EXHIBIT 10.15
CREDIT AGREEMENT
Dated as of March 13, 1998
Among
PENTACON, INC.
as Borrower,
NATIONSBANK OF TEXAS, N.A.,
as Agent,
and
THE LENDERS SIGNATORY HERETO
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 TERMS DEFINED ABOVE......................................1
Section 1.02 CERTAIN DEFINED TERMS....................................1
Section 1.03 ACCOUNTING TERMS AND DETERMINATIONS.....................18
ARTICLE II
COMMITMENTS
Section 2.01 LOANS AND LETTERS OF CREDIT.............................18
Section 2.02 BORROWINGS, CONTINUATIONS AND CONVERSIONS, LETTERS OF
CREDIT..................................................20
Section 2.03 CHANGES OF COMMITMENTS..................................22
Section 2.04 FEES....................................................23
Section 2.05 SEVERAL OBLIGATIONS.....................................24
Section 2.06 NOTES...................................................24
Section 2.07 PREPAYMENTS.............................................25
Section 2.08 ASSUMPTION OF RISKS.....................................25
Section 2.09 OBLIGATION TO REIMBURSE AND TO PREPAY...................26
Section 2.10 LENDING OFFICES.........................................28
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 REPAYMENT OF LOANS......................................28
Section 3.02 INTEREST................................................28
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 PAYMENTS................................................29
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Section 4.02 PRO RATA TREATMENT......................................29
Section 4.03 COMPUTATIONS............................................30
Section 4.04 NON-RECEIPT OF FUNDS BY THE AGENT.......................30
Section 4.05 SET-OFF, SHARING OF PAYMENTS, ETC.......................30
Section 4.06 TAXES...................................................31
ARTICLE V
CHANGE IN CIRCUMSTANCES
Section 5.01 INCREASED COST AND REDUCED RETURN.......................33
Section 5.02 LIMITATION ON TYPES OF LOANS............................34
Section 5.03 ILLEGALITY..............................................35
Section 5.04 TREATMENT OF AFFECTED LOANS.............................35
Section 5.05 COMPENSATION............................................36
Section 5.06 REPLACEMENT LENDERS.....................................36
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 INITIAL FUNDING.........................................37
Section 6.02 INITIAL AND SUBSEQUENT LOANS AND LETTERS OF CREDIT......39
Section 6.03 CONDITIONS RELATING TO LETTERS OF CREDIT................39
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
Section 7.01 CORPORATE EXISTENCE.....................................40
Section 7.02 FINANCIAL CONDITION.....................................40
Section 7.03 LITIGATION..............................................41
Section 7.04 NO BREACH...............................................41
Section 7.05 AUTHORITY...............................................41
Section 7.06 APPROVALS...............................................41
Section 7.07 USE OF LOANS............................................42
Section 7.08 ERISA...................................................42
Section 7.09 TAXES...................................................43
Section 7.10 TITLES, ETC.............................................43
Section 7.11 NO MATERIAL MISSTATEMENTS...............................44
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Section 7.12 INVESTMENT COMPANY ACT..................................44
Section 7.13 PUBLIC UTILITY HOLDING COMPANY ACT......................44
Section 7.14 SUBSIDIARIES............................................44
Section 7.15 LOCATION OF BUSINESS AND OFFICES........................44
Section 7.16 DEFAULTS................................................44
Section 7.17 ENVIRONMENTAL MATTERS...................................44
Section 7.18 COMPLIANCE WITH THE LAW.................................46
Section 7.19 INSURANCE...............................................46
Section 7.20 HEDGING AGREEMENTS......................................46
Section 7.21 RESTRICTION ON LIENS....................................46
Section 7.22 MATERIAL AGREEMENTS.....................................46
Section 7.23 REGISTRATION STATEMENT..................................47
ARTICLE VIII
AFFIRMATIVE COVENANTS
Section 8.01 FINANCIAL STATEMENTS....................................47
Section 8.02 LITIGATION..............................................49
Section 8.03 MAINTENANCE, ETC........................................49
Section 8.04 ENVIRONMENTAL MATTERS...................................50
Section 8.05 FURTHER ASSURANCES......................................50
Section 8.06 PERFORMANCE OF OBLIGATIONS..............................50
Section 8.07 ERISA INFORMATION AND COMPLIANCE........................51
Section 8.08 SUBSIDIARY SECURITY.....................................51
Section 8.09 INSPECTION..............................................51
Section 8.10 INSURANCE CERTIFICATE...................................52
Section 8.11 RELEASE OF LIENS; SEARCH CERTIFICATES...................52
ARTICLE IX
NEGATIVE COVENANTS
Section 9.01 DEBT....................................................52
Section 9.02 LIENS...................................................53
Section 9.03 INVESTMENTS, LOANS AND ADVANCES.........................53
Section 9.04 DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS................55
Section 9.05 SALES AND LEASEBACKS....................................55
Section 9.06 NATURE OF BUSINESS......................................55
Section 9.07 INTENTIONALLY OMITTED...................................55
Section 9.08 MERGERS, ETC............................................55
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Section 9.09 PROCEEDS OF NOTES.......................................55
Section 9.10 ERISA COMPLIANCE........................................55
Section 9.11 SALE OR DISCOUNT OF RECEIVABLES.........................56
Section 9.12 CAPITAL EXPENDITURES....................................57
Section 9.13 NET WORTH...............................................57
Section 9.14 RATIO OF FUNDED DEBT TO ADJUSTED EBITDA.................57
Section 9.15 FIXED CHARGE COVERAGE RATIO.............................57
Section 9.16 SALE OF PROPERTIES......................................57
Section 9.17 ENVIRONMENTAL MATTERS...................................57
Section 9.18 TRANSACTIONS WITH AFFILIATES............................58
Section 9.19 SUBSIDIARIES............................................58
Section 9.20 NEGATIVE PLEDGE AGREEMENTS..............................58
Section 9.21 FISCAL YEAR.............................................58
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 EVENTS OF DEFAULT......................................58
Section 10.02 REMEDIES...............................................60
ARTICLE XI
THE AGENT
Section 11.01 APPOINTMENT, POWERS AND IMMUNITIES.....................61
Section 11.02 RELIANCE BY AGENT......................................61
Section 11.03 DEFAULTS...............................................62
Section 11.04 RIGHTS AS A LENDER.....................................62
Section 11.05 INDEMNIFICATION........................................62
Section 11.06 NON-RELIANCE ON AGENT AND OTHER LENDERS................63
Section 11.07 RESIGNATION OR REMOVAL OF AGENT........................63
ARTICLE XII
MISCELLANEOUS
Section 12.01 WAIVER.................................................64
Section 12.02 NOTICES................................................64
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Section 12.03 PAYMENT OF EXPENSES, INDEMNITIES, ETC..................64
Section 12.04 AMENDMENTS, ETC........................................65
Section 12.05 SUCCESSORS AND ASSIGNS.................................66
Section 12.06 ASSIGNMENTS AND PARTICIPATIONS.........................66
Section 12.07 INVALIDITY.............................................67
Section 12.08 COUNTERPARTS...........................................67
Section 12.09 REFERENCES.............................................67
Section 12.10 SURVIVAL...............................................68
Section 12.11 CAPTIONS...............................................68
Section 12.12 NO ORAL AGREEMENTS.....................................68
SECTION 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION..............68
Section 12.14 INTEREST...............................................69
Section 12.15 CONFIDENTIALITY........................................70
Section 12.16 EXCULPATION PROVISIONS.................................70
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ANNEXES, EXHIBITS AND SCHEDULES
Annex I - List of Maximum Credit Amounts
Exhibit A-1 - Form of Note
Exhibit A-2 - Form of Swing Note
Exhibit B - Form of Borrowing, Continuation and Conversion Request
Exhibit C - Form of Compliance Certificate
Exhibit D - List of Security Instruments
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Form of Borrowing Base Certificate
Exhibit G - Form of Acquisition Certificate
Schedule 1.01(a) - Eligible Accounts
Schedule 1.01(b) - Eligible Inventory
Schedule 7.02 - Liabilities
Schedule 7.03 - Litigation
Schedule 7.09 - Taxes
Schedule 7.10 - Titles, etc.
Schedule 7.14 - Subsidiaries and Partnerships
Schedule 7.17 - Environmental Matters
Schedule 7.20 - Hedging Agreements
Schedule 7.22 - Material Agreements
Schedule 9.01 - Debt
Schedule 9.02 - Liens
Schedule 9.03 - Investments, Loans and Advances
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THIS CREDIT AGREEMENT dated as of March 13, 1998 is among:
PENTACON, INC., a corporation formed under the laws of the State of Delaware
(the "BORROWER"); each of the lenders that is a signatory hereto or which
becomes a signatory hereto as provided in Section 12.06 (individually, together
with its successors and assigns, a "LENDER" and, collectively, the "LENDERS");
and NATIONSBANK OF TEXAS, N.A., a national banking association (in its
individual capacity, "NATIONSBANK"), as agent for the Lenders (in such capacity,
together with its successors in such capacity, the "AGENT").
R E C I T A L S
A. The Borrower has requested that the Lenders provide certain loans to
and extensions of credit on behalf of the Borrower; and
B. The Lenders have agreed to make such loans and extensions of credit
subject to the terms and conditions of this Agreement.
C. In consideration of the mutual covenants and agreements herein
contained and of the loans, extensions of credit and commitments hereinafter
referred to, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 TERMS DEFINED ABOVE. As used in this Agreement, the
terms "AGENT," "BORROWER," "LENDER," "LENDERS" and "NATIONSBANK" shall have the
meanings indicated above.
Section 1.02 CERTAIN DEFINED TERMS. As used herein, the following
terms shall have the following meanings (all terms defined in this Article I or
in other provisions of this Agreement in the singular to have the same meanings
when used in the plural and VICE VERSA):
"ACQUISITION" shall mean the acquisition of (i) a controlling equity
interest in another Person (including the purchase of an option, warrant or
convertible or similar type security to acquire such a controlling interest at
the time it becomes exercisable by the holder thereof), whether by purchase of
such equity interest or upon exercise of an option or warrant for, or conversion
of securities into, such equity interest, or (ii) assets of another Person which
constitute all or substantially all of the assets of such Person or of a line or
lines of business conducted by such Person.
"ADDITIONAL COSTS" shall have the meaning assigned such term in Section
5.01(a).
"ADJUSTED EURODOLLAR RATE" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) determined by the Agent to be equal to the quotient
obtained by dividing (a) the Eurodollar Rate for such Eurodollar
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Loan for such Interest Period by (b) 1 minus the Reserve Requirement for such
Eurodollar Loan for such Interest Period.
"AFFECTED LOANS" shall have the meaning assigned such term in Section
5.04.
"AFFILIATE" of any Person shall mean (i) any Person directly or indirectly
controlled by, controlling or under common control with such first Person, (ii)
any director or officer of such first Person or of any Person referred to in
clause (i) above and (iii) if any Person in clause (i) above is an individual,
any member of the immediate family (including parents, spouse and children) of
such individual and any trust whose principal beneficiary is such individual or
one or more members of such immediate family and any Person who is controlled by
any such member or trust. For purposes of this definition, any Person which owns
directly or indirectly 5% or more of the securities having ordinary voting power
for the election of directors or other governing body of a corporation or 5% or
more of the partnership or other ownership interests of any other Person (other
than as a limited partner of such other Person) will be deemed to "CONTROL"
(including, with its correlative meanings, "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") such corporation or other Person.
"AGREEMENT" shall mean this Credit Agreement, as the same may from time to
time be amended or supplemented.
"AGGREGATE COMMITMENTS" at any time shall equal the amount calculated in
accordance with Section 2.03 hereof.
"AGGREGATE MAXIMUM CREDIT AMOUNTS" at any time shall equal the sum of the
Maximum Credit Amounts of the Lenders ($50,000,000), as the same may be reduced
pursuant to Section 2.03(b).
"APPLICABLE LENDING OFFICE" shall mean, for each Lender and for each Type
of Loan, the lending office of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
offices of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Borrower by written notice in
accordance with the terms hereof as the office by which its Loans of such Type
are to be made and maintained.
"APPLICABLE MARGIN" shall mean for each period identified below the
applicable per annum percentage set forth at the appropriate intersection in the
table shown below, based on the ratio of Funded Debt to Adjusted EBITDA as
defined in Section 9.14, for the four quarterly periods ending on and determined
as of the immediately preceding Quarterly Date:
FUNDED DEBT TO ADJUSTED APPLICABLE MARGIN FOR APPLICABLE MARGIN
EBITDA EURODOLLAR LOANS FOR BASE RATE LOANS
Less than 1.5 1.00% 0%
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Less than 1.75 but greater 1.25% 0%
than or equal to 1.5
Less than 2.0 but greater 1.50% 0%
than or equal to 1.75
Greater than or equal to 2.0 1.75% .25%
The Applicable Margin shall be established following each Quarterly Date (each,
a "Determination Date"). Any change in the Applicable Margin following each
Determination Date shall be determined based upon the computations set forth in
the Compliance Certificate furnished to the Agent pursuant to Section 8.01(i),
subject to review and approval of such computations by the Agent. each change in
the Applicable Margin shall be effective commencing as of the next Business Day
following the date such certificate is received (including, without limitation,
in respect of Eurodollar Loans then outstanding notwithstanding that such change
occurs during an Interest Period), and shall remain in effect until the date
that is the next Business Day following the first to occur of the date on which
(i) a new certificate is delivered for which a change in the Applicable Margin
occurs or (ii) is required to be delivered; PROVIDED, HOWEVER; if the Borrower
shall fail to deliver any such certificate within the time period required by
Section 8.01(i), then the Applicable Margin shall be .25% for Base Rate Loans
and 1.75% for Eurodollar Rate Loans until the appropriate certificate is so
delivered. From the Closing Date to the first Determination Date, the Applicable
Margin shall be determined based upon the Compliance Certificate delivered at
Closing.
"ASSIGNMENT AND ACCEPTANCE" shall have the meaning assigned such term in
Section 12.06(b).
"BASE RATE" shall mean, with respect to any Base Rate Loan, for any day,
the rate per annum equal to the higher of (i) the Federal Funds Rate for any
such day plus 1/2 of 1% or (ii) the Prime Rate for such day. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or Federal
Funds Rate.
"BASE RATE LOANS" shall mean Loans that bear interest at rates based upon
the Base Rate.
"BORROWING BASE" shall mean at any time the sum of (i) 85% of Eligible
Accounts plus (ii) the lesser of (A) 50% of Eligible Inventory and (B) the
amount determined under (i).
"BORROWING BASE CERTIFICATE" shall mean a certificate of a Responsible
Officer in the form of EXHIBIT F hereto.
"BUSINESS DAY" shall mean any day other than a day on which commercial
banks are authorized or required to close in Houston, Texas and, where such term
is used in the definition of "Quarterly Date" or if such day relates to a
borrowing or continuation of, a payment or prepayment of principal of or
interest on, or a conversion of or into, or the Interest Period for, a
Eurodollar Loan
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or a notice by the Borrower with respect to any such borrowing or continuation,
payment, prepayment, conversion or Interest Period, any day which is also a day
on which dealings in Dollar deposits are carried out in the London interbank
market.
"CAPITAL EXPENDITURES" shall mean, with respect to the Borrower and its
Subsidiaries, for any period the sum of (without duplication) (a) all
expenditures (whether paid in cash or accrued as liabilities) by the Borrower or
any Subsidiary during such period for items that would be classified as
"property, plant or equipment" or comparable items on the consolidated balance
sheet of the Borrower and its Subsidiaries, including without limitation all
transactional costs incurred in connection with such expenditures provided the
same have been capitalized, excluding, however, the amount of any Capital
Expenditures paid for with proceeds of casualty insurance as evidenced in
writing and submitted to the Agent together with any Compliance Certificate
delivered pursuant to Section 8.01(i), and (b) with respect to any Capital Lease
entered into by the Borrower or its Subsidiaries during such period, the present
value of the lease payments due under such Capital Lease over the term of such
Capital Lease applying a discount rate equal to the interest rate provided in
such lease (or in the absence of a stated interest rate, that rate used in the
preparation of the financial statements described in Section 8.01(a) and (b)),
all of the foregoing in accordance with GAAP applied on a Consistent Basis;
PROVIDED, HOWEVER, it shall not include (x) Capital Expenditures required by the
Agreement and Plan of Organization dated December 1, 1997 between Alatec
Products, Inc. and the Borrower and (y) Capital Expenditures incurred in
conjunction with Acquisitions permitted pursuant to Section 9.03(i).
"CAPITAL LEASES" shall mean all leases which have been or should be
capitalized in accordance with GAAP as in effect from time to time including
Statement No. 13 of the Financial Accounting Standards Board and any successor
thereof.
"CHANGE OF CONTROL" shall mean, at any time:
(A) With respect to the Borrower,
(i) any "person" or "group" (each as used in Sections 13(d)(3) and
14(d)(2) of the Exchange Act) other than the group consisting of one or
more stockholders of the Borrower who collectively owned 30% or more of
one or more of the Founding Companies immediately prior to the Acquisition
thereof by the Borrower, voting as a single unit, (each an "Existing
Control Group") either (A) becomes the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act), directly or indirectly, of voting stock
of the Borrower (or securities convertible into or exchangeable for such
voting stock) representing 30% or more of the combined voting power of all
voting stock of the Borrower (on a fully diluted basis) or (B) otherwise
has the ability, directly or indirectly, to elect a majority of the board
of directors of the Borrower (PROVIDED that if an event described in this
clause (i) shall occur solely by reason of the death of one or more
members of the Existing Control Group, then a "Change of Control" shall
not be deemed to have occurred so long as the voting stock of the decedent
is owned of record by the estate or immediately family of such decedent);
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(ii) during any period of up to 24 consecutive months, commencing on
the Closing Date, individuals who at the beginning of such 24-month period
were directors of the Borrower shall cease for any reason (other than the
death, disability or retirement of a director or of an officer of the
Borrower that is serving as a directory at such time so long as another
officer of the Borrower replaces such Person as a director) to constitute
a majority of the board of directors of the Borrower; or
(iii) any Person or two or more Persons acting in concert other than
the Existing Control Group shall have acquired by contract or otherwise,
or shall have consummated a contract or arrangement that results in its or
their acquisition of the power to exercise, directly or indirectly, a
controlling influence on the management or policies of the Borrower; or
(B) with respect to any Subsidiary,
(i) the Borrower shall cease to own, directly or indirectly, 100% of
the voting stock of each currently existing Subsidiary; or
(ii) any Person or two or more Persons acting in concert other than
the Borrower shall have acquired by contract or otherwise, or shall have
consummated a contract or arrangement that results in its or their
acquisition of the power to exercise, directly or indirectly, a
controlling influence on the management or policies of such Subsidiary.
"CLOSING DATE" shall mean March 13, 1998.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time and any successor statute.
"COMMITMENT" shall mean, for any Lender, its obligation to make Loans up
to the lesser of such Lender's Maximum Credit Amount or the Lender's Percentage
Share of the amount equal to the then effective Borrowing Base and to
participate in the Letters of Credit as provided in Section 2.01(b).
"COMPLIANCE CERTIFICATE" shall mean a certificate in the form of EXHIBIT C
hereto executed by a Responsible Officer.
"CONSISTENT BASIS" in reference to the applicable GAAP shall mean the
accounting principles observed in the period referred to are comparable in all
material respects to those applied in the preparation of the audited financial
statements of the Borrower referred to in Section 7.02.
"CONSOLIDATED NET INCOME" shall mean with respect to the Borrower and its
Consolidated Subsidiaries, for any period, the aggregate of the net income (or
loss) of the Borrower and its Consolidated Subsidiaries after allowances for
taxes for such period, determined on a consolidated
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basis in accordance with GAAP; PROVIDED that there shall be excluded from such
net income (to the extent otherwise included therein) the following: (i) the net
income of any Person in which the Borrower or any Consolidated Subsidiary has an
interest (which interest does not cause the net income of such other Person to
be consolidated with the net income of the Borrower and its Consolidated
Subsidiaries in accordance with GAAP), except to the extent of the amount of
dividends or distributions actually paid in cash in such period by such other
Person to the Borrower or to a Consolidated Subsidiary, as the case may be; (ii)
the net income (but not loss) of any Consolidated Subsidiary to the extent that
the declaration or payment of dividends or similar distributions or transfers or
loans by that Consolidated Subsidiary to the Borrower is not at the time
permitted by operation of the terms of its charter or any agreement, instrument
or Governmental Requirement applicable to such Consolidated Subsidiary, or is
otherwise restricted or prohibited in each case determined in accordance with
GAAP; (iii) any extraordinary gains including gains attributable to Property
sales not in the ordinary course of business; and (iv) the cumulative effect of
a change in accounting principles and any gains attributable to writeups of
assets.
"CONSOLIDATED SUBSIDIARIES" shall mean each Subsidiary of the Borrower
(whether now existing or hereafter created or acquired) the financial statements
of which shall be (or should have been) consolidated with the financial
statements of the Borrower in accordance with GAAP.
"CONTINUE", "CONTINUATION", and "CONTINUED" shall refer to the
continuation pursuant to Section 5.01 hereof of a Eurodollar Loan from one
Interest Period to the next Interest Period.
"CONVERT", "CONVERSION", and "CONVERTED" shall refer to a conversion
pursuant to Section 5.01 of one Type of Loan into another Type of Loan.
"DEBT" shall mean, for any Person the sum of the following (without
duplication): (i) all obligations of such Person for borrowed money or evidenced
by bonds, debentures, notes or other similar instruments (including principal,
interest, fees and charges); (ii) all obligations of such Person (whether
contingent or otherwise) in respect of bankers' acceptances, letters of credit,
surety or other bonds and similar instruments; (iii) all obligations of such
Person to pay the deferred purchase price of Property or services (other than
for borrowed money); (iv) all obligations under leases which shall have been, or
should have been, in accordance with GAAP, recorded as capital leases in respect
of which such Person is liable (whether contingent or otherwise); (v) all
obligations under leases which require such Person or its Affiliate to make
payments over the term of such lease, including payments at termination, which
are substantially equal to at least eighty percent (80%) of the purchase price
of the Property subject to such lease plus interest at an imputed rate of
interest; (vi) all Debt (as described in the other clauses of this definition)
and other obligations of others secured by a Lien on any asset of such Person,
whether or not such Debt is assumed by such Person; (vii) all Debt (as described
in the other clauses of this definition) and other obligations of others
guaranteed by such Person or in which such Person otherwise assures a creditor
against loss of the debtor or obligations of others; (viii) all obligations or
undertakings of such Person to maintain or cause to be maintained the financial
position or covenants of others or to purchase the Debt (as described in the
other clauses of this definition) or Property of others; (ix) obligations to
deliver goods or services
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in consideration of advance payments ; (x) obligations to pay for goods or
services whether or not such goods or services are actually received or utilized
by such Person; (xi) any capital stock of such Person in which such Person has a
mandatory obligation to redeem such stock; (xii) any Debt (as described in the
other clause of this definition) of a Special Entity for which such Person is
liable either by agreement or because of a Governmental Requirement; and (xiii)
all obligations of such Person under Hedging Agreements.
"DEFAULT" shall mean an Event of Default or an event which with notice or
lapse of time or both would become an Event of Default.
"DOLLARS" and "$" shall mean lawful money of the United States of America.
"EBITDA" shall mean, for any period, the sum of Consolidated Net Income
for such period plus the following expenses or charges to the extent deducted
from Consolidated Net Income in such period: interest, taxes, depreciation,
depletion and amortization, minus all non cash other income added to
Consolidated Net Income in such period.
"ELIGIBLE ACCOUNTS" shall mean at any time an amount equal to the
aggregate net invoice or ledger amount due on all trade accounts receivable of
the Borrower and the Guarantors for goods sold or leased or services rendered
upon which Borrower's and Guarantors' rights to receive payment are absolute and
not contingent upon the fulfillment of any condition whatsoever, and shall not
include (i) any account which is more than 60 days past due, (ii) any account
which is unpaid more than 120 days from the invoice date thereof, (iii) any
account which is past due more than twice Borrower's standard selling terms,
except with respect to any account for which Borrower has provided extended
payment terms, (iv) any account upon which there exists any Lien or other
encumbrance or for which there exists a right of setoff, defense or discount,
except regular discounts allowed in the ordinary course of business to promote
prompt payment and for which no defense or counterclaim has been asserted, (v)
any account which represents an obligation of any local, state or United States
federal governmental agency or entity, (vi) any account which arises out of a
contract or order which, by its terms, forbids or makes void or unenforceable
any assignment by Borrower to the Agent of the account receivable arising with
respect thereto, (vii) any account arising from a "sale on approval," "sale or
return," "consignment" or subject to any other repurchase or return agreement,
(viii) any account which represents an obligation of a customer which is not a
resident of the United States unless such account is supported by a letter of
credit or insurance in form and substance acceptable to the Agent, or such
customer is listed on SCHEDULE 1.01(A) OR otherwise approved by the Majority
Lenders (ix) any account which arises from the sale or lease to or performance
of services for, or represents an obligation of, an employee, affiliate,
partner, parent or subsidiary of Borrower, (x) any account which represents an
obligation of a customer of Borrower when 50% or more of Borrower's accounts
from such customer are not eligible pursuant to the foregoing formula, (xi) that
portion of any account from a customer of Borrower which represents the amount
by which Borrower's total accounts from such customer exceeds 25% of Borrower's
total accounts, (xii) any accounts arising from sales of goods or services in
which the performance of the Borrower has been bonded, (xiii)any account from a
customer which takes, suffers or permits to
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exist any of the events or conditions referred to in paragraphs (e), (f) or (g)
of Section 10.01 hereof, and (xiv) any account in which the Majority Lenders are
not or do not continue to be, in the reasonable determination of the Majority
Lenders, satisfied with the credit worthiness of the customer of Borrower in
relation to the amount of credit extended.
"ELIGIBLE ASSIGNEE" shall mean (i) a Lender, (ii) an Affiliate of a Lender
and (iii) any other Person approved by the Agent and, unless an Event of Default
has occurred and is continuing at the time any assignment is effected in
accordance with Section 12.06, the Borrower, such approval not to be
unreasonably withheld or delayed by the Borrower and such approval to be deemed
given by the Borrower if no objection is received by the assigning Lender and
the Agent from the Borrower within two Business Days after notice of such
proposed assignment has been provided by the assigning Lender to the Borrower;
PROVIDED, HOWEVER, that neither the Borrower nor an Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"ELIGIBLE INVENTORY" shall mean at any time all inventory of raw materials
and finished goods then owned by the Borrower and the Guarantors and held for
sale or disposition in the ordinary course of business, which is valued at the
lower of cost or market, other than (i) work in process and supplies, (ii) in
the event that the Agent has taken a security interest in the inventory, all
inventory in which the Agent does not have a first priority perfected security
interest, (iii) inventory which is not located at locations listed on SCHEDULE
1.01(B) in an amount not to exceed ten percent (10%) of the cost value of
inventory at such time, (iv) inventory on consignment, (v) repossessed
inventory, (vi) obsolete inventory, (vii) inventory that is not in good
condition or that fails to meet government standards, and (viii) inventory upon
which there exists any Lien or other encumbrance other than an Excepted Lien.
"ENVIRONMENTAL LAWS" shall mean any and all Governmental Requirements
pertaining to health or the environment in effect in any and all jurisdictions
in which the Borrower or any Subsidiary is conducting or at any time has
conducted business, or where any Property of the Borrower or any Subsidiary is
located, including without limitation, the Oil Pollution Act of 1990 ("OPA"),
the Clean Air Act, as amended, the Comprehensive Environmental, Response,
Compensation, and Liability Act of 1980 ("CERCLA"), as amended, the Federal
Water Pollution Control Act, as amended, the Occupational Safety and Health Act
of 1970, as amended, the Resource Conservation and Recovery Act of 1976
("RCRA"), as amended, the Safe Drinking Water Act, as amended, the Toxic
Substances Control Act, as amended, the Superfund Amendments and Reauthorization
Act of 1986, as amended, the Hazardous Materials Transportation Act, as amended,
and other environmental conservation or protection laws. The term "oil" shall
have the meaning specified in OPA, the terms "hazardous substance" and "release"
(or "threatened release") have the meanings specified in CERCLA, and the terms
"solid waste" and "disposal" (or "disposed") have the meanings specified in
RCRA; provided, however, that (i) in the event either OPA, CERCLA or RCRA is
amended so as to broaden the meaning of any term defined thereby, such broader
meaning shall apply subsequent to the effective date of such amendment and (ii)
to the extent the laws of the state in which any Property of the Borrower or any
Subsidiary is located establish a meaning for
-8-
"oil," "hazardous substance," "release," "solid waste" or "disposal" which is
broader than that specified in either OPA, CERCLA or RCRA, such broader meaning
shall apply.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
"ERISA AFFILIATE" shall mean each trade or business (whether or not
incorporated) which together with the Borrower or any Subsidiary would be deemed
to be a "single employer" within the meaning of section 4001(b)(1) of ERISA or
subsections (b), (c), (m) or (o) of section 414 of the Code.
"ERISA EVENT" shall mean (i) a "Reportable Event" described in Section
4043 of ERISA and the regulations issued thereunder, (other than such an event
with respect to which the requirement to give notice has been waived) (ii) the
withdrawal of the Borrower, any Subsidiary or any ERISA Affiliate from a Plan
during a plan year in which it was a "substantial employer" as defined in
Section 4001(a)(2) of ERISA, (iii) the filing of a notice of intent to terminate
a Plan or the treatment of a Plan amendment as a termination under Section
4041(c) of ERISA, (iv) the institution of proceedings to terminate a Plan by the
PBGC or (v) any other event or condition which could reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.
"EURODOLLAR LOANS" shall mean Loans the interest rates on which are
determined on the basis of rates referred to in the definition of "Adjusted
Eurodollar Rate".
"EURODOLLAR RATE" shall mean, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period. If for any reason such
rate is not available, the term "Eurodollar Rate" shall mean, for any Eurodollar
Loan for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a term comparable to such Interest Period; PROVIDED, HOWEVER, if more
than one rate is specified on Reuters Screen LIBO Page, the applicable rate
shall be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"EVENT OF DEFAULT" shall have the meaning assigned such term in Section
10.01.
"EXCEPTED LIENS" shall mean: (i) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been
maintained; (ii) Liens in connection with workmen's compensation, unemployment
insurance or other social security, old age pension or public liability
obligations not
-9-
yet due or which are being contested in good faith by appropriate action and for
which adequate reserves have been maintained in accordance with GAAP; (iii)
operators', vendors', carriers', warehousemen's, repairmen's, mechanics',
workmen's, materialmen's, construction or other like Liens arising by operation
of law in the ordinary course of business or statutory landlord's liens, each of
which is in respect of obligations that have not been outstanding more than 90
days or which are being contested in good faith by appropriate proceedings and
for which adequate reserves have been maintained in accordance with GAAP; (iv)
encumbrances (other than to secure the payment of borrowed money or the deferred
purchase price of Property or services), easements, restrictions, servitudes,
permits, conditions, covenants, exceptions or reservations in any rights of way
or other Property of the Borrower or any Subsidiary for the purpose of roads,
pipelines, transmission lines, transportation lines, distribution lines for the
removal of gas, oil, coal or other minerals or timber, and other like purposes,
or for the joint or common use of real estate, rights of way, facilities and
equipment, and defects, irregularities, zoning restrictions and deficiencies in
title of any rights of way or other Property which in the aggregate do not
materially impair the use of such rights of way or other Property for the
purposes of which such rights of way and other Property are held by the Borrower
or any Subsidiary or materially impair the value of such Property subject
thereto; (v) deposits of cash or securities to secure the performance of bids,
trade contracts, leases, statutory obligations and other obligations of a like
nature incurred in the ordinary course of business; and (vi) Liens permitted or
created by the Security Instruments.
"FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with a member of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (i) if the date for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (ii) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to NationsBank on such day on such transactions as determined by
the Agent.
"FEE LETTER" shall mean that certain letter agreement from the Agent to
the Borrower dated of even date with this Agreement concerning certain fees in
connection with this Agreement and any agreements or instruments executed in
connection therewith, as the same may be amended or replaced from time to time.
"FINANCIAL STATEMENTS" shall mean the financial statement or statements of
the Borrower and its Consolidated Subsidiaries described or referred to in
Section 7.02.
"FOUNDING COMPANIES" shall mean Alatec Products, Inc., AXS Solutions,
Inc., Capitol Bolt & Supply, Inc., Maumee Industries, Inc. and Sales Systems,
Limited.
"FRONTING BANK" shall mean NationsBank or any other Lender agreed to
between the Borrower and the Agent to issue Letters of Credit.
-10-
"FUNDED DEBT" shall mean, for any Person the sum of the following (without
duplication): (i) all obligations of such Person for borrowed money or evidenced
by bonds, debentures, notes or other similar instruments (including principal,
interest, fees and charges); (ii) all obligations of such Person (whether
contingent or otherwise) in respect of bankers' acceptances, letters of credit,
surety or other bonds and similar instruments; (iii) all obligations of such
Person to pay the deferred purchase price of Property or services (other than
for borrowed money) excluding accounts payable (for the deferred purchase price
of Property or services) from time to time incurred in the ordinary course of
business which, if greater than 90 days past the invoice or billing date, are
being contested in good faith by appropriate proceedings if reserves adequate
under GAAP shall have been established therefor; (iv) all obligations under
leases which shall have been, or should have been, in accordance with GAAP,
recorded as capital leases in respect of which such Person is liable (whether
contingent or otherwise); (v) all obligations under leases which require such
Person or its Affiliate to make payments over the term of such lease, including
payments at termination, which are substantially equal to at least eighty
percent (80%) of the purchase price of the Property subject to such lease plus
interest at an imputed rate of interest; (vi) all Debt and other obligations of
others guaranteed by such Person or in which such Person otherwise assures a
creditor against loss of the debtor or obligations of others; (vii) any capital
stock of such Person in which such Person has a mandatory obligation to redeem
such stock; (viii) any Debt of a Special Entity for which such Person is liable
either by agreement or because of a Governmental Requirement; and (ix) all
obligations of such Person under Hedging Agreements.
"GAAP" shall mean generally accepted accounting principles in the United
States of America in effect from time to time.
"GOVERNMENTAL AUTHORITY" shall include the country, the state, county,
city and political subdivisions in which any Person or such Person's Property is
located or which exercises valid jurisdiction over any such Person or such
Person's Property, and any court, agency, department, commission, board, bureau
or instrumentality of any of them including monetary authorities which exercises
valid jurisdiction over any such Person or such Person's Property. Unless
otherwise specified, all references to Governmental Authority herein shall mean
a Governmental Authority having jurisdiction over, where applicable, the
Borrower, the Subsidiaries or any of their Property or the Agent, any Lender or
any Applicable Lending Office.
"GOVERNMENTAL REQUIREMENT" shall mean any law, statute, code, ordinance,
order, determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including, without limitation,
Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority.
"GUARANTORS" shall mean each Subsidiary and any other Person who becomes
party to a Guaranty Agreement pursuant to the terms of Section 8.08.
-00-
"XXXXXXXX XXXXXXXXX" shall mean an agreement executed by the Guarantors in
form and substance satisfactory to the Agent guarantying, unconditionally,
payment of the Indebtedness, as the same may be amended, modified or
supplemented from time to time.
"HEDGING AGREEMENTS" shall mean any commodity, interest rate or currency
swap, cap, floor, collar, forward agreement or other exchange or protection
agreements or any option with respect to any such transaction.
"HIGHEST LAWFUL RATE" shall mean, with respect to each Lender, the maximum
nonusurious interest rate, if any, that at any time or from time to time may be
contracted for, taken, reserved, charged or received on the Notes or on other
Indebtedness under laws applicable to such Lender which are presently in effect
or, to the extent allowed by law, under such applicable laws which may hereafter
be in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow.
"INDEBTEDNESS" shall mean any and all amounts owing or to be owing by the
Borrower to the Agent, the Fronting Bank and/or Lenders in connection with the
Loan Documents, the Letter of Credit Agreements, and any Hedging Agreements now
or hereafter arising between the Borrower and any Lender and permitted by the
terms of this Agreement and all renewals, extensions and/or rearrangements of
any of the above.
"INDEMNIFIED PARTIES" shall have the meaning assigned such term in Section
12.03(b).
"INDEMNITY MATTERS" shall mean any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), claims, demands and
causes of action made or threatened against a Person and, in connection
therewith, all losses, liabilities, damages (including, without limitation,
consequential damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or concurrent
negligence of such Person seeking indemnification.
"INITIAL FUNDING" shall mean the funding of the initial Loans or issuance
of the initial Letters of Credit pursuant to Section 6.01 hereof.
"INTEREST PERIOD" shall mean, with respect to any Eurodollar Loan, the
period commencing on the date such Eurodollar Loan is made and ending on the
numerically corresponding day in the first, second, third or sixth calendar
month thereafter, as the Borrower may select as provided in Section 2.02 (or
such longer period as may be requested by the Borrower and agreed to by the
Majority Lenders), except that each Interest Period which commences on the last
Business Day of a calendar month (or on any day for which there is no
numerically corresponding day in the appropriate subsequent calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
-12-
Notwithstanding the foregoing: (i) no Interest Period may commence before
and end after the Revolving Credit Termination Date; (ii) no Interest Period for
any Eurodollar Loan may end after the due date of any installment, if any,
provided for in Section 3.01 hereof to the extent that such Eurodollar Loan
would need to be prepaid prior to the end of such Interest Period in order for
such installment to be paid when due; (iii) each Interest Period which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (or, if such next succeeding Business Day falls in the
next succeeding calendar month, on the next preceding Business Day); and (iv) no
Interest Period shall have a duration of less than one month and, if the
Interest Period for any Eurodollar Loans would otherwise be for a shorter
period, such Loans shall not be available hereunder.
"LC COMMITMENT" at any time shall mean $5,000,000.
"LC EXPOSURE" at any time shall mean the aggregate face amount of all
undrawn and uncancelled Letters of Credit and the aggregate of all amounts drawn
under all Letters of Credit and not yet reimbursed.
"LETTER OF CREDIT AGREEMENTS" shall mean the written agreements with the
Fronting Bank, executed or hereafter executed in connection with the issuance by
the Fronting Bank of the Letters of Credit, such agreements to be on the
Fronting Bank's customary form for letters of credit of comparable amount and
purpose as from time to time in effect or as otherwise agreed to by the Borrower
and the Fronting Bank.
"LETTERS OF CREDIT" shall mean the letters of credit issued pursuant to
Section 2.01(b) and all reimbursement obligations pertaining to any such letters
of credit, and "Letter of Credit" shall mean any one of the Letters of Credit
and the reimbursement obligations pertaining thereto.
"LIEN" shall mean any interest in Property securing an obligation owed to,
or a claim by, a Person other than the owner of the Property, whether such
interest is based on the common law, statute or contract, and whether such
obligation or claim is fixed or contingent, and including but not limited to (i)
the lien or security interest arising from a mortgage, encumbrance, pledge,
security agreement, conditional sale or trust receipt or a lease, consignment or
bailment for security purposes. The term "LIEN" shall include reservations,
exceptions, encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other title exceptions and encumbrances affecting
Property. For the purposes of this Agreement, the Borrower or any Subsidiary
shall be deemed to be the owner of any Property which it has acquired or holds
subject to a conditional sale agreement, or leases under a financing lease or
other arrangement pursuant to which title to the Property has been retained by
or vested in some other Person in a transaction intended to create a financing.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes and the Security
Instruments.
"LOANS" shall mean the loans as provided for by Sections 2.01(a) and (c).
-13-
"MAJORITY LENDERS" shall mean, as of any date, Lenders on such date having
Credit Exposures (as defined below) aggregating at least 66-2/3% of the
aggregate Credit Exposures of all the Lenders on such date. For purposes of the
preceding sentence, the amount of the "Credit Exposure" of each Lender shall be
equal to the aggregate principal amount of the Loans owing to such Lender plus
the aggregate unutilized amounts of such Lender's Revolving Credit Commitment
(without regard to any Swing Line Outstandings) plus the amount of such Lender's
Percentage Share of LC Exposure, provided that, (i) if any Lender shall have
failed to honor its obligation to make any Loan or other advance hereunder, it
shall not be deemed to have any Credit Exposure, (ii) if any Lender shall have
failed to pay to the Fronting Bank its Percentage Share of any drawing under any
Letter of Credit, such Lender's Credit Exposure attributable to LC Exposure
shall be deemed to be held by the Fronting Bank for purposes of this definition
and (iii) if any Lender shall have failed to pay to NationsBank its Percentage
Share of any Swing Line Loan, such Lender's Credit Exposure attributable to all
Swing Line Outstandings shall be deemed to be held by NationsBank for purposes
of this definition.
"MATERIAL ADVERSE EFFECT" shall mean any material and adverse effect on
(i) the assets, liabilities, financial condition, business, operations or
affairs of the Borrower and the Subsidiaries taken as a whole or from the facts
represented or warranted in any Loan Document, or (ii) the ability of the
Borrower and the Subsidiaries taken as a whole to carry out their business as at
the Closing Date or as proposed as of the Closing Date to be conducted or meet
their obligations under the Loan Documents on a timely basis.
"MAXIMUM CREDIT AMOUNT" shall mean, as to each Lender, the amount set
forth opposite such Lender's name on Annex I under the caption "Maximum Credit
Amounts" (as the same may be reduced pursuant to Section 2.03(b) hereof pro rata
to each Lender based on its Percentage Share) as modified from time to time to
reflect any assignments permitted by Section 12.06(b).
"MORTGAGED PROPERTY" shall mean the Property owned by the Borrower and
which is subject to the Liens existing and to exist under the terms of the
Security Instruments.
"MULTIEMPLOYER PLAN" shall mean a Plan defined as such in Section 3(37) or
4001(a)(3) of ERISA.
"NET WORTH" shall mean, as at any date, the sum of the following for the
Borrower and its Consolidated Subsidiaries determined (without duplication) in
accordance with GAAP:
(i) the amount of preferred stock and common stock at par plus the
amount of surplus of the Borrower, PLUS
(ii) the retained earnings (or, in the case of retained earnings
deficit, MINUS the amount of such deficit), MINUS
(iii) the sum of the following: cost of treasury shares.
-14-
"NOTES" shall mean the Notes provided for by Section 2.06, together with
any and all renewals, extensions for any period, increases, rearrangements,
substitutions or modifications thereof. The Notes shall include the Swing Line
Note.
"OTHER TAXES" shall have the meaning assigned such term in Section
4.06(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions.
"PERCENTAGE SHARE" shall mean the percentage of the Aggregate Commitments
to be provided by a Lender under this Agreement as indicated on Annex I hereto,
as modified from time to time to reflect any assignments permitted by Section
12.06(b).
"PERSON" shall mean any individual, corporation, company, voluntary
association, partnership, joint venture, trust, unincorporated organization or
government or any agency, instrumentality or political subdivision thereof, or
any other form of entity.
"PLAN" shall mean any employee pension benefit plan, as defined in Section
3(2) of ERISA, which (i) is currently or hereafter sponsored, maintained or
contributed to by the Borrower, any Subsidiary or an ERISA Affiliate or (ii) was
at any time during the preceding six calendar years sponsored, maintained or
contributed to, by the Borrower, any Subsidiary or an ERISA Affiliate.
"POST-DEFAULT RATE" shall mean, in respect of any principal of any Loan or
any other amount payable by the Borrower under this Agreement or any Note, a
rate per annum during the period commencing on the date of an Event of Default
until such amount is paid in full or all Events of Default are cured or waived
equal to 2% per annum above the Base Rate as in effect from time to time plus
the Applicable Margin (if any), but in no event to exceed the Highest Lawful
Rate provided that, for a Eurodollar Loan, the "Post-Default Rate" for such
principal shall be, for the period commencing on the date of the Event of
Default and ending on the earlier to occur of the last day of the Interest
Period therefor or the date all Events of Default are cured or waived, 2% per
annum above the interest rate for such Loan as provided in Section 3.02(ii), but
in no event to exceed the Highest Lawful Rate.
"PRIME RATE" shall mean the per annum rate of interest established from
time to time by NationsBank as its prime rate, which rate may not be the lowest
rate of interest charged by NationsBank to its customers.
"PRINCIPAL OFFICE" shall mean the principal office of the Agent, presently
located at 000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000-0000 or such other location as
designated by the Agent from time to time.
"PROPERTY" shall mean any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
-15-
"QUARTERLY DATES" shall mean the last day of each March, June, September,
and December, in each year, the first of which shall be March 31, 1998;
provided, however, that if any such day is not a Business Day, such Quarterly
Date shall be the next succeeding Business Day.
"REGULATION D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be amended or
supplemented from time to time.
"REGISTRATION STATEMENT" shall mean that certain Registration Statement of
the Borrower on Form S-1 filed with the SEC on December 3, 1997, as amended by
each of the first amendment through sixth amendment, which sixth amendment is
dated March 9, 1998.
"REGULATORY CHANGE" shall mean, with respect to any Lender, any change
after the Closing Date in any Governmental Requirement (including Regulation D)
or the adoption or making after such date of any interpretations, directives or
requests applying to a class of lenders (including such Lender or its Applicable
Lending Office) of or under any Governmental Requirement (whether or not having
the force of law) by any Governmental Authority charged with the interpretation
or administration thereof.
"REQUIRED PAYMENT" shall have the meaning assigned such term in Section
4.04.
"RESERVE REQUIREMENT" means, at any time, the maximum rate at which
reserves (including, without limitation, any marginal, special, supplemental, or
emergency reserves) are required to be maintained under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or any
successor) by member banks of the Federal Reserve System against Eurodollar
Loans, "Eurocurrency liabilities" (as such term is used in Regulation D).
Without limiting the effect of the foregoing, the Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks with
respect to (i) any category of liabilities which includes deposits by reference
to which the Adjusted Eurodollar Rate is to be determined, or (ii) any category
of extensions of credit or other assets which include Eurodollar Loans. The
Adjusted Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement.
"RESPONSIBLE OFFICER" shall mean, as to any Person, the Chief Executive
Officer, the President or any Vice President of such Person and, with respect to
financial matters, the term "Responsible Officer" shall include the Chief
Financial Officer of such Person. Unless otherwise specified, all references to
a Responsible Officer herein shall mean a Responsible Officer of the Borrower.
"RESTRICTED PAYMENT" shall mean (a) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock of Borrower
or any of its Subsidiaries (other than those payable or distributable solely to
the Borrower) now or hereafter outstanding, except a dividend payable solely in
shares of a class of stock to the holders of that class; (b) any redemption,
conversion, exchange, retirement or similar payment, purchase or other
acquisition for value, direct
-16-
or indirect, of any shares of any class of stock of Borrower or any of its
Subsidiaries (other than those payable or distributable solely to the Borrower)
now or hereafter outstanding; (c) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Borrower or any of its Subsidiaries now or
hereafter outstanding; and (d) any issuance and sale of capital stock of any
Subsidiary of the Borrower (or any option, warrant or right to acquire such
stock) other than to the Borrower.
"REVOLVING CREDIT TERMINATION DATE" shall mean, unless the Commitments are
sooner terminated pursuant to Sections 2.03(b) or 10.02 hereof, March 13, 2001.
"SEC" shall mean the Securities and Exchange Commission or any successor
Governmental Authority.
"SECURITY INSTRUMENTS" shall mean the Letters of Credit, the Letter of
Credit Agreements, the Fee Letter, the agreements or instruments described or
referred to in EXHIBIT D, and any and all other agreements or instruments now or
hereafter executed and delivered by the Borrower or any other Person (other than
participation or similar agreements between any Lender and any other lender or
creditor with respect to any Indebtedness pursuant to this Agreement) in
connection with, or as security for the payment or performance of the Notes,
this Agreement or reimbursement obligations under the Letters of Credit, as such
agreements may be amended, supplemented or restated from time to time.
"SPECIAL ENTITY" shall mean any joint venture, limited liability company
or partnership, general or limited partnership or any other type of partnership
or company other than a corporation in which the Borrower or one or more of its
other Subsidiaries is a member, owner, partner or joint venturer and owns,
directly or indirectly, at least a majority of the equity of such entity or
controls such entity, but excluding any tax partnerships that are not classified
as partnerships under state law. For purposes of this definition, any Person
which owns directly or indirectly an equity investment in another Person which
allows the first Person to manage or elect managers who manage the normal
activities of such second Person will be deemed to "control" such second Person
(E.G. a sole general partner controls a limited partnership).
"SUBORDINATED DEBT" shall mean any Debt of the Borrower expressly
subordinated to the Indebtedness pursuant to agreements in form and substance
satisfactory to the Lenders.
"SUBSIDIARY" shall mean (i) any corporation of which at least a majority
of the outstanding shares of stock having by the terms thereof ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time directly or indirectly owned or
controlled by the Borrower or one or more of its Subsidiaries or by the Borrower
and one or more of its Subsidiaries, (ii) any Special Entity and (iii) each
Founding Company prior to the date it becomes a Subsidiary. Unless otherwise
indicated herein, each reference to the term "Subsidiary" shall mean a
Subsidiary of the Borrower.
-17-
"SWING LINE COMMITMENT" shall mean, for the Swing Line Lender, its
obligation to make Swing Line Loans up to $5,000,000.
"SWING LINE FACILITY" shall mean the facility pursuant to Section 2.01(c).
"SWING LINE LENDER" shall mean NationsBank or such other Lender as Agent,
Borrower and such Lender shall agree.
"SWING LINE LOANS" shall mean the Loans made pursuant to Section 2.01(c).
"SWING LINE NOTE" shall mean the promissory note or notes (whether one or
more) of the Borrower described in Section 2.01(c) and being in the form of
EXHIBIT A-2.
"TAXES" shall have the meaning assigned such term in Section 4.06(a).
"TYPE" shall mean, with respect to any Loan, a Base Rate Loan or a
Eurodollar Loan.
"WHOLLY-OWNED SUBSIDIARY" shall mean, as to the Borrower, any Subsidiary
of which all of the outstanding shares of stock having by the terms thereof
ordinary voting power to elect the board of directors of such corporation, other
than directors' qualifying shares, are owned or controlled by the Borrower or
one or more of the Wholly-Owned Subsidiaries or by the Borrower and one or more
of the Wholly-Owned Subsidiaries.
Section 1.03 ACCOUNTING TERMS AND DETERMINATIONS. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Agent or the Lenders hereunder shall be
prepared, in accordance with GAAP, applied on a basis consistent with the
audited financial statements of the Borrower referred to in Section 7.02 (except
for changes concurred with by the Borrower's independent public accountants).
ARTICLE II
COMMITMENTS
Section 2.01 LOANS AND LETTERS OF CREDIT.
(a) LOANS. Each Lender severally agrees, on the terms of this Agreement,
to make Loans to the Borrower during the period from and including (i) the
Closing Date or (ii) such later date that such Lender becomes a party to this
Agreement as provided in Section 12.06(a), to but excluding, the Revolving
Credit Termination Date in an aggregate principal amount at any one time
outstanding up to but not exceeding the amount of such Lender's Commitment as
then in effect; PROVIDED, HOWEVER, that the aggregate principal amount of all
such Loans by all Lenders hereunder at any one
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time outstanding together with the LC Exposure and the amount outstanding under
the Swing Line Facility shall not exceed the Aggregate Commitments. Subject to
the terms of this Agreement, during the period from the Closing Date to but
excluding, the Revolving Credit Termination Date, the Borrower may borrow, repay
and reborrow the amount described in this Section 2.01(a).
(b) LETTERS OF CREDIT. During the period from and including the Closing
Date to but excluding the Revolving Credit Termination Date, the Fronting Bank,
as issuing bank for the Lenders, agrees to extend credit for the account of the
Borrower at any time and from time to time by issuing renewing, extending or
reissuing Letters of Credit; provided however, the LC Exposure at any one time
outstanding shall not exceed the lesser of (i) the LC Commitment or (ii) the
Aggregate Commitments, as then in effect, minus the aggregate principal amount
of all Loans then outstanding. The Lenders shall participate in such Letters of
Credit according to their respective Percentage Shares.
(c) SWING LINE. Notwithstanding any other provision of this
Agreement to the contrary, in order to administer the revolving facility under
Section 2.01(a) above in an efficient manner and to minimize the transfer of
funds between the Agent and the Lenders, the Swing Line Lender shall make
available Swing Line Loans to the Borrower at the election of Borrower prior to
the Revolving Credit Termination Date. The Swing Line Lender shall not make any
Swing Line Loan pursuant hereto (i) if the Borrower is not in compliance with
all the conditions to the making of Loans set forth in this Agreement, (ii) if
after giving effect to such Swing Line Loan, the outstanding Swing Line Loans
exceed the Swing Line Commitment, or (iii) if after giving effect to such Swing
Line Loan, the sum of all Loans then outstanding and the LC Exposure exceeds the
Aggregate Commitments. Loans made pursuant to this Section 2.01(c) shall be
limited to Loans bearing interest at the Base Rate or such other rate of
interest as agreed upon by the Borrower and the Swing Line Lender. The
indebtedness of the Borrower to the Swing Line Lender resulting from the
advances under this Section 2.01(c) shall be evidenced by the Swing Line Note
made by the Borrower, which Swing Line Note shall be in a principal amount equal
to the Swing Line Commitment.
(i) Subject to the terms of this Agreement, during the period from
the Closing Date to but excluding, the Revolving Credit Termination Date,
the Borrower may borrow, repay and reborrow Swing Line Loans under this
Section 2.01(c). Each repayment of a Swing Line Loan shall be in integral
multiples of $100,000 or the unpaid amount of the Swing Line Loans
outstanding. The minimum outstanding amount of Swing Line Loans shall be
$100,000.
(ii) If the Borrower instructs the Swing Line Lender to debit its
demand deposit account in an amount of any payment with respect to a Swing
Line Loan, or the Swing Line Lender otherwise receives repayment after
2:00 P.M. Houston, Texas time, on a Business Day, such payment shall be
deemed received on the next Business Day.
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(iii) The Borrower and each Lender which is or may become a party
hereto acknowledge that all Swing Line Loans are to be made solely by the
Swing Line Lender to the Borrower, but that such Lender shall share the
risk of loss with respect to such Loans in an amount equal to such
Lender's Percentage Share of such Swing Line Loan. Upon demand made by the
Swing Line Lender, each Lender (including the Swing Line Lender) shall,
according to its Percentage Share of such Swing Line Loan, promptly
provide to the Swing Line Lender its purchase price therefor in an amount
equal to its Percentage Share therein, in which case such Swing Line Loan
shall be deemed from and after such date a Loan made under Section
2.01(a). The obligation of each Lender to so provide its purchase price to
the Swing Line Lender shall be absolute and unconditional and shall not be
affected by the occurrence of an Event of Default or any other occurrence
or event.
(iv) The Borrower at its option (and, if the Swing Line Loan is a
Eurodollar Loan, subject to Section 5.05 hereof) may request a Loan
pursuant to Section 2.01(a) in an amount sufficient to repay any or all
Swing Line Loans on any date (subject to three (3) Business Days prior
notice in the case of Eurodollar Loans), and the Agent shall upon the
receipt of such Loan provide to the Swing Line Lender the amount necessary
to repay such Swing Line Loan or Loans (which the Swing Line Lender shall
then apply to such repayment) and credit any balance of the Loan in
immediately available funds to the Borrower's account. The proceeds of
such Loans shall be paid to the Swing Line Lender for application to the
outstanding Swing Line Loans and the Lenders shall then be deemed to have
made Loans pursuant to Section 2.01(a) in the amount of such advances. The
obligation of the Swing Line Lender to fund the Swing Line Loans shall
cease upon the earlier of (i) the occurrence of a Default, or (ii) the
Revolving Credit Termination Date; provided that when a Default is no
longer continuing, the Swing Line Lender shall be obligated to provide
Swing Line Loans provided all other conditions to making Loans are
satisfied.
(d ) LIMITATION ON TYPES OF LOANS. Subject to the other terms and
provisions of this Agreement, at the option of the Borrower, the Loans (other
than Swing Line Loans) may be Base Rate Loans or Eurodollar Loans; provided
that, without the prior written consent of the Majority Lenders, no more than
seven (7) Eurodollar Loans may be outstanding at any time to any Lender.
All Swing Line Loans shall be Base Rate Loans.
Section 2.02 BORROWINGS, CONTINUATIONS AND CONVERSIONS, LETTERS OF
CREDIT.
(a) BORROWINGS. The Borrower shall give the Agent (which shall promptly
notify the Lenders) advance notice as hereinafter provided of each borrowing
hereunder, which shall specify the aggregate amount of such borrowing, the Type
and the date (which shall be a Business Day) of the Loans to be borrowed and (in
the case of Eurodollar Loans) the duration of the Interest Period therefor.
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(b) MINIMUM AMOUNTS. All borrowings other than Swing Line Loans shall be
in amounts of at least $1,000,000 or any whole multiple of $100,000 in excess
thereof. All Swing Line Loans shall be in amounts of at least $100,000 or any
whole multiple of $100,000 in excess thereof.
(c) NOTICES. The initial borrowing and all continuations and conversions
shall require advance written notice to the Agent (which shall promptly notify
the Lenders) in the form of EXHIBIT B hereto (or telephonic notice promptly
confirmed by such a written notice), which in each case shall be irrevocable,
from the Borrower to be received by the Agent not later than 11:00 a.m. Houston,
Texas time at least one Business Day prior to the date of each Base Rate Loan
borrowing and three Business Days prior to the date of each Eurodollar Loan
borrowing, continuation or conversion. Without in any way limiting the
Borrower's obligation to confirm in writing any telephonic notice, the Agent may
act without liability upon the basis of telephonic notice believed by the Agent
in good faith to be from the Borrower prior to receipt of written confirmation.
In each such case, the Borrower hereby waives the right to dispute the Agent's
record of the terms of such telephonic notice except in the case of gross
negligence or willful misconduct by the Agent.
(d) CONTINUATION OPTIONS. Subject to the provisions made in this Section
2.02(d), the Borrower may elect to continue all or any part of any Eurodollar
Loan beyond the expiration of the then current Interest Period relating thereto
by giving advance notice as provided in Section 2.02(c) to the Agent (which
shall promptly notify the Lenders) of such election, specifying the amount of
such Loan to be continued and the Interest Period therefor. In the absence of
such a timely and proper election, the Borrower shall be deemed to have elected
to convert such Eurodollar Loan to a Base Rate Loan pursuant to Section 2.02(e).
All or any part of any Eurodollar Loan may be continued as provided herein,
provided that (i) any continuation of any such Loan shall be (as to each Loan as
continued for an applicable Interest Period) in amounts of at least $1,000,000
or any whole multiple of $100,000 in excess thereof and (ii) no Default shall
have occurred and be continuing. If a Default shall have occurred and be
continuing, each Eurodollar Loan shall be converted to a Base Rate Loan on the
last day of the Interest Period applicable thereto.
(e) CONVERSION OPTIONS. The Borrower may elect to convert all or any part
of any Eurodollar Loan on the last day of the then current Interest Period
relating thereto to a Base Rate Loan by giving advance notice to the Agent
(which shall promptly notify the Lenders) of such election. Subject to the
provisions made in this Section 2.02(e), the Borrower may elect to convert all
or any part of any Base Rate Loan (other than a Swing Line Loan) at any time and
from time to time to a Eurodollar Loan by giving advance notice as provided in
Section 2.02(c) to the Agent (which shall promptly notify the Lenders) of such
election. All or any part of any outstanding Loan may be converted as provided
herein, provided that (i) any conversion of any Base Rate Loan into a Eurodollar
Loan shall be (as to each such Loan into which there is a conversion for an
applicable Interest Period) in amounts of at least $1,000,000 or any whole
multiple of $100,000 in excess thereof and (ii) no Default shall have occurred
and be continuing. If a Default shall have occurred and be continuing, no Base
Rate Loan may be converted into a Eurodollar Loan.
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(f) ADVANCES. Not later than 11:00 a.m. Houston, Texas time on the date
specified for each borrowing hereunder, each Lender shall make available the
amount of the Loan to be made by it on such date to the Agent, to an account
which the Agent shall specify, in immediately available funds, for the account
of the Borrower. The amounts so received by the Agent shall, subject to the
terms and conditions of this Agreement, be made available to the Borrower by
depositing the same, in immediately available funds, in an account of the
Borrower, designated by the Borrower and maintained at the Principal Office.
(g) LETTERS OF CREDIT. The Borrower shall give the Fronting Bank (which
shall promptly notify the Lenders of such request) advance notice to be received
by the Fronting Bank not later than 11:00 a.m. Houston, Texas time not less than
three (3) Business Days prior thereto of each request for the issuance and at
least ten (10) Business Days prior to the date of the renewal or extension of a
Letter of Credit hereunder which request shall specify the amount of such Letter
of Credit, the date (which shall be a Business Day) such Letter of Credit is to
be issued, renewed or extended, the duration thereof, the name and address of
the beneficiary thereof, the form of the Letter of Credit and such other
information as the Fronting Bank may reasonably request all of which shall be
reasonably satisfactory to the Fronting Bank. Subject to the terms and
conditions of this Agreement, on the date specified for the issuance, renewal or
extension of a Letter of Credit, the Fronting Bank shall issue such Letter of
Credit to the beneficiary thereof.
In conjunction with the issuance of each Letter of Credit, the Borrower
shall execute a Letter of Credit Agreement. In the event of any conflict between
any provision of a Letter of Credit Agreement and this Agreement, the Borrower,
the Fronting Bank, the Agent and the Lenders hereby agree that the provisions of
this Agreement shall govern.
The Fronting Bank will send to the Borrower and each Lender, upon issuance
of any Letter of Credit, or an amendment thereto, a true and complete copy of
such Letter of Credit, or such amendment thereto.
Section 2.03 CHANGES OF COMMITMENTS.
(a) The Aggregate Commitments shall at all times be equal to the lesser of
(i) the Aggregate Maximum Credit Amounts after adjustments resulting from
reductions pursuant to Section 2.03(b) hereof or (ii) the Borrowing Base as
determined from time to time.
(b) The Borrower shall have the right to terminate or to reduce the amount
of the Aggregate Maximum Credit Amounts at any time or from time to time upon
not less than three (3) Business Days' prior notice to the Agent (which shall
promptly notify the Lenders) of each such termination or reduction, which notice
shall specify the effective date thereof and the amount of any such reduction
(which shall not be less than $5,000,000 or any whole multiple of $1,000,000 in
excess thereof) and shall be irrevocable and effective only upon receipt by the
Agent.
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(c) The Aggregate Maximum Credit Amounts once terminated or reduced may
not be reinstated.
Section 2.04 FEES.
(a) COMMITMENT FEE. The Borrower shall pay to the Agent for the account of
each Lender a commitment fee on the daily average unused amount (not to include
Swing Line Loans) of the Aggregate Commitments for each period identified below
from and including the Closing Date up to but excluding the earlier of the date
the Aggregate Commitments are terminated or the Revolving Credit Termination
Date at a rate per annum equal to the applicable per annum percentage set forth
at the appropriate intersection in the table shown below, based on the ratio of
Funded Debt to Adjusted EBITDA defined in Section 9.14 for the four quarterly
periods ending and determined as of the immediately preceding Quarterly Date:
FUNDED DEBT TO ADJUSTED COMMITMENT FEE
EBITDA PERCENTAGE
Less than 1.5 .20%
Less than 1.75 but greater .25%
than or equal to 1.5
Less than 2.0 but greater than .30%
or equal to 1.75
Greater than or equal to 2.0 .375%
The applicable Commitment Fee Percentage shall be established at the end of each
Quarterly Date (the "Determination Date"). Any change in the applicable
Commitment Fee Percentage following each Determination Date shall be determined
based upon the computations set forth in the Compliance Certificate furnished to
the Agent pursuant to Section 8.01(i), subject to review and approval of such
computations by the Agent and each change in the Applicable Margin shall be
effective commencing as of the next Business Date following the date such
certificate is received and remain in effect (or, if earlier, the date such
certificate was required to be delivered) until the date that is the next
Business Day following the first to occur of the date on which (i) a new
certificate is delivered for which a change in the Applicable Margin occurs or
(ii) is required to be delivered; PROVIDED, HOWEVER; if the Borrower shall fail
to deliver any such certificate within the time period required by Section
8.01(i), then the applicable Commitment Fee shall be .375% until the appropriate
certificate is so delivered. From the Closing Date to the first Determination
Date, the Commitment Fee Percentage shall be determined based upon the
Compliance Certificate delivered at Closing.
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Accrued commitment fees shall be payable quarterly in arrears on each Quarterly
Date and on the earlier of the date the Aggregate Commitments are terminated or
the Revolving Credit Termination Date.
(b) LETTER OF CREDIT FEES.
(i) The Borrower agrees to pay the Agent, for the account of each
Lender, commissions for issuing the Letters of Credit on the daily average
outstanding of the maximum liability of the Fronting Bank existing from
time to time under such Letter of Credit (calculated separately for each
Letter of Credit) at the rate per annum equal to the Applicable Margin
then in effect for Eurodollar Loans, provided that each Letter of Credit
shall bear a minimum commission of $350. Until the termination date
provided therein, each Letter of Credit shall be deemed to be outstanding
up to the full face amount of the Letter of Credit until the Fronting Bank
has received the canceled Letter of Credit or a written cancellation of
the Letter of Credit from the beneficiary of such Letter of Credit in form
and substance acceptable to the Fronting Bank, or for any reductions in
the amount of the Letter of Credit (other than from a drawing), written
notification from the beneficiary of such Letter of Credit. Such
commissions are payable quarterly in arrears on each Quarterly Date.
(ii) The Borrower agrees to pay the Fronting Bank, for its own
account, an issuing fee for issuing Letters of Credit on the daily average
outstanding of the maximum liability of the Fronting Bank existing from
time to time under such Letter of Credit (calculated separately for each
Letter of Credit) at the rate of one-eighth of one percent (.125%) per
annum, payable quarterly in arrears on each Quarterly Date and upon
cancellation or expiration of each such Letter of Credit.
(c) The Borrower shall pay to the Agent for its account such other fees as
are set forth in the Fee Letter on the dates specified therein to the extent not
paid prior to the Closing Date.
Section 2.05 SEVERAL OBLIGATIONS. The failure of any Lender to make
any Loan to be made by it or to provide funds for disbursements or
reimbursements under Letters of Credit on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan or provide funds on
such date, but no Lender shall be responsible for the failure of any other
Lender to make a Loan to be made by such other Lender or to provide funds to be
provided by such other Lender.
Section 2.06 NOTES. Each of the Loans (other than Swing Line Loans)
made by each Lender shall be evidenced by a single promissory note of the
Borrower in substantially the form of EXHIBIT A hereto, dated (i) the Closing
Date or (ii) the effective date of an Assignment and Acceptance pursuant to
Section 12.06(a), payable to the order of such Lender in a principal amount
equal to its Maximum Credit Amount as in effect and otherwise duly completed and
such substitute Notes as required by Section 12.06(a). The date, amount, Type,
interest rate and Interest Period of each Loan made by each Lender, and all
payments made on account of the principal thereof, shall be recorded by such
Lender on its books for its Note, and, prior to any transfer, may be endorsed by
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such Lender on a schedule attached to such Note or any continuation thereof or
on any separate record maintained by such Lender. Failure to make any such
notation or to attach a schedule shall not affect any Lender's or the Borrower's
rights or obligations in respect of such Loans or affect the validity of such
transfer by any Lender of its Note.
Section 2.07 PREPAYMENTS.
(a) The Borrower may prepay the Base Rate Loans upon not less than one (1)
Business Day's prior notice to the Agent (which shall promptly notify the
Lenders), which notice shall specify the prepayment date (which shall be a
Business Day) and the amount of the prepayment (which shall be at least
$1,000,000 for all Loans other than Swing Line Loans and at least $100,000 for
Swing Line Loans or the remaining aggregate principal balance outstanding on the
Notes) and shall be irrevocable and effective only upon receipt by the Agent,
provided that interest on the principal prepaid, accrued to the prepayment date,
shall be paid on the prepayment date. The Borrower may prepay Eurodollar Loans
on the same condition as for Base Rate Loans and in addition such prepayments of
Eurodollar Loans shall be subject to the terms of Section 5.05 and shall be in
an amount equal to all of the Eurodollar Loans for the Interest Period prepaid.
(b) If, after giving effect to any termination or reduction of the
Aggregate Maximum Credit Amounts pursuant to Section 2.03(b), the outstanding
aggregate principal amount of the Loans plus the LC Exposure exceeds the
Aggregate Maximum Credit Amounts, the Borrower shall (i) prepay the Loans on the
date of such termination or reduction in an aggregate principal amount equal to
the excess, together with interest on the principal amount paid accrued to the
date of such prepayment and (ii) if any excess remains after prepaying all of
the Loans, pay to the Agent on behalf of the Lenders an amount equal to the
excess to be held as cash collateral as provided in Section 2.09(b) hereof.
(c) Upon any redetermination of the amount of the Borrowing Base, if the
redetermined Borrowing Base is less than the aggregate outstanding principal
amount of the Loans plus the LC Exposure, then the Borrower shall within thirty
(30) days after delivery of the Borrowing Base Certificate required under
Section 8.01(h): (i) prepay the Loans in an aggregate principal amount equal to
such excess, together with interest on the principal amount paid accrued to the
date of such prepayment and (ii) if a Borrowing Base deficiency remains after
prepaying all of the Loans because of LC Exposure, the Borrower shall pay to the
Agent on behalf of the Lenders an amount equal to such Borrowing Base deficiency
to be held as cash collateral as provided in Section 2.09(b) hereof.
(d) Prepayments permitted or required under this Section 2.07 shall be
without premium or penalty, except as required under Section 5.05 for prepayment
of Eurodollar Loans. Any prepayments on the Loans may be reborrowed subject to
the then effective Aggregate Commitments.
Section 2.08 ASSUMPTION OF RISKS. The Borrower assumes all risks of
the acts or omissions of any beneficiary of any Letter of Credit or any
transferee thereof with respect to its use of such Letter of Credit. Neither the
Fronting Bank (except in the case of willful misconduct or bad
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faith on the part of the Fronting Bank or any of its employees), its
correspondents nor any Lender shall be responsible for the validity or
genuineness of certificates or other documents or any endorsements thereon, even
if such certificates or other documents should in fact prove to be invalid,
fraudulent or forged; for errors, omissions, interruptions or delays in
transmissions or delivery of any messages by mail, telex, or otherwise, whether
or not they be in code; for errors in translation or for errors in
interpretation of technical terms; the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in whole or in
part, which may prove to be invalid or ineffective for any reason; the failure
of any beneficiary or any transferee of any Letter of Credit to comply fully
with conditions required in order to draw upon any Letter of Credit; or for any
other consequences arising from causes beyond the Fronting Bank's control or the
control of the Fronting Bank's correspondents. In addition, neither the Fronting
Bank nor any Lender shall be responsible for any error, neglect, or default of
any of the Fronting Bank's correspondents; and none of the above shall affect,
impair or prevent the vesting of any of the Fronting Bank's, the Agent's or any
Lender's rights or powers hereunder or under the Letter of Credit Agreements,
all of which rights shall be cumulative. The Fronting Bank and its
correspondents may accept certificates or other documents that appear on their
face to be in order, without responsibility for further investigation of any
matter contained therein regardless of any notice or information to the
contrary. In furtherance and not in limitation of the foregoing provisions, the
Borrower agrees that any action, inaction or omission taken or not taken by the
Fronting Bank or by any correspondent for the Fronting Bank in good faith in
connection with any Letter of Credit, or any related drafts, certificates,
documents or instruments, shall be binding on the Borrower and shall not put the
Fronting Bank or its correspondents under any resulting liability to the
Borrower.
Section 2.09 OBLIGATION TO REIMBURSE AND TO PREPAY.
(a) If a disbursement by the Fronting Bank is made under any Letter of
Credit, the Borrower shall pay to the Agent within two (2) Business Days after
notice of any such disbursement is received by the Borrower, the amount of each
such disbursement made by the Fronting Bank under the Letter of Credit (if such
payment is not sooner effected as may be required under this Section 2.09 or
under other provisions of the Letter of Credit), together with interest on the
amount disbursed from and including the date of disbursement until payment in
full of such disbursed amount at a varying rate per annum equal to (i) the then
applicable interest rate for Base Rate Loans through the second Business Day
after notice of such disbursement is received by the Borrower and (ii)
thereafter, the Post-Default Rate for Base Rate Loans (but in no event to exceed
the Highest Lawful Rate) for the period from and including the third Business
Day following the date of such disbursement to and including the date of
repayment in full of such disbursed amount. The obligations of the Borrower
under this Agreement with respect to each Letter of Credit shall be absolute,
unconditional and irrevocable and shall be paid or performed strictly in
accordance with the terms of this Agreement under all circumstances whatsoever,
including, without limitation, but only to the fullest extent permitted by
applicable law, the following circumstances: (i) any lack of validity or
enforceability of this Agreement, any Letter of Credit or any of the Security
Instruments; (ii) any amendment or waiver of (including any default), or any
consent to departure from this
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Agreement (except to the extent permitted by any amendment or waiver), any
Letter of Credit or any of the Security Instruments; (iii) the existence of any
claim, set-off, defense or other rights which the Borrower may have at any time
against the beneficiary of any Letter of Credit or any transferee of any Letter
of Credit (or any Persons for whom any such beneficiary or any such transferee
may be acting), the Agent, any Lender or any other Person, whether in connection
with this Agreement, any Letter of Credit, the Security Instruments, the
transactions contemplated hereby or any unrelated transaction; (iv) any
statement, certificate, draft, notice or any other document presented under any
Letter of Credit proves to have been forged, fraudulent or invalid in any
respect or any statement therein proves to have been untrue or inaccurate in any
respect whatsoever; and (v) payment by the Fronting Bank under any Letter of
Credit against presentation of a draft or certificate which appears on its face
to comply, but does not comply, with the terms of such Letter of Credit.
Notwithstanding anything in this Agreement to the contrary, the Borrower will
not be liable for payment or performance that results from the gross negligence
or willful misconduct of the Fronting Bank, except (i) where the Borrower
actually recovers the proceeds for itself or the Fronting Bank of any payment
made by the Fronting Bank in connection with such gross negligence or willful
misconduct or (ii) in cases where the Fronting Bank makes payment to the named
beneficiary of a Letter of Credit.
(b) In the event of the occurrence of any Event of Default, a payment or
prepayment pursuant to Sections 2.07(b) and (c) hereof or the maturity of the
Notes, whether by acceleration or otherwise, an amount equal to the LC Exposure
(or the excess in the case of Sections 2.07(b) and (c)) shall be deemed to be
forthwith due and owing by the Borrower to the Fronting Bank, the Agent and the
Lenders as of the date of any such occurrence; and the Borrower's obligation to
pay such amount shall be absolute and unconditional, without regard to whether
any beneficiary of any such Letter of Credit has attempted to draw down all or a
portion of such amount under the terms of a Letter of Credit, and, to the
fullest extent permitted by applicable law, shall not be subject to any defense
or be affected by a right of set-off, counterclaim or recoupment which the
Borrower may now or hereafter have against any such beneficiary, the Fronting
Bank, the Agent, the Lenders or any other Person for any reason whatsoever. Such
payments shall be held by the Agent as cash collateral securing the LC Exposure
in an interest bearing account or accounts at the Principal Office; and the
Borrower hereby grants to and by its deposit with the Agent grants to the Agent
for the benefit of the Lenders a security interest in such cash collateral (and
the accrued interest thereon which shall be a part of the cash collateral). In
the event of any such payment by the Borrower of amounts contingently owing
under outstanding Letters of Credit and in the event that thereafter drafts or
other demands for payment complying with the terms of such Letters of Credit are
not made prior to the respective expiration dates thereof, the Agent agrees, if
no Event of Default has occurred and is continuing or if no other amounts are
outstanding under this Agreement, the Notes or the Security Instruments, to
remit to the Borrower amounts for which the contingent obligations evidenced by
the Letters of Credit have ceased plus any interest accrued thereon.
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(c) Each Lender severally and unconditionally agrees that it shall
promptly reimburse the Fronting Bank an amount equal to such Lender's Percentage
Share of any disbursement made by the Fronting Bank under any Letter of Credit
that is not reimbursed according to this Section 2.09.
Section 2.10 LENDING OFFICES. The Loans of each Type made by each
Lender shall be made and maintained at such Lender's Applicable Lending Office
for Loans of such Type.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 REPAYMENT OF LOANS. The Borrower will pay to the Agent,
for the account of each Lender, the principal payments required by this Section
3.01. On the Revolving Credit Termination Date the Borrower shall repay the
outstanding aggregate principal and accrued and unpaid interest under the Notes.
Section 3.02 INTEREST. The Borrower will pay to the Agent, for the
account of each Lender or the Swing Line Lender, as appropriate, interest on the
unpaid principal amount of each Loan made by such Lender for the period
commencing on the date such Loan is made to but excluding the date such Loan
shall be paid in full, at the following rates per annum:
(i) if such a Loan is a Base Rate Loan, the Base Rate (as in effect
from time to time) plus the Applicable Margin (as in effect from time to
time), but in no event to exceed the Highest Lawful Rate; and
(ii) if such a Loan is a Eurodollar Loan, for each Interest Period
relating thereto, the Eurodollar Rate for such Loan plus the Applicable
Margin (as in effect from time to time), but in no event to exceed the
Highest Lawful Rate.
Notwithstanding the foregoing, the Borrower will pay to the Agent, for the
account of each Lender interest at the applicable Post-Default Rate on any
principal of any Loan made by such Lender, and (to the fullest extent permitted
by law) on any other amount payable by the Borrower hereunder, under any Loan
Document or under any Note held by such Lender to or for account of such Lender,
for the period commencing on the date of an Event of Default until the same is
paid in full or all Events of Default are cured or waived.
Accrued interest on Base Rate Loans shall be payable on each Quarterly
Date commencing on March 31, 1998, and accrued interest on each Eurodollar Loan
shall be payable on the last day of the Interest Period therefor and, if such
Interest Period is longer than three months at three-month intervals following
the first day of such Interest Period, except that interest payable at the
Post-Default Rate shall be payable from time to time on demand and interest on
any Eurodollar Loan that
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is converted into a Base Rate Loan (pursuant to Section 5.04) shall be payable
on the date of conversion (but only to the extent so converted).
Promptly after the determination of any interest rate provided for herein
or any change therein, the Agent shall notify the Lenders to which such interest
is payable and the Borrower thereof. Each determination by the Agent of an
interest rate or fee hereunder shall, except in cases of manifest error, be
final, conclusive and binding on the parties.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 PAYMENTS. Except to the extent otherwise provided
herein, all payments of principal, interest and other amounts to be made by the
Borrower under the Loan Documents shall be made in Dollars, in immediately
available funds, to the Agent at such account as the Agent shall specify by
notice to the Borrower from time to time, not later than 11:00 a.m. Houston,
Texas time on the date on which such payments shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day). Such payments shall be made without (to the
fullest extent permitted by applicable law) defense, set-off or counterclaim.
Each payment received by the Agent under this Agreement or any Note for account
of a Lender shall be paid promptly to such Lender in immediately available
funds. Except as provided in clause (iii) of the definition of "Interest
Period", if the due date of any payment under this Agreement or any Note would
otherwise fall on a day which is not a Business Day such date shall be extended
to the next succeeding Business Day and interest shall be payable for any
principal so extended for the period of such extension. At the time of each
payment to the Agent of any principal of or interest on any borrowing, the
Borrower shall notify the Agent of the Loans to which such payment shall apply.
In the absence of such notice the Agent may specify the Loans to which such
payment shall apply, but to the extent possible such payment or prepayment will
be applied first to the Loans comprised of Base Rate Loans.
Section 4.02 PRO RATA TREATMENT. Except for Swing Line Loans and as
otherwise provided herein each Lender agrees that: (i) each borrowing from the
Lenders under Section 2.01 and each continuation and conversion under Section
2.02 shall be made from the Lenders pro rata in accordance with their Percentage
Share, each payment of commitment fee or other fees under Sections 2.04(a) and
(b) shall be made for account of the Lenders pro rata in accordance with their
Percentage Share, and each termination or reduction of the amount of the
Aggregate Maximum Credit Amounts under Section 2.03(b) shall be applied to the
Commitment of each Lender, pro rata according to the amounts of its respective
Commitment; (ii) each payment of principal of Loans by the Borrower shall be
made for account of the Lenders pro rata in accordance with the respective
unpaid principal amount of the Loans held by the Lenders; and (iii) each payment
of interest on Loans by the Borrower shall be made for account of the Lenders
pro rata in accordance with the amounts of interest due and payable to the
respective Lenders; and (iv) each reimbursement by the
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Borrower of disbursements under Letters of Credit shall be made for account of
the Fronting Bank or, if funded by the Lenders, pro rata for the account of the
Lenders, in accordance with the amounts of reimbursement obligations due and
payable to each respective Lender.
Section 4.03 COMPUTATIONS. Interest on Eurodollar Loans and fees
shall be computed on the basis of a year of 360 days and actual days elapsed
(including the first day but excluding the last day) occurring in the period for
which such interest is payable, unless such calculation would exceed the Highest
Lawful Rate, in which case interest shall be calculated on the per annum basis
of a year of 365 or 366 days, as the case may be. Interest on Base Rate Loans
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
and actual days elapsed (including the first day but excluding the last day)
occurring in the period for which such interest is payable.
Section 4.04 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent
shall have been notified by a Lender or the Borrower prior to the date on which
such notifying party is scheduled to make payment to the Agent (in the case of a
Lender) of the proceeds of a Loan or a payment under a Letter of Credit to be
made by it hereunder or (in the case of the Borrower) a payment to the Agent for
account of one or more of the Lenders hereunder (such payment being herein
called the "REQUIRED PAYMENT"), which notice shall be effective upon receipt,
that it does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient(s) on such date and, if such Lender or the Borrower (as
the case may be) has not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, on demand, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by the Agent
until but excluding the date the Agent recovers such amount at a rate per annum
which, for any Lender as recipient, will be equal to the Federal Funds Rate, and
for the Borrower as recipient, will be equal to the Base Rate plus the
Applicable Margin.
Section 4.05 SET-OFF, SHARING OF PAYMENTS, ETC.
(a) Upon the occurrence and during the continuance of any Event of
Default, 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 indebtedness at any time owing by such
Lender (or any of its Affiliates) to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement and the Note or Notes held by such Lender,
irrespective of whether such Lender shall have made any demand under this
Agreement or such Note and although such obligations may be unmatured. Each
Lender agrees promptly to notify the Borrower after any such set-off and
application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such set-off and application. The
rights of each Lender under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that such
Lender may have.
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(b) If any Lender (a "BENEFITTED LENDER") shall at any time receive any
payment of all or part of the Loans owing to it or interest thereon (or
reimbursement as to any Letter of Credit), or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, or otherwise), in a
greater proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans owing to it or interest
thereon (or reimbursement as to any Letter of Credit), such benefitted Lender
shall purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender's Loans owing to it (or participations in
Letters of Credit), or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
benefitted Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; PROVIDED, HOWEVER, that if all or any
portion of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Borrower agrees that any Lender so purchasing a participation from a Lender
pursuant to this Section 4.05 may, to the fullest extent permitted by law,
exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Person were the direct
creditor of the Borrower in the amount of such participation.
Section 4.06 TAXES.
(a) Any and all payments by the Borrower to or for the account of any
Lender or the Agent hereunder or under any other Loan Document shall be made
free and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, EXCLUDING, in the case of each Lender and the
Agent, taxes imposed on its income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender (or its Applicable Lending
Office) or the Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts,
deductions, charges, withholdings, and liabilities being hereinafter referred to
as "TAXES"). Assuming compliance with Section 4.06(d) hereof to the extent
applicable, if the Borrower shall be required by law to deduct any Taxes from or
in respect of any sum payable under this Agreement or any other Loan Document to
any Lender or the Agent, (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 4.06) such Lender or the Agent
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions, (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law, and (iv) the Borrower
shall furnish to the Agent, at its address set forth on the signature pages
hereof an original or a certified copy of a receipt evidencing payment thereof,
provided, Borrower shall not be required to take said action in respect of any
foreign Lender that has not complied with Section 4.06(d).
(b) In addition, the Borrower agrees to pay any and all present or future
stamp or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under this Agreement or any
other Loan Document or from the execution
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or delivery of, or otherwise with respect to, this Agreement or any other Loan
Document (hereinafter referred to as "OTHER TAXES").
(c) THE BORROWER AGREES TO INDEMNIFY EACH LENDER AND THE AGENT FOR THE
FULL AMOUNT OF TAXES AND OTHER TAXES (INCLUDING, WITHOUT LIMITATION, ANY TAXES
OR OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION ON AMOUNTS PAYABLE UNDER
THIS SECTION 4.06) PAID BY SUCH LENDER OR THE AGENT (AS THE CASE MAY BE) AND ANY
LIABILITY (INCLUDING PENALTIES, INTEREST, AND EXPENSES) ARISING THEREFROM OR
WITH RESPECT THERETO.
(d) Each Lender organized under the laws of a jurisdiction outside the
United States, on or prior to the date of its execution and delivery of this
Agreement in the case of each Lender listed on the signature pages hereof and on
or prior to the date on which it becomes a Lender in the case of each other
Lender, and from time to time thereafter if requested in writing by the Borrower
or the Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Agent with (i) Internal Revenue Service Form
1001 or 4224, as appropriate, or any successor form prescribed by the Internal
Revenue Service, certifying that such Lender is entitled to benefits under an
income tax treaty to which the United States is a party which reduces the rate
of withholding tax on payments of interest or certifying that the income
receivable pursuant to this Agreement is effectively connected with the conduct
of a trade or business in the United States, (ii) Internal Revenue Service Form
W-8 or W-9, as appropriate, or any successor form prescribed by the Internal
Revenue Service, and (iii) any other form or certificate required by any taxing
authority (including any certificate required by Sections 871(h) and 881(c) of
the Internal Revenue Code), certifying that such Lender is entitled to an
exemption from or a reduced rate of tax on payments pursuant to this Agreement
or any of the other Loan Documents.
(e) For any period with respect to which a Lender has failed to provide
the Borrower and the Agent with the appropriate form pursuant to Section 4.06(d)
(unless such failure is due to a change in treaty, law, or regulation occurring
subsequent to the date on which a form originally was required to be provided),
such Lender shall not be entitled to indemnification under Section 4.06(a) or
4.06(b) with respect to Taxes imposed by the United States; PROVIDED, HOWEVER,
that should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure to
deliver a form required hereunder, the Borrower shall take such steps as such
Lender shall reasonably request to assist such Lender to recover such Taxes.
(f) If the Borrower is required to pay additional amounts to or for the
account of any Lender pursuant to this Section 4.06, then such Lender will agree
to use reasonable efforts to change the jurisdiction of its Applicable Lending
Office so as to eliminate or reduce any such additional payment which may
thereafter accrue if such change, in the judgment of such Lender, is not
otherwise disadvantageous to such Lender and, in the event of the refund of any
such payments, shall promptly pay same to Borrower along with any interest (if
any) received with such refund.
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(g) Within thirty (30) days after the date of any payment of Taxes, the
Borrower shall furnish to the Agent the original or a certified copy of a
receipt evidencing such payment.
(h) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 4.06 shall survive the termination of the Commitments and the
payment in full of the Notes.
ARTICLE V
CHANGE IN CIRCUMSTANCES
Section 5.01 INCREASED COST AND REDUCED RETURN.
(a) If, after the date hereof, the adoption of any applicable law, rule,
or regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any governmental
authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such governmental authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending Office) to
any tax, duty, or other charge with respect to any Eurodollar Loans, its
Note, or its obligation to make Eurodollar Loans, or change the basis of
taxation of any amounts payable to such Lender (or its Applicable Lending
Office) under this Agreement or its Note in respect of any Eurodollar
Loans (other than taxes imposed on the overall net income of such Lender
by the jurisdiction in which such Lender has its principal office or such
Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any reserve, special
deposit, assessment or similar requirement (other than the Reserve
Requirement utilized in the determination of the Adjusted Eurodollar Rate)
relating to any extensions of credit or other assets of, or any deposits
with or other liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the Commitment of such Lender
hereunder; or
(iii) shall impose on such Lender (or its Applicable Lending Office)
or on the United States market for certificates of deposit or the London
interbank market any other condition affecting this Agreement or its Note
or any of such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, Converting into, Continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Agreement or its Note
with respect to any Eurodollar Loans, then the Borrower shall pay to such
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Lender on demand such amount or amounts as will compensate such Lender for such
increased cost or reduction. If any Lender requests compensation by the Borrower
under this Section 5.01(a), the Borrower may, by notice to such Lender (with a
copy to the Agent), suspend the obligation of such Lender to make or Continue
Loans of the Type with respect to which such compensation is requested, or to
Convert Loans of any other Type into Loans of such Type, until the event or
condition giving rise to such request ceases to be in effect (in which case the
provisions of Section 5.04 shall be applicable); PROVIDED that such suspension
shall not affect the right of such Lender to receive the compensation so
requested.
(b) If, after the date hereof, any Lender shall have determined that the
adoption of any applicable law, rule, or regulation regarding capital adequacy
or any change therein or in the interpretation or administration thereof by any
governmental authority, central bank, or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
governmental authority, central bank, or comparable agency, has or would have
the effect of reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of such Lender's
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change, request, or
directive (taking into consideration its policies with respect to capital
adequacy), then from time to time upon demand the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) Each Lender shall promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Lender to compensation pursuant to this Section and will designate
a different Applicable Lending Office if such designation will avoid the need
for, or reduce the amount of, such compensation and will not, in the judgment of
such Lender, be otherwise disadvantageous to it. Any Lender claiming
compensation under this Section shall furnish to the Borrower and the Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be conclusive in the absence of manifest error. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
Section 5.02 LIMITATION ON TYPES OF LOANS. If on or prior to the
first day of any Interest Period for any Eurodollar Loan:
(a) the Agent determines (which determination shall be conclusive)
that by reason of circumstances affecting the relevant market, adequate
and reasonable means do not exist for ascertaining the Eurodollar Rate for
such Interest Period; or
(b) the Majority Lenders determine (which determination shall be
conclusive) and notify the Agent that the Adjusted Eurodollar Rate will
not adequately and fairly reflect the cost to the Lenders of funding
Eurodollar Loans for such Interest Period;
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then the Agent shall give the Borrower prompt notice thereof specifying the
relevant Type of Loans and the relevant amounts or periods, and so long as such
condition remains in effect, the Lenders shall be under no obligation to make
additional Loans of such Type, Continue Loans of such Type, or to Convert Loans
of any other Type into Loans of such Type and the Borrower shall, on the last
day(s) of the then current Interest Period(s) for the outstanding Loans of the
affected Type, either prepay such Loans or Convert such Loans into another Type
of Loan in accordance with the terms of this Agreement.
Section 5.03 ILLEGALITY. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Lender or its
Applicable Lending Office to make, maintain, or fund Eurodollar Loans hereunder,
then such Lender shall promptly notify the Borrower thereof and such Lender's
obligation to make or Continue Eurodollar Loans and to Convert other Types of
Loans into Eurodollar Loans shall be suspended until such time as such Lender
may again make, maintain, and fund Eurodollar Loans (in which case the
provisions of Section 5.04 shall be applicable).
Section 5.04 TREATMENT OF AFFECTED LOANS. If the obligation of any
Lender to make a Eurodollar Loan or to Continue, or to Convert Loans of any
other Type into, Loans of a particular Type shall be suspended pursuant to
Section 5.01 or 5.03 hereof (Loans of such Type being herein called "AFFECTED
LOANS" and such Type being herein called the "AFFECTED TYPE"), such Lender's
Affected Loans shall be automatically Converted into Base Rate Loans on the last
day(s) of the then current Interest Period(s) for Affected Loans (or, in the
case of a Conversion required by Section 5.03 hereof, on such earlier date as
such Lender may specify to the Borrower with a copy to the Agent) and, unless
and until such Lender gives notice as provided below that the circumstances
specified in Section 5.01 or 5.03 hereof that gave rise to such Conversion no
longer exist:
(a) to the extent that such Lender's Affected Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Affected Loans shall be applied instead to its
Base Rate Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as Loans of the Affected Type shall be made or Continued instead as
Base Rate Loans, and all Loans of such Lender that would otherwise be
Converted into Loans of the Affected Type shall be Converted instead into
(or shall remain as) Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Agent) that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to the
Conversion of such Lender's Affected Loans pursuant to this Section 5.04 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Loans of the Affected Type made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
Converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Loans of the Affected Type, to the extent necessary so that,
after giving effect thereto, all Loans held by the Lenders holding
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Loans of the Affected Type and by such Lender are held pro rata (as to principal
amounts, Types, and Interest Periods) in accordance with their respective
Commitments.
Section 5.05 COMPENSATION. Upon the request of any Lender, the
Borrower shall pay to such Lender such amount or amounts as shall be sufficient
(in the reasonable opinion of such Lender) to compensate it for any loss, cost,
or expense (including loss of anticipated profits) incurred by it as a result
of:
(a) any payment, prepayment, or Conversion of a Eurodollar Loan for
any reason (including, without limitation, the acceleration of the Loans
pursuant to Section 10.02) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including, without
limitation, the failure of any condition precedent specified in Article 6
to be satisfied) to borrow, Convert, Continue, or prepay a Eurodollar Loan
on the date for such borrowing, Conversion, Continuation, or prepayment
specified in the relevant notice of borrowing, prepayment, Continuation,
or Conversion under this Agreement.
Section 5.06 REPLACEMENT LENDERS.
(a) If any Lender has notified the Borrower and the Agent of its incurring
additional costs under Section 5.01 hereof or has required the Borrower to make
payments for Taxes under Section 4.06 hereof, then the Borrower may, unless such
Lender has notified the Borrower and the Agent that the circumstances giving
rise to such notice no longer apply, terminate, in whole but not in part, the
Commitment of any Lender (other than the Agent) (the "TERMINATED LENDER") at any
time upon five (5) Business Days' prior written notice to the Terminated Lender
and the Agent (such notice referred to herein as a "NOTICE OF TERMINATION").
(b) In connection with the termination of the Commitment of the Terminated
Lender, the Borrower shall either: (i) obtain an agreement with one or more
Lenders to increase their Commitment or Commitments, (ii) request any one or
more other banking institutions to become parties to this Agreement in place and
instead of such Terminated Lender and agree to accept a Commitment or
Commitments or reduce the total of the Aggregate Maximum Credit Amounts by the
amount held by the Terminated Lender; PROVIDED, HOWEVER, that such one or more
other substitute banking institutions are reasonably acceptable to the Agent and
become parties by executing an Assignment and Acceptance (the Lenders or other
banking institutions that agree to accept in whole or in part the Commitment of
the Terminated Lender being referred to herein as the "REPLACEMENT LENDERS"),
such that the aggregate increased and/or accepted Commitments of the Replacement
Lenders under clauses (i) and (ii) above equal the Commitment of the Terminated
Lender.
(c) The Notice of Termination shall include the name of the Terminated
Lender, the date the termination will occur (the "TERMINATION DATE"), and the
Replacement Lender or Replacement
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Lenders to which the Terminated Lender will assign its Commitment and, if there
will be more than one Replacement Lender, the portion of the Terminated Lender's
Commitment to be assigned to each Replacement Lender.
(d) On the Termination Date, (i) the Terminated Lender shall by execution
and delivery of an Assignment and Acceptance assign its Commitment to the
Replacement Lender or Replacement Lenders (pro rata, if there is more than one
Replacement Lender, in proportion to the portion of the Terminated Lender's
Commitment to be assigned to each Replacement Lender) indicated in the Notice of
Termination and shall assign to the Replacement Lender or Replacement Lenders
each of its Loans (if any) then outstanding and participation interests in
Letters of Credit (if any) then outstanding pro rata as aforesaid), (ii) the
Terminated Lender shall endorse its Note, payable without recourse,
representation or warranty to the order of the Replacement Lender or Replacement
Lenders (pro rata as aforesaid), (iii) the Replacement Lender or Replacement
Lenders shall purchase the Note held by the Terminated Lender (pro rata as
aforesaid) at a price equal to the unpaid principal amount thereof plus interest
and facility and other fees accrued and unpaid to the Termination Date, and (iv)
the Replacement Lender or Replacement Lenders will thereupon (pro rata as
aforesaid) succeed to and be substituted in all respects for the Terminated
Lender with like effect as if becoming a Lender pursuant to the terms of Section
12.06(a), and the Terminated Lender will have the rights and benefits of an
assignor under Section 12.06(a). To the extent not in conflict, the terms of
Section 12.06(a) shall supplement the provisions of this Section 5.06(d). For
each assignment made under this Section 5.06, the Replacement Lender shall pay
to the Agent the processing fee provided for in Section 12.06(a). The Borrower
will be responsible for the payment of any breakage costs associated with
termination of the Terminated Lender, as set forth in Section 5.05.
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 INITIAL FUNDING.
The obligation of the Lenders to make the Initial Funding is subject
to the receipt by the Agent and the Lenders of all fees payable pursuant to
Section 2.04 on or before the Closing Date and the receipt by the Agent of the
following documents and satisfaction of the other conditions provided in this
Section 6.01, each of which shall be satisfactory to the Agent in form and
substance:
(a) A certificate of the Secretary or an Assistant Secretary of the
Borrower setting forth (i) resolutions of its board of directors with respect to
the authorization of the Borrower to execute and deliver the Loan Documents to
which it is a party and to enter into the transactions contemplated in those
documents, (ii) the officers of the Borrower (y) who are authorized to sign the
Loan Documents to which Borrower is a party and (z) who will, until replaced by
another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing
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documents and giving notices and other communications in connection with this
Agreement and the transactions contemplated hereby, (iii) specimen signatures of
the authorized officers, and (iv) the articles or certificate of incorporation
and bylaws of the Borrower, certified as being true and complete. The Agent and
the Lenders may conclusively rely on such certificate until the Agent receives
notice in writing from the Borrower to the contrary.
(b) A certificate of the Secretary or an Assistant Secretary of each
Subsidiary setting forth (i) resolutions of its board of directors with respect
to the authorization of such Subsidiary to execute and deliver the Loan
Documents to which it is a party and to enter into the transactions contemplated
in those documents, (ii) the officers of such Subsidiary (y) who are authorized
to sign the Loan Documents to which such Subsidiary is a party and (z) who will,
until replaced by another officer or officers duly authorized for that purpose,
act as its representative for the purposes of signing documents and giving
notices and other communications in connection with this Agreement and the
transactions contemplated hereby, (iii) specimen signatures of the authorized
officers, and (iv) the articles or certificate of incorporation and bylaws of
such Subsidiary, certified as being true and complete. The Agent and the Lenders
may conclusively rely on such certificate until they receive notice in writing
from the Borrower to the contrary.
(c) Certificates of the appropriate state agencies with respect to the
existence, qualification and good standing of the Borrower and Subsidiaries.
(d) A Compliance Certificate dated as of the date of the Initial Funding
substantially in the form of EXHIBIT C hereto.
(e) A Borrowing Base Certificate dated as of the date of the Initial
Funding.
(f) The Notes, duly completed and executed.
(g) The Security Instruments, including those described on EXHIBIT D, duly
completed and executed in sufficient number of counterparts for recording, if
necessary.
(h) An opinion of Xxxxxxx & Xxxxx L.L.P., special counsel to the Borrower
and the Subsidiaries, in form and substance satisfactory to the Agent, as to
such matters incident to the transactions herein contemplated as the Agent may
reasonably request.
(i) Completion of an initial public offering by the Borrower of its common
stock pursuant to the Registration Statement which results in no less than
$35,000,000 cash proceeds (cash proceeds shall be net of underwriter's discounts
and offering expenses including, without limitation, legal, accounting, printing
and listing fees) to the Borrower.
(j) The Agreements and Plans of Organization and other merger and/or
acquisition documents pursuant to which the Borrower will acquire the Founding
Companies shall have been received and found satisfactory to the Agent such
approval not to be unreasonably withheld.
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(k) Completion of the Borrower's acquisition of the Founding Companies as
contemplated by the Registration Statement prior to or contemporaneously with
the Initial Funding.
(l) Consolidated financial statements of the Founding Companies comprising
the Borrower and the other Subsidiaries for the year ending December 31, 1996,
and the nine (9) month period ending September 30, 1997, including balance
sheets, statements of income and cash flow audited (except Capitol Bolt &
Supply, Inc.) by independent public accountants of recognized national standing
and prepared in accordance with GAAP.
(m) Evidence satisfactory to the Agent that the Borrower and each
Subsidiary are carrying insurance in accordance with Section 7.19 hereof.
(n) The Borrower shall deliver or cause to be delivered to the Agent
releases of all Liens (other than Permitted Liens) encumbering the Property of
the Founding Companies or otherwise deliver commitments from the secured parties
or mortgagors of such Liens to release such Liens upon satisfaction of the
obligations thereby secured.
(o) Such other documents as the Agent or any Lender or special counsel to
the Agent may reasonably request.
Section 6.02 INITIAL AND SUBSEQUENT LOANS AND LETTERS OF CREDIT. The
obligation of the Lenders to make Loans to the Borrower upon the occasion of
each borrowing hereunder and to issue, renew, extend or reissue Letters of
Credit for the account of the Borrower (including the Initial Funding) is
subject to the further conditions precedent that, as of the date of such Loans
and after giving effect thereto: (i) no Default shall have occurred and be
continuing; (ii) no Material Adverse Effect shall have occurred; and (iii) the
representations and warranties made by the Borrower in Article VII and in the
Security Instruments shall be true on and as of the date of the making of such
Loans or issuance, renewal, extension or reissuance of a Letter of Credit with
the same force and effect as if made on and as of such date and following such
new borrowing, except to the extent such representations and warranties are
expressly limited to an earlier date, or are untrue because of an event not
prohibited hereby, or the Majority Lenders may expressly consent in writing to
the contrary. Each request for a borrowing or issuance, renewal, extension or
reissuance of a Letter of Credit by the Borrower hereunder shall constitute a
certification by the Borrower to the effect set forth in the preceding sentence
(both as of the date of such notice and, unless the Borrower otherwise notifies
the Agent prior to the date of and immediately following such borrowing or
issuance, renewal, extension or reissuance of a Letter of Credit as of the date
thereof).
Section 6.03 CONDITIONS RELATING TO LETTERS OF CREDIT. In addition
to the satisfaction of all other conditions precedent set forth in this Article
VI, the issuance, renewal, extension or reissuance of the Letters of Credit
referred to in Section 2.01(b) hereof is subject to the following conditions
precedent:
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(a) At least three (3) Business Days prior to the date of the issuance and
at least ten (10) Business Days (or such lesser time period as may be provided
therein) prior to the date of the renewal, extension or reissuance of each
Letter of Credit, the Agent shall have received a written request for a Letter
of Credit.
(b) Each of the Letters of Credit shall (i) be issued by the Fronting
Bank, (ii) contain such terms and provisions as are reasonably required by the
Agent, (iii) be for the account of the Borrower and (iv) expire not later than
the earlier of one (1) year from the date of issuance, renewal, extension or
reissuance or two (2) days before the Revolving Credit Termination Date.
(c) The Borrower shall have duly and validly executed and delivered to the
Fronting Bank a Letter of Credit Agreement pertaining to the Letter of Credit.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agent and the Lenders that
(each representation and warranty herein is given as of the Closing Date and
shall be deemed repeated and reaffirmed on the dates of each borrowing and
issuance, renewal, extension or reissuance of a Letter of Credit as provided in
Section 6.02):
Section 7.01 CORPORATE EXISTENCE. Each of the Borrower and each
Subsidiary: (i) is a corporation or entity duly organized, legally existing and
in good standing under the laws of the jurisdiction of its incorporation or
formation; (ii) has all requisite power, and has all material governmental
licenses, authorizations, consents and approvals necessary to own its assets and
carry on its business as now being or as proposed to be conducted; and (iii) is
qualified to do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary and where failure so
to qualify would have a Material Adverse Effect.
Section 7.02 FINANCIAL CONDITION. The audited consolidated balance
sheet of each of the Founding Companies as at December 31, 1996 and the related
consolidated statement of income, stockholders' equity and cash flow of each of
the Founding Companies for the fiscal year ended on said date, (except unaudited
statements for Capital Bolt & Supply, Inc.) with the opinion thereon of Ernst &
Young L.L.P. heretofore furnished to the Agent and the audited consolidated
balance sheet of each of the Founding Companies (except unaudited statements for
Capital Bolt & Supply, Inc.) as at September 30, 1997 and their related
consolidated statements of income, stockholders' equity and cash flow of each of
the Founding Companies for the nine-month period ended on such date heretofore
furnished to the Agent, are complete and correct in all material respects and
fairly present the consolidated financial condition of each of the Founding
Companies as at said dates and the results of its operations for the nine-month
period ending on said date, all in accordance with GAAP, as applied on a
consistent basis (subject, in the case of the interim financial
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statements, to normal year-end adjustments). The pro forma combined balance
sheets of the Borrower and the Subsidiaries heretofore furnished to the Agent
are complete and correct in all material respects and fairly present the
financial condition of the Borrower and the Subsidiaries as of the acquisition
thereof by the Borrower based upon the aforesaid financial statements of the
Founding Companies, all in accordance with GAAP, applied on a consistent basis.
None of the Borrower or any Subsidiary has on the Closing Date any material
Debt, contingent liabilities, liabilities for taxes, unusual forward or
long-term commitments or unrealized or anticipated losses from any unfavorable
commitments, except as referred to or reflected or provided for in the Financial
Statements or in SCHEDULE 7.02. Since September 30, 1997, there has been no
change or event having a Material Adverse Effect. Since the date of the
Financial Statements, neither the business nor the Properties of the Borrower or
any Subsidiary have been materially and adversely affected as a result of any
fire, explosion, earthquake, flood, drought, windstorm, accident, strike or
other labor disturbance, embargo, requisition or taking of Property or
cancellation of contracts, permits or concessions by any Governmental Authority,
riot, activities of armed forces or acts of God or of any public enemy.
Section 7.03 LITIGATION. Except as disclosed to the Lenders in
SCHEDULE 7.03 hereto, at the Closing Date there is no litigation, legal,
administrative or arbitral proceeding, investigation or other action of any
nature pending or, to the knowledge of the Borrower threatened against or
affecting the Borrower or any Subsidiary which involves the possibility of any
judgment or liability against the Borrower or any Subsidiary not fully covered
by insurance (except for normal deductibles), and which would have a Material
Adverse Effect.
Section 7.04 NO BREACH. Neither the execution and delivery of the
Loan Documents, nor compliance with the terms and provisions hereof will
conflict with or result in a breach of, or require any consent which has not
been obtained as of the Closing Date under, the respective formation and
governance documents (e.g. charter, partnership or limited liability agreement,
and by-laws) of the Borrower or any Subsidiary, or any Governmental Requirement
or any agreement or instrument to which the Borrower or any Subsidiary is a
party or by which it is bound or to which it or its Properties are subject, or
constitute a default under any such agreement or instrument, or result in the
creation or imposition of any Lien upon any of the revenues or assets of the
Borrower or any Subsidiary pursuant to the terms of any such agreement or
instrument other than the Liens created by the Loan Documents.
Section 7.05 AUTHORITY. The Borrower and each Subsidiary have all
necessary power and authority to execute, deliver and perform its obligations
under the Loan Documents to which it is a party; and the execution, delivery and
performance by the Borrower and each Subsidiary of the Loan Documents to which
it is a party, have been duly authorized by all necessary action on its part;
and the Loan Documents constitute the legal, valid and binding obligations of
the Borrower and each Subsidiary, enforceable in accordance with their terms.
Section 7.06 APPROVALS. No authorizations, approvals or consents
of, and no filings or registrations with, any Governmental Authority are
necessary for the execution, delivery or
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performance by the Borrower or any Subsidiary of the Loan Documents or for the
validity or enforceability thereof, except for the recording and filing of the
Security Instruments as required by this Agreement.
Section 7.07 USE OF LOANS. The proceeds of the Loans shall be used
to finance (to the extent not covered by the net proceeds from the initial
public offering of Borrower's common stock referred to in Section 6.01(h)
above), in part, Borrower's acquisition of the Founding Companies, to refinance
the Borrower's and the Founding Companies' existing indebtedness, for working
capital, capital expenditures, acquisitions and other corporate purposes,
including intercompany loans from time to time to the Guarantors. The Borrower
is not engaged principally, or as one of its important activities, in the
business of extending credit for the purpose, whether immediate, incidental or
ultimate, of buying or carrying margin stock (within the meaning of Regula tion
G, U or X of the Board of Governors of the Federal Reserve System) and no part
of the proceeds of any Loan hereunder will be used to buy or carry any margin
stock.
Section 7.08 ERISA. Except (i) as provided in Schedule 7.08 or (ii)
as would not have a Material Adverse Effect:
(a) The Borrower, each Subsidiary and each ERISA Affiliate have complied
with ERISA and, where applicable, the Code regarding each Plan.
(b) Each Plan is, and has been, maintained in compliance with ERISA and,
where applicable, the Code (this representation being made to the knowledge of
Borrower with respect to any Plan which is a Multiemployer Plan).
(c) No act, omission or transaction has occurred which could result in
imposition on the Borrower, any Subsidiary or any ERISA Affiliate (whether
directly or indirectly) of (i) either a civil penalty assessed pursuant to
section 502(c), (i) or (l) of ERISA or a tax imposed pursuant to Chapter 43 of
Subtitle D of the Code or (ii) breach of fiduciary duty liability damages under
section 409 of ERISA.
(d) No liability to the PBGC (other than for the payment of current
premiums which are not past due) by the Borrower, any Subsidiary or any ERISA
Affiliate has been or is expected by the Borrower, any Subsidiary or any ERISA
Affiliate to be incurred with respect to any Plan. No ERISA Event with respect
to any Plan has occurred.
(e) To Borrower's knowledge, full payment when due has been made of all
amounts which the Borrower, any Subsidiary or any ERISA Affiliate is required
under the terms of each Plan or applicable law to have paid as contributions to
such Plan, and no accumulated funding deficiency (as defined in section 302 of
ERISA and section 412 of the Code), whether or not waived, exists with respect
to any Plan.
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(f) Except as required by a collective bargaining agreement, none of the
Borrower, any Subsidiary or any ERISA Affiliate sponsors, maintains, or
contributes to an employee welfare benefit plan, as defined in section 3(1) of
ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by the
Borrower, a Subsidiary or any ERISA Affiliate in its sole discretion at any time
without any material liability.
(g) None of the Borrower, any Subsidiary or any ERISA Affiliate owes or
potentially owes any liability to any Multiemployer Plan.
(h) None of the Borrower, any Subsidiary or any ERISA Affiliate is
required to provide security under section 401(a)(29) of the Code due to a Plan
amendment that results in an increase in current liability for the Plan.
Section 7.09 TAXES. Except as set out in SCHEDULE 7.09, each of the
Borrower and the Subsidiaries has filed all United States Federal income tax
returns and all other tax returns which are required to be filed by them and
have paid all material taxes due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary. The charges, accruals and
reserves on the books of the Borrower and the Subsidiaries in respect of taxes
and other governmental charges are, in the opinion of the Borrower, adequate. No
tax lien has been filed and, to the knowledge of the Borrower, no claim is being
asserted with respect to any such tax, fee or other charge.
Section 7.10 TITLES, ETC.
(a) Except as set out in SCHEDULE 7.10, each of the Borrower and the
Subsidiaries has good and defensible title to its material (individually or in
the aggregate) Properties, free and clear of all Liens except Liens permitted by
Section 9.02.
(b) All leases and agreements necessary for the conduct of the business of
the Borrower and the Subsidiaries are valid and subsisting, in full force and
effect and there exists no default or event or circumstance which with the
giving of notice or the passage of time or both would give rise to a default
under any such lease or leases, which would affect in any material respect the
conduct of the business of the Borrower and the Subsidiaries.
(c) The rights, Properties and other assets presently owned, leased or
licensed by the Borrower and the Subsidiaries including, without limitation, all
easements and rights of way, include all rights, Properties and other assets
necessary to permit the Borrower and the Subsidiaries to conduct their business
in all material respects in the same manner as its business has been conducted
prior to the Closing Date.
(d) All of the assets and Properties of the Borrower and the Subsidiaries
which are reasonably necessary for the operation of its business are in good
working condition and are maintained in accordance with prudent business
standards.
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Section 7.11 NO MATERIAL MISSTATEMENTS. No written information,
statement, exhibit, certificate, document or report furnished to the Agent and
the Lenders (or any of them) by the Borrower or any Subsidiary in connection
with the negotiation of this Agreement contained any material misstatement of
fact or omitted to state a material fact or any fact necessary to make the
statement contained therein not materially misleading in the light of the
circumstances in which made and with respect to the Borrower and the
Subsidiaries taken as a whole. There is no fact peculiar to the Borrower or any
Subsidiary which has a Material Adverse Effect or in the future is reasonably
likely to have (so far as the Borrower can now foresee) a Material Adverse
Effect and which has not been set forth in this Agreement or the other
documents, certificates and statements furnished to the Agent by or on behalf of
the Borrower or any Subsidiary prior to, or on, the Closing Date in connection
with the transactions contemplated hereby.
Section 7.12 INVESTMENT COMPANY ACT. Neither the Borrower nor any
Subsidiary is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
Section 7.13 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the
Borrower nor any Subsidiary is a "holding company," or a "subsidiary company" of
a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company," or a "public utility" within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
Section 7.14 SUBSIDIARIES. Except as set forth on SCHEDULE 7.14 or
as permitted pursuant to Section 9.19, the Borrower has no Subsidiaries.
Section 7.15 LOCATION OF BUSINESS AND OFFICES. The Borrower's
principal place of business and chief executive offices are located at the
address stated on the signature page of this Agreement. On the Closing Date the
principal place of business and chief executive office of each Subsidiary are
located at the addresses stated on SCHEDULE 7.14. Each jurisdiction in which
each Subsidiary operates, maintains assets, or otherwise is doing business is
stated on SCHEDULE 7.14.
Section 7.16 DEFAULTS. Neither the Borrower nor any Subsidiary is in
default nor has any event or circumstance occurred which, but for the expiration
of any applicable grace period or the giving of notice, or both, would
constitute a default under any material agreement or instrument to which the
Borrower or any Subsidiary is a party or by which the Borrower or any Subsidiary
is bound which default would have a Material Adverse Effect. No Default
hereunder has occurred and is continuing.
Section 7.17 ENVIRONMENTAL MATTERS. Except (i) as provided in
SCHEDULE 7.17 or (ii) as would not have a Material Adverse Effect (or with
respect to (c), (d) and (e) below, where the failure to take such actions would
not have a Material Adverse Effect):
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(a) Neither any Property of the Borrower or any Subsidiary nor the
operations conducted thereon violate any order or requirement of any court or
Governmental Authority or any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of the Borrower or
any Subsidiary nor the operations currently conducted thereon or, to the best
knowledge of the Borrower, by any prior owner or operator of such Property or
operation, are in violation of or subject to any existing, pending or threatened
action, suit, investigation, inquiry or proceeding by or before any court or
Governmental Authority or to any remedial obligations under Environmental Laws;
(c) All notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed in connection with the operation or use of any
and all Property of the Borrower and each Subsidiary, including without
limitation past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, have been duly obtained
or filed, and the Borrower and each Subsidiary are in compliance with the terms
and conditions of all such notices, permits, licenses and similar
authorizations;
(d) All hazardous substances, solid waste, and oil and gas exploration and
production wastes, if any, generated at any and all Property of the Borrower or
any Subsidiary have in the past been transported, treated and disposed of in
accordance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the environment, and, to
the best knowledge of the Borrower, all such transport carriers and treatment
and disposal facilities have been and are operating in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and are not the
subject of any existing, pending or threatened action, investigation or inquiry
by any Governmental Authority in connection with any Environmental Laws;
(e) The Borrower has taken all steps reasonably necessary to determine and
has determined that no hazardous substances, solid waste, or oil and gas
exploration and production wastes, have been disposed of or otherwise released
and there has been no threatened release of any hazardous substances on or to
any Property of the Borrower or any Subsidiary except in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment;
(f) To the extent applicable, all Property of the Borrower and each
Subsidiary currently satisfies all design, operation, and equipment requirements
imposed by the OPA or scheduled as of the Closing Date to be imposed by OPA
during the term of this Agreement, and the Borrower does not have any reason to
believe that such Property, to the extent subject to OPA, will not be able to
maintain compliance with the OPA requirements during the term of this Agreement;
and
(g) Neither the Borrower nor any Subsidiary has any known contingent
liability in connection with any release or threatened release of any oil,
hazardous substance or solid waste into the environment.
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Section 7.18 COMPLIANCE WITH THE LAW. Neither the Borrower nor any
Subsidiary has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or other governmental authorization necessary for the
ownership of any of its Properties or the conduct of its business, which
violation or failure would have (in the event such violation or failure were
asserted by any Person through appropriate action) a Material Adverse Effect.
Section 7.19 INSURANCE. The Borrower and each Subsidiary maintain
all material policies of fire, liability, workmen's compensation and other forms
of insurance necessary for the operation of its business. All such policies are
in full force and effect, all premiums with respect thereto covering all periods
up to and including the date of the closing have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.
Such policies are sufficient for compliance with all requirements of law and of
all agreements to which the Borrower or any Subsidiary is a party; are valid,
outstanding and enforceable policies; provide adequate insurance coverage in at
least such amounts and against at least such risks (but including in any event
public liability) as are usually insured against in the same general area by
companies engaged in the same or a similar business for the assets and
operations of the Borrower and each Subsidiary; will remain in full force and
effect through the term hereof; and will not in any way be affected by, or
terminate or lapse by reason of, the transactions contemplated by this
Agreement. Neither the Borrower nor any of the Subsidiaries self insure any
material risks. Neither the Borrower nor any Subsidiary has been refused any
insurance with respect to its assets or operations, nor has its coverage been
limited below usual and customary policy limits, by an insurance carrier to
which it has applied for any such insurance or with which it has carried
insurance during the last three years.
Section 7.20 HEDGING AGREEMENTS. SCHEDULE 7.20 sets forth, as of the
Closing Date, a true and complete list of all Hedging Agreements (including
commodity price swap agreements, forward agreements or contracts of sale which
provide for prepayment for deferred shipment or delivery of oil, gas or other
commodities) of the Borrower and each Subsidiary, the material terms thereof
(including the type, term, effective date, termination date and notional amounts
or volumes), the net xxxx to market value thereof, all credit support agreements
relating thereto (including any margin required or supplied), and the
counterparty to each such agreement.
Section 7.21 RESTRICTION ON LIENS. Neither the Borrower nor any of
the Subsidiaries is a party to any agreement or arrangement (other than this
Agreement and the Security Instruments), or subject to any order, judgment, writ
or decree, which either restricts or purports to restrict its ability to grant
Liens to other Persons on or in respect of their respective assets of
Properties.
Section 7.22 MATERIAL AGREEMENTS. Set forth on SCHEDULE 7.22 hereto
is a complete and correct list of all material agreements, leases, indentures,
purchase agreements, obligations in respect of letters of credit, guarantees,
joint venture agreements, and other instruments in effect or to be in effect as
of the Closing Date (other than Hedging Agreements) providing for, evidencing,
securing or otherwise relating to any Debt of the Borrower or any of the
Subsidiaries, and all obligations of the Borrower or any of the Subsidiaries to
issuers of surety or appeal bonds issued for account of the Borrower or any such
Subsidiary, and such list correctly sets forth the names of the
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debtor or lessee and creditor or lessor with respect to the Debt or lease
obligations outstanding or to be outstanding and the property subject to any
Lien securing such Debt or lease obligation.
Section 7.23 REGISTRATION STATEMENT. The Registration Statement
contains no material misstatement of fact or omitted to state a material fact or
any fact necessary to make the statement contained therein not materially
misleading in the light of the circumstances in which made and with respect to
the Borrower and the Founding Companies taken as a whole.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the Commitments
are in effect and until payment in full of all Indebtedness hereunder, all
interest thereon and all other amounts payable by the Borrower hereunder:
Section 8.01 FINANCIAL STATEMENTS. The Borrower shall deliver, or
shall cause to be delivered, to the Agent with sufficient copies of each for the
Lenders:
(a) As soon as available and in any event within 90 days after the end of
each fiscal year of the Borrower, the audited consolidated and unaudited
consolidating statements of income, stockholders' equity, changes in financial
position and cash flow of the Borrower and its Consolidated Subsidiaries for
such fiscal year, and the related consolidated and consolidating balance sheets
of the Borrower and its Consolidated Subsidiaries as at the end of such fiscal
year, and setting forth in each case in comparative form the corresponding
figures for the preceding fiscal year, and accompanied by the related opinion of
independent public accountants of recognized national standing acceptable to the
Agent which opinion shall state that said financial statements fairly present
the consolidated financial condition and results of operations of the Borrower
and its Consolidated Subsidiaries as at the end of, and for, such fiscal year
and that such financial statements have been prepared in accordance with GAAP on
a Consistent Basis except for such changes in such principles with which the
independent public accountants shall have concurred and such opinion shall not
contain a "going concern" or like qualification or exception, and a certificate
of such accountants stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically stated, of any
Default.
(b) As soon as available and in any event within 45 days after the end of
each of the first three fiscal quarterly periods of each fiscal year of the
Borrower, unaudited consolidated statements of income, stockholders' equity,
changes in financial position and cash flow of the Borrower and its Consolidated
Subsidiaries for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related consolidated
balance sheets as at the end of such period, and setting forth in each case in
comparative form the corresponding figures for the
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corresponding period in the preceding fiscal year, accompanied by the
certificate of a Responsible Officer, which certificate shall state that said
financial statements fairly present the consolidated financial condition and
results of operations of the Borrower and its Consolidated Subsidiaries in
accordance with GAAP on a Consistent Basis, as at the end of, and for, such
period (subject to normal year-end audit adjustments).
(c) Promptly after the Borrower knows that any Default or any Material
Adverse Effect has occurred, a notice of such Default or Material Adverse
Effect, describing the same in reasonable detail and the action the Borrower
proposes to take with respect thereto.
(d) Promptly upon receipt thereof, a copy of each other report (excluding
routine correspondence) submitted to the Borrower or any Subsidiary by
independent accountants in connection with any annual, interim or special audit
made by them of the books of the Borrower and the Subsidiaries, and a copy of
any response by the Borrower or any Subsidiary of the Borrower, or the Board of
Directors of the Borrower or any Subsidiary of the Borrower, to such letter or
report.
(e) Promptly upon its becoming available, each financial statement,
report, notice or proxy statement sent by the Borrower to stockholders generally
and each regular or periodic report and any registration statement, prospectus
or written communication (other than transmittal letters) in respect thereof
filed by the Borrower with or received by the Borrower in connection therewith
from any securities exchange or the SEC or any successor agency.
(f) Promptly after the furnishing thereof, copies of any statement, report
or notice furnished to or any Person pursuant to the terms of any indenture,
loan or credit or other similar agreement, other than this Agreement and not
otherwise required to be furnished to the Lenders pursuant to any other
provision of this Section 8.01.
(g) From time to time such other information regarding the business,
affairs or financial condition of the Borrower or any Subsidiary (including,
without limitation, any Plan or Multi employer Plan and any reports or other
information required to be filed under ERISA) as any Lender or the Agent may
reasonably request.
(h) (i) not later than 30 days after and as of the end of each month, a
summary or, on request, a listing of accounts receivable aged from
date of invoice;
(ii) not later than 30 days after and as of the end of each calendar
year or on the request from the Agent, a list of the names and
addresses of all of Borrower's account debtors;
(iii) not later than 30 days after and as of the end of each month,
or on the request of the Agent, an inventory summary of balances at
the lower of cost or market for the Borrower and each Subsidiary;
and
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(iv) not later than 30 days after and as of the end of each month, a
Borrowing Base certificate in the form of EXHIBIT F hereto.
(i) The Borrower will furnish to the Agent, at the time it furnishes each
set of financial statements pursuant to paragraph (a) or (b) above, a Compliance
Certificate (i) certifying as to the matters set forth therein and stating that
no Default has occurred and is continuing (or, if any Default has occurred and
is continuing, describing the same in reasonable detail), (ii) setting forth in
reasonable detail the computations necessary to determine whether the Borrower
is in compliance with Sections 9.13, 9.14 and 9.15 as of the end of the
respective fiscal quarter or fiscal year and (iii) setting forth in reasonable
detail the computations necessary to determine the Applicable Margin and the
Commitment Fee..
Section 8.02 LITIGATION. The Borrower shall promptly give to the
Agent notice of all legal or arbitral proceedings, and of all proceedings before
any Governmental Authority affecting the Borrower or any Subsidiary, except
proceedings which, if adversely determined, would not have a Material Adverse
Effect. The Borrower will, and will cause each of the Subsidiaries to, promptly
notify the Agent and each of the Lenders of any claim, judgment, Lien or other
encumbrance affecting any Property of the Borrower or any Subsidiary if the
value of the claim, judgment, Lien, or other encumbrance affecting such Property
shall exceed $500,000.
Section 8.03 MAINTENANCE, ETC.
(a) The Borrower shall and shall cause each Subsidiary to: preserve and
maintain its corporate existence and all of its material rights, privileges and
franchises; keep books of record and account in which full, true and correct
entries will be made of all dealings or transactions in relation to its business
and activities; comply with all Governmental Requirements if failure to comply
with such requirements will have a Material Adverse Effect; pay and discharge
all taxes, assessments and governmental charges or levies imposed on it or on
its income or profits or on any of its Property prior to the date on which
penalties attach thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by proper proceedings
and against which adequate reserves are being maintained; upon reasonable
notice, permit representatives of the Agent or any Lender, during normal
business hours, to examine, copy and make extracts from its books and records,
to inspect its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Lender or the Agent (as
the case may be); and keep, or cause to be kept, insured by financially sound
and reputable insurers all Property of a character usually insured by Persons
engaged in the same or similar business similarly situated against loss or
damage of the kinds and in the amounts customarily insured against by such
Persons and carry such other insurance as is usually carried by such Persons
including, without limitation, environmental risk insurance to the extent
reasonably available.
(b) Contemporaneously with the delivery of the financial statements
required by Section 8.01(a) to be delivered for each year, the Borrower will
furnish or cause to be furnished to the Agent and the Lenders a certificate of
insurance coverage from the insurer in form and substance
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satisfactory to the Agent and, if requested, will furnish the Agent and the
Lenders copies of the applicable policies.
(c) The Borrower will and will cause each Subsidiary to operate its
Properties or cause such Properties to be operated in a careful and efficient
manner in accordance with the practices of the industry and in compliance with
all applicable contracts and agreements and in compliance in all material
respects with all Governmental Requirements.
Section 8.04 ENVIRONMENTAL MATTERS.
(a) The Borrower will and will cause each Subsidiary to establish and
implement such procedures as may be reasonably necessary to continuously
determine and assure that any failure of the following does not have a Material
Adverse Effect: (i) all Property of the Borrower and the Subsidiaries and the
operations conducted thereon and other activities of the Borrower and the
Subsidiaries are in compliance with and do not violate the requirements of any
Environmental Laws, (ii) no oil, hazardous substances or solid wastes are
disposed of or otherwise released on or to any Property owned by any such party
except in compliance with Environmental Laws, (iii) no hazardous substance will
be released on or to any such Property in a quantity equal to or exceeding that
quantity which requires reporting pursuant to Section 103 of CERCLA, and (iv) no
oil, oil and gas exploration and production wastes or hazardous substance is
released on or to any such Property so as to pose an imminent and substantial
endangerment to public health or welfare or the environment.
(b) The Borrower will promptly notify the Agent and the Lenders in writing
of any threatened action, investigation or inquiry by any Governmental Authority
of which the Borrower has knowledge in connection with any Environmental Laws,
excluding routine testing and corrective action.
Section 8.05 FURTHER ASSURANCES. The Borrower will and will cause
each Subsidiary to cure promptly any defects in the creation and issuance of the
Notes and the execution and delivery of the Security Instruments and this
Agreement. The Borrower at its expense will and will cause each Subsidiary to
promptly execute and deliver to the Agent upon request all such other documents,
agreements and instruments to comply with or accomplish the covenants and
agreements of the Borrower or any Subsidiary, as the case may be, in the
Security Instruments and this Agreement, or to further evidence and more fully
describe the collateral intended as security for the Notes, or to correct any
omissions in the Security Instruments, or to state more fully the security
obligations set out herein or in any of the Security Instruments, or to perfect,
protect or preserve any Liens created pursuant to any of the Security
Instruments, or to make any recordings, to file any notices or obtain any
consents, all as may be necessary or appropriate in connection therewith.
Section 8.06 PERFORMANCE OF OBLIGATIONS. The Borrower will pay the
Notes according to the reading, tenor and effect thereof; and the Borrower will
and will cause each Subsidiary to do and perform every act and discharge all of
the obligations to be performed and
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discharged by them under the Security Instruments and this Agreement, at the
time or times and in the manner specified.
Section 8.07 ERISA INFORMATION AND COMPLIANCE. The Borrower will
promptly furnish and will cause the Subsidiaries and any ERISA Affiliate to
promptly furnish to the Agent with sufficient copies to the Lenders (i) promptly
after the filing thereof with the United States Secretary of Labor, the Internal
Revenue Service or the PBGC, copies of each annual and other report with respect
to each Plan that is subject to Title IV of ERISA (other than a Multiemployer
Plan) and has unfunded vested benefits as reflected on such report or any trust
created thereunder, (ii) immediately upon becoming aware of the occurrence of
any ERISA Event or of any "prohibited transaction," as described in section 406
of ERISA or in section 4975 of the Code, in connection with any Plan or any
trust created thereunder, a written notice signed by a Responsible Officer
specifying the nature thereof, what action the Borrower, the Subsidiary or the
ERISA Affiliate is taking or proposes to take with respect thereto, and, when
known, any action taken or proposed by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto, and (iii) immediately upon
receipt thereof, copies of any notice of the PBGC's intention to terminate or to
have a trustee appointed to administer any Plan. With respect to each Plan
(other than a Multiemployer Plan) but except for failures which would not result
in a Material Adverse Effect, the Borrower will, and will cause each Subsidiary
and ERISA Affiliate to, (i) satisfy in full and in a timely manner, without
incurring any late payment or underpayment charge or penalty and without giving
rise to any lien, all of the contribution and funding requirements of section
412 of the Code (determined without regard to subsections (d), (e), (f) and (k)
thereof) and of section 302 of ERISA (determined without regard to sections 303,
304 and 306 of ERISA), and (ii) pay, or cause to be paid, to the PBGC in a
timely manner, without incurring any late payment or underpayment charge or
penalty, all premiums required pursuant to sections 4006 and 4007 of ERISA.
Section 8.08 SUBSIDIARY SECURITY. Should the Borrower create or
acquire any Subsidiary pursuant to Section 9.19 hereof it will promptly grant to
the Agent for the benefit of the Lenders a security interest and pledge of all
the capital stock of such Subsidiary in form and substance satisfactory to the
Agent, and the Borrower will cause such Subsidiary to enter into a guaranty of
the Indebtedness in form and substance satisfactory to the Agent; provided,
however, with respect to any such Subsidiary that is not a U.S. based entity,
the security interest and/or guaranty shall be limited to the extent necessary
to prevent any adverse tax consequence resulting therefrom. The delivery of such
security and guaranty shall be accompanied by such back up corporate authority
and opinions of counsel as the Agent may reasonably request.
Section 8.09 INSPECTION. The Borrower shall and shall cause each
Subsidiary to permit the Agent and the Lenders to visit and inspect any of their
respective Properties, to examine all of such Person's books of account records,
reports, and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances, and accounts with their respective officers,
employees, and independent public accountants all at such reasonable times and
as often as may be reasonably requested, provided that the Borrower is given at
least three (3) Business Days advance notice thereof and reasonable opportunity
to be present when independent public
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accountants or other third parties are contacted, and provided further that so
long as no Default or Event of Default exists, the Agent and the Lenders shall
not exercise the foregoing inspection right more often than once in any calendar
year.
Section 8.10 INSURANCE CERTIFICATE. Within 90 days after the Closing
Date, the Borrower shall furnish to the Agent insurance certificates for the
Borrower and the Subsidiaries evidencing the insurance required pursuant to
Section 8.03. During such 90 day period, promptly upon request, the Borrower
will make available for review by the Agent or any Lender the insurance policies
and any related information of the Borrower and the Subsidiaries.
Section 8.11 RELEASE OF LIENS; SEARCH CERTIFICATES. Not later than
45 days after the Closing Date, the Borrower shall deliver to the Agent Lien
search certificates for the Borrower and each of the Guarantors for each of the
jurisdictions set forth on Schedule 7.14 reflecting that the financing statement
relating to the Lien granted by the Borrower in favor of the Agent under the
Security Agreement (Stock and Other Securities) of even date herewith has been
properly filed and that all other Liens (excluding Permitted Liens) against the
Borrower, the Guarantors or their Properties have been released to the
satisfaction of the Agent.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as any of the Commitments
are in effect and until payment in full of Loans hereunder, all interest thereon
and all other amounts payable by the Borrower hereunder, without the prior
written consent of the Majority Lenders:
Section 9.01 DEBT. Neither the Borrower nor any Subsidiary will
incur, create, assume or suffer to exist any Debt, except:
(a) the Notes or other Indebtedness arising under the Loan Documents or
any guaranty of or suretyship arrangement for the Notes or other Indebtedness
arising under the Loan Documents;
(b) Debt of the Borrower and/or the Founding Companies existing on the
Closing Date which is reflected in the Financial Statements or is disclosed in
SCHEDULE 9.01, and any renewals or extensions (but not increases) thereof;
(c) accounts payable (for the deferred purchase price of Property or
services) from time to time incurred in the ordinary course of business which,
if greater than 90 days past the invoice or billing date, are being contested in
good faith by appropriate proceedings if reserves adequate under GAAP shall have
been established therefor;
(d) Debt (i) under Capital Leases and (ii) purchase money Debt which in
each purchase money Debt case shall not exceed 100% of the lesser of the total
purchase price and the fair market
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value of the Property acquired as determined at the time of acquisition,
provided all Debt incurred pursuant to this clause (d) shall not at any time
exceed $3,000,000.
(e) Subordinated Debt not to exceed $5,000,000 at any one time outstanding
which matures on a date subsequent to the Revolving Credit Termination Date.
(f) Hedging Agreements entered into by the Borrower, not for speculative
purposes, to hedge the interest cost with respect to the Loans and being for a
notional amount not to exceed the outstanding balance of principal and interest
on the Notes.
(g) Debt as a result of Section 9.03(g).
Section 9.02 LIENS. Neither the Borrower nor any Subsidiary will
create, incur, assume or permit to exist any Lien on any of its Properties (now
owned or hereafter acquired), except:
(a) Liens securing the payment of any Indebtedness;
(b) Excepted Liens;
(c) Liens securing Capital Leases or purchase money debt allowed under
Section 9.01(d) but only on the Property under lease or acquired with such debt;
and
(d) Liens disclosed on SCHEDULE 9.02.
Section 9.03 INVESTMENTS, LOANS AND ADVANCES. Neither the Borrower
nor any Subsidiary will make or permit to remain outstanding any loans or
advances to or investments in any Person, except that the foregoing restriction
shall not apply to:
(a) investments, loans or advances reflected in the Financial Statements
or which are disclosed to the Lenders in SCHEDULE 9.03;
(b) accounts receivable arising in the ordinary course of business;
(c) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one year from the date of creation thereof;
(d) commercial paper maturing within one year from the date of creation
thereof rated in the highest grade by Standard & Poors Corporation or Xxxxx'x
Investors Service, Inc.;
(e) deposits maturing within one year from the date of creation thereof
with, including certificates of deposit issued by, any Lender or any office
located in the United States of any other
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bank or trust company which is organized under the laws of the United States or
any state thereof, has capital, surplus and undivided profits aggregating at
least $100,000,000.00 (as of the date of such Lender's or bank or trust
company's most recent financial reports) and has a short term deposit rating of
no lower than A2 or P2, as such rating is set forth from time to time, by
Standard & Poors Corporation or Xxxxx'x Investors Service, Inc., respectively;
(f) deposits in money market funds investing exclusively in investments
described in Section 9.03(c), 9.03(d) or 9.03(e);
(g) investments, loans or advances made by the Borrower in or to the
Subsidiaries;
(h) other investments, loans or advances not to exceed $1,000,000 in the
aggregate at any time; and
(i) investments and/or loans for Acquisitions; provided, however,
Acquisitions involving non-equity consideration of more than $10,000,000 for any
individual Acquisition or $40,000,000 in the aggregate for all such Acquisitions
during the previous four fiscal quarters shall be made only upon the written
consent of the Majority Lenders, such consent to be in the sole and absolute
discretion of each such Lender. At least ten (10) Business Days prior to the
closing of any Acquisition requiring consent of the Majority Lenders, and on or
prior to the closing of any Acquisition not requiring such consent and for which
the non-equity consideration exceeds $5,000,000, the Borrower shall have
provided to the Agent a completed certificate substantially in the form of
EXHIBIT G together with all required exhibits, duly certified by a Responsible
Officer, which the Agent shall forward to the Lenders for any Acquisition
requiring consent of the Lenders. Prior to the closing of any Acquisition, the
Borrower shall, upon request by the Agent, make available to the Agent and the
Lenders at the Borrower's offices in Houston, Texas, any information regarding
the Acquisition as the Agent or any Lender may reasonably request, including
without limitation:
(a) descriptions in reasonable detail of the Property to be acquired
together with title or other pertinent information with respect to the
Property to be acquired;
(b) purchase agreements relating to the Acquisition, and all other
documents relating thereto or to the Properties to be acquired, including
without limitation, operations of the entity to be acquired, compliance
with Environmental Laws, and any available reports related thereto; and
(c) all financial statements of the entity to be acquired (such
financial statements for at least the most recent fiscal year to be
audited with respect to all target entities with an aggregate purchase
price in an amount in excess of fifteen percent (15%) of Net Worth as made
available to the Borrower, but in any event covering the then most recent
two (2) fiscal years together with current internally prepared interim
financial statements prepared by such target entity in accordance with
GAAP; and
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(d) financial projections of the acquired entity, in form and
substance satisfactory to the Agent.
Section 9.04 DIVIDENDS, DISTRIBUTIONS AND REDEMPTIONS. The Borrower
will not and will not permit any Subsidiary to make any Restricted Payment.
Section 9.05 SALES AND LEASEBACKS. Neither the Borrower nor any
Subsidiary will enter into any arrangement, directly or indirectly, with any
Person whereby the Borrower or any Subsidiary shall sell or transfer any of its
Property, whether now owned or hereafter acquired, and whereby the Borrower or
any Subsidiary shall then or thereafter rent or lease as lessee such Property or
any part thereof or other Property which the Borrower or any Subsidiary intends
to use for substantially the same purpose or purposes as the Property sold or
transferred.
Section 9.06 NATURE OF BUSINESS. Neither the Borrower nor any
Subsidiary will allow any material change to be made in the character of its
business.
Section 9.07 INTENTIONALLY OMITTED.
Section 9.08 MERGERS, ETC. Neither the Borrower nor any Subsidiary
will merge into or with or consolidate with any other Person, unless the
Borrower or a Subsidiary is the surviving entity and no Default exists or will
be created thereby, or sell, lease or otherwise dispose of (whether in one
transaction or in a series of transactions) all or substantially all of its
Property or assets to any other Person.
Section 9.09 PROCEEDS OF NOTES. The Borrower will not permit the
proceeds of the Notes to be used for any purpose other than those permitted by
Section 7.07. Neither the Borrower nor any Person acting on behalf of the
Borrower has taken or will take any action which might cause any of the Loan
Documents to violate Regulation G, U or X or any other regulation of the Board
of Governors of the Federal Reserve System or to violate Section 7 of the
Securities Exchange Act of 1934 or any rule or regulation thereunder, in each
case as now in effect or as the same may hereinafter be in effect.
Section 9.10 ERISA COMPLIANCE. Except as would not have or result in
a Material Adverse Effect, the Borrower will not at any time:
(a) Engage in, or permit any Subsidiary or ERISA Affiliate to engage in,
any transaction in connection with which the Borrower, any Subsidiary or any
ERISA Affiliate could be subjected to either a civil penalty assessed pursuant
to section 502(c), (i) or (l) of ERISA or a tax imposed by Chapter 43 of
Subtitle D of the Code;
(b) Terminate, or permit any Subsidiary or ERISA Affiliate to terminate,
any Plan in a manner, or take any other action with respect to any Plan, which
could result in any liability of the Borrower, any Subsidiary or any ERISA
Affiliate to the PBGC;
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(c) Fail to make, or permit any Subsidiary or ERISA Affiliate to fail to
make, full payment when due of all amounts which, under the provisions of any
Plan, agreement relating thereto or applicable law, the Borrower, a Subsidiary
or any ERISA Affiliate is required to pay as contributions thereto;
(d) Permit to exist, or allow any Subsidiary or ERISA Affiliate to permit
to exist, any accumulated funding deficiency within the meaning of Section 302
of ERISA or section 412 of the Code, whether or not waived, with respect to any
Plan other than a Multiemployer Plan;
(e) Permit the funding status of any plan which is regulated under Title
IV of ERISA (other than a Multiemployer Plan) to be in a condition that could
reasonably be expected to result in liability of the Borrower, any Subsidiary or
any ERISA Affiliate to the PBGC.;
(f) Contribute to or assume an obligation to contribute to, or permit any
Subsidiary or ERISA Affiliate to contribute to or assume an obligation to
contribute to, any Multiemployer Plan if such contributions could reasonably be
expected to result in the assessment of a withdrawal liability;
(g) Engage in an acquisition transaction a result of which would be that
Borrower would be in violation of any of the covenants of Paragraphs (d), (e) or
(f) of this Section 9.10;
(h) Incur, or permit any Subsidiary or ERISA Affiliate to incur, a
liability to or on account of a Plan under sections 515, 4062, 4063, 4064, 4201
or 4204 of ERISA;
(i) Except as required by a collective bargaining agreement contribute to
or assume an obligation to contribute to, or permit any Subsidiary or ERISA
Affiliate to contribute to or assume an obligation to contribute to, any
employee welfare benefit plan, as defined in section 3(1) of ERISA, including,
without limitation, any such plan maintained to provide benefits to former
employees of such entities, that may not be terminated by such entities in their
sole discretion at any time without any material liability; or
(j) Amend or permit any Subsidiary or ERISA Affiliate to amend, a Plan
resulting in an increase in current liability such that the Borrower, any
Subsidiary or any ERISA Affiliate is required to provide security to such Plan
under section 401(a)(29) of the Code.
Section 9.11 SALE OR DISCOUNT OF RECEIVABLES. Neither the Borrower
nor any Subsidiary will discount or sell (with or without recourse) any of its
notes receivable or accounts receivable, provided, such parties may, in good
faith, take such actions as are reasonably likely to maximize the value of
invoices more than 120 days past due and otherwise doubtful of collection,
provided, the aggregate original face amount of all receivables so discounted
and sold does not exceed $2,000,000.
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Section 9.12 CAPITAL EXPENDITURES. The Borrower will not make or
permit any Subsidiary to make any Capital Expenditures, if, after giving effect
thereto, the aggregate of all such expenditures would exceed $8,000,000 during
any fiscal year.
Section 9.13 NET WORTH. The Borrower will not at any time permit its
Net Worth to be less than the greater of (i) $75,000,000 or (ii) 90% of actual
Net Worth calculated as of March 31, 1998, PLUS 50% of the sum of the Borrower's
after tax consolidated net income for each fiscal quarter for which consolidated
net income is greater than $0 beginning with the fiscal quarter ending June 30,
1998 PLUS 100% of the net proceeds received from equity offerings after the
Closing Date.
Section 9.14 RATIO OF FUNDED DEBT TO ADJUSTED EBITDA. The Borrower
will not permit its ratio of Funded Debt as of the end of any fiscal quarter to
Adjusted EBITDA for the four fiscal quarters ending on such date to be greater
than 3.00 to 1.00. For the purposes of Section 9.14 only, "Adjusted EBITDA"
shall mean the EBITDA of the Borrower and the Subsidiaries calculated on a
pro-forma basis to include the EBITDA for the most recent four fiscal quarters
of acquired Persons (including, without limitation the Founding Companies) to
the extent that such EBITDA is not included in the EBITDA of the Borrower.
Section 9.15 FIXED CHARGE COVERAGE RATIO. The Borrower will not
permit its Fixed Charge Coverage Ratio as of the end of any fiscal quarter of
the Borrower (calculated quarterly at the end of each fiscal quarter) to be less
than 2.00 to 1.00. For the purposes of this Section 9.15, "FIXED CHARGE COVERAGE
RATIO" shall mean the ratio of (i) Adjusted EBITDA minus cash taxes (other than
cash taxes paid by Alatec Products, Inc. for tax years prior to 1997) and
Capital Expenditures for the four fiscal quarters ending on such date to (ii)
cash interest payments plus current maturities of Debt paid for such four fiscal
quarters of the Borrower and its Consolidated Subsidiaries. For the purposes of
Section 9.15 only, "Adjusted EBITDA" shall mean the EBITDA of the Borrower and
the Subsidiaries calculated on a pro-forma basis to include the EBITDA for the
most recent four fiscal quarters of the Founding Companies (and no other
acquired Persons) to the extent that such EBITDA is not included in the EBITDA
of the Borrower.
Section 9.16 SALE OF PROPERTIES. The Borrower will not, and will not
permit any Subsidiary to, sell, assign, convey or otherwise transfer any of its
Property or any interest therein except for Properties which are obsolete or no
longer useful in the Borrower's or Subsidiaries' business and Properties for
which the Borrower has given the Agent at least ten (10) Business Days prior
written notice of the proposed transfer and which shall not exceed $1,000,000 in
the aggregate in any fiscal year.
Section 9.17 ENVIRONMENTAL MATTERS. Neither the Borrower nor any
Subsidiary will cause or permit any of its Property to be in violation of, or do
anything or permit anything to be done which will subject any such Property to
any remedial obligations under any Environmental Laws, assuming disclosure to
the applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property where such violations or
remedial obligations would have a Material Adverse Effect.
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Section 9.18 TRANSACTIONS WITH AFFILIATES. Neither the Borrower nor
any Subsidiary will enter into any transaction, including, without limitation,
any purchase, sale, lease or exchange of Property or the rendering of any
service, with any Affiliate (except for the Borrower or any Guarantor) unless
such transactions are otherwise permitted under this Agreement, are in the
ordinary course of its business and are upon fair and reasonable terms no less
favorable to it than it would obtain in a comparable arm's length transaction
with a Person not an Affiliate, or are disclosed in the Registration Statement.
Section 9.19 SUBSIDIARIES. The Borrower shall not, and shall not
permit any Subsidiary to, create any additional Subsidiaries except as permitted
by Section 9.03. The Borrower shall not and shall not permit any Subsidiary to
sell or to issue any stock or ownership interest of a Subsidiary except to the
Borrower or any Guarantor and except in compliance with Section 9.03.
Section 9.20 NEGATIVE PLEDGE AGREEMENTS. Neither the Borrower nor
any Subsidiary will create, incur, assume or suffer to exist any contract,
agreement or understanding (other than this Agreement and the Security
Instruments) which in any way prohibits or restricts the granting, conveying,
creation or imposition of any Lien on any of its Property or restricts any
Subsidiary from paying dividends to the Borrower, or which requires the consent
of or notice to other Persons in connection therewith.
Section 9.21 FISCAL YEAR. The Borrower will not change its fiscal
year without consent of the Majority Lenders.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 EVENTS OF DEFAULT. One or more of the following events
shall constitute an "EVENT OF DEFAULT":
(a) the Borrower shall default in the payment or prepayment when due of
any principal of or interest on any Loan, or any reimbursement obligation for a
disbursement made under any Letter of Credit, or any fees or other amount
payable by it hereunder or under any Security Instrument and such default, other
than a default of a payment or prepayment of principal (which shall have no cure
period), shall continue unremedied for a period of three (3) Business Days; or
(b) the Borrower or any Subsidiary shall default in the payment when due
of any principal of or interest on any of its other Debt aggregating $500,000 or
more, or any event specified in any note, agreement, indenture or other document
evidencing or relating to any such Debt shall occur if the effect of such event
is to cause, or (with the giving of any notice or the lapse of time or both) to
permit the holder or holders of such Debt (or a trustee or agent on behalf of
such holder or holders) to cause, such Debt to become due prior to its stated
maturity; or
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(c) any representation, warranty or certification made or deemed made
herein or in any Security Instrument by the Borrower or any Subsidiary, or any
certificate furnished to any Lender or the Agent pursuant to the provisions
hereof or any Security Instrument, shall prove to have been false or misleading
as of the time made or furnished in any material respect; or
(d) the Borrower shall default in the performance of any of its
obligations under Article IX or any other Article of this Agreement other than
under Article VIII; or the Borrower shall default in the performance of any of
its obligations under Article VIII or any Security Instrument (other than the
payment of amounts due which shall be governed by Section 10.01(a)) and such
default shall continue unremedied for a period of thirty (30) days after the
earlier to occur of (i) notice thereof to the Borrower by the Agent or any
Lender (through the Agent), or (ii) the Borrower otherwise becoming aware of
such default; or
(e) the Borrower shall admit in writing its inability to, or be generally
unable to, pay its debts as such debts become due; or
(f) the Borrower shall (i) apply for or consent to the appointment of, or
the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the Federal Bankruptcy Code (as now or hereafter in effect), (iv) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, liquidation or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the application or
consent of the Borrower, in any court of competent jurisdiction, seeking (i) its
liquidation, reorganization, dissolution or winding-up, or the composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Borrower of all or any substantial part
of its assets, or (iii) similar relief in respect of the Borrower under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 60 days; or (iv)
an order for relief against the Borrower shall be entered in an involuntary case
under the Federal Bankruptcy Code; or
(h) a judgment or judgments for the payment of money in excess of $500,000
in the aggregate shall be rendered by a court against the Borrower or any
Subsidiary and the same shall not be discharged (or provision shall not be made
for such discharge), or a stay of execution thereof shall not be procured,
within thirty (30) days from the date of entry thereof and the Borrower or such
Subsidiary shall not, within said period of 30 days, or such longer period
during which execution of
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the same shall have been stayed, appeal therefrom and cause the execution
thereof to be stayed during such appeal; or
(i) the Security Instruments after delivery thereof shall for any reason,
except to the extent permitted by the terms thereof, cease to be in full force
and effect and valid, binding and enforceable in accordance with their terms, or
cease to create a valid and perfected Lien of the priority required thereby on
any of the collateral purported to be covered thereby, except to the extent
permitted by the terms of this Agreement, or the Borrower shall so state in
writing; or
(j) any Letter of Credit becomes the subject matter of any order,
judgment, injunction or any other such determination, or if the Borrower or any
other Person shall petition or apply for or obtain any order restricting payment
by the Agent under any Letter of Credit or extending the Lenders' liability
under any Letter of Credit beyond the expiration date stated therein or
otherwise agreed to by the Agent; or
(k) a Change of Control occurs or the Borrower discontinues its usual
business; or
(l) any Guarantor takes, suffers or permits to exist any of the events or
conditions referred to in paragraphs (e), (f), (g) or (h) hereof or if any
provision of any guaranty agreement related thereto shall for any reason cease
to be valid and binding on any Guarantor or if any Guarantor shall so state in
writing; PROVIDED, HOWEVER, the foregoing shall not be considered an Event of
Default for any Guarantor with total assets of less than $1,000,000 and for
which the foregoing does not result in a Material Adverse Effect.
Section 10.02 REMEDIES.
(a) In the case of an Event of Default other than one referred to in
clauses (e), (f) or (g) of Section 10.01 or in clause (l) to the extent it
relates to clauses (e), (f) or (g), the Agent, upon request of the Majority
Lenders, shall, by notice to the Borrower, cancel the Commitments and/or declare
the principal amount then outstanding of, and the accrued interest on, the Loans
and all other amounts payable by the Borrower hereunder and under the Notes
(including without limitation the payment of cash collateral to secure the LC
Exposure as provided in Section 2.09(b) hereof) to be forthwith due and payable,
whereupon such amounts shall be immediately due and payable without presentment,
demand, protest, notice of intent to accelerate, notice of acceleration or other
formalities of any kind, all of which are hereby expressly waived by the
Borrower.
(b) In the case of the occurrence of an Event of Default referred to in
clauses (e), (f) or (g) of Section 10.01 or in clause (l) to the extent it
relates to clauses (e), (f) or (g), the Commitments shall be automatically
canceled and the principal amount then outstanding of, and the accrued interest
on, the Loans and all other amounts payable by the Borrower hereunder and under
the Notes (including without limitation the payment of cash collateral to secure
the LC Exposure as provided in Section 2.09(b) hereof) shall become
automatically immediately due and payable without
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presentment, demand, protest, notice of intent to accelerate, notice of
acceleration or other formalities of any kind, all of which are hereby expressly
waived by the Borrower.
(c) All proceeds received after maturity of the Notes, whether by
acceleration or otherwise shall be applied first to reimbursement of expenses
and indemnities provided for in this Agreement and the Security Instruments;
second to accrued interest on the Notes; third to fees; fourth pro rata to
principal outstanding on the Notes and other Indebtedness; fifth to serve as
cash collateral to be held by the Agent to secure the LC Exposure; and any
excess shall be paid to the Borrower or as otherwise required by any
Governmental Requirement.
ARTICLE XI
THE AGENT
Section 11.01 APPOINTMENT, POWERS AND IMMUNITIES. Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent under this
Agreement and the other Loan Documents with such powers and discretion as are
specifically delegated to the Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Neither the Agent nor the Fronting Bank (which terms as used in this
sentence and in Section 11.05 and the first sentence of Section 11.06 hereof
shall include each of their Affiliates and their own and their Affiliates'
officers, directors, employees, and agents): (a) shall have any duties or
responsibilities except those expressly set forth in this Agreement and shall
not be a trustee or fiduciary for any Lender; (b) shall be responsible to the
Lenders for any recital, statement, representation, or warranty (whether written
or oral) made in or in connection with any Loan Document or any certificate or
other document referred to or provided for in, or received by any of them under,
any Loan Document, or for the value, validity, effectiveness, genuineness,
enforceability, or sufficiency of any Loan Document, or any other document
referred to or provided for therein or for any failure by the Borrower, a
Guarantor or any other Person to perform any of its obligations thereunder; (c)
shall be responsible for or have any duty to ascertain, inquire into, or verify
the performance or observance of any covenants or agreements by the Borrower, a
Guarantor or any other Person or the satisfaction of any condition or to inspect
the property (including the books and records) of the Borrower or any of its
Subsidiaries or Affiliates; (d) shall be required to initiate or conduct any
litigation or collection proceedings under any Loan Document; and (e) shall be
responsible for any action taken or omitted to be taken by it under or in
connection with any Loan Document, except for its own gross negligence or
willful misconduct. The Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
Section 11.02 RELIANCE BY AGENT. The Agent and the Fronting Bank
shall be entitled to rely upon any certification, notice, instrument, writing or
other communication (including any thereof by telephone, telex, telecopier,
telegram or cable) believed by either of them to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon
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advice and statements of legal counsel, independent accountants and other
experts selected by the Agent or the Fronting Bank. The Agent may deem and treat
the payee of any Note as the holder thereof for all purposes hereof unless and
until the Agent receives and accepts an Assignment and Acceptance executed in
accordance with Section 12.06 hereof. As to any matters not expressly provided
for by this Agreement, neither the Agent nor the Fronting Bank shall be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Lenders, and such
instructions shall be binding on all of the Lenders; PROVIDED, HOWEVER, that
neither the Agent nor the Fronting Bank shall be required to take any action
that exposes the Agent or the Fronting Bank to personal liability or that is
contrary to any Loan Document or applicable law or unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.
Section 11.03 DEFAULTS. The Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default or Event of Default unless
the Agent has received written notice from a Lender or the Borrower specifying
such Default or Event of Default and stating that such notice is a "Notice of
Default." In the event that the Agent receives such a notice of the occurrence
of a Default or Event of Default, the Agent shall give prompt notice thereof to
the Lenders. The Agent shall (subject to Section 11.02 hereof) take such action
with respect to such Default or Event of Default as shall reasonably be directed
by the Majority Lenders, PROVIDED THAT, unless and until the Agent shall have
received such directions, the Agent may (but shall not be obligated to) take
such action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable in the best interest of the Lenders.
Section 11.04 RIGHTS AS A LENDER. With respect to its Commitments
and the Loans made by it and its participation in the issuance of Letters of
Credit, NationsBank (and any successor acting as Agent) in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the Agent, and
the term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Agent in its individual capacity. NationsBank (and any successor
acting as Agent) and its Affiliates may (without having to account therefor to
any Lender) accept deposits from, lend money to, make investments in, provide
services to and generally engage in any kind of lending, trust or other business
with the Borrower (and any of its Affiliates) as if it were not acting as the
Agent, and NationsBank and its Affiliates may accept fees and other
consideration from the Borrower for services in connection with this Agreement
or otherwise without having to account for the same to the Lenders.
Section 11.05 INDEMNIFICATION. THE LENDERS AGREE TO INDEMNIFY THE
AGENT AND THE FRONTING BANK RATABLY IN ACCORDANCE WITH THEIR PERCENTAGE SHARES
FOR THE INDEMNITY MATTERS AS DESCRIBED IN SECTION 12.03 TO THE EXTENT NOT
INDEMNIFIED OR REIMBURSED BY THE BORROWER UNDER SECTION 12.03, BUT WITHOUT
LIMITING THE OBLIGATIONS OF THE BORROWER UNDER SAID SECTION 12.03 AND FOR ANY
AND ALL OTHER LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS,
JUDGMENTS, SUITS, COSTS,
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EXPENSES OR DISBURSEMENTS OF ANY KIND AND NATURE WHATSOEVER WHICH MAY BE IMPOSED
ON, INCURRED BY OR ASSERTED AGAINST THE AGENT OR THE FRONTING BANK IN ANY WAY
RELATING TO OR ARISING OUT OF: (I) ANY LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED THEREBY OR ANY ACTION TAKEN OR OMITTED BY THE AGENT UNDER ANY LOAN
DOCUMENT (INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE
AGENT), PROVIDED THAT NO LENDER SHALL BE LIABLE FOR ANY OF THE FOREGOING TO THE
EXTENT THEY ARISE FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
INDEMNIFIED PARTY. WITHOUT LIMITATION OF THE FOREGOING, EACH LENDER AGREES TO
REIMBURSE THE AGENT PROMPTLY UPON DEMAND FOR ITS RATABLE SHARE OF ANY COSTS OR
EXPENSES PAYABLE BY THE BORROWER UNDER SECTION 12.03, TO THE EXTENT THAT THE
AGENT IS NOT PROMPTLY REIMBURSED FOR SUCH COSTS AND EXPENSES BY THE BORROWER.
THE AGREEMENTS CONTAINED IN THIS SECTION SHALL SURVIVE PAYMENT IN FULL OF THE
LOANS AND ALL OTHER AMOUNTS PAYABLE UNDER THIS AGREEMENT.
Section 11.06 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender
acknowledges and agrees that it has, independently and without reliance on the
Agent, the Fronting Bank or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of the
Borrower and its decision to enter into this Agreement, and that it will,
independently and without reliance upon the Agent, the Fronting Bank or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement. Except for notices, reports
and other documents and information expressly required to be furnished to the
Lenders by the Agent hereunder, neither the Agent nor the Fronting Bank shall
have any duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Borrower (or any of its Affiliates) which may come into the possession of the
Agent, the Fronting Bank or any of their respective Affiliates. In this regard,
each Lender acknowledges that Xxxxxx & Xxxxxx L.L.P. is acting in this
transaction as special counsel to the Agent only, except to the extent otherwise
expressly stated in any legal opinion or any Loan Document. Each Lender will
consult with its own legal counsel to the extent that it deems necessary in
connection with the Loan Documents and the matters contemplated therein.
Section 11.07 RESIGNATION OR REMOVAL OF AGENT. The Agent may resign
at any time by giving notice thereof to the Lenders and the Borrower. Upon any
such resignation or removal, the Majority Lenders, with the consent of the
Borrower, shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the Majority Lenders and shall have
accepted such appointment within thirty (30) days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a commercial bank organized
under the laws of the United States of America having combined capital and
surplus of at least $100,000,000. Upon the acceptance of such appointment as
Agent hereunder by a successor, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation
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hereunder as Agent, the provisions of this Article XI and Section 12.03 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as the Agent.
ARTICLE XII
MISCELLANEOUS
Section 12.01 WAIVER. No failure on the part of the Agent or any
Lender to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power or privilege under any of the Loan Documents shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power or privilege under any of the Loan Documents preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
Section 12.02 NOTICES. All notices and other communications provided
for herein and in the other Loan Documents (including, without limitation, any
modifications of, or waivers or consents under, this Agreement or the other Loan
Documents) shall be given or made by telex, telecopy, courier or U.S. Mail or in
writing and telexed, telecopied, mailed or delivered to the intended recipient
at the "Address for Notices" specified below its name on the signature pages
hereof or in the Loan Documents or, as to any party, at such other address as
shall be designated by such party in a notice to each other party. Except as
otherwise provided in this Agreement or in the other Loan Documents, all such
communications shall be deemed to have been duly given when transmitted, if
transmitted before 1:00 p.m. local time on a Business Day (otherwise on the next
succeeding Business Day) by telex or telecopier and evidence or confirmation of
receipt is obtained, or personally delivered or, in the case of a mailed notice,
three (3) Business Days after the date deposited in the mails, postage prepaid,
in each case given or addressed as aforesaid.
Section 12.03 PAYMENT OF EXPENSES, INDEMNITIES, ETC.
(a) The Borrower agrees to pay on demand all costs and expenses of the
Agent in connection with the syndication, preparation, execution, delivery,
administration, modification, and amendment of this Agreement, the other Loan
Documents, and the other documents to be delivered hereunder, including, without
limitation, the reasonable fees and expenses of counsel for the Agent (including
the cost of internal counsel) with respect thereto and with respect to advising
the Agent as to its rights and responsibilities under the Loan Documents. The
Borrower further agrees to pay on demand all costs and expenses of the Agent and
the Lenders, if any (including, without limitation, reasonable attorneys' fees
and expenses and the cost of internal counsel), in connection with the
enforcement (whether through negotiations, legal proceedings, or otherwise) of
the Loan Documents and the other documents to be delivered hereunder.
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(b) THE BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS THE AGENT AND EACH
LENDER AND EACH OF THEIR AFFILIATES AND THEIR RESPECTIVE OFFICERS, DIRECTORS,
EMPLOYEES, AGENTS, AND ADVISORS (EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST
ANY AND ALL CLAIMS, DAMAGES, LOSSES, LIABILITIES, COSTS, AND EXPENSES
(INCLUDING, WITHOUT LIMITATION, REASONABLE ATTORNEYS' FEES) THAT MAY BE INCURRED
BY OR ASSERTED OR AWARDED AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING
OUT OF OR IN CONNECTION WITH OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN
CONNECTION WITH ANY INVESTIGATION, LITIGATION, OR PROCEEDING OR PREPARATION OF
DEFENSE IN CONNECTION THEREWITH) THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS
CONTEMPLATED HEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE LOANS
(INCLUDING ANY OF THE FOREGOING ARISING FROM THE NEGLIGENCE OF THE INDEMNIFIED
PARTY), EXCEPT TO THE EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR
EXPENSE IS FOUND IN A FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT
JURISDICTION TO HAVE RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT. IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER
PROCEEDING TO WHICH THE INDEMNITY IN THIS SECTION 12.03 APPLIES, SUCH INDEMNITY
SHALL BE EFFECTIVE WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING
IS BROUGHT BY THE BORROWER, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN
INDEMNIFIED PARTY OR ANY OTHER PERSON OR ANY INDEMNIFIED PARTY IS OTHERWISE A
PARTY THERETO AND WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE
CONSUMMATED. TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE LAW, THE BORROWER
AGREES NOT TO ASSERT ANY CLAIM AGAINST THE AGENT, ANY LENDER, ANY OF THEIR
AFFILIATES, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS, AGENTS, AND ADVISERS, ON ANY THEORY OF LIABILITY, FOR SPECIAL,
INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE
RELATING TO THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR
THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE LOANS.
(c) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower contained in
this Section 12.03 shall survive the payment in full of the Loans and all other
amounts payable under this Agreement.
Section 12.04 AMENDMENTS, ETC. To the maximum extent allowed by
applicable law, any provision of this Agreement or any other Loan Document may
be amended or waived if, but only if, such amendment or waiver is in writing and
is signed by the Borrower and the Majority Lenders (and, if Article 11 or the
rights or duties of the Agent are affected thereby, by the Agent); PROVIDED that
no such amendment or waiver shall, unless signed by all the Lenders, (i)
increase the Commitments of the Lenders, (ii) reduce the principal of or rate of
interest on any Loan or any fees or other amounts payable hereunder, (iii)
postpone any date fixed for the payment of any scheduled installment of
principal of or interest on any Loan or any fees or other amounts payable
hereunder or for termination of any Commitment, (iv) change the percentage of
the Commitments or of the unpaid principal amount of the Notes, or the number of
Lenders, which shall be required for the Lenders or any of them to take any
action under this Section or any other provision of this Agreement or (v)
release any Guarantor or all or substantially all of the collateral.
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Section 12.05 SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
Section 12.06 ASSIGNMENTS AND PARTICIPATIONS.
(a) Each Lender may assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Loans, its Note, and its Commitment);
PROVIDED, HOWEVER, that
(i) each such assignment shall be to an Eligible Assignee;
(ii) except in the case of an assignment to another Lender or an
assignment of all of a Lender's rights and obligations under this
Agreement, any such partial assignment shall be in an amount at least
equal to $5,000,000 or an integral multiple of $1,000,000 in excess
thereof;
(iii) each such assignment by a Lender shall be of a constant, and
not varying, percentage of all of its rights and obligations under this
Agreement and the Note; and
(iv) the parties to such assignment shall execute and deliver to the
Agent for its acceptance an Assignment and Acceptance in the form of
EXHIBIT E hereto, together with any Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of such
assignment, have the obligations, rights, and benefits of a Lender hereunder and
the assigning Lender shall, to the extent of such assignment, relinquish its
rights and be released from its obligations under this Agreement. Upon the
consummation of any assignment pursuant to this Section, the assignor, the Agent
and the Borrower shall make appropriate arrangements so that, if required, new
Notes are issued to the assignor and the assignee. If the assignee is not
incorporated under the laws of the United States of America or a state thereof,
it shall deliver to the Borrower and the Agent certification as to exemption
from deduction or withholding of Taxes in accordance with Section 4.06.
(b) The Agent shall maintain at its Principal Office a copy of each
Assignment and Acceptance delivered to and accepted by 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 owing to, each Lender from time to time (the
"REGISTER"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender hereunder
for all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
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(c) Upon its receipt of an Assignment and Acceptance executed by the
parties thereto, together with any Note subject to such assignment and payment
of the processing fee, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of EXHIBIT E hereto, (i) accept
such Assignment and Acceptance, (ii) record the information contained therein in
the Register and (iii) give prompt notice thereof to the parties thereto.
(d) Each Lender may sell participations to one or more Persons in all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and its Loans); PROVIDED, HOWEVER, that (i) such
Lender's obligations under this Agreement shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) the participant shall be entitled to the
benefit of the yield protection provisions contained in Article 5 and the right
of set-off contained in Section 4.05, and (iv) the Borrower shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement, and such Lender shall retain the
sole right to enforce the obligations of the Borrower relating to its Loans and
its Note and to approve any amendment, modification, or waiver of any provision
of this Agreement (other than amendments, modifications, or waivers decreasing
the amount of principal of or the rate at which interest is payable on such
Loans or Note, extending any scheduled principal payment date or date fixed for
the payment of interest on such Loans or Note, or extending its Commitment).
(e) Notwithstanding any other provision set forth in this Agreement, any
Lender may at any time assign and pledge all or any portion of its Loans and its
Note to any Federal Reserve Bank as collateral security pursuant to Regulation A
and any Operating Circular issued by such Federal Reserve Bank. No such
assignment shall release the assigning Lender from its obligations hereunder.
(f) Any Lender may furnish any information concerning the Borrower or any
of the Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 12.15 hereof.
Section 12.07 INVALIDITY. In the event that any one or more of the
provisions contained in any of the Loan Documents or the Letters of Credit, the
Letter of Credit Agreements shall, for any reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of the Notes, this Agreement or any
Security Instrument.
Section 12.08 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument and any of the parties hereto may execute this Agreement by
signing any such counterpart.
Section 12.09 REFERENCES. The words "herein," "hereof," "hereunder"
and other words of similar import when used in this Agreement refer to this
Agreement as a whole, and not
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to any particular article, section or subsection. Any reference herein to a
Section shall be deemed to refer to the applicable Section of this Agreement
unless otherwise stated herein. Any reference herein to an exhibit or schedule
shall be deemed to refer to the applicable exhibit or schedule attached hereto
unless otherwise stated herein.
Section 12.10 SURVIVAL. The obligations of the parties under Section
4.06, Article V, and Sections 11.05 and 12.03 shall survive the repayment of the
Loans and the termination of the Commitments. To the extent that any payments on
the Indebtedness or proceeds of any collateral are subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid to
a trustee, debtor in possession, receiver or other Person under any bankruptcy
law, common law or equitable cause, then to such extent, the Indebtedness so
satisfied shall be revived and continue as if such payment or proceeds had not
been received and the Agent's and the Lenders' Liens, security interests,
rights, powers and remedies under this Agreement and each Security Instrument
shall continue in full force and effect. In such event, each Security Instrument
shall be automatically reinstated and the Borrower shall take such action as may
be reasonably requested by the Agent and the Lenders to effect such
reinstatement.
Section 12.11 CAPTIONS. Captions and section headings appearing
herein are included solely for convenience of reference and are not intended to
affect the interpretation of any provision of this Agreement.
Section 12.12 NO ORAL AGREEMENTS. THE LOAN DOCUMENTS EMBODY THE
ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THE LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPO
RANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
SECTION 12.13 GOVERNING LAW; SUBMISSION TO JURISDICTION.
(A) THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT THAT UNITED
STATES FEDERAL LAW PERMITS ANY LENDER TO CHARGE INTEREST AT THE RATE ALLOWED BY
THE LAWS OF THE STATE WHERE SUCH LENDER IS LOCATED. SECTION 346.001, ET SEQ., OF
THE TEXAS FINANCE CODE (WHICH REGULATES CERTAIN REVOLVING CREDIT LOAN ACCOUNTS
AND REVOLVING TRI-PARTY ACCOUNTS) SHALL NOT APPLY TO THIS AGREEMENT OR THE
NOTES.
(B) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE LOAN DOCUMENTS
SHALL BE BROUGHT IN THE COURTS OF THE STATE OF TEXAS OR OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF TEXAS, AND, BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, THE BORROWER TO THE MAXIMUM EXTENT ALLOWED BY APPLICABLE LAW,
HEREBY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
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UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. THE BORROWER HEREBY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN
SUCH RESPECTIVE JURISDICTIONS. THIS SUBMISSION TO JURISDICTION IS NON-EXCLUSIVE
AND DOES NOT PRECLUDE THE AGENT OR ANY LENDER FROM OBTAINING JURISDICTION OVER
THE BORROWER IN ANY COURT OTHERWISE HAVING JURISDICTION.
(C) EACH OF THE BORROWER AND EACH LENDER HEREBY (I) IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY SECURITY
INSTRUMENT AND FOR ANY COUNTERCLAIM THEREIN; (II) IRREVOCABLY WAIVE, TO THE
MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER
IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES, OR DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES; (III) CERTIFY
THAT NO PARTY HERETO NOR ANY REPRESENTATIVE OR AGENT OF COUNSEL FOR ANY PARTY
HERETO HAS REPRESENTED, EXPRESSLY OR OTHERWISE, OR IMPLIED THAT SUCH PARTY WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS, AND (IV)
ACKNOWLEDGE THAT IT HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT, THE SECURITY
INSTRUMENTS AND THE TRANSACTIONS CONTEMPLATED HEREBY AND THEREBY BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS CONTAINED IN THIS SECTION 12.13.
Section 12.14 INTEREST. It is the intention of the parties hereto
that each Lender shall conform strictly to usury laws applicable to it.
Accordingly, if the transactions contemplated hereby would be usurious as to any
Lender under laws applicable to it (including the laws of the United States of
America and the State of Texas or any other jurisdiction whose laws may be
mandatorily applicable to such Lender notwithstanding the other provisions of
this Agreement), then, in that event, notwithstanding anything to the contrary
in any of the Loan Documents or any agreement entered into in connection with or
as security for the Notes, it is agreed as follows: (i) the aggregate of all
consideration which constitutes interest under law applicable to any Lender that
is contracted for, taken, reserved, charged or received by such Lender under any
of the Loan Documents or agreements or otherwise in connection with the Notes
shall under no circumstances exceed the maximum amount allowed by such
applicable law, and any excess shall be canceled automatically and if
theretofore paid shall be credited by such Lender on the principal amount of the
Indebtedness (or, to the extent that the principal amount of the Indebtedness
shall have been or would thereby be paid in full, refunded by such Lender to the
Borrower); and (ii) in the event that the maturity of the Notes is accelerated
by reason of an election of the holder thereof resulting from any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to any Lender may never include more than the maximum amount
allowed by such applicable law, and excess interest, if any, provided for in
this Agreement or otherwise shall be canceled automatically by such Lender as of
the date of such acceleration or prepayment and, if theretofore paid, shall be
credited by such Lender on the principal amount of the Indebtedness (or, to the
extent that the principal amount of the
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Indebtedness shall have been or would thereby be paid in full, refunded by such
Lender to the Borrower). All sums paid or agreed to be paid to any Lender for
the use, forbearance or detention of sums due hereunder shall, to the extent
permitted by law applicable to such Lender, be amortized, prorated, allocated
and spread throughout the full term of the Loans evidenced by the Notes until
payment in full so that the rate or amount of interest on account of any Loans
hereunder does not exceed the maximum amount allowed by such applicable law. If
at any time and from time to time (i) the amount of interest payable to any
Lender on any date shall be computed at the Highest Lawful Rate applicable to
such Lender pursuant to this Section 12.14 and (ii) in respect of any subsequent
interest computation period the amount of interest otherwise payable to such
Lender would be less than the amount of interest payable to such Lender computed
at the Highest Lawful Rate applicable to such Lender, then the amount of
interest payable to such Lender in respect of such subsequent interest
computation period shall continue to be computed at the Highest Lawful Rate
applicable to such Lender until the total amount of interest payable to such
Lender shall equal the total amount of interest which would have been payable to
such Lender if the total amount of interest had been computed without giving
effect to this Section 12.14. To the extent that Section 303.301 et seq. of the
Texas Finance Code is relevant for the purpose of determining the Highest Lawful
Rate, such Lender elects to determine the applicable rate ceiling under such
Article by the weekly rate ceiling from time to time in effect.
Section 12.15 CONFIDENTIALITY. The Agent and each Lender (each, a
"LENDING PARTY") agrees to keep confidential any information furnished or made
available to it by the Borrower pursuant to this Agreement that is marked
confidential; PROVIDED that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any Affiliate of
any Lending Party, or any officer, director, employee, agent, or advisor of any
Lending Party or Affiliate of any Lending Party to the extent required in
connection with their work on the Loans, (b) to any other Person if reasonably
incidental to the administration of the credit facility provided herein, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Agreement, (g) in connection with any
litigation to which such Lending Party or any of its Affiliates may be a party,
(h) to the extent necessary in connection with the exercise of any remedy under
this Agreement or any other Loan Document, and (i) subject to provisions
substantially similar to those contained in this Section, to any actual or
proposed participant or assignee.
Section 12.16 EXCULPATION PROVISIONS. EACH OF THE PARTIES HERETO
SPECIFICALLY AGREES THAT IT HAS A DUTY TO READ THIS AGREEMENT AND THE SECURITY
INSTRUMENTS AND AGREES THAT IT IS CHARGED WITH NOTICE AND KNOWLEDGE OF THE TERMS
OF THIS AGREEMENT AND THE SECURITY INSTRUMENTS; THAT IT HAS IN FACT READ THIS
AGREEMENT AND IS FULLY INFORMED AND HAS FULL NOTICE AND KNOWLEDGE OF THE TERMS,
CONDITIONS AND EFFECTS OF THIS AGREEMENT; THAT IT HAS BEEN REPRESENTED BY
INDEPENDENT LEGAL COUNSEL OF ITS CHOICE THROUGHOUT THE NEGOTIATIONS PRECEDING
ITS EXECUTION OF THIS AGREEMENT AND THE SECURITY INSTRUMENTS; AND HAS RECEIVED
THE
-70-
ADVICE OF ITS ATTORNEY IN ENTERING INTO THIS AGREEMENT AND THE SECURITY
INSTRUMENTS; AND THAT IT RECOGNIZES THAT CERTAIN OF THE TERMS OF THIS AGREEMENT
AND THE SECURITY INSTRUMENTS RESULT IN ONE PARTY ASSUMING THE LIABILITY INHERENT
IN SOME ASPECTS OF THE TRANSACTION AND RELIEVING THE OTHER PARTY OF ITS
RESPONSIBILITY FOR SUCH LIABILITY. EACH PARTY HERETO AGREES AND COVENANTS THAT
IT WILL NOT CONTEST THE VALIDITY OR ENFORCEABILITY OF ANY EXCULPATORY PROVISION
OF THIS AGREEMENT AND THE SECURITY INSTRUMENTS ON THE BASIS THAT THE PARTY HAD
NO NOTICE OR KNOWLEDGE OF SUCH PROVISION OR THAT THE PROVISION IS NOT
"CONSPICUOUS."
[SIGNATURES BEGIN ON NEXT PAGE]
-71-
The parties hereto have caused this Agreement to be duly executed as
of the day and year first above written.
BORROWER: PENTACON, INC.
By:/s/ XXXXX XXXXXXX
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer
Address for Notices:
0000 Xxx Xxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Attention:______________________
Signature Page - 1
LENDER AND AGENT: NATIONSBANK OF TEXAS, N.A.
By:/s/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Lending Office for Base Rate Loans and
Eurodollar Loans:
000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Address for Notices:
X.X. Xxx 0000
Xxxxxxx, Xxxxx 00000-0000
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Signature Page - 2
ANNEX 1
LIST OF MAXIMUM CREDIT AMOUNTS
MAXIMUM
NAME OF LENDER PERCENTAGE SHARE CREDIT AMOUNT
NationsBank of Texas, N.A. 100% $50,000,000
Annex 1-1
EXHIBIT A-1
FORM OF NOTE
$_____________________________ ___________________, 199__
FOR VALUE RECEIVED, PENTACON, INC., a Delaware corporation (the
"BORROWER") hereby promises to pay to the order of
______________________________ (the "LENDER"), at the Principal Office of
NATIONSBANK OF TEXAS, N.A. (the "AGENT"), at ______________________________, the
principal sum of _____________ Dollars ($____________) (or such lesser amount as
shall equal the aggregate unpaid principal amount of the Loans made by the
Lender to the Borrower under the Credit Agreement, as hereinafter defined), in
lawful money of the United States of America and in immediately available funds,
on the dates and in the principal amounts provided in the Credit Agreement, and
to pay interest on the unpaid principal amount of each such Loan, at such
office, in like money and funds, for the period commencing on the date of such
Loan until such Loan shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
The date, amount, Type, interest rate, Interest Period and maturity of
each Loan made by the Lender to the Borrower, and each payment made on account
of the principal thereof, shall be recorded by the Lender on its books and,
prior to any transfer of this Note, may be endorsed by the Lender on the
schedules attached hereto or any continuation thereof or on any separate record
maintained by the Lender.
This Note is one of the Notes referred to in the Credit Agreement dated as
of March 13, 1998 among the Borrower, the Lenders which are or become parties
thereto (including the Lender) and the Agent, and evidences Loans made by the
Lender thereunder (such Credit Agreement as the same may be amended or
supplemented from time to time, the "CREDIT AGREEMENT"). Capitalized terms used
in this Note have the respective meanings assigned to them in the Credit
Agreement.
This Note is issued pursuant to the Credit Agreement and is entitled to
the benefits provided for in the Credit Agreement and the Security Instruments.
The Credit Agreement provides for the acceleration of the maturity of this Note
upon the occurrence of certain events, for prepayments of Loans upon the terms
and conditions specified therein and other provisions relevant to this Note.
THIS NOTE AND THE OTHER LOAN DOCUMENTS EMBODY THE ENTIRE AGREEMENT AND
UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER AGREEMENTS AND
UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND
THEREOF. THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPO
RANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN
ORAL AGREEMENTS BETWEEN THE PARTIES.
Exhibit A-1-1
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF TEXAS.
PENTACON, INC.
By:
Name:
Title:
Exhibit X-0-0
XXXXXXX X-0
FORM OF SWING LINE NOTE
$5,000,000 ___________________, 199__
FOR VALUE RECEIVED, PENTACON, INC., a Delaware corporation (the
"BORROWER") hereby promises to pay to the order of NATIONSBANK OF TEXAS, N.A.
(the "SWING LINE LENDER"), at its Principal Office at _______________________,
the principal sum of FIVE MILLION DOLLARS ($5,000,000) or, if less, the
outstanding principal amount advanced under this Swing Line Note, in lawful
money of the United States of America and in immediately available funds, on the
dates and in the principal amounts provided in the Credit Agreement, and to pay
interest on the unpaid principal amount of each such Loan, at such office, in
like money and funds, for the period commencing on the date of such Loan until
such Loan shall be paid in full, at the rates per annum and on the dates
provided in the Credit Agreement.
The date, amount, interest rate and maturity of each Loan made by the
Swing Line Lender to the Borrower, and each payment made on account of the
principal thereof, shall be recorded by the Swing Line Lender on its books and,
prior to any transfer of this Swing Line Note, may be endorsed by the Swing Line
Lender on the schedules attached hereto or any continuation thereof or on any
separate record maintained by the Swing Line Lender.
This Swing Line Note is one of the Notes referred to in the Credit
Agreement dated as of March 13, 1998 among the Borrower, the Lenders which are
or become parties thereto (including the Swing Line Lender) and the Agent, and
evidences Swing Line Loans made by the Swing Line Lender thereunder (such Credit
Agreement as the same may be amended or supplemented from time to time, the
"CREDIT AGREEMENT"). Capitalized terms used in this Swing Line Note have the
respective meanings assigned to them in the Credit Agreement.
This Swing Line Note is issued pursuant to the Credit Agreement and is
entitled to the benefits provided for in the Credit Agreement and the Security
Instruments. The Credit Agreement provides for the acceleration of the maturity
of this Swing Line Note upon the occurrence of certain events, for prepayments
of Swing Line Loans upon the terms and conditions specified therein and other
provisions relevant to this Swing Line Note.
THIS SWING LINE NOTE AND THE OTHER LOAN DOCUMENTS EMBODY THE ENTIRE
AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES AND SUPERSEDE ALL OTHER
AGREEMENTS AND UNDERSTANDINGS BETWEEN SUCH PARTIES RELATING TO THE SUBJECT
MATTER HEREOF AND THEREOF. THIS SWING LINE NOTE AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Exhibit A-2-1
THIS SWING LINE NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF TEXAS.
PENTACON, INC.
By:
Name:
Title:
Exhibit A-2-2
EXHIBIT B
FORM OF BORROWING, CONTINUATION AND CONVERSION REQUEST
_____________________, 199__
PENTACON, INC., a Delaware corporation (the "BORROWER"), pursuant to the
Credit Agreement dated as of March 13, 1998 (together with all amendments or
supplements thereto, the "CREDIT AGREEMENT") among the Borrower, NATIONSBANK OF
TEXAS, N.A., as Agent for the lenders (the "LENDERS") which are or become
parties thereto, and such Lenders, hereby makes the requests indicated below
(unless otherwise defined herein, capitalized terms are defined in the Credit
Agreement):
1. Loans:
(a) Aggregate amount of new Loans to be $______________________;
(b) Requested funding date is _________________, 199__;
(c) $____________________ of such borrowings are to be Eurodollar Loans;
$____________________ of such borrowings are to be Base Rate Loans;
and
(d) Length of Interest Period for Eurodollar Loans is:
_________________________.
2. Eurodollar Loan Continuation for Eurodollar Loans maturing on
_____________________:
(a) Aggregate amount to be continued as Eurodollar Loans is
$____________________;
(b) Aggregate amount to be converted to Base Rate Loans is
$____________________;
(c) Length of Interest Period for continued Eurodollar Loans is
_____________________.
3. Conversion of Outstanding Base Rate Loans to Eurodollar Loans:
Exhibit B-1
Convert $__________________ of the outstanding Base Rate Loans to
Eurodollar Loans on ____________________ with an Interest Period of
______________________.
4. Conversion of outstanding Eurodollar Loans to Base Rate Loans:
Convert $__________________ of the outstanding Eurodollar Loans with
Interest Period maturing on ______________________, 199_, to Base
Rate Loans.
The undersigned certifies that he is the _____________________ of the
Borrower, and that as such he is authorized to execute this certificate on
behalf of the Borrower. The undersigned further certifies, represents and
warrants on behalf of the Borrower that the Borrower is entitled to receive the
requested borrowing, continuation or conversion under the terms and conditions
of the Credit Agreement.
PENTACON, INC.
By:_________________________________
Name:
Title:
Exhibit B-2
EXHIBIT C
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the ________________ of
PENTACON, INC., a Delaware corporation (the "BORROWER") and that as such he is
authorized to execute this certificate on behalf of the Borrower. With reference
to the Credit Agreement dated as of March 13, 1998 (together with all amendments
or supplements thereto being the "AGREEMENT") among the Borrower, NATIONSBANK OF
TEXAS, N.A., as Agent for the lenders (the "LENDERS") and such Lenders, the
undersigned represents and warrants as follows (each capitalized term used
herein having the same meaning given to it in the Agreement unless otherwise
specified):
(a) The representations and warranties of the Borrower contained in
Article VII of the Agreement and in the Security Instruments and otherwise
made in writing by or on behalf of the Borrower pursuant to the Agreement
and the Security Instruments were true and correct when made, and are
repeated at and as of the time of delivery hereof and are true and correct
at and as of the time of delivery hereof, except to the extent such
representations and warranties are expressly limited to an earlier date or
the Majority Lenders have expressly consented in writing to the contrary.
(b) The Borrower has performed and complied with all agreements and
conditions contained in the Agreement and in the Security Instruments
required to be performed or complied with by it prior to or at the time of
delivery hereof.
(c) Since September 30, 1997, no change has occurred, either in any
case or in the aggregate, in the condition, financial or otherwise, of the
Borrower or any Subsidiary which would have a Material Adverse Effect.
(d) There exists, and, after giving effect to the loan or loans with
respect to which this certificate is being delivered, will exist, no
Default under the Agreement or any event or circumstance which
constitutes, or with notice or lapse of time (or both) would constitute,
an event of default under any loan or credit agreement, indenture, deed of
trust, security agreement or other agreement or instrument evidencing or
pertaining to any Debt of the Borrower or any Subsidiary, or under any
material agreement or instrument to which the Borrower or any Subsidiary
is a party or by which the Borrower or any Subsidiary is bound.
(e) Attached hereto are the detailed computations necessary to
determine whether the Borrower is in compliance with Sections 9.12, 9.13,
9.14 and 9.15 as of the end of the [fiscal quarter][fiscal year] ending .
Exhibit C-1
(f) For the period beginning on _______________ and ending on the
next Determination Date (as defined in the definition of Applicable
Margin), the Applicable Margin for Eurodollar Loans should be _____% and
for Base Rate Loans should be _____% and the Commitment Fee Percentage
should be _____% and attached hereto are detailed computations necessary
to determine said Applicable Margin and Commitment Fee for such period.
EXECUTED AND DELIVERED this ____ day of ______________.
PENTACON, INC.
By:
Name:
Title:
Exhibit C-2
EXHIBIT D
SECURITY INSTRUMENTS
1. Security Agreement (Stock and Other Securities) in favor of the Agent
executed by Borrower
2. Financing Statement relating to Security Agreement (Stock and Other
Securities)
3. Assignment Separate from Stock Certificate for stock of Guarantors
4. Guaranty Agreements in favor of the Agent from each Guarantor
5. Financing Statements relating to the Guaranty Agreements
Exhibit D-1
EXHIBIT E
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Credit Agreement dated as of March 13, 1998 (the
"CREDIT AGREEMENT") among PENTACON, INC., a Delaware corporation (the
"BORROWER"), the Lenders (as defined in the Credit Agreement) and NATIONSBANK OF
TEXAS, N.A., as agent for the Lenders (the "AGENT"). Terms defined in the Credit
Agreement are used herein with the same meaning.
The "Assignor" and the "Assignee" referred to on SCHEDULE 1 agree as
follows:
1. The Assignor hereby sells and assigns to the Assignee, without recourse
and without representation or warranty except as expressly set forth herein, and
the Assignee hereby purchases and assumes from the Assignor, an interest in and
to the Assignor's rights and obligations under the Credit Agreement and the
other Loan Documents as of the date hereof equal to the percentage interest
specified on SCHEDULE 1 of all outstanding rights and obligations under the
Credit Agreement and the other Loan Documents. After giving effect to such sale
and assignment, the Assignee's Commitment and the amount of the Loans owing to
the Assignee will be as set forth on SCHEDULE 1.
2. The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto; (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower or the
performance or observance by Borrower of any of its obligations under the Loan
Documents or any other instrument or document furnished pursuant thereto; and
(iv) attaches the Note held by the Assignor and requests that the Agent exchange
such Note for new Notes payable to the order of the Assignee in an amount equal
to the Commitment assumed by the Assignee pursuant hereto and to the Assignor in
an amount equal to the Commitment retained by the Assignor, if any, as specified
on SCHEDULE 1.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
Section 8.01 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iii) confirms that it is an Eligible Assignee;
Exhibit E-1
(iv) appoints and authorizes the Agent to take such action as agent on its
behalf and to exercise such powers and discretion under the Credit Agreement as
are delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; (v) agrees that it will perform
in accordance with their terms all of the obligations that by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (vi)
attaches any U.S. Internal Revenue Service or other forms required under Section
4.06.
4. Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance and recording by the Agent. The effective
date for this Assignment and Acceptance (the "EFFECTIVE DATE") shall be the date
of acceptance hereof by the Agent, unless otherwise specified on SCHEDULE 1.
5. Upon such acceptance and recording by the Agent, as of the Effective
Date, (i) the Assignee shall be a party to the Credit Agreement and, to the
extent provided in this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Notes in respect of the interest assigned hereby (including, without
limitation, all payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement and the Notes for periods
prior to the Effective Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Texas.
8. This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of SCHEDULE 1 to this Assignment and Acceptance by telecopier shall
be effective as delivery of a manually executed counterpart of this Assignment
and Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused SCHEDULE 1
to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.
Exhibit E-2
SCHEDULE 1
to
ASSIGNMENT AND ACCEPTANCE
Percentage interest assigned: _______%
Assignee's Commitment: $_______
Aggregate outstanding principal amount
of Loans assigned: $_______
Principal amount of Note payable to Assignee $_______
Principal amount of Note payable to Assignor $_______
Effective Date (if other than date
of acceptance by Agent): *_______, 19__
[NAME OF ASSIGNOR], as Assignor
By:
Title:
Dated:_______________________, 199_
[NAME OF ASSIGNEE], as Assignee
By:
Title:
Domestic Lending Office:
Eurodollar Lending Office:
* This date should be no earlier than five Business Days after the delivery
of this Assignment and Acceptance to the Agent.
Exhibit E-3
Accepted [and Approved] **
this ___ day of ___________, 19 _
NATIONSBANK OF TEXAS, N.A., AS AGENT
By:
Title:
[Approved this ____ day
of ____________, 19__
[NAME OF BORROWER]
By: ]**
Title:
** Required if the Assignee is an Eligible Assignee solely by reason of
clause (iii) of the definition of "Eligible Assignee".
Exhibit E-4
EXHIBIT F
BORROWING BASE CERTIFICATE
Status as of _____________________, 199__.
In accordance with the terms of the Credit Agreement dated March 13, 1998 (the
"CREDIT AGREEMENT") among PENTACON, INC., a Delaware corporation, the Lenders
(as defined in the Credit Agreement) and NATIONSBANK OF TEXAS, N.A., as agent
for the Lenders (the "AGENT"), we hereby represent and warrant as follows:
1. Total Accounts Receivable $_________________
2. Less ineligible accounts receivable (as set forth in the definition of
Eligible Accounts in the Credit Agreement) $_________________
3. Eligible Accounts $_________________
4. a. ___% of Eligible Accounts $__________________
b. ___% of Eligible Inventory (not to exceed
$_________________) $__________________
c. Total Available $__________________
5. Maximum loan amount $__________________
6. Outstanding balance as of report date $__________________
7. Available for further advances (lesser of line
4c or line 5 minus line 6) $__________________
PENTACON, INC.
By:__________________________
Name:
Title:
Exhibit F-1
EXHIBIT G
FORM OF ACQUISITION CERTIFICATE
The undersigned hereby certifies that he is the ________________ of
PENTACON, INC., a Delaware corporation (the "BORROWER") and that as such he is
authorized to execute this certificate on behalf of the Borrower. Reference is
made to the Credit Agreement dated as of March 13, 1998, among the Borrower,
NationsBank of Texas, N.A., as Agent for the lenders (the "LENDERS") and such
Lenders (together with all amendments or supplements thereto being the "CREDIT
AGREEMENT"; each capitalized term used herein having the same meaning given to
it in the Credit Agreement unless otherwise specified). The Borrower intends to
make an Acquisition and in connection therewith hereby certifies to the Agent
and the Lenders that:
(a) EXHIBIT A attached hereto describes in reasonable detail the
Property to be acquired [and, to the extent requested by the Agent or any
Lender, delivered herewith to the Agent is all title or other pertinent
information with respect to the Property to be acquired].
(b) Attached hereto as EXHIBIT B are [audited] financial statements
of the target entity to be acquired covering the most recent two (2)
fiscal years together with current internally prepared interim financial
statements prepared by such target entity, in each case in accordance with
GAAP. [Such financial statements for at least the most recent fiscal year
to be audited with respect to all target entities with an aggregate
purchase price in an amount in excess of fifteen percent (15%) of Net
Worth.]
(c) Attached hereto as EXHIBIT C are financial projections of the
target entity.
(d) Delivered concurrently herewith is a Compliance Certificate
(with pro-forma computations for financial covenants) and a Borrowing Base
Certificate, taking into account the Acquisition (including EBITDA for the
target entity for the last four fiscal quarters).
EXECUTED AND DELIVERED this ____ day of ______________.
PENTACON, INC.
By:
Name:
Title:
Exhibit G-1
SCHEDULE 1.01(A)
ELIGIBLE ACCOUNTS
Any account receivable from Canadian customers.
A foreign account receivable from the following companies or affiliates of such
companies:
Cummins Engine Company - UK, Brazil, Mexico, Japan
Xxxx Corporation - Mexico
American Standard - Mexico
Xxxxxxxxx - Netherlands
General Electric - Mexico
European Gas Turbine - France
Schedule 1.01(a)-1
SCHEDULE 1.01(B)
ELIGIBLE INVENTORY
1. 0000 Xxxxxxxxxxxx Xxxxx
Xxxx Xxxxx, Xxxxxxx 00000
2. 0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxx
3. 0000 Xxxxx Xxxxxxx Xxxx Xxxx
Xxxxxxxxxxxx, XX
4. 0000 Xxxx Xxxxx, Xxxxx X
Xxxxxxxxxxxx, Xxxxxxx 00000
5. 00000 Xxxx Xxxxxxx Xxxx.
Xxxxxxx, Xxxxxxxxxx 00000
6. 00000 Xxxxxxxxx Xxxxxx Xx.
Xxxxxxxxx, Xxxxxxxx 00000
7. 0000 Xxx. 000
Xxxxx Xxxxxxx, Xxxxx 00000
8. 000 X. Xxxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
9. 00000 Xxxxxxxxx Xx.
Xxxxxx Xxxxx, Xxxxxxxx 00000
10. 000 X. Xxxxx Xxxx Xxxx.
Xxxxxxxxx Xxxxxxx, Xxxxxxx 00000
11. 000 X. Xxxxxxxx Xxxx 000
Xxxxxxxxxx, Xxxxxxxx 00000
12. 0000 Xxxxx Xxxxxxxxxx Xxxx., Xxxxx 000
Xxxxx, Xxxxxxxxx 00000
13. 0000 Xxxxx Xxxxxx
Xxxx, Xxxxxxxxxxxx
Schedule 1.01(b)-1
14. 0000 Xxxxx Xxx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx
15. 000 XX Xxxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
16. 0000-X Xxxx Xxxxxxxxx
Xxxxxxxx, Xxxxxxxx 00000
17. 000 Xxxxxxxx Xxxx, Xxxxx X
Xxxxxx Xxxx, Xxxxxxx 00000
18. 0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxx 00000
19. 0000-X Xxxxxxxx
Xxxxxx, Xxxxx 00000
20. 000 X. Xxxxxx
Xxxxxxxx, Xxxxx 00000
21. 0000 XXX Xxxx 000
Xxxxx, Xxxxx 00000
22. 0000 Xxxxx 00xx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
23. 0000 Xxxxxx Xxxx
Xxxxxxx Xxxxxx, Xxxxx Xxxxxxxx
24. 000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Schedule 1.01(b)-2
SCHEDULE 7.02
LIABILITIES
None.
Schedule 7.02-1
SCHEDULE 7.03
LITIGATION
None.
Schedule 7.03-1
SCHEDULE 7.09
TAXES
None, except as those relating to Alatec Products Inc., as described in said
party's financial statements which have previously been provided to the Agent.
Schedule 7.09-1
SCHEDULE 7.10
TITLES, ETC.
See Schedule 9.02
Schedule 7.10-1
SCHEDULE 7.14
SUBSIDIARIES OF BORROWER AND PRINCIPAL PLACE OF BUSINESS
SUBSIDIARY AND CHIEF EXECUTIVE OFFICE OTHER JURISDICTIONS OF OPERATION
Maumee Industries, Inc. None
0000 Xxxxxxxxxxxx Xx.
Xx. Xxxxx, Xxxxxxx 00000
Alatec Products, Inc. Florida
00000 Xxxxxxxx Xxxxxx Xxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000 Massachusetts
Minnesota
Missouri
Texas
AXS Solutions, Inc. Illinois
0000 Xxxxx Xxxxxx Xxxxxxxxxxxx
Xxxx, Xxxxxxxxxxxx 00000
Capitol Bolt & Supply, Inc. Arkansas
0000 Xxxxxxx Xxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000 Georgia
Illinois
Sales Systems, Limited
000 Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000 South Carolina
Schedule 7.14-1
SCHEDULE 7.17
ENVIRONMENTAL MATTERS
None.
Schedule 7.17-1
SCHEDULE 7.20
HEDGING AGREEMENTS
None.
Schedule 7.20-1
SCHEDULE 7.22
MATERIAL AGREEMENTS
None.
Schedule 7.22-1
SCHEDULE 9.01
DEBT
Company Debt Creditor
ALATEC
(2) Related Party Loan List
(2) Line of Credit City Nat'l
(2) Term Loan City Nat'l
(2) SBA Loan SBA
AXS
(2) Demand Note Core State
(2) Line of Credit PNC
(3) Liability on Non-Compete Former Stockholder
CAPITOL
(2) Line of Credit TCB
(2) Term Note TCB
MAUMEE
(2) Line of Credit Norwest
(2) Overadvance Norwest
(2) Equipment Note Norwest
(2) Stockholder Notes Black
SSL
(2) Stockholder Notes(1) Former Stockholders
(2) Line of Credit Nat'l Penn
(2) Notes Payable Nat'l Penn
(2) Xxxxxxx Xxxxx Xxxxx
(2) Stockholder Notes Xxxxxx/Xxxxxxxx
The Companies also lease certain facilities and equipment under capital and
operating leases which are generally secured by the facility or equipment which
are leased.
(1) Obligation under Redemption Agreement with minority stockholders.
(2) To be paid at the Consummation Date or within 14 days of such date.
(3) Balance at December 31, 1997 - $391,931.
Schedule 9.01-1
SCHEDULE 9.02
LIENS
None.
Schedule 9.02-1
SCHEDULE 9.03
INVESTMENTS, LOANS AND ADVANCES
None.
Schedule 9.03-1
