Exhibit 4.2
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[JPMorgan LOGO]
$300,000,000
REVOLVING CREDIT AGREEMENT
$150,000,000
TERM LOAN AGREEMENT
DATED AS OF
NOVEMBER 28, 2006
AMONG
SERVICE CORPORATION INTERNATIONAL
AS BORROWER,
THE LENDERS PARTY HERETO,
JPMORGAN CHASE BANK, N.A.,
AS ADMINISTRATIVE AGENT,
BANK OF AMERICA, N.A. AND THE BANK OF NOVA SCOTIA,
AS SYNDICATION AGENTS
FOR THE REVOLVING LOANS,
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X.X. XXXXXX SECURITIES INC.
AND
BANC OF AMERICA SECURITIES LLC,
AS JOINT BOOKRUNNERS AND JOINT LEAD ARRANGERS
FOR THE REVOLVING LOANS
AND
X.X. XXXXXX SECURITIES, INC.
AND
XXXXXXX XXXXX CAPITAL CORPORATION,
AS JOINT BOOKRUNNERS AND JOINT LEAD ARRANGERS
FOR THE TERM LOAN
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Xxxxxxx Xxxxx LLP
Counsel to the Administrative Agent
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS........................................................1
SECTION 1.01 DEFINED TERMS.............................................1
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS...................17
SECTION 1.03 TERMS GENERALLY..........................................17
SECTION 1.04 ACCOUNTING TERMS; GAAP...................................18
ARTICLE II THE CREDITS......................................................18
SECTION 2.01 REVOLVING LOAN COMMITMENTS...............................18
SECTION 2.02 REVOLVING LOANS AND BORROWINGS...........................18
SECTION 2.03 REQUESTS FOR REVOLVING BORROWINGS........................19
SECTION 2.04 TERM LOANS...............................................20
SECTION 2.05 SWINGLINE LOANS..........................................20
SECTION 2.06 LETTERS OF CREDIT........................................21
SECTION 2.07 FUNDING OF BORROWINGS....................................25
SECTION 2.08 INTEREST ELECTIONS.......................................26
SECTION 2.09 TERMINATION AND REDUCTION OF COMMITMENTS.................27
SECTION 2.10 REPAYMENT OF LOANS; EVIDENCE OF DEBT.....................28
SECTION 2.11 PREPAYMENT OF LOANS......................................29
SECTION 2.12 FEES.....................................................30
SECTION 2.13 INTEREST.................................................31
SECTION 2.14 ALTERNATE RATE OF INTEREST...............................32
SECTION 2.15 INCREASED COSTS..........................................32
SECTION 2.16 BREAK FUNDING PAYMENTS...................................33
SECTION 2.17 TAXES....................................................34
SECTION 2.18 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.................................................35
SECTION 2.19 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS...........37
SECTION 2.20 INCREASE IN THE REVOLVING LOAN COMMITMENTS...............37
ARTICLE III REPRESENTATIONS AND WARRANTIES..................................38
SECTION 3.01 ORGANIZATION; POWERS.....................................38
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY............................38
SECTION 3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS.....................39
SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE..........39
SECTION 3.05 PROPERTIES...............................................39
SECTION 3.06 LITIGATION AND ENVIRONMENTAL MATTERS.....................39
SECTION 3.07 COMPLIANCE WITH LAWS AND AGREEMENTS......................40
SECTION 3.08 INVESTMENT AND HOLDING COMPANY STATUS....................40
SECTION 3.09 TAXES....................................................40
SECTION 3.10 ERISA....................................................40
SECTION 3.11 DISCLOSURE...............................................40
SECTION 3.12 SUBSIDIARIES.............................................41
SECTION 3.13 MARGIN STOCK.............................................41
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SECTION 3.14 USE OF PROCEEDS..........................................41
SECTION 3.15 SOLVENCY.................................................41
ARTICLE IV CONDITIONS.......................................................41
SECTION 4.01 EFFECTIVE DATE...........................................41
SECTION 4.02 EACH CREDIT EVENT........................................43
ARTICLE V AFFIRMATIVE COVENANTS.............................................43
SECTION 5.01 FINANCIAL STATEMENTS; RATINGS CHANGE AND OTHER
INFORMATION..............................................43
SECTION 5.02 NOTICES OF MATERIAL EVENTS...............................44
SECTION 5.03 EXISTENCE; CONDUCT OF BUSINESS...........................45
SECTION 5.04 PAYMENT OF OBLIGATIONS...................................45
SECTION 5.05 MAINTENANCE OF PROPERTIES................................45
SECTION 5.06 BOOKS AND RECORDS; INSPECTION RIGHTS.....................45
SECTION 5.07 COMPLIANCE WITH LAWS.....................................45
SECTION 5.08 USE OF PROCEEDS AND LETTERS OF CREDIT....................46
SECTION 5.09 INSURANCE................................................46
SECTION 5.10 REQUIRED GUARANTORS......................................46
ARTICLE VI NEGATIVE COVENANTS...............................................46
SECTION 6.01 INDEBTEDNESS COVENANT....................................46
SECTION 6.02 LIMIT ON PREFERRED EQUITY ISSUANCE.......................48
SECTION 6.03 LIEN COVENANT............................................48
SECTION 6.04 SALE AND LEASEBACK TRANSACTIONS..........................49
SECTION 6.05 LIMITATION ON FUNDAMENTAL CHANGES........................49
SECTION 6.06 RESTRICTIONS ON INVESTMENTS, LOANS,
ADVANCES, GUARANTEES AND ACQUISITIONS....................50
SECTION 6.07 LIMITATION ON ASSET SALES................................52
SECTION 6.08 SWAP AGREEMENTS..........................................53
SECTION 6.09 LIMITATION ON RESTRICTED PAYMENTS........................53
SECTION 6.10 RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES.............55
SECTION 6.11 RESTRICTIONS ON RESTRICTIVE AGREEMENTS...................55
SECTION 6.12 FINANCIAL COVENANTS......................................55
ARTICLE VII EVENTS OF DEFAULT...............................................56
ARTICLE VIII THE ADMINISTRATIVE AGENT.......................................58
ARTICLE IX MISCELLANEOUS....................................................60
SECTION 9.01 NOTICES..................................................60
SECTION 9.02 WAIVERS; AMENDMENTS; RELEASE OF GUARANTORS...............61
SECTION 9.03 EXPENSES; INDEMNITY; DAMAGE WAIVER.......................62
SECTION 9.04 SUCCESSORS AND ASSIGNS...................................63
SECTION 9.05 SURVIVAL.................................................66
SECTION 9.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS.................67
SECTION 9.07 SEVERABILITY.............................................67
SECTION 9.08 RIGHT OF SETOFF..........................................67
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SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS..................................................67
SECTION 9.10 WAIVER OF JURY TRIAL.....................................68
SECTION 9.11 HEADINGS.................................................68
SECTION 9.12 CONFIDENTIALITY..........................................68
SECTION 9.13 INTEREST RATE LIMITATION.................................69
SECTION 9.14 USA PATRIOT ACT..........................................69
SECTION 9.15 FINAL AGREEMENT OF THE PARTIES...........................70
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EXHIBITS:
Exhibit 1.01A Form of Guarantee Agreement
Exhibit 1.01B Form of Revolving Promissory Note
Exhibit 1.01C Form of Term Promissory Note
Exhibit 4.01(h) Form of Borrowing Request
Exhibit 5.01 Form of Compliance Certificate
Exhibit 9.04 Form of Assignment and Assumption
Annex I Standard Terms and Conditions for Assignment and Assumption
SCHEDULES:
Schedule 2.01 Lender's Revolving Loan Commitments
Schedule 2.04 Lenders' Term Loan Commitments
Schedule 2.06(k) Existing Letters of Credit
Schedule 3.12 List of Subsidiaries
Schedule 6.03(b) Existing Liens
Schedule 6.06(b) Existing Investments
Schedule 6.11 Restrictive Agreements
Schedule 9.04 Approved Funds
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CREDIT AGREEMENT dated as of November 28, 2006,is entered into among
Service Corporation International, a Delaware corporation, the Lenders party
hereto, Bank of America, N.A., as the Syndication Agent for the Revolving Loans,
and JPMorgan Chase Bank, N.A., as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"ADJUSTED LIBO RATE" means, with respect to any Eurodollar Borrowing
for any Interest Period, an interest rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to (a) the LIBO Rate for such Interest
Period multiplied by (b) the Statutory Reserve Rate.
"ADMINISTRATIVE AGENT" means JPMorgan Chase Bank, N.A., in its
capacity as administrative agent for the Lenders hereunder.
"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"AFFILIATE" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"ALDERWOODS" means Alderwoods Group, Inc., a Delaware corporation.
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"ALDERWOODS DEBT" means the Indebtedness and all other obligations
created and existing pursuant to that certain Credit Agreement dated September
17, 2003 by and among Alderwoods Group, Inc. as borrower, Bank of America, N.A.
as administrative agent and the other lenders party thereto, and all related
documents.
"ALTERNATE BASE RATE" means, for any day, a rate per annum equal to
the higher of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. Any change in the Alternate
Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate
shall be effective from and including the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"APPLICABLE MARGIN" means, for any day, with respect to any ABR Loan
or Eurodollar Revolving Loan, or with respect to the facility fees payable
hereunder, as the case
may be, the Applicable Margin per annum set forth below under the caption "ABR
Spread", "Eurodollar Spread" or "Commitment Fee Rate", as the case may be, based
upon the Leverage Ratio:
For Revolving Loans:
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ABR EURODOLLAR COMMITMENT
CATEGORY LEVERAGE RATIO: SPREAD SPREAD FEE RATE
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I = 4.0 to 1.0 1.0% 2.0% .50%
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II = 3.0 to 1.0 but < 4.0 to 1.0 .75% 1.75% .375%
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III = 2.0 to 1.0 but < 3.0 to 1.0 .50% 1.50% .375%
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IV < 2.0 to 1.0 .25% 1.25% .25%
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For Term Loans, the ABR Spread will be 1.0%, and the Eurodollar
Spread will be 2.0%.
For purposes of the foregoing, each change in the Applicable Margin
resulting from a change in the Leverage Ratio shall be effective during the
period commencing on and including the date of delivery to the Administrative
Agent of such consolidated financial statements indicating such change and
ending on the date immediately preceding the effective date of the next such
change; provided that the Leverage Ratio shall be deemed to be in Category I at
any time (a) that an Event of Default has occurred and is continuing or (b) at
the option of the Administrative Agent or at the request of the Required Lenders
if the Borrower fails to deliver the consolidated financial statements required
to be delivered by it pursuant to SECTION 5.01(I) or SECTION 5.01(II), during
the period from the expiration of the time for delivery thereof until such
consolidated financial statements are delivered.
"APPLICABLE PERCENTAGE" means, with respect to any Lender, the
percentage of the total Revolving Loan Commitments represented by such Lender's
Revolving Loan Commitment. If the Revolving Loan Commitments have terminated or
expired, the Applicable Percentages shall be determined based upon the Revolving
Credit Exposures most recently in effect, giving effect to any assignments.
"Approved Fund" has the meaning assigned to such term in SECTION
9.04.
"ASSIGNMENT AND ASSUMPTION" means an assignment and assumption
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by SECTION 9.04), and accepted by the Administrative Agent,
in the form of EXHIBIT 9.04 or any other form approved by the Administrative
Agent.
"AVAILABILITY PERIOD" means the period from and including the
Effective Date to but excluding the earlier of the Revolving Maturity Date and
the date of termination of the Revolving Loan Commitments.
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"BOARD" means the Board of Governors of the Federal Reserve System
of the United States of America.
"BORROWER" means Service Corporation International, a Delaware
corporation.
"BORROWING" means (a) Revolving Loans of the same Type, made,
converted or continued on the same date and, in the case of Eurodollar Loans, as
to which a single Interest Period is in effect, (b) the initial funding of the
Term Loan and subsequent conversions or continuations thereof if such Borrowing
is made as a Eurodollar Borrowing, subject to the limitation set forth in (a)
above, or (c) a Swingline Loan.
"BORROWING REQUEST" means a request by the Borrower for a Revolving
Borrowing substantially in the form of EXHIBIT 4.01(H).
"BUSINESS DAY" means any day that is not a Saturday, Sunday or other
day on which commercial banks in Houston, Texas are authorized or required by
law to remain closed; PROVIDED that, when used in connection with a Eurodollar
Loan, the term "BUSINESS DAY" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"CAPITAL LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"CASH INTEREST EXPENSE" means interest expense determined under
GAAP, less amortization of deferred loan costs and original issue discounts.
"CHANGE IN CONTROL" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) of Equity
Interests representing more than 25% of the aggregate ordinary voting power
represented by the issued and outstanding Equity Interests of the Borrower
(including Equity Interests referenced in (d) below); (b) occupation of a
majority of the seats (other than vacant seats) on the board of directors of the
Borrower by Persons who were neither (i) nominated by the board of directors of
the Borrower nor (ii) appointed by directors so nominated; (c) the acquisition
of direct or indirect Control of the Borrower by any Person or group, or (d) any
event that gives holders of preferred Equity Interests or other securities
issued pursuant to any shareholders' rights plan of the Borrower the right to
purchase or to convert such securities to more than 25% of the aggregate (less
the percentage of Equity Interests referenced in (a) above held by the holders
of such preferred Equity Interests) voting Equity Interests of the Borrower.
"CHANGE IN LAW" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or
3
(c) compliance by any Lender or the Issuing Bank (or, for purposes of SECTION
2.15(B), by any lending office of such Lender or by such Lender's or the Issuing
Bank's holding company, if any) with any request, guideline or directive
(whether or not having the force of law) of any Governmental Authority made or
issued after the date of this Agreement.
"CLASS", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are Revolving Loans,
Term Loans or Swingline Loans.
"CODE" means the Internal Revenue Code of 1986, as amended from time
to time.
"COMMITMENT" means, with respect to each Lender, the sum of (i) such
Lender's Revolving Loan Commitment plus (ii) such Lender's Term Loan Commitment.
"CONSOLIDATED EBITDA" means EBITDA for the Borrower and its
Subsidiaries on a consolidated basis.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the actual
Cash Interest Expense (including imputed interest expense in respect of Capital
Lease Obligations) paid by the Borrower and the Subsidiaries or accrued during
such period.
"CONSOLIDATED OPERATING INCOME" means, for any period, the operating
income or loss of the Borrower and the Subsidiaries for such period determined
on a consolidated basis in accordance with GAAP.
"CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to exercise voting power, by contract or otherwise.
"CONTROLLING" and "CONTROLLED" have meanings correlative thereto.
"DEFAULT" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"DISCLOSED MATTERS" means the actions, suits and proceedings and the
environmental matters disclosed in SCHEDULE 3.06.
"DOLLARS" or "$" refers to lawful money of the United States of
America.
"DOMESTIC SUBSIDIARY" means any Subsidiary that is not a Foreign
Subsidiary.
"EBITDA" means, for any period, without duplication, for the
Borrower and its Subsidiaries, Consolidated Operating Income
(i) minus any gains or plus any losses on sales and impairments of
assets, to the extent included in Consolidated Operating Income;
4
(ii) plus depreciation and amortization (to the extent included in
operating expenses and excluding amortization of deferred loan costs);
(iii) plus non-cash stock compensation expense/amortization (to the
extent included in operating expenses);
(iv) plus rent expense in previous periods associated with assets
later capitalized with on-balance sheet debt;
(v) plus (A) actual Merger-related, non-recurring cash expenses
incurred to the extent included in operating expenses and not to exceed
$60,000,000 in aggregate, including expenses within the first 24 months
after Effective Date, such as severance of management and employees,
termination costs and buyouts of contracts and lease agreements,
conversions of computer systems and networks, transfer of documents and
other assets, legal and advisory fees directly related to the Merger, and
other items reasonably incurred of a similar nature and (B) non-cash merger
expenses that would not otherwise be picked up in other non-cash addbacks
to EBITDA;
(vi) plus royalty income from American Memorial Life Insurance
Company;
(vii) minus expenses attributable to surety premiums;
(viii) minus Pro Forma Divested EBITDA (to the extent positive and
previously included in operating income) or plus Pro Forma Divested EBITDA
(to the extent negative and previously included in operating income);
(ix) plus EBITDA of acquired operations in the quarters preceding the
acquisition;
(x) plus EBITDA of discontinued operations still owned (to the extent
positive) and minus EBITDA of discontinued operations still owned (to the
extent negative); and
(xi) plus net cash flow from/to non-consolidated joint ventures to the
extent received/paid in cash.
Provided, however, (a) EBITDA for the quarter ended March 31, 2006 shall be
$117,683,000, and EBITDA for the quarter ended June 30, 2006 shall be
$109,851,000 (b) the EBITDA for each of such quarters is subject to change to
reflect financial information as a result of acquisitions and divestitures after
the Effective Date, (c) EBITDA for the quarter ended September 30, 2006 shall be
$118,634,000 and (d) the calculation of EBITDA for the fiscal quarter ending
September 30, 2006 and the fiscal quarter ending December 31, 2006 shall include
the EBITDA of Alderwoods as a Subsidiary of the Borrower as if the Merger had
occurred on the first day of the quarter for which EBITDA is being calculated.
"EFFECTIVE DATE" means the date on which the conditions specified in
Section 4.01 are satisfied (or waived in accordance with Section 9.02).
5
"ENVIRONMENTAL LAWS" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"ENVIRONMENTAL LIABILITY" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"EQUITY INTERESTS" means shares of capital stock, partnership
interests, membership interests in a limited liability company, beneficial
interests in a trust or other equity ownership interests in a Person, and any
warrants, options or other rights entitling the holder thereof to purchase or
acquire any such equity interest.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA EVENT" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30 day notice period is waived or the
Merger and the transactions contemplated thereby); (b) the existence with
respect to any Plan of an "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived; (c) the
filing pursuant to Section 412(d) of the Code or Section 303(d) of ERISA of an
application for a waiver of the minimum funding standard with respect to any
Plan; (d) the incurrence by the Borrower or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Plan;
(e) the receipt by the Borrower or any ERISA Affiliate from the PBGC or a plan
administrator of any notice relating to an intention to terminate any Plan or
Plans or to appoint a trustee to administer any Plan; (f) the incurrence by the
Borrower or any of its ERISA Affiliates of any liability with respect to the
withdrawal or partial withdrawal from any Plan or Multiemployer Plan; or (g) the
receipt by the Borrower or any ERISA Affiliate of any notice, or the receipt by
any Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
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"EURODOLLAR", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"EVENT OF DEFAULT" has the meaning assigned to such term in ARTICLE
VII.
"EXCESS CASH FLOW" means (i) EBITDA, minus (ii) the sum of accrued
cash taxes, capital expenditures, Cash Interest Expense, scheduled principal
payments made on all Indebtedness other than the Revolving Loans (excluding any
payments made pursuant to Section SECTION 2.10(B)(II), Restricted Payments made
and permitted hereunder, and cash expended for acquisitions permitted by SECTION
6.06.
"EXCLUDED TAXES" means, with respect to the Administrative Agent,
any Lender, the Issuing Bank or any other recipient of any payment to be made by
or on account of any obligation of the Borrower hereunder, (a) income or
franchise taxes imposed on (or measured by) its net income by the United States
of America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which the Borrower is located and (c) in the case
of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under SECTION 2.19(B)), any withholding tax that is imposed on amounts
payable to such Foreign Lender at the time such Foreign Lender becomes a party
to this Agreement (or designates a new lending office) or is attributable to
such Foreign Lender's failure to comply with SECTION 2.17(E), except to the
extent that such Foreign Lender (or its assignor, if any) was entitled, at the
time of designation of a new lending office (or assignment), to receive
additional amounts from the Borrower with respect to such withholding tax
pursuant to SECTION 2.17(A).
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"FOREIGN LENDER" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"FOREIGN SUBSIDIARY" means any Subsidiary organized under the laws
of a jurisdiction other than the United States or any of its territories or
possessions or any political
7
subdivision thereof. For the avoidance of doubt, the Commonwealth of Puerto Rico
is not a territory, possession or political subdivision of the United States.
"GAAP" means generally accepted accounting principles in the United
States of America.
"GOVERNMENTAL AUTHORITY" means the government of the United States
of America, any other nation or any political subdivision thereof, whether state
or local, and any agency, authority, instrumentality, regulatory body, court,
central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; PROVIDED, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"GUARANTEE AGREEMENT" means the Guarantee of the Guarantors,
substantially in the form of EXHIBIT 1.01A hereto, guarantying the Obligations
of Borrower under this Agreement and the Loan Documents and all other
Indebtedness of the Borrower to any of the Agents or Lenders in respect of any
hedging obligations, any overdrafts or treasury, depository, cash management, or
similar services.
"GUARANTORS" means all Domestic Subsidiaries of the Borrower and any
other Subsidiary required to execute a Guaranty Agreement pursuant to SECTION
5.10.
"HAZARDOUS MATERIALS" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon gas, infectious or medical wastes
and all other substances or wastes of any nature regulated pursuant to any
Environmental Law.
"INCREASING LENDER" has the meaning set forth in Section 2.20.
"INDEBTEDNESS" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations
8
of such Person under conditional sale or other title retention agreements
relating to property acquired by such Person, (e) all obligations of such Person
in respect of the deferred purchase price of property or services (excluding
current accounts payable incurred in the ordinary course of business), (f) all
Indebtedness of others secured by (or for which the holder of such Indebtedness
has an existing right, contingent or otherwise, to be secured by) any Lien on
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations,
contingent or otherwise, of such Person in respect of bankers' acceptances. The
Indebtedness of any Person shall include the Indebtedness of any other entity
(including any partnership in which such Person is a general partner) to the
extent such Person is liable therefor as a result of such Person's ownership
interest in or other relationship with such entity, except to the extent the
terms of such Indebtedness provide that such Person is not liable therefor.
"INDEMNIFIED TAXES" means Taxes other than Excluded Taxes.
"INFORMATION MEMORANDUM" means the Confidential Information
Memorandum dated September 2006 relating to the Borrower and the Transactions.
"INTEREST COVERAGE RATIO" means the ratio of Consolidated EBITDA to
Consolidated Interest Expense, in each case, for the immediately preceding four
(4) fiscal quarters, provided, in such calculation for the quarter ending (i)
December 31, 2006, Consolidated Interest Expense shall be deemed to be the
amount thereof for such quarter multiplied by four (4), (ii) March 31, 2007,
Consolidated Interest Expense shall be deemed to be the amount thereof for the
immediately preceding two (2) quarters multiplied by two (2), and (iii) June 30,
2007, Consolidated Interest Expense shall be deemed to be the amount thereof for
the immediately preceding three (3) quarters multiplied by four-thirds (4/3).
"INTEREST ELECTION REQUEST" means a request by the Borrower to
convert or continue a Revolving Borrowing in accordance with SECTION 2.08.
"INTEREST PAYMENT DATE" means (a) with respect to any ABR Loan
(other than a Swingline Loan), the last day of each March, June, September and
December, (b) with respect to any Eurodollar Loan, the last day of the Interest
Period applicable to the Borrowing of which such Loan is a part and, in the case
of a Eurodollar Borrowing with an Interest Period of more than three months'
duration, each day prior to the last day of such Interest Period that occurs at
intervals of three months' duration after the first day of such Interest Period,
and (c) with respect to any Swingline Loan, the day that such Loan is required
to be repaid.
"INTEREST PERIOD" means with respect to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one, two, three or
six months thereafter, as the Borrower may elect; PROVIDED, that (i) if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless, in the case
of a Eurodollar Borrowing only, such next succeeding Business Day would fall in
the next calendar month, in which case such Interest Period shall end on the
next preceding Business Day and (ii)
9
any Interest Period that commences on the last Business Day of a calendar month
(or on a day for which there is no numerically corresponding day in the last
calendar month of such Interest Period) shall end on the last Business Day of
the last calendar month of such Interest Period. For purposes hereof, the date
of a Borrowing initially shall be the date on which such Borrowing is made and
thereafter shall be the effective date of the most recent conversion or
continuation of such Borrowing.
"ISSUING BANK" means JPMorgan Chase Bank, N.A., or Bank of America,
N.A., and any Lender that is an issuing bank with respect to those Letters of
Credit described in SECTION 2.06(K) hereof, each in its capacity as the issuer
of Letters of Credit hereunder, and their successors in such capacity as
provided in SECTION 2.06(I). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC DISBURSEMENT" means a payment made by the Issuing Bank pursuant
to a Letter of Credit.
"LC EXPOSURE" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"LENDERS" means the Persons listed on SCHEDULE 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Assumption, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Assumption. Unless the context otherwise requires, the term
"Lenders" includes all Revolving Lenders, all Term Lenders and the Swingline
Lender.
"LETTER OF CREDIT" means any letter of credit issued pursuant
to this Agreement.
"LEVERAGE RATIO" means, on any date, the ratio of the Total Debt of
the Borrower and all of its Subsidiaries as of such date, to Consolidated EBITDA
for the immediately preceding four (4) fiscal quarters, PROVIDED, at such time
as the Borrower has no outstanding Indebtedness other than Indebtedness which is
not prepayable, or is prepayable only with the addition of a prepayment penalty
or premium, the Leverage Ratio shall be defined as follows:
the ratio of: (a)(i) Total Debt of the Borrower and all of its
Subsidiaries less (ii) all unrestricted cash on hand of said Persons in
excess of $25,000,000, to (b) Consolidated EBITDA for the immediately
preceding four (4) fiscal quarters.
"LIBO RATE" means, with respect to any Eurodollar Borrowing for any
Interest Period, the rate appearing on Page 3750 of Reuters (or on any successor
or substitute page of such Service, or any successor to or substitute for such
Service, providing rate quotations comparable to those currently provided on
such page of such Service, as determined by the Administrative Agent from time
to time for purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00 a.m.,
10
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO RATE" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate rounded upwards, if necessary, to the
next 1/100 of 1% at which dollar deposits of $5,000,000 and for a maturity
comparable to such Interest Period are offered by the principal London office of
the Administrative Agent in immediately available funds in the London interbank
market at approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guarantee
Agreement and any other documents executed in connection herewith or therewith.
"LOAN PARTIES" means the Borrower and the Guarantors.
"LOANS" means the Term Loans, the Revolving Loans and the Swing Line
Loans.
"MARKETED EBITDA" means the trailing 12-month EBITDA figure
disclosed to potential buyers preceding the sale of an operation or a
Subsidiary.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and the Subsidiaries taken as a whole, (b) the ability of the
Borrower to perform any of its obligations under this Agreement or (c) the
rights of or benefits available to the Lenders under this Agreement.
"MATERIAL INDEBTEDNESS" means Indebtedness (other than the Loans and
Letters of Credit), or obligations in respect of one or more Swap Agreements, of
any one or more of the Borrower and its Subsidiaries in an aggregate principal
amount exceeding $15,000,000. For purposes of determining Material Indebtedness,
the "principal amount" of the obligations of the Borrower or any Subsidiary in
respect of any Swap Agreement at any time shall be the maximum aggregate amount
(giving effect to any netting agreements) that the Borrower or such Subsidiary
would be required to pay if such Swap Agreement were terminated at such time.
"MERGER" means the merger of a wholly owned direct Subsidiary of the
Borrower with and into Alderwoods, where Alderwoods is the surviving corporation
as a direct, wholly owned Subsidiary of the Borrower.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
11
`
"NOTE" means the promissory notes substantially in the form of
EXHIBIT 1.01B with respect to the Revolving Loans and EXHIBIT 1.01C with respect
to the Term Loans executed by the Borrower to the order of a Lender, partially
evidencing the Obligations.
"OBLIGATIONS" means all of the Borrower's obligations and duties
under this Agreement and each of the other Loan Documents.
"OTHER TAXES" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"PARTICIPANT" has the meaning set forth in Section 9.04.
"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"PERMITTED ACQUISITION" means any acquisition (by merger or
otherwise) by the Borrower or a Subsidiary of all or substantially all the
assets of, or all the Equity Interests in, a Person or division or line of
business of a Person, if (a) immediately after giving effect thereto, no Default
has occurred and is continuing or would result therefrom, (b) the business of
such acquired Person, or such acquired business, is reasonably related to the
business of the Borrower on the date hereof, (c) the requirements of SECTION
5.10 shall have been satisfied within the time periods specified therein, (d)
the Borrower and the Subsidiaries are in compliance, on a pro forma basis after
giving effect to such acquisition, with SECTION 6.12 to the extent then
applicable, as if such acquisition had occurred on the first day of the relevant
period for testing compliance with such Section, (e) such acquisition has been
approved by all necessary corporate and other action by the Person so acquired
or the Person selling the assets or other property so acquired by the Borrower
or such Subsidiary and (f) in the case of any acquisition in which the aggregate
consideration paid by the Borrower and the Subsidiaries exceeds $10,000,000, the
Borrower has delivered to the Administrative Agent an officer's certificate to
the effect set forth in clauses (a), (b), (c), (d) and (e) above, together with
all financial information reasonably requested by the Administrative Agent
relating to the Person or assets acquired and reasonably detailed calculations
demonstrating satisfaction of the requirement set forth in clause (d) above.
"PERMITTED ENCUMBRANCES" means:
(a) liens imposed by law for taxes that are not yet due or are being
contested in good faith, with adequate reserves, and the failure of such contest
could not reasonably be expected to result in a Material Adverse Effect;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
and other like liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than 30 days or are being
contested in good faith, with adequate reserves and the failure of such contest
could not reasonably be expected to result in a Material Adverse Effect;
12
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other social
security laws or regulations;
(d) deposits to secure the performance of bids, trade contracts,
leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature, in each case in the ordinary course of
business;
(e) judgment liens in respect of judgments that do not constitute an
event of default; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary course
of business that do not secure any monetary obligations and do not materially
detract from the value of the affected property or interfere with the ordinary
conduct of business of the Borrower or any Subsidiary.
provided that the term "Permitted Encumbrances" shall not include any lien
securing Indebtedness.
"PERMITTED INVESTMENTS" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America or Canada (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America or Canada),
in each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from the
date of acquisition thereof and having, at such date of acquisition, a rating of
A2 or better by S&P, P2 or better by Moody's, or R1 "mid" or better by The
Dominion Bond Rating Service;
(c) investments in certificates of deposit, banker's acceptances and
time deposits (including eurodollar deposits) maturing within 180 days from the
date of acquisition thereof issued or guaranteed by or placed with, and money
market deposit accounts issued or offered by, any Lender or any domestic office
of any commercial bank organized under the laws of the United States of America
or Canada or any State or Province thereof which has a combined capital and
surplus and undivided profits of not less than $500,000,000;
(d) fully collateralized repurchase agreements with a term of not more
than 30 days for securities described in clause (a) above and entered into with
a financial institution satisfying the criteria described in clause (c) above;
(e) money market funds that (i) comply with the criteria set forth in
Securities and Exchange Commission Rule 2a-7 under the Investment Company Act of
1940, (ii) are rated AAA by S&P or Aaa by Moody's and (iii) have portfolio
assets of at least $5,000,000,000;
13
(f) investments in corporate debt securities (including loan participations)
that (a) mature within 60 days from the date of acquisition, and (b) are rated
BBB or better by S&P or Baa2 or better by Moody's at the date of acquisition;
(g) investments in municipal securities or auction rate securities that are
rated AA or better by S&P or Aa or better by Moody's, provided that the Borrower
has the right to put such securities back to the issuer or seller thereof at
least once every 60 days; and
(h) other investments in an amount not to exceed $10,000,000 in the aggregate at
any one time by Foreign Subsidiaries in certificates of deposit, banker's
acceptances and time deposits (or other substantially similar investments)
maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts (or other
substantially similar deposit accounts) issued or offered by, any foreign
commercial bank not organized under the laws of the United States of America or
Canada or any state or province thereof.
"PERSON" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PRIME RATE" means the rate of interest per annum publicly announced
from time to time by JPMorgan Chase Bank, N.A., as its prime rate in effect at
its principal office in Houston, Texas; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"PRIVATE PLACEMENT NOTES" means collectively, the Private Placement
Notes Series A and the Private Placement Notes Series B.
"PRIVATE PLACEMENT NOTES SERIES A" means the Floating Rate Series A
Senior Notes due November 28, 2011, in the aggregate principal amount of
$50,000,000 issued pursuant to that certain Note Purchase Agreement dated as of
November 28, 2006, by and among Borrower and the noteholders party thereto.
"PRIVATE PLACEMENT NOTES SERIES B" means the Flowing Rate Series B
Senior Notes due November 28, 2011, in the aggregate principal amount of
$150,000,000 issued pursuant to that certain Note Purchase Agreement dated as of
November 28, 2006, by and among Borrower and the noteholders party thereto.
"PRO FORMA DIVESTED EBITDA" means the total Marketed EBITDA from
divested operations included in Consolidated Operating Income in the preceding
four quarters before consideration of divestures.
"REGISTER" has the meaning set forth in Section 9.04.
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"RELATED PARTIES" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
"REQUIRED LENDERS" means, at any time, Lenders holding more than 50%
of the sum of the total (a) Term Loans, plus (b) Revolving Loan Commitments (or,
if the Revolving Loan Commitments have terminated or expired, the Revolving
Credit Exposures) at such time.
"RESTRICTED PAYMENT" means any dividend or other distribution
(whether in cash, securities or other property) with respect to any Equity
Interests in the Borrower or any Subsidiary, or any payment (whether in cash,
securities or other property), including any sinking fund or similar deposit, on
account of the purchase, redemption, retirement, acquisition, cancellation or
termination of any such Equity Interests or any option, warrant or other right
to acquire any such Equity Interests.
"REVOLVING BORROWING" means a Borrowing under the Revolving Loan
Commitment.
"REVOLVING CREDIT EXPOSURE" means, with respect to any Lender at any
time, the sum of the outstanding principal amount of such Lender's Revolving
Loans and its LC Exposure and Swingline Exposure at such time.
"REVOLVING LENDERS" means the Lenders having Revolving Loan
Commitments.
"REVOLVING LOAN" means a Loan made pursuant to Section 2.02.
"REVOLVING LOAN COMMITMENT" means, with respect to each Revolving
Lender, the commitment of such Lender to make Revolving Loans including the
acquisition participations in Letters of Credit and Swingline Loans hereunder,
as such commitment may be (a) reduced from time to time pursuant to SECTION
2.09, (b) increased from time to time pursuant to SECTION 2.20 and (c) reduced
or increased from time to time pursuant to assignments by or to such Lender
pursuant to SECTION 9.04. The initial amount of each Lender's Revolving Loan
Commitment is set forth on SCHEDULE 2.01, or in the Assignment and Assumption
pursuant to which such Lender shall have assumed its Revolving Loan Commitment,
as applicable. The initial aggregate amount of the Lenders' Revolving Loan
Commitments is $300,000,000.00.
"REVOLVING MATURITY DATE" means five (5) years from the date of this
Agreement.
"SALE AND LEASEBACK TRANSACTION" means any arrangement whereby the
Borrower or a Subsidiary shall sell or transfer any property, real or personal,
used or useful in its business, whether now owned or hereinafter acquired, and
thereafter rent or lease from the buyer or transferee of the sold or transferred
property that it intends to use for substantially the same purpose or purposes
as the property sold or transferred.
"S&P" means Standard & Poor's Rating Services, a division of the
McGraw Hill Companies, Inc.
15
"STATUTORY RESERVE RATE" means a fraction (expressed as a decimal),
the numerator of which is the number one and the denominator of which is the
number one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"SUBSIDIARY" means, with respect to any Person (the "PARENT") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% of the equity or more than 50% of the ordinary voting power or, in the
case of a partnership, more than 50% of the general partnership interests are,
as of such date, owned, controlled or held, or (b) that is, as of such date,
otherwise Controlled, by the parent or one or more subsidiaries of the parent or
by the parent and one or more subsidiaries of the parent.
"SUBSIDIARY" means any subsidiary of the Borrower.
"SWAP AGREEMENT" means any agreement with respect to any swap,
forward, future or derivative transaction or option or similar agreement
involving, or settled by reference to, one or more rates, currencies,
commodities, equity or debt instruments or securities, or economic, financial or
pricing indices or measures of economic, financial or pricing risk or value or
any similar transaction or any combination of these transactions; PROVIDED that
no phantom stock or similar plan providing for payments only on account of
services provided by current or former directors, officers, employees or
consultants of the Borrower or the Subsidiaries shall be a Swap Agreement.
"SWINGLINE EXPOSURE" means, at any time, the aggregate principal
amount of all Swingline Loans outstanding at such time. The Swingline Exposure
of any Lender at any time shall be its Applicable Percentage of the total
Swingline Exposure at such time.
"SWINGLINE LENDER" means JPMorgan Chase Bank, N.A., in its capacity
as lender of Swingline Loans hereunder.
"SWINGLINE LOAN" means a Loan made pursuant to Section 2.05.
"TAXES" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"TERM LENDERS" means those Lenders having Term Loan Commitments.
16
"TERM LOAN" means a Loan made pursuant to Section 2.04.
"TERM LOAN COMMITMENT" means, with respect to each Term Lender, the
commitment of such Lender to make Term Loans hereunder on the Effective Date, as
such commitment may be reduced or increased from time to time pursuant to
SECTION 9.04. The initial amount of each Lender's Term Loan Commitment is set
forth on SCHEDULE 2.04. The initial aggregate amount of the Lenders' Term Loan
Commitments is $150,000,000.
"TERM LOAN MATURITY DATE" means three (3) years from the date of
this Agreement.
"TOTAL DEBT" means the consolidated total Indebtedness of the
Borrower and each of its Subsidiaries.
"TRANSPORTATION EQUIPMENT LEASES" has the meaning assigned such term
in Section 6.06(f).
"TRANSACTIONS" means the execution, delivery and performance by the
Borrower of this Agreement, the borrowing of Loans, the use of the proceeds
thereof and the issuance of Letters of Credit hereunder.
"TYPE", when used in reference to any Loan or Borrowing, refers to
whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate, the Alternate
Base Rate.
"WITHDRAWAL LIABILITY" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02 CLASSIFICATION OF LOANS AND BORROWINGS. For purposes of
this Agreement, Loans may be classified and referred to by Class (E.G., a
"Revolving Loan") or by Type (E.G., a "Eurodollar Loan") or by Class and Type
(E.G., a "Eurodollar Revolving Loan"). Borrowings also may be classified and
referred to by Class (E.G., a "Revolving Borrowing") or by Type (E.G., a
"Eurodollar Borrowing") or by Class and Type (E.G., a "Eurodollar Revolving
Borrowing").
SECTION 1.03 TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not
17
to any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04 ACCOUNTING TERMS; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; PROVIDED
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith.
ARTICLE II
THE CREDITS
SECTION 2.01 REVOLVING LOAN COMMITMENTS. Subject to the terms and
conditions set forth herein, each Revolving Lender agrees to make Revolving
Loans to the Borrower from time to time during the Availability Period in an
aggregate principal amount that will not result in (a) such Lender's Revolving
Credit Exposure exceeding such Lender's Revolving Loan Commitment as set forth
on SCHEDULE 2.01 or (b) the sum of the total Revolving Credit Exposures
exceeding the total Revolving Loan Commitments. Within the foregoing limits and
subject to the terms and conditions set forth herein, the Borrower may borrow,
prepay and reborrow Revolving Loans.
SECTION 2.02 REVOLVING LOANS AND BORROWINGS. (a) Each Revolving Loan
shall be made as part of a Borrowing consisting of Loans made by the Lenders
ratably in accordance with their respective Revolving Loan Commitments. The
failure of any Lender to make any Loan required to be made by it shall not
relieve any other Lender of its obligations hereunder; PROVIDED that the
Commitments of the Lenders are several and no Lender shall be responsible for
any other Lender's failure to make Loans as required.
(b) Subject to SECTION 2.14, each Revolving Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
in accordance herewith; PROVIDED that all Borrowings made on the Effective Date
must be made as ABR Borrowings, unless Borrower shall have notified the
Administrative Agent in writing not later than 10:00 a.m., Houston time, three
(3) Business Days before the Effective Date of its election for the initial
Borrowing to be a Eurodollar Borrowing. Each Swingline Loan shall be an ABR
Loan. Each Revolving Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Revolving Lender to
make such Revolving Loan; provided
18
that any exercise of such option shall not affect the obligation of the Borrower
to repay such Revolving Loan in accordance with the terms of this Agreement.
(c) At the commencement of each Interest Period for any Eurodollar
Revolving Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $1,000,000.00 and not less than $5,000,000.00. At the time
that each ABR Revolving Borrowing is made, such Borrowing shall be in an
aggregate amount that is an integral multiple of $1,000,000.00 and not less than
$5,000,000.00; PROVIDED that an ABR Revolving Borrowing may be in an aggregate
amount that is equal to the entire unused balance of the total Commitments or
that is required to finance the reimbursement of an LC Disbursement as
contemplated by SECTION 2.06(E). Each Swingline Loan shall be in an amount that
is an integral multiple of $100,000.00 and not less than $1,000,000.00.
Borrowings of more than one Type and Class may be outstanding at the same time;
PROVIDED that there shall not at any time be more than a total of 10 Eurodollar
Revolving Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Revolving Borrowing if the Interest Period requested with respect thereto
would end after the Revolving Maturity Date.
SECTION 2.03 REQUESTS FOR REVOLVING BORROWINGS. To request a Revolving
Borrowing, the Borrower shall notify the Administrative Agent of such request by
telephone (a) in the case of a Eurodollar Borrowing, not later than 10:00 a.m.,
Houston time, three Business Days before the date of the proposed Borrowing or
(b) in the case of an ABR Borrowing, not later than 11:00 a.m., Houston time, on
the date of the proposed Borrowing; PROVIDED that any such notice of an ABR
Borrowing to finance the reimbursement of an LC Disbursement as contemplated by
SECTION 2.06(E) may be given not later than 10:00 a.m., Houston, on the date of
the proposed Borrowing. Each such telephonic Borrowing Request shall be
irrevocable and shall be confirmed promptly by hand delivery or telecopy to the
Administrative Agent of a written Borrowing Request. Each such telephonic and
written Borrowing Request shall specify the following information in compliance
with SECTION 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing or a Eurodollar
Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial Interest
Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period"; and
(v) the location and number of the Borrower's account to which funds
are to be disbursed, which shall comply with the requirements of
SECTION 2.07.
If no election as to the Type of Revolving Borrowing is specified, then the
requested Revolving Borrowing shall be an ABR Borrowing. If no Interest Period
is specified with respect to any requested Eurodollar Borrowing, then the
Borrower shall be deemed to have selected an Interest
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Period of one month's duration. Promptly following receipt of a Borrowing
Request in accordance with this Section, the Administrative Agent shall advise
each Lender of the details thereof and of the amount of such Lender's Loan to be
made as part of the requested Borrowing.
SECTION 2.04 TERM LOANS. Subject to the terms and conditions herein
set forth, each Term Lender agrees to make and maintain a Term Loan in the
amount of such Lender's Term Loan Commitment as set forth on SCHEDULE 2.04. The
Term Loans shall be fully advanced on the Effective Date, and no Lender shall
have an obligation to make any additional Advance under the Term Loans after
such date. Any amount repaid under the Term Loans may not be reborrowed. All
amounts outstanding under the Term Loan shall, at the option of the Borrower, be
made and maintained as ABR Borrowings or Eurodollar Borrowings; PROVIDED that
all Loans comprising all or a portion of the same Borrowing shall at all times
be of the same Type. The Term Loan may be made and maintained as ten (10)
Borrowings bearing different interest rates; provided, that all of the initial
Borrowings fully advancing the Term Loan on the Effective Date shall be ABR
Borrowings, unless Borrower shall have notified the Administrative Agent in
writing not later than 10:00 a.m., Houston time, one (1) Business Day before the
Effective Date of its election for the initial Borrowing to be a Eurodollar
Borrowing, and further provided that the amounts of each such Borrowing shall be
in amounts as provided in SECTION 2.02(C) with respect to Revolving Loans. Each
Term Lender at its option may make or maintain any Eurodollar Loan by causing
any domestic or foreign branch of Affiliate of such Term Lender to make or
maintain such Term Loan; provided that any exercise of such option shall not
affect the Obligation of the Borrower to repay such Term Loan in accordance with
this Agreement.
SECTION 2.05 SWINGLINE LOANS. (a) Subject to the terms and conditions
set forth herein, the Swingline Lender agrees to make Swingline Loans to the
Borrower from time to time during the Availability Period, in an aggregate
principal amount at any time outstanding that will not result in (i) the
aggregate principal amount of outstanding Swingline Loans exceeding
$25,000,000.00 or (ii) the sum of the total Revolving Credit Exposures exceeding
the total Revolving Loan Commitments; PROVIDED that the Swingline Lender shall
not be required to make a Swingline Loan to refinance an outstanding Swingline
Loan. Within the foregoing limits and subject to the terms and conditions set
forth herein, the Borrower may borrow, prepay and reborrow Swingline Loans.
(b) To request a Swingline Loan, the Borrower shall notify the
Administrative Agent of such request by telephone (confirmed by telecopy), not
later than 3:00 p.m., Houston time, on the day of a proposed Swingline Loan.
Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan. The
Administrative Agent will promptly advise the Swingline Lender of any such
notice received from the Borrower. The Swingline Lender shall make each
Swingline Loan available to the Borrower by means of a credit to the general
deposit account of the Borrower with the Swingline Lender (or, in the case of a
Swingline Loan made to finance the reimbursement of an LC Disbursement as
provided in SECTION 2.06(E), by remittance to the Issuing Bank) by 4:00 p.m.,
Houston time, on the requested date of such Swingline Loan.
(c) The Swingline Lender may by written notice given to the
Administrative Agent not later than 10:00 a.m., Houston time, on any Business
Day require the Revolving Lenders to acquire participations on such Business Day
in all or a portion of the Swingline Loans
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outstanding. Such notice shall specify the aggregate amount of Swingline Loans
in which Revolving Lenders will participate. Promptly upon receipt of such
notice, the Administrative Agent will give notice thereof to each Revolving
Lender, specifying in such notice such Revolving Lender's Applicable Percentage
of such Swingline Loan or Loans. Each Revolving Lender hereby absolutely and
unconditionally agrees, upon receipt of notice as provided above, to pay to the
Administrative Agent, for the account of the Swingline Lender, such Revolving
Lender's Applicable Percentage of such Swingline Loan or Loans. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations in
Swingline Loans pursuant to this paragraph is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including the occurrence
and continuance of a Default or reduction or termination of the Commitments, and
that each such payment shall be made without any offset, abatement, withholding
or reduction whatsoever. Each Revolving Lender shall comply with its obligation
under this paragraph by wire transfer of immediately available funds, in the
same manner as provided in SECTION 2.07 with respect to Loans made by such
Revolving Lender (and SECTION 2.07 shall apply, MUTATIS MUTANDIS, to the payment
obligations of the Revolving Lenders), and the Administrative Agent shall
promptly pay to the Swingline Lender the amounts so received by it from the
Revolving Lenders. The Administrative Agent shall notify the Borrower of any
participations in any Swingline Loan acquired pursuant to this paragraph, and
thereafter payments in respect of such Swingline Loan shall be made to the
Administrative Agent and not to the Swingline Lender. Any amounts received by
the Swingline Lender from the Borrower (or other party on behalf of the
Borrower) in respect of a Swingline Loan after receipt by the Swingline Lender
of the proceeds of a sale of participations therein shall be promptly remitted
to the Administrative Agent; any such amounts received by the Administrative
Agent shall be promptly remitted by the Administrative Agent to the Revolving
Lenders that shall have made their payments pursuant to this paragraph and to
the Swingline Lender, as their interests may appear; provided that any such
payment so remitted shall be repaid to the Swingline Lender or to the
Administrative Agent, as applicable, if and to the extent such payment is
required to be refunded to the Borrower for any reason. The purchase of
participations in a Swingline Loan pursuant to this paragraph shall not relieve
the Borrower of any default in the payment thereof.
SECTION 2.06 LETTERS OF CREDIT. (a) GENERAL. Subject to the terms and
conditions set forth herein, the Borrower may request the issuance of Letters of
Credit for its own account, in a form reasonably acceptable to the
Administrative Agent and the Issuing Bank, at any time and from time to time
during the Availability Period. In the event of any inconsistency between the
terms and conditions of this Agreement and the terms and conditions of any form
of letter of credit application or other agreement submitted by the Borrower to,
or entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) NOTICE OF ISSUANCE, AMENDMENT, RENEWAL, EXTENSION; CERTAIN
CONDITIONS. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Administrative Agent (reasonably in advance of the requested date
of issuance, amendment, renewal or extension) a notice requesting the issuance
of a Letter of Credit, or identifying the Letter of Credit to be amended,
renewed or extended, and specifying the date of issuance, amendment, renewal or
extension (which shall be a Business
21
Day), the date on which such Letter of Credit is to expire (which shall comply
with paragraph (c) of this Section), the amount of such Letter of Credit, the
name and address of the beneficiary thereof and such other information as shall
be necessary to prepare, amend, renew or extend such Letter of Credit. If
requested by the Issuing Bank, the Borrower also shall submit a letter of credit
application on the Issuing Bank's standard form in connection with any request
for a Letter of Credit; provided, that (a) in the event of any conflict between
such application and this Agreement, this Agreement shall control, and (b) any
grant of a Lien contained in such application shall be ineffective so long as
this Agreement remains in place. A Letter of Credit shall be issued, amended,
renewed or extended only if (and upon issuance, amendment, renewal or extension
of each Letter of Credit the Borrower shall be deemed to represent and warrant
that), after giving effect to such issuance, amendment, renewal or extension (i)
the LC Exposure shall not exceed $175,000,000 and (ii) the total Revolving
Credit Exposures shall not exceed the total Revolving Loan Commitments.
(c) EXPIRATION DATE. Each Letter of Credit shall expire at or prior to
the close of business on the earlier of (i) the date one year after the date of
the issuance of such Letter of Credit (or, in the case of any renewal or
extension thereof, one year after such renewal or extension) and (ii) the date
that is five Business Days prior to the Maturity Date provided, a Letter of
Credit may provide for a later expiration date if, simultaneously with the
issuance (or if applicable, the renewal) thereof, the Borrower pledges to the
Issuing Bank, in a manner reasonably satisfactory to it, funds in an account
with the Issuing Bank equal to 105% of the face amount of such Letter of Credit.
(d) PARTICIPATIONS. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Revolving Lender, and each Revolving Lender hereby
acquires from the Issuing Bank, a participation in such Letter of Credit equal
to such Revolving Lender's Applicable Percentage of the aggregate amount
available to be drawn under such Letter of Credit. In consideration and in
furtherance of the foregoing, each Revolving Lender hereby absolutely and
unconditionally agrees to pay to the Administrative Agent, for the account of
the Issuing Bank, such Revolving Lender's Applicable Percentage of each LC
Disbursement made by the Issuing Bank and not reimbursed by the Borrower on the
date due as provided in paragraph (e) of this Section, or of any reimbursement
payment required to be refunded to the Borrower for any reason. Each Revolving
Lender acknowledges and agrees that its obligation to acquire participations
pursuant to this paragraph in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including any amendment, renewal or extension of any Revolving Letter of Credit
or the occurrence and continuance of a Default or reduction or termination of
the Commitments, and that each such payment shall be made without any offset,
abatement, withholding or reduction whatsoever.
(e) REIMBURSEMENT. If the Issuing Bank shall make any LC Disbursement
in respect of a Letter of Credit, the Borrower shall reimburse such LC
Disbursement by paying to the Administrative Agent an amount equal to such LC
Disbursement not later than 11:00 a.m., Houston time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 9:00 a.m., Houston time, on such date, or, if such notice
has not been received by the Borrower prior to such time on such date, then not
later than
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11:00 a.m., Houston time, on (i) the Business Day that the Borrower receives
such notice, if such notice is received prior to 9:00 a.m., Houston time, on the
day of receipt, or (ii) the Business Day immediately following the day that the
Borrower receives such notice, if such notice is not received prior to such time
on the day of receipt; PROVIDED that, if such LC Disbursement is not less than
$1,000,000, the Borrower may, subject to the conditions to borrowing set forth
herein, request in accordance with SECTION 2.03 or SECTION 2.05 that such
payment be financed with an ABR Revolving Borrowing or Swingline Loan in an
equivalent amount and, to the extent so financed, the Borrower's obligation to
make such payment shall be discharged and replaced by the resulting ABR
Revolving Borrowing or Swingline Loan. If the Borrower fails to make such
payment when due, the Administrative Agent shall notify each Lender of the
applicable LC Disbursement, the payment then due from the Borrower in respect
thereof and such Revolving Lender's Applicable Percentage thereof. Promptly
following receipt of such notice, each Revolving Lender shall pay to the
Administrative Agent its Applicable Percentage of the payment then due from the
Borrower, in the same manner as provided in SECTION 2.07 with respect to Loans
made by such Revolving Lender (and SECTION 2.07 shall apply, MUTATIS MUTANDIS,
to the payment obligations of the Revolving Lenders), and the Administrative
Agent shall promptly pay to the Issuing Bank the amounts so received by it from
the Revolving Lenders. Promptly following receipt by the Administrative Agent of
any payment from the Borrower pursuant to this paragraph, the Administrative
Agent shall distribute such payment to the Issuing Bank or, to the extent that
Revolving Lenders have made payments pursuant to this paragraph to reimburse the
Issuing Bank, then to such Revolving Lenders and the Issuing Bank as their
interests may appear. Any payment made by a Revolving Lender pursuant to this
paragraph to reimburse the Issuing Bank for any LC Disbursement (other than the
funding of ABR Revolving Loans or a Swingline Loan as contemplated above) shall
not constitute a Loan and shall not relieve the Borrower of its obligation to
reimburse such LC Disbursement.
(f) OBLIGATIONS ABSOLUTE. The Borrower's obligation to reimburse LC
Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. Neither
the Administrative Agent, the Lenders nor the Issuing Bank, nor any of their
Related Parties, shall have any liability or responsibility by reason of or in
connection with the issuance or transfer of any Letter of Credit or any payment
or failure to make any payment thereunder (irrespective of any of the
circumstances referred to in the preceding sentence), or any error, omission,
interruption, loss or delay in transmission or delivery of any draft, notice or
other communication under or relating to any Letter of Credit (including any
document required to make a drawing thereunder), any error in interpretation of
technical terms or any consequence arising from causes beyond the control of the
Issuing Bank; PROVIDED that the foregoing shall not be construed to excuse the
Issuing Bank from liability to the
23
Borrower to the extent of any direct damages (as opposed to consequential
damages, claims in respect of which are hereby waived by the Borrower to the
extent permitted by applicable law) suffered by the Borrower that are caused by
the Issuing Bank's failure to exercise care when determining whether drafts and
other documents presented under a Letter of Credit comply with the terms
thereof. The parties hereto expressly agree that, in the absence of negligence
or willful misconduct on the part of the Issuing Bank (as finally determined by
a court of competent jurisdiction), the Issuing Bank shall be deemed to have
exercised care in each such determination. In furtherance of the foregoing and
without limiting the generality thereof, the parties agree that, with respect to
documents presented which appear on their face to be in substantial compliance
with the terms of a Letter of Credit, the Issuing Bank may, in its sole
discretion, either accept and make payment upon such documents without
responsibility for further investigation, regardless of any notice or
information to the contrary, or refuse to accept and make payment upon such
documents if such documents are not in strict compliance with the terms of such
Letter of Credit.
(g) DISBURSEMENT PROCEDURES. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Administrative Agent and the Borrower by telephone (confirmed
electronically or by telecopy) of such demand for payment and whether the
Issuing Bank has made or will make an LC Disbursement thereunder; PROVIDED that
any failure to give or delay in giving such notice shall not relieve the
Borrower of its obligation to reimburse the Issuing Bank and the Revolving
Lenders with respect to any such LC Disbursement.
(h) INTERIM INTEREST. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Revolving Loans;
PROVIDED that, if the Borrower fails to reimburse such LC Disbursement when due
pursuant to paragraph (e) of this Section, then SECTION 2.13(D) shall apply.
Interest accrued pursuant to this paragraph shall be for the account of the
Issuing Bank, except that interest accrued on and after the date of payment by
any Revolving Lender pursuant to paragraph (e) of this Section to reimburse the
Issuing Bank shall be for the account of such Revolving Lender to the extent of
such payment.
(i) REPLACEMENT OF THE ISSUING BANK. The Issuing Bank may be replaced
at any time by written agreement among the Borrower, the Administrative Agent,
the replaced Issuing Bank and the successor Issuing Bank. The Administrative
Agent shall notify the Revolving Lenders of any such replacement of the Issuing
Bank. At the time any such replacement shall become effective, the Borrower
shall pay all unpaid fees accrued for the account of the replaced Issuing Bank
pursuant to SECTION 2.12(B). From and after the effective date of any such
replacement, (i) the successor Issuing Bank shall have all the rights and
obligations of the Issuing Bank under this Agreement with respect to Letters of
Credit to be issued thereafter and (ii) references herein to the term "Issuing
Bank" shall be deemed to refer to such successor or to any previous Issuing
Bank, or to such successor and all previous Issuing Banks, as the context shall
require. After the replacement of an Issuing Bank hereunder, the
24
replaced Issuing Bank shall remain a party hereto and shall continue to have all
the rights and obligations of an Issuing Bank under this Agreement with respect
to Letters of Credit issued by it prior to such replacement, but shall not be
required to issue additional Letters of Credit.
(j) CASH COLLATERALIZATION. If any Event of Default shall occur and be
continuing, on the Business Day that the Borrower receives notice from the
Administrative Agent or the Revolving Lenders holding at least fifty percent
(50%) of the Revolving Loan Commitments (or, if the maturity of the Loans has
been accelerated, Lenders with LC Exposure representing greater than 25% of the
total LC Exposure) demanding the deposit of cash collateral pursuant to this
paragraph, the Borrower shall deposit in an account with the Administrative
Agent, in the name of the Administrative Agent and for the benefit of the
Revolving Lenders, an amount in cash equal to the LC Exposure as of such date
plus any accrued and unpaid interest thereon; PROVIDED that the obligation to
deposit such cash collateral shall become effective immediately, and such
deposit shall become immediately due and payable, without demand or other notice
of any kind, upon the occurrence of any Event of Default with respect to the
Borrower described in clause (h) or (i) of ARTICLE VII. Such deposit shall be
held by the Administrative Agent as collateral for the payment and performance
of the obligations of the Borrower under this Agreement. The Administrative
Agent shall have exclusive dominion and control, including the exclusive right
of withdrawal, over such account. Other than any interest earned on the
investment of such deposits, which investments shall be made at the option and
sole discretion of the Administrative Agent and at the Borrower's risk and
expense, such deposits shall not bear interest. Interest or profits, if any, on
such investments shall accumulate in such account. Moneys in such account shall
be applied by the Administrative Agent to reimburse the Issuing Bank for LC
Disbursements for which it has not been reimbursed and, to the extent not so
applied, shall be held for the satisfaction of the reimbursement obligations of
the Borrower for the LC Exposure at such time or, if the maturity of the Loans
has been accelerated (but subject to the consent of Lenders with LC Exposure
representing greater than 25% of the total LC Exposure), be applied to satisfy
other obligations of the Borrower to the Revolving Lenders under this Agreement.
If the Borrower is required to provide an amount of cash collateral hereunder as
a result of the occurrence of an Event of Default, such amount (to the extent
not applied as aforesaid) shall be returned to the Borrower within three
Business Days after all Events of Default have been cured or waived.
(k) EXISTING LETTERS OF CREDIT. The letters of credit described on
SCHEDULE 2.06(K) will for all purposes be considered Letters of Credit under
this Credit Agreement.
SECTION 2.07 FUNDING OF BORROWINGS. (a) Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 2:00 p.m., Houston time, to the account of the
Administrative Agent most recently designated by it for such purpose by notice
to the Lenders; PROVIDED that Swingline Loans shall be made as provided in
SECTION 2.05. The Administrative Agent will make such Loans available to the
Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Administrative Agent in Houston and
designated by the Borrower in the applicable Borrowing Request; PROVIDED that
ABR Revolving Loans made to finance the reimbursement of an LC Disbursement as
provided in SECTION 2.06(e) shall be remitted by the Administrative Agent to the
Issuing Bank.
25
(b) Unless the Administrative Agent shall have received notice from a
Lender prior to the proposed date of any Borrowing that such Lender will not
make available to the Administrative Agent such Lender's share of such
Borrowing, the Administrative Agent may assume that such Lender has made such
share available on such date in accordance with paragraph (a) of this Section
and may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. In such event, if a Lender has not in fact made its share
of the applicable Borrowing available to the Administrative Agent, then the
applicable Lender and the Borrower severally agree to pay to the Administrative
Agent forthwith on demand such corresponding amount with interest thereon, for
each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Administrative Agent, at
(i) in the case of such Lender, the greater of the Federal Funds Effective Rate
and a rate determined by the Administrative Agent in accordance with banking
industry rules on interbank compensation or (ii) in the case of the Borrower,
the interest rate applicable to such Borrowing (without any obligation to pay
any break funding payment under SECTION 2.16 in connection with such payment).
If such Lender pays such amount to the Administrative Agent, then such amount
shall constitute such Lender's Loan included in such Borrowing. If the Borrower
pays such amount to the Administrative Agent, it shall not relieve the
defaulting Lender of its legal responsibility for its default.
SECTION 2.08 INTEREST ELECTIONS. (a) Each Borrowing initially shall be
of the Type specified in the applicable Borrowing Request and, in the case of a
Eurodollar Borrowing, shall have an initial Interest Period as specified in such
Borrowing Request. Thereafter, the Borrower may elect to convert such Borrowing
to a different Type or to continue such Borrowing and, in the case of a
Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Revolving Lenders or Term Lenders, as applicable,
holding the Loans comprising such Borrowing, and the Loans comprising each such
portion shall be considered a separate Borrowing. This Section shall not apply
to Swingline Borrowings, which may not be converted or continued.
(b) To make an election pursuant to this Section, the Borrower shall
notify the Administrative Agent of such election by telephone by the time that a
Borrowing Request would be required under SECTION 2.03 if the Borrower were
requesting a Revolving Borrowing of the Type resulting from such election to be
made on the effective date of such election. Each such telephonic Interest
Election Request shall be irrevocable and shall be confirmed promptly by hand
delivery or telecopy to the Administrative Agent of a written Interest Election
Request in a form approved by the Administrative Agent and signed by the
Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with SECTION 2.02:
(i) the Borrowing to which such Interest Election Request applies and,
if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each
resulting Borrowing (in which case the information to be specified
pursuant to clauses (iii) and (iv) below shall be specified for each
resulting Borrowing);
26
(ii) the effective date of the election made pursuant to such Interest
Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR Borrowing or a
Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing, the
Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of
the term "Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request, the
Administrative Agent shall advise each Lender of the details thereof and of such
Lender's portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing and the Administrative Agent, at the
request of the Required Lenders, so notifies the Borrower, then, so long as an
Event of Default is continuing (i) no outstanding Borrowing may be converted to
or continued as a Eurodollar Borrowing and (ii) unless repaid, each Eurodollar
Borrowing shall be converted to an ABR Borrowing at the end of the Interest
Period applicable thereto.
SECTION 2.09 TERMINATION AND REDUCTION OF COMMITMENTS. (a) Unless
previously terminated, the Revolving Loan Commitments shall terminate on the
Revolving Maturity Date.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Revolving Loan Commitments; PROVIDED that (i) each reduction of the
Revolving Loan Commitments shall be in an amount that is an integral multiple of
$1,000,000 and not less than $5,000,000 and (ii) the Borrower shall not
terminate or reduce the Revolving Loan Commitments if, after giving effect to
any concurrent prepayment of the Revolving Loans in accordance with SECTION 2.11
the Revolving Credit Exposure would exceed the total Revolving Loan Commitments;
provided that for purposes of this paragraph, the LC Exposure shall be deemed to
be zero if there exists either cash collateral equal to 105% of the LC Exposure
or one or more back-up letters of credit for the benefit of the Issuing Bank in
form and substance and issued by issuer(s) satisfactory to the Issuing Bank in
its sole discretion. Upon the provision of such cash collateral or back-up
letters of credit and the payment in full of all Obligations, then the Lenders
shall be released from their obligations under SECTION 2.06(D), and all letter
of credit fees accruing after the termination of the Revolving Loan Commitments
shall be for the account of the Issuing Bank.
27
(c) The Borrower shall notify the Administrative Agent of any election
to terminate or reduce the Revolving Loan Commitments under paragraph (b) of
this Section at least three Business Days prior to the effective date of such
termination or reduction, specifying such election and the effective date
thereof. Promptly following receipt of any notice, the Administrative Agent
shall advise the Lenders of the contents thereof. Each notice delivered by the
Borrower pursuant to this Section shall be irrevocable; PROVIDED that a notice
of termination of the Revolving Loan Commitments delivered by the Borrower may
state that such notice is conditioned upon the effectiveness of other credit
facilities, in which case such notice may be revoked by the Borrower (by notice
to the Administrative Agent on or prior to the specified effective date) if such
condition is not satisfied. Any termination or reduction of the Revolving Loan
Commitments shall be permanent. Each reduction of the Revolving Loan Commitments
shall be made ratably among the Revolving Lenders in accordance with their
respective Revolving Loan Commitments.
(d) There shall be no obligation under the Term Loan Commitments
following the initial Borrowing of the Term Loan on the Effective Date other
than to allow conversions or continuations of Term Loan Borrowing made as
Eurodollar Borrowings at the expiration of the applicable Interest Period.
SECTION 2.10 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay (i) to the Administrative Agent for the
account of each Revolving Lender the then-unpaid principal amount of each
Revolving Loan on the Revolving Maturity Date, (ii) subject to SECTION 2.05, to
the Swingline Lender the then unpaid principal amount of each Swingline Loan on
the earlier of the Revolving Maturity Date and the first date after such
Swingline Loan is made that is the 15th or last day of a calendar month and is
at least two Business Days after such Swingline Loan is made; PROVIDED that on
each date that a Revolving Borrowing is made, the Borrower shall repay all
Swingline Loans then outstanding, and (iii) to the Administrative Agent for the
account of each Term Lender the then unpaid principal amount of the Term Loan on
the Term Loan Maturity Date.
(b) The Borrower shall repay the Term Loan as follows:
(i) Commencing on December 31, 2006, and continuing
thereafter on the last Business Day of each quarter, the Borrower
shall pay to the Administrative Agent, for the pro-rata benefit of the
Term Lenders, a quarter of one percent (.25%) of the original
principal amount of the Term Loan;
(ii) The Borrower shall pay to the Administrative Agent, for
the pro-rata benefit of the Term Lenders, one hundred percent (100%)
of the net cash proceeds of the sale of: (A) any assets permitted to
be sold pursuant to SECTION 6.07(C) AND (D) until the final repayment
of the Term Loan, and (B) any equity in the Borrower, such payments to
commence and be due upon the last day of each Interest Period
applicable to the Term Loan that occurs after the aggregate total of
such proceeds equals $10,000,000.00, in any calendar year, provided,
in each case, portions of any such prepayments equaling not more than
$1,000,000 each may be deferred until the next succeeding sale to the
extent necessary to insure compliance with SECTION 2.04. Payments made
pursuant to this
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clause shall be applied to principal in reverse order of the payments
due under clause (a)(iii) above.
(iii) The Borrower shall pay to the Administrative Agent,
for the pro-rata benefit of each Term Lender, fifty percent (50%) of
all Excess Cash Flow, for the immediately preceding fiscal year of the
Borrower, such payments to commence on April 15, 2008 and continuing
on each April 15th thereafter until the final repayment of the Term
Loan. Payments made pursuant to this clause shall be applied to
principal in reverse order of the payments due under clause (a)(iii)
above.
(c) Each Lender shall maintain in accordance with its usual practice a
record evidencing the indebtedness of the Borrower to such Lender resulting from
each Loan made by such Lender, including the amounts of principal and interest
payable and paid to such Lender from time to time hereunder.
(d) The Administrative Agent shall maintain records in which it shall
record (i) the amount of each Loan made hereunder, the Class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(e) The entries made in the records maintained pursuant to paragraph
(c) or (d) of this Section shall be PRIMA FACIE evidence of the existence and
amounts of the obligations recorded therein; PROVIDED that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(f) Any Lender may request that Loans made by it be evidenced by a
Note. In such event, the Borrower shall prepare, execute and deliver to such
Lender a Note payable to the order of such Lender (or, if requested by such
Lender, to such Lender and its registered assigns). Thereafter, the Loans
evidenced by such promissory note and interest thereon shall at all times
(including after assignment pursuant to SECTION 9.04) be represented by one or
more promissory notes in such form payable to the order of the payee named
therein (or, if such promissory note is a registered note, to such payee and its
registered assigns).
SECTION 2.11 PREPAYMENT OF LOANS. (a) The Borrower shall have the
right at any time and from time to time to prepay any Revolving Borrowing in
whole or in part, subject to prior notice in accordance with paragraph (c) of
this Section.
(b) The Borrower shall have the right to at any time and from time to
time to prepay the Term Loan, in whole or in part, subject to prior notice in
accordance with paragraph (c) of this Section and payment of the following
prepayment premium (which prepayment premium shall also be payable upon any
payment pursuant to SECTION 2.10(B)(II)):
(i) .5% of any prepaid principal if such prepayment occurs between the
Effective Date and one hundred eighty (180) days following the Effective
Date, and
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(ii) 1% of any principal prepaid after one hundred eighty (180) days
following the Effective Date.
(c) The Borrower shall notify the Administrative Agent (and, in the
case of prepayment of a Swingline Loan, the Swingline Lender) by telephone
(confirmed by telecopy) of any prepayment hereunder (i) in the case of
prepayment of a Eurodollar Borrowing, not later than 11:00 a.m., Houston time,
three Business Days before the date of prepayment, (ii) in the case of
prepayment of an ABR Revolving Borrowing, not later than 11:00 a.m., Houston
time, one Business Day before the date of prepayment or (iii) in the case of
prepayment of a Swingline Loan, not later than 12:00 noon, Houston time, on the
date of prepayment. Each such notice shall be irrevocable and shall specify the
prepayment date and the principal amount of each Borrowing or portion thereof to
be prepaid; PROVIDED that, if a notice of prepayment is given in connection with
a conditional notice of termination of the Revolving Loan Commitments as
contemplated by SECTION 2.09, then such notice of prepayment may be revoked if
such notice of termination is revoked in accordance with SECTION 2.09. Promptly
following receipt of any such notice relating to a Revolving Borrowing, the
Administrative Agent shall advise the Revolving Lenders of the contents thereof.
Promptly following receipt of any such notice relating to the Term Loan, the
Administrative Agent shall advise the Term Lenders of the contents thereof. Each
partial prepayment of any Revolving Borrowing shall be in an amount that would
be permitted in the case of an advance of a Revolving Borrowing of the same Type
as provided in SECTION 2.02. Each prepayment of a Borrowing shall be applied
ratably to the Loans included in the prepaid Borrowing. Prepayments shall be
accompanied by accrued interest to the extent required by SECTION 2.13.
(d) Prepayments of the Term Loan shall be applied to principal in
reverse order of payments due pursuant to SECTION 2.10(B)(I).
SECTION 2.12 FEES. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment fee,
which shall accrue at the Commitment Fee Rate described in the definition of
"Applicable Margin" on the daily undrawn amount of the Revolving Loan Commitment
of such Revolving Lender during the period from and including the Effective Date
to but excluding the date on which such Commitment terminates. The face amount
of any outstanding Letters of Credit shall be considered to be drawn under the
Revolving Loan Commitment for purposes of calculating commitment fees. Accrued
commitment fees shall be payable in arrears on the last day of March, June,
September and December of each year and on the date on which the Revolving Loan
Commitments terminate, commencing on the first such date to occur after the date
hereof. All commitment fees shall be computed on the basis of a year of 360 days
and shall be payable for the actual number of days elapsed (including the first
day but excluding the last day).
(b) The Borrower agrees to pay (i) to the Administrative Agent for the
account of each Revolving Lender a participation fee with respect to its
participations in Letters of Credit, which shall accrue at the same Applicable
Margin used to determine the interest rate applicable to Eurodollar Revolving
Loans on the average daily amount of such Revolving Lender's LC Exposure
(excluding any portion thereof attributable to unreimbursed LC Disbursements)
during the period from and including the Effective Date to but excluding the
later of the date on which such Revolving Lender's Revolving Loan Commitment
terminates and
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the date on which such Revolving Lender ceases to have any LC Exposure, and (ii)
to the Issuing Bank a fronting fee, which shall accrue at the rate of 0.125% per
annum on the average daily amount of the LC Exposure (excluding any portion
thereof attributable to unreimbursed LC Disbursements) during the period from
and including the Effective Date to but excluding the later of the date of
termination of the Revolving Loan Commitments and the date on which there ceases
to be any LC Exposure, as well as the Issuing Bank's standard fees with respect
to the issuance, amendment, renewal or extension of any Letter of Credit or
processing of drawings thereunder. Participation fees and fronting fees accrued
through and including the last day of March, June, September and December of
each year shall be payable on the third Business Day following such last day,
commencing on the first such date to occur after the Effective Date; PROVIDED
that all such fees shall be payable on the date on which the Revolving Loan
Commitments terminate and any such fees accruing after the date on which the
Revolving Loan Commitments terminate shall be payable on demand. Any other fees
payable to the Issuing Bank pursuant to this paragraph shall be payable within
10 days after demand. All participation fees and fronting fees shall be computed
on the basis of a year of 360 days and shall be payable for the actual number of
days elapsed (including the first day but excluding the last day).
(c) The Borrower agrees to pay to the Administrative Agent, for its
own account, fees payable in the amounts and at the times separately agreed upon
between the Borrower and the Administrative Agent.
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Administrative Agent (or to the Issuing
Bank, in the case of fees payable to it) for distribution, in the case of
facility fees and participation fees, to the Lenders. Fees paid shall not be
refundable under any circumstances.
SECTION 2.13 INTEREST. (a) The Loans comprising each ABR Borrowing
(including each Swingline Loan) shall bear interest at the Alternate Base Rate
plus the Applicable Margin.
(b) The Loans comprising each Eurodollar Borrowing shall bear interest
at the Adjusted LIBO Rate for the Interest Period in effect for such Borrowing
plus the Applicable Margin.
(c) Notwithstanding the foregoing, if any principal of or interest on
any Loan or any fee or other amount payable by the Borrower hereunder is not
paid when due, whether at stated maturity, upon acceleration or otherwise, such
overdue amount shall bear interest, after as well as before judgment, at a rate
per annum equal to (i) in the case of overdue principal of any Loan, 2.0% plus
the rate otherwise applicable to such Loan as provided in the preceding
paragraphs of this Section or (ii) in the case of any other amount, 2.0% plus
the rate applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on each
Interest Payment Date for such Loan and upon termination of the Commitments;
PROVIDED that (i) interest accrued pursuant to paragraph (d) of this Section
shall be payable on demand, (ii) in the event of any repayment or prepayment of
any Loan (other than a prepayment of an ABR Revolving Loan prior to the end of
the Availability Period), accrued interest on the principal amount repaid or
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prepaid shall be payable on the date of such repayment or prepayment and (iii)
in the event of any conversion of any Eurodollar Revolving Loan prior to the end
of the current Interest Period therefor, accrued interest on such Loan shall be
payable on the effective date of such conversion.
(e) All interest hereunder shall be computed on the basis of a year of
360 days, except that interest computed by reference to the Alternate Base Rate
at times when the Alternate Base Rate is based on the Prime Rate shall be
computed on the basis of a year of 365 days (or 366 days in a leap year), and in
each case shall be payable for the actual number of days elapsed (including the
first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Administrative Agent,
and such determination shall be conclusive absent manifest error.
SECTION 2.14 ALTERNATE RATE OF INTEREST. If prior to the commencement
of any Interest Period for a Eurodollar Borrowing:
(i) the Administrative Agent determines (which determination
shall be conclusive absent manifest error) that adequate and
reasonable means do not exist for ascertaining the Adjusted LIBO Rate
or the LIBO Rate, as applicable, for such Interest Period; or
(ii) the Administrative Agent is advised by the Required Lenders
that the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period will not adequately and fairly reflect the cost to
such Lenders (or Lender) of making or maintaining their Loans (or its
Loan) included in such Borrowing for such Interest Period;
then the Administrative Agent shall give notice thereof to the Borrower and the
Lenders by telephone or telecopy as promptly as practicable thereafter and,
until the Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice no longer exist, (i) any Interest
Election Request that requests the conversion of any Revolving Borrowing to, or
continuation of any Revolving Borrowing as, a Eurodollar Borrowing shall be
ineffective, and (ii) any request for a new Eurodollar Borrowing shall be made
as an ABR Borrowing.
SECTION 2.15 INCREASED COSTS. (a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special deposit or
similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate) or the
Issuing Bank; or
(ii) impose on any Lender or the Issuing Bank or the London interbank
market any other condition affecting this Agreement or Eurodollar
Loans made by such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or
32
the Issuing Bank hereunder (whether of principal, interest or otherwise), then
the Borrower will pay to such Lender or the Issuing Bank, as the case may be,
such additional amount or amounts as will compensate such Lender or the Issuing
Bank, as the case may be, or an after-tax basis for such additional costs
incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change in
Law regarding capital requirements has or would have the effect of reducing the
rate of return on such Lender's or the Issuing Bank's capital or on the capital
of such Lender's or the Issuing Bank's holding company, if any, as a consequence
of this Agreement or the Loans made by, or participations in Letters of Credit
held by, such Lender, or the Letters of Credit issued by the Issuing Bank, to a
level below that which such Lender or the Issuing Bank or such Lender's or the
Issuing Bank's holding company could have achieved but for such Change in Law
(taking into consideration such Lender's or the Issuing Bank's policies and the
policies of such Lender's or the Issuing Bank's holding company with respect to
capital adequacy), then from time to time the Borrower will pay to such Lender
or the Issuing Bank, as the case may be, such additional amount or amounts as
will compensate such Lender or the Issuing Bank or such Lender's or the Issuing
Bank's holding company on an after-tax basis for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth the
amount or amounts necessary to compensate such Lender or the Issuing Bank or its
holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender or the Issuing Bank, as the
case may be, the amount shown as due on any such certificate within ten (10)
days after receipt thereof.
(d) Failure or delay on the part of any Lender or the Issuing Bank to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's or the Issuing Bank's right to demand such compensation; PROVIDED
that the Borrower shall not be required to compensate a Lender or the Issuing
Bank pursuant to this Section for any increased costs or reductions incurred
more than one hundred eighty (180) days prior to the date that such Lender or
the Issuing Bank, as the case may be, notifies the Borrower of the Change in Law
giving rise to such increased costs or reductions and of such Lender's or the
Issuing Bank's intention to claim compensation therefor; PROVIDED FURTHER that,
if the Change in Law giving rise to such increased costs or reductions is
retroactive, then the 180-day period referred to above shall be extended to
include the period of retroactive effect thereof.
SECTION 2.16 BREAK FUNDING PAYMENTS. In the event of (a) the payment
of any principal of any Eurodollar Loan other than on the last day of an
Interest Period applicable thereto (including as a result of an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Eurodollar Loan on the date specified in any notice
delivered pursuant hereto (regardless of whether such notice may be revoked
under SECTION 2.11(C) and is revoked in accordance therewith), or (d) the
assignment of any Eurodollar Loan other than on the last day of the Interest
Period applicable thereto as a result of a request by the Borrower pursuant to
SECTION 2.19, then, in any such event, the Borrower shall compensate each Lender
for the loss, cost and expense attributable to such event. In the case of a
Eurodollar Loan, such loss, cost or expense to any Lender shall be deemed to
include an amount determined by such Lender to be
33
the excess, if any, of (i) the amount of interest which would have accrued on
the principal amount of such Loan had such event not occurred, at the Adjusted
LIBO Rate that would have been applicable to such Loan, for the period from the
date of such event to the last day of the then current Interest Period therefor
(or, in the case of a failure to borrow, convert or continue, for the period
that would have been the Interest Period for such Loan), over (ii) the amount of
interest which would accrue on such principal amount for such period at the
interest rate which such Lender would bid were it to bid, at the commencement of
such period, for dollar deposits of a comparable amount and period from other
banks in the Eurodollar market. A certificate of any Lender setting forth any
amount or amounts that such Lender is entitled to receive pursuant to this
Section shall be delivered to the Borrower and shall be conclusive absent
manifest error. The Borrower shall pay such Lender the amount shown as due on
any such certificate within 10 days after receipt thereof.
SECTION 2.17 TAXES. Any and all payments by or on account of any
obligation of the Borrower hereunder shall be made free and clear of and without
deduction for any Indemnified Taxes or Other Taxes; PROVIDED that if the
Borrower shall be required to deduct any Indemnified Taxes or Other Taxes from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Bank (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 Governmental Authority in accordance with applicable law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) The Borrower shall indemnify the Administrative Agent, each Lender
and the Issuing Bank, within 10 days after written demand therefor, for the full
amount of any Indemnified Taxes or Other Taxes paid by the Administrative Agent,
such Lender or the Issuing Bank, as the case may be, on or with respect to any
payment by or on account of any obligation of the Borrower hereunder (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) and any penalties, interest and reasonable
expenses arising therefrom or with respect thereto, whether or not such
Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted
by the relevant Governmental Authority. A certificate as to the amount of such
payment or liability delivered to the Borrower by a Lender or the Issuing Bank,
or by the Administrative Agent on its own behalf or on behalf of a Lender or the
Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes or Other Taxes
by the Borrower to a Governmental Authority, the Borrower shall deliver to the
Administrative Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Administrative Agent.
(e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty
34
to which such jurisdiction is a party, with respect to payments under this
Agreement shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law or reasonably
requested by the Borrower as will permit such payments to be made without
withholding or at a reduced rate.
(f) If the Administrative Agent or a Lender determines, in its sole
discretion, that it has received a refund of any Taxes or Other Taxes as to
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this SECTION 2.17, it shall pay
over such refund to the Borrower (but only to the extent of indemnity payments
made, or additional amounts paid, by the Borrower under this SECTION 2.17 with
respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender and without
interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided, that the Borrower, upon the request of
the Administrative Agent or such Lender, agrees to repay the amount paid over to
the Borrower (plus any penalties, interest or other charges imposed by the
relevant Governmental Authority) to the Administrative Agent or such Lender in
the event the Administrative Agent or such Lender is required to repay such
refund to such Governmental Authority. This Section shall not be construed to
require the Administrative Agent or any Lender to make available its tax returns
(or any other information relating to its taxes which it deems confidential) to
the Borrower or any other Person.
SECTION 2.18 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS. (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or reimbursement of LC
Disbursements, or of amounts payable under SECTION 2.15, SECTION 2.16 or SECTION
2.17, or otherwise) prior to 12:00 noon, Houston time, on the date when due, in
immediately available funds, without set off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the
Administrative Agent, be deemed to have been received on the next succeeding
Business Day for purposes of calculating interest thereon. All such payments
shall be made to the Administrative Agent at its offices at 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxx, except payments to be made directly to the Issuing Bank or
Swingline Lender as expressly provided herein and except that payments pursuant
to SECTION 2.15, SECTION 2.16 or SECTION 2.17 and SECTION 9.03 shall be made
directly to the Persons entitled thereto. The Administrative Agent shall
distribute any such payments received by it for the account of any other Person
to the appropriate recipient promptly following receipt thereof. If any payment
hereunder shall be due on a day that is not a Business Day, the date for payment
shall be extended to the next succeeding Business Day, and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and available to
the Administrative Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
35
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Revolving Loans or participations in LC Disbursements or
Swingline Loans resulting in such Lender receiving payment of a greater
proportion of the aggregate amount of its Revolving Loans and participations in
LC Disbursements and Swingline Loans and accrued interest thereon than the
proportion received by any other Lender, then the Lender receiving such greater
proportion shall purchase (for cash at face value) participations in the
Revolving Loans and participations in LC Disbursements and Swingline Loans of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Revolving Loans and
participations in LC Disbursements and Swingline Loans; PROVIDED that (i) if any
such participations are purchased and all or any portion of the payment giving
rise thereto is recovered, such participations shall be rescinded and the
purchase price restored to the extent of such recovery, without interest, and
(ii) the provisions of this paragraph shall not be construed to apply to any
payment made by the Borrower pursuant to and in accordance with the express
terms of this Agreement or any payment obtained by a Lender as consideration for
the assignment of or sale of a participation in any of its Loans or
participations in LC Disbursements to any assignee or participant, other than to
the Borrower or any Subsidiary or Affiliate thereof (as to which the provisions
of this paragraph shall apply). The Borrower consents to the foregoing and
agrees, to the extent it may effectively do so under applicable law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may
exercise against the Borrower rights of set-off and counterclaim with respect to
such participation as fully as if such Lender were a direct creditor of the
Borrower in the amount of such participation.
(d) Unless the Administrative Agent shall have received notice from
the Borrower prior to the date on which any payment is due to the Administrative
Agent for the account of the Lenders or the Issuing Bank hereunder that the
Borrower will not make such payment, the Administrative Agent may assume that
the Borrower has made such payment on such date in accordance herewith and may,
in reliance upon such assumption, distribute to the Lenders or the Issuing Bank,
as the case may be, the amount due. In such event, if the Borrower has not in
fact made such payment, then each of the Lenders or the Issuing Bank, as the
case may be, severally agrees to repay to the Administrative Agent forthwith on
demand the amount so distributed to such Lender or Issuing Bank with interest
thereon, for each day from and including the date such amount is distributed to
it to but excluding the date of payment to the Administrative Agent, at the
greater of the Federal Funds Effective Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
(e) If any Lender shall fail to make any payment required to be made
by it pursuant to SECTION 2.05(C), SECTION 2.06(D), SECTION 2.06(E), SECTION
2.07(B), SECTION 2.18(D), or SECTION 9.03(C) then the Administrative Agent may,
in its discretion (notwithstanding any contrary provision hereof), apply any
amounts thereafter received by the Administrative Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
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SECTION 2.19 MITIGATION OBLIGATIONS; REPLACEMENT OF LENDERS. (a) If
any Lender requests compensation under SECTION 2.15, or if the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for the account of any Lender pursuant to SECTION 2.17, then such
Lender shall use reasonable efforts to designate a different lending office for
funding or booking its Loans hereunder or to assign its rights and obligations
hereunder to another of its offices, branches or affiliates, if, in the judgment
of such Lender, such designation or assignment (i) would eliminate or reduce
amounts payable pursuant to SECTION 2.15 or SECTION 2.17, as the case may be, in
the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under SECTION 2.15, or if the
Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to SECTION 2.17,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in
SECTION 9.04), all its interests, rights and obligations under this Agreement to
an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans and
participations in LC Disbursements and Swingline Loans, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under SECTION
2.15 or payments required to be made pursuant to SECTION 2.17, such assignment
will result in a reduction in such compensation or payments in the future. A
Lender shall not be required to make any such assignment and delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
SECTION 2.20 INCREASE IN THE REVOLVING LOAN COMMITMENTS. The Borrower
may on no more than two occasions during the period beginning on the date hereof
to and including the date that is six months prior to the Revolving Maturity
Date, by written notice to the Administrative Agent executed by the Borrower and
one or more financial institutions (any such financial institution referred to
in this Section being called an "INCREASING LENDER"), which may include any
Lender, cause the Revolving Loan Commitments to be extended by the Increasing
Lenders (or cause the Commitments of the Increasing Lenders to be increased, as
the case may be) in an amount for each Increasing Lender set forth in such
notice; provided, that (i) each extension of new Revolving Loan Commitments or
increase in existing Revolving Loan Commitments pursuant to this paragraph shall
result in the aggregate Revolving Loan Commitments being increased by no less
than $10,000,000, (ii) no extension of new Revolving Loan Commitments or
increase in existing Revolving Loan Commitments pursuant to this paragraph may
result in the aggregate Revolving Loan Commitments exceeding $400,000,000, (iii)
each Increasing Lender, if not already a Lender hereunder, shall be subject to
the approval of
37
the Administrative Agent (which approval shall not be unreasonably withheld) and
(iv) each Increasing Lender, if not already a Lender hereunder, shall become a
party to this Agreement by completing and delivering to the Administrative Agent
a duly executed accession agreement in a form reasonably satisfactory to the
Administrative Agent and the Borrower (an "ACCESSION AGREEMENT"). New Revolving
Loan Commitments and increases in Revolving Loan Commitments shall become
effective on the date specified in the applicable notices delivered pursuant to
this paragraph. Upon the effectiveness of any Accession Agreement to which any
Increasing Lender is a party, (i) such Increasing Lender shall thereafter be
deemed to be a party to this Agreement and shall be entitled to all rights,
benefits and privileges accorded a Revolving Lender hereunder and subject to all
obligations of a Lender hereunder and (II) SCHEDULE 2.01 shall be deemed to have
been amended to reflect the Commitment of such Increasing Lender as provided in
such Accession Agreement. Upon the effectiveness of any increase pursuant to
this Section in the Revolving Loan Commitment of a Revolving Lender already a
party hereto, SCHEDULE 2.01 shall be deemed to have been amended to reflect the
increased Revolving Loan Commitment of such Lender. Notwithstanding the
foregoing, no increase in the aggregate Revolving Loan Commitments (or in the
Revolving Loan Commitment of any Lender) shall become effective under this
Section unless, on the date of such increase, the Administrative Agent shall
have received a certificate, dated as of the effective date of such increase and
executed by a Financial Officer of the Borrower, to the effect that the
conditions set forth in paragraphs (i) and (ii) of SECTION 4.02 shall be
satisfied (with all references in such paragraphs to a Borrowing being deemed to
be references to such increase and attaching resolutions of the Borrower
approving such increase). Following any extension of a new Revolving Loan
Commitment or increase of a Lender's Revolving Loan Commitment pursuant to this
paragraph, any Revolving Loans outstanding prior to the effectiveness of such
increase or extension shall continue to be outstanding until the ends of the
respective Interests Periods applicable thereto, and shall then be repaid and,
if the Borrower shall so elect, refinanced with new Revolving Loans made
pursuant to SECTION 2.01 ratably in accordance with the Revolving Loan
Commitments in effect following such extension or increase.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 3.01 ORGANIZATION; POWERS. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.02 AUTHORIZATION; ENFORCEABILITY. The Transactions are
within the Borrower's corporate powers and have been duly authorized by all
necessary corporate and, if required, stockholder action. This Agreement has
been duly executed and delivered by the Borrower and constitutes a legal, valid
and binding obligation of the Borrower, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization,
38
moratorium or other laws affecting creditors' rights generally and subject to
general principles of equity, regardless of whether considered in a proceeding
in equity or at law.
SECTION 3.03 GOVERNMENTAL APPROVALS; NO CONFLICTS. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except such as have been
obtained or made and are in full force and effect, (b) will not violate any
applicable law or regulation or the charter, by-laws or other organizational
documents of the Borrower or any of its Subsidiaries or any order of any
Governmental Authority, (c) will not violate or result in a default under any
indenture, agreement or other instrument binding upon the Borrower or any of its
Subsidiaries or its assets, or give rise to a right thereunder to require any
payment to be made by the Borrower or any of its Subsidiaries, and (d) will not
result in the creation or imposition of any Lien on any asset of the Borrower or
any of its Subsidiaries.
SECTION 3.04 FINANCIAL CONDITION; NO MATERIAL ADVERSE CHANGE. (a) The
Borrower has heretofore furnished to the Lenders its consolidated balance sheet
and statements of income, stockholders equity and cash flows (i) as of and for
the fiscal year ended December 31, 2005, reported on by PriceWaterhouseCoopers
LLP, independent public accountants, and (ii) as of and for the fiscal quarter
and the portion of the fiscal year ended June 30, 2006, certified by its chief
financial officer. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its consolidated Subsidiaries as of such dates and for such periods
in accordance with GAAP, subject to year end audit adjustments and the absence
of footnotes in the case of the statements referred to in clause (ii) above.
(b) Since December 31, 2005, there has been no material adverse change
in the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and its Subsidiaries, taken as a whole.
SECTION 3.05 PROPERTIES. (a) Each of the Borrower and its Subsidiaries
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) Each of the Borrower and its Subsidiaries owns, or is licensed to
use, all trademarks, tradenames, copyrights, patents and other intellectual
property material to its business, and the use thereof by the Borrower and its
Subsidiaries does not infringe upon the rights of any other Person, except for
any such infringements that, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 3.06 LITIGATION AND ENVIRONMENTAL MATTERS. (a) There are no
actions, suits or proceedings by or before any arbitrator or Governmental
Authority pending against or, to the knowledge of the Borrower, threatened
against or affecting the Borrower or any of its Subsidiaries (i) as to which
there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the
aggregate, to result in a Material Adverse Effect (other than the Disclosed
Matters) or (ii) that involve this Agreement or the Transactions.
39
(b) Except with respect to any other matters that, individually or in
the aggregate, could not reasonably be expected to result in a Material Adverse
Effect, neither the Borrower nor any of its Subsidiaries (i) has failed to
comply with any Environmental Law or to obtain, maintain or comply with any
permit, license or other approval required under any Environmental Law, (ii) has
become subject to any Environmental Liability, (iii) has received notice of any
claim with respect to any Environmental Liability or (iv) knows of any basis for
any Environmental Liability.
(c) Since the date of this Agreement, there has been no change in the
status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
SECTION 3.07 COMPLIANCE WITH LAWS AND AGREEMENTS. Each of the Borrower
and its Subsidiaries is in compliance with all laws, regulations and orders of
any Governmental Authority applicable to it or its property and all indentures,
agreements and other instruments binding upon it or its property, except where
the failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect. No Default has occurred and is
continuing.
SECTION 3.08 INVESTMENT AND HOLDING COMPANY STATUS. Neither the
Borrower nor any of its Subsidiaries is an "investment company" as defined in,
or subject to regulation under, the Investment Company Act of 1940.
SECTION 3.09 TAXES. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or caused to be paid all Taxes required to have been
paid by it, except (a) Taxes that are being contested in good faith by
appropriate proceedings and for which the Borrower or such Subsidiary, as
applicable, has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 3.10 ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $30,000,000.00 the fair market value of the assets of such Plan, and the
present value of all accumulated benefit obligations of all underfunded Plans
(based on the assumptions used for purposes of Statement of Financial Accounting
Standards No. 87) did not, as of the date of the most recent financial
statements reflecting such amounts, exceed by more than $50,000,000.00 the fair
market value of the assets of all such underfunded Plans.
SECTION 3.11 DISCLOSURE. The Borrower has disclosed to the Lenders all
agreements, instruments and corporate or other restrictions to which it or any
of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. Neither the Information Memorandum nor any of the other
reports, financial statements, certificates or other information
40
furnished by or on behalf of the Borrower to the Administrative Agent or any
Lender in connection with the negotiation of this Agreement or delivered
hereunder (as modified or supplemented by other information so furnished)
contains any material misstatement of fact or omits to state any material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; PROVIDED that, with respect to
projected financial information, the Borrower represents only that such
information was prepared in good faith based upon assumptions believed to be
reasonable at the time.
SECTION 3.12 SUBSIDIARIES. SCHEDULE 3.12 sets forth the name of, and
the ownership interest of the Borrower and each other Person in, each Subsidiary
of the Borrower and identifies which are Foreign Subsidiaries and which are
Domestic Subsidiaries as of the date hereof. The shares of capital stock or
other ownership interests of each Subsidiary are owned by the Borrower, directly
or indirectly, free and clear of all Liens.
SECTION 3.13 MARGIN STOCK. Neither the Borrower nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of buying or carrying Margin Stock (as defined
in Registration U of the Board). The proceeds of the Loans and the Letters of
Credit will not be used in a way that will result in any of the Loans or the
Letters of Credit under this Agreement being violative of Regulation U or
Regulation X of the Board.
SECTION 3.14 USE OF PROCEEDS. The proceeds of the Loans shall be used
to repay existing Indebtedness, to finance, in part, the Merger, for working
capital and for general corporate purposes of, in each case, the Borrower and
its Subsidiaries. The Borrower represents and warrants to the Lenders and the
Administrative Agent that all Loans will be for business, commercial, investment
or other similar purpose and not primarily for personal, family, household or
agricultural use, as such terms are used in the Texas Finance Code.
SECTION 3.15 SOLVENCY. Immediately following the making of each Loan
on the Closing Date and after giving effect to the application of the proceeds
of each Loan, (a) the fair market value of the assets of each Loan Party
(individually and on a consolidated basis) will exceed its debts and
liabilities; (b) the present fair saleable value of the property of each Loan
Party (individually and on a consolidated basis) will be greater than the amount
that will be required to pay the probable liability of its debts and other
liabilities; (c) each Loan Party (individually and on a consolidated basis) will
be able to pay its debts and liabilities as they become absolute and mature; and
(d) each Loan Party (individually and on a consolidated basis the Borrower and
each of its Subsidiaries) will not have unreasonably small capital with which to
conduct its business as such business is now conducted and is proposed to be
conducted following the Closing Date.
ARTICLE IV
CONDITIONS
SECTION 4.01 EFFECTIVE DATE. The obligations of the Lenders to make
Loans and of the Issuing Bank to issue Letters of Credit hereunder shall not
become effective until the date
41
on which the Administrative Agent (or its counsel) shall have received from each
Loan Party, in form and substance satisfactory to it:
(a) either (i) a counterpart of this Agreement signed by the Borrower
or (ii) written evidence satisfactory to the Administrative Agent (which may
include electronic or telecopy transmission of signed signature pages) that the
Borrower has signed a counterpart of this Agreement.
(b) a Note for each Lender requesting one.
(c) the executed Guarantee Agreement (or electronic or telecopy copy
of a signed signature page thereof) from each Domestic Subsidiary and all
Foreign Subsidiaries as required by SECTION 5.10.
(d) favorable written opinions (addressed to the Administrative Agent
and the Lenders and dated the Effective Date) of Xxxxx Xxxxxxx & Xxxx LLP,
counsel for the Borrower and the Guarantors, the general counsel of Borrower,
and Xxxxx, Brown, Koehn, Shors & Xxxxxxx, P.C. local Iowa counsel for the
Borrower and covering such matters relating to the Borrower, the Guarantors,
this Agreement or the Transactions as the Required Lenders shall reasonably
request. The Borrower hereby requests such counsel to deliver such opinion.
(e) such documents and certificates as the Administrative Agent or its
counsel may reasonably request relating to the organization, existence and good
standing of the Borrower, the authorization of the Transactions and any other
legal matters relating to the Borrower, this Agreement or the Transactions, all
in form and substance satisfactory to the Administrative Agent and its counsel.
(f) a certificate, dated the Effective Date and signed by the
President, a Vice President or a Financial Officer of the Borrower, confirming
compliance with the conditions set forth in paragraphs (i) and (ii) of SECTION
4.02.
(g) (i) satisfactory audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the Borrower
for the two most recent fiscal years ended prior to the Effective Date as to
which such financial statements are available and (ii) satisfactory unaudited
consolidated balance sheet and related statements of operations, stockholders'
equity and cash flows of the Borrower for each quarterly period ended subsequent
to the date of the latest financial statements delivered pursuant to clause (i)
of this SECTION 4.01(G) as to which such financial statements are available.
(h) Borrowing Request (substantially in the form of EXHIBIT 4.01(H)
hereto).
(i) evidence of liability and hazard insurance for each Loan Party in
such amounts and on such terms as are standard and customary in the industry in
which said entities conduct their operations.
(j) all conditions precedent to the completion of the Merger
(including all requisite approvals therefor) have been satisfied (with the
filing of the merger certificate to occur immediately upon the funding of the
Term Loan);
42
(k) all information regarding the Borrower and its Subsidiaries that
it is required to collect pursuant to the USA Patriot Act;
(l) all fees and other amounts due and payable on or prior to the
Effective Date, including, to the extent invoiced, reimbursement or payment of
all out of pocket expenses required to be reimbursed or paid by the Borrower
hereunder; and
(m) such other documents or items as the Administrative Agent may
reasonably request.
SECTION 4.02 EACH CREDIT EVENT. The obligation of each Lender to make
a Loan on the occasion of any Borrowing, and of the Issuing Bank to issue,
amend, renew or extend any Letter of Credit, is subject to the satisfaction of
the following conditions:
(i) The representations and warranties of the Borrower set forth
in this Agreement shall be true and correct on and as of the date of such
Borrowing or the date of issuance, amendment, renewal or extension of such
Letter of Credit, as applicable.
(ii) At the time of and immediately after giving effect to such
Borrowing or the issuance, amendment, renewal or extension of such Letter
of Credit, as applicable, (i) no Default shall have occurred and be
continuing and (ii) there shall have been no events that have, or could
reasonably be expected to cause, a Material Adverse Effect since the
date of the last such issuance or Borrowing.
(iii) A Borrowing Request.
Each Borrowing and each issuance, amendment, renewal or extension of a Letter of
Credit shall be deemed to constitute a representation and warranty by the
Borrower on the date thereof as to the matters specified in paragraphs (i) and
(ii) of this Section.
ARTICLE V
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of Credit shall have expired or terminated and
all LC Disbursements shall have been reimbursed, the Borrower covenants and
agrees with the Lenders that:
SECTION 5.01 FINANCIAL STATEMENTS; RATINGS CHANGE AND OTHER
INFORMATION. The Borrower will furnish to the Administrative Agent (in
electronic or hard copy form):
(i) within 90 days after the end of each fiscal year of the Borrower,
its audited consolidated balance sheet and related statements of
operations, stockholders' equity and cash flows as of the end of and for
such year, setting forth in each case in comparative form the figures for
the previous fiscal year, all reported on by PriceWaterhouseCoopers or
other independent public accountants of recognized national standing
(without a "going concern" or like qualification or exception and without
any qualification or
43
exception as to the scope of such audit) to the effect that such
consolidated financial statements present fairly in all material respects
the financial condition and results of operations of the Borrower and its
consolidated Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied;
(ii) within 45 days after the end of each of the first three fiscal
quarters of each fiscal year of the Borrower, its consolidated balance
sheet and related statements of operations, stockholders' equity and cash
flows as of the end of and for such fiscal quarter and the then elapsed
portion of the fiscal year, setting forth in each case in comparative form
the figures for the corresponding period or periods of (or, in the case of
the balance sheet, as of the end of) the previous fiscal year, all
certified by one of its Financial Officers as presenting fairly in all
material respects the financial condition and results of operations of the
Borrower and its consolidated Subsidiaries on a consolidated basis in
accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes;
(iii) concurrently with any delivery of financial statements under
clause (i) or (ii) above, a certificate of a Financial Officer of the
Borrower (i) certifying as to whether a Default has occurred and, if a
Default has occurred, specifying the details thereof and any action taken
or proposed to be taken with respect thereto, (ii) setting forth reasonably
detailed calculations demonstrating compliance with SECTION 3.10, SECTION
6.01, SECTION 6.07, SECTION 6.09 and SECTION 6.12 (in the form of
compliance certificate attached hereto as EXHIBIT 5.01) and (iii) stating
whether any change in GAAP or in the application thereof has occurred since
the date of the audited financial statements referred to in SECTION 3.04
and, if any such change has occurred, specifying the effect of such change
on the financial statements accompanying such certificate;
(iv) concurrently with any delivery of financial statements under
clause (i) above, an annual budget of the Borrower and the Subsidiaries for
such fiscal year;
(v) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any Subsidiary with the Securities and Exchange Commission,
or any Governmental Authority succeeding to any or all of the functions of
said Commission, or with any national securities exchange, as the case may
be; and
(vi) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any Subsidiary, or compliance with the terms of this Agreement,
as the Administrative Agent or any Lender may reasonably request.
SECTION 5.02 NOTICES OF MATERIAL EVENTS. The Borrower will furnish to
the Administrative Agent prompt written notice of the following:
(i) the occurrence of any Default;
(ii) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting the
Borrower or any
44
Affiliate thereof that, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect;
(iii) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liabilities of the Borrower and its Subsidiaries increasing after
the Effective Date in an aggregate amount exceeding $5,000,000; and
(iv) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
SECTION 5.03 EXISTENCE; CONDUCT OF BUSINESS. The Borrower will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business unless the failure to do so could not reasonably
be expected to have a Material Adverse Effect; PROVIDED that the foregoing shall
not prohibit any merger, consolidation, liquidation or dissolution permitted
under SECTION 6.05.
SECTION 5.04 PAYMENT OF OBLIGATIONS. The Borrower will, and will cause
each of its Subsidiaries to, pay its obligations, including Tax liabilities,
that, if not paid, could result in a Material Adverse Effect before the same
shall become delinquent or in default, except where (a) the validity or amount
thereof is being contested in good faith by appropriate proceedings, (b) the
Borrower or such Subsidiary has set aside on its books adequate reserves with
respect thereto in accordance with GAAP and (c) the failure to make payment
pending such contest could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 5.05 MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause each of its Subsidiaries to keep and maintain all property material to the
conduct of its business in good working order and condition, ordinary wear and
tear excepted.
SECTION 5.06 BOOKS AND RECORDS; INSPECTION RIGHTS. The Borrower will,
and will cause each of its Subsidiaries to, keep proper books of record and
account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 5.07 COMPLIANCE WITH LAWS. The Borrower will, and will cause
each of its Subsidiaries to, comply with all laws, rules, regulations and orders
of any Governmental Authority applicable to it or its property, including,
without limitation, Environmental Laws,
45
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 5.08 USE OF PROCEEDS AND LETTERS OF CREDIT. The proceeds of
the Loans will be used only to finance the Merger and for working capital and
general corporate purposes. No part of the proceeds of any Loan will be used,
whether directly or indirectly, for any purpose that entails a violation of any
of the Regulations of the Board, including Regulations T, U and X. Letters of
Credit will be issued only to support the general corporate purposes of the
Borrower and its Subsidiaries.
SECTION 5.09 INSURANCE. The Borrower will, and will cause each of the
Subsidiaries to, maintain, with financially sound and reputable insurance
companies, insurance in such amounts (with no greater risk retention) and
against such risks as are customary among companies of established reputation
engaged in the same or similar businesses and operating in the same or similar
locations. The Borrower will furnish to the Lenders, upon request of the
Administrative Agent, information in reasonable detail as to the insurance so
maintained.
SECTION 5.10 REQUIRED GUARANTORS.
(a) If any Domestic Subsidiary is formed or acquired after the
Effective Date, the Borrower will, within ten (10) Business Days, notify the
Administrative Agent and the Lenders thereof and promptly but in no event later
than twenty (20) Business Days after such formation or acquisition cause the
Subsidiary to execute a Guarantee Agreement.
(b) If, at any time, (i) the aggregate consolidated revenues of
Foreign Subsidiaries exceeds twenty percent (20%) of the aggregate total
consolidated revenue for the most recently ended period of four (4) fiscal
quarters of the Company or (ii) the aggregate consolidated assets of Foreign
Subsidiaries exceeds twenty percent (20%) of the aggregate total consolidated
assets as of the end of the most recently ended fiscal quarter of the Borrower
and all of its Subsidiaries, the Borrower shall promptly cause one or more of
said Foreign Subsidiaries to execute a Guarantee Agreement such that, after
giving effect to such Guarantee Agreement, both the aggregate consolidated
revenue and the aggregate consolidated assets (measured according to book value
basis), of all Foreign Subsidiaries that have not executed a Guaranty, is less
than twenty percent (20%) of the total consolidated revenue and total assets of
the Borrower and all of its Subsidiaries.
ARTICLE VI
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan and all fees payable hereunder have been paid in
full and all Letters of Credit have expired or terminated and all LC
Disbursements shall have been reimbursed, the Borrower covenants and agrees with
the Lenders that:
SECTION 6.01 INDEBTEDNESS COVENANT. The Borrower will not, and will
not permit any Subsidiary to, create, incur, assume or permit to exist any
Indebtedness, except:
46
(a) Indebtedness created under the Loan Documents;
(b) Indebtedness pursuant to: (i) the private placement notes related
to the Merger, (the "PRIVATE PLACEMENT NOTES") that, together with the Term Loan
do not exceed $350,000,000, and (ii) Indebtedness of the Borrower of up to
$500,000,000 in public bond debt related to the Merger;
(c) Indebtedness existing on the Effective Date and set forth on
SCHEDULE 6.01(C) hereto and extensions, renewals and replacements of any such
Indebtedness that do not increase the outstanding principal amount or change the
parties directly or indirectly responsible for the payment thereof; provided
that any such refinancing Indebtedness (A) shall be unsecured and (B) shall not
mature before the earlier of (x) the maturity date of the Indebtedness
refinanced and (y) the date six months following the Revolving Maturity Date;
(d) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary to the Borrower or any other Subsidiary; provided that Indebtedness
of any Subsidiary that is not a Loan Party to the Borrower or any other Loan
Party shall be subject to SECTION 6.06 below;
(e) Unsecured Guarantees by the Borrower of Indebtedness of any
Subsidiary and Guarantees by any Guarantor of Indebtedness of any other
Guarantor, to the extent said Indebtedness is permitted hereunder;
(f) Indebtedness of the Borrower or any Subsidiary incurred after the
Effective Date under leases (collectively, "TRANSPORTATION EQUIPMENT LEASES") of
motor vehicles (including off-road vehicles) and aircraft;
(g) (A) Indebtedness of the Borrower or any Subsidiary incurred after
the Effective Date to finance the acquisition, construction or improvement of
any fixed or capital assets, including Capital Lease Obligations and any
Indebtedness assumed in connection with the acquisition of any such assets, or
secured by a Lien on any such assets prior to the acquisition thereof, and
extensions, renewals and replacements of any such Indebtedness that do not
increase the outstanding principal amount or change the parties directly or
indirectly responsible for the payment thereof, (B) Attributable Debt (as
defined below) of the Borrower or any Subsidiary incurred after the date hereof
pursuant to Sale and Leaseback Transactions permitted by SECTION 6.04 and (C)
Indebtedness represented by seller notes executed by the Borrower incurred after
the date hereof in connection with Permitted Acquisitions; provided that (i) the
Indebtedness in clause (A) hereof is incurred prior to or within 120 days (or
such longer period if necessary solely to obtain any permits or licenses
required in connection with such acquisition, construction or improvement) after
such acquisition or the completion of such construction or improvement and (ii)
the aggregate principal amount of the Indebtedness permitted by this clause (g)
in excess of Attributable Debt shall not exceed $75,000,000 at any time
outstanding. "ATTRIBUTABLE DEBT" means, with respect to any Sale and Leaseback
transaction, the present value (computed in accordance with GAAP as if the
obligations incurred in connection with such Sale and Leaseback transaction were
capital lease obligations) of the total obligations of the lessee for rental
payments during the remaining term of the lease included in such sale and
leaseback transaction (including any period for which such lease has been
extended). In the case of any lease which is terminable by the lessee upon
payment of a penalty, the Attributable Debt shall be
47
the lesser of (i) the Attributable Debt determined assuming termination upon the
first date such lease may be terminated (in which case the Attributable Debt
shall also include the amount of the penalty, but no rent shall be considered as
required to be paid under such lease subsequent to the first date upon which it
may be so terminated) and (ii) the Attributable Debt determined assuming no such
termination. Any determination of any rate implicit in the terms of the lease
included in such Sale and Leaseback transaction made in accordance with
generally accepted financial practices by the Borrower shall be binding and
conclusive absent manifest error;
(h) Unsecured Indebtedness incurred under a credit facility by any one
or more Canadian Subsidiaries of Borrower, so long as said Subsidiary guarantees
the Loans and, further provided that the aggregate principal amount of such
Indebtedness permitted by this clause does not exceed $100,000,000;
(i) Unsecured Indebtedness of any Subsidiary, provided that the
aggregate principal amount of all Indebtedness permitted by this clause shall
not exceed the aggregate principal amount of $5,000,000.00 at any time
outstanding;
(j) Obligations incurred in connection with covenants not to compete
to the extent such obligations are treated as indebtedness under GAAP, provided
that the aggregate principal amount of all Indebtedness permitted by this clause
shall not exceed $50,000,000 at any time outstanding;
(k) Indebtedness of any Subsidiary of the Borrower in existence (but
not incurred or created in connection with an acquisition) on the date on which
such Subsidiary is acquired by the Borrower, provided (i) neither the Borrower
nor any of its other Subsidiaries has any obligation with respect to such
Indebtedness, (ii) none of the properties of the Borrower or any of its other
Subsidiaries is bound with respect to such Indebtedness and (iii) the Borrower
is in compliance with the financial covenants after such acquisition; and
(l) Unsecured Indebtedness of the Borrower not permitted by any other
clause of this SECTION 6.01; provided that (i) no Default exists at the time, or
is created as a result of, the incurrence of such Indebtedness, (ii) for all
Indebtedness in excess of $50 million, such Indebtedness does not have a
maturity date before the date six months following the Revolving Maturity Date,
and (iii) the terms of such unsecured Indebtedness are not more restrictive than
the terms of the Loan Documents.
SECTION 6.02 LIMIT ON PREFERRED EQUITY ISSUANCE. The Borrower will
not, nor will it permit any Subsidiary to, issue any preferred stock or other
preferred Equity Interests, other than (a) preferred Equity Interests of the
Borrower issued (i) without any mandatory redemption provisions or (ii) pursuant
to any shareholders' rights plan of the Borrower; and (b) preferred Equity
Interests issued by any Subsidiary to the extent, and only to the extent, that
such preferred Equity Interests are owned by the Borrower or another Subsidiary.
SECTION 6.03 LIEN COVENANT. The Borrower will not, and will not permit
any Subsidiary to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
48
(a) Permitted Encumbrances;
(b) Any Lien on any property or asset of the Borrower or any
Subsidiary existing on the Effective Date and set forth on SCHEDULE 6.03(B);
provided that (i) such Lien shall not apply to any other property or asset of
the Borrower or any Subsidiary and (ii) such Lien shall secure only those
obligations which it secures on the Effective Date hereof;
(c) Any Lien existing on any property or asset prior to the
acquisition thereof by the Borrower or any Subsidiary or existing on any
property or asset of any person that becomes a Subsidiary after the Effective
Date prior to the time such Person becomes a Subsidiary; provided that (i) such
Lien is not created in contemplation of or in connection with such acquisition
or such Person becoming a Subsidiary, as the case may be, (ii) such Lien shall
not apply to any other property or assets of the Borrower or any Subsidiary and
(iii) such Lien shall secure only those obligations which it secures on the date
of such acquisition or the date such Person becomes a Subsidiary, as the case
may be;
(d) Liens on property subject to Transportation Equipment Leases,
provided that the Indebtedness secured by any Transportation Equipment Lease
does not exceed the cost of acquiring the property subject thereto;
(e) Liens on fixed or capital assets acquired, constructed or improved
by the Borrower or any Subsidiary; provided that (i) such Liens secure permitted
Indebtedness, (ii) such Liens and the Indebtedness secured thereby are incurred
prior to or within 120 days (or such longer period if necessary solely to obtain
any permits or licenses required in connection with such acquisition,
construction or improvement) after such acquisition or the completion of such
construction or improvement, (iii) the Indebtedness secured thereby does not
exceed the cost of acquiring, constructing or improving such fixed or capital
assets and (iv) such Liens shall not apply to any other property or assets of
the Borrower or any Subsidiary; and
(f) Liens in cash collateral pursuant to SECTION 2.06(J).
SECTION 6.04 SALE AND LEASEBACK TRANSACTIONS. The Borrower will not,
and will not permit any of the Subsidiaries to, enter into any Sale and
Leaseback Transaction; provided that the Borrower may enter into (a) Sale and
Leaseback Transactions if the aggregate outstanding Attributable Debt in respect
of sale and leaseback transactions permitted by this clause (a) shall at no time
exceed $125,000,000 and (b) any Transportation Equipment Lease; and provided
further that all Attributable Debt associated with any such Sale and Leaseback
transaction shall be treated as Indebtedness of the Borrower and shall be
subject to the limitations of the Indebtedness covenant.
SECTION 6.05 LIMITATION ON FUNDAMENTAL CHANGES.
(a) The Borrower will not, and will not permit any Subsidiary to,
merge into or consolidate with any other Person, or permit any other Person to
merge into or consolidate with it, or sell, transfer, lease or otherwise dispose
of (in one transaction or in a series of transactions) assets (including capital
stock of Subsidiaries) constituting all or substantially all the assets of the
Borrower and the Subsidiaries on a consolidated basis (whether now owned or
hereafter acquired), or, in the case of the Borrower or any Guarantor, liquidate
or dissolve,
49
except that, if at the time thereof and immediately after giving effect thereto
no Default shall have occurred and be continuing (i) any Subsidiary may merge
into the Borrower in a transaction in which the Borrower is the surviving
corporation, (ii) any Subsidiary may merge into any other Subsidiary in a
transaction in which the surviving entity is a Subsidiary; PROVIDED, HOWEVER,
that (A) no Guarantor may merge into a Foreign Subsidiary (unless prior to such
merger, such Foreign Subsidiary was also a Guarantor), and (B) after giving
effect to such transaction, the surviving Subsidiary is a Guarantor if either of
such Subsidiaries was previously a Guarantor, (iii) any permitted asset
disposition and involving the sale of a Subsidiary may be effected by a merger
of such Subsidiary, (iv) any Subsidiary may sell, transfer, lease or otherwise
dispose of its assets to the Borrower or to another Subsidiary; provided,
however, that (A) no Guarantor may sell, transfer, lease or otherwise dispose of
its assets to any Foreign Subsidiary (unless prior to such sale, transfer, lease
or disposition such Foreign Subsidiary was also a Guarantor), and (B) after
giving effect to such transaction, the surviving Subsidiary is a Guarantor if
either of such Subsidiaries was previously a Guarantor, and (v) any Subsidiary
may liquidate or dissolve if the Borrower determines in good faith that such
liquidation or dissolution is in the best interests of the Borrower and is not
materially disadvantageous to the Lenders; provided that any such merger
involving a person that is not a wholly owned Subsidiary immediately prior to
such merger shall not be permitted unless also permitted by SECTION 6.06
regarding Restrictions on Investments.
(b) The Borrower will not, and will not permit any of the Subsidiaries
to, engage to any material extent in any business other than businesses of the
type conducted by the Borrower and the Subsidiaries on the Effective Date and
businesses reasonably related thereto.
SECTION 6.06 RESTRICTIONS ON INVESTMENTS, LOANS, ADVANCES, GUARANTEES
AND ACQUISITIONS. The Borrower will not, and will not permit any of the
Subsidiaries to, purchase, hold or acquire (including pursuant to any merger
with any Person that was not a wholly owned Subsidiary prior to such merger) any
capital stock, evidences of Indebtedness or securities (including any option,
warrant or other right to acquire any of the foregoing) of, make or permit to
exist any loans or advances to, guarantee any obligations of, or make or permit
to exist any investment or any other interest in, any other Person, or purchase
or otherwise acquire (in one transaction or a series of transactions) any assets
of any other Person constituting a business unit, except:
(a) Permitted Investments;
(b) Investments, guarantees and loans existing on the Effective Date
and set forth on SCHEDULE 6.06(B);
(c) In addition to the investments described in (b) above, investments
by the Borrower and the Subsidiaries in Equity Interests in their respective
Subsidiaries; provided that the aggregate amount of investments made by Borrower
or any Subsidiary to Subsidiaries that are not Guarantors, together with all
loans and advances and Guarantees made pursuant to clauses (d) and (f) below,
shall not exceed $30,000,000 at any time outstanding;
(d) In addition to the loans described in (b) above, loans or advances
made by the Borrower to any Subsidiary or made by any Subsidiary to the Borrower
or any other
50
Subsidiary; provided that the amount of such loans and advances made by Borrower
or any Subsidiary to Subsidiaries that are not Guarantors, together with
investments and Guarantees made pursuant to clause (c) above and clause (f)
below by Borrower or any Subsidiary to Subsidiaries that are not Guarantors,
shall not exceed $30,000,000 at any time outstanding;
(e) Obligations of the Borrower to any Subsidiary, or of any
Subsidiary to the Borrower or any other Subsidiary, arising from the management
and investment of cash on a pooled basis in the ordinary course of business;
(f) Guarantees constituting permitted Indebtedness; provided that (i)
a Subsidiary shall not Guarantee any Indebtedness of the Borrower unless such
Subsidiary also has Guaranteed the Loans and the Private Placement Notes and
(ii) the aggregate principal amount of Indebtedness of Subsidiaries that are not
Guarantors that is Guaranteed by any Borrower or Guarantor pursuant to this
clause (f), together with investments and loans and advances made by Borrower or
Guarantor to Subsidiaries that are not Guarantors pursuant to clauses (c) and
(d) above, shall not exceed $30,000,000 at any time outstanding (exclusive of
investments, guaranties and loans described in clause (b) immediately above);
(g) Guarantees by the Borrower of accounts payable of Subsidiaries in
the ordinary course of business;
(h) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent accounts and disputes with,
customers and suppliers, in each case in the ordinary course of business;
(i) Investments in perpetual care trusts, pre-need trusts or similar
transactions made (a) in the ordinary course of such Person's business and (b)
subject to applicable Federal, state or local regulations;
(j) Permitted Acquisitions for consideration consisting of common
stock of the Borrower, and other consideration to the extent the amount or fair
market value of such other consideration paid by the Borrower and the
Subsidiaries therefor (including Indebtedness assumed pursuant to SECTION
6.01(L) above) does not exceed (A) $50,000,000 for any single Permitted
Acquisition, and (B) $100,000,000 for all Permitted Acquisitions within a 12
month period;
(k) Equity Interests and debt obligations owned by the Borrower or any
Subsidiary following a transaction described in SECTION 6.07;
(l) Equity Interests in Persons owned by the Borrower or any
Subsidiary following the sale of Equity Interests in Subsidiaries in
transactions constituting asset dispositions permitted under SECTION 6.07 and
other investments in joint ventures engaged in businesses reasonably related to
the business of the Borrower as of the date of this Agreement; provided that no
investment shall be permitted pursuant to this clause (l) that, together with
all other investments permitted under this clause (l), would at any time have a
book value exceeding $50,000,000 in the aggregate;
51
(m) Investments not permitted by any other clause of this Section;
provided that no investment shall be made pursuant to this clause (m) that,
together with all other investments made pursuant to this clause (m) after the
date hereof, would exceed $10,000,000 in the aggregate; and
(n) Other alternative investments not permitted by any other clause of
this Section; provided that both before and immediately after giving effect to
any such investment, (i) the Borrower has at least $50,000,000 in liquidity in
the form of Permitted Investments and at least $150,000,000 of total liquidity,
including (A) unrestricted cash, (B) Permitted Investments and (C) the
difference between the aggregate Revolving Loan Commitments as of such date and
the aggregate Revolving Credit Exposure as of such date.
SECTION 6.07 LIMITATION ON ASSET SALES. The Borrower will not, and
will not permit any of the Subsidiaries to, sell, transfer, lease or otherwise
dispose of any asset, including any Equity Interest, owned by it, nor will the
Borrower permit any of the Subsidiaries to issue any additional Equity Interest
in such Subsidiary, except:
(a) sales of inventory (including parcels in developed cemetery
properties), used or surplus equipment and Permitted Investments in the ordinary
course of business;
(b) sales, transfers and dispositions to the Borrower or a Subsidiary;
provided that any such sales, transfers or dispositions involving a Subsidiary
that is not a Guarantor shall be made in compliance with SECTION 6.10 regarding
Restrictions on Transactions with Affiliates below;
(c) following the completion of the sales described in clause (d)
below sales, transfers, leases and other dispositions of assets (other than
accounts receivable or inventory) the sale of which is not otherwise permitted
by any other clause; provided that (i) the aggregate book value of all assets
sold, transferred or otherwise disposed of in reliance upon this clause (c)
shall not exceed 20% of the proforma consolidated total assets of the Borrower
and its Subsidiaries as of June 30, 2006, as provided in the 8-K filing of the
Borrower filed with the Securities Exchange Commission on September 19, 2006
(plus any increase in the consolidated total assets resulting from permitted
acquisitions of Subsidiaries after the Effective Date, with each such increase
to be measured as of the date of such permitted acquisition, less pre-need
funeral and cemetery receivables and trust investments, cemetery perpetual care
trust investments, insurance invested assets and any similar categories shown on
the consolidated balance sheet of the Borrower after giving effect to any such
permitted acquisitions) in the aggregate during the term hereof (as of September
19, 2006, such calculation of total net assets will result in an amount equal to
$5,124,504,000.00), (ii) all sales, transfers, leases and other dispositions
permitted pursuant to this clause (c) shall be made for fair value and (iii) the
aggregate, non-cash consideration received in connection with all such sales
shall not exceed $400,000,000 during the term hereof; and
(d) asset sales up to $500 million contemplated by the Borrower as a
result of the Merger, whether or not required by the Federal Trade Commission,
the proceeds of which will be applied, in part, to reduce the Term Facility as
required hereunder.
52
For purposes of this Section and SECTIONS 2.10(B)(II) and 6.06, any
transaction which is a "like kind exchange" under Section 1031 of the Code shall
be considered a disposition (if the Borrower or one of its Subsidiaries receives
cash consideration upon the completion thereof) or an acquisition (if the
Borrower or one of its Subsidiaries pays cash consideration upon the completion
thereof) only upon the completion of such transaction, and then only to the
extent of the cash received or paid.
SECTION 6.08 SWAP AGREEMENTS. The Borrower will not, and will not
permit any of the Subsidiaries to, enter into any Swap Agreement, except (a)
Swap Agreements entered into to hedge or mitigate risks (including foreign
exchange risks) to which the Borrower or any Subsidiary has actual exposure
(other than in respect of equity interests or Indebtedness of the Borrower or
any of its Subsidiaries), and (b) Swap Agreements entered into in order to
effectively cap, collar or exchange interest rates (from fixed to floating
rates, from one floating rate to another floating rate or otherwise) with
respect to any interest-bearing liability or investment of the Borrower or any
Subsidiary.
SECTION 6.09 LIMITATION ON RESTRICTED PAYMENTS.
(a) The Borrower will not, and will not permit any of the Subsidiaries
to, declare or make, or agree to pay or make, directly or indirectly, any
Restricted Payment except that (i) any Subsidiary may make any Restricted
Payment to the Borrower or any other Subsidiary (provided that neither the
Borrower nor any Guarantor may make any Restricted Payment to a Subsidiary that
is not a Guarantor) and (ii) as otherwise provided herein. At any time the
Leverage Ratio following the making of a dividend is greater than 3.5 to 1.0,
and so long as no Default or Event of Default exists at the time, or is created
as a result of any such dividend, the Borrower may declare and pay dividends
with respect to its Equity Interests not to exceed $40 million in the aggregate
in any calendar year. At any time the Leverage Ratio following the making of a
dividend, share repurchase or redemption is less than or equal to 3.5 to 1.0,
and so long as no Default or Event of Default exists at the time or is created
as a result of such dividend, share repurchase or redemption, the provisions of
this Section will not apply to restrict dividends, share repurchase or
redemption.
(b) Notwithstanding the above, at any time the Leverage Ratio is
greater than 3.5 to 1.0 but less than 4.0 to 1.0, so long as (i) there is no
outstanding balance under the Revolving Loan, and (ii) the Term Loan has been
paid in full, Borrower may make share repurchases of its common stock in a total
amount not to exceed $100,000,000 during the term hereof. The Leverage Ratio for
purposes of this subsection (b) will be determined pursuant to the most recent
quarterly compliance certificate; provided, that if such ratio decreases below
3.5 to 1.0 during any quarter solely as a result of a decrease in Total Debt,
then such ratio, until the next quarterly compliance certificate, for purposes
of this subsection (b) may, at the Borrower's option, be determined pursuant to
a certificate calculating such ratio and executed by an officer of the Borrower.
(c) The Borrower will not, nor will it permit any of the Subsidiaries
to, make or agree to make, directly or indirectly, any payment or other
distribution (whether in cash, securities or other property) in respect of
principal of or interest on any Indebtedness, or any payment or other
distribution (whether in cash, securities or other property), including any
53
sinking fund or similar deposit, on account of the purchase, redemption,
retirement, defeasance, acquisition, cancellation or termination of any
Indebtedness, except:
(i) payment of Indebtedness created hereunder;
(ii) regularly scheduled and other mandatory interest and principal
payments as and when due in respect of any Indebtedness permitted under
SECTION 6.01;
(iii) refinancings of permitted Indebtedness, including the payment of
customary fees, costs and expenses in connection therewith;
(iv) the payment of secured Indebtedness that becomes due as a result
of the voluntary sale or transfer of the property or assets securing such
Indebtedness to the extent such sale or transfer is permitted;
(v) the payment of Indebtedness of any person acquired by the Borrower
or any Subsidiary that exists on the date of such acquisition; provided
that such Person becomes a Subsidiary as a result of such acquisition;
(vi) payment of Indebtedness that matures prior to the Revolving
Maturity Date; provided there are no outstanding Revolving Loans;
(vii) payment of Indebtedness that matures after the Revolving Credit
Maturity Date; provided that (A) no Indebtedness described in clause (vi)
above is outstanding, other than (1) non-public Indebtedness disclosed on
the Effective Date or (2) other non-public Indebtedness incurred after the
Effective Date in an aggregate amount not to exceed $10,000,000, and (B)
there are no outstanding Revolving Loans;
(viii) prepayments and redemptions of Indebtedness of the Borrower or
any Subsidiary with proceeds of any issuance and sale of common stock of
the Borrower;
(ix) exchanges of common stock of the Borrower for Indebtedness of the
Borrower or any Subsidiary;
(x) other prepayments by the Borrower or any Subsidiary not permitted
by any other clause of this SECTION 6.09; provided that no such prepayment
or redemption shall be made if (i) as of date of the most recently
delivered financial statements, the Leverage Ratio is greater than or equal
to 3.5 to 1.00 and the Borrower or any Subsidiary has made such other
prepayments permitted under this clause (including the proposed prepayment)
in excess of $200,000,000 in the aggregate, or (ii) as of the date of the
most recently delivered financial statements, the Leverage Ratio is less
than 3.5 to 1.00 and the Borrower or any Subsidiary has made such other
prepayments permitted under this clause (including the proposed prepayment)
in excess of $400,000,000 in the aggregate (inclusive of the aggregate
amount of prepayments and redemptions made under clause (i)), in each case
so long as there are no outstanding Revolving Loans; and
(xi) prepayment of the Term Facility, prepayment of the Private
Placement Notes and prepayment of the Alderwoods Debt in accordance with
the terms thereof.
54
SECTION 6.10 RESTRICTIONS ON TRANSACTIONS WITH AFFILIATES. The
Borrower will not, and will not permit any Subsidiary to, sell, lease or
otherwise transfer any property or assets to, or purchase, lease or otherwise
acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) transactions in the
ordinary course of business at prices and on terms and conditions not less
favorable to the Borrower or such Subsidiary than could be obtained on an
arm's-length basis from unrelated third parties, (b) transactions between or
among the Borrower and one or more Subsidiaries that are Guarantors not
involving any other affiliate, (c) any investment, loan or advance involving a
Subsidiary that is permitted hereunder, (d) any Restricted Payment permitted by
SECTION 6.09 and (e) issuances of Equity Interests of the Borrower in
satisfaction of obligations under retirement plans.
SECTION 6.11 RESTRICTIONS ON RESTRICTIVE AGREEMENTS. The Borrower will
not, and will not permit any of the Subsidiaries to, directly or indirectly,
enter into, incur or permit to exist any agreement or other arrangement that
prohibits, restricts or imposes any condition upon (a) the ability of the
Borrower or any Subsidiary to create, incur or permit to exist any Lien upon any
of its properties or assets, or (b) the ability of any Subsidiary to pay
dividends or other distributions with respect to any shares of its capital stock
or to make or repay loans or advances to the Borrower or any other Subsidiary or
to guarantee Indebtedness of the Borrower or any other Subsidiary that are, in
each case in this clause (b), more restrictive than that which exists as of the
date hereof; provided that the foregoing shall not apply to (i) restrictions and
conditions imposed by law or by any Loan Document, (ii) restrictions and
conditions existing on the date hereof identified on SCHEDULE 6.11 (but shall
apply to any extension or renewal of, or any amendment or modification expanding
the scope of, any such restriction or commitment), (iii) restrictions and
conditions contained in any extension, renewal, replacement, amendment or
modification of each indenture (including any supplemental indentures entered
into pursuant to the terms thereof) to which the Borrower is a party on the date
hereof and that is identified on the schedule referenced in clause (ii) above,
so long as such restrictions and conditions are not more restrictive than those
in the indenture being extended, renewed, replaced, amended or modified and (iv)
the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided
such restrictions and conditions apply only to the Subsidiary that is to be sold
and such sale is permitted hereunder.
SECTION 6.12 FINANCIAL COVENANTS. (a) The Borrower will not permit the
Leverage Ratio as of the last day of each fiscal quarter to be greater than the
following:
EACH FISCAL QUARTER ENDING MAXIMUM RATIO
-------------------------- -------------
December '06 - June '07 5.50 to 1.00
September '07 - December '07 5.25 to 1.00
March '08 - June '08 5.00 to 1.00
September '08 - 4.75 to 1.00
December '08
March '09 - December '09 4.25 to 1.00
March '10 - December '10 3.75 to 1.00
Thereafter 3.50 to 1.00
(b) The Borrower will not permit the Interest Coverage Ratio as of the
last day of each fiscal quarter to be less than:
55
EACH FISCAL QUARTER ENDING MINIMUM RATIO
-------------------------- -------------
December '06 - December '08 2.50 to 1.00
March '09 - June '10 2.75 to 1.00
Thereafter 3.00 to 1.00
ARTICLE VII
EVENTS OF DEFAULT
If any of the following events ("EVENTS OF DEFAULT") shall occur:
(a) the Borrower shall fail to pay any principal of any Loan or any
reimbursement obligation in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Loan or any fee
or any other amount (other than an amount referred to in clause (a) of this
Article) payable under this Agreement, when and as the same shall become due and
payable, and such failure shall continue unremedied for a period of five
Business Days;
(c) any representation or warranty made or deemed made by or on behalf
of the Borrower or any Subsidiary in or in connection with this Agreement or any
amendment or modification hereof or waiver hereunder, or in any report,
certificate, financial statement or other document furnished pursuant to or in
connection with this Agreement or any amendment or modification hereof or waiver
hereunder, shall prove to have been incorrect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in SECTION 5.02, SECTION 5.03 (with respect to
the Borrower's existence) or SECTION 5.08, SECTION 5.10 or in ARTICLE VI;
(e) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those specified
in clause (a), (b) or (d) of this Article), and such failure shall continue
unremedied for a period of 30 days after notice thereof from the Administrative
Agent to the Borrower (which notice will be given at the request of any Lender);
(f) the Borrower or any Subsidiary shall fail to make any payment
(whether of principal or interest and regardless of amount) in respect of any
Material Indebtedness, when and as the same shall become due and payable;
(g) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables or
permits (with or without the giving of notice, the lapse of time or both) the
holder or holders of any Material Indebtedness or any trustee or agent on its or
their behalf to cause any Material Indebtedness to become due, or to require the
prepayment, repurchase, redemption or defeasance thereof, prior to its scheduled
56
maturity; PROVIDED that this clause (g) shall not apply to secured Indebtedness
that becomes due as a result of the voluntary sale or transfer of the property
or assets securing such Indebtedness;
(h) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other relief
in respect of the Borrower or any Subsidiary or its debts, or of a substantial
part of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar official
for the Borrower or any Subsidiary or for a substantial part of its assets, and,
in any such case, such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered;
(i) the Borrower or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking liquidation, reorganization or other
relief under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (ii) consent to the institution of,
or fail to contest in a timely and appropriate manner, any proceeding or
petition described in clause (h) of this Article, (iii) apply for or consent to
the appointment of a receiver, trustee, custodian, sequestrator, conservator or
similar official for the Borrower or any Subsidiary or for a substantial part of
its assets, (iv) file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the
benefit of creditors or (vi) take any action for the purpose of effecting any of
the foregoing;
(j) the Borrower or any Subsidiary shall become unable, admit in
writing its inability or fail generally to pay its debts as they become due;
(k) one or more judgments for the payment of money in an aggregate
amount in excess of $15,000,000 shall be rendered against the Borrower, any
Subsidiary or any combination thereof and the same shall remain undischarged for
a period of 30 consecutive days during which execution shall not be effectively
stayed, or any action shall be legally taken by a judgment creditor to attach or
levy upon any assets of the Borrower or any Subsidiary to enforce any such
judgment;
(l) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders, when taken together with all other ERISA Events that have
occurred, could reasonably be expected to result in liability of the Borrower
and its Subsidiaries increasing after the Effective Date in an aggregate amount
exceeding (i) $15,000,000 in any year or (ii) $40,000,000 for all periods;
(m) a Change in Control shall occur; or
(n) the Merger is not consummated within one (1) Business Day of the
initial Borrowing hereunder.
then, and in every such event (other than an event with respect to the Borrower
described in clause (h) or (i) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times: (i)
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terminate the Commitments, and thereupon the Commitments shall terminate
immediately, and (ii) declare the Loans then outstanding to be due and payable
in whole (or in part, in which case any principal not so declared to be due and
payable may thereafter be declared to be due and payable), and thereupon the
principal of the Loans so declared to be due and payable, together with accrued
interest thereon and all fees and other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to the Borrower described in
clause (h) or (i) of this Article, the Commitments shall automatically terminate
and the principal of the Loans then outstanding, together with accrued interest
thereon and all fees and other obligations of the Borrower accrued hereunder,
shall automatically become due and payable, without presentment, demand, protest
or other notice of any kind, all of which are hereby waived by the Borrower, and
(iii) take such other steps to collect the Loans and protect the interest of the
Lenders as shall be allowed by law or in equity.
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Each of the Lenders and the Issuing Bank hereby irrevocably appoints
the Administrative Agent as its agent and authorizes the Administrative Agent to
take such actions on its behalf and to exercise such powers as are delegated to
the Administrative Agent by the terms hereof, together with such actions and
powers as are reasonably incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the
same rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing as directed by the Required Lenders (or such
other number or percentage of the Lenders as shall be necessary under the
circumstances as provided in SECTION 9.02), and (c) except as expressly set
forth herein, the Administrative Agent shall not have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the
Borrower or any of its Subsidiaries that is communicated to or obtained by the
bank serving as Administrative Agent or any of its Affiliates in any capacity.
The Administrative Agent shall not be liable for any action taken or not taken
by it with the consent or at the request of the Required Lenders (or such other
number or percentage of the Lenders as shall be necessary under the
circumstances as provided in SECTION 9.02) or in the absence of its own gross
negligence or willful misconduct. The Administrative Agent shall be deemed not
to have knowledge of any Default unless and until written notice thereof is
given to the Administrative Agent by the
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Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents
of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in ARTICLE IV or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
Subject to the appointment and acceptance of a successor
Administrative Agent as provided in this paragraph, the Administrative Agent may
resign at any time by notifying the Lenders, the Issuing Bank and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, in
consultation with the Borrower, to appoint a successor. If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders and the Issuing Bank, appoint a successor Administrative Agent which
shall be a bank with an office in Houston, Texas, or an Affiliate of any such
bank. Upon the acceptance of its appointment as Administrative Agent hereunder
by a successor, such successor shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. The fees payable by the Borrower to a successor
Administrative Agent shall be the same as those payable to its predecessor
unless otherwise agreed between the Borrower and such successor. After the
Administrative Agent's resignation hereunder, the provisions of this Article and
SECTION 9.03 shall continue in effect for the benefit of such retiring
Administrative Agent, its sub agents and their respective Related Parties in
respect of any actions taken or omitted to be taken by any of them while it was
acting as Administrative Agent.
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Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any related agreement or any document furnished hereunder or thereunder.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 NOTICES. (a) Except in the case of notices and other
communications expressly permitted to be given by telephone (and subject to
paragraph (b) below), all notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service,
mailed by certified or registered mail or sent by telecopy, as follows:
(i) if to the Borrower, to it at 0000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxx
00000, Attention of Chief Financial Officer (Phone No. (000) 000-0000;
Telecopy No. (000) 000-0000; E-Mail Address xxxxx.xxxxxx@xxx-xx.xxx);
(ii) if to the Administrative Agent, Issuing Bank or Swingline Lender,
to JPMorgan Chase Bank, Loan and Agency Services Group, 00 Xxxxx Xxxxxxxx,
00xx Xxxxx, Xxxxxxx, Xxxxxxxx 00000-0000, Attention Xxxxxxx Xxxxxx (Phone
No. (000) 000-0000; Telecopy No. (000) 000-0000; E-Mail Address
xxxxxxx.xxxxxx@xxxxxxxx.xxx), and a copy to JPMorgan Chase Bank, 711 Xxxxxx
Street, 8N-78, Xxxxxxx, Xxxxx 00000, Attention Xxxxx Xxxxxx (Phone No.
(000) 000-0000; Telecopy No. (000) 000-0000; E-Mail Address
xxxxx.x.xxxxxx@xxxxx.xxx); and
(iii) if to any other Lender, to it at its address (or telecopy
number) set forth in its Administrative Questionnaire.
(b) Notices and other communications to the Lenders hereunder may be
delivered or furnished by electronic communications pursuant to procedures
approved by the Administrative Agent; provided that the foregoing shall not
apply to notices pursuant to ARTICLE II unless otherwise agreed by the
Administrative Agent and the applicable Lender. The Administrative Agent or the
Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it; provided that approval of such procedures may be
limited to particular notices or communications.
(c) Any party hereto may change its address or telecopy number for
notices and other communications hereunder by notice to the other parties
hereto. All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
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SECTION 9.02 WAIVERS; AMENDMENTS; RELEASE OF GUARANTORS. (a) No
failure or delay by the Administrative Agent, the Issuing Bank or any Lender in
exercising any right or power hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent, the Issuing
Bank and the Lenders hereunder are cumulative and are not exclusive of any
rights or remedies that they would otherwise have. No waiver of any provision of
this Agreement or consent to any departure by the Borrower there from shall in
any event be effective unless the same shall be permitted by paragraph (b) of
this Section, and then such waiver or consent shall be effective only in the
specific instance and for the purpose for which given. Without limiting the
generality of the foregoing, the making of a Loan or issuance of a Letter of
Credit shall not be construed as a waiver of any Default, regardless of whether
the Administrative Agent, any Lender or the Issuing Bank may have had notice or
knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or by the Borrower and the
Administrative Agent with the consent of the Required Lenders; PROVIDED that no
such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the principal amount of any Loan or
LC Disbursement or reduce the rate of interest thereon, or reduce any fees
payable hereunder, without the written consent of each Lender affected thereby,
(iii) postpone the scheduled date of payment of the principal amount of any Loan
or LC Disbursement, including, without limitation, any payments required under
SECTION 2.10(B) hereof, or any interest thereon, or any fees payable hereunder,
or reduce the amount of, waive or excuse any such payment, or postpone the
scheduled date of expiration of any Commitment, without the written consent of
each Lender affected thereby, (iv) change SECTION 2.18(B) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (v) permit an Interest Period with a duration in
excess of six (6) months, or (vi) change any of the provisions of this Section
or the definition of "Required Lenders" or any other provision hereof specifying
the number or percentage of Lenders required to waive, amend or modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender; PROVIDED FURTHER that no such
agreement shall amend or waive or change the allocation of a mandatory
prepayment without the consent of the holders of a majority of the aggregate
outstanding principal amount of Term Loans and that no such agreement shall
amend, modify or otherwise affect the rights or duties of the Administrative
Agent, the Issuing Bank or the Swingline Lender hereunder without the prior
written consent of the Administrative Agent, the Issuing Bank or the Swingline
Lender, as the case may be.
(c) Notwithstanding any contrary position in this Agreement or any
other Loan Document, if (a) a Guarantor is no longer a Subsidiary and (b) at the
time such Guarantor became a non-subsidiary, no Event of Default then existed,
then such Guarantor shall be automatically released from its obligations under
the Guarantee Agreement to which it is a party, without need for any formal
action by the Administrative Agent or any Lender; and the Administrative Agent
will confirm such release by a notice to the Borrower upon receipt of a request
therefor.
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SECTION 9.03 EXPENSES; INDEMNITY; DAMAGE WAIVER. (a) The Borrower
shall pay (i) all reasonable out of pocket expenses incurred by the
Administrative Agent and its Affiliates, including the reasonable fees, charges
and disbursements of counsel for the Administrative Agent, in connection with
the syndication of the credit facilities provided for herein, the preparation
and administration of this Agreement or any amendments, modifications or waivers
of the provisions hereof (whether or not the transactions contemplated hereby or
thereby shall be consummated), (ii) all reasonable out-of-pocket expenses
incurred by the Issuing Bank in connection with the issuance, amendment, renewal
or extension of any Letter of Credit or any demand for payment thereunder and
(iii) all out-of-pocket expenses incurred by the Administrative Agent, the
Issuing Bank or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Issuing Bank or any Lender, in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section, or in connection with
the Loans made or Letters of Credit issued hereunder, including all such out-of
pocket expenses incurred during any workout, restructuring or negotiations in
respect of such Loans or Letters of Credit.
(b) The Borrower shall indemnify the Administrative Agent, the Issuing
Bank and each Lender, and each Related Party of any of the foregoing Persons
(each such Person being called an "INDEMNITEE") against, and hold each
Indemnitee harmless from, any and all losses, claims, damages, liabilities and
related expenses, including the fees, charges and disbursements of any counsel
for any Indemnitee, incurred by or asserted against any Indemnitee arising out
of, in connection with, or as a result of (i) the execution or delivery of this
Agreement or any agreement or instrument contemplated hereby, the performance by
the parties hereto of their respective obligations hereunder or the consummation
of the Transactions or any other transactions contemplated hereby, (ii) any Loan
or Letter of Credit or the use of the proceeds there from (including any refusal
by the Issuing Bank to honor a demand for payment under a Letter of Credit if
the documents presented in connection with such demand do not strictly comply
with the terms of such Letter of Credit), (iii) any actual or alleged presence
or release of Hazardous Materials on or from any property owned or operated by
the Borrower or any of its Subsidiaries, or any Environmental Liability related
in any way to the Borrower or any of its Subsidiaries, or (iv) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; PROVIDED that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee.
(c) To the extent that the Borrower fails to pay any amount required
to be paid by it to (i) the Issuing Bank or the Swingline Lender under paragraph
(a) or (b) of this Section, each Revolving Lender severally agrees to pay to the
Issuing Bank or the Swingline Lender, as the case may be, such Lender's
Applicable Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount;
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent, the Issuing Bank or the Swingline Lender in
its capacity as such, and (ii) the Administrative Agent under paragraph (a) or
(b) of this Section, each Lender severally agrees to pay its pro-rata share
62
(based on the total of the outstanding Term Loans plus the Revolving Loan
Commitments) of such amount to the Administrative Agent.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Loan or Letter of Credit or the use of the proceeds thereof.
(e) All amounts due under this Section shall be payable promptly after
written demand therefor.
WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED HEREUNDER
SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL LOSSES, LIABILITIES,
CLAIMS AND DAMAGES ARISING OUT OF OR RESULTING FROM THE ORDINARY, SOLE AND
CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.
SECTION 9.04 SUCCESSORS AND ASSIGNS. (a) The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit), except that (i) the Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void) and
(ii) no Lender may assign or otherwise transfer its rights or obligations
hereunder except in accordance with this Section. Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
(including any Affiliate of the Issuing Bank that issues any Letter of Credit),
Participants (to the extent provided in paragraph (c) of this Section) and, to
the extent expressly contemplated hereby, the Related Parties of each of the
Administrative Agent, the Issuing Bank and the Lenders) any legal or equitable
right, remedy or claim under or by reason of this Agreement.
(b) (i) Subject to the conditions set forth in paragraph (b)(ii)
below, any Lender may assign to one or more assignees all or a portion of its
rights and obligations under this Agreement (including all or a portion of its
Commitment and the Loans at the time owing to it) with the prior written consent
(such consent not to be unreasonably withheld) of:
(A) the Borrower, PROVIDED that no consent of the Borrower shall
be required for an assignment to a Lender, an Affiliate of a Lender, an
Approved Fund or, if an Event of Default has occurred and is continuing,
any other assignee;
(B) the Administrative Agent, PROVIDED that no consent of the
Administrative Agent shall be required for an assignment to an assignee
that is a Lender, an Affiliate of a Lender or an Approved Fund; and
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(C) the Issuing Bank and Swingline Lender, provided that no
consent of the Issuing Bank or the Swingline Lender shall be
required for an assignment of all or any portion of the Term Loan.
(ii) Assignments shall be subject to the following additional
conditions:
(A) except in the case of an assignment to a Lender or an
Affiliate of a Lender or an assignment of the entire remaining amount of
the assigning Lender's Revolving Loan Commitment or Loans of any Class, the
amount of the Revolving Loan Commitment or Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 with respect to
Revolving Loans or $500,000 with respect to Term Loans unless each of the
Borrower and the Administrative Agent otherwise consent, PROVIDED Approved
Funds shall be aggregated for purposes of determining compliance with such
minimum assignment amount and that no such consent of the Borrower shall be
required if an Event of Default under clause (a), (b), (h) or (i) of
ARTICLE VII has occurred and is continuing;
(B) each partial assignment shall be made as an assignment
of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement, PROVIDED that this clause shall not be
construed to prohibit the assignment of a proportionate part of all the
assigning Lender's rights and obligations in respect of one Class of
Commitments or Loans;
(C) the parties to each assignment shall execute and deliver
to the Administrative Agent an Assignment and Assumption, together with a
processing and recordation fee of $3,500; PROVIDED that no more than one
such fee shall be payable in connection with simultaneous assignments to or
by two or more Approved Funds; and
(D) the assignee, if it shall not be a Lender, shall deliver to
the Administrative Agent an Administrative Questionnaire.
For the purposes of this Section 9.04(b), the term "Approved Fund" has
the following meaning:
"APPROVED FUND" means any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender. All of
the entities on SCHEDULE 9.04 are Approved Funds.
(iii) Subject to acceptance and recording thereof pursuant to
paragraph (b)(iv) of this Section, from and after the effective date
specified in each Assignment and Assumption the assignee thereunder shall
be a party hereto and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Assumption, be
released from its
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obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of SECTION 2.15, SECTION
2.16, SECTION 2.17 and SECTION 9.03; provided that such release shall not
affect any legal responsibility for such Lender's actions and failures to
act occurring before the effective date of such Assignment and Assumption).
Any assignment or transfer by a Lender of rights or obligations under this
Agreement that does not comply with this SECTION 9.04 shall be treated for
purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (c) of this
Section.
(iv) The Administrative Agent, acting for this purpose as an agent of
the Borrower, shall maintain at one of its offices a copy of each
Assignment and Assumption delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment
of, and principal amount of the Loans and LC Disbursements owing to, each
Lender pursuant to the terms hereof from time to time (the "Register"). The
entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent, the Issuing Bank and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by
the Borrower, the Issuing Bank and any Lender, at any reasonable time and
from time to time upon reasonable prior notice.
(v) Upon its receipt of a duly completed Assignment and Assumption
executed by an assigning Lender and an assignee, the assignee's completed
Administrative Questionnaire (unless the assignee shall already be a Lender
hereunder), the processing and recordation fee referred to in paragraph (b)
of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Administrative Agent shall accept such
Assignment and Assumption and record the information contained therein in
the Register; provided that if either the Assigning Lender or the assignee
shall have failed to make any payment required to be made by it pursuant to
SECTION 2.05(C), SECTION 2.06(D), SECTION 2.06(E), SECTION 2.07(B), SECTION
2.18(D), OR SECTION 9.03(C), the Administrative Agent shall have no
obligation to accept such Assignment and Assumption and record the
information therein in the Register unless and until such payment shall
have been made in full, together with all accrued interest thereon. No
assignment shall be effective for purposes of this Agreement unless it has
been recorded in the Register as provided in this paragraph.
(c) (i) Any Lender may, without the consent of the Borrower, the
Administrative Agent, the Issuing Bank or the Swingline Lender, sell
participations to one or more banks or other entities (a "Participant") in all
or a portion of such Lender's rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans owing to it);
provided that (A) such Lender's obligations under this Agreement shall remain
unchanged, (B) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (C) the Borrower, the
Administrative Agent, the Issuing Bank and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. Any agreement or
65
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to SECTION 9.02(B) that
affects such Participant. Subject to paragraph (c)(ii) of this Section, the
Borrower agrees that each Participant shall be entitled to the benefits of
SECTION 2.15, SECTION 2.16 and SECTION 2.17 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of SECTION 9.08 as though it were a Lender, provided
such Participant agrees to be subject to SECTION 2.18(C) as though it were a
Lender.
(ii) A Participant shall not be entitled to receive any greater
payment under SECTION 2.15 or SECTION 2.17 than the applicable Lender
would have been entitled to receive with respect to the participation
sold to such Participant, unless the sale of the participation to such
Participant is made with the Borrower's express prior written consent.
A Participant that would be a Foreign Lender if it were a Lender shall
not be entitled to the benefits of SECTION 2.17 unless the Borrower is
notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with
SECTION 2.17(E) as though it were a Lender.
(d) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; PROVIDED that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05 SURVIVAL. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Loans
and issuance of any Letters of Credit, regardless of any investigation made by
any such other party or on its behalf and notwithstanding that the
Administrative Agent, the Issuing Bank or any Lender may have had notice or
knowledge of any Default or incorrect representation or warranty at the time any
credit is extended hereunder, and shall continue in full force and effect as
long as the principal of or any accrued interest on any Loan or any fee or any
other amount payable under this Agreement is outstanding and unpaid or any
Letter of Credit is outstanding and so long as the Commitments have not expired
or terminated. The provisions of SECTION 2.15, SECTION 2.16, SECTION 2.17,
SECTION 9.03 AND ARTICLE VIII, shall survive and remain in full force and effect
regardless of the consummation of the transactions contemplated hereby, the
repayment of the Loans, the expiration or termination of the Letters of Credit
and the Commitments or the termination of this Agreement or any provision
hereof.
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SECTION 9.06 COUNTERPARTS; INTEGRATION; EFFECTIVENESS. This Agreement
may be executed in counterparts (and by different parties hereto on different
counterparts), each of which may be delivered by electronic or telecopy
transmission and each of which shall constitute an original, but all of which
when taken together shall constitute a single contract. The Loan Documents and
any separate letter agreements with respect to fees payable to the
Administrative Agent constitute the entire contract among the parties relating
to the subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof. Except
as provided in SECTION 4.01, this Agreement shall become effective when it shall
have been executed by the Administrative Agent and when the Administrative Agent
shall have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07 SEVERABILITY. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08 RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, each Lender and each of its Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
law, to set off and apply any and all deposits (general or special, time or
demand, provisional or final) at any time held and other obligations at any time
owing by such Lender or Affiliate to or for the credit or the account of the
Borrower against any of and all the obligations of the Borrower now or hereafter
existing under this Agreement held by such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement and although
such obligations may be unmatured. The rights of each Lender under this Section
are in addition to other rights and remedies (including other rights of setoff)
which such Lender may have.
SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS. (a)This Agreement shall be construed in accordance with and governed by
the law of the State of Texas.
(b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of the District Courts
of the State of Texas sitting in Houston, Xxxxxx County, Texas and of the United
States District Court of the Southern District of Texas, and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
Texas State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent, the Issuing Bank or any Lender
67
may otherwise have to bring any action or proceeding relating to this Agreement
against the Borrower or its properties in the courts of any jurisdiction.
(c) Each party hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in SECTION 9.01. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 HEADINGS. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 CONFIDENTIALITY. Each of the Administrative Agent, the
Issuing Bank and the Lenders agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or any suit, action or
proceeding relating to this Agreement or the enforcement of rights hereunder,
(f) subject to an agreement containing provisions substantially the same as
those of this Section, to (i) any assignee of or Participant in, or any
prospective assignee of or Participant in, any of its rights or obligations
under this Agreement, (ii) any pledgee referred to in SECTION 9.04(D), or (iii)
any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower or (h) to the extent such Information (i) becomes
publicly available other than as a result of a breach of this Section or (ii)
68
becomes available to the Administrative Agent, the Issuing Bank or any Lender on
a nonconfidential basis from a source other than the Borrower. For the purposes
of this Section, "INFORMATION" means all information received from the Borrower
relating to the Borrower or its business, other than any such information that
is available to the Administrative Agent, the Issuing Bank or any Lender on a
nonconfidential basis prior to disclosure by the Borrower; PROVIDED that, in the
case of information received from the Borrower after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 9.13 INTEREST RATE LIMITATION. Notwithstanding anything herein
to the contrary, in no event whatsoever shall the amount contracted for,
charged, paid or otherwise agreed to be paid to or received by the Agent or any
Lender for the use, forbearance or detention of money under this Agreement or
any Loan Document or otherwise exceed the maximum non-usurious rate pursuant to
applicable law (the "MAXIMUM RATE"), and if at any time the interest rate
applicable to any Loan, together with all fees, charges and other amounts which
are treated as interest on such Loan under applicable law (collectively the
"CHARGES"), shall exceed the Maximum Rate, the rate of interest payable in
respect of such Loan hereunder, together with all Charges payable in respect
thereof, shall be limited to the Maximum Rate and, to the extent lawful, the
interest and Charges that would have been payable in respect of such Loan but
were not payable as a result of the operation of this Section shall be cumulated
and the interest and Charges payable to such Lender in respect of other Loans or
periods shall be increased (but not above the Maximum Rate therefor) until such
cumulated amount, together with interest thereon at the Federal Funds Effective
Rate to the date of repayment, shall have been received by such Lender. Anything
in this Agreement or any other Loan Document to the contrary notwithstanding,
the Borrower shall not be required to pay unearned interest and shall never be
required to pay interest at a rate in excess of the Maximum Rate, and if the
effective rate of interest which would otherwise be payable under this Agreement
and the other Loan Documents would exceed the Maximum Rate, or if the Agent or
any Lender shall receive any unearned interest or shall receive monies that are
deemed to constitute interest which would increase the effective rate of
interest payable by the Borrower under this Agreement or Loan Document to a rate
in excess of the Maximum Rate, then (a) the amount of interest which would
otherwise be payable by the Borrower under this Agreement or any Loan Document
shall be reduced to the amount allowed under applicable law, and (b) any
unearned interest paid by the Borrower or any interest paid by the Borrower in
excess of the Maximum Rate shall be credited on the principal of (or, if the
principal amount shall have been paid in full, refunded to the Borrower). It is
further agreed that, without limitation of the foregoing, all calculations of
the rate of interest contracted for, charged or received by any Lender under
this Agreement or any Loan Document, are made for the purpose of determining
whether such rate exceeds the Maximum Rate, and shall be made by amortizing,
prorating and spreading in equal parts during the period of the full stated term
of the Loans evidenced by said Notes all interest at any time contracted for,
charged or received by such Lender in connection therewith.
SECTION 9.14 USA PATRIOT ACT. Each Lender that is subject to the
requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law October 26, 2001)) (the
69
"PATRIOT ACT") hereby notifies the Borrower that pursuant to the requirements of
the Patriot Act, it is required to obtain, verify and record information that
identifies the Borrower, which information includes the name and address of the
Borrower and other information that will allow such Lender to identify the
Borrower in accordance with the Patriot Act.
SECTION 9.15 FINAL AGREEMENT OF THE PARTIES. THIS WRITTEN AGREEMENT
(INCLUDING THE EXHIBITS AND SCHEDULES HERETO) AND THE OTHER LOAN DOCUMENTS
CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS
BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES
RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF. Any previous agreement among
the parties with respect to the subject matter hereof is superseded by this
Agreement. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party other than the parties hereto any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
SERVICE CORPORATION
INTERNATIONAL
By: /s/ Xxxx X. Xxxxxxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxxxxxx
Title: Senior Vice President and Chief
Financial Officer
71
JPMORGAN CHASE BANK, N.A., individually
and as Administrative Agent
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President
72
BANK OF AMERICA, N.A., individually and as
Syndication Agent
By: /s/ Xxxx X. Xxxxxx
-----------------------------------
Name: Xxxx X. Xxxxxx
Title: Senior Vice President
00
XXX XXXX XX XXXX XXXXXX, as a Revolving
Lender
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Managing Director
74
WACHOVIA BANK, NATIONAL ASSOCIATION, as a
Revolving Lender
By: /s/ Xxxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
XXXXXXX XXXXX CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
AMEGY BANK NATIONAL ASSOCIATION, as a
Revolving Lender
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Senior Vice President
SUMITOMO MITSUI BANKING CORPORATION, as a
Revolving Lender
By: /s/ Xxxxxxx Xxxxx
-----------------------------------
Name: Xxxxxxx Xxxxx
Title: Joint General Manager
FIFTH THIRD BANK, a Michigan Banking
Corporation, as a Revolving Lender
By: /s/ Xxxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
XXXXXX COMMERCIAL PAPER INC., as a
Revolving Lender
By: /s/ Xxxxx Xxxxxx
-----------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Signatory
XXXXXXX XXXXX BANK, FSB, as a
Revolving Lender
By: /s/ Xxxxxxx X. Xxxxxx Xx.
-----------------------------------
Name: Xxxxxxx X. Xxxxxx Xx.
Title: Vice President
REGIONS BANK, as a Revolving Lender
By: /s/ Xxxxx X. Page
-----------------------------------
Name: Xxxxx X. Page
Title: Senior Vice President
BANK OF TEXAS, N.A., as a
Revolving Lender
By: /s/ Xxxxx Xxxxx
-----------------------------------
Name: Xxxxx Xxxxx
Title: Bank of Texas
MIZUHO CORPORATE BANK, LTD., as a
Revolving Lender
By: /s/ Xxxxxxx X. Xxxx
-----------------------------------
Name: Xxxxxxx X. Xxxx
Title: SVP and Team Leader
US BANK, N.A., as a Revolving Lender
By: /s/ Xxxxx X. XxXxxxxx
-----------------------------------
Name: Xxxxx X. XxXxxxxx
Title: Vice President
COMPASS BANK, as a Revolving Lender
By: /s/ Xxx Browig
-----------------------------------
Name: Xxx Browig
Title: Senior Vice President
SUNTRUST BANK, as a Revolving Lender
By: /s/ Xxxxxx X. Xxxxxxx
-----------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Director
