the Agent, for the account of
the Lenders, the amount of each advance which may be drawn under or pursuant to
a Letter of Credit or an L/C Draft related thereto (such obligation of the
Borrower to reimburse the Agent for an advance made under a Letter of Credit or
L/C Draft being hereinafter referred to as a "REIMBURSEMENT OBLIGATION" with
respect to such Letter of Credit or L/C Draft). If the Borrower at any time
fails to repay a Reimbursement Obligation pursuant to this SECTION 3.6, the
Borrower shall be deemed to have elected to borrow Revolving Loans from the
Lenders, as of the date of the advance giving rise to the Reimbursement
Obligation, equal in amount to the amount of the unpaid Reimbursement
Obligation. Such Revolving Loans shall be made as of the date of the payment
giving rise to such Reimbursement Obligation, automatically, without notice and
without any requirement to satisfy the conditions precedent otherwise applicable
to an Advance of Revolving Loans. The Agent shall give prompt notice to the
Borrower of any such Revolving Loans made or deemed to be made; PROVIDED,
HOWEVER, that the failure to so notify the Borrower shall not affect the
Borrower's obligations under this SECTION 3.6. Such Revolving Loans shall
constitute a Floating Rate Advance, the proceeds of which Advance shall be used
to repay such Reimbursement Obligation. If, for any reason, the Borrower fails
to repay a Reimbursement Obligation on the day such Reimbursement Obligation
arises and, for any reason, the Lenders are unable to make or have no obligation
to make Revolving Loans, then such Reimbursement Obligation shall bear interest
from and after such day, until paid in full, at the interest rate applicable to
a Floating Rate Advance.
3.7 LETTER OF CREDIT FEES. The Borrower agrees to pay (i) quarterly, in
arrears, on each Payment Date, to the Agent for the ratable benefit of the
Lenders (except as set forth in SECTION 9.2), a letter of credit fee at a rate
per annum equal to the Applicable L/C Fee Percentage on the average daily
outstanding face amount available for drawing under all standby Letters of
Credit; (ii) quarterly, in arrears, on each Payment Date, to the Agent for the
sole account and benefit of the Issuing Bank, a fronting fee at a rate per annum
equal to 0.125% on the average daily outstanding face amount available for
drawing under all standby Letters of Credit; and (iii) to the Agent for the
benefit of each Issuing Bank, all customary fees and other issuance, amendment,
document examination, negotiation and presentment expenses and related charges
in connection with the issuance, amendment, presentation of L/C Drafts, and the
like customarily charged by the Issuing Bank with respect to standby and
commercial Letters of Credit, including, without limitation, standard
commissions with respect to commercial Letters of Credit (which commissions
shall be negotiated between the Borrower and the applicable Issuing
Bank but which, in any event, shall not exceed the Applicable L/C Fee
Percentage), payable at the time of invoice of such amounts. With respect to
the Existing Letters of Credit, the provisions of this SECTION 3.7 shall
supersede any existing fee arrangements with respect to such Existing Letters of
Credit.
3.8 ISSUING BANK REPORTING REQUIREMENTS. In addition to the notices
required by SECTION 3.4(c), each Issuing Bank shall, no later than the tenth
Business Day following the last day of each month, provide to the Agent, upon
the Agent's request, schedules, in form and substance reasonably satisfactory to
the Agent, showing the date of issue, account party, amount, expiration date and
the reference number of each Letter of Credit issued by it outstanding at any
time during such month and the aggregate amount payable by the Borrower during
such month. In addition, upon the request of the Agent, each Issuing Bank shall
furnish to the Agent copies of any Letter of Credit and any application for or
reimbursement agreement with respect to a Letter of Credit to which the Issuing
Bank is party and such other documentation as may reasonably be requested by the
Agent. Upon the request of any Lender, the Agent will provide to such Lender
information concerning such Letters of Credit.
3.9 INDEMNIFICATION; EXONERATION. (a) In addition to amounts payable as
elsewhere provided in this ARTICLE III, the Borrower hereby agrees to protect,
indemnify, pay and save harmless the Agent, each Issuing Bank and each Lender
from and against any and all liabilities and costs which the Agent, such Issuing
Bank or such Lender may incur or be subject to as a consequence, direct or
indirect, of (i) the issuance of any Letter of Credit other than, in the case of
the applicable Issuing Bank, as a result of its Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, or (ii) the failure of the applicable Issuing Bank to honor a
drawing under a Letter of Credit as a result of any act or omission, whether
rightful or wrongful, of any present or future DE JURE or DE FACTO Governmental
Authority (all such acts or omissions herein called "GOVERNMENTAL ACTS").
(b) As among the Borrower, the Lenders, the Agent and the Issuing Bank,
the Borrower assumes all risks of the acts and omissions of, or misuse of such
Letter of Credit by, the beneficiary of any Letters of Credit. In furtherance
and not in limitation of the foregoing, subject to the provisions of the Letter
of Credit applications and Letter of Credit reimbursement agreements executed by
the Borrower at the time of request for any Letter of Credit, neither the Agent,
any Issuing Bank nor any Lender shall be responsible (in the absence of Gross
Negligence or willful misconduct in connection therewith, as determined by the
final judgment of a court of competent jurisdiction): (i) for the form,
validity, sufficiency, accuracy, genuineness or legal effect of any document
submitted by any party in connection with the application for and issuance of
the Letters of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of a
Letter of Credit to comply duly with conditions required in order to draw upon
such Letter of Credit; (iv) for
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, facsimile, cable, telegraph, telex, or other similar form of
teletransmission or otherwise; (v) for errors in interpretation of technical
trade terms; (vi) for any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter of Credit or of
the proceeds thereof; (vii) for the misapplication by the beneficiary of a
Letter of Credit of the proceeds of any drawing under such Letter of Credit; and
(viii) for any consequences arising from causes beyond the control of te Agent,
the Issuing Bank and the Lenders, including, without limitation, any
Governmental Acts. None of the above shall affect, impair, or prevent the
vesting of any Issuing Bank's rights or powers under this SECTION 3.9.
(c) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth, any action taken or omitted by any Issuing
Bank under or in connection with the Letters of Credit or any related
certificates shall not, in the absence of Gross Negligence or willful
misconduct, as determined by the final judgment of a court of competent
jurisdiction, put the applicable Issuing Bank, the Agent or any Lender under any
resulting liability to the Borrower or relieve the Borrower of any of its
obligations hereunder to any such Person.
(d) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this SECTION 3.9 shall survive the payment in full of principal and interest
hereunder, the termination of the Letters of Credit and the termination of this
Agreement. THE PARTIES INTEND FOR THE INDEMNIFICATION PROVISIONS OF THIS
SECTION 3.9 TO APPLY AND PROTECT EACH INDEMNIFIED PERSON FROM THE CONSEQUENCES
OF ITS OWN NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING
OR CONCURRING CAUSE OF ANY CLAIM.
3.10 CASH COLLATERAL. Notwithstanding anything to the contrary herein or
in any application for a Letter of Credit, only so long as a Default shall have
occurred and is continuing, the Borrower shall, upon the Agent's demand, deliver
to the Agent for the benefit of the Lenders and the Issuing Bank, cash, or other
collateral of a type satisfactory to the Required Lenders, having a value, as
determined by such Lenders, equal to the aggregate outstanding L/C Obligations.
In addition, if the Revolving Credit Availability is at any time less than the
amount of contingent L/C Obligations outstanding at any time, the Borrower shall
deposit cash collateral with the Agent in an amount equal to the amount by which
such L/C Obligations exceed such Revolving Credit Availability from time to
time. Any such collateral shall be held by the Agent in a separate account
appropriately designated as a cash collateral account in relation to this
Agreement and the Letters of Credit and retained by the Agent for the benefit of
the Lenders and the Issuing Bank as collateral security for the Borrower's
obligations in respect of this Agreement and each of the Letters of Credit and
L/C Drafts. Such amounts shall be applied to reimburse the Issuing Bank for
drawings or payments under or pursuant to Letters of Credit or L/C Drafts, or if
no such reimbursement is required, to payment of such of the
other Obligations as the Agent shall determine. If no Default shall be
continuing, amounts remaining in any cash collateral account established
pursuant to this SECTION 3.10 which are not to be applied to reimburse an
Issuing Bank for amounts actually paid or to be paid by such Issuing Bank in
respect of a Letter of Credit or L/C Draft, shall be returned to the Borrower
(after deduction of the Agent's expenses incurred in connection with such cash
collateral account).
ARTICLE IV: CHANGE IN CIRCUMSTANCES
4.1 YIELD PROTECTION. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law) adopted after the Closing Date and having general
applicability to all banks within the jurisdiction in which such Lender operates
(excluding, for the avoidance of doubt, the effect of and phasing in of capital
requirements or other regulations or guidelines passed prior to the Closing
Date), or any interpretation or application thereof by any Governmental
Authority charged with the interpretation or application thereof, or the
compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the Borrower
(excluding, in the case of each Lender and the Agent, such taxes (including
income taxes, franchise taxes and branch profit taxes) as are imposed on or
measured by such Lender's or Agent's, as the case may be, income by the
United States of America or any Governmental Authority of the jurisdiction
under the laws of which such Lender or Agent, as the case may be, is
organized ), or changes the basis of taxation of payments to any Lender in
respect of its Loans, its L/C Interests, the Letters of Credit or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (other than reserves
and assessments taken into account in determining the interest rate
applicable to Eurodollar Rate Loans) with respect to its Loans, L/C
Interests or the Letters of Credit, or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of making,
funding or maintaining the Loans, the L/C Interests or the Letters of
Credit or reduces any amount received by any Lender or any applicable
Lending Installation in connection with Loans or Letters of Credit, or
requires any Lender or any applicable Lending Installation to make any
payment calculated by reference to the amount of Loans or L/C Interests
held or interest received by it or by reference to the Letters of Credit,
by an amount deemed material by such Lender;
and the result of any of the foregoing is to increase the cost to that Lender of
making, renewing or maintaining its Loans, L/C Interests or Letters of Credit or
to reduce any
amount received under this Agreement, then, within 15 days after receipt by the
Borrower of written demand by such Lender pursuant to SECTION 4.5, the Borrower
shall pay such Lender that portion of such increased expense incurred or
reduction in an amount received which such Lender determines is attributable to
making, funding and maintaining its Loans, L/C Interests, Letters of Credit and
its Commitment.
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines (i)
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a "Change" (as defined below), and (ii) such
increase in capital will result in an increase in the cost to such Lender of
maintaining its Loans, L/C Interests, the Letters of Credit or its obligation to
make Loans hereunder, then, within 15 days after receipt by the Borrower of
written demand by such Lender pursuant to SECTION 4.5, the Borrower shall pay
such Lender the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its L/C Interests, the Letters of
Credit or its obligation to make Loans hereunder (after taking into account such
Lender's policies as to capital adequacy). "CHANGE" means (i) any change after
the Closing Date of this Agreement in the "Risk-Based Capital Guidelines" (as
defined below) excluding, for the avoidance of doubt, the effect of any phasing
in of such Risk-Based Capital Guidelines or any other capital requirements
passed prior to the Closing Date hereof, or (ii) any adoption of or change in
any other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force of law)
after the Closing Date and having general applicability to all banks and
financial institutions within the jurisdiction in which such Lender operates
which affects the amount of capital required or expected to be maintained by any
Lender or any Lending Installation or any corporation controlling any Lender.
"RISK-BASED CAPITAL GUIDELINES" means (i) the risk-based capital guidelines in
effect in the United States on the Closing Date, including transition rules, and
(ii) the corresponding capital regulations promulgated by regulatory authorities
outside the United States implementing the July 1988 report of the Basle
Committee on Banking Regulation and Supervisory Practices Entitled
"International Convergence of Capital Measurements and Capital Standards,"
including transition rules, and any amendments to such regulations adopted prior
to the Closing Date.
4.3 AVAILABILITY OF TYPES OF ADVANCES. If (i) any Lender determines that
maintenance of its Eurodollar Rate Loans at a suitable Lending Installation
would violate any applicable law, rule, regulation or directive, whether or not
having the force of law, or (ii) the Required Lenders determine that (x)
deposits of a type and maturity appropriate to match fund Eurodollar Rate
Advances are not available or (y) the interest rate applicable to a Type of
Advance does not accurately reflect the cost of making or maintaining such an
Advance, then the Agent shall suspend the availability of the affected Type of
Advance and, in the case of any occurrence set forth in clause (i) require any
Advances of the affected Type to be converted to Floating Rate Loans until the
circumstances giving rise to such suspension no longer exist.
4.4 FUNDING INDEMNIFICATION. If any payment of a Eurodollar Rate Advance
occurs on a date which is not the last day of the applicable Interest Period,
whether because of acceleration, prepayment, or otherwise, or a Eurodollar Rate
Advance is not made on the date specified by the Borrower for any reason other
than default by the Lenders, or a Eurodollar Rate Advance is converted on a day
other than the last day of the applicable Interest Period, the Borrower
indemnifies each Lender for any loss or cost incurred by it resulting therefrom
(including loss of profit)), including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the Eurodollar
Rate Advance. In connection with (a) any assignment by any Lender of any portion
of the Loans made pursuant to SECTION 13.3 and made during the Syndication
Period, and if, notwithstanding the provisions of SECTION 2.2, the Borrower has
requested and the Agent has consented to the use of the Eurodollar Rate and (b)
any assignment by any Lender of any portion of the Loans made pursuant to
SECTION 2.4(c), the Borrower shall be deemed to have repaid all outstanding
Eurodollar Rate Advances as of the effective date of such assignment and
reborrowed such amount as a Floating Rate Advance and/or Eurodollar Rate Advance
(chosen in accordance with the provisions of SECTION 2.2) and the
indemnification provisions under this SECTION 4.4 shall apply.
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. If reasonably possible,
each Lender shall designate an alternate Lending Installation with respect to
its Eurodollar Rate Loans to reduce any liability of the Borrower to such Lender
under SECTIONS 4.1 and 4.2 or to avoid the unavailability of a Type of Advance
under SECTION 4.3, so long as such designation is not materially disadvantageous
to such Lender. Each Lender requiring compensation pursuant to SECTION 2.12(E)
or to this ARTICLE IV shall use its reasonable efforts to notify the Borrower
and the Agent in writing of any Change, law, policy, rule, guideline or
directive giving rise to such demand for compensation not later than ninety (90)
days following the date upon which the responsible account officer of such
Lender knows or should have known of such Change, law, policy, rule, guideline
or directive; PROVIDED, HOWEVER, that the failure to so notify the Borrower
shall not affect the Borrower's obligations under this SECTION 4.5. Any demand
for compensation pursuant to this ARTICLE IV shall be in writing and shall state
the amount due, if any, under SECTION 4.1, 4.2 or 4.4 and shall set forth in
reasonable detail the calculations upon which such Lender determined such
amount. Such written demand shall be rebuttably presumed correct for all
purposes. Determination of amounts payable under such Sections in connection
with a Eurodollar Rate Loan shall be calculated as though each Lender funded its
Eurodollar Rate Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not. The
obligations of the Borrower under SECTIONS 4.1, 4.2 and 4.4 shall survive
payment of the Obligations and termination of this Agreement.
ARTICLE V: CONDITIONS PRECEDENT
5.1 INITIAL ADVANCES AND LETTERS OF CREDIT. The Lenders shall not be
required to make the initial Loans or issue any Letters of Credit or purchase
any participations therein unless (i) no law, regulation, order, judgment or
decree of any Governmental Authority shall, and the Agent shall not have
received any notice that litigation is pending or threatened which is likely to,
(A) enjoin, prohibit or restrain the making of the initial Loans on the Closing
Date or (B) impose or result in the imposition of a Material Adverse Effect; and
(ii) the Borrower has furnished to the Agent each of the following, with
sufficient copies for the Lenders, all in form and substance satisfactory to the
Agent and the Lenders:
(a) Copies, certified by the Secretary or Assistant Secretary of the
Borrower and each Guarantor, of its articles or certificate of
incorporation and good standing certificates (which copies for the Borrower
shall be certified as of a recent date by the appropriate governmental
officer in its respective jurisdiction of incorporation and states in which
such entity is doing business), its by-laws and of its Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed necessary
by counsel for any Lender) authorizing the execution of the Loan Documents;
(b) An incumbency certificate, executed by the Secretary or Assistant
Secretary of the Borrower and each Guarantor, which shall identify by name
and title and bear the signature of the officers of the Borrower and
Guarantors authorized to sign the Loan Documents and, in the case of the
Borrower, to request Loans and Letters of Credit hereunder, upon which
certificate the Lenders shall be entitled to rely until informed of any
change in writing by the Borrower;
(c) A certificate, in form and substance satisfactory to the Agent,
signed by the chief financial officer or treasurer of the Borrower, (i)
stating that on the Closing Date no Default or Unmatured Default has
occurred and is continuing and (ii) setting forth the pro forma
calculation of the Leverage Ratio as of Closing Date;
(d) A written opinion of the Borrower's and Guarantors' counsel,
addressed to the Agent and the Lenders, in substantially the forms attached
as EXHIBIT G hereto;
(e) Revolving Notes payable to the order of each of the applicable
Lenders;
(f) The Collateral Documents executed by each of the Guarantors
(together with UCC-1 financing statements and such other documentation as
may be necessary to insure the Agent has a first priority perfected
security interest in all of the Collateral);
(g) Copies of each environmental assessment report, if any, conducted
by the Borrower or any of its Subsidiaries with respect to their operations
or properties;
(h) Written information satisfactory to the Agent demonstrating that
the Borrower and its Subsidiaries (i) have made a complete and full
assessment of their Year 2000 issues; (ii) have a realistic and achievable
program for remediating the Year 2000 issues on a timely basis; and (iii)
do not reasonably anticipate that Year 2000 Issues will have a Material
Adverse Effect; and
(i) Such other documents as the Agent or any Lender or its counsel
may have reasonably requested, including, without limitation, the documents
set forth on the List of Closing Documents attached hereto as EXHIBIT H.
5.2 EACH ADVANCE AND LETTER OF CREDIT. The Lenders shall not be required
to make any Advance, issue any Letter of Credit or purchase any participation
therein, unless on the applicable Borrowing Date, or in the case of a Letter of
Credit, the date on which the Letter of Credit is to be issued:
(i) There exists no Default or Unmatured Default; and
(ii) The representations and warranties contained in ARTICLE VI are
true and correct as of such Borrowing Date (unless such representation and
warranty expressly relates to an earlier date or is no longer true solely
as a result of transactions permitted by this Agreement).
Each Borrowing Notice with respect to each such Advance and the letter of
credit application with respect to a Letter of Credit shall constitute a
representation and warranty by the Borrower that the conditions contained in
SECTIONS 5.2(i) and (ii) have been satisfied. If any Lender has a reasonable
basis for believing a Default or Unmatured Default may have occurred and is
continuing or that the Borrower is not able to make one or more of the
representations and warranties set forth in ARTICLE VI, such Lender may require
a duly completed officer's certificate in substantially the form of EXHIBIT I
hereto and/or a duly completed compliance certificate in substantially the form
of EXHIBIT J hereto as a condition to making an Advance or the issuance of any
Letter of Credit.
ARTICLE VI: REPRESENTATIONS AND WARRANTIES
In order to induce the Agent and the Lenders to enter into this Agreement
and to make the Loans and other financial accommodations to the Borrower, the
Borrower represents and warrants as follows to each Lender and the Agent as of
the Closing Date and thereafter on each date as required by SECTION 5.2:
6.1 ORGANIZATION; CORPORATE POWERS. The Borrower and each of its
Subsidiaries (i) is a corporation duly organized, validly existing and in good
standing under the laws
of the jurisdiction of its organization, (ii) from and after June 18, 1999 with
respect to the jurisdictions identified on SCHEDULE 6.8 as jurisdictions in
which the Borrower or any of its Subsidiaries is not qualified to transact
business as a foreign corporation on the Closing Date, and from and after the
Closing Date with respect to all other jurisdictions, is duly qualified to do
business and is in good standing under the laws of each jurisdiction in which
failure to be so qualified and in good standing could not reasonably be expected
to have a Material Adverse Effect and (iii) has all requisite corporate power
and authority to own, operate and encumber its property and to conduct its
business as presently conducted and as proposed to be conducted.
6.2 AUTHORITY.
(A) The Borrower and each of its Subsidiaries has the requisite power and
authority (i) to execute, deliver and perform each of the Loan Documents
executed by it and (ii) to file the Loan Documents which must be filed by it as
required by this Agreement or the other Loan Documents with any Governmental
Authority.
(B) The execution, delivery, performance and filing, as the case may be, of
each of the Loan Documents which must be executed or filed by the Borrower or
any of its Subsidiaries in connection with the transactions evidenced by this
Agreement and to which the Borrower or any of its Subsidiaries is the party, and
the consummation of the transactions contemplated thereby, have been duly
approved by the respective boards of directors and, if necessary, the
shareholders of the Borrower and its Subsidiaries, and such approvals have not
been rescinded. No other corporate action or proceedings on the part of the
Borrower or its Subsidiaries are necessary to consummate such transactions.
(C) Each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party has been duly executed, delivered and, if applicable,
filed, as the case may be, by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms (except as
enforceability may be limited by bankruptcy, insolvency, or similar laws
affecting the enforcement of creditors' rights generally), is in full force and
effect, and the Borrower and its Subsidiaries have performed and complied with
all the terms, provisions, agreements and conditions set forth therein and
required to be performed or complied with by such parties, and no unmatured
default, default or breach of any covenant by any such party exists thereunder.
6.3 NO CONFLICT; GOVERNMENTAL CONSENTS. The execution, delivery and
performance of each of the Loan Documents to which the Borrower or any of its
Subsidiaries is a party do not and will not (i) conflict with the certificate or
articles of incorporation or by-laws of the Borrower or any such Subsidiary,
(ii) constitute a tortious interference with any Contractual Obligation of any
Person or conflict with, result in a breach of or constitute (with or without
notice or lapse of time or both) a default under any Requirement of Law
(including, without limitation, any Environmental Property Transfer Act) or
Contractual Obligation of the Borrower or any such Subsidiary, or require
termination of any Contractual Obligation, (iii) result in or require the
creation or imposition of any Lien whatsoever upon any of the property or assets
of the Borrower or
any such Subsidiary, other than Liens created under or permitted by the Loan
Documents, or (iv) require any approval of the Borrower's or any such
Subsidiary's shareholders except such as have been obtained. The execution,
delivery and performance of each of the Loan Documents to which the Borrower or
any of its Subsidiaries is a party do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by any
Governmental Authority, including under any Environmental Property Transfer Act,
except filings, consents or notices which have been made, obtained or given, or
which, if not made, obtained or given, individually or in the aggregate could
not reasonably be expected to have a Material Adverse Effect.
6.4 FINANCIAL STATEMENTS.
(A) The PRO FORMA financial statements of the Borrower and its
Subsidiaries contained in the Offering Memorandum, present on a PRO FORMA basis
the financial condition of the Borrower and such Subsidiaries as of the dates
contained therein, and reflect on a PRO FORMA basis those liabilities reflected
in the notes thereto, and the payment or accrual of all Transaction Costs. The
projections and assumptions (x) dated on or about January 25, 1999 and delivered
to the Administrative Agent as part of the Offering Memorandum and (y) pursuant
to SECTION 7.2 (O)(iv), in each case, were (or shall be when delivered) prepared
in good faith and on the basis of assumptions and information that the Borrower
believed to be reasonable at the time so furnished.
(B) The historical financial statements of the Borrower and its
Subsidiaries (1) dated as of June 30, 1998 and September 30, 1998 and included
in the Offering Memorandum and (2) dated as of December 31, 1998 and separately
provided to the Agent and the Lenders, in each case, (i) were prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods covered thereby (except as otherwise expressly noted
therein), (ii) fairly present the financial condition of each of the Borrower
and its Subsidiaries as of the dates thereof and the results of operations for
the periods covered thereby; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of each of the Borrower and its Subsidiaries
as of the dates thereof.
6.5 NO MATERIAL ADVERSE CHANGE. Since December 31, 1998, there has
occurred no event or circumstance which has had or could reasonably be expected
to have a Material Adverse Effect. For the avoidance of doubt, the
representation and warranty under this SECTION 6.5 is true and accurate
notwithstanding, and after giving effect to, the occurrence of the events
described on SCHEDULE 6.5.
6.6 TAXES.
(A) TAX EXAMINATIONS. All material deficiencies which have been asserted
against the Borrower or any of the Borrower's Subsidiaries as a result of any
federal, state, local or foreign tax examination for each taxable year in
respect of which an examination has been conducted have been fully paid or
finally settled or are being
contested in good faith, and as of the Closing Date no issue has been raised by
any taxing authority in any such examination which, by application of similar
principles, reasonably can be expected to result in assertion by such taxing
authority of a material deficiency for any other year not so examined which has
not been reserved for in the Borrower's consolidated financial statements to the
extent, if any, required by Agreement Accounting Principles. Neither the
Borrower nor any of the Borrower's Subsidiaries anticipates any material tax
liability with respect to the years which have not been closed pursuant to
applicable law other than those items which have been reserved for in accordance
with Agreement Accounting Principles.
(B) PAYMENT OF TAXES. All tax returns and reports of the Borrower and its
Subsidiaries required to be filed have been timely filed, and all taxes,
assessments, fees and other governmental charges thereupon and upon their
respective property, assets, income and franchises which are shown in such
returns or reports to be due and payable have been paid except those items which
are being contested in good faith and have been reserved for in accordance with
Agreement Accounting Principles. The Borrower has no knowledge of any proposed
tax assessment against the Borrower or any of its Subsidiaries that will have or
could reasonably be expected to have a Material Adverse Effect or result in
liability, individually or in the aggregate in excess of $1,000,000.
6.7 LITIGATION; LOSS CONTINGENCIES AND VIOLATIONS. Except as set forth in
SCHEDULE 6.7 (the "DISCLOSED LITIGATION"), there is no action, suit, proceeding,
arbitration or (to the Borrower's knowledge after diligent inquiry)
investigation before or by any Governmental Authority or private arbitrator
pending or, to the Borrower's knowledge after diligent inquiry, threatened
against the Borrower or any of its Subsidiaries or any property of any of them
that (i) challenges the validity or the enforceability of any provision of the
Loan Documents or (ii) will have or could reasonably be expected to have a
Material Adverse Effect or result in liability, individually or in the
aggregate in excess of $1,000,000. There is no material loss contingency within
the meaning of Agreement Accounting Principles which has not been reflected in
the consolidated financial statements of the Borrower and its Subsidiaries
prepared and delivered pursuant to SECTION 7.1(A) for the fiscal period during
which such material loss contingency was incurred. Neither the Borrower nor any
of its Subsidiaries is (A) in violation of any applicable Requirements of Law
which violation will have or could reasonably be expected to have a Material
Adverse Effect or result in liability, individually or in the aggregate in
excess of $1,000,000, or (B) subject to or in default with respect to any final
judgment, writ, injunction, restraining order or order of any nature, decree,
rule or regulation of any court or Governmental Authority which will have or
could reasonably be expected to have a Material Adverse Effect.
6.8 SUBSIDIARIES. SCHEDULE 6.8 to this Agreement (i) contains a
description as of the Closing Date (or as of the date of any supplement thereto)
of the corporate structure of, the Borrower and its Subsidiaries and any other
Person in which the Borrower or any of its Subsidiaries holds an Equity
Interest; and (ii) accurately sets forth as of the Closing Date (or as of the
date of any supplement thereto) (A) the correct legal name, the jurisdiction of
incorporation and the jurisdictions in which each of the Borrower and the
Subsidiaries of the Borrower is qualified to transact business as a foreign
corporation, and each of the jurisdictions in which the Borrower and its
Subsidiaries conducts business without qualification as a foreign corporation
except any jurisdiction where such failure to be so qualified and in good
standing could not reasonably be expected to have a Material Adverse Effect, (B)
for each Subsidiary of the Borrower, the authorized, issued and outstanding
shares of each class of Capital Stock of such Subsidiaries and the owners of
such shares (both as of the Closing Date or the date of any such supplement and
on a fully-diluted basis), and (C) a summary of the direct and indirect
partnership, joint venture, or other Equity Interests, if any, of the Borrower
and each Subsidiary of the Borrower in any Person that is not a corporation.
None of the issued and outstanding Capital Stock of the Borrower or any of its
Subsidiaries is subject to any vesting, redemption or repurchase agreement and,
except as set forth on SCHEDULE 6.8, there are no warrants or options
outstanding with respect to such Capital Stock. The outstanding Capital Stock
of the Borrower and each of the Borrower's Subsidiaries is duly authorized,
validly issued, fully paid and nonassessable. The Borrower has no Subsidiaries
other than (i) the Subsidiaries set forth on SCHEDULE 6.8 and (ii) any
Subsidiaries acquired in connection with a Permitted Acquisition, in connection
with which the Borrower shall have provided all of the documents, instruments
and agreements as required by this Agreement. The Borrower shall not permit
either of ACS Municipal Brokers, Inc. or ACS Capital, Inc., to engage in the
conduct of any activity or business, whether or not permitted by their
respective articles of incorporation or by-laws, including, without limitation,
any Acquisition, any incurrence of Indebtedness, or any issuance of Equity
Interests.
6.9 ERISA. No Benefit Plan has incurred any material accumulated funding
deficiency (as defined in Sections 302(a)(2) of ERISA and 412(a) of the Code)
whether or not waived. Neither the Borrower nor any member of the Controlled
Group has incurred any material liability to the PBGC which remains outstanding
other than the payment of premiums, and there are no premium payments which have
become due which are unpaid. Schedule B to the most recent annual report filed
with the IRS with respect to each Benefit Plan and, if so requested, furnished
to the Lenders, is complete and accurate. Since the date of each such Schedule
B, there has been no material adverse change in the funding status or financial
condition of the Benefit Plan relating to such Schedule B. Neither the Borrower
nor any member of the Controlled Group has (i) failed to make a required
contribution or payment to a Multiemployer Plan or (ii) made a complete or
partial withdrawal under Sections 4203 or 4205 of ERISA from a Multiemployer
Plan, in either event which could result in any material liability. Neither the
Borrower nor any member of the Controlled Group has failed to make a required
installment or any other required payment under Section 412 of the Code, in
either case involving any material amount, on or before the due date for such
installment or other payment. Neither the Borrower nor any member of the
Controlled Group is required to provide security to a Benefit Plan under Section
401(a)(29) of the Code due to a Plan amendment that results in an increase in
current liability for the plan year. Neither the Borrower nor any of its
Subsidiaries maintains or contributes to any employee welfare benefit plan
within the meaning of Section 3(1) of ERISA which provides benefits to employees
after termination of employment other than as required by Section 601 of
ERISA. Each Plan which is intended to be qualified under Section 401(a) of
the Code as currently in effect is so qualified, and each trust related to any
such Plan is exempt from federal incom tax under Section 501(a) of the Code as
currently in effect. The Borrower and all Subsidiaries are in compliance in all
material respects with the responsibilities, obligations and duties imposed on
them by ERISA and the Code with respect to all Plans. Neither the Borrower nor
any of its Subsidiaries nor any fiduciary of any Plan has engaged in a nonexempt
prohibited transaction described in Sections 406 of ERISA or 4975 of the Code
which could reasonably be expected to subject the Borrower or any Guarantor to
material liability. Neither the Borrower nor any member of the Controlled Group
has taken or failed to take any action which would constitute or result in a
Termination Event, which action or inaction could reasonably be expected to
subject the Borrower to material liability. Neither the Borrower nor any
Subsidiary is subject to any liability under Sections 4063, 4064, 4069, 4204 or
4212(c) of ERISA and no other member of the Controlled Group is subject to any
liability under Sections 4063, 4064, 4069, 4204 or 4212(c) of ERISA which could
reasonably be expected to subject the Borrower or any Guarantor to material
liability. Neither the Borrower nor any of its Subsidiaries has, by reason of
the transactions contemplated hereby, any obligation to make any payment to any
employee pursuant to any Plan or existing contract or arrangement. For purposes
of this SECTION 6.9 "material" means any noncompliance or basis for liability
which could reasonably be likely to subject the Borrower or any of its
Subsidiaries to liability individually or in the aggregate for all such matters
in excess of $1,000,000.
6.10 ACCURACY OF INFORMATION. The information, exhibits, schedules and
reports furnished by or on behalf of the Borrower and any of its Subsidiaries to
the Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents (including, without limitation, the Offering
Memorandum), the representations and warranties of the Borrower and its
Subsidiaries contained in the Loan Documents, and all certificates and documents
delivered to the Agent and the Lenders pursuant to the terms thereof, taken as a
whole, do not contain as of the date furnished any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein or therein in light of the circumstances under which
they were made, not misleading.
6.11 SECURITIES ACTIVITIES. Neither the Borrower nor any of its
Subsidiaries is engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
6.12 MATERIAL AGREEMENTS. Neither the Borrower nor any of its
Subsidiaries is a party to any Contractual Obligation or subject to any charter
or other corporate restriction which individually or in the aggregate will have
or could reasonably be expected to have a Material Adverse Effect. Neither the
Borrower nor any of its Subsidiaries has received notice or has knowledge that
(i) it is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, or (ii) any condition exists which, with the giving of notice
or the lapse of time or both, would constitute a default with respect to any
such
Contractual Obligation, in each case, except where such default or defaults, if
any, individually or in the aggregate will not have or could not reasonably be
expected to have a Material Adverse Effect or result in liability, individually
or in the aggregate in excess of $1,000,000.
6.13 COMPLIANCE WITH LAWS. The Borrower and its Subsidiaries are in
compliance with all Requirements of Law applicable to them and their respective
businesses, in each case where the failure to so comply individually or in the
aggregate could reasonably be expected to have a Material Adverse Effect or
result in liability, individually or in the aggregate in excess of $1,000,000.
6.14 ASSETS AND PROPERTIES. The Borrower and each of its Subsidiaries has
good and marketable title to all of its assets and properties (tangible and
intangible, real or personal) owned by it or a valid leasehold interest in all
of its leased assets (except insofar as marketability may be limited by any laws
or regulations of any Governmental Authority affecting such assets), except
where the failure to have any such title will not have or could not reasonably
be expected to have a Material Adverse Effect, and all such assets and property
are free and clear of all Liens, except Liens permitted under SECTION 7.3(C).
Substantially all of the assets and properties owned by, leased to or used by
the Borrower and/or each such Subsidiary of the Borrower are in adequate
operating condition and repair, ordinary wear and tear excepted. Neither this
Agreement nor any other Loan Document, nor any transaction contemplated under
any such agreement, will affect any right, title or interest of the Borrower or
such Subsidiary in and to any of its assets in a manner that will have or could
reasonably be expected to have a Material Adverse Effect.
6.15 STATUTORY INDEBTEDNESS RESTRICTIONS. Neither the Borrower nor any of
its Subsidiaries is subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act, the Interstate Commerce Act, or the
Investment Company Act of 1940, or any other federal, state or local statute,
ordinance or regulation which limits its ability to incur indebtedness or its
ability to consummate the transactions contemplated hereby.
6.16 INSURANCE. SCHEDULE 6.16 to this Agreement accurately sets forth all
insurance policies and programs currently in effect with respect to the
respective properties and assets and business of the Borrower and its
Subsidiaries, specifying for each such policy and program, (i) the amount
thereof, (ii) the risks insured against thereby, (iii) the name of the insurer
and each insured party thereunder, (iv) the policy or other identification
number thereof, (v) the expiration date thereof, (vi) the annual premium with
respect thereto and (vii) describes any reserves, relating to any self-insurance
program that is in effect. Such insurance policies and programs reflect
Coverage that is reasonably consistent with prudent industry practice. SCHEDULE
6.16 may be updated from time to time by the Borrower giving written notice
thereof to the Agent.
6.17 LABOR MATTERS.
(A) Except as listed on SCHEDULE 6.17 to this Agreement, there are on the
Closing Date no collective bargaining agreements, other labor agreements or
Multiemployer Plans covering any of the employees of the Borrower or any of its
Subsidiaries. As of the Closing Date, no attempt to organize the employees of
the Borrower, and no labor disputes, strikes or walkouts affecting the
operations of the Borrower or any of its Subsidiaries, is pending, or, to the
Borrower's knowledge, threatened, planned or contemplated.
(B) Set forth in SCHEDULE 6.17 to this Agreement is a list, as of the
Closing Date, of all material consulting agreements, executive compensation
plans, deferred compensation agreements, employee pension plans or retirement
plans, employee profit sharing plans, employee stock purchase and stock option
plans, severance plans, group life insurance, hospitalization insurance or other
plans or arrangements of the Borrower and its Subsidiaries providing for
benefits for employees of the Borrower and its Subsidiaries.
6.18 ENVIRONMENTAL MATTERS. (a)(i) The operations of the Borrower and its
Subsidiaries comply in all material respects with Environmental, Health or
Safety Requirements of Law;
(ii) the Borrower and its Subsidiaries have all material permits,
licenses or other authorizations required under Environmental, Health or
Safety Requirements of Law and are in material compliance with such
permits;
(iii) neither the Borrower, any of its Subsidiaries nor any of their
respective present property or operations, or, to the best of, the
Borrower's or any of its Subsidiaries' knowledge, any of their respective
past property or operations, are subject to or the subject of, any
investigation known to the Borrower or any of its Subsidiaries, any
judicial or administrative proceeding, order, judgment, decree, settlement
or other agreement respecting: (A) any material violation of
Environmental, Health or Safety Requirements of Law; (B) any material
remedial action; or (C) any material claims or liabilities arising from the
Release or threatened Release of a Contaminant into the environment;
(iv) there is not now, nor to the best of the Borrower's or any of
its Subsidiaries' knowledge has there ever been on or in the property of
the Borrower or any of its Subsidiaries any landfill, waste pile,
underground storage tanks, aboveground storage tanks, surface impoundment
or hazardous waste storage facility of any kind, any polychlorinated
biphenyls (PCBs) used in hydraulic oils, electric transformers or other
equipment, or any asbestos containing material that in the case of any of
the foregoing could be reasonably expected to result in any material claims
or liabilities; and
(v) neither the Borrower nor any of its Subsidiaries has any material
Contingent Obligation in connection with any Release or threatened Release
of a Contaminant into the environment.
(b) For purposes of this SECTION 6.18 "material" means any noncompliance
or basis for liability which could reasonably be expected individually or in the
aggregate to have a Material Adverse Effect or result in liability, individually
or in the aggregate in excess of $1,000,000.
6.19. BENEFITS. Each of the Borrower and its Subsidiaries will benefit
from the financing arrangement established by this Agreement. The Agent and the
Lenders have stated and the Borrower acknowledges that, but for the agreement by
each of the Guarantors to execute and deliver the Guaranty and their Collateral
Documents, the Agent and the Lenders would not have made available the credit
facilities established hereby on the terms set forth herein.
6.20. YEAR 2000 ISSUES. Each of the Borrower and its Subsidiaries has
made a full and complete assessment of the Year 2000 Issues and has a realistic
and achievable program for remediating the Year 2000 Issues on a timely basis.
Based on such assessment and program, the Borrower does not reasonably
anticipate that Year 2000 Issues will have a Material Adverse Effect.
6.21. SUBORDINATED INDEBTEDNESS. The Secured Obligations constitute
senior indebtedness which is entitled to the benefits of the subordination
provisions of all outstanding Permitted Subordinated Indebtedness.
ARTICLE VII : COVENANTS
The Borrower covenants and agrees that so long as any Commitments are
outstanding and thereafter until payment in full of all of the Obligations
(other than contingent indemnity obligations), unless the Required Lenders shall
otherwise give prior written consent:
7.1 REPORTING. The Borrower shall:
(A) FINANCIAL REPORTING. Furnish to the Lenders:
(i) QUARTERLY REPORTS. As soon as practicable, and in any event
within forty-five (45) days after the end of each fiscal quarter, the
consolidated and consolidating balance sheet of the Borrower and its
Subsidiaries as at the end of such period and the related consolidated and
consolidating statements of income and cash flows of the Borrower and its
Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter,
certified by the chief financial officer of the Borrower on behalf of the
Borrower as fairly presenting the consolidated and consolidating financial
position of the Borrower and its Subsidiaries as at the dates indicated and
the results of their operations and cash flows for the periods indicated in
accordance with Agreement Accounting Principles, subject to normal year end
adjustments, and a forecasted consolidated and consolidating balance sheet
and a consolidated
and consolidating statement of income and cash flows of the Borrower and
its Subsidiaries for and as of the end of the next succeeding fiscal
quarter and a comparison of the statements of income and cash flows to
budget. To the extent that the consolidating financial statements referred
to throughout this SECTION 7.1 prepared by legal entity are not sufficient
to reflect the divisional financial statements of the Transportation
Business, the Borrower shall also prepare each such consolidating financial
statements on a divisional consolidating basis for the Transportation
Business and the remaining business of the Borrower and its Subsidiaries.
(ii) ANNUAL REPORTS. As soon as practicable, and in any event within
ninety (90) days after the end of each fiscal year, (a) the consolidated
and consolidating balance sheet of the Borrower and its Subsidiaries as at
the end of such fiscal year and the related consolidated and consolidating
statements of income, stockholders' equity and cash flows of the Borrower
and its Subsidiaries for such fiscal year, and in comparative form the
corresponding figures for the previous fiscal year and (b) an audit report
on the consolidated items listed in CLAUSE (a) hereof of independent
certified public accountants of recognized national standing, which audit
report shall be unqualified and shall state that such financial statements
fairly present the consolidated financial position of the Borrower and its
Subsidiaries as at the dates indicated and the results of their operations
and cash flows for the periods indicated in conformity with Agreement
Accounting Principles and that the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards. The deliveries made
pursuant to this CLAUSE (ii) shall be accompanied by (x) any management
letter prepared by the above-referenced accountants, and (y) a certificate
of such accountants that, in the course of their examination necessary for
their certification of the foregoing, they have obtained no knowledge of
any Default of Unmatured Default, or if, in the opinion of such
accountants, any such Default or Unmatured Default shall exist, stating the
nature and status thereof.
(iii) OFFICER'S CERTIFICATE. Together with each delivery of any
financial statement (a) pursuant to CLAUSES (i)and (ii) of this SECTION
7.1(A), an Officer's Certificate of the Borrower, substantially in the form
of EXHIBIT I attached hereto and made a part hereof, stating that no
Default or Unmatured Default exists, or if any Default or Unmatured Default
exists, stating the nature and status thereof and (b) pursuant to CLAUSES
(i) and (ii) of this SECTION 7.1(A), a compliance certificate,
substantially in the form of EXHIBIT J attached hereto and made a part
hereof, signed by the Borrower's chief financial officer or treasurer,
setting forth calculations for the period then ended, which demonstrate
compliance, when applicable, with the provisions of SECTION 7.4, setting
forth the Borrower's calculations of projected covenant compliance for the
subsequent four fiscal quarters, and which calculate the Leverage Ratio for
purposes of determining the then Applicable Eurodollar Margin, Applicable
Floating Rate Margin and Applicable Commitment Fee Percentage.
(iv) BUDGETS; BUSINESS PLANS; FINANCIAL PROJECTIONS. As soon as
approved by the Borrower's board of directors and in any event within
ninety (90) days after the beginning of each fiscal year, a copy of the
plan and forecast (including a projected balance sheet, income statement
and statement of cash flow) of the Borrower and its Subsidiaries for the
upcoming 12-month period prepared in such detail as shall be reasonably
satisfactory to the Agent.
(B) NOTICE OF DEFAULT. Promptly upon any of the chief executive officer,
chief operating officer, chief financial officer or treasurer of the Borrower
obtaining knowledge (i) of any condition or event which constitutes a Default or
Unmatured Default, or becoming aware that any Lender or Agent has given any
written notice with respect to a claimed Default or Unmatured Default under this
Agreement, or (ii) that any Person has given any written notice to the Borrower
or any Subsidiary of the Borrower or taken any other action with respect to a
claimed default or event or condition of the type referred to in SECTION 8.1(e),
deliver to the Agent and the Lenders a notice specifying (a) the nature and
period of existence of any such claimed default, Default, Unmatured Default,
condition or event, (b) the notice given or action taken by such Person in
connection therewith, and (c) what action the Borrower has taken, is taking and
proposes to take with respect thereto.
(C) LAWSUITS. (i) Promptly upon any chief executive officer, chief
operating officer, chief financial officer, treasurer or general counsel of the
Borrower obtaining knowledge of the institution of, or written threat of, any
action, suit, proceeding, governmental investigation or arbitration against or
affecting the Borrower or any of its Subsidiaries or any property of the
Borrower or any of its Subsidiaries which is not Disclosed Litigation and which
action, suit, proceeding, governmental investigation or arbitration exposes, or
in the case of multiple actions, suits, proceedings, governmental investigations
or arbitrations arising out of the same general allegations or circumstances
could reasonably be expected to have a Material Adverse Effect or result in
liability, individually or in the aggregate in excess of $1,000,000, give
written notice thereof to the Agent and provide such other information as may be
reasonably available to enable each Lender and the Agent and its counsel to
evaluate such matters (at which time such items shall be included in Disclosed
Litigation for all purposes hereof); and (ii) in addition to the requirements
set forth in CLAUSE (i) of this SECTION 7.1(C), upon request of the Agent or the
Required Lenders, promptly give written notice of the status of the Disclosed
Litigation or any action, suit, proceeding, governmental investigation or
arbitration covered by a report delivered pursuant to CLAUSE (i) above or
disclosed in any filing with the Commission and provide such other information
as may be reasonably available to it to enable each Lender and the Agent and its
counsel to evaluate such matters.
(D) ERISA NOTICES. Deliver or cause to be delivered to the Agent and the
Lenders, at the Borrower's expense, the following information and notices as
soon as reasonably possible, and in any event:
(i) (a) within ten (10) Business Days after the Borrower obtains
knowledge that a Termination Event has occurred, a written statement of the
chief financial officer of the Borrower describing such Termination Event
and the action, if any, which the Borrower has taken, is taking or proposes
to take with respect thereto, and when known, any action taken or
threatened by the IRS, DOL or PBGC with respect thereto and (b) within ten
(10) Business Days after any member of the Controlled Group obtains
knowledge that a Termination Event has occurred which could reasonably be
expected to subject the Borrower or any member of the Controlled Group to
liability individually or in the aggregate in excess of $1,000,000, a
written statement of the chief financial officer of the Borrower describing
such Termination Event and the action, if any, which the member of the
Controlled Group has taken, is taking or proposes to take with respect
thereto, and when known, any action taken or threatened by the IRS, DOL or
PBGC with respect thereto;
(ii) within ten (10) Business Days after the Borrower or any of its
Subsidiaries obtains knowledge that a prohibited transaction (defined in
Sections 406 of ERISA and Section 4975 of the Code) has occurred which
could result in material liability, a statement of the chief financial
officer of the Borrower describing such transaction and the action which
the Borrower or such Subsidiary has taken, is taking or proposes to take
with respect thereto;
(iii) within ten (10) Business Days after the Borrower or any of its
Subsidiaries receives notice of any unfavorable determination letter from
the IRS regarding the qualification of a Plan under Section 401(a) of the
Code, copies of each such letter;
(iv) within ten (10) Business Days after the filing thereof with the
IRS, a copy of each funding waiver request filed with respect to any
Benefit Plan and all communications received by the Borrower or a member of
the Controlled Group with respect to such request;
(v) within ten (10) Business Days after receipt by the Borrower or
any member of the Controlled Group of the PBGC's intention to terminate a
Benefit Plan or to have a trustee appointed to administer a Benefit Plan,
copies of each such notice;
(vi) within ten (10) Business Days after receipt by the Borrower or
any member of the Controlled Group of a notice from a Multiemployer Plan
regarding the imposition of withdrawal liability, copies of each such
notice;
(vii) within ten (10) Business Days after the Borrower or any member
of the Controlled Group fails to make a required installment or any other
required payment under Section 412 of the Code on or before the due date
for such installment or payment, a notification of such failure;
(viii) within ten (10) Business Days after the Borrower or any member
of the Controlled Group knows or has reason to know that (a) a
Multiemployer Plan has been terminated, (b) the administrator or plan
sponsor of a Multiemployer Plan intends to terminate a Multiemployer Plan,
or (c) the PBGC has instituted or will institute proceedings under Section
4042 of ERISA to terminate a Multiemployer Plan;
(ix) within ten (10) Business Days after request therefor by the
Agent or any of the Lenders, copies of each annual report (form 5500
series), including Schedule B thereto, filed with respect to each Benefit
Plan; and
(x) within ten (10) Business Days after request therefor by the Agent
or any of the Lenders, copies of each actuarial report received by the
Borrower or any member of the Controlled Group for any Benefit Plan or
Multiemployer Plan and/or any annual report for any Multiemployer Plan.
For purposes of this SECTION 7.1(D), the Borrower, any of its Subsidiaries and
any member of the Controlled Group shall be deemed to know all facts known by
the Administrator of any Plan of which the Borrower or any member of the
Controlled Group or such Subsidiary is the plan sponsor.
(E) LABOR MATTERS. Notify the Agent and the Lenders in writing, promptly
upon the Borrower's learning thereof, of (i) any material labor dispute to which
the Borrower or any of its Subsidiaries may become a party, including, without
limitation, any strikes, lockouts or other disputes relating to such Persons'
plants and other facilities and (ii) any material liability incurred under the
Worker Adjustment and Retraining Notification Act with respect to the closing of
any plant or other facility of the Borrower or any of its Subsidiaries.
(F) OTHER INDEBTEDNESS. Deliver to the Agent (i) a copy of each regular
report, notice or communication regarding potential or actual defaults
(including any accompanying officer's certificate) delivered by or on behalf of
the Borrower or any of its Subsidiaries to the holders of funded Indebtedness
pursuant to the terms of the agreements governing such Indebtedness, such
delivery to be made at the same time and by the same means as such notice or
other communication is delivered to such holders, and (ii) a copy of each notice
or other communication regarding potential or actual defaults received by the
Borrower or any of its Subsidiaries from the from the holders of funded
Indebtedness pursuant to the terms of such Indebtedness, such delivery to be
made promptly after such notice or other communication is received by the
Borrower or any such Subsidiary.
(G) OTHER REPORTS. Deliver or cause to be delivered to the Agent and the
Lenders copies of all financial statements, reports and notices, if any, sent or
made available generally by the Borrower to its securities holders or filed with
the Commission by the Borrower, all press releases made available generally by
the Borrower or any of the Borrower's Subsidiaries to the public concerning
material developments in the business of
the Borrower or any such Subsidiary and all notifications received from the
Commission by the Borrower or its Subsidiaries pursuant to the Securities
Exchange Act of 1934 and the rules promulgated thereunder (other than customary
comment letters received in connection with registration statements or other
routine communications between the Commission and the Borrower).
(H) ENVIRONMENTAL NOTICES. As soon as possible and in any event within ten
(10) days after receipt by the Borrower or any of its Subsidiaries, a copy of
(i) any notice or claim to the effect that the Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release by the
Borrower, any of its Subsidiaries, or any other Person of any Contaminant into
the environment, and (ii) any notice alleging any violation of any
Environmental, Health or Safety Requirements of Law by the Borrower or any of
its Subsidiaries if, in either case, such notice or claim relates to an event
which could reasonably be expected to have a Material Adverse Effect or result
in liability, individually or in the aggregate in excess of $1,000,000.
(I) YEAR 2000 INFORMATION. Upon the request of the Agent or any Lender,
Borrower will provide to the Agent and the Lenders a description of its Year
2000 program, including updates and progress reports. Borrower will advise the
Agent of any reasonably anticipated Material Adverse Effect as a result of Year
2000 Issues.
(J) OTHER INFORMATION. Promptly upon receiving a request therefor from
the Agent or any Lender, prepare and deliver to the Agent and the Lenders such
other information with respect to the Borrower, any of its Subsidiaries or the
Collateral as from time to time may be reasonably requested by the Agent or any
Lender, including, without limitation, schedules identifying and describing the
Collateral and any dispositions thereof or any Asset Sale (and the use of the
Net Cash Proceeds thereof), as from time to time may be reasonably requested by
the Agent or any Lender. In addition, promptly upon the receipt thereof from
the Borrower's accountants, deliver to the Agent and the Lenders a copy of any
management letter prepared by the accountants.
7.2 AFFIRMATIVE COVENANTS.
(A) CORPORATE EXISTENCE, ETC. Except for mergers permitted pursuant to
SECTION 7.3(I), the Borrower shall, and shall cause each of its Subsidiaries to,
at all times maintain its corporate existence and preserve and keep, or cause to
be preserved and kept, in full force and effect its rights and franchises
material to its businesses.
(B) CORPORATE POWERS; CONDUCT OF BUSINESS. From and after June 18, 1999
with respect to the jurisdictions identified on SCHEDULE 6.8 as jurisdictions in
which the Borrower or any of its Subsidiaries is not qualified to transact
business as a foreign corporation on the Closing Date, and from and after the
Closing Date with respect to all other jurisdictions, the Borrower shall, and
shall cause each of its Subsidiaries to, qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified and where the failure to be so qualified will have or could
reasonably be expected to have a Material Adverse Effect. The Borrower will,
and will
cause each Subsidiary to, carry on and conduct its business in substantially the
same manner and in substantially the same fields of enterprise as it is
presently conducted.
(C) COMPLIANCE WITH LAWS, ETC. The Borrower shall, and shall cause its
Subsidiaries to, (a) comply with all Requirements of Law and all restrictive
covenants affecting such Person or the business, properties, assets or
operations of such Person, and (b) obtain as needed all Permits necessary for
its operations and maintain such Permits in good standing unless failure to
comply or obtain could not reasonably be expected to have a Material Adverse
Effect or result in liability, individually or in the aggregate in excess of
$1,000,000.
(D) PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. The Borrower shall
pay, and cause each of its Subsidiaries to pay, (i) all taxes, assessments and
other governmental charges imposed upon it or on any of its properties or assets
or in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, and (ii) all claims (including, without
limitation, claims for labor, services, materials and supplies) for sums which
have become due and payable and which by law have or may become a Lien (other
than a Lien permitted by SECTION 7.3(C)) upon any of the Borrower's or such
Subsidiary's property or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; PROVIDED, HOWEVER, that no such taxes,
assessments and governmental charges referred to in CLAUSE (i) above or claims
referred to in CLAUSE (ii) above (and interest, penalties or fines relating
thereto) need be paid if being contested in good faith by appropriate
proceedings diligently instituted and conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity with Agreement
Accounting Principles shall have been made therefor. The Borrower will not, nor
will it permit any of its Subsidiaries to, file or consent to the filing of any
consolidated income tax return with any other Person other than the consolidated
return of the Borrower.
(E) INSURANCE. The Borrower shall maintain for itself and its
Subsidiaries, or shall cause each of its Subsidiaries to maintain in full force
and effect, insurance policies and programs listed on SCHEDULE 6.16 to this
Agreement or substantially similar policies and programs or other policies and
programs as reflect coverage that is reasonably consistent with prudent industry
practice. The Borrower shall deliver to the Agent endorsements (y) to all "All
Risk" physical damage insurance policies on all of the Borrower's and each of
its Subsidiaries' tangible real and personal property and assets and business
interruption insurance policies naming the Agent loss payee, and (z) to all
general liability and other liability policies naming the Agent an additional
insured. In the event the Borrower or any of its Subsidiaries, at any time or
times hereafter shall fail to obtain or maintain any of the policies or
insurance required herein or to pay any premium in whole or in part relating
thereto, then the Agent, without waiving or releasing any obligations or
resulting Default hereunder, may at any time or times thereafter (but shall be
under no obligation to do so) obtain and maintain such policies of insurance and
pay such premiums and take any other action with respect thereto which the Agent
deems advisable. All sums so disbursed by the Agent shall constitute part of
the Obligations, payable as provided in this Agreement.
(F) INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. The Borrower
shall permit and cause each of the Borrower's Subsidiaries to permit, any
authorized representative(s) designated by either the Agent or any Lender to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine, audit, check and make copies of their respective
financial and accounting records, books, journals, orders, receipts and any
correspondence and other data relating to their respective businesses or the
transactions contemplated hereby (including, without limitation, in connection
with environmental compliance, hazard or liability), and to discuss their
affairs, finances and accounts with their officers and independent certified
public accountants, all upon reasonable notice and at such reasonable times
during normal business hours, as often as may be reasonably requested; PROVIDED,
that while no such notice shall be required if the Agent or any of the Lenders
has a reasonable basis to believe a Default or Unmatured Default exists. The
Borrower shall keep and maintain, and cause each of the Borrower's Subsidiaries
to keep and maintain, in all material respects, proper books of record and
account in which entries in conformity with Agreement Accounting Principles
shall be made of all dealings and transactions in relation to their respective
businesses and activities. If a Default has occurred and is continuing, the
Borrower, upon the Agent's request, shall turn over copies any such records to
the Agent or its representatives.
(G) ERISA COMPLIANCE. The Borrower shall, and shall cause each of the
Borrower's Subsidiaries to, establish, maintain and operate all Plans to comply
in all material respects with the provisions of ERISA, the Code, all other
applicable laws, and the regulations and interpretations thereunder and the
respective requirements of the governing documents for such Plans, except where
the failure to comply will not or could not reasonably be expected to subject
the Borrower and its Subsidiaries to liability individually or in the aggregate
in excess of $1,000,000.
(H) MAINTENANCE OF PROPERTY. The Borrower shall cause all property used
or useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, that nothing in this SECTION 7.2(H) shall prevent the
Borrower or any of its Subsidiaries from discontinuing the operation or
maintenance of any of such property if such discontinuance is, in the judgment
of the Borrower, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the Agent or the
Lenders.
(I) ENVIRONMENTAL COMPLIANCE. The Borrower and its Subsidiaries shall
comply with all Environmental, Health or Safety Requirements of Law, except
where noncompliance could not reasonably be expected to have a Material Adverse
Effect or result in liability, individually or in the aggregate in excess of
$1,000,000. Neither the Borrower nor any of its Subsidiaries shall be the
subject of any proceeding or investigation pertaining to (i) the Release by the
Borrower or any of its Subsidiaries of
any Contaminant into the environment or (ii) the liability of the Borrower or
any of its Subsidiaries arising from the Release by any other Person of any
Contaminant into the environment, which, in either case, has or is reasonably
likely to have a Material Adverse Effect or result in liability, individually or
in the aggregate in excess of $1,000,000.
(J) USE OF PROCEEDS. The Borrower shall use the proceeds of the Loans to
(i) repay certain existing Indebtedness, (ii) provide funds for the additional
working capital needs and other general corporate purposes of the Borrower and
its Subsidiaries and (iii) fund Permitted Acquisitions. The Borrower will not,
nor will it permit any Subsidiary to, use any of the proceeds of the Loans to
purchase or carry any "Margin Stock" or to make any Acquisition, other than any
Permitted Acquisition pursuant to SECTION 7.3(G).
(K) ADDITION OF GUARANTORS; ADDITION OF PLEDGED CAPITAL STOCK AND OTHER
COLLATERAL. The Borrower shall cause (i) each Subsidiary that is (y) a
Subsidiary as of the date of this Agreement or (z) at any time thereafter, a
Material Subsidiary, and (ii) each other Subsidiary necessary for the Borrower
to comply with the requirements set forth in SECTION 7.3(E), to deliver to the
Agent an executed Guaranty Supplement to become a Guarantor under the Guaranty
in the form of EXHIBIT C attached hereto and appropriate corporate resolutions,
opinions and other documentation in form and substance reasonably satisfactory
to the Agent, such Guaranty Supplement and other documentation to be delivered
to the Agent as promptly as possible but in any event (1) on the date of the
consummation of a Permitted Acquisition involving a Material Subsidiary and (2)
otherwise within thirty (30) days of determination that a Subsidiary is a
Material Subsidiary or otherwise needs to be added as a Guarantor.
Simultaneously with any Subsidiary becoming a Guarantor, the Borrower shall (or,
if the Capital Stock of such Subsidiary is owned by another Subsidiary, shall
cause such other Subsidiary to) deliver to the Agent an executed supplement to
the Pledge Agreement or a Pledge Agreement, together with appropriate corporate
resolutions, opinions, stock certificates, UCC filings or amendments and other
documentation, in each case in form and substance reasonably satisfactory to the
Agent and the Agent shall be reasonably satisfied that it has a first priority
perfected pledge of all of the Capital Stock of such Guarantor owned by the
Borrower and its Subsidiaries. Simultaneously with any Subsidiary becoming a
Guarantor (or, solely in the case of the establishment of Collection Accounts,
with ninety (90) days after such Subsidiary becomes a Guarantor), the Borrower
shall cause such Subsidiary to (i) execute and deliver a Security Agreement
Supplement (and deliver the other documents required thereby) and, if
applicable, Intellectual Property Agreements; (ii) if such Subsidiary owns or
leases any real property deemed to be material by the Agent or the Required
Lenders in its or their sole discretion, deliver to the Agent with respect to
such real property Collateral Documents to provide the Agent with a first
priority perfected security interest therein and lien thereon all in form,
content and scope reasonably satisfactory to the Agent and (iii) deliver such
other documentation as the Agent may reasonably require in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, real estate title insurance policies, environmental reports,
landlord's waivers, certified resolutions and other organizational and
authorizing documents of such Subsidiary, favorable opinions of counsel to such
Subsidiary (which shall cover, among other things, the legality, validity,
binding effect
and enforceability of the documentation referred to above and the perfection of
the Agent's liens thereunder) and other items of the types required to be
delivered by the Subsidiaries pursuant to Section 5.1 as of the Closing Date or,
solely in the case of Collection Account Agreements, within 90 days thereafter,
all in form, content and scope reasonably satisfactory to the Agent.
(L) YEAR 2000 ISSUES. The Borrower shall and shall cause each of its
Subsidiaries to take all actions reasonably necessary to assure that the Year
2000 Issues will not have a Material Adverse Effect.
(M) INSURANCE AND CONDEMNATION PROCEEDS. The Borrower directs and shall
cause its Subsidiaries to direct all insurers under policies of property damage,
boiler and machinery and business interruption insurance and payors of any
condemnation claim or award relating to the property to pay all proceeds payable
under such policies or with respect to such claim or award for any loss with
respect to the Collateral directly to the Agent, for the benefit of the Agent
and the Holders of the Secured Obligations; PROVIDED, HOWEVER, in the event that
such proceeds or award are less than $500,000 ("EXCLUDED PROCEEDS"), unless a
Default shall have occurred and be continuing, the Agent shall remit such
Excluded Proceeds to the Borrower. The Agent shall hold such proceeds in an
interest bearing account as cash collateral for the Obligations. For up to 180
days from the date of any loss (the "DECISION PERIOD"), the Borrower may notify
the Agent that it intends to restore, rebuild or replace the property subject to
any insurance payment or condemnation award and shall, as soon as practicable
thereafter, provide the Agent detailed information, including a construction
schedule and cost estimates. Should a Default occur at any time during the
Decision Period, should the Borrower notify the Agent that it has decided not to
rebuild or replace such property during the Decision Period, or should the
Borrower fail to notify the Agent of the Borrower's decision during the Decision
Period, then the amounts held as cash collateral pursuant to this SECTION 7.2(M)
shall upon the Required Lenders' direction be paid to the Agent for the ratable
benefit of the Lenders for application as a prepayment to the outstanding Loans
and shall result in a reduction of the Aggregate Commitment. Proceeds held as
cash collateral pursuant to this SECTION 7.2(M) shall be disbursed as payments
for restoration, rebuilding or replacement of such property as such amounts
become due pursuant to documentation reasonably acceptable to the Agent;
PROVIDED, HOWEVER, should a Default occur after the Borrower has notified the
Agent that it intends to rebuild or replace the property, the amounts held as
cash collateral may, or shall, upon the Required Lenders' direction be applied
as a prepayment of the Loans as set forth above and shall result in a reduction
of the Aggregate Commitment. Upon completion of the restoration, rebuilding or
replacement of such property, the unused proceeds shall be applied as a
prepayment of the Loans. All insurance and condemnation proceeds shall be
subject to the security interest of the Agent on behalf of itself and the
Holders of Secured Obligations under the Collateral Documents until so released.
(N) COLLATERAL DOCUMENTS. Without in any way limiting the requirements
and covenants set forth in the Collateral Documents, if, subsequent to the
Closing Date, the Borrower or any Guarantor shall (a) acquire any intellectual
property, securities, instruments, chattel paper or other personal property
required to be delivered to the Agent
as Collateral hereunder or under any of the Collateral Documents or (b) acquire,
construct or lease any real property, the Borrower shall promptly (and in any
event within five (5) Business Days) after any executive officer of the Borrower
or any of its Subsidiaries acquires knowledge of same notify the Agent of same.
The Borrower shall, and shall cause each of its Subsidiaries to, take such
action at its own expense as reasonably requested by the Agent to ensure that
the Agent has a first priority (subject to any applicable Lien permitted under
SECTION 7.3(C)) perfected Lien to secure the Secured Obligations in (i) all
owned real property and personal property of the Borrower and its Subsidiaries
located in the United States, (ii) to the extent deemed to be material by the
Agent or the Required Lenders in its or their sole reasonable discretion, all
other owned real and personal property of the Borrower and its Subsidiaries and
(iii) all leased real property located in the United States, subject in each
case only to Liens permitted under SECTION 7.3(C). The Borrower shall, and
shall cause each of its Subsidiaries to, adhere to the covenants set forth in
the Collateral Documents, including, without limitation, the covenants regarding
the location of personal property as set forth in the Security Agreements.
(O) POST-CLOSING REQUIREMENTS. Without in any way limiting the covenants
and other agreements set forth in this Agreement and the other Loan Documents,
the Borrower shall:
(i) on or before the date that is 90 days following the date hereof,
cause all of the Borrower and its Subsidiaries' deposit accounts to be
subject to Collection Account Agreements as provided in the Security
Agreements;
(ii) on or before the date that is 90 days following the date hereof,
deliver to the Agent or cause its Subsidiaries to deliver to the Agent
landlord waiver agreements and collateral assignments of leases as provided
in the Security Agreements with respect to the Borrower's and its
Subsidiaries' leased premises;
(iii) on or before June 30, 1999, merge both ACS Municipal Brokers,
Inc. and ACS Capital, Inc. with and into one or more of the Guarantors with
the Guarantor being the surviving corporation in such mergers;
(iv) on or before April 9, 1999, deliver to the Agent and the Lenders
revised consolidated projections and assumptions for the Borrower and its
subsidiaries after giving effect to the events described on SCHEDULE 6.5,
prepared in accordance with Agreement Accounting Principles; and
(v) on or before June 18, 1999, deliver to the Agent evidence
satisfactory to the Agent that the Borrower and its Subsidiaries shall be
qualified to do business as a foreign corporation in each jurisdiction set
forth opposite such Person's name on SCHEDULE 6.8 hereto where such
qualification is required by law.
7.3 NEGATIVE COVENANTS.
(A) INDEBTEDNESS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to any Indebtedness, except:
(i) the Obligations;
(ii) Permitted Existing Indebtedness and Permitted Refinancing
Indebtedness;
(iii) unsecured subordinated indebtedness incurred by the Borrower to
a Seller in connection with a Permitted Acquisition the terms (including,
without limitation those with respect to amount, maturity (which shall not
be prior to six (6) months after the Termination Date), amortization,
interest rate, premiums, fees, covenants, subordination (it being
understood and agreed that the subordination provisions contained in the
form of Subordination Agreement attached as SCHEDULE 7.3(A)(iii) shall be
deemed to be acceptable to the Agent), events of default and remedies) of
which are acceptable to the Agent when issued (such Indebtedness, together
with the Permitted Existing Indebtedness which is subordinated Indebtedness
being referred to herein as "PERMITTED SUBORDINATED INDEBTEDNESS");
(iv) Indebtedness in respect of obligations secured by Customary
Permitted Liens;
(v) Indebtedness constituting Contingent Obligations in respect of
Indebtedness otherwise permitted hereunder;
(vi) Indebtedness arising from intercompany loans from the Borrower to
any Controlled Subsidiary or from any Subsidiary to the Borrower or any
Controlled Subsidiary; PROVIDED that in each case such Indebtedness is
subordinated upon terms satisfactory to the Agent to the obligations of the
Borrower and its Subsidiaries with respect to the Obligations;
(vii) guaranties by the Borrower of Indebtedness permitted to be
incurred by any Subsidiary;
(viii) Indebtedness in respect of Hedging Obligations permitted under
SECTION 7.3(Q);
(ix) secured or unsecured purchase money Indebtedness (including
Capitalized Leases) incurred by the Borrower or any of its Subsidiaries
after the Closing Date (including, as a result of the assumption of any
such Indebtedness in connection with a Permitted Acquisition) to finance
the acquisition of fixed assets, if (1) at the time of such incurrence, no
Default or Unmatured Default has
occurred and is continuing or would result from such incurrence, (2) such
Indebtedness has a scheduled maturity and is not due on demand, (3) such
Indebtedness does not exceed the lower of the fair market value or the cost
of the applicable fixed assets on the date acquired, (4) such Indebtedness
does not exceed in the aggregate at any time (a) $1,000,000 for
Indebtedness incurred other than in connection with the Transportation
Business and (b) an amount for Indebtedness incurred by the Transportation
Business to finance its motor vehicles not in excess of the amount
permitted to be expended by the Transportation Business for Capital
Expenditures under SECTION 7.4(D)(ii) below, and (5) any Lien securing such
Indebtedness is permitted under SECTION 7.3(C) (such Indebtedness being
referred to herein as "PERMITTED PURCHASE MONEY INDEBTEDNESS");
(x) Secured Indebtedness of a Person which becomes a Subsidiary after
the date hereof, PROVIDED that such Indebtedness (1) existed at the time
such Person became a Subsidiary and was not incurred in anticipation
thereof, (2) is not otherwise permitted under CLAUSE (ix) above, and (3)
together with all other such secured Indebtedness, does not in aggregate
principal amount outstanding exceed $2,000,000 at any time; PROVIDED,
further that immediately after such Person becomes a Subsidiary of the
Borrower, no Default or Unmatured Default shall have occurred and be
continuing.
(xi) Indebtedness with respect to surety, appeal and performance
bonds obtained by the Borrower or any of its Subsidiaries in the ordinary
course of business;
(xii) Indebtedness arising under the Guaranty; and
(xiii) other unsecured Indebtedness (other than working capital
financing) existing at a New Subsidiary at the time of the Permitted
Acquisition thereof (but not incurred in connection or in anticipation of
such Permitted Acquisition) the outstanding principal balance of which does
not exceed ten percent (10%) of the book value of the assets acquired as a
result of such Permitted Acquisition.
(B) SALES OF ASSETS. Neither the Borrower nor any of its Subsidiaries
shall sell, assign, transfer, lease, convey or otherwise dispose of any property
(including the stock of any Subsidiary), whether now owned or hereafter
acquired, or any income or profits therefrom, or enter into any agreement to do
so, except:
(i) sales of inventory in the ordinary course of business;
(ii) the disposition in the ordinary course of business of equipment
that is obsolete, excess or no longer useful in the Borrower's or its
Subsidiaries' business; and
(iii) sales, assignments, transfers, leases, conveyances or other
dispositions of other assets (including sales of stock of a Subsidiary) if
such transaction:
(a) in the case of sales of a Material Subsidiary or other assets
representing ten percent (10%) of Consolidated Tangible Assets, is for
consideration consisting of at least 80% of cash; and
(b) for all such transactions (1) is for not less than Fair
Value, and (2) when combined with all such other transactions (each
such transaction being valued at book value) (A) during the
immediately preceding twelve-month period, represents the disposition
of not greater than ten percent (10%) of the Borrower's Consolidated
Tangible Assets at the end of the fiscal quarter immediately preceding
that in which such transaction is proposed to be entered into, and (B)
during the period from the Closing Date to the date of such proposed
transaction, represents the disposition of not greater than twenty
percent (20%) of the Borrower's Consolidated Tangible Assets at the
end of the fiscal quarter immediately preceding that in which such
transaction is proposed to be entered into.
(C) LIENS. Neither the Borrower nor any of its Subsidiaries shall
directly or indirectly create, incur, assume or permit to exist any Lien on or
with respect to any of their respective property or assets except:
(i) Permitted Existing Liens;
(ii) Customary Permitted Liens;
(iii) purchase money Liens (including the interest of a lessor under
a Capitalized Lease and Liens to which any property is subject at the time
of the Borrower's acquisition thereof) securing Permitted Purchase Money
Indebtedness; PROVIDED that such Liens shall not apply to any property of
the Borrower or its Subsidiaries other than that purchased or subject to
such Capitalized Lease; and
(iv) Liens securing the Obligations or Secured Obligations.
In addition, neither the Borrower nor any of its Subsidiaries shall become a
party to any agreement, note, indenture or other instrument, or take any other
action, which would prohibit the creation of a Lien on any of its properties or
other assets in favor of the Agent for the benefit of itself and the Holders of
Secured Obligations, as collateral for the Secured Obligations; PROVIDED that
any agreement, note, indenture or other instrument in connection with Liens
permitted pursuant to CLAUSES (i), (iii) and (iv) above may prohibit the
creation of a Lien in favor of the Agent for the benefit of itself and the
Holders of Secured Obligations on the items of property subject to such Lien.
(D) INVESTMENTS. Except to the extent permitted pursuant to PARAGRAPH (G)
below, neither the Borrower nor any of its Subsidiaries shall directly or
indirectly make or own any Investment except:
(i) Investments in Cash Equivalents;
(ii) Permitted Existing Investments in an amount not greater than the
amount thereof on the Closing Date;
(iii) Investments in trade receivables or received in connection with
the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;
(iv) Investments consisting of deposit accounts maintained by the
Borrower or its Subsidiaries in the ordinary course of business in
connection with its cash management system;
(v) Investments consisting of non-cash consideration from a sale,
assignment, transfer, lease, conveyance or other disposition of property
permitted by SECTION 7.3(B);
(vi) Investments consisting of intercompany loans from any Subsidiary
to the Borrower or any other Subsidiary permitted by SECTION 7.3(A)(vi);
(vii) Investments in any Controlled Subsidiary of the Borrower;
(viii) Investments constituting Permitted Acquisitions; and
(ix) Investments consisting of Collection Accounts maintained by the
Borrower and the Guarantors in the ordinary course of business and subject
to a Collection Account Agreement; and
(x) Investments in addition to those referred to elsewhere in this
SECTION 7.3(D) in an amount not to exceed $100,000 in the aggregate at any
time outstanding;
PROVIDED, HOWEVER, that the Investments described in CLAUSES (v), (viii) and (x)
above shall not be made if either a Default or Unmatured Default shall have
occurred and be continuing on the date of making such Investment or would result
therefrom on the date of making such Investment.
(E) NON-GUARANTOR SUBSIDIARIES. The Borrower shall not permit
Subsidiaries which are not Guarantors, the Capital Stock of which is not pledged
or the assets of which are not subject to a Security Agreement and other
Collateral Documents to
represent(i) five percent (5%) or more of Consolidated Tangible Assets or (ii)
five percent (5%) or more of the consolidated EBITDA.
(F) RESTRICTED PAYMENTS. Neither the Borrower nor any of its Subsidiaries
shall declare or make any Restricted Payment, except:
(i) the defeasance, redemption, repurchase or prepayment of any
Permitted Subordinated Indebtedness with the net cash proceeds of Permitted
Refinancing Indebtedness;
(ii) Restricted Payments or payments in connection with the
transactions described on SCHEDULE 7.3(H) with shareholders which are
"beneficial owners" (as defined in Rule 13d-3 under the Securities Exchange
Act of 1934) of greater than five percent (5%) or more of any class of
voting securities (or other voting interests) of the Borrower, directors,
management or other Affiliates (other than with or among Controlled
Subsidiaries of the Borrower); PROVIDED, that the aggregate of all such
Restricted Payments and other payments shall not exceed $420,000 in the
aggregate during fiscal year 1999 and $300,000 in the aggregate in any
fiscal year thereafter;
(iii) mandatory principal payments due on Indebtedness or any
earn-out or other similar form of contingent purchase price payments (x) to
the seller(s) in connection with acquisitions completed prior to the date
hereof and described on SCHEDULE 1.1.1 and (y) to the seller(s) in
connection with any Permitted Acquisition; and
(iv) where the consideration therefor consists solely of Equity
Interests (but excluding Disqualified Stock) of the Borrower or its
Subsidiaries provided no Change of Control would occur as a result thereof;
PROVIDED, HOWEVER, that the Restricted Payments described in CLAUSES (i), (ii)
and (iii) above shall not be permitted if either a Default shall have occurred
and be continuing at the date of declaration or payment thereof or would result
therefrom.
(G) CONDUCT OF BUSINESS; SUBSIDIARIES; ACQUISITIONS. (i) Neither the
Borrower nor any of its Subsidiaries shall engage in any business other than the
businesses engaged in by the Borrower on the Closing Date and any business or
activities which are substantially similar, related or incidental thereto.
(ii) The Borrower may create, acquire and/or capitalize any
Subsidiary (a "NEW SUBSIDIARY") after the date hereof pursuant to any
transaction that is permitted by or not otherwise prohibited by this Agreement;
PROVIDED that upon the creation or acquisition of each New Subsidiary, the
Borrower shall cause each New Subsidiary that is a Material Subsidiary to
promptly deliver to the Agent the documents, instruments and agreements required
pursuant to SECTION 7.2(K), and all New Subsidiaries that are Material
Subsidiaries shall be Controlled Subsidiaries. After the formation or
acquisition
of any New Subsidiary permitted hereunder, if requested by the Agent, the
Borrower shall provide a supplement to SCHEDULE 6.8 to this Agreement.
(iii) The Borrower shall not and shall not permit any of its
Subsidiaries to make any Acquisitions, other than Acquisitions meeting all of
the following requirements (each such Acquisition constituting a "PERMITTED
ACQUISITION"):
(a) no Default or Unmatured Default shall have occurred and be
continuing or would result from such Acquisition or the incurrence of any
Indebtedness in connection therewith;
(b) in the case of an Acquisition of Equity Interests of an entity,
such Acquisition shall be for at least eighty-one percent (81%) of the
Equity Interest of such entity (provided all of the outstanding Equity
Interests of such entity shall be subject to a Pledge Agreement);
(c) the businesses being acquired shall be substantially similar,
related or incidental to the businesses or activities engaged in by the
Borrower and its Subsidiaries on the Closing Date;
(d) the Indebtedness incurred by the Borrower to the Seller as part of
the consideration therefor (other than Indebtedness assumed in connection
therewith and permitted pursuant to SECTION 7.3(A)) shall be Permitted
Subordinated Indebtedness under SECTION 7.3(A);
(e) the Indebtedness assumed by the Borrower or any of its
Subsidiaries in connection therewith shall be permitted under SECTION
7.3(A);
(f) prior to each such Acquisition, the Borrower shall deliver to the
Agent and the Lenders a documentation, information and certification
package including, without limitation:
(i) a certificate from one of the Authorized Officers, (A)
calculating the purchase price and EBITDA for purposes of CLAUSE (i)
below; (B) certifying that after giving effect to such Acquisition and
the incurrence of or assumption of any Indebtedness hereunder and
permitted by SECTION 7.3(A) in connection therewith, on a PRO FORMA
basis, as if the Acquisition and such incurrence or assumption of
Indebtedness had occurred on the first day of the twelve-month period
ending on the last day of the Borrower's most recently completed
fiscal quarter, the Borrower would have been in compliance with all of
the covenants contained in this Agreement, including, without
limitation, the financial covenants set forth in SECTION 7.4; (C)
calculating the Leverage Ratio as of the closing of such Acquisition
based upon (1) for Total Debt, Total Debt as of the date of the
closing of such Permitted Acquisition (after taking into account any
Indebtedness incurred or assumed in connection with such transaction)
and
(2) for Adjusted EBITDA, Adjusted EBITDA for the twelve-month period
ending prior to the consummation thereof and for which information for
the target entity in such Acquisition is available, calculated as set
forth in the definition thereof;
(ii) information in such detail as shall be satisfactory to the
Agent with respect to any adjustments to the target entity's
historical EBITDA proposed to be utilized by the Borrower in the
calculation of Adjusted EBITDA;
(iii) all of the Collateral Documents necessary for the
perfection of a first priority security interest in all of the assets
to be acquired or the Equity Interests and assets of the entity to be
acquired together with opinions of counsel, in each case in form and
substance reasonably acceptable to the Agent;
(iv) a Guaranty Supplement if required pursuant to the terms of
this Agreement
(v) the financial statements of the target entity together with
any PRO FORMA financial statements, projections, forecasts and budgets
prepared by the Borrower in connection therewith;
(vi) a copy of the acquisition agreement for such Acquisition,
together with drafts of the material schedules thereto;
(vii) a copy of all documents, instruments and agreements with
respect to any Indebtedness to be incurred or assumed in connection
with such Acquisition; and
(viii) such other documents or information as shall be reasonably
requested by the Agent or any Lender;
(g) the purchase is consummated pursuant to a negotiated acquisition
agreement on a non-hostile basis pursuant to an acquisition agreement
approved by the board of directors or other applicable governing body of
the Seller prior to the commencement thereof;
(h) after giving effect to such Acquisition, the representations and
warranties set forth in ARTICLE VI hereof shall be true and correct in all
material respects on and as of the date of such Acquisition with the same
effect as though made on and as of such date; and
(i) the written consent of the Required Lenders shall have been
obtained in connection with any Acquisition if:
(1) the aggregate purchase price (including, without limitation
or duplication, cash, stock, Indebtedness assumed (net of any cash
acquired), and transaction related contractual payments, including
amounts payable under non-compete, consulting or similar agreements)
(valuing all non-cash consideration at Fair Value) (the "PURCHASE
PRICE") is equal to or greater than $7,5000,000; or
(2) the Purchase Price, together with the Purchase Price of all
other Acquisitions completed during the immediately preceding
twelve-month period, is equal to or greater than $20,000,000 in the
aggregate; or
(3) the Purchase Price is equal to or greater than seven (7)
times the Adjusted EBITDA of the target entity for the last 12-month
period preceding such Acquisition for which financial statements are
available.
With respect to any Acquisition where the target entity's revenues for the
12-month period ended immediately preceding such Acquisition are equal to or
greater than ten percent (10%) of the Borrower's and its Subsidiaries'
Consolidated Revenues, or, if otherwise requested by the Agent or the Required
Lenders, the Borrower shall (a) have obtained (and shall have based the
calculations set forth above on) historical audited financial statements for the
target for a period of not less than two years, obtained from the seller or
provided by independent certified public accountants retained for the purposes
of such Acquisition, broken down by fiscal quarter in the Borrower's reasonable
judgment, copies of which shall be provided to the Agent and the Lenders and (b)
at the request of the Required Lenders, provide such financial information as
shall be reasonably acceptable to the Agent and the Required Lenders
demonstrating the Borrower's PRO FORMA compliance with the covenants after
taking into account such Acquisition and the incurrence of any Indebtedness in
connection therewith.
(H) TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. Except for Restricted
Payments permitted by SECTION 7.3(F) and except for the transactions set forth
on SCHEDULE 7.3(H), neither the Borrower nor any of its Subsidiaries shall
directly or indirectly (a) enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any "beneficial owner" (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934) of greater than
five percent (5%) or more of any class of voting securities (or other voting
interests) of the Borrower, or with any Affiliate of the Borrower which is not
its Subsidiary, on terms that are less favorable to the Borrower or any of its
Subsidiaries, as applicable, than those that might be obtained in an arm's
length transaction at the time from Persons who are not such a "beneficial
owner" or Affiliate or (b) pay any director's fees or management fees or other
similar fees or similar types of compensation to any holder or holders of Equity
Interests of the Borrower or any Affiliates of the Borrower (other than
Subsidiaries of the Borrower).
(I) RESTRICTION ON FUNDAMENTAL CHANGES. Neither the Borrower nor any of
its Subsidiaries shall enter into any merger or consolidation, or liquidate,
wind-up or
dissolve (or suffer any liquidation or dissolution), or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of the Borrower's or any such Subsidiary's business or
property, whether now or hereafter acquired, except (i) transactions permitted
under SECTIONS 7.3(B) or 7.3(G) (ii) the merger of a Subsidiary of the Borrower
into a Person acquired in connection with a Permitted Acquisition; (iii) the
merger of a wholly-owned Subsidiary of the Borrower with and into the Borrower;
and (iv) the merger of a Subsidiary of the Borrower with another Subsidiary of
the Borrower; PROVIDED, HOWEVER, (i) with respect to any such permitted mergers
involving any Guarantor, the surviving corporation in the merger shall also be
or become a Guarantor; and (ii) after the consummation of any such transaction,
the Borrower shall be in compliance with the provisions of SECTIONS 7.2(K) and
7.3(E).
(J) SALES AND LEASEBACKS. Neither the Borrower nor any of its
Subsidiaries shall become liable, directly, by assumption or by Contingent
Obligation, with respect to any lease, whether an operating lease or a
Capitalized Lease, of any property (whether real or personal or mixed) (i) which
it or one of its Subsidiaries sold or transferred or is to sell or transfer to
any other Person, or (ii) which it or one of its Subsidiaries intends to use for
substantially the same purposes as any other property which has been or is to be
sold or transferred by it or one of its Subsidiaries to any other Person in
connection with such lease, unless (i) the sale involved is not prohibited under
SECTION 7.3(B), (ii) the lease does not involve Indebtedness prohibited under
SECTION 7.3(A) and (iii) the aggregate amount of all obligations incurred by the
Borrower and its Subsidiaries in connection therewith does not exceed $1,000,000
outstanding at any time.
(K) MARGIN REGULATIONS. Neither the Borrower nor any of its Subsidiaries,
shall use all or any portion of the proceeds of any credit extended under this
Agreement to purchase or carry Margin Stock.
(L) ERISA. The Borrower shall not
(i) engage, or permit any of its Subsidiaries to engage, in any
prohibited transaction described in Sections 406 of ERISA or 4975 of the
Code for which a statutory or class exemption is not available or a private
exemption has not been previously obtained from the DOL;
(ii) permit to exist any accumulated funding deficiency (as defined
in Sections 302 of ERISA and 412 of the Code), with respect to any Benefit
Plan, whether or not waived;
(iii) fail, or permit any Controlled Group member to fail, to pay
timely required contributions or annual installments due with respect to
any waived funding deficiency to any Benefit Plan;
(iv) terminate, or permit any Controlled Group member to terminate,
any Benefit Plan which would result in any liability of the Borrower or any
Controlled Group member under Title IV of ERISA;
(v) fail to make any contribution or payment to any Multiemployer
Plan which the Borrower or any Controlled Group member may be required to
make under any agreement relating to such Multiemployer Plan, or any law
pertaining thereto;
(vi) fail, or permit any Controlled Group member to fail, to pay any
required installment or any other payment required under Section 412 of the
Code on or before the due date for such installment or other payment; or
(vii) amend, or permit any Controlled Group member to amend, a Plan
resulting in an increase in current liability for the plan year such that
the Borrower or any Controlled Group member is required to provide security
to such Plan under Section 401(a)(29) of the Code,
except where such transactions, events, circumstances, or failures will not have
or is not reasonably likely to subject the Borrower and its Subsidiaries to
liability individually or in the aggregate in excess of $1,000,000.
(M) ISSUANCE OF EQUITY INTERESTS. The Borrower shall not issue any Equity
Interests if as a result of such issuance a Change of Control shall occur. None
of the Borrower's Subsidiaries shall issue any Equity Interests other than to
the Borrower and all of which shall be subject to the applicable Pledge
Agreement.
(N) CORPORATE DOCUMENTS. Neither the Borrower nor any of its Subsidiaries
shall amend, modify or otherwise change any of the terms or provisions in any of
their respective constituent documents as in effect on the Closing Date hereof
in any manner adverse to the interests of the Lenders, without the prior written
consent of the Required Lenders.
(O) FISCAL YEAR. The Borrower or any of its consolidated Subsidiaries may
change its fiscal year for accounting or tax purposes from a period consisting
of the 12-month period ending June 30 of each calendar year only so long as the
Borrower shall cause to be delivered not less frequently than every 12 months
the audited financial statements of the Borrower and its consolidated
Subsidiaries as set forth in SECTION 7.1(A)(ii).
(P) SUBSIDIARY COVENANTS. The Borrower will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Indebtedness or other Obligation owed to the
Borrower or any other Subsidiary, make loans or advances or other Investments in
the Borrower or any other Subsidiary, or sell, transfer or otherwise convey any
of its property to the Borrower or any other Subsidiary.
(Q) HEDGING OBLIGATIONS. The Borrower shall not and shall not permit any
of its Subsidiaries to enter into any interest rate, commodity or foreign
currency exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar agreements entered into by the Borrower or a
Subsidiary pursuant to which the Borrower or such Subsidiary has hedged its
actual interest rate, foreign currency or commodity exposure.
(R) SUBORDINATED INDEBTEDNESS. The Borrower shall not and shall not
permit any of its Subsidiaries to amend, supplement or modify the terms of any
Permitted Subordinated Indebtedness, or make any payment required as a result of
an amendment or change thereto, other than amendments, supplements or
modifications which (1)(a) decrease the rate of interest payable on such
Permitted Subordinated Indebtedness, (b) provide for the payment in kind in lieu
of cash of any portion of the interest on the Permitted Subordinated
Indebtedness, (c) provide for the extension of the maturity date with respect to
any principal or interest payment to be made under the instruments evidencing
such Permitted Subordinated Indebtedness, (d) provide more flexibility to the
Borrower or its Subsidiaries in connection with any covenants or (e) waive any
defaults existing in connection with the Permitted Subordinated Indebtedness and
(2) do not adversely affect in any respect the interests of the Agent or any
Lender.
(S) CHANGE OF DEPOSIT ACCOUNTS. Except to the extent permitted in SECTION
7.3(D)(iv), the Borrower shall not and shall not permit any Guarantor to
establish or maintain any deposit account with any bank or other financial
institution other than those which within ninety (90) days after the Closing
Date (or, in the case of any deposit account established after the closing Date,
on or prior to the date such deposit account is established) have entered into a
Collection Account Agreement in form and substance acceptable to the Agent.
7.4 FINANCIAL COVENANTS. The Borrower shall comply with the following:
(A) INTEREST COVERAGE RATIO. The Borrower shall maintain a ratio
("INTEREST COVERAGE RATIO") of (i) EBITDA to (ii) Interest Expense, in each case
for the Borrower and its consolidated Subsidiaries of at least:
(1) 2.75 to 1.00 for each fiscal quarter commencing with the fiscal
quarter ending March 31, 1999 through the fiscal quarter ending
September 30, 1999; and
(2) 3.00 to 1.00 for each fiscal quarter thereafter.
In each case the Interest Coverage Ratio shall be determined as of the last day
of each fiscal quarter for the four-quarter period ending on such day. For
purposes of the calculation of Interest Expense for any period under this
SECTION 7.4(A), such amounts shall be calculated for any such period by
including the actual amount for the applicable
period ending on such day attributable to Permitted Acquisitions occurring
during such period on a PRO FORMA basis for the period from the first day of the
applicable period through the date of the closing of each Permitted Acquisition,
utilizing (a) where available or required pursuant to the terms of this
Agreement, historical audited and/or reviewed unaudited financial statements
obtained from the seller, broken down by fiscal quarter in the Borrower's
reasonable judgment or (b) unaudited financial statements (where no audited or
reviewed financial statements are required pursuant to the terms of this
Agreement) reviewed internally by the Borrower, broken down by fiscal quarter in
the Borrower's reasonable judgment, utilizing, without duplication, (A) for the
entities acquired prior to the Closing Date, the PRO FORMA adjustments which are
consistent with the Commission's regulations and practices as of the Closing
Date (whether or not applicable) to account for adjustments to historical
Interest Expense as described in the Offering Memorandum and (B) any PRO FORMA
adjustments which are consistent with the Commission's regulations and practices
as of the Closing Date (whether or not applicable) to account for adjustments to
historical Interest Expense for an acquired entity in connection with a
Permitted Acquisition.
(B) LEVERAGE RATIO. The Borrower shall not at any time permit the ratio
(the "LEVERAGE RATIO") of (i) Total Debt of the Borrower and its consolidated
Subsidiaries to (ii) Adjusted EBITDA of the Borrower and its consolidated
Subsidiaries, to be greater than 3.00 to 1.00. The Leverage Ratio shall be
calculated, in each case, determined as of the last day of each fiscal quarter
(commencing with the fiscal quarter ending March 31 and each fiscal quarter
thereafter) based upon (a) for Total Debt, Total Debt as of the last day of each
such fiscal quarter; and (b) for Adjusted EBITDA, Adjusted EBITDA for the
twelve-month period ending on such day, calculated as set forth in the
definition thereof.
(C) MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not permit its
Consolidated Net Worth at any time to be less than the sum of (a) $30,503,070
PLUS (b) seventy-five percent (75%) of Net Income (if positive) calculated
separately for each fiscal quarter ending after December 31, 1998, PLUS (c)
one-hundred percent (100%) of the adjustment to stockholders' equity made in
connection with the issuance of any Capital Stock.
(D) CAPITAL EXPENDITURES. The Borrower will not, nor will it permit any
Subsidiary to, expend, or be committed to expend, for Capital Expenditures in
the acquisition of fixed assets (i) during any period of 12 consecutive months,
Capital Expenditures for its business other than the Transportation Business in
excess of two percent (2.0%) of Consolidated Revenues of the Borrower and its
Subsidiaries other than Consolidated Revenues attributable to the Transportation
Business for the immediately preceding twelve months and (ii) during any period
of 12 consecutive months, Capital Expenditures for its Transportation Business
in excess of eight percent (8.0%) of Consolidated Revenues of the Borrower and
its Subsidiaries attributed to the Transportation Business. For purposes of
this SECTION 7.4(D), the Capital Expenditures for all Subsidiaries during the
applicable twelve-month period are to be included, even though some of such
Capital Expenditures occurred prior to such entity becoming a Subsidiary of the
Borrower.
ARTICLE VIII: DEFAULTS
8.1 DEFAULTS. Each of the following occurrences shall constitute a
Default under this Agreement:
(a) FAILURE TO MAKE PAYMENTS WHEN DUE. The Borrower or any Subsidiary
shall (i) fail to pay when due any of the Obligations consisting of principal
with respect to the Loans or (ii) shall fail to pay within three (3) Business
Days of the date when due any of the other Obligations under this Agreement or
the other Loan Documents.
(b) BREACH OF CERTAIN COVENANTS. The Borrower shall fail or shall fail to
cause any of its Subsidiaries to duly and punctually to perform or observe any
agreement, covenant or obligation under:
(i) SECTION 7.1(J), 7.2(B), 7.2(L) or 7.2(M) and such failure shall
continue unremedied for ten (10) Business Days;
(ii) SECTIONS 7.1(A), 7.2(C), 7.2(D), 7.2(E), 7.2(G) through and
including 7.2(I) and such failure shall continue unremedied for five (5)
Business Days; or
(iii) SECTIONS 7.1(B),7.2(A), 7.2(F), 7.2(J), 7.2(K), 7.2(N), 7.2(O),
7.3 or 7.4.
(c) BREACH OF REPRESENTATION OR WARRANTY. Any representation or warranty
made or deemed made by the Borrower or any of its Subsidiaries to the Agent or
any Lender herein or in any of the other Loan Documents or in any written
statement or certificate at any time given by any such Person pursuant to any of
the Loan Documents shall be false or misleading in any material respect on the
date as of which made (or deemed made).
(d) OTHER DEFAULTS. The Borrower shall default in the performance of or
compliance with any term contained in this Agreement (other than as covered by
PARAGRAPHS (a), (b) or (c) of this SECTION 8.1), or the Borrower or any of its
Subsidiaries shall default in the performance of or compliance with any term
contained in any of the other Loan Documents, and such default shall continue
for thirty (30) days after the occurrence thereof.
(e) DEFAULT AS TO OTHER INDEBTEDNESS. The Borrower or any of its
Subsidiaries shall fail to make any payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) with respect
to any Indebtedness the outstanding principal amount of which Indebtedness is in
excess of $500,000; or any breach, default or event of default shall occur, or
any other condition shall exist under any instrument, agreement, or any other
indenture pertaining to any such Indebtedness, if the effect thereof is to cause
an acceleration, mandatory redemption, a requirement that the Borrower offer to
purchase such Indebtedness or other required repurchase of such Indebtedness, or
permit the holder(s) of such Indebtedness to accelerate the maturity of
any such Indebtedness or require a redemption or other repurchase of such
Indebtedness; or any such Indebtedness shall be otherwise declared to be due and
payable (by acceleration or otherwise) or required to be prepaid, redeemed or
otherwise repurchased by the Borrower or any of its Subsidiaries (other than by
a regularly scheduled required prepayment) prior to the stated maturity thereof.
(f) INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) An involuntary case shall be commenced against the Borrower or
any of the Borrower's Subsidiaries and the petition shall not be dismissed,
stayed, bonded or discharged within sixty (60) days after commencement of
the case; or a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of the Borrower or any of the
Borrower's Subsidiaries in an involuntary case, under any applicable
bankruptcy, insolvency or other similar law now or hereinafter in effect;
or any other similar relief shall be granted under any applicable federal,
state, local or foreign law.
(ii) A decree or order of a court having jurisdiction in the premises
for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over the Borrower or any
of the Borrower's Subsidiaries or over all or a substantial part of the
property of the Borrower or any of the Borrower's Subsidiaries shall be
entered; or an interim receiver, trustee or other custodian of the Borrower
or any of the Borrower's Subsidiaries or of all or a substantial part of
the property of the Borrower or any of the Borrower's Subsidiaries shall be
appointed or a warrant of attachment, execution or similar process against
any substantial part of the property of the Borrower or any of the
Borrower's Subsidiaries shall be issued and any such event shall not be
stayed, dismissed, bonded or discharged within sixty (60) days after entry,
appointment or issuance.
(g) VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. The Borrower or
any of the Borrower's Subsidiaries shall (i) commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, (ii) consent to the entry of an order for relief in an involuntary case,
or to the conversion of an involuntary case to a voluntary case, under any such
law, (iii) consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property, (iv)
make any assignment for the benefit of creditors or (v) take any corporate
action to authorize any of the foregoing.
(h) JUDGMENTS AND ATTACHMENTS. Any money judgment(s), writ or warrant of
attachment, or similar process against the Borrower or any of its Subsidiaries
or any of their respective assets involving in any single case or in the
aggregate an amount in excess of $500,000 is or are entered and shall remain
undischarged, unvacated, unbonded or unstayed for a period of sixty (60) days or
in any event later than fifteen (15) days prior to the date of any proposed sale
thereunder.
(i) DISSOLUTION. Any order, judgment or decree shall be entered against
the Borrower or any of its Subsidiaries decreeing its involuntary dissolution or
split up and such order shall remain undischarged and unstayed for a period in
excess of sixty (60) days; or the Borrower or any of its Subsidiaries shall
otherwise dissolve or cease to exist except as specifically permitted by this
Agreement.
(j) LOAN DOCUMENTS; FAILURE OF SECURITY. At any time, for any reason,
(i) any Loan Document ceases to be in full force and effect or the Borrower or
any of the Borrower's Subsidiaries party thereto seeks to repudiate its
obligations thereunder or the Liens intended to be created thereby are, or the
Borrower or any such Subsidiary seeks to render such Liens, invalid or
unperfected, or (ii) any Lien on any Collateral of any Material Subsidiary
shall, at any time, for any reason, be invalidated or otherwise cease to be in
full force and effect, or such Lien shall not have the priority contemplated by
this Agreement or the Loan Documents.
(k) TERMINATION EVENT. Any Termination Event occurs which is reasonably
likely to subject the Borrower or any of its Subsidiaries to liability
individually or in the aggregate in excess of $1,000,000.
(l) WAIVER OF MINIMUM FUNDING STANDARD. If the plan administrator of any
Plan applies under Section 412(d) of the Code for a waiver of the minimum
funding standards of Section 412(a) of the Code and any Lender believes the
substantial business hardship upon which the application for the waiver is based
could reasonably be expected to subject either the Borrower or any Controlled
Group member to liability individually or in the aggregate in excess of
$1,000,000.
(m) CHANGE OF CONTROL. A Change of Control shall occur.
(n) HEDGING AGREEMENTS. Nonpayment by the Borrower or any Subsidiary of
any obligation under any Hedging Agreement or the breach by the Borrower or
Subsidiary of any other term, provision or condition contained in any Hedging
Agreement and such nonpayment or breach shall continue for ten (10) days after
the occurrence thereof.
(o) GUARANTOR DEFAULT OR REVOCATION. Any Guaranty shall fail to remain in
full force or effect or any action shall be taken by the Borrower or any
Subsidiary to discontinue or to assert the invalidity or unenforceability of any
Guaranty, or any Guarantor shall fail to comply with any of the terms or
provisions of any Guaranty to which it is a party, or any Guarantor denies that
it has any further liability under any Guaranty to which it is a party, or gives
notice to such effect.
(p) FAILURE OF SUBORDINATION. The subordination provisions of the
documents and instruments evidencing any Permitted Subordinated Indebtedness
shall, at any time, be invalidated or otherwise cease to be in full force and
effect.
A Default shall be deemed "continuing" until cured or until waived in
writing in accordance with SECTION 9.3.
ARTICLE IX: ACCELERATION, DEFAULTING LENDERS; WAIVERS, AMENDMENTS AND REMEDIES
9.1 TERMINATION OF COMMITMENTS; ACCELERATION. If any Default described in
SECTION 8.1(f) or 8.1(g) occurs with respect to the Borrower, the obligations of
the Lenders to make Loans hereunder and the obligation of the Issuing Bank to
issue Letters of Credit hereunder shall automatically terminate and the
Obligations shall immediately become due and payable without any election or
action on the part of the Agent, the Issuing Bank or any Lender. If any other
Default occurs, the Required Lenders may terminate or suspend the obligations of
the Lenders to make Loans hereunder and the obligation of the Issuing Bank to
issue Letters of Credit hereunder, or declare the Obligations to be due and
payable, or both, whereupon, after written notice to the Borrower, the
Obligations shall become immediately due and payable, without presentment,
demand, protest or other notice of any kind, all of which the Borrower expressly
waives.
9.2 DEFAULTING LENDER. In the event that any Lender fails to fund its Pro
Rata Share of any Advance requested or deemed requested by the Borrower, which
such Lender is obligated to fund under the terms of this Agreement (the funded
portion of such Advance being hereinafter referred to as a "NON PRO RATA LOAN"),
until the earlier of such Lender's cure of such failure and the termination of
the Commitments, the proceeds of all amounts thereafter repaid to the Agent by
the Borrower and otherwise required to be applied to such Lender's share of all
other Obligations pursuant to the terms of this Agreement shall be advanced to
the Borrower by the Agent on behalf of such Lender to cure, in full or in part,
such failure by such Lender, but shall nevertheless be deemed to have been paid
to such Lender in satisfaction of such other Obligations. Notwithstanding
anything in this Agreement to the contrary:
(i) the foregoing provisions of this SECTION 9.2 shall apply
only with respect to the proceeds of payments of Obligations and shall
not affect the conversion or continuation of Loans pursuant to SECTION
2.8;
(ii) any such Lender shall be deemed to have cured its failure
to fund its Pro Rata Share of any Advance at such time as an amount
equal to such Lender's original Pro Rata Share of the requested
principal portion of such Advance is fully funded to the Borrower,
whether made by such Lender itself or by operation of the terms of
this SECTION 9.2, and whether or not the Non Pro Rata Loan with
respect thereto has been repaid, converted or continued;
(iii) amounts advanced to the Borrower to cure, in full or in
part, any such Lender's failure to fund its Pro Rata Share of any
Advance ("CURE LOANS") shall bear interest at the rate applicable to
Floating Rate
Loans in effect from time to time, and for all other purposes of this
Agreement shall be treated as if they were Floating Rate Loans;
(iv) regardless of whether or not a Default has occurred or is
continuing, and notwithstanding the instructions of the Borrower as to
its desired application, all repayments of principal which, in
accordance with the other terms of this Agreement, would be applied to
the outstanding Floating Rate Loans shall be applied FIRST, ratably to
all Floating Rate Loans constituting Non Pro Rata Loans, SECOND,
ratably to Floating Rate Loans other than those constituting Non Pro
Rata Loans or Cure Loans and, THIRD, ratably to Floating Rate Loans
constituting Cure Loans;
(v) for so long as and until the earlier of any such Lender's
cure of the failure to fund its Pro Rata Share of any Advance and the
termination of the Commitments, the term "Required Lenders" for
purposes of this Agreement shall mean Lenders (excluding all Lenders
whose failure to fund their respective Pro Rata Shares of such Advance
have not been so cured) whose Pro Rata Shares represent sixty-six and
two-thirds percent (66 2/3%) of the aggregate Pro Rata Shares of such
Lenders; and
(vi) for so long as and until any such Lender's failure to fund
its Pro Rata Share of any Advance is cured in accordance with SECTION
9.2(ii), (A) such Lender shall not be entitled to any commitment fees
with respect to its Commitment and (B) such Lender shall not be
entitled to any letter of credit fees, which commitment fees and
letter of credit fees shall accrue in favor of the Lenders which have
funded their respective Pro Rata Share of such requested Advance,
shall be allocated among such performing Lenders ratably based upon
their relative Commitments, and shall be calculated based upon the
average amount by which the aggregate Commitments of such performing
Lenders exceeds the sum of (I) the outstanding principal amount of the
Loans owing to such performing Lenders, PLUS (II) the outstanding
Reimbursement Obligations owing to such performing Lenders, PLUS (III)
the aggregate participation interests of such performing Lenders
arising pursuant to SECTION 3.5 with respect to undrawn and
outstanding Letters of Credit.
9.3 AMENDMENTS. Subject to the provisions of this ARTICLE IX, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder or any provision in any Loan Document; PROVIDED, HOWEVER, that
no such supplemental agreement shall, without the consent of each Lender
affected thereby:
(i) Postpone or extend the Termination Date or any other date fixed
for any payment of principal of, or interest on, the Loans, the
Reimbursement
Obligations or any fees or other amounts payable to such Lender (except
with respect to (a) any modifications of the provisions relating to
prepayments of Loans and other Obligations and (b) a waiver of the
application of the default rate of interest pursuant to SECTION 2.9
hereof);
(ii) Reduce the principal amount of any Loans or L/C Obligations, or
reduce the rate or extend the time of payment of interest or fees thereon
(including as a result of a change in the definition of Leverage Ratio or
any of the components thereof or the method of calculation thereof);
(iii) Reduce the percentage specified in the definition of Required
Lenders or any other percentage of Lenders specified to be the applicable
percentage in this Agreement to act on specified matters;
(iv) Other than pursuant to the provisions of SECTION 2.4(b),
increase the amount of the Commitment of any Lender hereunder;
(v) Permit the Borrower to assign its rights under this Agreement;
(vi) Amend this SECTION 9.3;
(vii) Other than in connection with a transaction permitted under the
terms of the Agreement release any Guarantor of the Obligations; or
(viii) Other than in connection with a transaction permitted under
the terms of the Agreement, release a material portion of the Collateral.
No amendment of any provision of this Agreement relating to (a) the Agent shall
be effective without the written consent of the Agent and (b) Letters of Credit
shall be effective without the written consent of the Issuing Bank. The Agent
may waive payment of the fee required under SECTION 13.3(B) without obtaining
the consent of any of the Lenders.
9.4 PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan or the issuance of a Letter of Credit notwithstanding the
existence of a Default or the inability of the Borrower to satisfy the
conditions precedent to such Loan or issuance of such Letter of Credit shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to SECTION 9.3, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE X: GENERAL PROVISIONS
10.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Revolving
Notes and the making of the Loans herein contemplated.
10.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to the
contrary notwithstanding, no Lender shall be obligated to extend credit to the
Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
10.3 PERFORMANCE OF OBLIGATIONS. The Borrower agrees that the Agent may,
but shall have no obligation to (i) at any time, pay or discharge taxes, liens,
security interests or other encumbrances levied or placed on or threatened
against any Collateral (other than taxes which are being contested in good faith
by appropriate proceedings properly instituted and diligently conducted and with
respect to which adequate reserves or other appropriate provisions are being
maintained in accordance with Agreement Accounting Principles) and (ii) after
the occurrence and during the continuance of a Default, make any other payment
or perform any act required of the Borrower under any Loan Document or take any
other action which the Agent in its discretion deems necessary or desirable to
protect or preserve the Collateral or enhance the likelihood of repayment of the
Obligations. The Agent shall use its reasonable efforts to give the Borrower
and the Lenders notice of any action taken under this SECTION 10.3 prior to the
taking of such action or promptly thereafter provided the failure to give such
notice shall not affect the Borrower's or Lenders' obligations in respect
thereof. The Borrower agrees to pay the Agent, upon demand, the principal
amount of all funds advanced by the Agent under this SECTION 10.3, together with
interest thereon at the rate from time to time applicable to Floating Rate Loans
from the date of such advance until the outstanding principal balance thereof is
paid in full. If the Borrower fails to make payment in respect of any such
advance under this SECTION 10.3 within one (1) Business Day after the date the
Borrower receives written demand therefor from the Agent, the Agent shall
promptly notify each Lender and each Lender agrees that it shall thereupon make
available to the Agent, in
Dollars in immediately available funds, the amount equal to such Lender's Pro
Rata Share of such advance. If such funds are not made available to the Agent
by such Lender within one (1) Business Day after the Agent's demand therefor,
the Agent will be entitled to recover any such amount from such Lender together
with interest thereon at the Federal Funds Effective Rate for each day during
the period commencing on the date of such demand and ending on the date such
amount is received. The failure of any Lender to make available to the Agent
its Pro Rata Share of any such unreimbursed advance under this SECTION 10.3
shall neither relieve any other Lender of its obligation hereunder to make
available to the Agent such other Lender's Pro Rata Share of such advance on the
date such payment is to be made nor increase the obligation of any other Lender
to make such payment to the Agent. All outstanding principal of, and interest
on, advances made under this SECTION 10.3 shall constitute Obligations for
purposes hereof.
10.4 HEADINGS. Section headings in the Loan Documents are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of the Loan Documents.
10.5 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS EMBODY
THE FINAL AND ENTIRE AGREEMENT AND UNDERSTANDING AMONG THE BORROWER, THE AGENT
AND THE LENDERS AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS AMONG THE
BORROWER, THE AGENT AND THE LENDERS RELATING TO THE SUBJECT MATTER THEREOF.
THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS 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 HERETO.
10.6 SEVERAL OBLIGATIONS; BENEFITS OF THIS AGREEMENT. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other Lender (except to the extent to which
the Agent is authorized to act as such). The failure of any Lender to perform
any of its obligations hereunder shall not relieve any other Lender from any of
its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
10.7 EXPENSES; INDEMNIFICATION.
(A) EXPENSES. The Borrower shall reimburse the Agent for any reasonable
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys' and paralegals' fees and time charges of attorneys and paralegals for
the Agent, which attorneys and paralegals may be employees of the Agent) paid or
incurred by the Agent in connection with the preparation, negotiation,
execution, delivery, syndication, review, amendment, modification, and
administration of the Loan Documents. The Borrower also agrees to reimburse the
Agent and the Lenders for any costs, internal charges and
out-of-pocket expenses (including attorneys' and paralegals' fees and time
charges of attorneys and paralegals for the Agent and the Lenders, which
attorneys and paralegals may be employees of the Agent or the Lenders) paid or
incurred by the Agent or any Lender in connection with the collection of the
Obligations and enforcement of the Loan Documents. In addition to expenses set
forth above, the Borrower agrees to reimburse the Agent, promptly after the
Agent's request therefor, for each audit or other business analysis performed by
or for the benefit of the Lenders in connection with this Agreement or the other
Loan Documents in an amount equal to the Agent's then reasonable and customary
charges for each person employed to perform such audit or analysis, plus all
costs and expenses (including without limitation, travel expenses) incurred by
the Agent in the performance of such audit or analysis. Agent shall provide the
Borrower with a detailed statement of all reimbursements requested under this
SECTION 10.7(A).
(B) INDEMNITY. The Borrower further agrees to defend, protect, indemnify,
and hold harmless the Agent and each and all of the Lenders and each of their
respective Affiliates, and each of such Agent's, Lender's, or Affiliate's
respective officers, directors, employees, attorneys and agents (including,
without limitation, those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in ARTICLE V)
(collectively, the "INDEMNITEES") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses of any kind or nature whatsoever (including, without limitation,
the fees and disbursements of counsel for such Indemnitees in connection with
any investigative, administrative or judicial proceeding, whether or not such
Indemnitees shall be designated a party thereto), imposed on, incurred by, or
asserted against such Indemnitees in any manner relating to or arising out of:
(i) this Agreement, the other Loan Documents or any act, event or
transaction related or attendant thereto or to any Permitted Acquisition,
the making of the Loans, and the issuance of and participation in Letters
of Credit hereunder, the management of such Loans or Letters of Credit, the
use or intended use of the proceeds of the Loans or Letters of Credit
hereunder, or any of the other transactions contemplated by the Loan
Documents; or
(ii) any liabilities, obligations, responsibilities, losses, damages,
personal injury, death, punitive damages, economic damages, consequential
damages, treble damages, intentional, willful or wanton injury, damage or
threat to the environment, natural resources or public health or welfare,
costs and expenses (including, without limitation, attorney, expert and
consulting fees and costs of investigation, feasibility or remedial action
studies), fines, penalties and monetary sanctions, interest, direct or
indirect, known or unknown, absolute or contingent, past, present or future
relating to violation of any Environmental, Health or Safety Requirements
of Law arising from or in connection with the past, present or future
operations of the Borrower, its Subsidiaries or any of their respective
predecessors in interest, or, the past, present or future environmental,
health or safety condition of any respective property of the Borrower or
its Subsidiaries, the presence of asbestos-containing materials at any
respective property of the Borrower or its
Subsidiaries or the Release or threatened Release of any Contaminant into
the environment (collectively, the "INDEMNIFIED MATTERS");
PROVIDED, HOWEVER, the Borrower shall have no obligation to an Indemnitee
hereunder with respect to Indemnified Matters caused by or resulting from (y) a
dispute among the Lenders or a dispute between any Lender and the Agent, or (z)
the willful misconduct or Gross Negligence of such Indemnitee or breach of
contract by such Indemnitee with respect to the Loan Documents, in each case, as
determined by the final non-appealed judgment of a court of competent
jurisdiction. If the undertaking to indemnify, pay and hold harmless set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall contribute the maximum portion which it
is permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees. THE
PARTIES INTEND FOR THE PROVISIONS OF THIS SECTION 10.7(B) TO APPLY AND PROTECT
EACH INDEMNIFIED PERSON FROM THE CONSEQUENCES OF ITS OWN NEGLIGENCE, WHETHER OR
NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING OR CONCURRING CAUSE OF ANY CLAIM.
(C) WAIVER OF CERTAIN CLAIMS; SETTLEMENT OF CLAIMS. The Borrower further
agrees to assert no claim against any of the Indemnitees on any theory of
liability for consequential, special, indirect, exemplary or punitive damages.
No settlement shall be entered into by the Borrower or any if its Subsidiaries
with respect to any claim, litigation, arbitration or other proceeding relating
to or arising out of the transactions evidenced by this Agreement, the other
Loan Documents or in connection with any Permitted Acquisition or related
transactions (whether or not the Agent or any Lender or any Indemnitee is a
party thereto) unless such settlement releases all Indemnitees from any and all
liability with respect thereto.
(D) SURVIVAL OF AGREEMENTS. The obligations and agreements of the
Borrower under this SECTION 10.7 shall survive the termination of this
Agreement.
10.8 NUMBERS OF DOCUMENTS. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
10.9 ACCOUNTING. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with Agreement Accounting
Principles.
10.10 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document that
is held to be inoperative, unenforceable, or invalid in any jurisdiction shall,
as to that jurisdiction, be inoperative, unenforceable, or invalid without
affecting the remaining provisions in that jurisdiction or the operation,
enforceability, or validity of that provision in any other jurisdiction, and to
this end the provisions of all Loan Documents are declared to be severable.
10.11 NONLIABILITY OF LENDERS. The relationship between the Borrower and
the Lenders and the Agent shall be solely that of borrower and lender. Neither
the Agent nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with any
phase of the Borrower's business or operations.
10.12 GOVERNING LAW. THIS AGREEMENT IS BEING EXECUTED AND DELIVERED, AND
IS INTENDED TO BE PERFORMED, IN DALLAS, TEXAS, AND THE SUBSTANTIVE LAWS OF THE
STATE OF TEXAS SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT AND
INTERPRETATION OF THIS AGREEMENT AND ALL OTHER LOAN DOCUMENTS. ANY DISPUTE
BETWEEN THE BORROWER AND THE AGENT, ANY LENDER, OR ANY INDEMNITEE ARISING OUT
OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, AND WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE
RESOLVED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF TEXAS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
10.13. CONSENT TO JURISDICTION; SERVICE OF PROCESS; JURY TRIAL.
(A) THE BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION OF ANY UNITED STATES FEDERAL OR TEXAS STATE COURT SITTING IN
DALLAS, TEXAS IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN
DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR
ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN DALLAS, TEXAS.
(B) SERVICE OF PROCESS. THE BORROWER WAIVES PERSONAL SERVICE OF ANY
PROCESS UPON IT AND IRREVOCABLY APPOINTS CT CORPORATION AS THE BORROWER'S AGENT
FOR THE PURPOSE OF ACCEPTING SERVICE OF PROCESS ISSUED BY ANY COURT. NOTHING
HEREIN SHALL IN ANY WAY BE DEEMED TO LIMIT THE ABILITY OF THE AGENT OR THE
LENDERS TO SERVE ANY SUCH WRITS, PROCESS OR SUMMONSES IN ANY OTHER MANNER
PERMITTED BY APPLICABLE LAW. THE BORROWER IRREVOCABLY WAIVES ANY OBJECTION
(INCLUDING, WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON
THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION
HEREWITH IN ANY JURISDICTION SET FORTH ABOVE.
(C) WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH. EACH OF THE PARTIES HERETO AGREES AND CONSENTS THAT ANY
SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY AND THAT ANY PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OR A
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(D) WAIVER OF BOND. THE BORROWER WAIVES THE POSTING OF ANY BOND OTHERWISE
REQUIRED OF ANY PARTY HERETO IN CONNECTION WITH ANY JUDICIAL PROCESS OR
PROCEEDING TO REALIZE ON THE COLLATERAL ENFORCE ANY JUDGMENT OR OTHER COURT
ORDER ENTERED IN FAVOR OF SUCH PARTY, OR TO ENFORCE BY SPECIFIC PERFORMANCE,
TEMPORARY RESTRAINING ORDER, PRELIMINARY OR PERMANENT INJUNCTION, THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT.
(E) ADVICE OF COUNSEL. EACH OF THE PARTIES REPRESENTS TO EACH OTHER PARTY
HERETO THAT IT HAS DISCUSSED THIS AGREEMENT AND, SPECIFICALLY, THE PROVISIONS OF
THIS SECTION 10.13, WITH ITS COUNSEL.
10.14 NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties hereto and no presumption or burden of proof shall arise
favoring or disfavoring any party by virtue of the authorship of any provisions
of this Agreement.
10.15 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. The Borrower agrees that
any and all claims of the Borrower against any Guarantor, any endorser or any
other guarantor of all or any part of the Obligations, or against any of its
properties, including, without limitation, pursuant to the any intercompany
Indebtedness permitted under SECTION 7.3(A)(vi), shall be subordinate and
subject in right of payment to the prior payment, in full and in cash, of all
Obligations. Notwithstanding any right of the Borrower to ask, demand, xxx for,
take or receive any payment from any Guarantor, all rights, liens and security
interests of the Borrower, whether now or hereafter arising and howsoever
existing, in any assets of any Guarantor shall be and are Subordinated to the
rights, if any, of the Lenders and the Agent in those assets. The Borrower
shall have no right to possession of any such asset or to foreclose upon any
such asset, whether by judicial action or otherwise, unless and until all of the
Obligations shall have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Agent and the Lenders have been terminated. If, during the
continuance of a Default, all or any part of the assets of any Guarantor, or the
proceeds thereof, are subject to any distribution, division or application to
the creditors of any Guarantor, whether partial or complete, voluntary or
involuntary, and whether by reason of liquidation, bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding, then, and in any such event, any payment or distribution of any kind
or character, either in cash, securities or other property, which shall be
payable or deliverable upon or with respect to any indebtedness of any Guarantor
to the Borrower, including, without limitation, pursuant to the any intercompany
Indebtedness permitted under SECTION 7.3(A)(vi) ("INTERCOMPANY INDEBTEDNESS")
shall be paid or delivered directly to the Agent for application on any of the
Obligations, due or to become due, until such Obligations shall have first been
paid in full in cash and satisfied; PROVIDED, HOWEVER, ordinary course payments
or distributions made by any Guarantor to the Borrower shall be required to be
paid or delivered to the Agent only upon the Agent's request. The Borrower
irrevocably authorizes and empowers the Agent to demand, xxx for, collect and
receive every such payment or distribution and give acquittance therefor and to
make and present for and on behalf of the Borrower such proofs of claim and take
such other action, in the Agent's own name or in the name of the Borrower or
otherwise, as the Agent may deem necessary or advisable for the enforcement of
this SECTION 10.15. The Agent may vote such proofs of claim in any such
proceeding, receive and collect any and all dividends or other payments or
disbursements made thereon in whatever form the same may be paid or issued and
apply the same on account of any of the Obligations. Should any payment,
distribution, security or instrument or proceeds thereof be received by the
Borrower upon or with respect to the Intercompany Indebtedness during the
continuance of a Default and prior to the satisfaction of all of the Obligations
and the termination of all financing arrangements under this Agreement and the
other Loan Documents between the Borrower and the Agent and the Lenders, the
Borrower shall receive and hold the same in trust, as trustee, for the benefit
of the Agent and the Holders of Secured Obligations and shall forthwith
deliver the same to the Agent, for the benefit of the Agent and the Holders of
Secured Obligations, in precisely the form received (except for the endorsement
or assignment of the Borrower where necessary), for application to any of the
Obligations, due or not due, and, until so delivered, the same shall be held in
trust by the Borrower as the property of the Agent and the Lenders; PROVIDED,
HOWEVER, ordinary course payments or distributions made by any Guarantor to the
Borrower shall be required to be paid or delivered to the Agent only upon the
Agent's request. If the Borrower fails to make any such endorsement or
assignment to the Agent, the Agent or any of its officers or employees are
irrevocably authorized to make the same. The Borrower agrees that until the
Obligations have been paid in full in cash and satisfied and all financing
arrangements under this Agreement and the other Loan Documents between the
Borrower and the Agent and the Lenders have been terminated, the Borrower will
not assign or transfer to any Person (other than the Agent) any claim the
Borrower has or may have against any Guarantor.
10.16. USURY NOT INTENDED. It is the intent of the Borrower and each
Lender in the execution and performance of this Agreement and the other Loan
Documents to contract in strict compliance with applicable usury laws, including
conflicts of law concepts, governing the Advances of each Lender including such
applicable laws of the State of Texas and the United States of America from
time-to-time in effect. In furtherance thereof, the Lenders and the Borrower
stipulate and agree that none of the terms and provisions contained in this
Agreement or the other Loan Documents shall ever be construed to create a
contract to pay, as consideration for the use, forbearance or detention of
money, interest at a rate in excess of the Maximum Rate and that for purposes
hereof "interest" shall include the aggregate of all charges which constitute
interest under such laws that are contracted for, charged or received under this
Agreement; and in the event that, notwithstanding the foregoing, under any
circumstances the aggregate amounts taken, reserved, charged, received or paid
on the Advances, include amounts which by applicable law are deemed interest
which would exceed the Maximum Rate, then such excess shall be deemed to be a
mistake and each Lender receiving same shall credit the same on the principal of
its Revolving Notes (or if such Revolving Notes shall have been paid in full,
refund said excess to the Borrower); PROVIDED, however, that it at any time the
Floating Rate or Eurodollar Rate applicable to any of the Obligations hereunder
shall exceed the Maximum Rate, thereby causing such rate of interest to be
limited to the Maximum Rate, then any subsequent reduction in the Floating Rate
or Eurodollar Rate as applicable shall not reduce the rate of interest on the
Obligations below the Maximum Rate until the total amount of interest accrued on
the Obligations equals the amount of interest which would have accrued on the
obligations if the Floating Rate or Eurodollar Rate, as applicable, had at all
times been in effect. In the event that the maturity of the Revolving Notes are
accelerated by reason of any election of the holder thereof resulting from any
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest may
never include more than the Maximum Rate and excess interest, if any, provided
for in this Agreement or otherwise shall be canceled automatically as of the
date of such acceleration or prepayment and, if theretofore paid, shall be
credited on the applicable Revolving Notes (or, if the applicable Revolving
Notes shall have been paid in full, refunded to the Borrower of such interest).
In determining whether or not the
interest paid or payable under any specific contingencies exceeds the Maximum
Rate, the Borrower and the Lenders shall to the maximum extent permitted under
applicable law (a) characterize any non-principal payment as an expense, fee or
premium rather than as interest, (b) exclude voluntary payments and the effects
thereof, and (c) amortize, prorate, allocate and spread in equal parts during
the period of the full stated term of the Revolving Notes all amounts considered
to be interest under applicable law at any time contracted for, charged,
received or reserved in connection with the Obligations in accordance with the
maximum amounts outstanding from time to time thereunder and the maximum legal
rates of interest from time to time in effect under applicable law in order to
lawfully charge the maximum amount of interest permitted under applicable law.
The provisions of this Section shall control over all other provisions of this
Agreement or the other Loan Documents which may be in apparent conflict
herewith. To the extent federal law permits the Agent and the Lenders to
contract for, charge or receive a greater amount of interest, the Agent and the
Lenders will rely on federal law instead of the Texas Finance Code, as
supplemented by Texas Credit Title, for the purpose of determining the Maximum
Rate. Additionally, to the maximum extent permitted by applicable law now or
hereafter in effect, Agent may, at its option and from time to time, implement
any other method of computing the Maximum Rate under the Texas Finance Code (as
supplemented by Texas Credit Title) or under other applicable law by giving
notice, if required, to Borrower as provided by applicable law now or hereafter
in effect. Notwithstanding anything to the contrary contained herein or in any
of the other Loan Documents, it is not the intention of the Agent and the
Lenders to accelerate the maturity of any interest that has not accrued at the
time of such acceleration or to collect unearned interest at the time of such
acceleration.
10.17. BUSINESS LOANS. The Borrower warrants and represents that the
Loans evidenced by the Revolving Notes are and shall be for business,
commercial, investment or other similar purposes and not primarily for personal,
family, household or agricultural use. In no event shall Chapter 346 of the
Texas Finance Code (which regulates certain revolving loan accounts and
revolving tri-party accounts) apply to this Agreement and the other Loan
Documents.
ARTICLE XI: THE AGENT
11.1 APPOINTMENT; NATURE OF RELATIONSHIP. Bank One, Texas, NA is
appointed by the Lenders as the Agent hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Agent (for so long
as the Agent remains in such capacity under this Agreement) to act as the
contractual representative of such Lender with only the rights and duties
expressly set forth herein and in the other Loan Documents. The Agent agrees to
act as such contractual representative upon the express conditions contained in
this ARTICLE XI. Notwithstanding the use of the defined term "Agent," it is
expressly understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement and that the Agent is
merely acting as the representative of the Lenders with only those duties as are
expressly set forth in this Agreement and the other Loan Documents. In its
capacity as the Lenders'
contractual representative, the Agent (i) does not assume any fiduciary duties
to any of the Lenders, (ii) is a "representative" of the Lenders within the
meaning of Section 9-105 of the Uniform Commercial Code and (iii) is acting as
an independent contractor, the rights and duties of which are limited to those
expressly set forth in this Agreement and the other Loan Documents. Each of the
Lenders agrees to assert no claim against the Agent on any agency theory or any
other theory of liability for breach of fiduciary duty, all of which claims each
Lender waives.
11.2 POWERS. The Agent shall have and may exercise such powers under the
Loan Documents as are specifically delegated to the Agent by the terms of each
thereof, together with such powers as are reasonably incidental thereto. The
Agent shall have no implied duties or fiduciary duties to the Lenders, or any
obligation to the Lenders to take any action hereunder or under any of the other
Loan Documents except any action specifically provided by the Loan Documents
required to be taken by the Agent.
11.3 GENERAL IMMUNITY. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for any action taken or omitted to be taken by it or them hereunder
or under any other Loan Document or in connection herewith or therewith except
to the extent such action or inaction is found in a final judgment by a court of
competent jurisdiction to have arisen solely from (i) the Gross Negligence or
willful misconduct of such Person or (ii) breach of contract by such Person with
respect to the Loan Documents. THE PARTIES INTEND FOR THE PROVISIONS OF THIS
SECTION 11.3 TO APPLY AND PROTECT EACH INDEMNIFIED PERSON FROM THE CONSEQUENCES
OF ITS OWN NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS THE SOLE, CONTRIBUTING
OR CONCURRING CAUSE OF ANY CLAIM.
11.4 NO RESPONSIBILITY FOR LOANS, CREDITWORTHINESS, COLLATERAL, RECITALS,
ETC. Neither the Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document; (iii) the
satisfaction of any condition specified in ARTICLE V, except receipt of items
required to be delivered solely to the Agent; (iv) the existence or possible
existence of any Default or (v) the validity, effectiveness or genuineness of
any Loan Document or any other instrument or writing furnished in connection
therewith. The Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or in any of the other Loan
Documents, for the perfection or priority of any of the Liens on any of the
Collateral, or for the execution, effectiveness, genuineness, validity,
legality, enforceability, collectibility, or sufficiency of this Agreement or
any of the other Loan Documents or the transactions contemplated thereby, or for
the financial condition of any guarantor of any or all of the Obligations, the
Borrower or any of its Subsidiaries.
11.5 ACTION ON INSTRUCTIONS OF LENDERS. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan
Document in accordance with written instructions signed by the Required Lenders
(or any other percentage of Lenders specified to be the applicable percentage in
this Agreement or any other Loan Document to act on specified matters), and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders and on all holders of Revolving Notes. The Agent
shall be fully justified in failing or refusing to take any action hereunder and
under any other Loan Document unless it shall first be indemnified to its
satisfaction by the Lenders pro rata against any and all liability, cost and
expense that it may incur by reason of taking or continuing to take any such
action.
11.6 EMPLOYMENT OF AGENTS AND COUNSEL. The Agent may execute any of its
duties as the Agent hereunder and under any other Loan Document by or through
employees, agents, and attorney-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning the contractual arrangement between the Agent and the Lenders
and all matters pertaining to the Agent's duties hereunder and under any other
Loan Document.
11.7 RELIANCE ON DOCUMENTS; COUNSEL. The Agent shall be entitled to rely
upon any Revolving Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Agent, which
counsel may be employees of the Agent.
11.8 THE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, PROVIDED that no Lender shall be liable
for any of the foregoing to the extent any of the foregoing is found in a final
non-appealable judgment by a court of competent jurisdiction to have arisen
solely from the Gross Negligence or willful misconduct of the Agent. THE PARTIES
INTEND FOR THE PROVISIONS OF THIS SECTION 11.8 TO APPLY AND PROTECT THE AGENT
FROM THE CONSEQUENCES OF ITS OWN NEGLIGENCE, WHETHER OR NOT THAT NEGLIGENCE IS
THE SOLE, CONTRIBUTING OR CONCURRING CAUSE OF ANY CLAIM.
11.9 RIGHTS AS A LENDER. With respect to its Commitment, Loans made by it
and the Revolving Notes issued to it, the Agent shall have the same rights and
powers
hereunder and under any other Loan Document as any Lender and may exercise the
same as through it were not the Agent, and the term "Lender" or "Lenders" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent may accept deposits from, lend money to, and generally
engage in any kind of trust, debt, equity or other transaction, in addition to
those contemplated by this Agreement or any other Loan Document, with the
Borrower or any of its Subsidiaries in which such Person is not prohibited
hereby from engaging with any other Person.
11.10 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
11.11 SUCCESSOR AGENT. The Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower, and the Agent may be removed at
any time with or without cause by written notice received by the Agent from the
Required Lenders. Upon any such resignation or removal, the Required Lenders
shall have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within thirty days
after the retiring Agent's giving notice of resignation, then the retiring Agent
may appoint, on behalf of the Borrower and the Lenders, a successor Agent.
Notwithstanding anything herein to the contrary, so long as no Default has
occurred and is continuing, each such successor Agent shall be subject to
approval by the Borrower, which approval shall not be unreasonably withheld.
Such successor Agent shall be a commercial bank having capital and retained
earnings of at least $50,000,000. Upon the acceptance of any appointment as the
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations hereunder and under the other Loan Documents. After any
retiring Agent's resignation hereunder as Agent, the provisions of this ARTICLE
XI shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent hereunder and under
the other Loan Documents.
11.12 COLLATERAL DOCUMENTS. (a) Each Lender authorizes the Agent to enter
into the Pledge Agreements and each of the other Collateral documents
contemplated thereby (collectively, the "Collateral Documents") to which it is a
party and to take all action contemplated by such documents. Each Lender agrees
that no Holder of Secured Obligations (other than the Agent) shall have the
right individually to seek to realize upon the security granted by any
Collateral Document, it being understood and agreed that
such rights and remedies may be exercised solely by the Agent for the benefit of
the Holders of Secured Obligations upon the terms of the Collateral Documents.
(b) In the event that any Collateral is hereafter pledged by any Person as
collateral security for the Obligations, the Agent is hereby authorized to
execute and deliver on behalf of the Holders of Secured Obligations any Loan
Documents necessary or appropriate to grant and perfect a Lien on such
Collateral in favor of the Agent on behalf of the Holders of Secured
Obligations.
(c) The Lenders hereby authorize the Agent, at its option and in its
discretion, to (y) release any Lien granted to or held by the Agent upon any
Collateral and/or (z) release any Guarantor from its obligations under the
Guaranty (i) upon termination of the Commitments and payment and satisfaction of
all of the Obligations at any time arising under or in respect of this Agreement
or the Loan Documents or the transactions contemplated hereby or thereby;
(ii) in connection with any transaction permitted by, but only in accordance
with, the terms of the applicable Loan Document; or (iii) in connection with any
transaction approved, authorized or ratified in writing by the Required Lenders,
unless such release is required to be approved by all of the Lenders hereunder.
Upon request by the Agent at any time, the Lenders will confirm in writing the
Agent's authority to release particular types or items of Collateral pursuant to
this SECTION 11.12(c).
(d) Upon any sale or transfer of assets constituting Collateral which is
permitted pursuant to the terms of any Loan Document, or consented to in writing
by the Required Lenders or all of the Lenders, as applicable, or consummation of
any transaction involving the sale of all or substantially all of the assets of
a Guarantor and upon at least five Business Days' prior written request by the
Borrower, the Agent shall (and is hereby irrevocably authorized by the Lenders
to) execute such documents as may be necessary to evidence the release of the
Liens granted to the Agent for the benefit of the Holders of Secured Obligations
herein or pursuant hereto upon the Collateral that was sold or transferred or
evidence the release of the applicable Guarantor from its obligations under the
Guaranty; PROVIDED, HOWEVER, that (i) the Agent shall not be required to execute
any such document on terms which, in the Agent's opinion, would expose the Agent
to liability or create any obligation or entail any consequence other than the
release of such Liens without recourse or warranty, and (ii) such release shall
not in any manner discharge, affect or impair the Secured Obligations any other
Guarantor's obligations under the Guaranty or any Liens upon (or obligations of
the Borrower or any Subsidiary in respect of) all interests retained by the
Borrower or any Subsidiary, including (without limitation) the proceeds of the
sale, all of which shall continue to constitute part of the Collateral.
ARTICLE XII: SETOFF; RATABLE PAYMENTS
12.1 SETOFF. In addition to, and without limitation of, any rights of the
Lenders under applicable law, if any Default occurs and is continuing, any
indebtedness from any Lender to the Borrower (including all account balances,
whether provisional or final and whether or not collected or available) may be
offset and applied toward the payment of the Obligations owing to such Lender,
whether or not the Obligations, or any part hereof, shall then be due.
12.2 RATABLE PAYMENTS. If any Lender, whether by setoff or otherwise, has
payment made to it upon its Loans (other than payments received pursuant to
SECTIONS 4.1, 4.2 or 4.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligation or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to the obligations owing to them. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
12.3 APPLICATION OF PAYMENTS. Subject to the provisions of SECTION 9.2,
(i) prior to the occurrence of a Default, the Agent shall apply all payments and
prepayments in respect of the Obligations in such order as shall be specified by
the Borrower and (ii) after the occurrence of a Default, the Agent shall, unless
otherwise specified at the direction of the Required Lenders which direction
shall be consistent with the last sentence of this SECTION 12.3, apply all
payments and prepayments in respect of any Obligations and all proceeds of
Collateral in the following order:
(A) first, to pay interest on and then principal of any portion of
the Loans which the Agent may have advanced on behalf of any Lender for
which the Agent has not then been reimbursed by such Lender or the
Borrower;
(B) second, to pay interest on and then principal of any advance made
under SECTION 10.3 for which the Agent has not then been paid by the
Borrower or reimbursed by the Lenders;
(C) third, to pay Obligations in respect of any fees, expense
reimbursements or indemnities then due to the Agent;
(D) fourth, to pay Obligations in respect of any fees, expenses,
reimbursements or indemnities then due to the Lenders and the Issuing Bank;
(E) fifth, to pay interest due in respect of Loans and L/C
Obligations;
(F) sixth, to the ratable payment or prepayment of principal
outstanding on Loans, Reimbursement Obligations and outstanding Hedging
Obligations under any Hedging Agreements, in such order as the Agent may
determine in its sole discretion;
(G) seventh, to provide required cash collateral, if required pursuant
to SECTION 3.10 and
(H) eighth, to the ratable payment of all other Secured Obligations.
Unless otherwise designated (which designation shall only be applicable prior to
the occurrence of a Default) by the Borrower, all principal payments in respect
of Loans shall be applied FIRST, to repay outstanding Floating Rate Loans, and
THEN to repay outstanding Eurodollar Rate Loans with those Eurodollar Rate Loans
which have earlier expiring Interest Periods being repaid prior to those which
have later expiring Interest Periods. The order of priority set forth in CLAUSE
(ii) of this SECTION 12.3 and the related provisions of this Agreement are set
forth solely to determine the rights and priorities of the Agent and the Issuing
Bank as among themselves. The order of priority set forth in CLAUSES (D)
through (H) of this SECTION 12.3 may at any time and from time to time be
changed by the Required Lenders without necessity of notice to or consent of or
approval by the Borrower, or any other Person. The order of priority set forth
in CLAUSES (A) through (C) of this SECTION 12.3 may be changed only with the
prior written consent of the Agent.
12.4 RELATIONS AMONG LENDERS.
(a) Except with respect to the exercise of set-off rights of any Lender in
accordance with SECTION 12.1, the proceeds of which are applied in accordance
with this Agreement, and except as set forth in the second sentence of CLAUSE
(b) below, each Lender agrees that it will not take any action, nor institute
any actions or proceedings, against the Borrower or any other obligor hereunder
or with respect to any Collateral or any Loan Document, without the prior
written consent of the Required Lenders or, as may be provided in this Agreement
or the other Loan Documents, at the direction of the Agent.
(b) The Lenders are not partners or co-venturers, and no Lender shall be
liable for the acts or omissions of, or (except as otherwise set forth herein in
case of the Agent) authorized to act for, any other Lender. Notwithstanding the
foregoing, and subject to SECTION 12.2, any Lender shall have the right to
enforce on an unsecured basis the payment of the principal of and interest on
any Loan made by it after the date such principal or interest has become due and
payable pursuant to the terms of this Agreement.
ARTICLE XIII: BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Holders of Secured Obligations and their respective successors and assigns,
except that (i) the Borrower shall not have the right to assign its rights or
obligations under the Loan Documents and (ii) any assignment by any Lender must
be made in compliance with SECTION 13.3 hereof. Notwithstanding clause (ii) of
this SECTION 13.1, any Lender may at any time, without the consent of the
Borrower or the Agent, assign all or any portion of its rights under this
Agreement and its Revolving Notes to a Federal Reserve Bank; PROVIDED, HOWEVER,
that no such assignment shall release the transferor Lender from its obligations
hereunder. The Agent may treat the payee of any Revolving Note as the owner
thereof for all purposes hereof unless and until such payee complies with
SECTION 13.3 hereof in the case of an assignment thereof or, in the case of any
other transfer, a written notice of the transfer is filed with the Agent. Any
assignee or transferee of a Revolving Note agrees by acceptance thereof to be
bound by all the terms and provisions of the Loan Documents. Any request,
authority or consent of any Person, who at the time of making such request or
giving such authority or consent is the holder of any Revolving Note, shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Revolving Note or of any Revolving Note or Revolving Notes issued in exchange
therefor.
13.2 PARTICIPATIONS.
(A) PERMITTED PARTICIPANTS; EFFECT. Subject to the terms set forth in
this SECTION 13.2, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one or more banks or other
entities ("PARTICIPANTS") participating interests in any Loan owing to such
Lender, any Revolving Note held by such Lender, any Commitment of such Lender,
any L/C Interest of such Lender or any other interest of such Lender under the
Loan Documents on a pro rata or non-pro rata basis. Notice of such
participation to the Agent shall be required prior to any participation becoming
effective with respect to a Participant which is not a Lender or an Affiliate of
a Lender. In the event of any such sale by a Lender of participating interests
to a Participant, such Lender's obligations under the Loan Documents shall
remain unchanged, such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, such Lender shall remain
the holder of any such Revolving Note for all purposes under the Loan Documents,
all amounts payable by the Borrower under this Agreement shall be determined as
if such Lender had not sold such participating interests, and the Borrower and
the Agent shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents
except that, for purposes of ARTICLE IV hereof, the Participants shall be
entitled to the same rights as if they were Lenders.
(B) VOTING RIGHTS. Each Lender shall retain the sole right to approve,
without the consent of any Participant, any amendment, modification or waiver of
any provision of the Loan Documents other than any amendment, modification or
waiver with respect to
any Loan or Commitment in which such Participant has an interest which requires
the consent of all of the affected Lenders pursuant to the terms of SECTION 9.3.
(C) BENEFIT OF SETOFF. The Borrower agrees that each Participant shall be
deemed to have the right of setoff provided in SECTION 12.1 hereof in respect to
its participating interest in amounts owing under the Loan Documents to the same
extent as if the amount of its participating interest were owing directly to it
as a Lender under the Loan Documents, PROVIDED that each Lender shall retain the
right of setoff provided in SECTION 12.1 hereof with respect to the amount of
participating interests sold to each Participant except to the extent such
Participant exercises its right of setoff. The Lenders agree to share with each
Participant, and each Participant, by exercising the right of setoff provided in
SECTION 12.1 hereof, agrees to share with each Lender, any amount received
pursuant to the exercise of its right of setoff, such amounts to be shared in
accordance with SECTION 12.2 as if each Participant were a Lender.
13.3 ASSIGNMENTS.
(A) PERMITTED ASSIGNMENTS. Any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to one or
more banks or other entities ("PURCHASERS") all or a portion of its rights and
obligations under this Agreement (including, without limitation, its Commitment,
all Loans owing to it, all of its participation interests in existing Letters of
Credit, and its obligation to participate in additional Letters of Credit
hereunder) in accordance with the provisions of this SECTION 13.3. Each
assignment shall be of a constant, and not a varying, ratable percentage of all
of the assigning Lender's rights and obligations under this Agreement. Such
assignment shall be effected through an Assignment Agreement substantially in
the form of EXHIBIT A hereto and shall not be permitted hereunder unless such
assignment is either for all of such Lender's rights and obligations under the
Loan Documents or, without the prior written consent of the Agent, involves
Loans and Commitments in an aggregate amount of at least $5,000,000. The
consent of the Agent and, so long as no Default or Unmatured Default shall have
occurred and is continuing, the Borrower (which consent, in each such case,
shall not be unreasonably withheld or delayed), shall be required prior to an
assignment becoming effective with respect to a Purchaser which is not a Lender
or an Affiliate thereof.
(B) EFFECT; CLOSING DATE. Upon (i) delivery to the Agent of a notice of
assignment, substantially in the form attached as APPENDIX I to EXHIBIT A hereto
(a "NOTICE OF ASSIGNMENT"), together with any consent required by SECTION
13.3(A) hereof, and (ii) payment of a $3,500 fee by the assignor or the assignee
(as agreed) to the Agent for processing such assignment, such assignment shall
become effective on the effective date specified in such Notice of Assignment.
The Notice of Assignment shall contain a representation by the Purchaser to the
effect that none of the consideration used to make the purchase of the
Commitment, Loans and L/C Obligations under the applicable assignment agreement
are "plan assets" as defined under ERISA and that the rights and interests of
the Purchaser in and under the Loan Documents will not be "plan assets" under
ERISA. On and after the effective date of such assignment, such Purchaser, if
not
already a Lender, shall for all purposes be a Lender party to this Agreement and
any other Loan Documents executed by the Lenders and shall have all the rights
and obligations of a Lender under the Loan Documents, to the same extent as if
it were an original party hereto, and no further consent or action by the
Borrower, the Lenders or the Agent shall be required to release the transferor
Lender with respect to the percentage of the Aggregate Commitment, Loans and
Letter of Credit participations assigned to such Purchaser. Upon the
consummation of any assignment to a Purchaser pursuant to this SECTION 13.3(B),
the transferor Lender, the Agent and the Borrower shall make appropriate
arrangements so that replacement Revolving Notes are issued to such transferor
Lender and new Revolving Notes or, as appropriate, replacement Revolving Notes,
are issued to such Purchaser, in each case in principal amounts reflecting their
Commitments, as adjusted pursuant to such assignment.
(C) THE REGISTER. The Agent shall maintain at its address referred to in
SECTION 14.1 a copy of each Commitment and Acceptance delivered pursuant to
SECTION 2.4(b) and each Assignment Agreement delivered to and accepted by it
pursuant to this SECTION 13.3 and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of and
principal amount of the Loans owing to, each Lender from time to time and
whether such Lender is an original Lender, became a Lender pursuant to SECTION
2.4(b) or the assignee of another Lender pursuant to an assignment under this
SECTION 13.3. The entries in the Register shall be conclusive and binding for
all purposes, absent manifest error, and the Borrower and each of its
Subsidiaries, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the Borrower or
any Lender at any reasonable time and from time to time upon reasonable prior
notice.
13.4 CONFIDENTIALITY. Subject to SECTION 13.5, the Agent and the Lenders
shall hold all nonpublic information obtained pursuant to the requirements of
this Agreement and identified as such by the Borrower in accordance with such
Person's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a prospective Transferee in
connection with the contemplated participation or assignment or as required or
requested by any Governmental Authority or representative thereof or pursuant to
legal process and shall require any such Transferee to agree (and require any of
its Transferees to agree) to comply with this SECTION 13.4. In no event shall
the Agent or any Lender be obligated or required to return any materials
furnished by the Borrower; PROVIDED, HOWEVER, each prospective Transferee shall
be required to agree that if it does not become a participant or assignee it
shall return all materials furnished to it by or on behalf of the Borrower in
connection with this Agreement.
13.5 DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and any
prospective Transferee any and all information in such Lender's possession
concerning the Borrower and its Subsidiaries and the Collateral; PROVIDED that
prior to any such disclosure, such
prospective Transferee shall agree to preserve in accordance with SECTION 13.4
the confidentiality of any confidential information described therein.
ARTICLE XIV: NOTICES
14.1 GIVING NOTICE. Except as otherwise permitted by SECTION 2.11 with
respect to Borrowing Notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Documents shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
14.2 CHANGE OF ADDRESS. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XV: COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of which
taken together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart. This Agreement shall be
effective when it has been executed by the Borrower, the Agent and the Lenders
and each party has notified the Agent by facsimile or telephone, that it has
taken such action.
IN WITNESS WHEREOF, the Borrower, the Lenders and the Agent have executed
this Agreement as of the Closing Date.
PRECEPT BUSINESS SERVICES, INC.,
as the Borrower
By:
----------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Chief Financial Officer
Address:
0000 Xxxxxxx Xxxxxx Xxxxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: Chief Financial Officer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
BANK ONE, TEXAS, NA, as Agent and as a Lender
By:
---------------------------
Name:
Title:
Address:
0000 Xxxx Xxxxxx
0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION
By:___________________________
Name: Xxxxx Xxxxxxx
Title: Assistant Vice President
Address:
0000 Xxxx Xxxxxx
0xx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
SCHEDULE 3.1
EXISTING LETTERS OF CREDIT
Date Of
Issuance
ISSUER AMOUNT ACCOUNT PARTY BENEFICIARY NUMBER
---------------------------------------------------------------------------------------------
Xxxxx Fargo Bank $330,000 Precept Investors, Inc. Texas Central Bank 10/3/97
(Texas), N.A. No.
NZS282824
