SECOND AMENDED AND RESTATED CREDIT AGREEMENT By and Between TYLER TECHNOLOGIES, INC. and BANK OF TEXAS, N.A. as Lender Dated as of October 20, 2008
SECOND
AMENDED AND RESTATED
By and
Between
TYLER
TECHNOLOGIES, INC.
and
BANK
OF TEXAS, N.A.
as
Lender
Dated as
of October 20, 2008
TABLE
OF CONTENTS
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ARTICLE
I DEFINITIONS
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1 | |||
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ARTICLE
II THE CREDIT facility
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12 | |||
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Section
2.1. Commitment.
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12 | |||
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Section
2.2. Borrowing Procedure.
|
13 | |||
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ARTICLE
III INTEREST RATE PROVISIONS
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15 | |||
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Section
3.1. Interest Rate Determination
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15 | |||
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Section
3.2. Additional Interest Rate Provisions.
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16 | |||
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ARTICLE
IV PREPAYMENTS AND OTHER PAYMENTS
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17 | |||
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Section
4.1. Required Payments.
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17 | |||
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Section
4.2. Optional Prepayments
|
18 | |||
|
Section
4.3. Notice of Payments
|
18 | |||
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Section
4.4. Place of Payment or Prepayment
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18 | |||
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Section
4.5. No Prepayment Premium or Penalty
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18 | |||
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Section
4.6. Increased Costs.
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18 | |||
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Section
4.7. Taxes.
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19 | |||
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Section
4.8. Reduction or Termination of the Commitment
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20 | |||
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Section
4.9. Payments on Business Day
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20 | |||
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ARTICLE
V
|
21 | |||
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Section
5.1. Commitment Fees.
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21 | |||
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Section
5.2. Fees Not Interest; Nonpayment
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21 | |||
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ARTICLE
VI
|
22 | |||
|
Section
6.1. Organization and Qualification; Subsidiaries
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22 | |||
|
Section
6.2. Authorization
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22 | |||
|
Section
6.3. No Conflicts
|
22 | |||
|
Section
6.4. Enforceability
|
22 | |||
|
Section
6.5. Accuracy of Information; No Material Adverse Change
|
22 | |||
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Section
6.6. Taxes
|
23 | |||
|
Section
6.7. Litigation and Other Proceedings
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23 | |||
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Section
6.8. No Defaults
|
23 | |||
|
Section
6.9. Solvency
|
23 | |||
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Section
6.10. Representations and Warranties
|
23 | |||
|
Section
6.11. Margin Regulations
|
24 | |||
|
Section
6.12. Licenses, Permits, Trademarks, etc
|
24 | |||
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Section
6.13. Compliance with Governmental Requirements
|
24 | |||
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Section
6.14. ERISA
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24 | |||
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Section
6.15. Title to Properties
|
24 | |||
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Section
6.16. Burdensome Contracts
|
24 | |||
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ARTICLE
VII
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24 | |||
|
Section
7.1. Conditions to Initial Advance
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24 | |||
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Section
7.2. Conditions to each Loan, Continuation or Conversion
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26 | |||
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ARTICLE
VIII
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27 | |||
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Section
8.1. Financial Statements and Information
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27 | |||
|
Section
8.2. Maintenance of Existence and Good Standing
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28 |
i
TABLE
OF CONTENTS
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|
Section
8.3. Compliance With Governmental Requirements
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28 | |||
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Section
8.4. Payment of Obligations
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29 | |||
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Section
8.5. Notification of Material Adverse Change
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29 | |||
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Section
8.6. Notification of Defaults
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29 | |||
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Section
8.7. Notification of Exchange Act Filings
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29 | |||
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Section
8.8. Notification of Proceedings Affecting Collateral
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29 | |||
|
Section
8.9. Additional Information
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30 | |||
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Section
8.10. Books and Records
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30 | |||
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Section
8.11. Insurance
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30 | |||
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Section
8.12. Deposit Relationship
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30 | |||
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Section
8.13. Collateral Audit
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30 | |||
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ARTICLE
IX
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30 | |||
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Section
9.1. Debt
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31 | |||
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Section
9.2. Liens
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31 | |||
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Section
9.3. Organizational Documents
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31 | |||
|
Section
9.4. No Subsidiaries
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31 | |||
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Section
9.5. Dividends
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32 | |||
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Section
9.6. Acquisitions
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32 | |||
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Section
9.7. Mergers, Consolidations, etc
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32 | |||
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Section
9.8. Change of Name
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32 | |||
|
Section
9.9. Financial Covenants
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32 | |||
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Section
9.10. Investments
|
32 | |||
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Section
9.11. Subordinated Debt; Seller Note
|
32 | |||
|
Section
9.12. Character of Business
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32 | |||
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ARTICLE
X
|
33 | |||
|
Section
10.1. Events of Default
|
33 | |||
|
Section
10.2. Remedies
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34 | |||
|
Section
10.3. Certain Other Remedial Matters
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34 | |||
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ARTICLE
XI
|
35 | |||
|
Section
11.1. Waivers, Etc
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35 | |||
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Section
11.2. Reimbursement of Expenses
|
35 | |||
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Section
11.3. Venue
|
35 | |||
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Section
11.4. Notices
|
36 | |||
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Section
11.5. GOVERNING LAW
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36 |
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Section
11.6. Survival of Representations, Warranties and
Covenants
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36 | |||
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Section
11.7. Counterparts; Execution by Facsimile Transmission
|
37 | |||
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Section
11.8. Separability
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37 | |||
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Section
11.9. Descriptive Headings
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37 | |||
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Section
11.10. Setoff
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37 | |||
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Section
11.11. Successors and Assigns; Participations.
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38 | |||
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Section
11.12. Interest
|
38 | |||
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Section
11.13. Indemnification
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39 | |||
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Section
11.14. Payments Set Aside
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40 | |||
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Section
11.15. Amendments, Etc
|
40 | |||
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Section
11.16. Relationship of the Parties
|
40 | |||
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Section
11.17. Certain Matters of Construction
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41 | |||
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Section
11.18. USA Patriot Act Notice
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41 | |||
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Section
11.19. FINAL AGREEMENT
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41 |
ii
SECOND AMENDED AND
RESTATED
Tyler
Technologies, Inc. a Delaware corporation (“Borrower”) and Bank
of Texas, N.A., a national banking association (“Lender”), hereby
agree as follows:
W I T N E S S E T H:
WHEREAS,
Borrower and Lender entered into that certain Amended and Restated Credit
Agreement dated February 11, 2005 (the “Existing Agreement”),
in which Bank of Texas committed to provide a revolving credit loan and a letter
of credit facility to Borrower; and
WHEREAS,
the Existing Agreement was subsequently amended to terminate the revolving
credit loan provided therein; and
WHEREAS,
Borrower has requested that Lender renew and extend the letter of credit
facility and provide a new revolving credit loan to Borrower; and
WHEREAS,
Lender has agreed to such request on the terms and conditions herein
contained.
NOW,
THEREFORE, in consideration of the mutual covenants herein contained, and for
other valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE
I
DEFINITIONS
As used
herein, the following words and terms shall have the respective meanings
indicated opposite each of them:
“Accounts Receivable”
shall mean all of Borrower’s and Guarantors’ accounts, instruments, contract
rights, chattel paper, documents, and general intangibles arising from the sale
of goods and/or the rendition of services by Borrower or any Guarantor in the
ordinary course of business, and the proceeds thereof and all security and
guaranties therefor, whether now existing or hereafter created, and all
returned, reclaimed or repossessed goods, and all books and records pertaining
to the foregoing.
“Acquisition” shall
mean any transaction or series of related transactions in which Borrower
acquires all or substantially all of the stock or other equity interests in, or
all or substantially all of the assets of, any Person or, in the case of a
Person that is a corporation or other business entity, any division
thereof.
“Additional Costs”
shall mean, with respect to any Rate Period in the case of any LIBOR Rate
Portion, all costs, losses or payments, as reasonably determined by Lender in
its sole and absolute discretion, that Lender incurs, suffers or makes by reason
of any increase in the cost to Lender of agreeing to make or making, funding or
maintaining any LIBOR Rate Portion because of or arising from (a) the
introduction of, or any change in or in the interpretation or administration of,
any law or regulation or (b) the compliance with any request from any
central bank or other Governmental Authority (whether or not having the force of
law).
“Adjusted LIBOR Rate”
shall mean with respect to a LIBOR Rate Portion on the first day of the Rate
Period, a rate per annum equal to the sum of (a) the quotient of (i) the LIBOR
Rate on the first day of the Rate Period, divided by (ii) the remainder of 1.00
minus the LIBOR Reserve Requirement, if any, on the first day of the Rate
Period, plus (b) the FDIC Percentage in effect on first day of the Rate Period,
together with any additional impositions, assessments, fees or surcharges that
may be imposed on Lender (expressed as a percentage), to the extent such
impositions, assessments, fees or surcharges are not reflected in the FDIC
Percentage or the LIBOR Reserve Requirement and are generally imposed on banks
with capitalization and supervisory risk factors comparable to Lender, plus (c)
the Applicable Margin.
“Advance” means a
borrowing under the Revolving Commitment, (a) made by Lender on a Borrowing
Date, or (b) converted or continued by Lender on the same date of conversion or
continuation, consisting, in either case, of the aggregate amount of Advances of
the same Type and for the same Rate Period.
“Affiliate” shall mean
any Person controlled by, controlling or under common control with
Borrower.
“Agreement” shall mean
this Second Amended and Restated Credit Agreement, as the same may be amended,
modified or supplemented from time to time.
“Applicable Margin”
means the margin related to Base Rate Portions or LIBOR Rate Portions, as
applicable, as set forth in Schedule I attached
hereto.
“Authorized Officer”
shall mean, as to any Person, the Chairman, the President, Chief Executive
Officer, Chief Financial Officer, Vice President, Treasurer or other officer
duly authorized by the board of directors of such Person.
“Bankruptcy Code”
shall mean the United States Bankruptcy Code of 1978, as amended, and any
successor statute.
“Base Rate” means (a)
the prime rate of interest set by BOK Financial Corporation, in its sole
discretion, on a daily basis as published by BOK Financial Corporation from time
to time, minus (b) the Applicable Margin.
“Base Rate Portion”
shall mean any Loan which bears interest at the Base Rate.
“Borrower” shall
have the meaning set forth in the first paragraph of this
Agreement.
“Borrowing Date” shall
mean a date upon which Borrower has an Advance delivered pursuant to
Section 2.2(a) or a Letter of Credit issued pursuant to Section
2.2(b).
“Business Day” shall
mean a day when Lender is open for business, provided that, if the applicable
Business Day relates to any LIBOR Rate Portion, it shall mean a day when Lender
is open for business and on which commercial banks are open for international
business (including dealings in Dollar deposits) in London.
“Capital Expenditures”
means the expenditures of any Person which are capitalized on the balance sheet
of such Person in accordance with GAAP (including that portion of Capitalized
Lease Obligations which should be capitalized on a balance sheet of such Person
in accordance with GAAP) and which are made in connection with the purchase,
construction or improvement of items properly classified on such balance sheet
as property, plant, equipment or other fixed assets or intangibles.
“Capitalized Lease”
means, as to any Person, a lease of (or other agreement conveying the right to
use) real and/or personal property to such Person as lessee, with respect to
which the obligations of such Person to pay rent or other amounts are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person in accordance with GAAP (including Statement of Financial Accounting
Standards No. 13 of the Financial Accounting Standards Board).
“Capitalized Lease
Obligations” means, as to any Person, the obligation of such Person to
pay rent or other amounts under a Capitalized Lease and, for purposes of this
Agreement, the amount of such obligation shall be the capitalized amount
thereof, determined in accordance with GAAP.
“Cash Collateralize”
shall have the meaning set forth in Section 2.2(d)(iii).
“Closing Date” shall
mean the date on which each of the conditions set forth in Section 7.1 have been
satisfied.
“Code” shall mean the
Internal Revenue Code of 1986, as amended, as now or hereafter in effect,
together with all regulations, rulings and interpretations thereof or thereunder
issued by the Internal Revenue Service.
“Collateral” shall
have the meaning set forth in the Security Agreements, the Pledge Agreements and
any other Loan Document which grants a Lien in favor of Lender as security for
the Obligations.
“Contingent
Obligation” shall mean, with respect of any Person, any obligation of
such Person guaranteeing or intended to guarantee any Debt or other obligation
(the “primary obligation”) of any other Person (the “primary obligor”) in any
manner, whether directly or indirectly, including, without limitation, any
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of
any such primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (d) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided, that
notwithstanding the foregoing, the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation of any Person shall
be the amount of the primary obligation or such lesser amount to which the
maximum exposure of such Person shall have been specifically
limited.
“Contribution
Agreement” means the contribution agreement, if any, to be executed by
each Guarantor in favor of the other Guarantors and approved by Lender, as
required by this Agreement and as it may from time to time be renewed, extended,
amended and restated.
“Conversion/Continuation
Date” shall have the meaning set forth in
Section 3.1(b).
“Credit Period” shall
mean the period commencing on the Closing Date and ending on the Maturity Date,
or such earlier date of termination of Lender’s obligation to make Advances or
issue Letters of Credit hereunder.
“Current Maturities”
shall mean, with respect to any Person, on any date of calculation, the current
liabilities of such Person attributable to the principal portion of its
long-term debt, determined in accordance with GAAP for the coming 12
months.
“Debt” shall mean,
with respect to any Person at any time, without duplication, (a) indebtedness
for borrowed money or for the deferred purchase price of property or services
purchased, excluding trade accounts payable within 120 days after the creation
thereof, (b) all indebtedness of others for borrowed money or for the deferred
purchase price of property or services secured by a Lien on any property owned
by such Person, whether or not such indebtedness has been assumed by such
Person, (c) Capitalized Lease Obligations, (d) all obligations payable out of
the proceeds of production from property of such Person, whether or not the
obligation secured thereby shall have been assumed by such Person, and (e)
Contingent Obligations of such Person.
“Default” shall mean
any of the events specified in Section 10.1, whether or not there has been
satisfied any requirement in connection with such event for the giving of
notice, or the lapse of time, or the happening of any further condition, event
or act.
“Dollars” and “$” shall mean lawful
currency of the United States of America.
“Distribution” by any
Person, shall mean (a) with respect to any stock issued by such Person or any
partnership or joint venture interest of such person, the retirement,
redemption, repurchase, or other acquisition for value of such stock,
partnership or joint venture interest, (b) the declaration or payment (without
duplication) of any dividend or other distribution, whether monetary or in kind,
on or with respect to any stock, partnership or joint venture of any Person, and
(c) any other payment or distribution of assets of a similar nature or in
respect of an equity investment.
“EBITDA” shall mean,
based on trailing four quarters, determined in accordance with GAAP for Borrower
and its Subsidiaries on a consolidated basis, the sum of net income, less income
or plus loss from discontinued operations and extraordinary items, plus income
taxes, plus depreciation, plus amortization, plus interest expense, plus any
other non-cash expenses, each as deducted in determining such net
income. The calculation of EBITDA shall include any new Subsidiary
acquired by Borrower in an Acquisition, as long as Lender has received and
reviewed audited consolidated financial statements for such Subsidiary, and all
notes thereto, including a balance sheet and statements of income, retained
earnings and cash flows, all prepared in conformity with GAAP on a consolidated
basis and accompanied by a report and unqualified opinion of an independent
certified public accountants satisfactory to Lender stating that such
accountants have conducted audits of such financial statements in accordance
with generally accepted auditing standards and that, in their opinion, such
financial statements present fairly, in all material respects, such new
Subsidiary’s financial position as of their date and the results of such new
Subsidiary’s operations and cash flows for the period covered, in conformity
with GAAP. The calculation of EBITDA may include any new Subsidiary
without the audited financial statements and opinion required by the preceding
sentence only with the express written consent of Lender.
“Environmental Laws”
shall mean any and all Governmental Requirements relating to: (a) the
environment, which includes, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata; (b) emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals or
industrial, toxic or hazardous substances or wastes into the environment; or (c)
otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants, chemicals
or industrial, toxic or hazardous substances or wastes.
“ERISA” shall have the
meaning set forth in Section 6.14.
“Event of Default”
shall mean any of the events specified in Section 10.1, provided that there
has been satisfied any requirement in connection with such event for the giving
of notice, or the lapse of time, or the happening of any further condition,
event or act.
“Expiration Date”
shall mean the last day of a Rate Period.
“FDIC Percentage”
shall mean, on any day, the net assessment rate (expressed as a percentage
rounded to the next highest 1/100 of 1%), if any, which is in effect on such day
(under the regulations of the Federal Deposit Insurance Corporation or any
successor) for determining the assessments paid by Lender to the Federal Deposit
Insurance Corporation (or any successor) for insuring Eurocurrency deposits made
in Dollars at Lender’s principal offices. Each determination of said
percentage made by Lender shall, in the absence of manifest error, be binding
and conclusive.
“Federal Funds Rate”
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank on the Business Day next succeeding such day; provided that (a) if
such day 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 (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate (rounded upward, if necessary, to a whole multiple
of 1/100 of 1%) charged to Lender on such day on such transactions as determined
by the Lender.
“Fixed Charge
Coverage” shall mean the ratio of (i) EBITDA less cash paid for taxes and
less Capital Expenditures (excluding such Capital Expenditures identified on
Schedule II), to (ii) the sum of Current Maturities plus Interest Expense plus
the Current Maturities of Capitalized Lease Obligations (without duplication of
Interest Expense).
“Funded Debt” shall
mean all outstanding liabilities for borrowed money and other interest-bearing
liabilities, including current and long-term Debt, and unfunded commitments
under any outstanding letters of credit, excluding Cash Collateralized Letters
of Credit.
“GAAP” means generally
accepted accounting principles set forth in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of Certified Public
Accountants and statements and pronouncements of the Financial Accounting
Standards Board, which principles are applicable to the circumstances in
question as of the date of determination, except as to the financial statements
delivered pursuant to Section 8.1(b), subject to (a) changes resulting from
year-end adjustments and (b) any non-conformity with such generally accepted
accounting principles as a result of the absence of any footnotes required by
such generally accepted accounting principles.
“Governmental
Authority” shall mean any government, any state or other political
subdivision thereof, or any Person exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
“Governmental
Requirement” means any law, statute, code, ordinance, order, rule,
regulation, judgment, decree, injunction, writ, edict, franchise, permit,
certificate, license, award, authorization or other direction, guideline, or
requirement of any Governmental Authority, including, without limitation, any
requirement under common law.
“Guarantor” shall mean
each Subsidiary executing a Guaranty of the Obligations in favor of
Lender.
“Guaranty” shall mean
the continuing guaranty of payment and performance of the Obligations, to be
executed by each existing Guarantor in favor Lender pursuant to Section 9.4, as
it may from time to time be renewed, extended, amended or restated.
“Highest Lawful Rate”
shall mean, with respect to Lender, the maximum non-usurious interest rate, if
any, that at any time or from time to time may be contracted for, taken,
reserved, charged, or received with respect to the Loan and Note or on other
amounts, if any, due to Lender pursuant to this Agreement or any other Loan
Document, under laws applicable to 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 non-usurious interest rate than
applicable laws now allow. At all times, if any, as Chapter 303
(“Chapter 303”) of the Texas Finance Code, shall establish the Highest Lawful
Rate for any purpose under this Agreement or any other Loan Document, the
Highest Lawful Rate shall be the “indicated rate ceiling” as defined in Chapter
303 from time to time in effect. To the extent required by applicable
law in determining the Highest Lawful Rate with respect to Lender as of any
date, there shall be taken into account the aggregate amount of all payments and
charges theretofore charged, reserved or received by Lender hereunder or under
the other Loan Documents which constitute or are deemed to constitute interest
under applicable law.
“incur” (including the
correlative terms “incurred,” “incurring,” “incurs” and “incurrence”), when used
with respect to any Debt, shall mean create, incur, assume, guarantee or in any
manner become liable in respect of such Debt.
“Indemnified Parties”
shall have the meaning set forth in Section 11.13.
“Interest Expense”
shall mean for any period, without duplication, the aggregate of all interest
expense, all prepayment charges and all amortization of debt discount and
expense, including, without limitation, all net amounts payable (or receivable)
under Interest Rate Agreements and all interest expense attributable to
Capitalized Leases, in each instance determined in accordance with
GAAP.
“Interest Payment
Date” shall mean (a) as to any Base Rate Portion, the fifteenth of
each month, beginning with November 15, 2008 (or if any such date is not a
Business Day, then the next succeeding Business Day); (b) as to any LIBOR
Rate Portion in which the Rate Period with respect thereto is one month, the
date on which such Rate Period ends; and (c) as to any LIBOR Rate Portion
in which the Rate Period with respect thereto is greater than one month, the
date on which each month during such Rate Period ends, and the date on which
such Rate Period ends.
“Interest Rate
Agreement” shall mean an interest rate swap agreement, interest rate cap
agreement or similar arrangement.
“Investment” means, as
applied to any Person, any direct or indirect purchase or other acquisition by
such Person of stock or other securities of any other Person, or any direct or
indirect loan, advance or capital contribution by such Person to any other
Person, or any other item which would be classified as an “investment” on a
balance sheet of such Person prepared in accordance with GAAP, including any
direct or indirect contribution by such Person of property or assets to a joint
venture, partnership or other business entity in which such Person retains an
interest.
“Laws” means,
collectively, all international, foreign, Federal, state and local statutes,
treaties, rules, guidelines, regulations, ordinances, codes and administrative
or judicial precedents or authorities, including the interpretation or
administration thereof by any Governmental Authority charged with the
enforcement, interpretation or administration thereof, and all applicable
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any Governmental Authority, in each case
whether or not having the force of law.
“Lender” shall have
the meaning set forth in the first paragraph of this Agreement.
“Letter of Credit”
shall mean a letter of credit issued for the account of Borrower (or a Guarantor
designated by Borrower) upon application by Borrower pursuant to Section 2.2(b)
and the other terms and conditions of this Agreement.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
7
“Letter of Credit
Commitment” shall mean the obligation of Lender to issue Letters of
Credit pursuant to this Agreement in an aggregate amount of principal
outstanding at any time not to exceed $6,000,000, as the same may be increased
with the express written consent of Lender or decreased pursuant to the terms of
this Agreement.
“Letter of Credit
Exposure” shall mean the aggregate of the undrawn portion of each Letter
of Credit outstanding at any time.
“Letter of Credit Expiration
Date” shall mean the date that is 364 days from the date of this
Agreement.
“Letter of Credit
Margin” shall mean the fee applicable to Letters of Credit as set forth
on Schedule I
hereto.
“LIBOR Rate” shall
mean the rate of interest determined by Lender at which deposits in Dollars for
the relevant Rate Period and comparable in amount to the LIBOR Rate Portion in
question are offered based on information presented on the Telerate Screen as of
11:00 A.M. (London time) on the day which is two (2) Business Days prior to the
first day of such Rate Period; provided, that if at least two such offered rates
appear on the Telerate Screen in respect of such Rate Period, the arithmetic
mean of all such rates (as determined by Lender) will be the rate used;
provided, further, that if Telerate ceases to provide LIBOR quotations, such
rate shall be the average rate of interest determined by Lender at which
deposits in Dollars are offered for the relevant Rate Period by Lender (or its
successor) to banks with combined capital and surplus in excess of $500,000,000
in the London interbank market as of 11:00 A.M. (London time) on the first day
of such Rate Period.
“LIBOR Rate Portion”
shall mean that portion or portion of the Loan which bears interest at the
Adjusted LIBOR Rate.
“LIBOR Reserve
Requirement” shall mean, on any day, that percentage (expressed as a
decimal fraction) which is in effect on such date, if any, as provided by the
Federal Reserve System for determining the maximum reserve requirements
generally applicable to financial institutions regulated by the Federal Reserve
Board comparable in size and type to Lender (including, without limitation,
basic supplemental, marginal and emergency reserves) under Regulation D with
respect to “Eurocurrency liabilities” as currently defined in Regulation D, or
under any similar or successor regulation with respect to Eurocurrency
liabilities or Eurocurrency funding (or, if reserves for Eurocurrency
liabilities are not separately stated in such regulations, the other applicable
category of liabilities which includes deposits by reference to which the
interest rate on a LIBOR Rate Portion is determined). Each
determination by Lender of the LIBOR Reserve Requirement, shall, in the absence
of manifest error, be conclusive and binding.
“Lien” shall mean (a)
any interest in property (whether real, personal or mixed and whether tangible
or intangible) which secures the payment of Debt or an obligation owed to, or a
claim by, a Person other than the owner of such property, whether such interest
is based on the common law, statute or contract, including, without limitation,
any such interest arising from (and irrespective of whether created by such
owner or another Person) a mortgage, charge, pledge, security agreement,
conditional sale, Capitalized Lease or trust receipt, or arising from a lease,
consignment or bailment given for security purposes, and (b) any exception to or
defect in the title to or ownership interest in such property, including,
without limitation, reservations, rights of entry, possibilities of reverter,
encroachments, easements, rights of way and restrictive covenants (other than
minor exceptions to or irregularities in the title or ownership interest in such
property which do not materially impair the use of such property for its
intended purpose).
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“Loan” shall mean the
revolving line of credit in the maximum amount of the Revolving Commitment and
the letter of credit facility in the maximum amount of the Letter of Credit
Commitment, each to be funded by Lender to Borrower pursuant to the term of this
Agreement as the same may be renewed or extended or increased (with the prior
written consent of Lender) from time to time.
“Loan Documents” shall
mean this Agreement, the Note, the Guaranties, the Security Agreements, and all
instruments, certificates and agreements now or hereafter executed or delivered
to Lender pursuant to any of the foregoing and the transactions connected
therewith, and all amendments, modifications, renewals, extensions, increases
and rearrangements of, and substitutions for, any of the foregoing.
“Material Adverse
Effect” shall mean any material adverse effect on (a) the financial
condition, business, properties, assets, or operations of Borrower and its
Subsidiaries on a consolidated basis, (b) the ability of Borrower and the
Guarantors, on a consolidated basis, to repay the Obligations, (c) the ability
of Borrower or any Guarantor to perform on a timely basis any other obligations
under this Agreement or any other Loan Document to which it is a party,
(d) the validity or enforceability of any Loan Document or (e) the rights
and remedies of Lender under any Loan Document.
“Maturity Date” shall
mean October 19, 2009.
“Moody’s” shall mean
Xxxxx’x Investors Service, Inc. and any successor thereto.
“Mortgage” shall mean
the mortgage or deed of trust executed by Borrower to or for the benefit of
Lender, evidencing the lien granted by Borrower to or for the benefit of Lender
in the real property more particularly set forth therein securing the
Obligations.
“Note” shall mean the
promissory note or notes executed by Borrower in favor of Lender evidencing the
obligation to repay the Loan, substantially in the form of Exhibit A, together
with any renewals, extensions, modifications or amendments of the
forgoing.
“Notice of Borrowing”
shall have the meaning set forth in Section 2.2(a).
“Notice of Rate
Change/Continuation” shall have the meaning set forth in
Section 3.1(b).
“Obligations” shall
mean the Loan and all of the other obligations of Borrower and the Subsidiaries
now or hereafter existing under the Loan Documents, whether for principal,
interest, fees, expenses, indemnification or otherwise.
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“Officer’s
Certificate” shall mean a certificate signed in the name of Borrower by
an Authorized Officer.
“Other Taxes” shall
have the meaning set forth in Section 4.7(b).
“PBGC” shall have the
meaning set forth in Section 6.14.
“Permitted
Acquisition” shall mean an Acquisition which is agreed to by Borrower and
the other party thereto with respect to which (a) the consideration paid by
Borrower or any Subsidiary (whether in cash, by issuance of Subordinated Debt
permitted under Section 9.1, by issuance of stock, by assumption of Debt or
otherwise and including the value of any management, consulting, purchase or
required performance agreement by Borrower or any Subsidiary in connection
therewith), does not exceed, (i) for any single Acquisition, $5,000,000, and
(ii) together with the consideration paid for all other Acquisitions consummated
in the immediately preceding twelve (12) month period, $30,000,000, (b) Borrower
has caused to be subordinate to the payment of the Obligations and unsecured,
any Debt Borrower issues in connection with such Acquisition, and (c) Borrower
has paid any Debt assumed in connection with such Acquisition unless such Debt
is permitted under Section 9.1.
“Permitted
Distribution” shall mean, with respect to the stock of Borrower, the
repurchase of such stock by Borrower in an aggregate amount not to exceed
$20,000,000 in the immediately preceding twelve (12) month
period. For purposes of calculating the aggregate amount allowed
hereunder, such amount shall include only the stock repurchased by Borrower on a
going forward basis, beginning as of the Closing Date, and shall not include any
stock repurchased by Borrower before the Closing Date.
“Permitted
Investments” shall mean (a) obligations, with a maturity of less than two
years, with the full faith and credit of the United States of America, (b)
direct obligations of any state of the United States, or municipality therein,
rated in one of the two top classifications by S&P or Moody’s and maturing
within one year from date of acquisition, (c) certificates of deposit,
eurodollar time deposits or banker’s acceptances, maturing within two years from
date of acquisition, issued by (1) Lender, or (2) any United States commercial
bank having capital, surplus and undivided profits aggregating not less than
$100 million and whose (or whose parent corporation’s) unsecured long-term debt
is rated in one of the two top classifications by S&P or Moody’s, (d)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clauses (b) and (c) above entered into with
any financial institution meeting the qualifications specified in clause (c)
above, (e) commercial paper of any United States corporation with a maturity of
less than 270 days from date of acquisition and which is rated in one of the two
top classifications by S&P or Moody’s, (f) indebtedness of any United States
corporation with a maturity of less than 270 days from date of acquisition and
which is (1) evidenced by bonds, notes, debentures or other instruments issued
and authenticated under an indenture qualified under the Trust Indenture Act of
1939, as amended, and (2) rated in one of the two top classifications by S&P
or Moody’s, (g) investments in money market or mutual funds at least ninety
percent (90%) of the assets of which constitute Dollars or investments in
securities of the type described in clauses (a) through (f) above (without
regard to maturities), (h) Investments in money market or mutual funds (other
than those described in clause (g) above) acquired through and maintained in an
account with Lender or any Person controlled by, controlling or under common
control with Lender, (i) Investments in wholly-owned Subsidiaries of Borrower,
so long as Borrower has complied with the requirements of Section 9.4 with
respect thereto, (j) expense advances to employees in the ordinary course of
business for travel and lodging not to exceed $100,000 in the aggregate at any
time outstanding, (k) Investments in demand deposit accounts maintained with
FDIC member banks, and (l) Investments outstanding on the date of this Agreement
that are disclosed in Schedule 9.10.
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“Person” shall mean an
individual, partnership, joint venture, corporation, limited liability company,
joint stock company, bank, trust, unincorporated organization and/or a
government or any department or agency thereof.
“Pledge Agreement”
shall mean the Pledge Agreement or Pledge Agreements executed by Borrower and
any applicable Subsidiary, by which Borrower or such applicable Subsidiary
pledges to Lender a security interest in all of the stock or other equity
interests of the Subsidiaries.
“Rate Period” shall
mean the period of time for which the LIBOR Rate shall be in effect as to any
LIBOR Rate Portion which shall be a one, two or three month period of time,
commencing with the Borrowing Date or the Expiration Date of the immediately
preceding Rate Period, as the case may be, applicable to and ending on the
effective date of any rate change or rate continuation made as provided in
Section 3.1(b) as Borrower may specify in a Notice of Borrowing or Notice
of Rate Change/Continuation, subject, however, to the early termination
provisions of Section 3.2(a) relating to any LIBOR Rate Portion; provided,
however, that: (i) any Rate Period which would otherwise end on a day which
is not a Business Day shall be extended to the next succeeding Business Day
unless such Business Day falls in another calendar month, in which case such
Rate Period shall end on the next preceding Business Day, and (ii) no Rate
Period shall extend beyond the Maturity Date.
“Revolving Commitment”
shall mean the obligation of Lender to make Advances or issue Letters of Credit
pursuant to this Agreement in an aggregate amount of principal outstanding at
any time not to exceed $25,000,000, as the same may be increased with the
express written consent of Lender or decreased pursuant to the terms of this
Agreement.
“S&P” shall mean
Standard & Poor’s Rating Group and any successor thereto.
“Security Agreements”
shall mean (a) that certain Amended and Restated Security Agreement, dated as of
the Closing Date executed by Borrower in favor of Lender, and (b) any Security
Agreement executed by a Subsidiary in favor of Lender.
“Subordinated Debt”
shall mean any Debt of Borrower (a) unsecured, and (b) subordinated to payment
of the Obligations in form and substance satisfactory to Lender.
“Subsidiary” shall
mean any corporation, partnership, limited liability company, joint venture,
association, bank or other business entity of which 50% or more of the total
voting power of shares of stock or other indicia of equity rights entitled to
vote in the election of directors, managers, general partners, trustees or other
members of the governing body thereof is at the time directly or indirectly
owned by Borrower or any Subsidiary.
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“Taxes” shall have the
meaning set forth in Section 4.7(a).
“Total Liabilities”
shall mean and include without duplication (a) all items which in accordance
with GAAP would be included on the liability side of a consolidated balance
sheet of Borrower on the date as of which Total Liabilities is to be determined
(excluding capital stock
surplus, surplus reserves and deferred credits), (b) all Contingent Obligations,
(c) all Debt secured by any Lien existing on any interest of Borrower or any
Subsidiary in property owned subject to such lien whether or not the Debt
secured thereby shall have been assumed, and (d) all leases sold by a Borrower
or any Subsidiary with recourse to Borrower or any Subsidiary, provided that
such term shall not mean or include any Debt in respect of which monies
sufficient to pay and discharge the same in full (either on the expressed date
of maturity thereof or on such earlier date as such Debt may be duly called for
redemption and payment) shall be deposited with a depository, agency or trustee
acceptable to Lender, in trust and on a fully perfected basis, for the payment
thereof.
“Total Outstandings”
means the sum of (a) the aggregate amount of all Advances, plus (b) the
aggregate amount of all Letter of Credit Exposure.
“Type” shall mean any
Base Rate Portion or any LIBOR Rate Portion.
ARTICLE
II
THE
CREDIT FACILITY
Section
2.1. Commitment.
(a) Revolving Line of
Credit. Upon the terms and conditions and relying upon the
representations and warranties set forth herein and in the other Loan Documents,
Lender agrees to make revolving Advances to Borrower from time to time in
amounts not to exceed the maximum amount of the Commitment. Within
such limits and during such period and subject to the terms and conditions of
this Agreement, Borrower may borrow, repay and reborrow Advances hereunder at
any time prior to the Maturity Date.
(b) Letters of
Credit. Subject to the terms and conditions set forth herein,
Lender agrees (1) to issue Letters of Credit for the account of the Borrower
from time to time on any Business Day during the period from the Closing Date
until (i) with regard to Letters of Credit issued under the Revolving
Commitment, the Maturity Date, and (ii) with regard to Letters of Credit issued
under the Letter of Credit Commitment, the Letter of Credit Expiration Date, and
(2) to honor drafts under the Letters of Credit; provided that Lender shall not
be obligated to issue any Letter of Credit if as of the date of such issuance,
(x) the aggregate amount of all Letter of Credit Exposure with regard to Letters
of Credit issued under the Revolving Commitment would exceed the amount
available under the Revolving Commitment, or (y) the outstanding amount of the
Letter of Credit Exposure with regard to Letters of Credit issued under the
Letter of Credit Commitment would exceed the amount available under the Letter
of Credit Commitment. Within the foregoing limits, and subject to the
terms and conditions hereof, the Borrower’s ability to obtain Letters of Credit
shall be fully revolving, and accordingly the Borrower may, during the foregoing
period, obtain Letters of Credit to replace Letters of Credit that have expired
or that have been drawn upon and reimbursed. All amounts Lender is
required to advance under any Letter of Credit issued under the Revolving
Commitment shall be deemed an Advance hereunder and shall bear interest as
provided herein. Borrower shall be liable for all costs and expenses,
including, but not limited to, attorney’s fees and court costs, relating to such
Letter of Credit, or any action related to such Letter of Credit, incurred by
Lender in connection with such Letter of Credit.
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(c) Promissory
Notes. Borrower shall execute and deliver to Lender (i) a
Note, which shall be dated the Closing Date, in the principal amount of the
Revolving Commitment, and payable to Lender as provided in the Note and in this
Agreement, and (ii) a Note, which shall be dated the Closing Date, in the
principal amount of the Letter of Credit Commitment, and payable to Lender as
provided in the Note and in this Agreement. Each Note shall bear
interest on the unpaid principal amount thereof from time to time outstanding at
the rate per annum determined as specified in Section 3.1,
payable on each Interest Payment Date and on the Maturity Date, commencing with
the first Interest Payment Date following the date of such Note.
(d) Termination of
Commitment. The outstanding principal balance of each Note,
together with all accrued but unpaid interest thereon, shall be due and payable
in full on the Maturity Date. The Revolving Commitment shall
terminate on the Maturity Date and, after such date, Lender shall have no
obligation hereunder to make Advances or to issue Letters of Credit under the
Revolving Commitment. The Letter of Credit Commitment shall terminate
on the Letter of Credit Expiration Date, and, after such date, Letter of Credit
Issuer shall have no obligation hereunder to issue Letters of Credit under the
Letter of Credit Commitment.
(e) Use of
Proceeds. All Advances and Letters of Credit made or issued
pursuant to this Agreement shall be used solely for working capital needs of
Borrower and its Subsidiaries and for Acquisitions and the repurchase by
Borrower of issued and outstanding shares of Borrower’s stock.
Section
2.2. Borrowing
Procedure.
(a) Amounts; Method of
Borrowing. Each Advance by Borrower hereunder shall be
(i) in the case of a borrowing consisting of a LIBOR Rate Portion, in an
aggregate amount of not less than $500,000 or an integral multiple of $250,000
in excess thereof; or (ii) in the case of a borrowing consisting of a Base
Rate Portion, in an aggregate amount of not less than $250,000. Each
Advance by Borrower shall be made upon prior written notice from Borrower to
Lender in the form of Exhibit B-1 hereto (a
“Notice of
Borrowing”), delivered to Lender not later than 10:00 a.m. (Dallas,
Texas time) (i) on the third Business Day prior to the Borrowing Date, if
such borrowing consists of a LIBOR Rate Portion; and (ii) on the Borrowing
Date, if such borrowing consists of a Base Rate Portion. Each Notice
of Borrowing shall be irrevocable and shall specify (i) the amount of the
proposed borrowing and of each LIBOR Rate Portion and/or Base Rate Portion
comprising a part thereof; (ii) the Borrowing Date; (iii) with respect
to any LIBOR Rate Portion, the Rate Period with respect to each such LIBOR
Rate Portion and the Expiration Date of each such Rate Period; and
(iv) the demand deposit account of Borrower at Lender in which the proceeds
of the borrowing are to be deposited. Delivery of any Notice of
Borrowing to Lender shall constitute a representation by Borrower that the
representations and warranties made by Borrower under the Loan Documents are
true and correct as of the date of delivery of such Notice of
Borrowing.
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(b) Method of Issuing Letters of
Credit. Not less than five (5) Business Days prior to the
requested date of issuance of any Letter of Credit, Borrower shall execute and
deliver to Lender the customary letter of credit application and agreement in
the form of Exhibit
B-2 hereto (a “LOC
Application”). Nothing in this Agreement shall prohibit Letter
of Credit Issuer from modifying the form of the LOC Application in effect from
time to time in connection with the issuance of any Letter of
Credit. In the event of a direct conflict between the provisions of
the LOC Application and this Agreement, the provisions of this Agreement shall
govern. In no event shall a Letter of Credit have an expiration date
which is later than the earlier of (i) with regard to Letters of Credit issued
under the Revolving Commitment, (1) the fifth Business Day prior to the Maturity
Date and (2) one year after its issuance, unless Borrower shall have deposited
with Lender cash collateral satisfactory to Lender in an aggregate amount equal
to the Letter of Credit Exposure for such Letter of Credit, and (ii) with regard
to Letters of Credit issued under the Letter of Credit Commitment, (1) the fifth
Business Day prior to the Letter of Credit Expiration Date and (2) one year
after its issuance. Upon satisfaction of the conditions precedent set
forth in Article VII, and subject to the other terms and conditions of this
Agreement, Lender shall issue Letters of Credit for the account of Borrower (or
a Guarantor designated by Borrower) within five (5) Business Days from receipt
by Lender of the fully-executed LOC Application.
(c) Obligation to Issue Letters of
Credit. The Lender shall be under no obligation to issue any
Letter of Credit if:
(i) any
order, judgment or decree of any Governmental Authority or arbitrator shall by
its terms purport to enjoin or restrain the Lender from issuing such Letter of
Credit, or any Law applicable to the Lender or any request or directive (whether
or not having the force of law) from any Governmental Authority with
jurisdiction over the Lender shall prohibit, or request that the Lender refrain
from, the issuance of letters of credit generally or such Letter of Credit in
particular or shall impose upon the Lender with respect to such Letter of Credit
any restriction, reserve or capital requirement (for which the Lender is not
otherwise compensated hereunder) not in effect on the Closing Date, or shall
impose upon the Lender any unreimbursed loss, cost or expense which was not
applicable on the Closing Date and which the Lender in good xxxxx xxxxx material
to it; or
(ii) the
issuance of such Letter of Credit would violate one or more written policies of
the Lender, which are applied indiscriminately to all borrowers of
Lender.
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(d) Cash Collateral.
(i) Borrower
shall Cash Collateralize all Letters of Credit issued under the Letter of Credit
Commitment prior to the issuance of any such Letter of Credit.
(ii) If,
as of the Maturity Date, any Letter of Credit issued under the Revolving
Commitment may for any reason remain issued and partially or wholly undrawn,
Borrower shall immediately Cash Collateralize the then outstanding amount of all
Letter of Credit Exposure (in an amount equal to such Letter of Credit Exposure
determined by Lender as of the date of the Maturity Date).
(iii) For
purposes hereof, “Cash
Collateralize” means to pledge and deposit with or deliver to the Lender,
as collateral for the Letter of Credit Exposure, cash or deposit account
balances pursuant to documentation in form and substance satisfactory to
Lender. Derivatives of such term have corresponding
meanings. Borrower hereby grants to Lender a security interest in all
such cash, deposit accounts and all balances therein and all proceeds of the
foregoing. Cash collateral shall be maintained in blocked, interest
bearing deposit accounts at Lender.
ARTICLE
III
INTEREST
RATE PROVISIONS
Section
3.1. Interest Rate
Determination. The Loan shall bear interest on the unpaid
principal amount thereof from time to time outstanding, until maturity, at a
rate per annum (calculated based on a year of 360 days in each case for the
actual days elapsed) as follows:
(a) The
principal balance of the Loan from time to time outstanding shall bear interest
at an annual rate equal to the lesser of (i) with respect to any LIBOR Rate
Portion, the Adjusted LIBOR Rate, and with respect to any Base Rate Portion, the
Base Rate, as the case may be, with respect thereto or (ii) the Highest
Lawful Rate, from the day of Advance to, but not including, (y) with
respect to any Base Rate Portion, the Maturity Date and (z) with respect to
any LIBOR Rate Portion, the Expiration Date of the Rate Period then in effect
with respect thereto.
(b) So
long as no Default or Event of Default has occurred and is continuing, Borrower
may at any time prior to the applicable Maturity Date (y) change the
interest rates to apply to all or any portion of the Loan or (z) elect to
continue all or any part of the outstanding principal balance of any LIBOR Rate
Portion as portions of such Type by giving Lender an irrevocable written notice
in the form of Exhibit C hereto
(the “Notice of Rate
Change/Continuation”) specifying (i) the date on which the
applicable LIBOR Rate Portion or Base Rate Portion was made; (ii) the
interest rate then applicable to such LIBOR Rate Portion or Base Rate Portion;
(iii) with respect to any LIBOR Rate Portions, the Rate Period then
applicable to each such LIBOR Rate Portion; (iv) the principal amount of
such LIBOR Rate Portion to remain outstanding; and (v) the requested
effective date of the rate change or continuation (the “Conversion/Continuation
Date”). In the case of the conversion of all or any part of
any Base Rate Portion into a LIBOR Rate Portion or the continuation of any LIBOR
Rate Portion, (x) such notice must be received by Lender at least three (3)
full Business Days prior to the Conversion/Continuation Date, and otherwise at
least one (1) full Business Day prior thereto, and (y) in either case such LIBOR
Rate Portion shall be in an aggregate principal amount greater than or equal to
$1,000,000 or in an integral multiple of $100,000 in excess
thereof. Each rate so specified shall become effective on the
Conversion/Continuation Date and remain in effect until the expiration of the
applicable Rate Period specified in such Notice of Rate
Change/Continuation. Each Notice of Rate Change/Continuation shall be
irrevocable.
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(c) If
Borrower shall fail to choose, as provided in subsection (b) above, the rate of
interest to become effective with respect to any LIBOR Rate Portions upon the
Expiration Date of the Rate Period with respect thereto, such portion of the
Loan shall bear interest at the Base Rate on and after such Expiration Date
until Borrower shall have so chosen a different rate.
(d) Nothing
contained herein shall authorize Borrower (i) to convert any Base Rate
Portion into or continue any LIBOR Rate Portion as a LIBOR Rate Portion unless
the Expiration Date of the Rate Period for the new LIBOR Rate Portion occurs on
or before the Maturity Date, (ii) to continue or change the interest rates
applicable to any LIBOR Rate Portions prior to the Expiration Date of the Rate
Period with respect thereto, or (iii) to convert any Base Rate Portion into a
LIBOR Rate Portion or to continue any LIBOR Rate Portion if a Default or an
Event of Default has occurred and is continuing.
(e) Notwithstanding
anything set forth herein to the contrary (other than Section 11.12), if an
Event of Default has occurred and is continuing the Loan shall bear interest at
a rate per annum which shall be equal to the lesser of (i) 3% above the
Base Rate or (ii) the Highest Lawful Rate, which interest shall be due and
payable on demand.
Section
3.2. Additional Interest Rate
Provisions.
(a) Anything
in this Agreement to the contrary notwithstanding, if at any time Lender
determines (which determination shall be conclusive absent manifest error) that
the introduction of or any change in any Governmental Regulation by any
Governmental Authority charged with the interpretation or administration thereof
shall make it unlawful for Lender to maintain or fund any LIBOR Rate Portion or
to convert any Base Rate Portion into, or to continue, any LIBOR Rate Portion
hereunder, Lender shall promptly give notice thereof to
Borrower. With respect to any LIBOR Rate Portion which is outstanding
when Lender so notifies Borrower, upon such date as shall be specified in such
notice, the Rate Period shall end and the lesser of (i) the Base Rate or
(ii) the Highest Lawful Rate shall commence to apply in lieu of the
Adjusted LIBOR Rate in respect of such portion of the Loan. At least
five (5) Business Days after such specified date, Borrower shall pay to Lender
(y) accrued and unpaid interest on each affected LIBOR Rate Portion at the
Adjusted LIBOR Rate in effect at the time of such notice to but not including
such specified date plus (z) such amount or amounts (to the extent that
such amount or amounts would not be usurious under applicable Governmental
Regulation) as may be necessary to compensate Lender for any costs and losses
incurred by it, but otherwise without penalty. If notice has been
given by Lender pursuant to the foregoing provisions of this Section 3.2,
then, unless and until the circumstances giving rise to such notice no longer
apply, such Adjusted LIBOR Rate shall not again apply to any portion of the Loan
and the obligation of Lender to convert any portion of the Loan into, or to
continue, any LIBOR Rate Portion as, a LIBOR Rate Portion shall be
suspended.
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(b) Subject
to Section 11.12 hereof, Borrower will indemnify Lender against, and
reimburse Lender on demand for, any loss, cost or expense incurred or sustained
by Lender (including, without limitation, any loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by Lender
to fund or maintain any LIBOR Rate Portion to Borrower ) as a result of
(i) any Additional Costs incurred by Lender; (ii) any payment,
prepayment or repayment (whether authorized or required hereunder or otherwise)
of all or a portion of any LIBOR Rate Portion on a day other than the last day
of a Rate Period for such LIBOR Rate Portion; (iii) any payment or
prepayment (whether required hereunder or otherwise) of any LIBOR Rate Portion
made after the delivery of a Notice of Borrowing or a Notice of Rate
Change/Continuation, as the case may be, but before the applicable Borrowing
Date or a Conversion/Continuation Date, as the case may be, if such payment or
prepayment prevents the proposed borrowing from becoming fully effective; or
(iv) after receipt by Lender of a Notice of Borrowing or a Notice of Rate
Change/Continuation, as the case may be, the failure of any LIBOR Rate Portion
to be made or effected by Lender due to any condition precedent to a borrowing
not being satisfied by Borrower or due to any other action or inaction of
Borrower.
(c) The
agreements contained in Sections 3.2(a) and 3.2(b) shall survive the
termination of this Agreement and the payment in full of the Note and all other
amounts payable hereunder.
ARTICLE
IV
PREPAYMENTS
AND OTHER PAYMENTS
Section
4.1. Required
Payments.
(a) Interest Payment
Dates. Interest owed under the Note is due not later than
12:00 noon (Dallas, Texas time) on each Interest Payment Date, in immediately
available funds in Dallas, Texas, to Lender at its address referred to in
Section 11.4.
(b) Principal Payment
Date. All outstanding principal owed under the Note is due not
later than 12:00 noon (Dallas, Texas time) on the Maturity Date in immediately
available funds in Dallas, Texas, to Lender at its address referred to in
Section 11.4.
(c) Intentionally
Omitted.
SECOND AMENDED AND RESTATED
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(d) Excess Advances. In
the event that the sum of the outstanding Advances (including, without
limitation, any Advances required to be made as a result of a draw on a Letter
of Credit) plus the Letter of Credit exposure exceeds the maximum amount of the
Commitment then in effect (such excess amount referred to herein as the “Excess Amount”),
Borrower shall immediately pay to Lender the Excess Amount, together with any
amount owed under Section 3.2(b) resulting from such payment.
Section
4.2. Optional
Prepayments. Borrower shall have the right at any time and
from time to time to prepay, in whole or in part any Advance; provided, that
each partial prepayment shall be in an aggregate principal amount of at least
$25,000, together with interest accrued thereon to the date of such prepayment
and all amounts due, if any, under Section 3.2.
Section
4.3. Notice of
Payments. Borrower shall give Lender at least three (3)
Business Days’ prior written notice of each prepayment with respect to any LIBOR
Rate Portion proposed to be made by Borrower pursuant to Section 4.2 on a
day other than the last day of the Rate Period for such LIBOR Rate Portion,
specifying the principal amount thereof to be prepaid, the prepayment date and
the account of Borrower to be charged if such prepayment is to be so
effected. Notice of such prepayment having been given, the principal
amount of the Loan specified in such notice, together with interest thereon to
the date of prepayment, shall become due and payable on such prepayment
date. If Borrower pays or prepays any LIBOR Rate Portion prior to the
end of the Rate Period applicable thereto, such payment shall be subject to
Section 3.2(b).
Section
4.4. Place of Payment or
Prepayment. All payments and prepayments made in accordance
with the provisions of this Agreement or of the Note in respect of commitment
fees or of principal or interest on the Note shall be made to Lender no later
than 12:00 noon (Dallas, Texas time) in immediately available funds at the
address referred to in Section 11.4.
Section
4.5. No Prepayment Premium or
Penalty. Each prepayment pursuant to Section 4.2 shall be
without premium or penalty, except as provided in Section 3.2(b).
Section
4.6. Increased Costs.
(a) Notwithstanding
any other provision herein, but subject to Section 11.12, if after the date
of this Agreement the introduction of or change in any applicable Governmental
Regulation or any change in any Governmental Regulation or in the interpretation
or administration thereof, or compliance by Lender (or any lending office of
Lender) with any applicable guideline or request from any central bank or
Governmental Authority (whether or not having the force of a Governmental
Regulation) either (i) shall impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against loans made or
commitments entered into by Lender, or (ii) shall impose on Lender any
other conditions affecting this Agreement; and the result of any of the
foregoing affects or would have the effect of reducing the rate of return on
Lender’s capital as a consequence of its obligations hereunder to a level below
that which Lender could have achieved but for such adoption, change or
compliance (taking into consideration Lender’s policies with respect to capital
adequacy) then, subject to Section 11.12 hereof, Borrower shall pay to
Lender such additional amount or amounts as will compensate Lender for such
reduction. Notwithstanding the foregoing, in no event shall the compensation
payable under this Section 4.6 (to the extent, if any, constituting
interest under applicable laws) together with all amounts constituting interest
under applicable laws and payable in connection with this Agreement, the Note
and the other Loan Documents, exceed the Highest Lawful Rate.
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(b) Lender
will notify Borrower of any event which will entitle Lender to compensation
pursuant to subsection (a) above. A certificate of Lender setting
forth in reasonable detail such amount or amounts as shall be necessary to
compensate Lender as specified in subsection (a) above shall be conclusive
absent manifest error. Borrower agrees to pay to Lender for the
account of Lender the amount shown as due on any such certificate within fifteen
(15) days after its receipt of the same Lender may not make any claim
for compensation under this Section 4.6 by reason of any increased costs or
reduction of return incurred or suffered by Lender more than ninety (90) days
prior to the date on which such certificate is received by
Borrower..
(c) Subject
to the last sentence of Section 4.6(b), failure on the part of Lender to demand
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital with respect to the Loan shall not
constitute a waiver of Lender’s rights to demand compensation for any increased
costs or reduction in amounts received or receivable or reduction in return on
capital with respect to the Loan.
Section
4.7. Taxes.
(a) Subject
to Section 11.12, any and all payments by Borrower hereunder or under the
Note shall be made free and clear of and without deduction for any and all
present or future taxes, deductions, charges or withholdings, and all
liabilities with respect thereto, including, without limitation, such taxes,
deductions, charges, withholdings or liabilities whatsoever (x) imposed,
assessed, levied or collected on or in respect of the Loan solely as a result of
the interest rate being determined by reference to the LIBOR Rate, or the
provisions of this Agreement relating to the LIBOR Rate, or the recording,
registration, notarization or other formalization of any thereof or any payments
of principal, interest or other amounts made on or in respect of the Loan when
the interest rate is determined by reference to the LIBOR Rate, or
(y) imposed, assessed, levied or collected by any jurisdiction (or any
political subdivision thereof) under or in which Borrower or any Subsidiary is
organized or doing business, excluding, taxes
imposed on Lender’s net income (including penalties and interest payable in
respect thereof) and franchise taxes imposed on Lender by any jurisdiction (or
any political subdivision thereof) under the laws of which Lender is organized
or doing business (all such non-excluded taxes, deductions, charges,
withholdings and liabilities being hereinafter referred to as “Taxes”). Subject
to Section 11.12 hereof, if Borrower shall be required by Governmental
Regulation to deduct any Taxes from or in respect of any sum payable hereunder
or under the Note to Lender (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section 4.7) Lender
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) Borrower shall make such deductions, and
(iii) Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable Governmental
Regulation. If requested by Lender, Borrower shall confirm that all
applicable Taxes, if any, imposed on it by virtue of the transactions under this
Agreement have been properly and legally paid by it to the appropriate taxing
authorities by sending either (A) official tax receipts or notarized copies
of such receipts to Lender within thirty (30) days after payment of any
applicable tax or (B) a certificate executed by an Authorized Officer of
Borrower confirming that such Taxes have been paid, together with evidence of
such payment.
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(b) In
addition, subject to Section 11.12 hereof, Borrower agrees to pay any
present or future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made hereunder or
under the Note or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement or the Note (hereinafter referred to as “Other
Taxes”).
(c) Subject
to Section 11.12 hereof, Borrower will indemnify Lender for the full amount
of Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 4.7) paid by
Lender and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made
within thirty (30) days from the date Lender makes written demand
therefor.
(d) Without
prejudice to the survival of any other agreement of Borrower hereunder, the
agreement and obligations of Borrower contained in this Section 4.7 shall
survive the termination of this Agreement and the payment in full of the Note
and all other amounts payable hereunder.
Section
4.8. Reduction or Termination of the
Commitment. Borrower may at any time or from time to time
reduce or terminate the Revolving Commitment or the Letter of Credit Commitment
by giving not less than three (3) full Business Days’ prior written notice to
such effect to Lender; provided, that any partial reduction shall be in an
amount of not less than $500,000 or an integral multiple of $100,000 in excess
thereof; and provided further, however, that no partial reduction shall reduce
the aggregate amount of the Revolving Commitment or the Letter of Credit
Commitment to an amount greater than zero and less than
$1,000,000. Promptly after Lender’s receipt of such notice of
reduction, such reduction shall be effective on the date specified in the notice
from Borrower with respect to such reduction. The Revolving
Commitment shall automatically terminate on the earlier of the Maturity Date or
upon the acceleration of the maturity date of the Note. The Letter of
Credit Commitment shall automatically terminate on the earlier of the Letter of
Credit Expiration Date or upon the acceleration of the maturity date of the
Note. Each reduction of the Revolving Commitment or the Letter of
Credit Commitment hereunder shall be irrevocable.
Section
4.9. Payments on Business
Day. Whenever any payment or prepayment hereunder or under the
Note shall be stated to be due on a day other than a Business Day, such payment
shall be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of interest;
provided, however, if such extension would cause payment of interest on or
principal of LIBOR Rate Portions to be made in the next following calendar
month, such payment shall be made on the next preceding Business
Day.
SECOND AMENDED AND RESTATED
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ARTICLE
V
COMMITMENT
FEE AND OTHER FEES
Section
5.1. Commitment Fees.
(a) Upfront Commitment
Fee. Borrower agrees to pay to Lender, on the Closing Date, an
upfront commitment fee in respect of the Revolving Commitment of in the amount
of $25,000.
(b) Unused Commitment Fee.
Borrower agrees to pay to Lender a fee at a per annum rate equal to 15 basis
points on the daily unused portion of the Revolving Commitment from the date
hereof to and including the Maturity Date, payable in arrears at the end of each
calendar quarter hereafter and on the Maturity Date (the amount of the Letter of
Credit Exposure for Letters of Credit issued under the Revolving Commitment at
any time shall reduce the unused portion of the Revolving Commitment for the
purpose of calculating the fee under this Section 5.1(b)). Borrower may
permanently reduce the Commitment in whole, or in part, pursuant to Section 4.8,
provided,
however, that the amount of the Revolving Commitment may not be reduced below
the principal amount of the outstanding Advances and Letter of Credit
Exposure. All accrued fees under this Section 5.1(b) shall be payable
on the effective date of any termination of the obligations of Lender to make
Advances hereunder.
(c) Letter of Credit
Fees. Borrower shall pay to Lender a letter of credit
fee at a per annum rate equal to: (i) the Letter of Credit Margin on
the average daily Letter of Credit Exposure under the Letter of Credit
Commitment, and (ii) the Revolving LC Margin on the average daily Letter of
Credit Exposure under the Revolving Commitment. Such fee shall be
payable in arrears payable at the end of each calendar quarter hereafter and on
the Maturity Date. Borrower shall also pay to Lender at the time of
issuance of each Letter of Credit and in connection with any re-issuance or
draws thereunder, issuance fees and documentary charges in accordance with
Lender’s standard schedule for such charges as in effect from time to
time.
Section
5.2. Fees Not Interest;
Nonpayment. The fees described in this Agreement represent
compensation for services rendered and to be rendered separate and apart from
the lending of money or the provision of credit and do not constitute
compensation for the use, detention, or forbearance of money, and, subject to
Section 11.12, the obligation of Borrower to pay each fee described herein
shall be in addition to, and not in lieu of, the obligation of Borrower to pay
interest, other fees described in this Agreement, and expenses otherwise
described in this Agreement. Fees shall be payable when due in
Dollars and in immediately available funds. Subject to
Section 11.12 hereof, all fees, including, without limitation, the fees
referred to in Section 5.1 and any other fees payable pursuant to this
Agreement, shall be non-refundable, and shall, to the fullest extent permitted
by Governmental Regulation, bear interest, if not paid when due, at a rate per
annum equal to the lesser of (a) 3% above the Base Rate or (b) the
Highest Lawful Rate.
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ARTICLE
VI
REPRESENTATIONS
AND WARRANTIES
Borrower
represents and warrants that:
Section
6.1. Organization and Qualification;
Subsidiaries. Borrower is (i) duly organized, validly existing
and in good standing under the laws of the state of its organization and has
full legal right, power and authority to carry on its business as presently
conducted and to execute, deliver and perform its obligations under this
Agreement and all other Loan Documents executed by it, and (ii) is duly
qualified to do business and in good standing in each jurisdiction in which the
nature of the business it conducts in such jurisdiction makes such qualification
necessary or desirable except where the failure to so qualify would not
reasonably be expected to have a Material Adverse Effect. As of the
Closing Date, Borrower does not own any Subsidiary. Borrower owns all
of the issued and outstanding stock of such Subsidiaries and there are no
outstanding warrants or requirements of any type for the issuance of additional
shares in such Subsidiaries.
Section
6.2. Authorization. Borrower’s
execution, delivery and performance of the Loan Documents (i) have been duly
authorized by all necessary action under such Person’s organizational documents
and otherwise, (ii) do not and will not require any consent of any other person
or entity, and (iii) do not and will not require any consent, license, permit
authorization or other approval (including foreign exchange approvals) of any
Governmental Authority, or any notice to, exemption by, any registration,
declaration or filing with or the filing of any other action in respect of any
Governmental Requirement.
Section
6.3. No
Conflicts. Neither execution or delivery by Borrower of any
Loan Document nor the fulfillment of or compliance with its terms and provisions
will (i) violate any Governmental Requirement of any Governmental Authority or
the basic organizational documents of such Person or (ii) conflict with or
result in a breach of the terms, conditions or provisions of, or cause a default
under, any material agreement, instrument, franchise, license or
concession to which such Person is a party or bound.
Section
6.4. Enforceability. Each
Loan Document to which Borrower is a party has been duly and validly executed,
issued and delivered by Borrower. They are in proper legal form for
prompt enforcement and they are Borrower’s valid and legally binding obligations
enforceable in accordance with their terms, except as limited by applicable
bankruptcy, insolvency, fraudulent transfer, fraudulent conveyance,
reorganization, moratorium, or other similar laws at the time in effect
affecting the rights of creditors generally. Borrower’s obligations
under the Loan Documents rank and will rank at least equal in priority of
payment with all of Borrower’s other debt.
Section
6.5. Accuracy of Information; No Material
Adverse Change. All information supplied to Lender and all
statements made to Lender by or on behalf of Borrower in connection with this
Agreement are and will be true, correct, complete, valid and genuine in all
material respects. Each of Borrower’s financial statements furnished
to Lender pursuant to Section 7.1 of this Agreement fairly presents the
financial condition and results of operations of Borrower as of its date and for
the period then ended. There has been no material adverse change in
the financial condition or results of operations of Borrower since the last
financial statements delivered by Borrower pursuant to Section 7.1(c) or 8.1, as
applicable, and all assets listed on the last such statement so delivered are
subject to Borrower’s management control and disposition and, except as shown
therein, are available to satisfy any claim rightfully made pursuant to the Loan
Documents executed by Borrower.
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Section
6.6. Taxes. Borrower has
filed all tax returns required to be filed and paid all taxes shown thereon to
be due by the due date or extension thereof, including interest and penalties,
except for taxes being diligently contested in good faith and for payment of
which adequate reserves have been set aside.
Section
6.7. Litigation and Other
Proceedings. There is no condemnation or other action, suit or
proceeding pending or, to the best of Borrower’s knowledge, threatened against
or affecting Borrower or any Collateral, at law or in equity, or before or by
any Governmental Authority, which could reasonably be expected to result in any
material adverse change in Borrower’s business or financial condition or in any
Collateral or in other material property of Borrower or any interest in
it.
Section
6.8. No
Defaults. Borrower is not in default with respect to the
payment of any debt for borrowed money which has an outstanding balance in
excess of $100,000 or under any agreement or other papers evidencing or securing
any such debt, which has not been waived, or with respect to any Governmental
Requirement under circumstances in which any such default could
reasonably be expected to have a Material Adverse Effect, except in connection
with the matters described or to which reference is made in Section
6.7.
Section
6.9. Solvency. Borrower
is solvent and no bankruptcy or insolvency proceedings are pending or
contemplated by or, to Borrower’s knowledge, against Borrower or any
Guarantor. After giving effect to the limitations on liability
contained in the Guaranty and to the rights and obligations of the Borrower
under the Contribution Agreements, Borrower’s liabilities and obligations under
this Agreement and the other Loan Documents do not and will not render Borrower
insolvent, cause Borrower’s liabilities to exceed Borrower’s assets or leave
Borrower with too little capital to properly conduct all of its business as now
conducted or contemplated to be conducted.
Section
6.10. Representations and
Warranties. No representation or warranty contained in any
Loan Document executed by Borrower or any then existing Subsidiary and, as of
the date such statement is dated or certified, no statement contained in any
certificate, schedule, list, financial statement or other papers furnished to
Lender by or on behalf of Borrower contains or will contain any untrue statement
of material fact, or omits or will omit to state a material fact necessary to
make the statements contained therein not misleading, provided that, insofar as
the foregoing representation and warranty addresses information provided to
Borrower or any Subsidiary by customers, such representation and warranty is
based solely upon investigation made by Borrower or any such Subsidiary in the
normal course of business.
SECOND AMENDED AND RESTATED
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Section
6.11. Margin
Regulations. None of the proceeds of the Loan will be used for
the purpose of purchasing or carrying, directly or indirectly, any margin stock
or for any other purpose which would make such credit a “purpose credit” within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System.
Section
6.12. Licenses, Permits, Trademarks,
etc. Borrower possesses all material permits, licenses,
patents, trademarks, trade names and copyrights required to conduct its
business.
Section
6.13. Compliance with Governmental
Requirements. Borrower and the property of Borrower covered by
the Loan Documents are in compliance with all Governmental Requirements, except
where the failure to comply with the same could not reasonably be expected to
have a Material Adverse Effect, and Borrower manages and operates (and will
continue to manage and operate) its business in accordance with good industry
practices.
Section
6.14. ERISA. No event has
occurred which could result in liability on Borrower to the Pension Benefit
Guaranty Corporation (“PBGC”). Borrower
has met all requirements with respect to funding of each plan (a “Plan”) maintained for
any of Borrower’s employees subject to Title IV of the Employee Retirement
Benefit Act of 1974, as amended, and related regulations (“ERISA”), if any
exists. No event or condition has occurred that would permit any lien
under ERISA to attach to any of the collateral for Borrower’s obligations in
connection herewith.
Section
6.15. Title to
Properties. Borrower has good, sufficient and legal title to,
or valid leasehold interest in, all of the assets listed on its balance sheet,
subject to no Liens except those permitted in Section 9.2.
Section
6.16. Burdensome
Contracts. Borrower is not a party to any contract or
agreement or subject to any restriction the performance of or the compliance
with which could reasonably be expected to have a Material Adverse
Effect.
ARTICLE
VII
CONDITIONS
Section
7.1. Conditions to Initial
Advance. Lender will not be obligated to make the initial
Advance or issue any Letter of Credit hereunder unless all of the following
conditions shall be satisfied at the time of such Advance or
issuance:
(a) Approvals. Prior to
the Closing Date, Borrower shall have obtained all orders, approvals or consents
of all Persons required for the execution, delivery and performance by Borrower
of the Loan Documents to which each such Person is a party.
(b) Compliance with
Law. The business and operations of Borrower as conducted at
all times relevant to the transactions contemplated by this Agreement to and
including the close of business on the Closing Date shall have been and shall be
in compliance (other than any failure to be in compliance that does not result
in a Material Adverse Effect) with all applicable Governmental
Regulations. No Governmental Regulation shall prohibit the
transactions contemplated by the Loan Documents, no order, judgment or decree of
any Governmental Authority shall exist, and no litigation shall be pending or,
to the best knowledge of Borrower, threatened, which in the judgment of Lender
(A) would enjoin, prohibit or restrain the transactions contemplated by the Loan
Documents or (B) could reasonably be expected to have a Material Adverse
Effect.
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(c) Financial
Statements. On the Closing Date, Lender shall have received
and reviewed: (i) internally prepared, consolidated financial statements of
Borrower as of December 31, 2007; (ii) a company prepared, consolidated
financial projection for Borrower for the 2008 calendar year; and (iii) a
certificate dated the Closing Date of the chief financial officer or the
treasurer of Borrower certifying that the financial position of Borrower as of
the Closing Date is not materially different from that presented in the December
31, 2007 consolidated balance sheet of Borrower attached to such
certificate.
(d) Insurance. Lender
shall have received evidence satisfactory to it of the existence of all
insurance policies required by the Loan Documents, such policies designating
Lender as the loss payee, providing for the giving of at least thirty (30) days’
notice to Lender of cancellation or material modification thereof, and otherwise
complying with the provisions of Section 8.11. Lender shall have received such
agreements, guaranties, subordinations (as to payment liens and security
interests or both), releases and other agreements and assurances from other
creditors of Borrower as Lender shall reasonably require.
(e) Payment of Fees and
Expenses. Lender shall have received payment of (i) all
fees described in Section 5 hereof and (ii) without limiting the
obligations of Borrower under Section 11.2, the reasonable expenses of, or
incurred by, Lender and its counsel, to the extent billed as of the Closing
Date, in connection with the negotiation and closing of the transactions
contemplated herein.
(f) Required Documents and
Certificates. On the Closing Date, Lender shall have received
the following, in each case in form, scope and substance satisfactory to
Lender:
(i) the
Note;
(ii) the
Security Agreements;
(iii) an
Officer’s Certificate from Borrower dated as of the Closing Date certifying,
inter alia, (A) the Articles of Incorporation and Bylaws (or equivalent
corporate documents), as amended and in effect, of Borrower and each Subsidiary;
(B) resolutions duly adopted by the Board of Directors of Borrower and each
Subsidiary authorizing the transactions contemplated by the Loan Documents to
which it is a party; and (C) the incumbency and specimen signatures of the
officers of Borrower authorized to execute documents on its behalf;
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(iv) a
certificate from the appropriate public official of the jurisdiction in which
Borrower and each Subsidiary is organized as to the continued existence and good
standing of Borrower and each Subsidiary;
(v) a
legal opinion in form, substance and scope reasonably satisfactory to Lender
from counsel for, and issued upon the express instructions of, Borrower;
and
(vi) certified
copies of Requests for Information of Copies (Form UCC-11), or equivalent
reports, listing all effective financing statements which name Borrower or any
Subsidiary (under its present name, any trade names and any previous names) as
debtor and which are filed, together with copies of all such financing
statements.
(g) Field
Exam/Audit. Lender shall have performed to its satisfaction a
field exam/audit of Borrower’s assets, including, without limitation, the
Eligible Accounts Receivables.
Section
7.2. Conditions to each Loan, Continuation
or Conversion. Lender will not be obligated to make, continue
or convert any Advance or LIBOR Rate Portion (including its initial Advance)
hereunder unless all of the following conditions shall be satisfied at the time
of such Advance, continuation or conversion:
(a) Representations and
Warranties. The representations and warranties made, or deemed
made, in or pursuant to this Agreement and the other Loan Documents shall be
true and correct as of the date of the contemplated Advance, continuation or
conversion as though originally made on such date, and Lender shall have
received a certificate from an Authorized Officer of Borrower certifying that:
(i) the representations and warranties of Borrower and its Subsidiaries
contained in the Loan Documents (other than those representations and warranties
limited by their terms to a specific date) shall be true and correct on and as
of the particular Borrowing Date or the applicable Conversion/Continuation Date,
as though made on and as of such date; (ii) no Event of Default or Default
has occurred and is continuing; and (iii) no event has occurred since the
date of the most recent financial statements delivered pursuant to
Section 8.1(a), that has caused, or could reasonably be expected to cause,
a Material Adverse Effect.
(b) No Default. No
Event of Default or Default shall have occurred and be continuing.
(c) Borrowing
Documents. On each Borrowing Date, Lender shall have received
a Notice of Borrowing delivered in accordance with Section 2.2 and any
necessary report or representation required to be delivered by Borrower
subsequent to the Closing Date pursuant to Section 7.1(f) or Section 8.1(c), as
the case may be. Prior to the issuance of any Letter
of Credit, Lender shall have received an LOC Application as required
by this Agreement.
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(d) Conversion/Continuation Documents.
On each Conversion/Continuation Date, Lender shall have received a Notice
of Rate Change/Continuation and any documents or representations necessary to
facilitate such action.
(e) Security for the
Loan. Each Subsidiary, if any, shall have executed and
delivered to Lender a Guaranty and a Contribution Agreement and Borrower and
such Subsidiary shall have executed and delivered to Lender, and filed where
appropriate, all security agreements, pledge agreements, financing statements
and other documents, instruments and agreements so as to create in favor of
Lender a first priority lien on all of the assets of Borrower and its
Subsidiaries as collateral for the Obligations.
(f) Other Documentation and
Information. Lender shall have received such other evidence,
documentation and information as Lender may reasonably request.
Section
7.3. Post-Closing
Requirements. As soon as possible, and in any event within
thirty (30) days of the Closing Date, Borrower shall deliver to
Lender
(a) a
Mortgage granting to Lender a first and prior lien on Borrower’s real property
located in Lubbock, Texas, Longview, Texas, Dayton, Ohio, Yarmouth, Maine, and
Bangor, Maine, and shall deliver to Lender, upon request, such title insurance
policies, surveys, environmental reports and other property specific information
requested by Lender in connection therewith;
(b) a
certificate from the appropriate public official of each jurisdiction in which
Borrower is authorized and qualified to do business as to the due qualification
and good standing of Borrower unless failure is not reasonably likely to have a
Material Adverse Effect;
ARTICLE
VIII
AFFIRMATIVE
COVENANTS
Borrower
covenants and agrees that, so long as Borrower may obtain Advances or issuances
of Letters of Credit under this Agreement and until payment in full of the
Obligations and termination of the Revolving Commitment and the Letter of Credit
Commitment, Borrower will and will cause each Subsidiary, if any,
to:
Section
8.1. Financial Statements and
Information. Furnish or cause to be furnished to Lender a copy
of each of the following within the times indicated:
(a) as
soon as available and in any event no later than one hundred twenty (120) days
after the end of each fiscal year of Borrower, (i) annual audited consolidated
financial statements for Borrower, and all notes thereto, including a balance
sheet and statements of income, retained earnings and cash flows for such fiscal
year and the immediately preceding fiscal year in comparative form, all prepared
in conformity with GAAP on a consolidated basis and accompanied by a report and
opinion of Ernst & Young LLP or other firm of independent certified public
accountants satisfactory to Lender stating that such accountants have conducted
audits of such financial statements in accordance with generally accepted
auditing standards and that, in their opinion, such financial statements present
fairly, in all material respects, Borrower’s financial position as of their date
and the results of Borrower’s operations and cash flows for the period they
covered in conformity with GAAP, (ii) copies of the internally prepared
consolidating balance sheets and statements of income of Borrower and its
Subsidiaries utilized in the preparation of the consolidated financial
statements of Borrower furnished to Lender pursuant to clause (i) preceding and
certified on behalf of Borrower by an appropriate officer or other responsible
party acceptable to Lender, and (iii) a Compliance Certificate substantially in
the form of Exhibit
D;
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(b) as
soon as available and in any event within 45 days after the end of each of the
first three fiscal quarters of each fiscal year of Borrower, (i), unaudited
consolidated financial statements for Borrower, including a balance sheet as at
the close of such quarter and an income statement and statement of cash flows
for such quarter, all prepared in accordance with GAAP on a consolidated basis
and certified on behalf of Borrower by an appropriate officer or other
responsible party acceptable to Lender, and (ii) a Compliance Certificate
substantially in the form of Exhibit
D;
(c) as
soon as available and in any event within 30 calendar days after the end of each
fiscal quarter, a complete aging of all accounts receivable by
Borrower;
(d) promptly
following the discovery thereof, information in reasonable detail correcting any
information provided to Lender in reliance upon information from a customer of
Borrower which Borrower discovers to be inaccurate or misleading in any material
respect;
(e) promptly
upon the filing thereof, copies of all registration statements, and annual,
quarterly, monthly or other regular reports filed by or on behalf of Borrower or
any of its Subsidiaries with the Securities and Exchange Commission;
and
(f) such
other information relating to Borrower’s or any Subsidiary’s financial condition
and affairs as Lender may from time to time reasonably request or as may be
required from time to time by any Loan Document.
Section
8.2. Maintenance of Existence and Good
Standing. Maintain its existence and obtain and maintain all
franchises and permits necessary for Borrower and each Subsidiary continuously
to be in good standing in the state of its organization with full power and
authority to conduct its regular business and to own and operate its
property.
Section
8.3. Compliance With Governmental
Requirements. Conduct its business in substantial compliance
with all Governmental Requirements and will comply with and punctually perform
all of the covenants, agreements and obligations imposed upon it to the extent
any failure to so comply could reasonably be expected to have a Material Adverse
Effect or cause any representation or warranty in the Loan Documents to be false
or misleading in any material respect.
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Section
8.4. Payment of
Obligations. Pay punctually and discharge when due, or renew
or extend, any debt incurred by it equal to or exceeding $100,000 and will
discharge, perform and observe the covenants, provisions and conditions to be
performed, discharged and observed on its part in connection therewith or in
connection with any agreement or other instrument relating thereto or in
connection with any mortgage, pledge or lien existing at any time upon any of
the property or assets of Borrower securing the payment thereof, provided,
however, that nothing contained in this Section 8.4 shall require Borrower to
pay, discharge, renew or extend any such indebtedness or to discharge, perform
or observe any such covenants, provisions and conditions so long as Borrower
shall be diligently and in good faith contesting any claims which may be
asserted against it with respect to any such indebtedness or any such covenants,
provisions and conditions and shall set aside on its books reserves with respect
thereto deemed adequate by Lender.
Section
8.5. Notification of Material Adverse
Change. Promptly upon acquiring knowledge of any material
adverse change in its assets, liabilities, financial condition, business,
operations, affairs or circumstances, notify Lender in writing thereof, setting
forth the nature of such change in reasonable detail and will take or cause to
be taken all such steps as are necessary or appropriate to remedy promptly any
such change.
Section
8.6. Notification of
Defaults. Promptly upon acquiring knowledge thereof, notify
Lender by telephone (and confirm such notice in writing within five (5) days) of
the existence of any Default or Event of Default hereunder or of any default or
event of default (however denominated) under any of the Loan Documents, or under
the loan papers evidencing and/or securing any other Debt, specifying the nature
and duration thereof and what action Borrower has taken, is taking and proposes
to take with respect thereto. In no event shall silence by Lender be
deemed a waiver by it of a Default or an Event of Default. Borrower
will take all such steps as are necessary or appropriate to remedy promptly any
such Default or Event of Default
Section
8.7. Notification of Exchange Act
Filings. Promptly upon acquiring knowledge of the filing with
the Securities and Exchange Commission of any Schedule 13D, 13G, or 14D-1 with
respect to the acquisition of, or a tender offer with respect to, the capital
stock of Borrower, furnish a copy of such filing to Lender.
Section
8.8. Notification of Proceedings Affecting
Collateral. Immediately upon obtaining knowledge of the
institution of any proceedings for the condemnation of the Collateral covered by
the Loan Documents, the real property described in Section 7.2(e) or any
material portion thereof, or any other legal proceedings arising out of injury
or damage to the Collateral covered by the Loan Documents, the real property
described in Section 7.2(e) or any material portion thereof, notify Lender in
writing of the pendency of such proceedings. Lender may (but shall
not be required to) participate in any such proceedings, and Borrower or the
applicable Subsidiary shall from time to time deliver to Lender all instruments
requested by it to permit such participation. Borrower or the
applicable Subsidiary shall, at its expense, diligently prosecute any such
proceedings, and shall consult with Lender, its attorneys and experts, and
cooperate with them in the carrying on or defense of any such
proceeding.
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Section
8.9. Additional
Information. Furnish to Lender from time to time, within ten
(10) days after Lender’s request thereof, such information relating to the
Collateral or Borrower’s or any Subsidiary’s financial condition and affairs as
Lender may from time to time request or as may be required from time to time by
any Loan Document.
Section
8.10. Books and
Records. At all times maintain proper books of record and
account in accordance with sound accounting practice in which true, full and
correct entries will be made of all its dealings and business affairs, and will
set aside on its books adequate reserves for depletion, depreciation,
obsolescence and/or amortization of its property, and all other reserves which,
in accordance with sound accounting practice, should be set aside, and will
write down, to the estimated salvage value thereof, all property not useful in
its business. Lender shall be entitled to have such books examined
and audited, at the expense of Borrower, at any time (but, except during the
continuance of a Default, not more than once in any fiscal quarter of Borrower)
by representatives of Lender.
Section
8.11. Insurance. At all
times maintain insurance with insurance companies rated acceptably to Lender or
otherwise acceptable to Lender, in such amounts and against such risks as are
satisfactory to Lender, including without limitation casualty and liability
insurance complying with the loss payee and notice requirements specified in
Section 7.1(d), and, in any event, as would be reasonably prudent for entities
in the same or similar type and size of business and owning similar property in
the same general area, and furnish to Lender, not less frequently than annually
a certificate of insurance as to the insurance carried. If Borrower
or any Subsidiary shall at any time or times hereafter fail to obtain or
maintain any of the policies of insurance required herein, or fail to pay any
premium in whole or in part relating to such policies, Lender may, but shall not
be obligated to, obtain or cause to be maintained insurance coverage, including
at Lender’s option, the coverage provided by all or any of the policies of
Borrower and its Subsidiaries and pay all or any part of the premium therefor,
without waiving any default by Borrower, and any sums so disbursed by Lender
shall be additional Advances to Borrower by Lender payable on
demand.
Section
8.12. Deposit Relationship. Except
for demand depositary accounts maintained by Subsidiaries of Borrower for the
purposes of facilitating deposits of collections in the ordinary course of
business and of providing a source of daily xxxxx cash requirements, Borrower
will at all times during the term of this Agreement maintain, and cause its
Subsidiaries (other than the Excluded Subsidiaries) to maintain, general
operating accounts and day-to-day cash management accounts with
Lender.
Section
8.13. Collateral
Audit. Assist Lender with Lender’s audit of the Collateral,
which audit or audits shall occur at Lender’s discretion.
ARTICLE
IX
NEGATIVE
COVENANTS
Borrower
covenants and agrees that, so long as Borrower may obtain Advances or issuances
of Letters of Credit under this Agreement and until payment in full of the
Obligations, Borrower will not and will not permit any Subsidiary to, without
obtaining the prior written consent of Lender:
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Section
9.1. Debt. Create,
incur, suffer or permit to exist, or assume or guarantee, directly or
indirectly, or otherwise become or remain liable with respect to, any Debt,
contingent or otherwise (including without limitation, any off balance sheet
liabilities), except: (a) the Obligations; (b) Debt that is in the form of
loans or advances from Borrower to any Guarantor or between Guarantors and that
is not evidenced by promissory notes and, if requested by Lender, is expressly
subordinated to the Note; (c) Subordinated Debt (i) existing on the date of this
Agreement and described in Schedule 9.1 or (ii) incurred to make Permitted
Acquisitions, provided that the aggregate amount of Subordinated Debt issued for
such purpose shall not exceed $3,000,000 and shall relate only to Permitted
Acquisitions made in the fiscal year in which it is counted; and (e) Debt
existing on the date of this Agreement and described in Schedule
9.1.
Section
9.2. Liens. Create or
suffer to be created or to exist any Lien excepting only (a) Liens in favor of
Lender to secure the Obligations, (b) Liens subordinated to Liens in favor of
Lender under terms acceptable to Lender in its sole discretion and to which
Lender is a party, (c) Liens created by operation of law in the ordinary course
of business for amounts not yet due (or being contested in good faith by
appropriate proceedings or other appropriate actions which are sufficient to
prevent enforcement of such Liens and with respect to which adequate reserves or
other appropriate provisions are being maintained in accordance with GAAP), (d)
Liens existing on the date of this Agreement and described in Schedule 9.2, (e)
Liens securing Debt or Capital Leases permitted under Section 9.1(c), provided
that no such Lien secures any Debt other than the Debt incurred in connection
with the purchase or lease of the property subject thereto or encumbers any
property (including the proceeds thereof) other than the property purchased or
leased with the proceeds of the Debt secured thereby, (f) Liens in
the form of precautionary financing statements filed under the Uniform
Commercial Code to reflect operating leases, (g) Liens in the form of zoning
restrictions, restrictive covenants, rights of way, easements, licenses and
other restrictions on the use of real property which do not materially impair
the use of such real property in the ordinary operation of the business of
Borrower or the applicable Subsidiary of Borrower utilizing the same, and (h)
Liens in the form of purchase money security interests in favor of vendors from
whom equipment is purchased in the ordinary course of business for resale to
customers of Borrower or its Subsidiaries if (1) such Liens in favor of any
vendor do not cover property other than equipment purchased from such vendor and
(2) the Debt secured by such Liens is fully paid within 120 days after the
creation thereof.
Section
9.3. Organizational
Documents. Modify or amend its organization documents or
suffer or permit a material modification or amendment to its organizational
documents in any manner that reasonably could be expected to affect any rights
of Lender under the Loan Documents or have a Material Adverse
Effect.
Section
9.4. No
Subsidiaries. Acquire or form any Subsidiary unless (a) such
Subsidiary (i) is a wholly-owned Subsidiary, (ii) executes and delivers to
Lender a Guaranty, (iii) enters into a Security Agreement in substantially the
form of the Security Agreements executed by Subsidiaries on the Closing Date,
and (iv) delivers such certificates, evidences of corporate action, financing
statements, opinions of counsel and other documents as Lender may reasonably
request and (b) Borrower or the appropriate Subsidiary executes a Pledge
Agreement pledging to Lender the stock of such new Subsidiary, and delivers to
Lender the applicable stock certificates and stock powers executed in blank, all
of the items referred to in (a) and (b) above to be in form and substance
reasonably satisfactory to Lender, in each case not later than 10 days after the
acquisition or formation of such Subsidiary.
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Section
9.5. Dividends. Declare
or pay any Distributions, except dividends declared and paid by any Guarantor to
Borrower and Permitted Distributions.
Section
9.6. Acquisitions. Make any
Acquisition other than a Permitted Acquisition.
Section
9.7. Mergers, Consolidations, etc.
(a) Merge or consolidate with or into any other Person,
(b) convey, transfer or otherwise dispose of all or substantially all of
its assets to any Person, or (c) adopt or effect any plan of
reorganization, recapitalization, liquidation or dissolution, except that (i) a
Subsidiary of Borrower may be a party to any merger or consolidation that
constitutes an Acquisition permitted by Section 9.6, provided that such
Subsidiary shall be the survivor of any such merger or consolidation, (ii) any
Guarantor may merge into or consolidate with Borrower (if Borrower is the
survivor of any such merger or consolidation), and (iii) any Guarantor may merge
into or consolidate with any other Guarantor.
Section
9.8. Change of Name. Change its
name without first notifying Lender in writing of such change at least thirty
(30) days before its effective date.
Section
9.9. Financial
Covenants. Permit:
(a) On
a consolidated basis as of the last day of any fiscal quarter, the ratio of
Funded Debt to EBITDA less Capital Expenditures (excluding such Capital
Expenditures identified on Schedule II) and less cash paid for Taxes for the
preceding four fiscal quarters then ended to be greater than
2.0:1.0.
(b) On
a consolidated basis as of the last day of any fiscal quarter, the Fixed Charge
Coverage for the preceding four fiscal quarters then ended to be less than
2.0:1.0.
Section
9.10. Investments. Make or permit to
remain outstanding any Investment other than Permitted Investments.
Section
9.11. Subordinated Debt; Seller
Note. Permit any amendment or modification to the documents
evidencing or governing any Subordinated Debt permitted by Section 9.1(d), or,
directly or indirectly, voluntarily prepay, defease or in substance defease,
purchase, redeem, retire, or otherwise acquire any such Subordinated Debt, or
make any principal payment on the Subordinated Debt prior to payment in full of
the Obligations and the termination of the Revolving Commitment.
Section
9.12. Character of
Business. Change the general character of its business as
conducted on the Closing Date, or engage in any type of business not reasonably
related to its business as presently conducted.
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ARTICLE
X
EVENTS OF DEFAULT;
REMEDIES
Section
10.1. Events of
Default. The occurrence of any of the following events shall
constitute an “Event of Default” (herein so called) under this
Agreement:
(a) Borrower
(i) shall fail to pay when due any payment or prepayment of the principal of the
Note or (ii) shall fail to pay when due any interest on the Note or any other
monetary amount due under this Agreement or any other Loan Document and such
failure shall not have been cured within five (5) Business Days;
(b) (i)
any covenant contained in Sections 8.1, 8.2, 8.5, 8.6, 8.9, or Article IX of
this Agreement is not fully and timely performed, observed or kept in all
material respects or (ii) any other covenant, agreement or condition contained
in this Agreement or in any other Loan Document is not fully and timely
performed, observed or kept in all material respects and such failure or breach
is not cured within thirty (30) days following the earlier of knowledge of such
failure or breach by Borrower or the receipt by Borrower of written notice
thereof from Lender;
(c) any
representation, warranty, certification or statement made or deemed to have been
made by Borrower or any Subsidiary in this Agreement or by Borrower or any other
Person in any certificate, financial statement or other document delivered
pursuant to this Agreement, including, without limitation, any other Loan
Document, shall prove to have been incorrect in any material respect when
made;
(d) any
event or condition shall occur and continue unremedied or unwaived for a period
beyond any applicable cure period provided pursuant to the terms of any Debt of
Borrower or any Subsidiary in excess of $500,000, which entitles (or, with the
giving of notice or lapse of time or both, would entitle) the holder of any such
Debt to accelerate the maturity thereof;
(e) Borrower
or any Subsidiary shall commence a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of it or any substantial part of its property, or shall
consent to any such relief or to the appointment of or taking possession by any
such official in an involuntary case or other proceeding commenced against it,
or shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due, or shall take any corporate
action to authorize any of the foregoing;
(f) an
involuntary case or other proceeding shall be commenced against Borrower or any
Subsidiary seeking liquidation, reorganization or other relief with respect to
it or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of sixty (60) days; or an order for relief
shall be entered against Borrower or any Subsidiary under the federal bankruptcy
laws as now or hereafter in effect;
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(g) one
or more final judgments or orders for the payment of money in an aggregate
amount outstanding at any time in excess of $1,000,000 shall be rendered against
Borrower or any Subsidiary and such judgment or order (i) shall continue
unsatisfied and unstayed (unless bonded with a supersedeas bond at least equal
to such judgment or order) for a period of thirty (30) days or (ii) is not fully
paid and satisfied at least ten days prior to the date on which any
of its assets may be lawfully sold to satisfy such judgment or
order;
(h) one or
more judgments or orders for the payment of money shall be rendered against
Borrower or any Subsidiary, whether or not otherwise bonded or stayed, which has
a Material Adverse Effect; or
(i)
the sale, pledge, encumbrance, assignment or transfer, voluntarily or
involuntarily, of any equity interest in any Guarantor, without the prior
written consent of Lender.
Section
10.2. Remedies. If any of
the Events of Default specified in Section 10.1 shall occur, then (a) Lender
shall be entitled (i) by notice to Borrower, to declare the commitments and
the obligation to make Advances or issue Letters of Credit hereunder to be
terminated, whereupon the same shall forthwith terminate, and (ii) to
declare the Note and all interest accrued and unpaid thereon, and all other
amounts payable under the Note, this Agreement, and the other Loan Documents, to
be forthwith due and payable, whereupon the notes, all such interest and all
such other amounts, shall become and be forthwith due and payable without
presentment, demand, protest, or further notice of any kind (including, without
limitation, notice of default, notice of intent to accelerate and notice of
acceleration), all of which are hereby expressly waived by Borrower, and
(b) Lender may avail itself of any and all powers, rights and remedies
available at law or provided in this Agreement, the Note, the other Loan
Documents or any other document executed pursuant hereto or in connection
herewith; provided, however, that with respect to any Event of Default described
in Section 10.1(e) or 10.1(f), (x) the Revolving Commitment and Letter of
Credit Commitment and the obligation of Lender to make Advances or issue Letters
of Credit hereunder shall automatically be terminated and (y) the entire
unpaid principal amount of the Note, all interest accrued and unpaid thereon and
all such other amounts payable under the Note, this Agreement and the other Loan
Documents, shall automatically become immediately due and payable, without
presentment, demand, protest, or any notice of any kind (including, without
limitation, notice of default, notice of intent to accelerate and notice of
acceleration), all of which are hereby expressly waived by
Borrower.
Section
10.3. Certain Other Remedial Matters.
Upon the occurrence of any Event of Default, Lender shall also have the
right immediately and without notice, to take possession of and exercise
possessory rights with regard to any property securing payment of the
Obligations. All powers, rights and remedies of Lender set forth in
this Article X shall be cumulative and not exclusive of any other power, right
or remedy available to Lender under any Governmental Requirement or under this
Agreement, the Note, the other Loan Documents or any other document executed
pursuant hereto or in connection herewith to enforce the performance or
observance of the covenants and agreements contained in this Agreement and the
other Loan Documents, and no delay or omission of Lender to exercise any power,
right or remedy shall impair any such power, right or remedy, or shall be
construed to be a waiver of the right to exercise any such power, right or
remedy. Every power, right or remedy of Lender set forth in this
Agreement, the Note, the other Loan Documents or any other document executed
pursuant hereto or in connection herewith, or afforded by Governmental
Requirement may be exercised from time to time, and as often as may be deemed
expedient by Lender.
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ARTICLE
XI
MISCELLANEOUS
Section
11.1. Waivers, Etc. No
failure or delay on the part of Lender in exercising any power or right
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. No course of
dealing between Borrower and Lender shall operate as a waiver of any right of
Lender. No modification or waiver of any provision of this
Agreement, the Note or any other Loan Document nor consent to any
departure by Borrower therefrom shall in any event be effective unless the same
shall be in writing, and then such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No notice
to or demand on Borrower in any case shall entitle Borrower to any other or
further notice or demand in similar or other circumstances.
Section
11.3. Venue. BORROWER
AND LENDER AGREE THAT DALLAS COUNTY, TEXAS IS PROPER VENUE FOR ANY ACTION OR
PROCEEDING BROUGHT BY BORROWER OR LENDER, WHETHER IN CONTRACT, TORT OR
OTHERWISE. ANY ACTION OR PROCEEDING AGAINST BORROWER MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT IN SUCH COUNTY TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW. TO THE EXTENT PERMITTED BY APPLICABLE LAW, BORROWER
HEREBY IRREVOCABLY (A) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH
COURTS, AND (B) WAIVES ANY OBJECTION BORROWER MAY NOW OR HEREAFTER HAVE AS
TO THE VENUE OF ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT OR THAT
ANY SUCH COURT IS AN INCONVENIENT FORUM. BORROWER AGREES THAT SERVICE
OF PROCESS UPON BORROWER MAY BE MADE BY CERTIFIED OR REGISTERED MAIL, RETURN
RECEIPT REQUESTED, AT BORROWER’S ADDRESSES SPECIFIED IN SECTION
11.4. LENDER MAY SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
AND MAY BRING ANY ACTION OR PROCEEDING AGAINST BORROWER OR WITH RESPECT TO ANY
OF BORROWER’S PROPERTIES IN COURTS IN OTHER PROPER JURISDICTIONS OR
VENUES.
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Section
11.4. Notices. All
notices and other communications provided for herein shall be in writing
(including telex, facsimile, or cable communication) and shall be mailed,
couriered, telecopied, telexed, cabled or delivered addressed as
follows:
If to
Borrower, to it at:
0000
Xxxxxx Xxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention: Treasurer
Telephone:
000-000-0000
Fax:
000-000-0000
If to
Lender, to it at:
Bank of
Texas, N.A.
0000
Xxxxxx Xxxx, Xxxxx 0000
Xxxxxx,
Xxxxx 00000
Attention: Xxxx
Xxxxxxx
Telephone: (000)
000-0000
Fax: (000)
000-0000
or as to
Borrower or Lender, to such other address as shall be designated by such party
in a written notice to the other parties. All such notices and
communications shall, when mailed, delivered by courier, telecopied, telexed,
transmitted, or cabled, become effective when three (3) Business Days have
elapsed after being deposited in the mail (with first class postage prepaid and
addressed as aforesaid), or when confirmed by telex answerback, transmitted to
the correct telecopier, or delivered to the courier or the cable company, except
that notices and communications from Borrower to Lender shall not be effective
until actually received by Lender.
Section
11.5. GOVERNING
LAW. EACH LOAN DOCUMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF
AMERICA.
Section
11.6. Survival of Representations,
Warranties and Covenants. All representations, warranties and covenants
contained herein or in the other Loan Documents or made in writing by Borrower
or any Subsidiary in connection herewith or therewith shall survive the
execution and delivery of this Agreement and the Note, and will bind and inure
to the benefit of the respective successors and assigns of the parties hereto,
whether so expressed or not, provided that the undertaking of Lender to make
Advances to, or issue Letters of Credit for, Borrower shall not inure to the
benefit of any successor or assign of Borrower. No investigation at
any time made by or on behalf of Lender shall diminish Lender’s right to rely
thereon.
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Section
11.7. Counterparts; Execution by Facsimile
Transmission. This Agreement may be executed in several counterparts, and
by the parties hereto on separate counterparts, and each counterpart, when so
executed and delivered, shall constitute an original instrument, and all such
separate counterparts shall constitute but one and the same
instrument. The method of execution of each Loan Document may be by
means of facsimile transmission, and delivery of such a facsimile transmission
shall be deemed an original for purposes hereof, and each party so delivering a
facsimile transmission shall promptly thereafter deliver the original version
thereof.
Section
11.8. Separability. Should any
clause, sentence, paragraph or section of this Agreement be judicially declared
to be invalid, unenforceable or void, such decision shall not have the effect of
invalidating or voiding the remainder of this Agreement, and the parties hereto
agree that the part or parts of this Agreement so held to be invalid,
unenforceable or void will be deemed to have been stricken herefrom and the
remainder will have the same force and effectiveness as if such part or parts
had never been included herein. Each covenant contained in this Agreement shall
be construed (absent an express contrary provision herein) as being independent
of each other covenant contained herein, and compliance with any one covenant
shall not (absent such an express contrary provision) be deemed to excuse
compliance with one or more other covenants.
Section
11.9. Descriptive
Headings. The section headings in this Agreement have been
inserted for convenience only and shall be given no substantive meaning or
significance whatsoever in construing the terms and provisions of this
Agreement.
Section
11.10. Setoff. Borrower,
for itself and its Subsidiaries, hereby gives and confirms to Lender a right of
setoff of all moneys, securities and other property of Borrower or any
Subsidiary and the proceeds thereof, now or hereafter delivered to remain with
or in transit in any manner to Lender, its correspondents or its agents from or
for Borrower or any Subsidiary, whether for safekeeping, custody, pledge,
transmission, collection or otherwise or coming into possession of Lender in any
way, and also, any balance of any deposit accounts and credits of Borrower or
any Subsidiary with, and any and all claims of security for the payment of the
Note and of all other liabilities and obligations now or hereafter owed by
Borrower or any Subsidiary to Lender, contracted with or acquired by Lender,
whether such liabilities and obligations be joint, several, absolute,
contingent, secured, unsecured, matured or unmatured, and Borrower, for itself
and its Subsidiaries, hereby authorizes Lender at any time or times, while there
is then continuing an Event of Default without prior notice, to apply such
money, securities, other property, proceeds, balances, credits of claims, or any
part of the foregoing, to any or all of the Obligations now or hereafter
existing, whether such Obligations be contingent, unmatured or otherwise, and
whether any collateral security therefor is deemed adequate or
not. The rights described herein shall be in addition to any
collateral security described in any separate agreement executed by
Borrower.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
37
Section
11.11. Successors and Assigns;
Participations.
(a) All
covenants, promises and agreements by or on behalf of Borrower, its Subsidiaries
or Lender contained in this Agreement and the other Loan Documents shall bind
and inure to the benefit of their respective successors and permitted
assigns. Neither Borrower nor any Subsidiary may assign or transfer
any of its rights or obligations under the Loan Documents without the prior
written consent of Lender, except in connection with the consummation of a
transaction permitted under Section 9.7.
(b) Lender
may sell participations to one or more banks or other financial institutions in
all or a portion of its rights and obligations under this Agreement and the
other Loan Documents (including all or a portion of any of its Commitment, the
Loan and the Obligations of Borrower owing to it and the Note held by
it).
(c) Notwithstanding
any other provision herein, Lender may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this
Section 11.11, disclose to the assignee or participant or proposed assignee
or participant, any information relating to Borrower or any Subsidiary furnished
to Lender by or on behalf of Borrower or any Subsidiary.
Section
11.12. Interest. All
agreements between Borrower and Lender, whether now existing or hereafter
arising and whether written or oral, are hereby expressly limited so that in no
contingency or event whatsoever, whether by reason of demand being made on the
Note or otherwise, shall the amount contracted for, charged, reserved or
received by Lender for the use, forbearance, or detention of the money to be
loaned under this Agreement or otherwise or for the payment or performance of
any covenant or obligation contained herein or in any other Loan Document exceed
the Highest Lawful Rate. If, as a result of any circumstances
whatsoever, fulfillment by Borrower of any provision hereof or of any of such
documents, at the time performance of such provision shall be due, shall involve
transcending the limit of validity prescribed by applicable usury law or result
in Lender having or being deemed to have contracted for, charged, reserved or
received interest (or amounts deemed to be interest) in excess of the maximum
lawful rate or amount of interest allowed by applicable law to be so contracted
for, charged, reserved or received by Lender, then, ipso facto, the obligation
to be fulfilled by Borrower shall be reduced to the limit of such validity, and
if, from any such circumstance, Lender shall ever receive interest or anything
which might be deemed interest under applicable law which would exceed the
Highest Lawful Rate, such amount which would be excessive interest shall be
refunded to Borrower, or, to the extent (i) permitted by applicable law and
(ii) such excessive interest does not exceed the unpaid principal balance
of the Note and the amounts owing on other Obligations of Borrower to Lender
under any Loan Document, applied to the reduction of the principal amount owing
on account of the Note or the amounts owing on other Obligations of Borrower to
Lender under any Loan Document and not to the payment of
interest. All sums paid or agreed to be paid to Lender for the use,
forbearance, or detention of the indebtedness of Borrower to Lender shall, to
the extent permitted by applicable law, be amortized, prorated, allocated, and
spread throughout the full term of such indebtedness until payment in full of
the principal thereof (including the period of any renewal or extension thereof)
so that the interest on account of such indebtedness shall not exceed the
Highest Lawful Rate. The terms and provisions of this
Section 11.12 shall control and supersede every other provision hereof and
of all other agreements between Borrower and Lender. Borrower and
Lender agree that Chapter 15 of the Texas Credit Code shall not apply to
this Agreement, the Note, the Loan or the Commitment.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
38
Section
11.13. Indemnification. Borrower
agrees:
(a) TO INDEMNIFY LENDER AND ITS
AFFILIATES AND EACH OF ITS OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS,
REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS (“INDEMNIFIED
PARTIES”) FROM, HOLD EACH OF THEM HARMLESS AGAINST AND PROMPTLY UPON DEMAND PAY
OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY MATTERS WHICH MAY BE INCURRED BY OR
ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY OF THEM IS
DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT OF OR IN ANY WAY RELATED
TO (I) ANY ACTUAL OR PROPOSED USE BY BORROWER OF THE PROCEEDS OF THE LOAN,
(II) THE EXECUTION, DELIVERY AND PERFORMANCE OF THE LOAN DOCUMENTS,
(III) THE OPERATION OF THE BUSINESS OF BORROWER OR THE SUBSIDIARIES,
(IV) THE FAILURE OF BORROWER OR ANY OF THE SUBSIDIARIES TO COMPLY WITH THE
TERMS OF ANY LOAN DOCUMENT OR WITH ANY GOVERNMENTAL REQUIREMENT, (V) ANY
INACCURACY OF ANY REPRESENTATION OR ANY BREACH OF ANY WARRANTY OF BORROWER OR
ANY OF THE SUBSIDIARIES SET FORTH IN ANY OF THE LOAN DOCUMENTS, (VI) ANY
ASSERTION THAT LENDER WAS NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT
TO THE LOAN DOCUMENTS OR (VII) ANY OTHER ASPECT OF THE LOAN DOCUMENTS,
INCLUDING, WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL
AND ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR
PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY
INVESTIGATIONS, LITIGATIONS OR INQUIRIES) OR CLAIM AND INCLUDING ALL INDEMNITY
MATTERS ARISING BY REASON OF THE NEGLIGENCE OF ANY INDEMNIFIED PARTY (EXCEPT AS
TO THE EXTENT ANY SUCH INDEMNITY MATTERS HAVE BEEN CAUSED BY THE GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY, IT BEING THE INTENT
OF THE PARTIES THAT EACH INDEMNIFIED PARTY SHALL BE INDEMNIFIED FROM INDEMNITY
MATTERS CAUSED BY THE NEGLIGENCE, WHETHER SOLE, JOINT, CONCURRENT, CONTRIBUTORY,
ACTIVE OR PASSIVE, OF SUCH INDEMNIFIED PARTY), PROVIDED, HOWEVER, THAT THE
PROVISIONS OF THIS SECTION 11.13(a) SHALL NOT BE APPLICABLE TO ANY ACTION
INITIATED BY BORROWER AGAINST LENDER FOR BREACH OF CONTRACTUAL OBLIGATION
CONTAINED IN ANY OF THE LOAN DOCUMENTS IN WHICH BORROWER IS THE PREVAILING
PARTY; AND
(b) TO INDEMNIFY AND HOLD HARMLESS FROM
TIME TO TIME THE INDEMNIFIED PARTY FROM AND AGAINST ANY AND ALL LOSSES, CLAIMS,
COST RECOVERY ACTIONS, ADMINISTRATIVE ORDERS OR PROCEEDINGS, DAMAGES AND
LIABILITIES TO WHICH ANY SUCH PERSON MAY BECOME SUBJECT (I) UNDER ANY
ENVIRONMENTAL LAW APPLICABLE TO BORROWER, THE SUBSIDIARIES, OR ANY OF THEIR
PROPERTIES, INCLUDING, WITHOUT LIMITATION, THE TREATMENT OR DISPOSAL OF
HAZARDOUS SUBSTANCES ON ANY OF THEIR PROPERTIES, (II) AS A RESULT OF THE
BREACH OR NON-COMPLIANCE BY BORROWER OR ANY SUBSIDIARY WITH ANY ENVIRONMENTAL
LAW APPLICABLE TO BORROWER OR ANY SUBSIDIARY, (III) DUE TO PAST OWNERSHIP
BY BORROWER OR ANY SUBSIDIARY OF ANY OF ITS PROPERTIES OR PAST ACTIVITY ON ANY
OF ITS PROPERTIES WHICH, THOUGH LAWFUL AND FULLY PERMISSIBLE AT THE TIME, COULD
RESULT IN PRESENT LIABILITY, (IV) THE PRESENCE, USE, RELEASE, STORAGE,
TREATMENT OR DISPOSAL OF HAZARDOUS SUBSTANCES ON OR AT ANY OF THE
PROPERTIES OWNED OR OPERATED BY BORROWER OR ANY SUBSIDIARY OR (V) ANY OTHER
ENVIRONMENTAL, HEALTH OR SAFETY CONDITION IN CONNECTION WITH THE BUSINESS
OF BORROWER OR ANY SUBSIDIARY.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
39
(c) Borrower’s
obligations under this Section 11.13 shall survive the termination of this
Agreement and the payment in full of the Note and all other amounts payable
hereunder.
Section
11.14. Payments Set
Aside. To the extent any payments on the Obligations or
proceeds of any Collateral or the proceeds of such enforcement or setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other Person under any debtor relief Law, then to the extent of such
recovery, the Obligations or part thereof originally intended to be satisfied,
and all rights and remedies therefor, shall be revived and shall continue in
full force and effect, and Lender’s rights, powers and remedies under this
Agreement and each other Loan Document shall continue in full force and effect,
as if such payment had not been made or such enforcement or setoff had not
occurred. In such event, each Loan Document shall be automatically
reinstated and Borrower and each Subsidiary shall take such action as may be
reasonably requested by Lender to effect such reinstatement.
Section
11.15. Amendments, Etc. No
amendment or waiver of any provision of this Agreement, the Note or any other
Loan Document, nor consent to any departure by Borrower or any
Subsidiary herefrom or therefrom, shall in any event be effective
unless the same shall be in writing and signed by Borrower and/or the applicable
Subsidiary, as to amendments, and by Lender in all cases, and then, in any case,
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.
Section
11.16. Relationship of the
Parties. This Agreement provides for the making of a loan by
Lender, in its capacity as a lender, to Borrower, in its capacity as a borrower,
and for the payment of interest and repayment of principal by Borrower to
Lender. The relationship between Lender and Borrower is limited to
that of creditor/secured party, on the one hand, and debtor, on the other
hand. The provisions herein for compliance with financial,
environmental, and other covenants, delivery of financial, environmental and
other reports, and financial, environmental and other inspections,
investigations, audits, examinations or tests are intended solely for the
benefit of Lender to protect its interests as a lender in assuring payments of
interest and repayment of principal and nothing contained in this Agreement or
any other Loan Document shall be construed as permitting or obligating Lender to
act as financial or business advisors or consultants to Borrower or any
Subsidiary, as permitting or obligating Lender to control Borrower or any
Subsidiary or to conduct or operate Borrower’s or any Subsidiary’s operations,
as creating any fiduciary obligation on the part of Lender to Borrower or any
Subsidiary, or as creating any joint venture, agency, or other relationship
between the parties other than as explicitly and specifically stated in this
Agreement. Borrower acknowledges that it has had the opportunity to
obtain the advice of experienced counsel of its own choosing in connection with
the negotiation and execution of this Agreement and the other Loan Documents and
to obtain the advice of such counsel with respect to all matters contained
herein. Borrower further acknowledges that it is experienced with
respect to financial and credit matters and has made its own independent
decision to apply to Lender for the financial accommodations provided hereby and
to execute and deliver this Agreement and the other Loan Documents.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
40
Section
11.17. Certain Matters of Construction.
The masculine and neuter genders used in this Agreement each includes the
masculine, feminine and neuter genders, and whenever the singular number is
used, the same shall include the plural where appropriate, and vice
versa. Wherever the term “including” or a similar term is used in
this Agreement, it shall be read as if it were written “including by way of
example only and without in any way limiting the generality of the clause or
concept referred to.”
Section
11.18. USA Patriot Act
Notice. Lender hereby notifies the Borrower that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed
into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Borrower, which
information includes the name and address of the Borrower and other information
that will allow Lender to identify the Borrower in accordance with the
Act.
Section
11.19. FINAL
AGREEMENT. THIS WRITTEN AGREEMENT 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.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
41
IN WITNESS
WHEREOF, the parties hereto, by their respective officers thereunto duly
authorized, have executed this Agreement effective as of October 20,
2008.
| BORROWER: | |||
|
TYLER
TECHNOLOGIES, INC., a
Delaware
corporation
|
|||
|
|
By:
|
||
| Xxxxx X. Xxxxxx, | |||
| Executive Vice President and | |||
| Chief Financial Officer | |||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
42
IN WITNESS
WHEREOF, the parties hereto, by their respective officers thereunto duly
authorized, have executed this Agreement effective as of October 20,
2008.
| LENDER: | |||
|
BANK
OF TEXAS, N.A., a national
banking
association
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
43
SCHEDULE
I
PRICING
SCHEDULE
|
TYPE
OR FEE
|
MARGIN
|
|
Base
Rate Portion
|
1.5%
|
|
LIBOR
Rate Portion
|
1.0%
|
|
Letter
of Credit
|
0.75%
|
|
Revolving
LC Margin
|
1.0%
|
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
1
SCHEDULE
II
REAL
ESTATE CAPITAL EXPENDITURES
|
(in
thousands)
|
est
|
est
|
est
|
||||||||||||||||||||||
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
Quarter
|
||||||||||||||||||||
|
3/31/2008
|
6/30/2008
|
9/30/2008
|
12/31/2008
|
3/31/2008
|
6/30/2008
|
Total
|
|||||||||||||||||||
|
Lubbock
building (new construction)
|
2,210 | 284 | 2,106 | 2,900 | 2,500 | 10,000 | |||||||||||||||||||
|
Yarmouth
(Cole Haan) building
|
11,320 | 11,320 | |||||||||||||||||||||||
|
Falmouth
building
|
10,000 | 10,000 | |||||||||||||||||||||||
|
Totals
|
0
|
2,210 | 11,604 | 12,106 | 2,900 | 2,500 | 31,320 | ||||||||||||||||||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
1
SCHEDULE
9.10
PERMITTED
INVESTMENTS
|
Tyler
Technologies, Inc.
|
|||
|
Investment
Summary
|
|||
|
As
of October 17, 2008
|
|||
|
Taxable/
|
|||
|
Tax
Adv/
|
|||
|
Agent
|
Investment
Description
|
Amount
|
Tax
Free
|
|
Bear
Xxxxxxx
|
Columbia
FSD ser Xx Xxx Resvs Cap (CAFXX)
|
$623,234
|
TF
|
|
Berks
County PA Mun
|
$800,000
|
TF
|
|
|
Louisville
& Jefferson Cnty KY Regl Arpt
|
$950,000
|
TF
|
|
|
New
York ST HSG FIN AGY
|
$675,000
|
TF
|
|
|
Northeastern
Pa Hosp & Edl Auth Hlth
|
$1,000,000
|
TF
|
|
|
$4,048,234
|
|||
|
BOSC
Pershing Investment
|
Jefferson
County Bond
|
$1,725,000
|
TF
|
|
$1,725,000
|
|||
|
Texas
Capital Bank
|
Eurodollar
investment
|
$10,346,070
|
T
|
|
$10,346,070
|
|||
|
Bank
of Texas
|
Money
Market Investment
|
$5,645,725
|
T
|
|
Collected
balance - earnings credit
|
$1,187,663
|
T
|
|
|
$6,833,388
|
|||
|
Weighted
average yield
|
$22,952,692
|
||
|
Total
Auction Rate Securities
|
$5,150,000
|
||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – TYLER TECHNOLOGIES, INC.
Page
1
EXHIBIT
A-1
Form of
Revolving Note
PROMISSORY
NOTE
(Revolving
Line of Credit)
| $25,000,000 |
Dallas,
Texas
|
October 20,
2008
|
FOR VALUE
RECEIVED, the undersigned, TYLER TECHNOLOGIES, INC., a Delaware corporation (the
“Undersigned”),
promises to pay to the order of BANK OF TEXAS, N.A., a national banking
association, and any successors and assigns (the “Payee”), at 0000
Xxxxxx Xxxx, Xxxxx 0000, Xxxxxx, Xxxxx 00000, the principal sum of Twenty Five
Million and no/100 Dollars ($25,000,000) (or the unpaid balance of all principal
advanced under this Note, if that amount is less) together with interest on the
unpaid principal balance of this Note from day to day outstanding, as
hereinafter provided. All capitalized terms herein, unless otherwise
defined, shall have the same definitions as those found in that certain Second
Amended and Restated Credit Agreement by and between the Undersigned and Payee
dated of even date herewith, as amended on the date hereof (as amended, the
“Credit
Agreement”).
This Note
shall evidence the Undersigned’s indebtedness to Payee for Payee’s portion of
the Revolving Commitment, and advances made thereunder.
The Loan
shall bear interest on the unpaid principal amount thereof from time to time
outstanding, until maturity, at the interest rates as provided in, and pursuant
to the terms of, the Credit Agreement.
Interest
and principal on this Note shall be due and payable as provided in the Credit
Agreement. The final principal payment and any unpaid interest owing
hereunder shall be due and payable in full on the Maturity Date. The
principal balance hereof may be, and shall be required to be, prepaid as
provided in the Credit Agreement.
This Note
is a revolving promissory note; therefore, amounts advanced hereunder may be
repaid, readvanced and repaid pursuant to the terms set forth in the Credit
Agreement.
At the
option of the holder of this Note the entire principal balance and accrued
interest owing hereon shall become due and payable without further demand upon
the occurrence at any time of any Event of Default under the Credit
Agreement.
Except as
otherwise set forth in this Note or the Credit Agreement, the Undersigned waives
demand, presentment for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, notice of intent to accelerate, notice of
acceleration and all other notice of any kind, filing of suit and diligence in
collecting this Note or enforcing any of the security herefor, and consents to
all extensions which from time to time may be granted by the holder hereof and
to all partial payments hereon, whether before or after maturity.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT A-1
Page
1
If this
Note is not paid when due, whether at maturity or by acceleration or otherwise,
or if it is collected through a bankruptcy, probate or other judicial or
administrative proceeding, whether before or after maturity, the Undersigned
agrees to pay all reasonable costs of collection, including, but not limited to,
reasonable attorneys’ fees, incurred by the holder hereof.
Any
provisions herein, or in any other document executed in connection herewith, or
in any other agreement or commitment, whether written or oral, expressed or
implied, to the contrary notwithstanding, the holder hereof shall in no event
charge or be entitled to receive or collect, nor shall or may amounts received
hereunder be credited, so that the holder hereof shall be paid, as interest, a
sum greater than the maximum permitted by applicable law to be charged to the
person, partnership, firm or corporation primarily obligated to pay this
Note. If any construction of this Note, or any and all other papers,
agreements or commitments, indicates a different right given to the holder
hereof to ask for, demand or receive any larger sum as interest, such is a
mistake in calculation or wording, which this clause shall override and control;
it being the intention of the parties that this Note and all other instruments
executed in connection herewith shall in all things comply with applicable law,
and proper adjustment shall automatically be made accordingly. In the
event the holder hereof ever receives, collects or applies as interest, any sum
in excess of the maximum permitted by applicable law, such excess amount shall
be applied to the reduction of the unpaid principal balance of this Note, in the
inverse order of maturity, and not to interest, and if this Note is paid in
full, any remaining excess shall be refunded to the Undersigned. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the maximum permitted by applicable law, the Undersigned
and the holder hereof shall, to the maximum extent permitted under applicable
law: (i) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest; (ii) exclude voluntary prepayments and the effects
thereof; and (iii) amortize, prorate, allocate and spread the total amount of
interest throughout the entire term of this Note (including any renewals or
extensions) so that the interest rate is uniform throughout the entire term of
this Note and does not exceed the maximum permitted by applicable
law. The provisions of this paragraph shall control all existing and
future agreements between the Undersigned and the holder hereof.
This Note
is executed and delivered in the State of Texas and intended to be performed in
Dallas County, Texas, and except to the extent that the laws of the United
States of America may pre-empt or govern the terms hereof, this Note shall be
governed by and construed in accordance with the laws of the State of Texas; and
the Undersigned irrevocably agrees that in the event of any dispute involving
this Note or any other instruments executed in connection herewith, venue for
such dispute shall lie in any court of competent jurisdiction in Dallas County,
Texas.
This Note
and all the covenants, promises and agreements contained herein shall be binding
upon and inure to the benefit of the respective heirs, devisees, legal and
personal representatives, successors and assigns of the holder hereof and the
Undersigned.
THIS 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.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT A-1
Page
2
EXECUTED
effective as of the date first written above.
|
TYLER
TECHNOLOGIES, INC.
|
|||
|
|
By:
|
||
| Xxxxx X. Xxxxxx, | |||
| Vice President-Finance | |||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT A-1
Page
3
EXHIBIT
A-2
Form of
Letter of Credit Facility Note
SECOND AMENDED AND RESTATED
PROMISSORY NOTE
(Letter
of Credit Facility)
| $6,000,000 |
Dallas,
Texas
|
October 20,
2008
|
This Note
shall evidence the Undersigned’s indebtedness to Payee for Payee’s portion of
the Letter of Credit Commitment, and advances made thereunder.
The Loan
shall bear interest on the unpaid principal amount thereof from time to time
outstanding, until maturity, at the interest rates as provided in, and pursuant
to the terms of, the Credit Agreement.
Interest
and principal on this Note shall be due and payable as provided in the Credit
Agreement. The final principal payment and any unpaid interest owing
hereunder shall be due and payable in full on the Maturity Date. The
principal balance hereof may be, and shall be required to be, prepaid as
provided in the Credit Agreement.
This Note
is a revolving promissory note; therefore, amounts advanced hereunder may be
repaid, readvanced and repaid pursuant to the terms set forth in the Credit
Agreement.
At the
option of the holder of this Note the entire principal balance and accrued
interest owing hereon shall become due and payable without further demand upon
the occurrence at any time of any Event of Default under the Credit
Agreement.
Except as
otherwise set forth in this Note or the Credit Agreement, the Undersigned waives
demand, presentment for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, notice of intent to accelerate, notice of
acceleration and all other notice of any kind, filing of suit and diligence in
collecting this Note or enforcing any of the security herefor, and consents to
all extensions which from time to time may be granted by the holder hereof and
to all partial payments hereon, whether before or after maturity.
If this
Note is not paid when due, whether at maturity or by acceleration or otherwise,
or if it is collected through a bankruptcy, probate or other judicial or
administrative proceeding, whether before or after maturity, the Undersigned
agrees to pay all reasonable costs of collection, including, but not limited to,
reasonable attorneys’ fees, incurred by the holder hereof.
Any
provisions herein, or in any other document executed in connection herewith, or
in any other agreement or commitment, whether written or oral, expressed or
implied, to the contrary notwithstanding, the holder hereof shall in no event
charge or be entitled to receive or collect, nor shall or may amounts received
hereunder be credited, so that the holder hereof shall be paid, as interest, a
sum greater than the maximum permitted by applicable law to be charged to the
person, partnership, firm or corporation primarily obligated to pay this
Note. If any construction of this Note, or any and all other papers,
agreements or commitments, indicates a different right given to the holder
hereof to ask for, demand or receive any larger sum as interest, such is a
mistake in calculation or wording, which this clause shall override and control;
it being the intention of the parties that this Note and all other instruments
executed in connection herewith shall in all things comply with applicable law,
and proper adjustment shall automatically be made accordingly. In the
event the holder hereof ever receives, collects or applies as interest, any sum
in excess of the maximum permitted by applicable law, such excess amount shall
be applied to the reduction of the unpaid principal balance of this Note, in the
inverse order of maturity, and not to interest, and if this Note is paid in
full, any remaining excess shall be refunded to the Undersigned. In
determining whether or not the interest paid or payable, under any specific
contingency, exceeds the maximum permitted by applicable law, the Undersigned
and the holder hereof shall, to the maximum extent permitted under applicable
law: (i) characterize any nonprincipal payment as an expense, fee or premium
rather than as interest; (ii) exclude voluntary prepayments and the effects
thereof; and (iii) amortize, prorate, allocate and spread the total amount of
interest throughout the entire term of this Note (including any renewals or
extensions) so that the interest rate is uniform throughout the entire term of
this Note and does not exceed the maximum permitted by applicable
law. The provisions of this paragraph shall control all existing and
future agreements between the Undersigned and the holder hereof.
This Note
is executed and delivered in the State of Texas and intended to be performed in
Dallas County, Texas, and except to the extent that the laws of the United
States of America may pre-empt or govern the terms hereof, this Note shall be
governed by and construed in accordance with the laws of the State of Texas; and
the Undersigned irrevocably agrees that in the event of any dispute involving
this Note or any other instruments executed in connection herewith, venue for
such dispute shall lie in any court of competent jurisdiction in Dallas County,
Texas.
This Note
and all the covenants, promises and agreements contained herein shall be binding
upon and inure to the benefit of the respective heirs, devisees, legal and
personal representatives, successors and assigns of the holder hereof and the
Undersigned.
THIS 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.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT A-1
Page
2
EXECUTED
effective as of the date first written above.
|
TYLER
TECHNOLOGIES, INC.
|
|||
|
|
By:
|
||
| Xxxxx X. Xxxxxx, | |||
| Vice President-Finance | |||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT A-1
Page
3
EXHIBIT
B-1
Notice of
Borrowing
This
Notice of Borrowing is being delivered by TYLER TECHNOLOGIES, INC., a Delaware
corporation (“Borrower”), as
borrower under that certain Second Amended and Restated Credit Agreement (the
“Credit
Agreement”), dated as of October 20, 2008, executed by Borrower and Bank
of Texas, N.A., a national banking association (the “Lender”). Unless
defined herein or indicated otherwise, each capitalized term used herein shall
have the meaning given to such term in the Credit Agreement.
1. Borrower
hereby requests an Advance in an amount equal to $____________ to be funded on
___________. Borrower represents and warrants to Lender that the
Advance herein requested does not exceed the amount which Borrower is entitled
to receive pursuant to Section 2.1 (or any other provision) of the Credit
Agreement.
2. Borrower
requests that of the Advance requested hereby, $_____________ bear interest
based at the Base Rate and $_______________ bear interest based at the Adjusted
LIBOR Rate. With respect to the LIBOR Rate Portion, the Rate Period
shall be ____ month(s), with the first day of the Rate Period being the date on
which the LIBOR Rate Portion is funded.
3. Borrower
hereby certifies, represents and warrants to Lender that:
(b) This
Request for Advance has been duly authorized by all necessary action on the part
of Borrower.
(c) The
representations and warranties contained in the Credit Agreement and the other
Loan Documents remain true and correct in all material respects on and as of the
date hereof (except to the extent any representation or warranty is made as of a
particular date) with the same force and effect as though made on the date
hereof.
(d) No
Default or Event of Default has occurred and is continuing, and the making of
the Advance requested hereby shall not constitute a Default or Event of
Default.
(e) Borrower
has performed and complied in all material respects with all agreements and
conditions in the Credit Agreement and the other Loan Documents required to be
performed or complied with by such Borrower on or prior to the date hereof, and
each of the conditions precedent contained in the Credit Agreement applicable to
the Advance requested hereby has been satisfied.
(f) The
proceeds of the Advance requested will not be used in violation of any provision
of the Credit Agreement or any other Loan Document.
4. Borrower
acknowledges and agrees that the making of the Advance requested hereby shall
not constitute a waiver of any condition precedent to the obligation of Lender
to make further Advances.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT B-1
Page
1
EXECUTED
as of _________________, 20___.
| AUTHORIZED OFFICER: | |||
|
TYLER
TECHNOLOGIES, INC.,
a
Delaware
corporation
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT B-1
Page
2
EXHIBIT
B-2
Letter of
Credit Application
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT B-2
EXHIBIT
C
Notice of
Rate Change/Continuation
This
Notice of Rate Change/Continuation (the “Notice”) is being
delivered by TYLER TECHNOLOGIES, INC., a Delaware corporation (“Borrower”), as
borrower under that certain Second Amended and Restated Credit Agreement (the
“Credit
Agreement”), dated as of October 20, 2008, executed by Borrower, and Bank
of Texas, N.A., a national banking association (the “Lender”). Unless
defined herein or indicated otherwise, each capitalized term used herein shall
have the meaning given to such term in the Credit Agreement.
1. Interest
Rate Change
Pursuant
to Section 3.1(b) of the Credit Agreement, Borrower hereby elects to change the
interest rates applying to the portions of the Loan listed
below. Borrower provides the following information: (a) Amount
of Loan to be affected, (b) date on which the current interest rate applicable
to the affected portion of the Loan became effected, (c) Type of interest rate
currently applied (LIBOR or Base Rate), (d) interest rate currently applicable
to such portion, (e) Type of interest rate to be applied from the effective date
of this Notice (LIBOR or Base Rate), and (f) if a LIBOR Portion is requested,
the requested Rate Period.
|
Amount
|
Date
|
Type
(current)
|
Rate
(current)
|
Type of Interest to
be
Applied
|
Requested Rate
Period
|
|
___________
|
______
|
____________
|
_______
|
_______________
|
___________
|
|
___________
|
______
|
____________
|
_______
|
_______________
|
___________
|
|
___________
|
______
|
____________
|
_______
|
_______________
|
___________
|
5. Continuation
of LIBOR Rate Portion
Pursuant
to Section 3.1(b) of the Credit Agreement, Borrower hereby elects to continue
the outstanding principal balances of the below listed LIBOR Rate Portions as
such LIBOR Rate Portions. Borrower provides the following
information: (a) The principal amount of such LIBOR Rate Portion to remain
outstanding, (b) first date of the current Rate Period, (c) current Rate Period,
and (d) requested Rate Period
|
Amount to Remain
Outstanding
|
Date
|
Current Rate
Period
|
Requested Rate
Period
|
|
_____________
|
_______
|
_______________
|
________________
|
|
_____________
|
_______
|
_______________
|
________________
|
|
_____________
|
_______
|
_______________
|
________________
|
6. Borrower
requests this rate change or continuation to be effective as of the ___ day of
_____________, ______ (the “Conversion/Continuation
Date”). Each rate so specified shall become effective on the
Conversion/Continuation Date and remain in effect until the expiration of the
applicable Rate Period.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT C
Page
1
7. Borrower
hereby certifies, represents and warrants to Lender that:
8. This
Notice has been duly authorized by all necessary action on the part of
Borrower.
9. Borrower
has performed and complied in all material respects with all agreements and
conditions in the Credit Agreement and the other Loan Documents required to be
performed or complied with by such Borrower on or prior to the date
hereof.
10. This
Notice is irrevocable.
EXECUTED
as of _________________, 20___.
| AUTHORIZED OFFICER: | |||
|
TYLER
TECHNOLOGIES, INC.,
a
Delaware
corporation
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT C
Page
2
EXHIBIT
D
Compliance
Certificate
This
Compliance Certificate is furnished pursuant to that certain Second Amended and
Restated Credit Agreement dated as of October 20, 2008 (as amended, modified,
renewed or extended from time to time, the “Credit Agreement”)
among TYLER TECHNOLOGIES, INC. (the “Borrower”), Bank of
Texas, N.A., a national banking association (the “Lender”). Unless
otherwise defined herein, capitalized terms used in this Compliance Certificate
have the meanings ascribed thereto in the Credit Agreement.
THE
UNDERSIGNED HEREBY CERTIFIES TO LENDER THAT:
1. I
am the duly
elected
of the Borrower;
2. I
have reviewed the terms of the Credit Agreement and I have made, or have caused
to be made under my supervision, a detailed review of the transactions and
conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements.
3. The
reviews described in paragraph 2 did not disclose, and I have no knowledge of,
the existence of any condition or event which constitutes a Default or Event of
Default during or at the end of the accounting period covered by the attached
financial statements or as of the date of this Certificate, except as set forth
below.
4. Schedule
I attached hereto sets forth financial data and computations evidencing the
Borrower’s compliance with certain covenants of the Credit Agreement as of the
______ ended ________, all of which data and computations are true, complete and
correct in all material respects, and are based upon and derived from the
financial statements for the __________ ended ______________ concurrently being
furnished by Borrower pursuant to Section 8.1 of the
Credit Agreement prepared in accordance with GAAP.
5. Schedule
II attached hereto sets forth the various reports and deliveries which are
required at this time under the Credit Agreement, and the other Loan Documents
and the status of compliance.
Described
below are the exceptions, if any, to paragraph 3 by listing, in detail, the
nature of the condition or event, the period during which it has existed and the
action which the Borrower has taken, is taking, or proposes to take with respect
to each such condition or event:
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT D
Page
1
The
foregoing certifications are made and delivered this _____ day of ____________,
______.
|
TYLER
TECHNOLOGIES, INC., a
Delaware
corporation
|
|||
|
|
By:
|
||
| Name: | |||
| Title: | |||
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT D
Page
2
SCHEDULE
I
TO
COMPLIANCE
CERTIFICATE
Compliance
as of _________, ____ with
Section 9.9
of the Credit Agreement
|
1.
|
Section
9.9(a) — Funded Debt to EBITDA
|
||
|
(a)
|
Outstanding
liabilities for borrowed money and other interest bearing
liabilities
|
$_____________
|
|
|
(b)
|
Unfunded
commitments under outstanding letters of credit (excluding cash
collateralized letters of credit)
|
$_____________
|
|
|
(c)
|
Funded
Debt (sum of (a) + (b))
|
$_____________
|
|
|
(d)
|
Consolidated
net income for the four fiscal quarters ended [quarter for which
Compliance Certificate is being furnished]
|
||
|
(e)
|
Income
from discontinued operations and extraordinary items for the four fiscal
quarters ended [quarter for which Compliance Certificate is being
furnished]
|
$_____________
|
|
|
(f)
|
Loss
from discontinued operations and extraordinary items for the four fiscal
quarters ended [quarter for which Compliance Certificate is being
furnished]
|
$_____________
|
|
|
(g)
|
The
following, each for the four fiscal quarters ended [quarter for which
Compliance Certificate is being furnished], as deducted in determining
consolidated net income for such period:
|
$_____________
|
|
|
(i)
Income Taxes
|
$______________
|
||
|
(ii)
Depreciation
|
$______________
|
||
|
(iii) Amortization
|
$______________
|
||
|
(iv) Interest
expense
|
$______________
|
||
|
(v) Other
non-cash expenses
|
$______________
|
$______________
|
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT D
Page
3
|
(h)
|
EBITDA
for the four fiscal quarters ended [quarter for which Compliance
Certificate is being furnished] (sum of (d) + (f) +(g) minus
(e))
|
$______________
|
|
|
(i)
|
Cash
paid for taxes during the four fiscal quarters ended [quarter for which
Compliance Certificate is being furnished]
|
$_____________
|
|
|
(j)
|
Cash
paid for Capital Expenditures (as defined in the Credit Agreement) during
the four fiscal quarters ended [quarter for which Compliance Certificate
is being furnished]
|
$_____________
|
|
|
(k)
|
Remainder
derived by subtracting from (h) the sum of (i)+(j)
|
$_____________
|
|
|
(l)
|
Ratio
of Funded Debt to EBITDA ((c) divided by (k))
|
______________
|
|
|
Borrower
is in compliance with Section 9.9(a) of the Credit Agreement if line (l)
is equal to less than 2.0.
|
|||
|
2.
|
Section
9.9(b) - Fixed Charge Coverage
|
||
|
(a)
|
EBITDA
for the four fiscal quarters ended [quarter for which Compliance
Certificate is being furnished] (line (h) from Section 1
preceding)
|
$_____________
|
|
|
(b)
|
Cash
paid for taxes during the four fiscal quarters ended[quarter for which
Compliance Certificate is being furnished]
|
$_____________
|
|
|
(c)
|
Cash
paid for Capital Expenditures (as defined in the Credit Agreement) during
the four fiscal quarters ended [quarter for which Compliance Certificate
is being furnished]
|
$_____________
|
|
|
(d)
|
Remainder
derived by subtracting from (a) the sum of (b)+(c)
|
$_____________
|
|
|
(e)
|
Current
Maturities (as defined in the Credit Agreement) as of the last day of the
four fiscal quarters ended [quarter for which Compliance Certificate is
being furnished]
|
$______________
|
|
|
(f)
|
Interest
Expense (as defined in the Credit Agreement) as of the last day of the
four fiscal quarters ended [quarter for which Compliance Certificate is
being furnished]
|
$______________
|
|
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT D
Page
4
|
(g)
|
Current
maturities of Capitalized Lease Obligations(as defined in the Credit
Agreement), without duplication of interest expense included in (f), as of
the last day of the four fiscal quarters ended [quarter for which
Compliance Certificate is being furnished]
|
$______________
|
|
|
(h)
|
The
sum of (e)+(f)+(g)
|
$______________
|
|
|
(i)
|
Fixed
Charge Coverage (line (d) divided by line (h)
|
$______________
|
|
Borrower is in compliance with Section 9.9(b) of the Credit Agreement if line (i) is equal to or greater than 2.0.
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT D
Page
5
SCHEDULE
II
TO
COMPLIANCE
CERTIFICATE
Reports
and Deliveries Currently Due
[For
Compliance Certificate accompanying annual financial statements furnished under
Section 8.1(a) of the Credit Agreement]:
Borrower’s
consolidated financial statements for the fiscal year ended ____________,
required and furnished pursuant to Section 8.1(a) of the Credit Agreement are
furnished concurrently with this Compliance Certificate, as
follows:
|
(j)
|
Consolidated
balance sheet.
|
|
(k)
|
Consolidated
statements of income, retained earnings and cash flows.
|
|
(l)
|
Notes
to consolidated financial statements.
|
|
(m)
|
Report
and opinion of [Ernst & Young LLP]
|
|
(n)
|
Consolidating
balance sheets and statements of income for the fiscal year
ended _________ (each certified by an Authorized Officer of Borrower)
for each of Borrower and the following
Subsidiaries:
|
[For
Compliance Certificate accompanying quarterly financial statements furnished
under Section 8.1(b) of the Credit Agreement]:
Borrower’s
consolidated financial statements (unaudited) for the fiscal quarter ended
____________ (certified by an Authorized Officer of Borrower), required and
furnished pursuant to Section 8.1(b) of the Credit Agreement are furnished
concurrently with this Compliance Certificate, as follows:
|
(a)
|
Consolidated
balance sheet (unaudited).
|
|
(b)
|
Consolidated
statement of income (unaudited).
|
|
(c)
|
Consolidated
statement of cash flow
(unaudited).
|
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT – EXHIBIT D
Page
6
