EXHIBIT 10.7
LOAN AGREEMENT
AMONG
GEOSCIENCE CORPORATION,
as Borrower
XXXXX FARGO BANK (TEXAS), NATIONAL ASSOCIATION,
as Agent and a Bank,
AND
EACH OF THE BANKS FROM TIME TO TIME SIGNATORY HERETO
December 6, 1996
TABLE OF CONTENTS
Page
ARTICLE I - Definitions ................................................... 1
Section 1.1. Definitions ............................................. 1
Section 1.2. Other Definitional Provisions ........................... 11
ARTICLE II - Advances ..................................................... 11
Section 2.1. Commitment .............................................. 11
Section 2.2. The Notes ............................................... 12
Section 2.3. Repayment of Advances ................................... 12
Section 2.4. Interest ................................................ 12
Section 2.5. Procedure for Advances Under the Revolving
Credit Commitment ..................................... 12
Section 2.6. Use of Proceeds ......................................... 13
Section 2.7. Conversion and Continuation Options ..................... 13
ARTICLE III - Payments .................................................... 14
Section 3.1. Method of Payment ....................................... 14
Section 3.2. Prepayment .............................................. 14
Section 3.3. Pro Rata Treatment ...................................... 14
Section 3.4. Non-Receipt of Funds by the Agent ....................... 14
Section 3.5. Computation of Interest ................................. 15
Section 3.6. Reserve and Capital Adequacy Provisions ................. 15
Section 3.7. Limitation on Eurodollar Borrowings ..................... 16
Section 3.8. Determination of Interest Rates ......................... 17
Section 3.9. No Prepayment During an Interest Period ................. 17
ARTICLE IV - Guaranty ..................................................... 17
Section 4.1. Guaranty ................................................ 17
ARTICLE V - Conditions Precedent .......................................... 17
Section 5.1. Initial Advance ......................................... 17
Section 5.2. All Advances ............................................ 18
ARTICLE VI - Representations and Warranties ............................... 18
Section 6.1. Corporate Existence ..................................... 18
Section 6.2. Financial Statements .................................... 19
Section 6.3. Corporate Action; No Breach ............................. 19
Section 6.4. Operation of Business ................................... 19
Section 6.5. Litigation and Judgments ................................ 19
Section 6.6. Rights in Properties, Liens ............................. 19
Section 6.7. Enforceability .......................................... 19
Section 6.8. Approvals ............................................... 20
Section 6.9. Taxes ................................................... 20
Section 6.10. Use of Proceeds; Margin Securities ..................... 20
Section 6.11. ERISA .................................................. 20
Section 6.12. Disclosure ............................................. 20
Section 6.13. Subsidiaries ........................................... 20
Section 6.14. Agreements ............................................. 20
Section 6.15. Compliance with Laws ................................... 21
Section 6.16. Investment Company Act ................................. 21
Section 6.17. Public Utility Holding Company Act ..................... 21
Section 6.18. Environmental Matters .................................. 21
ARTICLE VII - Positive Covenants .......................................... 22
Section 7.1. Reporting Requirements .................................. 22
Section 7.2. Maintenance of Existence ................................ 23
Section 7.3. Maintenance of Properties ............................... 23
Section 7.4. Taxes and Claims ........................................ 23
Section 7.5. Insurance ............................................... 23
Section 7.6. Inspection Rights ....................................... 23
Section 7.7. Keeping Books and Records ............................... 23
Section 7.8. Compliance with Laws .................................... 23
Section 7.9. Compliance with Agreements .............................. 24
Section 7.10. Further Assurances ..................................... 24
Section 7.11. ERISA .................................................. 24
Section 7.12. Change in Business ..................................... 24
ARTICLE VIII - Negative Covenants ......................................... 24
Section 8.1. Lease Rentals ........................................... 24
Section 8.2. Debt .................................................... 25
Section 8.3. Liens ................................................... 25
Section 8.4. Merger and Consolidation ................................ 26
Section 8.5. Sale of Assets .......................................... 26
Section 8.6. Dealings with Affiliates ................................ 26
Section 8.7. Loans and Investments ................................... 27
Section 8.8. Compliance with Environmental Laws ...................... 27
ARTICLE IX - Financial Covenants .......................................... 27
Section 9.1. Tangible Net Worth ...................................... 27
Section 9.2. Working Capital ......................................... 27
Section 9.3. Relationship of Funded Debt to Total Capitalization ..... 27
Section 9.4. Debt Service Ratio ...................................... 27
Section 9.5. Capital Expenditures .................................... 27
ARTICLE X - Default ....................................................... 28
Section 10.1. Events of Default ...................................... 28
Section 10.2. Remedies Upon Default .................................. 29
Section 10.3. Performance by the Agent ............................... 30
ARTICLE XI - The Agent .................................................... 30
Section 11.1. Appointment, Powers and Immunities ..................... 30
Section 11.2. Rights of the Agent as a Bank .......................... 32
Section 11.3. Sharing of Payments, Etc ............................... 32
Section 11.4. Indemnification ........................................ 32
Section 11.5. Independent Credit Decisions ........................... 33
Section 11.6. Several Commitments .................................... 33
Section 11.7. Successor Agent ........................................ 33
ARTICLE XII - Miscellaneous ............................................... 34
Section 12.1. Expenses of the Agent and the Banks .................... 34
Section 12.2. Indemnification ........................................ 34
Section 12.3. Limitation of Liability ................................ 34
Section 12.4. No Waiver; Cumulative Remedies ......................... 35
Section 12.5. Successors and Assigns ................................. 35
Section 12.6. Survival ............................................... 37
Section 12.7. ENTIRE AGREEMENT; AMENDMENT ............................ 38
Section 12.8. Maximum Interest Rate .................................. 38
Section 12.9. Notices ................................................ 39
Section 12.10. APPLICABLE LAW; VENUE; SERVICE OF PROCESS ............. 39
Section 12.11. Counterparts .......................................... 39
Section 12.12. Severability .......................................... 39
Section 12.13. Headings .............................................. 39
Section 12.14. Non-Application of Chapter 15 of Texas Credit Code .... 40
Section 12.15. Special Covenant ...................................... 40
Section 12.16. Arbitration ........................................... 40
EXHIBITS
A. Form of Note
B. Form of Advance Request Form
C. Form of Limited Guaranty
D. Form of Assignment and Acceptance
E. Real Property Description
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of December 6, 1996 (this "Agreement"), is
between GEOSCIENCE CORPORATION, a Nevada corporation ("Borrower"), each of the
banks or other lending institutions which is or which may from time to time
become a signatory hereto or any successor or assignee thereof (individually, a
"Bank" and, collectively, the "Banks"), and XXXXX FARGO BANK (TEXAS), NATIONAL
ASSOCIATION, a national banking association, as agent for itself and the other
Banks (in such capacity, together with its successors in such capacity, the
"Agent").
R E C I T A L S:
The Borrower has requested that the Banks make revolving credit loans to
the Borrower with advances thereunder not to exceed an aggregate principal
amount of $3,000,000 outstanding at any time. The Banks are willing to make such
loans to the Borrower upon the terms and conditions hereinafter set forth.
NOW THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
I
DEFINITIONS
I.1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
"AAA" has the meaning assigned to it in Section 12.16(b) hereof.
"ACCEPTABLE ENCUMBRANCE" means a pledge, Lien, security interest, mortgage,
or other encumbrance of the Real Property which secures Acceptable
Permanent Financing.
"ACCEPTABLE PERMANENT FINANCING" means Debt of the Borrower, secured by the
Real Property; provided that such Debt, when incurred, does not cause the
violation of any covenant or agreement contained herein.
"ADJUSTED EURODOLLAR RATE" means that rate of interest per annum which
shall on any day be equal to the sum of (i) the Eurodollar Base Rate plus
(ii) 1.25%. The Adjusted Eurodollar Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurodollar Base Rate.
"ADVANCE" means an advance of funds by a Bank to the Borrower pursuant to
Article II.
"ADVANCE REQUEST FORM" means a certificate, in substantially the form of
Exhibit "B" hereto, properly completed and signed by the Borrower
requesting an Advance.
"AFFILIATE" means any Person which directly or indirectly through one or
more intermediaries controls, or is controlled by, or is under common
control with, the Borrower. The term "control" means the possession,
directly or indirectly, of the power to direct or cause the direction of
the management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise.
"AGGREGATE LONG-TERM LEASE RENTALS" means the aggregate of the minimum
annual rental payments (excluding income taxes, property taxes, insurance
and other charges which the lessee is required to pay to, or on behalf of,
the lessor pursuant to any lease) of the Borrower and its Subsidiaries
under all leases of real and personal property having a remaining unexpired
term as at the date of determination (including the original term and any
renewals or extensions available at the lessee's sole option) in excess of
three years.
"APPLICABLE LENDING OFFICE" means for each Bank and each type of Advance,
the Lending Office of such Bank (or of an Affiliate of such Bank)
designated for such type of Advance below its name on the signature pages
hereof or such other office of such Bank (or of an Affiliate of such Bank)
as such Bank may from time to time specify to the Borrower and the Agent as
the office by which its Advances of such type are to be made and
maintained.
"ASSIGNEE" has the meaning assigned to it in Section 12.5(b) hereof.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and acceptance entered into
by a Bank and its assignee and accepted by the Agent pursuant to Section
12.5 in substantially the form of Exhibit "D" hereto.
"BUSINESS DAY" means (a) any day on which commercial banks are not
authorized or required to close in Houston, Texas, and, (b) with respect to
all borrowings, payments, Conversions, Continuations, Interest Periods, and
notices in connection with Eurodollar Advances, any day which is a Business
Day described in clause (a) above and which is also a day on which dealings
in Dollar deposits are carried out in the London interbank market.
"CAPITAL EXPENDITURES" means expenditures which, in accordance with GAAP,
would be required to be capitalized on a consolidated balance sheet of the
Borrower and its Subsidiaries.
"CAPITALIZED LEASE" means any lease of property, real or personal, which in
accordance with GAAP, would be required to be capitalized on a balance
sheet of the lessee.
"CAPITALIZED LEASE OBLIGATIONS" means payments pursuant to Capitalized
Leases which, under GAAP, would be included in determining total
liabilities as shown on the liability side of a balance sheet.
"CASH FLOW" means, at any particular time, Net Income of the Borrower and
its Subsidiaries plus Interest Expense, depreciation, amortization and
other non-cash expenses deducted from the Borrower's and its Subsidiaries'
revenues to determine Net Income plus those items listed in clauses (i),
(ii) and (iii) of the definition of Net Income, all determined in
accordance with GAAP.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
regulations promulgated and rulings issued thereunder.
"COMMITMENT" means, as to each Bank, the obligation of such Bank to make
Advances hereunder in the principal amount set forth opposite the name of
such Bank on the signature pages hereto under the heading "Commitment."
"CURRENT ASSETS" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as current assets on a consolidated
balance sheet of the Borrower and its Subsidiaries.
"CURRENT LIABILITIES" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as current liabilities on a
consolidated balance sheet of the Borrower and its Subsidiaries.
"CURRENT MATURITIES OF LONG TERM DEBT" means, at any particular time, all
principal due and payable during the next succeeding twelve month period on
any of the Borrower's or its Subsidiaries' Debt for money borrowed, which
has a maturity of greater than twelve months.
"CURRENT RATIO" means, at any particular time, the ratio of Current Assets
to Current Liabilities.
"DEBT" means (i) all obligations and liabilities, which in accordance with
GAAP would be included in determining total liabilities as shown on a
balance sheet as of the date at which Debt is to be determined, (ii) all
obligations and liabilities for borrowed money secured by any security
interest of any kind existing on property owned subject to such security
interest whether or not such obligations or liabilities shall have been
assumed, (iii) all guaranties (whether by discount or otherwise),
endorsements (other than for collection or deposit in the ordinary course
of business), letters of credit and other contingent obligations and
agreements to acquire or to supply or advance funds in respect of any
obligation, liability or dividend of any other Person and (iv) any
agreement to pay the purchase price of any product or service in which such
agreement to pay is not dependent upon whether or not such product or
service is furnished; provided, however, that Capitalized Lease Obligations
shall not constitute Debt.
"DEBT SERVICE COSTS" means, at any particular time, Current Maturities of
Long Term Debt plus Interest Expense.
"DEBT SERVICE RATIO" means, at the end of each calendar quarter, the ratio
of (i) the sum of Cash Flow for each of the preceding four consecutive
calendar quarters to (ii) Debt Service Costs.
"DEFAULT" means any event which, with the giving of notice or lapse of
time, could become an Event of Default.
"DEFAULT RATE" means the Maximum Rate or, if no Maximum Rate exists, the
sum of the Prime Rate in effect from day to day plus 5%.
"DISPUTE" has the meaning assigned to it in Section 12.16(a) hereof.
"DOLLARS" and "$" mean lawful money of the United States of America.
"ENVIRONMENTAL LAWS" means any and all federal, state, and local laws,
regulations, and requirements pertaining to health, safety, or the
environment, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, 42 U.S.C. ss. 9601 et
seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C. ss.
6901 et seq., the Occupational Safety and Health Act, 29 U. S. C. ss. 651
et seq., the Clean Air Act, 42 U. S. C. ss. 7401 et seq. the Clean Water
Act, 33 U.S.C. ss. 1251 et seq., the Toxic Substances Control Act, 15
U.S.C. ss. 2601 et seq., and all similar laws, regulations, and
requirements of any governmental authority or agency having jurisdiction
over the Borrower or any Subsidiary or any of their respective properties
or assets, as such laws, regulations, and requirements may be amended or
supplemented from time to time.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and published
interpretations thereunder.
"ERISA AFFILIATE" means any corporation or trade or business which is a
member of the same controlled group of corporations (within the meaning of
Section 414(b) of the Code) as the Borrower or is under common control
(within the meaning of Section 414(c) of the Code) with the Borrower.
"EURODOLLAR BASE RATE" means, with respect to each Interest Period during
which the LIBO Rate is applicable, a rate per annum (rounded upward, if
necessary, to the nearest 1/100th of 1%) equal to the quotient of (a) the
LIBO Rate with respect to such Interest Period, divided by (b) the
remainder of 1.00 minus the applicable Statutory Reserve in effect on the
first day of such Interest Period. The Eurodollar Base Rate shall be
adjusted automatically on and as of the effective date of any change in the
applicable Statutory Reserve.
"EURODOLLAR BORROWING" means any Advance with respect to which the Borrower
shall have selected an interest rate based on the Adjusted Eurodollar Rate
in accordance with the provisions of this Agreement.
"EVENT OF DEFAULT" has the meaning specified in Section 10.1.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/16 of 1%) 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 of New York on the Business
Day next succeeding such day, provided that (a) if the day for which such
rate is to be determined is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (b)
if such rate is not so published on such next succeeding Business Day, the
Federal Funds Rate for any day shall be the average rate charged to
Reference Bank on such day on such transactions as determined by the Agent.
"FLOATING RATE BORROWING" means any Revolving Credit Loan with respect to
which the Borrower shall have selected an interest rate based upon the
Prime Rate in accordance with the provisions of this Agreement.
"FUNDED DEBT" means the Debt evidenced by the Note and all Debt owed or
guaranteed which by its terms matures more than one year from the date such
Funded Debt is being determined pursuant to applicable provisions of this
Agreement or which may be renewed or extended at the option of the obligor
for more than one year from such date whether or not theretofore renewed or
extended.
"GAAP" means generally accepted accounting principles, applied on a
consistent basis, as set forth in Opinions of the Accounting Principles
Board of the American Institute of Certified Public Accountants and/or in
statements of the Financial Accounting Standards Board and/or their
respective successors and which are applicable in the circumstances as of
the date in question. Accounting principles are applied on a "consistent
basis" when the accounting principles observed in a current period are
comparable in all material respects to those accounting principles applied
in a preceding period.
"GUARANTOR" means Tech-Sym Corporation, a Nevada corporation, whose address
is 00000 Xxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000.
"GUARANTY" means the guaranty of the Guarantor in favor of the Banks, in
substantially the form of Exhibit "C" hereto, as the same may be amended,
supplemented, or modified from time to time.
"HAZARDOUS SUBSTANCE" means any substance, product, waste, pollutant,
material, chemical, contaminant, constituent, or other material which is or
becomes listed, regulated, or addressed under any Environmental Law,
including, without limitation, asbestos, petroleum, and polychlorinated
biphenyls.
"INTEREST EXPENSE" means any expense of the Borrower or its Subsidiaries
which would be considered interest expense in accordance with GAAP.
"INTEREST PERIOD" means, (i) as to any portion of the Advance bearing
interest at the Prime Rate, any period selected by the Borrower, and (ii)
as to any portion of the Advance bearing interest at the Adjusted
Eurodollar Rate, a period of one month, two months or three months, as the
Borrower may elect in the manner set forth in Section 2.5 hereof, provided
that:
(i) the initial Interest Period for any portion of the Advance
shall commence on the date of each Advance and each Interest Period
occurring thereafter for such Advance shall commence on the day on
which the next preceding Interest Period for such Advance expires:
(ii) no Interest Period shall extend beyond the Revolving Credit
Termination Date;
(iii) if the Borrower has selected an Interest Period with
respect to any portion of the Advance which extends beyond the
Revolving Credit Termination Date, the Borrower shall be deemed to
have selected an Interest Period which will expire on the Revolving
Credit Termination Date;
(iv) in the absence of an election by the Borrower as provided
above, the Borrower shall be deemed to have elected an Advance bearing
interest at the Prime Rate with a 30 day Interest Period;
(v) if any Interest Period for an Advance would otherwise end on
a day which is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day, unless the result of
such extension would be to extend such Interest Period into another
calendar month, in which event such Interest Period shall end on the
immediately preceding Business Day; and
(vi) any Interest Period with respect to a Eurodollar Borrowing
that begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last
Business Day of a calendar month.
"LEVERAGE RATIO" means, at any particular time, the ratio of Liabilities to
Tangible Net Worth.
"LIABILITIES" means, at any particular time, all amounts which, in
conformity with GAAP, would be included as liabilities on a consolidated
balance sheet of the Borrower or its Subsidiaries.
"LIBO RATE" means the rate of interest per annum equal to the arithmetic
average (rounded upward to the nearest whole multiple of one-sixteenth of
one percent) of the respective rates per annum at which deposits in Dollars
are offered to Agent in the interbank eurodollar market at its eurodollar
lending office at approximately 11:00 a.m. Houston, Texas time two Business
Days prior to the first day of an applicable Interest Period, in an amount
approximately equal to the
principal amount of the Advance of the Banks to which such Interest Period
is to apply, and for a period of time comparable to such Interest Period.
"LIEN" means any mortgage, pledge, security interest, encumbrance,
possessory interest, lien or charge of any kind, including any agreement to
give any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof, and the filing of or agreement
to give any financing statement under the Uniform Commercial Code of any
jurisdiction in connection with any of the foregoing.
"LOAN DOCUMENTS" means this Agreement, the Note, the Guaranty and all other
promissory notes, security agreements, deeds of trust, assignments,
guaranties, and other instruments, documents, and agreements executed and
delivered pursuant to or in connection with this Agreement, as such
instruments, documents, and agreements may be amended, modified, renewed,
extended, or supplemented from time to time.
"MAXIMUM RATE" means the maximum rate of nonusurious interest permitted
from day to day by applicable law, including as to Article 5069-1.04,
Vernon's Texas Civil Statutes (and as the same may be incorporated by
reference in other Texas statutes), but otherwise without limitation, that
rate based upon the "indicated rate ceiling" and calculated after taking
into account any and .all relevant fees, payments, and other charges in
respect of the Loan Documents which are deemed to be interest under
applicable law.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan defined as such in Section
3(37) of ERISA to which contributions have been made by the Borrower or any
ERISA Affiliate and which is covered by Title IV of ERISA.
"NET INCOME" means the net income and net losses of the Borrower and its
Subsidiaries, determined in accordance with GAAP, but excluding therefrom
the sum of:
(i) proceeds of life insurance policies;
(ii) gains arising from (a) the sale or disposition of any assets
of the Borrower or its Subsidiaries which are not current assets, as
determined in accordance with GAAP, (b) any write-up, subsequent to
the date hereof, in the book value of any asset owned by the Borrower
or its Subsidiaries and (c) the acquisition by the Borrower or its
Subsidiaries of debt securities for a cost less than principal and
accrued interest thereon;
(iii) the net income of any Person other than a Subsidiary in
which the Borrower or a Subsidiary has any form of equity interest,
except to the extent such Person's net income has been actually
distributed and received by the Borrower or a
Subsidiary in the form of cash or other property (the latter valued at
the fair market value thereof at the time of distribution);
(iv) any portion of the net income of any Subsidiary accrued
prior to the date it becomes a Subsidiary;
(v) extraordinary gains and losses (including, without
limitation, capital gains or losses in aggregate amounts exceeding
$100,000 in any one fiscal year) and extraordinary charges or credits;
(vi) any amounts paid or payable in any currency that, at the
time of determination of Net Income, is not fully convertible into
United States dollars;
(vii) net income of any successor to, or transferee corporation
of, the Borrower or its Subsidiaries prior to consummation of the
transaction that results in any related consolidation, merger or
transfer of assets; and
(viii) any deferred credit (or amortization of a deferred credit)
arising from the acquisition in any manner of any other Person.
"NOTES" means the promissory notes executed by the Borrower and payable to
the order of the Banks, in substantially the form of Exhibit "A" hereto,
and all extensions, renewals, and modifications thereof and each document
and instrument given in substitution therefor.
"OBLIGATED PARTY" means the Guarantor or any other Person who is or becomes
party to any agreement that guarantees or secures payment and performance
of the Obligations or any part thereof.
"OBLIGATIONS" means all obligations, indebtedness, and liabilities of the
Borrower to Agent and the Banks, or any or some of them, now existing or
hereafter arising, whether direct, indirect, related, unrelated, fixed,
contingent, liquidated, unliquidated, joint, several, or joint and several,
including, without limitation, the obligations, indebtedness, and
liabilities of the Borrower under this Agreement and the other Loan
Documents, and all interest accruing thereon and all attorneys' fees and
other expenses incurred in the enforcement or collection thereof.
"PAYOR" has the meaning assigned to it in Section 3.4 hereof.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLAN" means any employee benefit or other plan established or maintained
by the Borrower or any ERISA Affiliate and which is covered by Title IV of
ERISA.
"PRIME RATE" means that variable rate of interest per annum established by
Agent from time to time as its "prime rate." Such rate is set by Agent as a
general reference rate of interest, taking into account such factors as
Agent may deem appropriate, it being understood that many of Agent's
commercial or other loans are priced in relation to such rate, that it is
not necessarily the lowest or best rate charged to any customer and that
Agent may make various commercial or other loans at rates of interest
having no relationship to such rate.
"PROHIBITED TRANSACTION" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code.
"REAL PROPERTY" means the real property and interests in real property
identified on Exhibit "E" attached hereto and all improvements and fixtures
thereon and all appurtenances thereto.
"REGISTER" has the meaning assigned to it in Section 12.5(d) hereof.
"REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA.
"REQUIRED BANKS" means both Banks if there are only two Banks and the Banks
having at least 66-2/3% of the outstanding principal amount of all Advances
if there are more than two Banks.
"RESTRICTED INVESTMENTS" means all investments (including stock purchases,
capital contributions and advances, loans, guarantees and other extensions
of credit) of the Borrower or its Subsidiaries in any Persons, other than:
(a) Investments existing as of the date hereof, and disclosed to
Agent in writing prior to the date hereof;
(b) Investments in direct or indirect obligations of the United
States of America maturing within three years of acquisition;
(c) Investments in commercial paper maturing within 270 days of
acquisition and rated A-1 by S&P or Prime-1 by Xxxxx'x; and
(d) Investments in (i) certificates of deposit maturing within
two years after their date of acquisition and issued by Agent, a Bank
or banks incorporated in the United States of America having capital,
surplus and undivided profits of at least $100,000,000 or (ii) in
Eurodollar certificates of deposit maturing within one year after
their date of acquisition and issued by banks having capital, surplus
and undivided profits of at least $1 billion.
"REVOLVING CREDIT ADVANCE REQUEST" has the meaning assigned to it in
Section 2.5 hereof.
"REVOLVING CREDIT COMMITMENT" means the obligation of the Banks to make
Advances hereunder in an aggregate principal amount at any one time
outstanding up to but not exceeding $3,000,000 as such amount may be
reduced pursuant to Section 2.7.
"REVOLVING CREDIT TERMINATION DATE" means 11:00 A.M. Houston, Texas time on
December 5, 1997, or such earlier date on which the Revolving Credit
Commitment terminates as provided in this Agreement.
"SELECTED RATE" means the rate of interest (either a Prime Rate or an
Adjusted Eurodollar Rate) which is applicable to the principal balance
under the Notes, or portions thereof, designated in accordance with Section
2.5 hereof, subject to the limitations of Sections 3.5 and 3.6 hereof.
"SHORT-TERM DEBT" means all Debt for borrowed money of the Borrower or its
Subsidiaries maturing on demand or within one year from the date of
determination.
"S&P" means Standard & Poor's Corporation.
"STATUTORY RESERVES" means the aggregate (without duplication) of the
highest maximum reserve percentages (expressed as a decimal fraction) of
Agent (including, without limitation, any basic, marginal, special,
emergency or supplemental reserves) established from time to time by the
Board of Governors of the Federal Reserve System and any other banking
authority to which Agent and the Banks are subject, with respect to any
Eurodollar Borrowing, for Eurocurrency Liabilities (as defined in
Regulation D of said Board). Such reserve percentages shall include,
without limitation, those imposed under Regulation D. Eurodollar Borrowings
shall be deemed to constitute "Eurocurrency Liabilities," as provided for
in Regulation D and to be subject to such reserve requirements without
benefit of or credit for proration, exceptions or offsets which may be
available from time to time to Agent or any Bank under Regulation D.
Statutory Reserves shall be adjusted automatically on and as of the
effective date of any change in any reserve percentage.
"SUBSIDIARY" means any Person of which or in which the Borrower and its
other Subsidiaries own or control, directly or indirectly, 50 percent or
more of (a) the combined voting power of all classes having general voting
power under ordinary circumstances to elect a majority of the board of
directors or equivalent body of such Persons, if it is a corporation, (b)
the capital interest or profits interest of such Person, if it is a
partnership, limited liability company, joint venture or similar entity, or
(c) the beneficial interest of such Person, if it is a trust, association
or other unincorporated association or organization.
"TANGIBLE NET WORTH" means the sum of all capital stock, capital in excess
of par value and retained earnings of the Borrower and its Subsidiaries,
determined on a consolidated basis in accordance with GAAP, less (i) the
sum of all goodwill, trade names, trademarks, patents, organization
expense, unamortized debt discount and expense and other similar
intangibles
properly classified as intangibles in accordance with generally accepted
accounting principles and (ii) write-ups of assets subsequent to the date
hereof.
"TOTAL CAPITALIZATION" means Tangible Net worth plus Funded Debt of the
Borrower and its Subsidiaries determined on a consolidated basis in
accordance with GAAP.
"WORKING CAPITAL" means, at any particular time, the amount by which
Current Assets exceed Current Liabilities.
I.2. OTHER DEFINITIONAL PROVISIONS. All definitions contained in this
Agreement are equally applicable to the singular and plural forms of the terms
defined. The words "hereof", 'herein", and "hereunder" and words of similar
import referring to this Agreement refer to this Agreement as a whole and not to
any particular provision of this Agreement. Unless otherwise specified, all
Article and Section references pertain to this Agreement. All accounting terms
not specifically defined herein shall be construed in accordance with GAAP.
Terms used herein that are defined in the Uniform Commercial Code as adopted by
the State of Texas, unless otherwise defined herein, shall have the meanings
specified in the Uniform Commercial Code as adopted by the State of Texas.
II
ADVANCES
II.1. COMMITMENT. Subject to the terms and conditions of this Agreement,
each Bank agrees to make one or more Advances to the Borrower from time to time
from the date hereof to and including the Revolving Credit Termination Date,
provided that the aggregate amount of all Advances at any time outstanding shall
not exceed the Revolving Credit Commitment plus the face amount of outstanding
Credits. Subject to the foregoing limitations, and the other terms and
provisions of this Agreement, the Borrower may borrow, repay, and reborrow
hereunder.
II.2. THE NOTES. The obligation of the Borrower to repay the Advances shall
be evidenced by the Notes.
II.3. REPAYMENT OF ADVANCES. The Borrower shall repay the unpaid principal
amount of all Advances on the Revolving Credit Termination Date.
II.4. INTEREST. Interest shall be subject to the provisions of the Note and
the other provisions of this Article II.
II.5. PROCEDURE FOR ADVANCES UNDER THE REVOLVING CREDIT COMMITMENT. Prior
to the Revolving Credit Termination Date, the Borrower shall give Agent a
written notice executed on behalf of the Borrower by any Authorized Financial
Officer of the Borrower (the "REVOLVING CREDIT ADVANCE REQUEST") of any proposed
Advance under the Revolving Credit Commitment which shall be irrevocable. Each
Revolving Credit Advance Request shall be received by Agent not later than 2:00
p.m. Houston, Texas time, by the Agent, as long as the Agent is the only Bank,
and mutually by the
Agent, the Borrower and Banks if there is more than one Bank, (i) the same
Business Day of any proposed Floating Rate Borrowing requested by the Borrower,
and (ii) at least two Business Days prior to any proposed Eurodollar Borrowing
requested by the Borrower. Each such Revolving Credit Advance Request shall
specify: (i) the Selected Rate which the Borrower desires; (ii) the principal
amount proposed to be covered by the Selected Rate; (iii) the borrowing date
(which shall be a Business Day); and (iv) a proposed Interest Period. The Agent
shall notify each Bank of the contents of each such notice. Not later than 3:00
p.m., Houston, Texas time (or such other time as may be agreed upon between the
Agent, the Borrower and the Banks if there is more than one Bank) on the date
specified for the Advance hereunder, each Bank will make available to the Agent
at the Principal Office in immediately available funds, for the account of the
Borrower, its pro rata share of the Revolving Credit Advance. After the Agent's
receipt of such funds and subject to the other terms and conditions of this
Agreement, the Agent will make the Revolving Credit Advance available to the
Borrower by depositing the same, in immediately available funds, in an account
of the Borrower (designated by the Borrower) maintained with the Agent at
Agent's principal office. If the required Revolving Credit Advance Request has
not been received by Agent prior to the expiration of any then relevant Interest
Period with respect to any Advance, the Borrower shall be deemed to have elected
to repay such Advance in whole on the last day of the current Interest Period
with respect thereto and to reborrow the principal amount of such Advance on
such date as a Floating Rate Borrowing. Agent is hereby authorized to act in
reliance upon a certificate of incumbency from the Borrower's Secretary or
Assistant Secretary as to the identity of the foregoing officers and their due
appointment and authorization to issue Revolving Credit Advance Requests and
receive proceeds of Advances hereunder on behalf of the Borrower unless and
until Agent is in actual receipt of written notice by the Borrower of revocation
of said appointment and authorization. Prior to 2:00 p.m. Houston, Texas, time
on each borrowing date and subject to the provisions of SECTION 2.1, Agent shall
make available to the Borrower in immediately available funds the requested
Advance by deposit to the Borrower's deposit account maintained with Agent or
such other reasonable disposition of such funds as the Borrower shall request of
Agent in writing. Agent shall, and is hereby authorized by the Borrower to,
endorse on the Schedule attached to the Note or on a continuation of such
Schedule attached to and made a part of such Note an appropriate notation
evidencing the date and amount of each Advance and payment and prepayment by the
Borrower of the principal of and interest on the Advance evidenced by such Note,
the Selected Rate of the Advance made and the Selected Rate of the Advance
repaid, but the failure of Agent to make any such endorsement or any incorrect
endorsement shall not subject Agent or any Bank to any liability hereunder and
shall not limit, enlarge or otherwise affect the Obligations of the Borrower
under the Note.
II.6. USE OF PROCEEDS. The proceeds of Advances shall be used for the
Borrower's general working capital purposes.
II.7. CONVERSION AND CONTINUATION OPTIONS. (a) The Borrower may elect from
time to time to convert Eurodollar Borrowings to Floating Borrowings by giving
Agent at least two Business Days' prior irrevocable notice of such election,
PROVIDED that any such conversion of Eurodollar Borrowings shall only be made on
the last day of an Interest Period with respect thereto. The Borrower may elect
from time to time to convert Floating Rate Borrowings to Eurodollar Borrowings
by giving Agent at least two Business Days' prior irrevocable notice of such
election. All or any part of outstanding Eurodollar Borrowings and Floating Rate
Borrowings may be converted as provided herein,
PROVIDED that (i) no Advance may be converted into a Eurodollar Borrowing when
any Default or Event of Default has occurred and is continuing, (ii) partial
conversions shall be in an aggregate principal amount of (A) in the case of any
conversion of Floating Rate Borrowings, $10,000 or a whole multiple of $10,000
in excess thereof and (B) in the case of any conversion of Eurodollar
Borrowings, at least $10,000, (iii) any such conversion may only be made if,
after giving effect thereto, SUBSECTION 2.8(c) shall not have been contravened
and (iv) no Advance may be converted to a Eurodollar Borrowing after the date
that is one month prior to the Revolving Credit Termination Date.
(a) Any Eurodollar Borrowing may be continued as such upon the expiration
of an Interest Period with respect thereto by compliance by the Borrower with
the notice provisions contained in SECTION 2.5; PROVIDED that no Eurodollar
Borrowing may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to a Floating
Rate Borrowing on the last day of the Interest Period, in effect for such
Advance, during which such Default or Event of Default occurs; and PROVIDED,
FURTHER, that if the Borrower shall not have complied with such notice
provisions, the Borrower shall be deemed irrevocably to have requested that such
Eurodollar Borrowing be converted to a Floating Rate Borrowing on the last day
of such Interest Period.
(b) Any borrowings, conversions, payments and prepayments hereunder shall
be in such amounts and be made pursuant to such elections so that, after giving
effect thereto, the unpaid principal amount of Eurodollar Borrowings shall not
be less than $100,000.
III
PAYMENTS
III.1. METHOD OF PAYMENT. All payments of principal, interest, and other
amounts to be made by the Borrower under this Agreement, the Notes, and the
other Loan Documents shall be made to Agent, for the benefit of the Banks, at
its office at 0000 Xxxxxxxxx, Xxxxxxx, Xxxxx 00000, without setoff, deduction,
or counterclaim, in Dollars and in immediately available funds. The Borrower
shall, at the time of making each such payment, specify to Agent the sums
payable by the Borrower under this Agreement, the Notes, or other Loan Document
to which such payment is to be applied. In the event the Borrower fails to so
specify, or if an Event of Default has occurred and is continuing, Agent may
apply such payment to the Obligations in such order and manner as it may elect
in its sole discretion. Each payment received by the Agent under this Agreement
or any other Loan Document for the benefit of a Bank shall be paid promptly to
such Bank, in immediately available funds, for the account of such Bank's
Applicable Lending Office (and if not paid promptly shall be accompanied by
interest thereon at a per annum rate equal to the Federal Funds Rate for the
period commencing on the date due until paid). Whenever any payment under this
Agreement, the Notes, or any other Loan Document shall be stated to be due on a
day that is not a Business Day, such payment may be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of the payment of interest.
III.2. PREPAYMENT. The Borrower may prepay the Notes in whole at any time
or from time to time in part without premium or penalty but with accrued
interest to the date of prepayment on the amount so prepaid, provided that each
partial prepayment shall be in the principal amount of $25,000.00 or an integral
multiple thereof.
III.3. PRO RATA TREATMENT. Except to the extent otherwise provided herein:
(a) the making of Advances shall be made pro rata among the Banks according to
the amounts of their respective Commitments; (b) each payment and prepayment of
principal of or interest on Advances by the Borrower shall be made to the Agent
for the benefit of the Banks holding Advances pro rata in accordance with the
respective unpaid principal amounts of such Advances held by such Banks; and (d)
Interest Periods for Advances shall be allocated among the Banks holding
Advances pro rata according to the respective principal amounts held by such
Banks.
III.4. NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall have been
notified by a Bank or the Borrower (the "Payor") prior to the date on which such
Bank is to make payment to the Agent of the proceeds of a Loan to be made by it
hereunder or the Borrower is to make a payment to the Agent for the account of
one or more of the Banks, as the case may be (such payment being herein called
the "Required Payment"), which notice shall be effective upon receipt, that the
Payor does not intend to make the Required Payment to the Agent, the Agent may
assume that the Required Payment has been made and may, in reliance upon such
assumption (but shall not be required to), make the amount thereof available to
the intended recipient on such date and, if the Payor has not in fact made the
Required Payment to the Agent, the recipient of such payment shall, on demand,
pay to the Agent the amount made available to it together with interest thereon
in respect of the period commencing on the date such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate for such period.
III.5. COMPUTATION OF INTEREST. Interest on all Prime Rate Advances and the
Credit Fees hereunder shall be calculated on the basis of a year of 365/366 days
for the actual number of days elapsed. Interest on all Eurodollar Borrowings
shall be calculated on the basis of a year of 360 days, for the actual number of
days elapsed. Agent shall, as promptly as is practicable, notify the Borrower of
each determination of an Adjusted Eurodollar Rate, and of each change in the
Prime Rate, in accordance with the Agent's customary practices. Any changes in
the rate of interest on the Notes resulting from changes in the Prime Rate shall
become effective as of the opening of business on the day on which such change
in the Prime Rate shall occur. If at any time during the term of the Advance the
rate of interest applicable to any Advance would otherwise exceed the Maximum
Rate, the rate of interest on such Advance shall be limited to the Maximum Rate,
but any subsequent reduction in such interest rate will not reduce the rate of
interest below the Maximum Rate until the total amount of interest earned,
measured by a dollar amount, equals the amount of interest which would have been
earned, measured by a dollar amount, if the interest rate had not been held at
the Maximum Rate. After maturity (stated or by acceleration) of the Notes, the
Notes shall, at the option of Agent, bear interest at the Default Rate until the
Notes are paid in full.
III.6. RESERVE AND CAPITAL ADEQUACY PROVISIONS. (a) The Borrower agrees to
indemnify the Banks against, and pay to the Banks within 10 Business Days of
demand therefor, amounts equal to:
(i) the cost of any increased present and future reserve, capital adequacy
(which are directly related to the cost of funds) or special deposit
requirements or any taxes (other than federal, state, or local income,
franchise, gross profit or other taxes on the overall operations of the Banks),
domestic or foreign, which the Banks are required to keep or pay by reason of
its funding any portion of the Advance bearing interest at an Adjusted
Eurodollar Rate or by reason of or under any outstanding Credits or unfunded
commitments under the Revolving Credit Commitment; (ii) any costs or expenses
incurred by the Banks as a result of the Borrower's failure to borrow a portion
of the Advance to bear interest at an Adjusted Eurodollar Rate once requested
and/or the Borrower's payment or conversion to another Selected Rate hereunder
whether as a result of an acceleration of maturity or otherwise) of all or a
portion of the Advance bearing interest at an Adjusted Eurodollar Rate prior to
the end of the Interest Period and/or the Borrower's failure to make any payment
hereunder when due, including, without limitation, any loss arising from the
reemployment of funds at rates lower than the cost to the Banks of such funds. A
certificate of any Bank, setting forth in reasonable detail the basis for the
determination of such costs and expenses shall be conclusive, absent manifest
error. In determining such amount or amounts, such Bank may use any reasonable
averaging and attribution methods.
(a) In addition to the foregoing provisions, if after the date hereof, any
Bank shall have determined that the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by such Bank with any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Bank's capital as a consequence of its
obligations hereunder or the transactions contemplated hereby to a level below
that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 10 Business Days after demand by such Bank, the Borrower
shall pay to such Bank such additional amount or amounts as will compensate such
Bank for such reduction. A certificate of any Bank claiming compensation under
this Section 3.4 and setting forth the additional amount or amounts to be paid
to it hereunder shall be conclusive, absent manifest error. In determining such
amount or amounts, such Bank may use any reasonable averaging and attribution
methods.
III.7. LIMITATION ON EURODOLLAR BORROWINGS. If, at any time that an
Adjusted Eurodollar Rate is to be determined or a Eurodollar Borrowing is to be
made or continued by Agent or the Banks, Agent reasonably determines that:
(a) with respect to any Advance to bear interest at the Adjusted
Eurodollar Rate, eurodollar deposits in the appropriate amount and for the
appropriate period are not being offered in the interbank eurodollar
market, Agent shall promptly give notice thereof to the Borrower (and such
determination shall be conclusive on the Borrower), and thereafter no new
Eurodollar Borrowings shall be permitted to be outstanding until such time
as eurodollar deposits for the appropriate amount and for the appropriate
periods are again offered in the interbank eurodollar market; or
(b) the Adjusted Eurodollar Rate will not adequately and fairly
reflect the cost to the Banks of making, maintaining, or funding a proposed
Advance that the Borrower has requested be made or continued as or
converted into an Advance bearing interest at the Adjusted Eurodollar Rate,
then Agent shall promptly give notice to the Borrower of such
determination, and any such requested Advance shall bear interest at the
Prime Rate; or
(c) as a result of changes after the date of this Agreement in the
laws of any country or state (domestic or foreign), or the adoption or
making after such date of any interpretations, directives, or regulations
(whether or not having the force of law) by any court, governmental
authority, or reserve bank charged with the interpretation or
administration thereof, it shall be or become unlawful or impossible for
any Bank to make, maintain, or fund any Advance bearing an Adjusted
Eurodollar Rate of interest, the Banks' obligation to make the affected
Advance shall be automatically cancelled, and the affected Advance shall be
automatically converted to an Advance bearing interest at the Prime Rate,
and the Borrower shall pay the Banks any amounts necessary to compensate
the Banks for any such conversion which occurs prior to the last day of the
then current Interest Period for such Advance, in accordance with Section
3.4 hereof.
III.8. DETERMINATION OF INTEREST RATES. Agent shall correctly calculate
each interest rate applicable to the Advances hereunder. Agent will, at the
request of the Borrower, furnish such additional information concerning the
calculation of the interest rate on any Eurodollar Borrowings as the Borrower
may reasonably request. Additionally, Agent may fund Advances hereunder bearing
an Adjusted Eurodollar Rate of interest at any office of Agent which Agent, in
its sole discretion, may elect and at which the Borrower maintains an account
capable of receiving such funding.
III.9. NO PREPAYMENT DURING AN INTEREST PERIOD. The Borrower shall not make
any prepayments on any portion of any Eurodollar Borrowing on a day that is not
the last day of the applicable Interest Period with respect to the same.
IV
GUARANTY
IV.1. GUARANTY. By execution and delivery of the Guaranty, the Guarantor
shall unconditionally and irrevocably guarantee payment of the indebtedness
evidenced by the Note and all other indebtedness created by, and amounts payable
by the Borrower under, this Agreement, to the extent stated in such Guaranty.
V
CONDITIONS PRECEDENT
V.1. INITIAL ADVANCE. The obligation of the Banks to make the initial
Advance is subject to the condition precedent that the Agent shall have received
on or before the day of such Advance all of the following, each dated (unless
otherwise indicated) the date hereof, in form and substance satisfactory to the
Agent:
(a) RESOLUTIONS. Resolutions of the Board of Directors of the Borrower
and the Guarantor certified by its respective Secretary or an Assistant
Secretary which authorize the execution, delivery, and performance by the
Borrower and the Guarantor, as applicable, of this Agreement and the other
Loan Documents to which the Borrower or the Guarantor is or is to be a
party;
(b) INCUMBENCY CERTIFICATE. A certificate of incumbency certified by
the respective Secretary or an Assistant Secretary of the Borrower and the
Guarantor certifying the names of the officers of the Borrower and the
Guarantor, as applicable, authorized to sign this Agreement and each of the
other Loan Documents to which the Borrower or the Guarantor, as applicable,
is or is to be a party (including the certificates contemplated herein)
together with specimen signatures of such officers;
(c) GOOD STANDING CERTIFICATES. Evidence from the appropriate
government officials of the state of Nevada as to the existence and good
standing of the Borrower and the Guarantor;
(d) NOTE. The Note executed by the Borrower;
(e) GUARANTY. The Guaranty executed by the Guarantor;
(f) INSURANCE POLICIES. Evidence acceptable to the Agent of the
existence of the insurance coverage required pursuant to Section 7.5; and
(g) UCC SEARCH. The results of a Uniform Commercial Code search
showing all financing statements and other documents or instruments on file
against the Borrower in the office of the Secretary of State of Texas, such
search to be dated a current date.
V.2. ALL ADVANCES. The obligation of the Banks to make any Advance
(including the initial Advance) is subject to the following additional
conditions precedent:
(a) ADVANCE REQUEST FORM. The Agent shall have received, at least one
Business Day prior to the date of such Advance, an Advance Request Form,
dated the date of such Advance, executed by an authorized officer of the
Borrower, all of the statements in which shall be true and correct on and
as of such date; and
(b) ADDITIONAL DOCUMENTATION. The Agent shall have received such
additional approvals, opinions, or documents as the Agent or its legal
counsel may reasonably request.
VI
REPRESENTATIONS AND WARRANTIES
TO INDUCE THE AGENT AND EACH BANK TO ENTER INTO THIS AGREEMENT, THE
BORROWER REPRESENTS AND WARRANTS TO THE AGENT AND EACH BANK THAT:
VI.1. CORPORATE EXISTENCE. The Borrower (a) is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation; (b) has all requisite corporate power and
authority to own its assets and carry on its business as now being or as
proposed to be conducted; and (c) is qualified to do business in all
jurisdictions in which the nature of its business makes such qualification
necessary and where failure to so qualify would have a material adverse effect
on its business, condition (financial or otherwise), operations, prospects, or
properties. The Borrower has the corporate power and authority to execute,
deliver, and perform its obligations under this Agreement and the other Loan
Documents to which it is or may become a party.
VI.2. FINANCIAL STATEMENTS. The Borrower has delivered to the Agent
unaudited consolidated financial statements of the Borrower as of September 30,
1996. Such financial statements are true and correct, have been prepared in
accordance with GAAP, and fairly and accurately present the financial condition
of the Borrower as of the date indicated therein and the results of operations
for the period indicated therein. The Borrower has no material contingent
liabilities, liabilities for taxes, material forward or long-term commitments,
or unrealized or anticipated losses from any unfavorable commitments not
reflected in such financial statements. There has been no material adverse
change in the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower since the effective date of the most
recent financial statements referred to in this Section.
VI.3. CORPORATE ACTION; NO BREACH. The execution, delivery, and performance
by the Borrower of this Agreement and the other Loan Documents to which the
Borrower is or may become a party have been duly authorized by all requisite
action on the part of the Borrower and do not and will not violate or conflict
with the articles of incorporation or bylaws of the Borrower or any law, rule,
or regulation or any order, writ, injunction, or decree of any court,
governmental authority, or arbitrator, and do not and will not conflict with,
result in a breach of, or constitute a default under, or result in the creation
or imposition of any Lien upon any of the revenues or assets of the Borrower
pursuant to the provisions of any indenture, mortgage, deed of trust, security
agreement, franchise, permit, license, or other instrument or agreement by which
the Borrower or any of its properties is bound.
VI.4. OPERATION OF BUSINESS. The Borrower possesses all licenses, permits,
franchises, patents, copyrights, trademarks, and trade names, or rights thereto,
to conduct its business substantially as now conducted and as presently proposed
to be conducted, and the Borrower is not in violation of any valid rights of
others with respect to any of the forgoing.
VI.5. LITIGATION AND JUDGMENTS. There is no action, suit, investigation, or
proceeding before or by any court, governmental authority, or arbitrator
pending, or to the knowledge of the Borrower, threatened against or affecting
the Borrower, that would, if adversely determined, have a material adverse
effect on the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower or the ability of the Borrower to pay
and perform the Obligations. There are no outstanding judgments against the
Borrower.
VI.6. RIGHTS IN PROPERTIES, LIENS. The Borrower has good and indefeasible
title to or valid leasehold interests in its properties and assets, real and
personal, including the properties, assets, and leasehold interests reflected in
the financial statements described in Section 6.2, and none of the properties,
assets, or leasehold interests of the Borrower is subject to any Lien, except as
permitted by Section 8.3.
VI.7. ENFORCEABILITY. This Agreement constitutes, and the other Loan
Documents to which the Borrower is a party, when delivered, shall constitute the
legal, valid, and binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms, except as limited by
bankruptcy, insolvency, or other laws of general application relating to the
enforcement of creditor's rights.
VI.8. APPROVALS. No authorization, approval, or consent of, and no filing
or registration with, any court, governmental authority, or third party is or
will be necessary for the execution, delivery, or performance by the Borrower of
this Agreement and the other Loan Documents to which the Borrower is or may
become a party or the validity or enforceability thereof.
VI.9. TAXES. The Borrower has filed all tax returns (federal, state, and
local) required to be filed, including all income, franchise, employment,
property, and sales taxes, and have paid all of their respective liabilities for
taxes, assessments, and governmental charges and other levies that are due and
payable, and the Borrower knows of no pending investigation of the Borrower by
any taxing authority or of any pending but unassessed tax liability of the
Borrower.
VI.10. USE OF PROCEEDS; MARGIN SECURITIES. The Borrower is not engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying margin stock (within the
meaning of Regulations G, T, U, or X of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any extension of credit under
this Agreement will be used to purchase or carry any such margin stock or to
extend credit to others for the purpose of purchasing or carrying margin stock.
VI.11. ERISA. The Borrower has complied with all applicable minimum funding
requirements and all other applicable and material requirements of ERISA, and
there are no existing conditions that would give rise to liability thereunder.
No Reportable Event has occurred in connection with any Plan that might
constitute grounds for the termination thereof by the PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer such Plan.
VI.12. DISCLOSURE. No statement, information, report, representation, or
warranty made by the Borrower in this Agreement or in any other Loan Document or
furnished to the Agent or any Bank in connection with this Agreement or any of
the transactions contemplated hereby contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements herein
or therein not misleading. There is no fact known to the Borrower which has a
material adverse effect, or which might in the future have a material adverse
effect, on the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower that has not been disclosed in writing
to the Agent.
VI.13. SUBSIDIARIES. The Borrower has no Subsidiaries other than Cogniseis
Development, Inc., Symtromix Corporation and Syntron, Inc.
VI.14. AGREEMENTS. The Borrower is not a party to any indenture, loan, or
credit agreement, or to any lease or other agreement or instrument, or subject
to any charter or corporate restriction which could have a material adverse
effect on the business, condition (financial or otherwise), operations,
prospects, or properties of the Borrower, or the ability of the Borrower to pay
and perform its obligations under the Loan Documents to which it is a party. the
Borrower is not in default in any material respect in the performance,
observance, or fulfillment of any of the obligations, covenants, or conditions
contained in any agreement or instrument material to its business to which it is
a party.
VI.15. COMPLIANCE WITH LAWS. (i) the Borrower is not: (x) in default with
respect to any order, writ, injunction or decree of any court to which it is a
named party, or (y) in default under any law, rule, regulation, ordinance or
order relating to its or their respective businesses, the sanctions and
penalties resulting from which defaults described in clauses (x) and (y) would,
individually or in the aggregate, have a material adverse effect on the
business, properties, operations, assets or financial condition of the Borrower.
(i) The Borrower is not a "national" of a "designated foreign country", a
Person defined as a "designated foreign country", an entity defined as "Iran" or
an "Iranian Entity," an entity defined as "Nicaragua" or a "Nicaraguan," an
"Entity controlled by the South African Government," or an entity defined as the
"Government of Libya" or a "Libyan Person" within the meaning of definitions in
the Foreign Asset Control, Cuban Assets Control, Iranian Assets Control,
Nicaraguan Control, South African Transaction or Libyan Sanctions Regulations of
the Unites States Treasury Department.
VI.16. INVESTMENT COMPANY ACT. The Borrower is not an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
VI.17. PUBLIC UTILITY HOLDING COMPANY ACT. The Borrower is not a "holding
company" or a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" or a "public utility" within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
VI.18. ENVIRONMENTAL MATTERS.
(a) The Borrower, and all of its properties, assets, and operations
are in compliance with all Environmental Laws. The Borrower is not aware
of, nor has the Borrower received notice of, any past, present, or future
conditions, events, activities, practices, or incidents which may interfere
with or prevent the compliance or continued compliance of the Borrower with
all Environmental Laws.
(b) The Borrower has obtained all permits, licenses, and
authorizations which are required under Environmental Laws.
(c) There is no action, suit, proceeding, investigation, or inquiry
before any court, administrative agency, or other governmental authority
pending or, to the knowledge of the Borrower, threatened against the
Borrower relating in any way to any Environmental Law. The Borrower (i)
does not have any liability for remedial action under any Environmental
Law, (ii) has not received any request for information by any governmental
authority with respect to the condition, use, or operation of any of its
properties or assets, or (iii) has not received any notice from any
governmental authority or other Person with respect to any violation of or
liability under any Environmental Law.
(d) No Lien arising under any Environmental Law has attached to any of
the properties or assets of the Borrower.
VII
POSITIVE COVENANTS
THE BORROWER COVENANTS AND AGREES THAT, AS LONG AS THE OBLIGATIONS OR ANY
PART THEREOF ARE OUTSTANDING OR ANY BANK HAS ANY COMMITMENT HEREUNDER, THE
BORROWER WILL PERFORM AND OBSERVE THE FOLLOWING POSITIVE COVENANTS, UNLESS THE
REQUIRED BANKS SHALL OTHERWISE CONSENT IN WRITING:
VII.1. REPORTING REQUIREMENTS. The Borrower will furnish to the Agent:
(a) QUARTERLY FINANCIAL STATEMENTS. As soon as available, and in any
event within 45 days after the end of each of the first three quarters of
each fiscal year of the Borrower and 90 days after the end of the fourth
quarter of each fiscal year of the Borrower, a copy of an unaudited
consolidated financial report of the Borrower as of the end of such fiscal
quarter and for the portion of the fiscal year then ended, containing
balance sheets, statements of income, statements of retained earnings and
cash flows, in each case setting forth in comparative form the figures for
the corresponding period of the preceding fiscal year, all in reasonable
detail certified by the Treasurer or Assistant Treasurer of the Borrower to
have been prepared in accordance with GAAP and to fairly and accurately
present (subject to year-end audit adjustments) the financial condition and
results of operations of the Borrower at the date and for the periods
indicated therein;
(b) CERTIFICATE OF NO DEFAULT. Concurrently with the delivery of each
of the financial statements referred to in subsections 7.01(a), a
certificate of the Treasurer or Assistant Treasurer of the Borrower (i)
stating that to the best of such officer's knowledge, (a) no Default or
Event of Default has occurred and is continuing, or if Default or an Event
of Default has occurred and is continuing, a statement as to the nature
thereof and the action which is proposed to be taken with respect thereto
and (b) no material adverse change has occurred in the condition of the
Borrower either financial or otherwise, and (ii) showing in reasonable
detail the calculations demonstrating compliance with Article IX;
(c) NOTICE OF LITIGATION. Promptly after the commencement thereof,
notice of all actions, suits, and proceedings before any court or
governmental department, commission, board, bureau, agency, or
instrumentality, domestic or foreign, affecting the Borrower in which the
damages sought exceed $250,000;
(d) NOTICE OF DEFAULT. As soon as possible and in any event within
five days after the occurrence of each Default or Event of Default, a
written notice setting forth the details of such Default or Event of
Default or the action which the Borrower has taken and proposes to take
with respect thereto; and
(e) GENERAL INFORMATION. Promptly, such other information concerning
the Borrower as the Agent may from time to time reasonably request.
VII.2. MAINTENANCE OF EXISTENCE. The Borrower will preserve and maintain
its corporate existence and all of its leases, privileges, licenses, permits,
franchises, qualifications, and rights that are necessary or desirable in the
ordinary conduct of its business as presently conducted in an orderly and
efficient manner in accordance with good business practices except as permitted
pursuant to Sections 8.5 and 8.6.
VII.3. MAINTENANCE OF PROPERTIES. The Borrower will maintain, keep, and
preserve all of its properties (tangible and intangible) necessary or useful in
the proper conduct of its business in good working order and condition ordinary
wear and tear excepted.
VII.4. TAXES AND CLAIMS. The Borrower will pay or discharge at or before
maturity or before becoming delinquent (i) all taxes, levies, assessments, and
governmental charges imposed on it or its income or profits or any of its
property, and (ii) all lawful claims for labor, material, and supplies, which,
if unpaid, might become a Lien upon any of its property; provided, however, that
the Borrower shall not be required to pay or discharge any tax, levy,
assessment, or governmental charge which is being contested in good faith by
appropriate proceedings diligently pursued, and for which adequate reserves have
been established.
VII.5. INSURANCE. The Borrower will maintain or cause to be maintained,
with financially sound and reputable insurance companies workmen's compensation
insurance, liability insurance, and insurance on its property, assets, and
business at least in such amounts and against such
risks as are usually insured against by Persons engaged in similar businesses
and in no less than the amounts in existence on the date of this Agreement.
VII.6. INSPECTION RIGHTS. At any reasonable time and from time to time, the
Borrower will permit representatives of the Agent to examine and make copies of
the books and records of, and visit and inspect the properties of the Borrower,
and to discuss the business, operations, and financial condition of the Borrower
with its officers and employees.
VII.7. KEEPING BOOKS AND RECORDS. The Borrower will maintain proper books
of record and account in which full, true, and correct entries in conformity
with GAAP shall be made of all dealings and transactions in relation to its
business and activities.
VII.8. COMPLIANCE WITH LAWS. The Borrower will comply with all laws, rules
and regulations relating to its business, other than the laws, rules and
regulations the failure to comply with which and the sanctions and penalties
resulting therefrom, when taken together with the failure to comply with all
other laws, rules and regulations and the sanctions and penalties resulting
therefrom, would not have an adverse effect on the operations, business,
property, assets or financial condition of the Borrower, or would not result in
the creation of a Lien which, if incurred in the ordinary course of business,
would not be permitted by Section 8.3 on any of the property of the Borrower;
provided, however, that the Borrower shall not be required to comply with laws,
rules and regulations the validity or applicability of which are being contested
in good faith and by appropriate proceedings.
VII.9. COMPLIANCE WITH AGREEMENTS. The Borrower will comply in all material
respects with all agreements, contracts, and instruments binding on it or
affecting its properties or business, if the failure to comply with such
agreements, contracts and instruments could have a material adverse effect on
the business, condition (financial or otherwise), operations, prospects or
properties of the Borrower.
VII.10. FURTHER ASSURANCES. The Borrower will execute and deliver such
further instruments as may be requested by the Agent to carry out the provisions
and purposes of this Agreement and the other Loan Documents.
VII.11. ERISA. The Borrower will comply with all minimum funding
requirements, and all other material requirements, of ERISA, if applicable, so
as not to give rise to any liability thereunder.
VII.12. CHANGE IN BUSINESS. The Borrower shall continue to carry on
substantially in the same types of business carried on by the Borrower as of the
date hereof and activities which are ancillary, incidental or necessary to the
ongoing business of the Borrower.
VIII
NEGATIVE COVENANTS
THE BORROWER COVENANTS AND AGREES THAT, AS LONG AS THE OBLIGATIONS OR ANY
PART THEREOF ARE OUTSTANDING OR ANY BANK HAS ANY COMMITMENT HEREUNDER, THE
BORROWER WILL PERFORM AND OBSERVE THE FOLLOWING NEGATIVE COVENANTS, UNLESS THE
REQUIRED BANKS SHALL OTHERWISE CONSENT IN WRITING:
VIII.1. LEASE RENTALS. The Borrower will not, at any time, permit Aggregate
Long-Term Lease Rentals to exceed 15% of Tangible Net Worth; provided, however,
that Aggregate Long- Term Lease Rentals may exceed 15% of Tangible Net Worth to
the extent that such Aggregate Long-Term Lease Rentals in excess of 15%
constitute Capitalized Lease Obligations, which, if included as Funded Debt,
could be incurred under Section 8.2.
VIII.2. DEBT. The Borrower will not, and will not permit its Subsidiaries
to, create, assume, incur, guarantee or otherwise become liable, directly or
indirectly, in respect of any Debt other than:
(a) The Note;
(b) Funded Debt of the Borrower and its Subsidiaries existing on the
date hereof and reflected in the financial statements referred to in
Section 6.2;
(c) Other Funded Debt of the Borrower, if after giving effect thereto
and to the application of the proceeds thereof, Funded Debt of the Borrower
and its Subsidiaries determined on a consolidated basis in accordance with
GAAP then to be outstanding would not exceed 55% of Total Capitalization;
(d) Debt to the Guarantor; and
VIII(cc) Acceptable Permanent Financing.
VIII.3. LIENS. The Borrower will not, and will not permit its Subsidiaries
to, create, assume, incur or permit to exist, directly or indirectly, any Lien
on its properties or assets, whether now owned or hereafter acquired, except:
(a) Liens existing on property of the Borrower and its Subsidiaries
and Capitalized Leases of the Borrower and its Subsidiaries as of the date
hereof;
(b) Liens, pledges or deposits in connection with xxxxxxx'x
compensation, social security, taxes, assessments or other similar charges
or deposits required to be made in the ordinary course of business and not
in connection with borrowing money;
(c) Construction or materialmen's or warehousemen's Liens securing
obligations not overdue, or if overdue, being contested in good faith by
appropriate proceedings;
(d) Pledges or deposits for the purpose of securing a stay or
discharge of the course of any legal proceedings, providing the aggregate
amount of said deposits does not exceed $150,000;
(e) Encumbrances in the nature of zoning restrictions, easements,
rights and restrictions of record on the use of real property, landlord's
and lessor's liens in the ordinary course of business, which do not
materially detract from the value of such property or impair the use
thereof;
(f) Liens incurred in connection with progress payments made by the
United States of America with respect to government contracts entered into
with the United States of America or a contractor performing a government
contract or with respect to inventory purchased in connection with such
government contracts;
(g) Liens on property acquired by the Borrower or its Subsidiaries
after the date hereof, created in respect of such property within 180 days
after the date of acquisition thereof and not extending to other property
of the Borrower or its Subsidiaries and Capitalized Lease Obligations
incurred subsequent to the date hereof; provided that, the Debt secured by
such Lien or Capitalized Lease Obligations does not exceed 100% of the
purchase price of such Property; and
VIII(h) Acceptable Encumbrances.
VIII.4. MERGER AND CONSOLIDATION. The Borrower will not merge or
consolidate with any Person, except that:
(a) The Borrower may consolidate with or merge into any Person or sell
or otherwise transfer substantially all of its assets, or permit any other
Person to merge into it, provided that immediately after giving effect
thereto,
(i) The Borrower or another subsidiary of the Guarantor shall be
the successor corporation, which corporation shall be a corporation
organized under the laws of a state of the United States having
substantially all of its assets in the United States and conducting
substantially all of its business in the United States; and
(ii) The Borrower shall be in compliance with all provisions of
this Agreement, or if the Borrower is not the successor corporation,
the obligations of the Borrower with respect to the Note shall be
assumed in writing by
such other subsidiary of the Guarantor, and such other subsidiary of
the Guarantor shall be in compliance with all provisions of this
Agreement.
VIII.5. SALE OF ASSETS. The Borrower will not, and will not permit its
Subsidiaries to, sell, lease, transfer or otherwise dispose of any assets, in
one or a series of transactions, other than in the ordinary course of business,
to any Person if in any twelve month period of the Borrower, after giving effect
to such sale, lease, transfer or other disposition, the aggregate of the greater
of book or fair market value of all such assets sold, leased, transferred or
otherwise disposed of in such twelve month period would exceed 20% of Tangible
Net Worth.
VIII.6. DEALINGS WITH AFFILIATES. The Borrower will not enter into any
transaction (including the furnishing of goods or services) with an Affiliate
except in the ordinary course of business as presently conducted (which includes
the payment of management fees and the provision of funds for payment of taxes)
and on terms and conditions no less favorable to the Borrower than would be
obtained in a comparable arm's-length transaction with a Person not an
Affiliate.
VIII.7. LOANS AND INVESTMENTS. The Borrower will not make any advance,
loan, extension of credit, or capital contribution to or investment in, or
purchase any bonds, notes, debentures, or other securities of any Person, except
Restricted Investments and investments permitted under Section 8.4; provided,
however, that notwithstanding any provision of this Section 8.7 to the contrary,
the Borrower may make advances and loans to the Guarantor and to its
Subsidiaries.
VIII.8. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not (i)
conduct any activity which is likely to cause a release or threatened release of
any Hazardous Substance, or (i) conduct any activity or use any of their
respective properties or assets in any manner that is likely to violate any
Environmental Law.
IX
FINANCIAL COVENANTS
The Borrower covenants and agrees that, as long as the Obligations or any
part thereof are outstanding or any Bank has any commitment hereunder, the
Borrower will observe and perform the following financial covenants, unless the
Required Banks shall otherwise consent in writing:
IX.1. TANGIBLE NET WORTH. The Borrower will at all times maintain Tangible
Net Worth in an amount not less than $60,000,000.
IX.2. WORKING CAPITAL. The Borrower will at all times maintain Working
Capital in an amount not less than $20,000,000.
IX.3. RELATIONSHIP OF FUNDED DEBT TO TOTAL CAPITALIZATION. The Borrower
will not at any time permit Funded Debt (excluding any intercompany or Affiliate
Debt) of the Borrower and its Subsidiaries to exceed 55% of its consolidated
Total Capitalizations..
IX.4. DEBT SERVICE RATIO. The Borrower will at all times maintain a Debt
Service Ratio of not less than 2.0 to 1.0.
IX.5. CAPITAL EXPENDITURES. The Borrower will not permit the aggregate
Capital Expenditures to exceed $6,000,000.00 during any fiscal year.
X
DEFAULT
X.1. EVENTS OF DEFAULT. Each of the following shall be deemed an "Event of
Default":
(a) The Borrower shall fail to pay when due the Obligations or any
part thereof and such failure shall have continued for three days.
(b) Any representation or warranty made or deemed made by the Borrower
or any Obligated Party (or any of their respective officers) in any Loan
Document or in any certificate, report, notice, or financial statement
furnished at any time in connection with this Agreement shall be false,
misleading, or erroneous in any material respect when made or deemed to
have been made.
(c) The Borrower or any Obligated Party shall fail to perform,
observe, or comply with any covenant, agreement, or term contained in this
Agreement or any other Loan Document and such failure shall have continued
for 30 days after management of the Borrower knows or should have known of
such failure.
(d) The Borrower or any Obligated Party shall commence a voluntary
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 a 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 generally fail to
pay its debts as they become due or shall take any corporate action to
authorize any of the foregoing.
(e) An involuntary proceeding shall be commenced against the Borrower
or any Obligated Party 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 for it or a substantial
part of its property, and such involuntary proceeding shall remain
undismissed and unstayed for a period of 30 days.
(f) The Borrower or any Obligated Party shall fail to discharge within
a period of sixty (60) days after the commencement thereof any attachment,
sequestration, or similar proceeding or proceedings involving an aggregate
amount in excess of $500,000 against any of its assets or properties.
(g) The Borrower or any Obligated Party shall fail to satisfy and
discharge within a period of 60 days any judgment or judgments against it
for the payment of money in an aggregate amount in excess of $500,000.
(h) The Borrower or any Obligated Party shall default (i) in the
payment of the principal of or interest on any other Debt in excess of
$250,000, individually or in the aggregate, as and when the same shall
become due and payable, of the Borrower or any Obligated Party, as
applicable, for borrowed money, (ii) under any mortgage, agreement or other
instrument under or pursuant to which such Debt in excess of $250,000,
individually or in the aggregate, for borrowed money is issued, or (iii)
under any Capitalized Lease of the Borrower or any Obligated Party, as
applicable, or any operating lease, with aggregate payments or rentals in
excess of $250,000, individually or in the aggregate, regardless of whether
such default would be an Event of Default hereunder, and such default under
(i), (ii) or (iii) above shall result in the acceleration of such Debt.
(i) This Agreement or any other Loan Document shall cease to be in
full force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by the Borrower,
any Obligated Party or any of their respective shareholders, or the
Borrower or any Obligated Party shall deny that it has any further
liability or obligation under any of the Loan Documents.
(j) Any of the following events shall occur or exist with respect to
the Borrower or any ERISA Affiliate: (i) any Prohibited Transaction
involving any Plan; (ii) any Reportable Event with respect to any Plan;
(iii) the filing under Section 4041 of ERISA of a notice of intent to
terminate any Plan or the termination of any Plan; (iv) any event or
circumstance that might constitute grounds entitling the PBGC to institute
proceedings under Section 4042 of ERISA for the termination of, or for the
appointment of a trustee to administer, any Plan, or the institution by the
PBGC of any such proceedings; (v) complete or partial withdrawal under
Section 4201 or 4204 of ERISA from a Multiemployer Plan or the
reorganization, insolvency, or termination of any Multiemployer Plan; and
in each case above, such event or condition, together with all other events
or conditions, if any, have subjected or could in the reasonable opinion of
the Agent subject the Borrower to any tax, penalty, or other liability to a
Plan, a Multiemployer Plan, the PBGC, or otherwise (or any combination
thereof) which in the aggregate exceed or could reasonably be expected to
exceed $100,000.
X.2. REMEDIES UPON DEFAULT. If any Event of Default shall occur, any Bank
may without notice terminate its commitment to lend hereunder and declare the
Obligations or any part thereof to be immediately due and payable, and the same
shall thereupon become immediately due and payable, without notice, demand,
presentment, notice of dishonor, notice of acceleration, notice of intent to
accelerate, notice of intent to demand, protest, or other formalities of any
kind, all of which are hereby expressly waived by the Borrower; provided,
however, that upon the occurrence of an Event of Default under Section 10.1(d)
or Section 10.1(e), the commitment of the Banks to lend hereunder shall
automatically terminate, and the Obligations shall become immediately due and
payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, notice of intent to demand,
protest, or other formalities of any kind, all of which are hereby expressly
waived by the Borrower. If any Event of Default shall occur, each Bank may
exercise all rights and remedies available to it in law or in equity, under the
Loan Documents, or otherwise.
X.3. PERFORMANCE BY THE AGENT. If the Borrower shall fail to perform any
covenant, duty, or agreement contained in any of the Loan Documents, the Agent
may perform or attempt to perform such covenant, duty, or agreement on behalf of
the Borrower. In such event, the Borrower shall, at the request of the Agent,
promptly pay any amount expended by the Agent in such performance or attempted
performance to the Agent, together with interest thereon at the Default Rate
from the date of such expenditure until paid. Notwithstanding the foregoing, it
is expressly agreed that the Agent shall not have any liability or
responsibility for the performance of any obligation of the Borrower under this
Agreement or any other Loan Document.
XI
THE AGENT
XI.1. APPOINTMENT, POWERS AND IMMUNITIES. In order to expedite the various
transactions contemplated by this agreement, the Banks hereby irrevocably
appoint and authorize Xxxxx Fargo Bank (Texas), National Association, to act as
their Agent hereunder and under each of the other Loan Documents. Xxxxx Fargo
Bank (Texas), National Association consents to such appointment and agrees to
perform the duties of the Agent as specified herein. The Banks authorize and
direct the Agent to take such action in their name and on their behalf under the
terms and provisions of the Loan Documents and to exercise such rights and
powers thereunder as are specifically delegated to or required of the Agent for
the Banks, together with such rights and powers as are reasonably incidental
thereto. The Agent is hereby expressly authorized to act as the Agent on behalf
of itself and the other Banks:
(a) To receive on behalf of each of the Banks any payment of
principal, interest, fees or other amounts paid pursuant to this Agreement
and the Notes and to distribute to each Bank its pro rata share of all
payments so received as provided in this Agreement;
(b) To receive all documents and items to be furnished under the Loan
Documents;
(c) To act as nominee for and on behalf of the Banks in and under the
Loan Documents;
(d) To arrange for the means whereby the funds of the Banks are to be
made available to the Borrower;
(e) To distribute to the Banks information, requests, notices,
payments, prepayments, documents and other items received from the
Borrower, the other Obligated Parties, and other Persons;
(f) To execute and deliver to the Borrower, the other Obligated
Parties, and other Persons, all requests, demands, approvals, notices, and
consents received from the Banks;
(g) To the extent permitted by the Loan Documents, to exercise on
behalf of each Bank all rights and remedies of the Banks upon the
occurrence of any Event of Default; and
(h) To take such other actions as may be requested by Required Banks.
Neither the Agent nor any of its Affiliates, officers, directors,
employees, attorneys, or agents shall be liable for any action taken or omitted
to be taken by any of them hereunder or otherwise in connection with this
Agreement or any of the other Loan Documents except for its or their own gross
negligence or willful misconduct. Without limiting the generality of the
preceding sentence, the Agent (i) may treat the payee of any Note as the holder
thereof until the Agent receives written notice of the assignment or transfer
thereof signed by such payee and in form satisfactory to the Agent; (ii) shall
have no duties or responsibilities except those expressly set forth in this
Agreement and the other Loan Documents, and shall not by reason of this
Agreement or any other Loan Document be a trustee or fiduciary for any Bank;
(iii) shall not be required to initiate any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent requested by the
Required Banks; (iv) shall not be responsible to the Banks for any recitals,
statements, representations or warranties contained in this Agreement or any
other Loan Document, or any certificate or other document referred to or
provided for in, or received by any of them under, this Agreement or any other
Loan Document, or for the value, validity, effectiveness, enforceability, or
sufficiency of this Agreement or any other Loan Document or any other document
referred to or provided for herein or therein or for any failure by any Person
to perform any of its obligations hereunder or thereunder; (v) may consult with
legal counsel (including counsel for the Borrower), independent public
accountants, and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants, or experts; and (vi) shall incur no
liability under or in respect of any Loan Document by acting upon any notice,
consent, certificate, or other instrument or writing believed by it to be
genuine and signed or sent by the proper party or parties. As to any matters not
expressly provided
for by this Agreement, the Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder in accordance with instructions
signed by the Required Banks, and such instructions of the Required Banks and
any action taken or failure to act pursuant thereto shall be binding on all of
the Banks; PROVIDED, however, that the Agent shall not be required to take any
action which exposes the Agent to personal liability or which is contrary to
this Agreement or any other Loan Document or applicable law.
XI.2. RIGHTS OF THE AGENT AS A BANK. With respect to its Commitment, the
Advances made by it and the Notes issued to it, Xxxxx Fargo Bank (Texas),
National Association in its capacity as a Bank hereunder shall have the same
rights and powers hereunder as any other Bank and may exercise the same as
though it were not acting as the Agent, and the term "Bank" or "Banks" shall,
unless the context otherwise indicates, include the Agent in its individual
capacity. The Agent and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to, act as trustee under
indentures of, provide merchant banking services to, and generally engage in any
kind of business with the Borrower, any of its Subsidiaries, any other Obligated
Party, and any other Person who may do business with or own securities of the
Borrower, any Subsidiary, or any other Obligated Party, all as if it were not
acting as the Agent and without any duty to account therefor to the Banks.
XI.3. SHARING OF PAYMENTS, ETC. If any Bank shall obtain any payment of any
principal of or interest on any Advance made by it under this Agreement or
payment of any other obligation under the Loan Documents then owed by the
Borrower or any other Obligated Party to such Bank, whether voluntary,
involuntary, through the exercise of any right of setoff, banker's lien,
counterclaim or similar right, or otherwise, in excess of its pro rata share,
such Bank shall promptly purchase from the other Banks participations in the
Advances held by them hereunder in such amounts, and make such other adjustments
from time to time as shall be necessary to cause such purchasing Bank to share
the excess payment ratably with each of the other Banks in accordance with its
pro rata portion thereof. To such end, all of the Banks shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if all or any portion of such excess payment is thereafter rescinded or must
otherwise be restored. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any Bank so purchasing a
participation in the Advances made by the other Banks may exercise all rights of
setoff, banker's lien, counterclaim, or similar rights with respect to such
participation as fully as if such Bank were a direct holder of Advances to the
Borrower in the amount of such participation. Nothing contained herein shall
require any Bank to exercise any such right or shall affect the right of any
Bank to exercise, and retain the benefits of exercising, any such right with
respect to any other indebtedness or obligation of the Borrower.
XI.4. INDEMNIFICATION. The Banks hereby agree to indemnify the Agent from
and hold the Agent harmless against (to the extent not reimbursed under Sections
12.1 and 12.2, but without limiting the obligations of the Borrower under
Sections 12.1 and 12.2), ratably in accordance with their respective
Commitments, any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, deficiencies, suits, costs, expenses (including attorneys'
fees), and disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of any of the Loan Documents or any action taken or omitted to be taken by
the Agent under or in respect of any of the Loan Documents; PROVIDED, further,
that no Bank shall be liable
for any portion of the foregoing to the extent caused by the Agent's gross
negligence or willful misconduct. Without limitation of the foregoing, it is the
express intention of the Banks that the Agent shall be indemnified hereunder
from and held harmless against all of such liabilities, obligations, losses,
damages, penalties, actions, judgments, deficiencies, suits, costs, expenses
(including attorneys' fees), and disbursements of any kind or nature directly or
indirectly arising out of or resulting from the sole or contributory negligence
of the Agent. Without limiting any other provision of this Section, each Bank
agrees to reimburse the Agent promptly upon demand for its pro rata share
(calculated on the basis of the Commitments) of any and all out-of-pocket
expenses (including attorneys' fees) incurred by the Agent in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings, or otherwise) of,
or legal advice in respect of rights or responsibilities under, the Loan
Documents, to the extent that the Agent is not reimbursed for such expenses by
the Borrower.
XI.5. INDEPENDENT CREDIT DECISIONS. Each Bank agrees that it has
independently and without reliance on the Agent or any other Bank, and based on
such documents and information as it has deemed appropriate, made its own credit
analysis of the Borrower and decision to enter into this Agreement and that it
will, independently and without reliance upon the Agent or any other Bank, and
based upon such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any of the other Loan Documents. The Agent shall
not be required to keep itself informed as to the performance or observance by
the Borrower or any Obligated Party of this Agreement or any other Loan Document
or to inspect the properties or books of the Borrower or any Obligated Party.
Except for notices, reports and other documents and information expressly
required to be furnished to the Banks by the Agent hereunder or under the other
Loan Documents, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other financial information concerning the affairs,
financial condition or business of the Borrower or any Obligated Party (or any
of their Affiliates) which may come into the possession of the Agent or any of
its Affiliates.
XI.6. SEVERAL COMMITMENTS. The Commitments and other obligations of the
Banks under this Agreement are several. The default by any Bank in making an
Advance in accordance with its Commitment shall not relieve the other Banks of
their obligations under this Agreement. In the event of any default by any Bank
in making any Advance, each nondefaulting Bank shall be obligated to make its
Advance but shall not be obligated to advance the amount which the defaulting
Bank was required to advance hereunder. In no event shall any Bank be required
to advance an amount or amounts which shall in the aggregate exceed such Bank's
Commitment. No Bank shall be responsible for any act or omission of any other
Bank.
XI.7. SUCCESSOR AGENT. Subject to the appointment and acceptance of a
successor Agent as provided below, the Agent may resign at any time by giving
notice thereof to the Banks and the Borrower and the Agent may be removed at any
time with or without cause by the Required Banks. Upon any such resignation or
removal, the Required Banks will have the right to appoint a successor Agent. If
no successor Agent shall have been so appointed by the Required Banks and shall
have accepted such appointment within 30 days after the retiring Agent's giving
of notice of resignation or the Required Banks' removal of the retiring Agent,
then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the United States of America or any State thereof and having combined
capital and surplus of at least $100,000,000. Upon the acceptance of its
appointment as successor Agent, such successor Agent shall thereupon succeed to
and become vested with all rights, powers, privileges, immunities, and duties of
the resigning or removed Agent, and the resigning or removed Agent shall be
discharged from its duties and obligations under this Agreement and the other
Loan Documents. After any Agent's resignation or removal as the Agent, the
provisions of this Article XI shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was the
Agent.
XII
MISCELLANEOUS
XII.1. EXPENSES OF THE AGENT AND THE BANKS. The Borrower hereby agrees to
pay the Agent and each Bank on demand: (i) all reasonable costs and expenses
incurred by the Agent or such Bank in connection with the preparation,
negotiation, and execution of this Agreement and the other Loan Documents and
any and all amendments, modifications, renewals, extensions, and supplements
thereof and thereto, including, without limitation, the fees and expenses of the
Agent or such Bank's legal counsel, (ii) all reasonable costs and expenses
incurred by the Agent or such Bank in connection with the enforcement of this
Agreement or any other Loan Document, including, without limitation, the fees
and expenses of the Agent's or such Bank's legal counsel, and (iii) all other
reasonable costs and expenses incurred by the Agent or such Bank in connection
with this Agreement or any other Loan Document, including, without limitation,
all costs, expenses, taxes, assessments, filing fees, and other charges levied
by any governmental authority or otherwise payable in respect of this Agreement
or any other Loan Document.
XII.2. INDEMNIFICATION. The Borrower hereby indemnifies the Agent, each
Bank and each Affiliate thereof and their respective officers, directors,
employees, attorneys, and agents from, and holds each of them harmless against,
any and all losses, liabilities, claims, damages, penalties, judgments, costs,
and expenses (including attorneys' fees) to which any of them may become subject
which directly or indirectly arise from or relate to (i) the negotiation,
execution, delivery, performance, administration, or enforcement of any of the
Loan Documents, (ii) any of the transactions contemplated by the Loan Documents,
(iii) any breach by the Borrower of any representation, warranty, covenant, or
other agreement contained in any of the Loan Documents, (iv) the presence,
release, threatened release, disposal, removal, or cleanup of any Hazardous
Substance located on, about, within, or affecting any of the properties or
assets of the Borrower or any Subsidiary, or (v) any investigation, litigation,
or other proceeding, including, without limitation, any threatened
investigation, litigation, or other proceeding relating to any of the foregoing.
Without limiting any provision of this Agreement or of any other Loan Document,
it is the express intention of the parties hereto that each Person to be
indemnified under this Section shall be indemnified from and held harmless
against any and all losses, liabilities, claims, damages, penalties, judgments,
costs, and expenses (including attorneys' fees) arising out of or resulting from
the sole or contributory negligence of the Person to be indemnified.
XII.3. LIMITATION OF LIABILITY. None of the Agent, any Bank or any
Affiliate, officer, director, employee, attorney, or agent thereof shall have
any liability with respect to, and the Borrower hereby waives, releases, and
agrees not to xxx any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by the Borrower in
connection with, arising out of, or in any way related to, this Agreement or any
of the other Loan Documents, or any of the transactions contemplated by this
Agreement or any of the other Loan Documents. The Borrower hereby waives,
releases, and agrees not to xxx the Agent or any Bank or any of their respective
Affiliates, officers, directors, employees, attorneys, or agents for punitive
damages in respect of any claim in connection with, arising out of, or in any
way related to, this Agreement or any of the other Loan Documents, or any of the
transactions contemplated by this Agreement or any of the other Loan Documents.
XII.4. NO WAIVER; CUMULATIVE REMEDIES. No failure on the part of the Agent
or any Bank to exercise and no delay in exercising, and no course of dealing
with respect to, any right, power, or privilege under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, or privilege under this Agreement preclude any other or further
exercise thereof or the exercise of any other right, power, or privilege. The
rights and remedies provided for in this Agreement and the other Loan Documents
are cumulative and not exclusive of any rights and remedies provided by law. In
addition to any rights of setoff provided by law, the Agent and each Bank shall
have the right to setoff and apply against the Obligations in such manner as the
Agent or such Bank may determine, at any time and without notice to the
Borrower, any and all deposits (general or special, time or demand, provisional
or final) or other sums at any time credited by or owing from the Agent or such
Bank to the Borrower.
XII.5. SUCCESSORS AND ASSIGNS.
(a) This Agreement is binding upon and shall inure to the benefit of
the Agent, each Bank and the Borrower and their respective successors and
assigns, except that the Borrower may not assign or transfer any of its
rights or obligations under this Agreement except as provided in Section
8.5, without the prior written consent of the Required Banks. Any Bank may
sell participations to one or more banks or other institutions in or to all
or a portion of its rights and obligations under this Agreement and the
other Loan Documents (including, without limitation, all or a portion of
its Commitments and the Advances owing to it); provided, however, that (i)
such Bank's obligations under this Agreement and the other Loan Documents
(including, without limitation, its Commitment) shall remain unchanged,
(ii) such Bank shall remain solely responsible to the Borrower for the
performance of such obligations, (iii) such Bank shall remain the holder of
its Note for all purposes of this Agreement, (iv) the Borrower shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement and the other Loan
Documents, and (v) such Bank shall not sell a participation that conveys to
the participant the right to vote or give or withhold consents under this
Agreement or any other Loan Document, other than the right to vote upon or
consent to (A) any increase of such Bank's Commitment, (B) any reduction of
the principal amount of, or interest to be paid on, the Advances of such
Bank, (C) any reduction of any commitment fee or other amount payable to
such Bank under any Loan
Document, or (D) any postponement of any date for the payment of any amount
payable in respect of the Advances of such Bank.
(b) The Borrower and each of the Banks agree that any Bank (the
"Assigning Bank") may at any time assign to one or more assignees all, or a
proportionate part of all, of its rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, its
Advance(s)) (each an "Assignee"); provided, however, that (i) each such
assignment shall be of a consistent, and not a varying, percentage of all
of the assigning Bank's rights and obligations under this Agreement and the
other Loan Documents, (ii) except in the case of an assignment of all of a
Bank's rights and obligations under this Agreement and the other Loan
Documents, the amount of the Commitment of the assigning Bank being
assigned pursuant to each assignment (determined as of the date of the
Assignment Acceptance with respect to such assignment) shall in no event be
less than $1,000,000, and (iii) the parties to each such assignment shall
execute and deliver to the Agent for its acceptance and recording in the
Register (as defined below), an Assignment and Acceptance, together with
the Note subject to such assignment, and a processing and recordation fee
of $2,500. Upon such execution, delivery, acceptance, and recording, from
and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five Business Days after the
execution thereof, or, if so specified in such Assignment and Acceptance,
the date of acceptance thereof by the Agent, (x) the assignee thereunder
shall be a party hereto as a "Bank" and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment
and Acceptance, have the rights and obligations of a Bank hereunder and
under the Loan Documents and (y) the Bank that is an assignor thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement and the
other Loan Documents (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of a Bank's rights and obligations
under the Loan Documents, such Bank shall cease to be a party thereto).
(c) By executing and delivering an Assignment and Acceptance, the Bank
that is an assignor thereunder and the assignee thereunder confirm to and
agree with each other and the other parties hereto as follows: (i) other
than as provided in such Assignment and Acceptance, such assigning Bank
makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties, or representations made in or in
connection with the Loan Documents or the execution, legality, validity,
and enforceability, genuineness, sufficiency, or value of the Loan
Documents or any other instrument or document furnished pursuant thereto;
(ii) such assigning Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Borrower or
any Obligated Party or the performance or observance by the Borrower or any
Obligated Party of its obligations under the Loan Documents; (iii) such
assignee confirms that it has received a copy of the other Loan Documents,
together with copies of the financial statements referred to in Section 7.1
and such other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such Assignment and
Acceptance; (iv) such assignee will, independently and
without reliance upon the Agent or such assignor and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents; (v) such assignee
appoints and authorizes the Agent to take such action as agent on its
behalf and exercise such powers under the Loan Documents as are delegated
to the Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of the Loan Documents are required to be performed by it as a Bank.
(d) The Agent shall maintain at its principal office a copy of each
Assignment and Acceptance delivered to and accepted by it and a register
for the recordation of the names and addresses of the Banks and the
Commitment of, and principal amount of the Advances owing to, each Bank
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Agent, and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes under the
Loan Documents. The Register shall be available for inspection by the
Borrower or any Bank at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and assignee, together with any Note subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit "D" hereto, (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register, and (iii) give prompt written notice
thereof to the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its expense, shall execute and deliver to the
Agent in exchange for the surrendered Note a new Note to the order of such
assignee in an amount equal to the Commitment assumed by it pursuant to
such Assignment and Acceptance and, if the assigning Bank has retained a
Commitment, a new Note to the order of the assigning Bank in an amount
equal to the Commitment retained by it hereunder (each such promissory note
shall constitute a "Note" for purposes of the Loan Documents). Such new
Notes shall be in an aggregate principal amount of the surrendered Note,
shall be dated the effective date of such Assignment and Acceptance, and
shall otherwise be in substantially the form of Exhibit "D" hereto.
(f) Any Bank may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower or its Subsidiaries furnished to such
Bank by or on behalf of the Borrower or its Subsidiaries.
XII.6. SURVIVAL. All representations and warranties made in this Agreement
or any other Loan Document or in any document, statement, or certificate
furnished in connection with this Agreement shall survive the execution and
delivery of this Agreement and the other Loan Documents, and no investigation by
the Agent or any Bank or any closing shall affect the representations and
warranties or the right of the Agent or any Bank to rely upon them. Without
prejudice to the survival of any other obligation of the Borrower hereunder, the
obligations of the Borrower under Sections 3.5, 12.1, and 12.2 shall survive
repayment of the Note and termination of the Revolving Credit Commitment.
XII.7. ENTIRE AGREEMENT; AMENDMENT. THIS AGREEMENT, THE NOTE, AND THE OTHER
LOAN DOCUMENTS REFERRED TO HEREIN EMBODY THE FINAL, ENTIRE AGREEMENT AMONG THE
PARTIES HERETO AND SUPERSEDE ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OF THE
PARTIES HERETO. THERE ARE NO ORAL AGREEMENTS AMONG THE PARTIES HERETO. The
provisions of this Agreement and the other Loan Documents to which the Borrower
is a party may be amended or waived only by an instrument in writing, agreed and
consented to by the Required Banks and the Borrower; PROVIDED, that no
amendment, waiver, or consent shall, unless in writing and signed by all of the
Banks and the Borrower, do any of the following: (a) increase Commitments of the
Banks or subject the Banks to any additional obligations; (b) change the
Maturity Date or reduce the principal of, or interest on, the Notes or any fees
or other amounts payable hereunder; (c) postpone any date fixed for any payment
of principal of, or interest on, the Notes or any fees or other amounts payable
hereunder; (d) waive any of the conditions specified in Article V; (e) change
the percentage of the Commitments or of the aggregate unpaid principal amount of
the Notes or the number of Banks which shall be required for the Banks or any of
them to take any action under this Agreement; (f) change any provision contained
in this Section 12.7; or (g) release any collateral except as permitted in the
Loan Documents. Notwithstanding anything to the contrary contained in this
Section, no amendment, waiver, or consent shall be made with respect to Article
XI hereof without the prior written consent of the Agent.
XII.8. MAXIMUM INTEREST RATE. No provision of this Agreement or of any
other Loan Document shall require the payment or the collection of interest in
excess of the maximum permitted by applicable law. If any excess of interest in
such respect is hereby provided for, or shall be adjudicated to be so provided,
in any Loan Document or otherwise in connection with this loan transaction, the
provisions of this Section shall govern and prevail and neither the Borrower nor
the sureties, guarantors, successors, or assigns of the Borrower shall be
obligated to pay the excess amount of such interest or any other excess sum paid
for the use, forbearance, or detention of sums loaned pursuant hereto. In the
event any Bank ever receives, collects, or applies as interest any such sum,
such amount which would be in excess of the maximum amount permitted by
applicable law shall be applied as a payment and reduction of the principal of
the indebtedness evidenced by its Note; and, if the principal of such Note has
been paid in full, any remaining excess shall forthwith be paid to the Borrower.
In determining whether or not the interest paid or payable exceeds the Maximum
Rate, the Borrower and each Bank shall, to the extent permitted by 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 in equal or unequal
parts the total amount of interest throughout the entire
contemplated term of the indebtedness evidenced by such Note so that interest
for the entire term does not exceed the Maximum Rate.
XII.9. NOTICES. All notices and other communications provided for in this
Agreement and the other Loan Documents to which the Borrower is a party shall be
given or made by telex, telegraph, telecopy, cable, or in writing and telexed,
telecopied, telegraphed, cabled, mailed by certified mail return receipt
requested, or delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof; or, as to any party at
such other address as shall be designated by such party in a notice to the other
party given in accordance with this Section. Except as otherwise provided in
this Agreement, all such communications shall be deemed to have been duly given
when transmitted by telex or telecopy, subject to telephone confirmation of
receipt, or delivered to the telegraph or cable office, subject to telephone
confirmation of receipt, or when personally delivered or, in the case of a
mailed notice, when duly deposited in the mails, in each case given or addressed
as aforesaid; PROVIDED, however, notices to the Agent pursuant to Article II
shall not be effective until received by the Agent.
XII.10. APPLICABLE LAW; VENUE; SERVICE OF PROCESS. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
THE APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. THIS AGREEMENT HAS BEEN
ENTERED INTO IN XXXXXX COUNTY, TEXAS, AND IT SHALL BE PERFORMABLE FOR ALL
PURPOSES IN XXXXXX COUNTY, TEXAS. ANY ACTION OR PROCEEDING AGAINST THE BORROWER
UNDER OR IN CONNECTION WITH ANY OF THE LOAN DOCUMENTS MAY BE BROUGHT IN ANY
STATE OR FEDERAL COURT IN XXXXXX COUNTY, TEXAS. THE BORROWER HEREBY IRREVOCABLY
(I) SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURTS, AND (II) WAIVES ANY
OBJECTION IT 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. THE BORROWER AGREES THAT SERVICE OF PROCESS UPON IT MAY BE MADE BY
CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED, AT ITS ADDRESS SPECIFIED
OR DETERMINED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 12.7.
XII.11. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
XII.12. SEVERABILITY. Any provision of this Agreement held by a court of
competent jurisdiction to be invalid or unenforceable shall not impair or
invalidate the remainder of this Agreement and the effect thereof shall be
confined to the provision held to be invalid or illegal.
XII.13. HEADINGS. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
XII.14. NON-APPLICATION OF CHAPTER 15 OF TEXAS CREDIT CODE. The provisions
of Chapter 15 of the Texas Credit Code (Vernon's Texas Civil Statutes, Article
5069-15) are specifically declared by the parties hereto not to be applicable to
this Agreement or any of the other Loan Documents or to the transactions
contemplated hereby.
XII.15. SPECIAL COVENANT. In the event that an action or inaction of the
Agent may be directed by the Required Banks and such required percentage is not
obtained due to disagreement by the Banks, the Bank or the Banks objecting to
the action taken or not taken, as the case may be, by the Agent due to the
absence of direction of the Required Banks may, but shall not be required to,
purchase the other Bank's or the Banks' rights and obligations under this
Agreement and the other Loan Documents (including, without limitation, their
Advance(s)) at par value. In such event, the selling Bank or the Banks shall be
obligated to sell its Advance(s) to the other Bank or the Banks and comply with
the provisions of Section 12.5 hereof upon the full payment by the other Bank or
the Banks at par value.
XII.16. ARBITRATION.
(a) ARBITRATION. Upon the demand of any party, any Dispute shall be
resolved by binding arbitration (except as set forth in (e) below) in accordance
with the terms of this Agreement. A "Dispute" shall mean any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, any of the Note Purchase
Documents, or any past, present or future extensions of credit and other
activities, transactions or obligations of any kind related directly or
indirectly to any of the Note Purchase Documents, including without limitation,
any of the foregoing arising in connection with the exercise of any self-help,
ancillary or other remedies pursuant to any of the Note Purchase Documents. Any
party may by summary proceedings bring an action in court to compel arbitration
of a Dispute. Any party who fails or refuses to submit to arbitration following
a lawful demand by any other party shall bear all costs and expenses incurred by
such other party in compelling arbitration of any Dispute.
(b) GOVERNING RULES. Arbitration proceedings shall be administered by the
American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Note
Purchase Documents. The arbitration shall be conducted at a location in Texas
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award rendered in an arbitration may be entered in any court having
jurisdiction; provided however, that nothing contained herein shall be deemed to
be a waiver by any party that is a bank of the protections afforded to it under
12 U.S.C. ss.91 or any similar applicable state law.
(c) NO WAIVER; PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration hereunder.
(d) ARBITRATOR QUALIFICATIONS AND POWERS AWARDS. Arbitrators must be active
members of the Texas State Bar with expertise in the substantive laws applicable
to the subject matter of the Dispute. Arbitrators are empowered to resolve
Disputes by summary rulings in response to motions filed prior to the final
arbitration hearing. Arbitrators (i) shall resolve all Disputes in accordance
with the substantive law of the state of Texas, (ii) may grant any remedy or
relief that a court of the state of Texas could order or grant within the scope
hereof and such ancillary relief as is necessary to make effective any award,
and (iii) shall have the power to award recovery of all costs and fees, to
impose sanctions and to take such other actions as they deem necessary to the
same extent a judge could pursuant to the Federal Rules of Civil Procedure, the
Texas Rules of Civil Procedure or other applicable law. Any Dispute in which the
amount in controversy is $5,000,000 or less shall be decided by a single
arbitrator who shall not render an award of greater than $5,000,000 (including
damages, costs, fees and expenses). By submission to a single arbitrator, each
party expressly waives any right or claim to recover more than $5,000,000. Any
Dispute in which the amount in controversy exceeds $5,000,000 shall be decided
by majority vote of a panel of three arbitrators; provided however, that all
three arbitrators must actively participate in all hearings and deliberations.
(e) JUDICIAL REVIEW. Notwithstanding anything herein to the contrary, in
any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (i) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the substantive law of the state of
Texas, and (iii) the parties shall have in addition to the grounds referred to
in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (A) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (B) whether the
conclusions of law are erroneous under the substantive law of the state of
Texas. Judgment confirming an award in such a proceeding may be entered only if
a court determines the award is supported by substantial evidence and not based
on legal error under the substantive law of the state of Texas.
(f) MISCELLANEOUS. To the maximum extent practicable, the AAA, the
arbitrators and the parties shall take all action required to conclude any
arbitration proceedings within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulations, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provisions most
directly related to the Note Purchase Documents or the subject matter of the
Dispute shall control. This arbitration provision shall survive termination,
amendment or expiration of any of the Note Purchase Documents or any
relationship between the parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
BORROWER:
GEOSCIENCE CORPORATION
By:/s/ Xxxxxxx X. Xxxxx
Xxxxxxx X. Xxxxx, President
Address:
00000 Xxxxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attention: General Counsel
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
AGENT:
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By:/s/ Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, Vice President
Address:
0000 Xxxxxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: 713/000-0000
Telephone No.: 713/000-0000
Attention: Xxxxx Xxxxxxxx
LENDER:
XXXXX FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
COMMITMENT: $3,000,000 By:/s/Xxxxx Xxxxxxxx
Xxxxx Xxxxxxxx, Vice President
Address:
0000 Xxxxxxxxx
Xxxxxxx, Xxxxx 00000
Fax No.: 713/000-0000
Telephone No.: 713/000-0000
Attention: Xxxxx Xxxxxxxx
EXHIBIT A
FORM OF NOTES
EXHIBIT B
FORM OF ADVANCE REQUEST FORM
EXHIBIT C
FORM OF LIMITED GUARANTY
EXHIBIT D
FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT E
REAL PROPERTY DESCRIPTION
