EXHIBIT 10.35
CREDIT AGREEMENT
DATED AS OF JANUARY 3, 2000
AMONG
FINTUBE TECHNOLOGIES, INC.
BANK OF AMERICA, N.A.
AS AGENT,
SWING LINE LENDER, AND LENDER
BANK ONE, TEXAS, N.A.
DOCUMENTATION AGENT,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
CREDIT AGREEMENT
This CREDIT AGREEMENT is effective as of January 3, 2000, among
Fintube Technologies, Inc., an Oklahoma corporation (the "COMPANY"), the
several financial institutions from time to time party to this Agreement
(collectively, the "LENDERS"; individually, a "LENDER"), and Bank of America,
N.A., as Swing Line Lender and as agent for the Lenders.
WHEREAS, the Lenders have agreed to make available to the Company
secured term loans and a secured revolving credit facility with a letter of
credit subfacility and a swing line subfacility upon the terms and conditions
set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.01 Certain Defined Terms. The following terms have the following
meanings:
"ACCOUNT DEBTOR" means the party who is obligated on or under
an Account.
"ACCOUNTS" means all present and future rights of the Company
or any Subsidiary to payment for goods sold or leased or for
services rendered, which are not evidenced by instruments or
chattel paper, and whether or not they have been earned by
performance.
"ACQUISITION" means any transaction or series of related
transactions for the purpose of or resulting, directly or
indirectly, in (a) the acquisition of all or substantially all
of the assets of a Person, or of any business or division of a
Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity
of any Person, or otherwise causing any Person to become a
Subsidiary, or (c) a merger or consolidation or any other
combination with another Person (other than a Person that is a
Subsidiary) provided that the Company or the Subsidiary is the
surviving entity.
"ACQUISITION DOCUMENTS" means the Asset Purchase Agreement and
the other documents, certificates and agreements delivered in
connection with the Fintube Acquisition.
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"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or
is under common control with, such Person. A Person shall be
deemed to control another Person if the controlling Person
possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the
other Person, whether through the ownership of voting
securities, membership interests, by contract, or otherwise.
"AGENT" means BofA in its capacity as agent for the Lenders
hereunder, and any successor agent arising under SECTION
10.09.
"AGENT-RELATED PERSONS" means BofA and any successor agent
arising under SECTION 10.09 and any successor letter of credit
issuing bank hereunder, together with their respective
Affiliates, and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
"AGENT'S PAYMENT OFFICE" means the address for payments set
forth on SCHEDULE 11.02 or such other address as the Agent may
from time to time specify.
"AGGREGATE COMMITMENT" means the sum of (a) the Aggregate
Revolving Loan Commitment and (b) the Aggregate Term Loan
Commitment.
"AGGREGATE REVOLVING LOAN COMMITMENT" means the aggregate
Revolving Loan Commitments of the Lenders, equal to Twenty
Million Dollars ($20,000,000.00).
"AGGREGATE TERM LOAN COMMITMENT" means the aggregate Term Loan
Commitments of the Lenders, equal to Thirty-Nine Million
Dollars ($39,000,000.00).
"AGREEMENT" means this Credit Agreement.
"APPLICABLE BASE RATE MARGIN" means, subject to the last
sentence of this definition, for any period, the applicable of
the following percentages in effect with respect to such
period as the Leverage Ratio of the Company shall fall
within the indicated ranges:
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APPLICABLE BASE RATE MARGIN
LEVERAGE RATIO (IN BASIS POINTS)
--------------------------------- ----------------------------------
GREATER THAN
LESS THAN OR EQUAL TO REVOLVING LOAN TERM LOAN
--------- ----------- -------------- ---------
1. 1.5:1.0 ---- 0 0
2. 2.0:1.0 1.5:1.0 0 0
3. 2.5:1.0 2.0:1.0 50 50
4. ---- 2.5:1.0 100 100
The Leverage Ratio shall be calculated by the Company as of the end of
each fiscal quarter, commencing with the fiscal quarter ending June 30,
2000, and shall be reported to the Agent pursuant to a Compliance
Certificate executed by a Responsible Officer of the Company and
delivered pursuant to SUBSECTION 7.02(b) hereof. The Applicable Base
Rate Margin shall be adjusted, if necessary, on the third Business Day
after the delivery of such certificate; PROVIDED, that if such
certificate, together with the financial statements to which such
certificate relates, is not delivered to the Agent by the fifth
Business Day after the date on which the related financial statements
are due to be delivered to the Agent pursuant to SUBSECTION 7.01(a) or
(b), then, from such fifth Business Day until the third Business Day
after delivery of such certificate, the Applicable Base Rate Margin
shall be equal to 100 basis points for Revolving Loans and Term Loans.
From the Closing Date until adjusted as described above, the Applicable
Base Rate Margin shall be equal to 100 basis points for Revolving Loans
and Term Loans.
"APPLICABLE COMMITMENT FEE PERCENTAGE" means, subject to the
last sentence of this definition, for any period, the
applicable of the following percentages in effect with respect
to such period as the Leverage Ratio of the Company shall fall
within the indicated ranges:
LEVERAGE RATIO
--------------------------------- APPLICABLE COMMITMENT FEE
GREATER THAN PERCENTAGE (IN BASIS POINTS)
LESS THAN OR EQUAL TO ----------------------------
--------- ------------
1. 1.5:1.0 ---- 25
2. 2.0:1.0 1.5:1.0 25
3. 2.5:1.0 2.0:1.0 50
4. ---- 2.5:1.0 50
The Leverage Ratio shall be calculated by the Company as of the end of
each fiscal quarter, commencing with the fiscal quarter ending June 30,
2000, and shall be reported to the Agent pursuant to a Compliance
Certificate executed by a Responsible
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Officer of the Company and delivered pursuant to SUBSECTION 7.02(b)
hereof. The Applicable Commitment Fee Percentage shall be adjusted, if
necessary, on the third Business Day after the delivery of such
certificate; PROVIDED, that if such certificate, together with the
financial statements to which such certificate relates, is not
delivered to the Agent by the fifth Business Day after the date on
which the related financial statements are due to be delivered to the
Agent pursuant to SUBSECTION 7.01(a) or (b), then, from such fifth
Business Day until the third Business Day after delivery of such
certificate, the Applicable Commitment Fee Percentage shall be equal to
50 basis points. From the Closing Date until adjusted as described
above, the Applicable Commitment Fee Percentage shall be equal to 50
basis points.
"APPLICABLE OFFSHORE RATE MARGIN" means, subject to the last
sentence of this definition, for any period, the applicable of
the following percentages in effect with respect to such
period as the Leverage Ratio of the Company shall fall within
the indicated ranges:
LEVERAGE RATIO APPLICABLE OFFSHORE RATE MARGIN
--------------------------------- (IN BASIS POINTS)
GREATER THAN -------------------------------------
LESS THAN OR EQUAL TO REVOLVING LOAN TERM LOAN
--------- ------------ -------------- ---------
1. 1.5:1.0 ---- 100 100
2. 2.0:1.0 1.5:1.0 150 150
3. 2.5:1.0 2.0:1.0 200 200
4. ---- 2.5:1.0 250 250
The Leverage Ratio shall be calculated by the Company as of the end of
each fiscal quarter, commencing with the fiscal quarter ending June 30,
2000, and shall be reported to the Agent pursuant to a Compliance
Certificate executed by a Responsible Officer of the Company and
delivered pursuant to SUBSECTION 7.02(b) hereof. The Applicable
Offshore Rate Margin shall be adjusted, if necessary, on the third
Business Day after the delivery of such certificate, with such
adjustment to apply to all Interest Periods then outstanding and
beginning thereafter until the next adjustment date; PROVIDED, that if
such certificate, together with the financial statements to which such
certificate relates, is not delivered to the Agent by the fifth
Business Day after the date on which the related financial statements
are due to be delivered to the Agent pursuant to SUBSECTION 7.01(a) or
(b), then, from such fifth Business Day until the third Business Day
after delivery of such certificate, the Applicable Offshore Rate Margin
shall be equal to 250 Basis Points for Revolving Loans and Term Loans.
From the Closing Date until adjusted as described above, the Applicable
Offshore Rate Margin shall be equal to 250 Basis Points for Revolving
Loans and Term Loans.
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"APPROVED FUND" means, with respect to any Lender that is a
fund that invests in bank loans, any other fund that invests
in bank loans and is advised or managed by the same investment
advisor as such Lender or by an Affiliate of such investment
advisor.
"ASSET DISPOSITION" has the meaning specified in SECTION 8.02.
"ASSIGNEE" has the meaning specified in SUBSECTION 11.08(a).
"ATTORNEY COSTS" means and includes all reasonable fees and
disbursements of any law firm or other external counsel.
"ASSET PURCHASE AGREEMENT" means that certain Asset Purchase
Agreement by and between Lone Star Technologies, Inc.,
Fintube Technologies, Inc. and Fintube Limited Partnership
dated November 16, 1999.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of
1978 (11 U.S.C. Sections 101, ET SEQ.).
"BASE RATE" means, for any day, the higher of: (a) 0.50% per
annum above the latest Federal Funds Rate; and (b) the rate of
interest in effect for such day as publicly announced from
time to time by BofA in San Francisco, California, as its
"prime rate." (The "prime rate" is a rate set by BofA based
upon various factors including BofA's costs and desired
return, general economic conditions and other factors, and is
used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.) Any change in
the reference rate announced by BofA shall take effect at the
opening of business on the day specified in the public
announcement of such change.
"BASE RATE LOAN" means a Loan that bears interest based on the
Base Rate.
"BASIS POINT" means one one-hundredth of one percent.
"BOFA" means Bank of America, N.A.
"BORROWING" means a borrowing hereunder consisting of
Revolving Loans or Term Loans of the same Type made to the
Company on the same day by the Lenders under ARTICLE II, and,
in the case of Offshore Rate Loans, having the same Interest
Period. The making of a Swing Line Loan shall not constitute a
Borrowing.
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"BORROWING BASE" shall mean at any time an amount equal to the
sum at such time of (i) Receivables Availability,(ii)
Inventory Availability, and (iii) Import Letters of Credit
Availability.
"BORROWING DATE" means any date on which a Borrowing occurs
under SECTION 2.03.
"BUSINESS DAY" means any day other than a Saturday, Sunday or
other day on which commercial banks in New York City, Chicago,
St. Louis or San Francisco are authorized or required by law
to close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are
carried on in the applicable offshore dollar interbank market.
"CAPITAL ADEQUACY REGULATION" means any guideline or directive
of any central bank or other Governmental Authority, or any
other law, rule or regulation, whether or not having the force
of law, in each case, regarding capital adequacy of any bank
or of any corporation controlling a bank.
"CAPITAL EXPENDITURES" means, for any period and with respect
to any Person, the aggregate of all expenditures by such
Person and its Subsidiaries for the acquisition or leasing of
fixed or capital assets or additions to equipment (including
replacements, capitalized repairs and improvements during such
period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its
Subsidiaries.
"CAPITAL STOCK" means (a) in the case of a corporation,
corporate stock, (b) in the case of an association or business
entity, any and all shares, interests, participations, rights
or other equivalents (however designated) of corporate stock,
(c) in the case of a partnership or limited liability company,
partnership or membership interests (whether general or
limited) and (d) any other interest or participation that
confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the
issuing Person.
"CASH COLLATERALIZE" means to pledge and deposit with or
deliver to the Agent, for the benefit of the Agent, the
Issuers and the Lenders, as additional collateral for the L/C
Obligations, cash or deposit account balances pursuant to
documentation in form and substance reasonably satisfactory to
the Agent and the Issuers (which documents are hereby
consented to by the Lenders). Derivatives of such term shall
have corresponding meanings. The Company hereby grants the
Agent, for the benefit of the Agent, the Issuers and the
Lenders, a security interest in all such cash and deposit
account balances. Cash collateral shall be maintained in
blocked, non-interest bearing deposit accounts at BofA.
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"CERCLA" has the meaning specified in the definition of
"Environmental Laws."
"CHANGE OF CONTROL" means the occurrence of any of the
following: (a) the sale, lease, transfer, conveyance or other
disposition (other than by way of merger or consolidation), in
one or a series of related transactions, of all or
substantially all of the assets of the Company and its
Subsidiaries taken as a whole to any "person" (as such term is
used in Section 13(d)(3) of the Exchange Act); (b) the
adoption of a plan relating to the liquidation or dissolution
of the Company; (c) the consummation of any transaction
(including, without limitation, any merger or consolidation)
the result of which is that any "person" (as defined above)
becomes the "beneficial owner" (as such term is defined in
Rule 13d-3 and Rule 13d-5 under the Exchange Act, except that
a person shall be deemed to have "beneficial ownership" of all
securities that such person has the right to acquire, whether
such right is currently exercisable or is exercisable only
upon the occurrence of a subsequent condition), directly or
indirectly of more than 25% of the Voting Stock of the Company
(measured by voting power rather than number of shares); (d)
the Company consolidates with, or merges with or into, any
Person, or any Person consolidates with, or merges with or
into, the Company in any such event pursuant to a transaction
in which any of the outstanding Voting Stock of the Company is
converted into or exchanged for cash, securities or other
property, other than any such transaction where the Voting
Stock of the Company outstanding immediately prior to such
transaction is converted into or exchanged for Voting Stock of
the surviving or transferee Person constituting a majority of
the outstanding shares of such Voting Stock of such surviving
or transferee Person (immediately after giving effect to such
issuance); or (e) during any period of 25 consecutive calendar
months, commencing on the date of this Agreement, the ceasing
of those individuals (the "CONTINUING DIRECTORS") who (i) were
directors of the Company on the first day of each such period
or (ii) subsequently became directors of the Company and whose
actual election or initial nomination for election subsequent
to that date was approved by a majority of the Continuing
Directors then on the board of directors of the Company, to
constitute a majority of the board of directors of the
Company.
"CLOSING DATE" means the date on which all conditions
precedent set forth in SECTION 5.01 are satisfied or waived by
all Lenders (or, in the case of SUBSECTION 5.01(e), waived by
the Person entitled to receive such payment).
"CODE" means the Internal Revenue Code of 1986, and
regulations promulgated thereunder.
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"COLLATERAL" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by the
Company and its Subsidiaries in or upon which a Lien now or
hereafter exists in favor of the Lenders, or the Agent on
behalf of the Lenders, whether under this Agreement, under the
Collateral Documents or under any other documents executed by
any such Person and delivered to the Agent or the Lenders.
"COLLATERAL DOCUMENTS" means, collectively, (a) the ST
Holdings Pledge Agreement, the Foreign Subsidiary Pledge, the
Domestic Subsidiary Pledge, Security Agreement, the Mortgages,
the Subsidiary Guaranty, ST Holdings Guaranty, Lock Box
Agreement, L/C Application, and all other security agreements,
mortgages, deeds of trust, patent and trademark assignments,
lease assignments, guarantees and other similar agreements
between the Company or any Subsidiary or any Guarantor and
the Lenders or the Agent for the benefit of the Lenders now
or hereafter delivered to the Lenders or the Agent pursuant
to or in connection with the transactions contemplated hereby,
and all financing statements (or comparable documents now or
hereafter filed in accordance with the Uniform Commercial
Code or comparable law) against the Company or any Subsidiary
or any Guarantor as debtor in favor of the Lenders or the
Agent for the benefit of the Lenders as secured party, and
(b) any amendments, supplements, modifications, renewals,
replacements, consolidations, substitutions and extensions of
any of the foregoing.
"COMMITMENT", as to each Lender, means (a) such Lender's Term
Loan Commitment, plus (b) such Lender's Revolving Loan
Commitment.
"COMPANY" has the meaning specified in the introductory clause
hereto.
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form of EXHIBIT C.
"CONTINGENT OBLIGATION" means, as to any Person, any direct or
indirect liability of that Person, whether or not contingent,
with or without recourse, (a) with respect to any
Indebtedness, lease, dividend, letter of credit or other
obligation (the "PRIMARY OBLIGATIONS") of another Person (the
"PRIMARY OBLIGOR"), including any obligation of that Person
(i) to purchase, repurchase or otherwise acquire such primary
obligations or any security therefor, (ii) to advance or
provide funds for the payment or discharge of any such primary
obligation, or to maintain working capital or equity capital
of the primary obligor or otherwise to maintain the net worth
or solvency or any balance sheet item, level of income or
financial condition of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the
ability of the primary obligor to make payment of such
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primary obligation, or (iv) otherwise to assure or hold
harmless the holder of any such primary obligation against
loss in respect thereof (each, a "GUARANTY OBLIGATION");
(b) with respect to any Surety Instrument issued for the
account of another Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments;
(c) to purchase any materials, supplies or other property
from, or to obtain the services of, another Person if the
relevant contract or other related document or obligation
requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of
whether delivery of such materials, supplies or other
property is ever made or tendered, or such services are
ever performed or tendered; or (d) in respect of any Swap
Contract. The amount of any Contingent Obligation, (v) in
the case of Guaranty Obligations, shall be deemed equal to
the lesser of (i) the stated or determinable amount of the
primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable,
the maximum reasonably anticipated liability in respect
thereof, and (ii) the stated amount of the guaranty, (w) in
the case of Contingent Obligations in respect of Swap
Contracts, shall be deemed equal to the aggregate Swap
Termination Value of such Swap Contracts, (x) in the case
of Contingent Obligations in respect of Surety Instruments
other than Non-Surety L/C's, shall be deemed equal to the
probable amount of the expected liability thereunder,(y) in
the case of Contingent Obligations in respect of Non-Surety
L/C's, shall be deemed equal to (i) the face amount of
outstanding Non-Surety L/C's which are not Letters of
Credit and (ii) the outstanding amount of L/C Obligations
in respect of Non-Surety L/C's which are Letters of Credit,
and (z) the stated amount of all Contingent Obligations
described in clause(c) above.
"CONTRACTUAL OBLIGATION" means, as to any Person, any
provision of any security issued by such Person or of any
agreement, undertaking, contract, indenture, mortgage, deed of
trust or other instrument, document or agreement to which such
Person is a party or by which it or any of its property is
bound.
"CONVERSION/CONTINUATION DATE" means any date on which, under
SECTION 2.04, the Company (a) converts Loans of one Type to
another Type, or (b) continues as Loans of the same Type, but
with a new Interest Period, Loans having
Interest Periods expiring on such date.
"CREDIT EXTENSION" means and includes (a) the making of any
Loans hereunder, and (b) the Issuance of any Letters of Credit
hereunder.
"CURRENT ASSETS" means all assets of the Company, on a
consolidated basis, which should, in accordance with GAAP, be
classified as current assets.
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"CURRENT LIABILITIES" means all liabilities of the Company, on
a consolidated basis, which should, in accordance with GAAP,
be classified as current liabilities, other than current
maturities in respect of the Loans.
"DEFAULT" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not
cured or otherwise remedied during such
time) constitute an Event of Default.
"DOLLARS", "DOLLARS" and "$" each mean lawful money of the
United States.
"DOMESTIC SUBSIDIARY" means a Subsidiary organized under
the laws of the United States or any political subdivision
or any agency, department or instrumentality thereof.
"DOMESTIC SUBSIDIARY PLEDGE" means that certain Security and
Stock Pledge Agreement executed by the Company in favor of the
Agent creating a pledge of 100% of the capital stock, units,
partnership interests, membership interests, or other equity
of all of the Company's Domestic Subsidiaries.
"EBITDA" means, for any period, for the Company and its
Subsidiaries on a consolidated basis, determined in accordance
with GAAP, the sum of (a) the net income (or net loss) for
such period, PLUS (b) all amounts treated as expenses for
depreciation and interest and the amortization of intangibles
of any kind to the extent included in the determination of
such net income (or loss), PLUS (c) all accrued taxes on or
measured by income to the extent included in the determination
of such net income (or net loss); PROVIDED, HOWEVER, that net
income (or net loss) shall be computed without giving effect
to extraordinary losses or extraordinary gains or gains or
losses arising from the sale of discontinued operations;
PROVIDED, FURTHER, that for any measurement which relates back
to a period prior to the date hereof, EBITDA shall be
determined by adding (x) the EBITDA of the Company and its
Subsidiaries for such period PLUS (y) the EBITDA of FLP and
its Subsidiaries for such periods.
"EFFECTIVE AMOUNT" means (a) with respect to any Revolving
Loans, Swing Line Loans and Term Loans on any date, the
aggregate outstanding principal amount thereof after giving
effect to any Borrowings and prepayments or repayments of
Revolving Loans, Swing Line Loans and Term Loans occurring on
such date; and (b) with respect to any outstanding L/C
Obligations on any date, the amount of such L/C Obligations on
such date after giving effect to any Issuances of Letters of
Credit occurring on such date and any other changes in the
aggregate amount of the L/C Obligations as of such date,
including as a result of any reimbursements of outstanding
unpaid drawings under any Letters of Credit or any reductions
in the maximum amount available for drawing under Letters of
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Credit taking effect on such date. For purposes of SUBSECTION
2.07(a) the Effective Amount shall be determined without
giving effect to any mandatory prepayments to be made under
SUBSECTION 2.07(b).
"ELIGIBLE ACCOUNTS" means all Accounts of the Company and its
Subsidiaries, provided that the following Accounts are not
Eligible Accounts: (i) Accounts which remain unpaid ninety
(90) days after the original date of the applicable invoice;
(ii) all Accounts owing by a single Account Debtor, including
a currently scheduled Account, if twenty-five percent (25%) or
more of the balance owing by such Account Debtor to the
Company or any Subsidiary remains unpaid ninety (90) days
after the original date of the applicable invoice or invoices;
(iii) Accounts due by a single Account Debtor which represent
an amount exceeding fifteen percent (15%) of all Accounts;
provided, however, that with the written consent of Agent,
such limitation may be raised to twenty-five percent (25%) or
such other percentage Agent may allow; (iv) Accounts with
respect to which the Account Debtor is a director, officer,
employee, Subsidiary or Affiliate of the Company or any
Subsidiary; (v) Accounts with respect to which the Account
Debtor is the United States of America or any department,
agency or instrumentality thereof unless such Account has been
assigned to the Agent in accordance with the terms and
conditions of the Assignment of Claims Act and the Collateral
Documents, but only to the extent that a notice of assignment
with respect to such Account has been executed by each
government officer and other Person required under the
Assignment of Claims Act and such a copy of notice of
assignment has been delivered to Agent PROVIDED, HOWEVER, that
no Account existing on or created within the 30 days following
the Closing Date shall be deemed ineligible pursuant to this
subsection (vi) unless the provisions of this subsection (iv)
have not been met with respect to such Account on or before
the 90th day following the Closing Date; (vii) Accounts with
respect to which the Account Debtor is not a resident of the
United States or Canada, unless the Account Debtor has
supplied the Company or applicable Subsidiary with an
irrevocable letter of credit, issued by a financial
institution satisfactory to Agent, sufficient to cover such
Account in form and substance satisfactory to Agent; (viii)
Accounts to the extent to which the Account Debtor has
asserted a counterclaim or a right of setoff; (ix) Accounts
for which the prospect of payment or performance by the
Account Debtor is or will be impaired as determined by Agent
in the exercise of its reasonable discretion and in accordance
with Agent's customary business practices; (x) Accounts with
respect to which Agent does not have a first and valid fully
perfected security interest; (xi) Accounts with respect to
which the Account Debtor is the subject of bankruptcy or a
similar insolvency proceeding or has made an assignment for
the benefit of creditors or whose assets have been conveyed to
a receiver or trustee; (xii) Accounts with respect to which
the Account Debtor's obligation to pay the Account is
conditional upon the Account
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Debtor's approval or is otherwise subject to any repurchase
obligation or return right, as with sales made on a
xxxx-and-hold, guaranteed sale, sale-and-return, sale on
approval (except with respect to Accounts in connection with
which Account Debtors are entitled to return Inventory on the
basis of the quality of such Inventory) or consignment basis;
(xiii) Accounts to the extent that the Account Debtor's
indebtedness to the Company or applicable Subsidiary exceeds a
credit limit determined by Agent in the exercise of reasonable
discretion and in accordance with Agent's customary business
practices; and (xiv) Accounts with respect to which the
Account Debtor is located in any State requiring qualification
to do business or the filing of a Notice of Business
Activities Report or similar report in order to permit the
Company or applicable Subsidiary to seek judicial enforcement
in such State of payment of any such Account, unless the
Company or applicable Subsidiary has duly qualified to do
business as a foreign corporation in such State or filed a
Notice of Business Activities Report with the appropriate
office in such State for the then current year.
"ELIGIBLE ASSIGNEE" means (a) a commercial bank organized
under the laws of the United States, or any state thereof, and
having a combined capital and surplus of at least
$100,000,000; (b) a commercial bank organized under the laws
of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a
combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency
located in the United States; (c) a Person that is primarily
engaged in the business of commercial banking and that is (i)
a Subsidiary of a Lender, (ii) a Subsidiary of a Person of
which a Lender is a Subsidiary, or (iii) a Person of which a
Lender is a Subsidiary; (d) as to the Term Loans, (i) an
"accredited investor", as such term is defined in Rule 501(a)
of Regulation D under the Securities Act of 1933, as amended
(other than the Company or an Affiliate of the Company) or
(ii) a finance company, insurance company or other financial
institution or fund (whether a corporation, partnership, trust
or other entity) that is primarily engaged in the business of
making, purchasing or otherwise investing in commercial loans;
and (e) any other entity approved by the Company and the
Agent.
"ELIGIBLE IMPORT LETTERS OF CREDIT" means commercial
documentary letters of credit issued for the purpose of
importing inventory of the Company or its
Subsidiaries.
"ELIGIBLE INVENTORY" means Inventory of the Company and its
Subsidiaries held for sale in the ordinary course of business
(but not including packaging or shipping materials or
maintenance supplies) which is deemed by the Agent in
12
the exercise of its reasonable discretion to be eligible for
inclusion in the calculation of the Borrowing Base, provided
that the following Inventory is not Eligible Inventory: (i)
Inventory which is obsolete, not in good condition, or not
currently usable or currently salable in the ordinary course
of the Company's or a Subsidiary's business; (ii) Inventory
consisting of supplies including, but not limited to the tool
crib inventory of the Company and its Subsidiaries; (iii)
Inventory which is not located in the United States or Canada;
(iv) Inventory located on premises leased by the Company or
any Subsidiary to the extent that the lessor of such premises
has not executed a landlord waiver and consent in form and
substance satisfactory to Agent provided, however, that the
Company shall have 60 days subsequent to the Closing to obtain
a landlord waiver from the City of Tulsa-Xxxxxx County Port
Authority; and (v) Inventory with respect to which Agent does
not have a first priority, valid and perfected security
interest. Any Inventory not disqualified under any of clauses
(i) through (v) is Eligible Inventory unless the Company is
notified to the contrary by Agent.
"ENVIRONMENTAL CLAIMS" means all claims, however asserted, by
any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental
Law, or for release or injury to the environment or threat to
public health, personal injury (including sickness, disease or
death), property damage, natural resources damage, or
otherwise alleging liability or responsibility for damages
(punitive or otherwise), investigation, cleanup, removal,
remedial or response costs, restitution, civil or criminal
penalties, injunctive relief, or other type of relief,
resulting from or based upon the presence, placements,
discharge, emission or release (including intentional and
unintentional, negligent and non-negligent, sudden or
non-sudden, accidental or non-accidental, placements, spills,
leaks, discharges, emissions or releases) of any Hazardous
Material at, in, or from any property, whether or not owned by
the Company or any Subsidiary or taken as collateral, or in
connection with any operations of the Company.
"ENVIRONMENTAL LAWS" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances
and codes, together with all administrative orders, directed
duties, requests, licenses, authorizations and permits of, and
agreements with, any Governmental Authorities, in each case
relating to environmental, health, safety and land use
matters, including without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980
("CERCLA"), the Clean Air Act, the Federal Water Pollution
Control Act of 1972, the Solid Waste Disposal Act, the Federal
Resource Conservation and Recovery Act, the Toxic Substances
Control Act, and the Emergency Planning and Community
Right-to-Know Act.
"ENVIRONMENTAL PERMITS" has the meaning specified in
SUBSECTION 6.12(b).
13
"ERISA" means the Employee Retirement Income Security Act of
1974, and regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with the Company within the
meaning of Section 414(b) or (c) of the Code (and Sections
414(m) and (o) of the Code for purposes of provisions relating
to Section 412 of the Code), but specifically excluding Lone
Star Technologies, Inc. and its Subsidiaries other than ST
Holdings.
"ERISA EVENT" means (a) a Reportable Event with respect to a
Pension Plan; (b) a withdrawal by the Company or any ERISA
Affiliate from a Pension Plan subject to Section 4063 of ERISA
during a plan year in which it was a substantial employer (as
defined in Section 4001(a)(2) of ERISA) or a cessation of
operations which is treated as such a withdrawal under Section
4062(e) of ERISA; (c) a complete or partial withdrawal by the
Company or any ERISA Affiliate from a Multiemployer Plan or
notification that a Multiemployer Plan is in reorganization;
(d) the filing of a notice of intent to terminate, the
treatment of a Plan amendment as a termination under Section
4041 or 4041A of ERISA, or the commencement of proceedings by
the PBGC to terminate a Pension Plan or Multiemployer Plan;
(e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer,
any Pension Plan or Multiemployer Plan; or (f) the imposition
of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA,
upon the Company or any ERISA Affiliate.
"EURODOLLAR RESERVE PERCENTAGE" has the meaning specified in
the definition of "Offshore Rate".
"EVENT OF DEFAULT" means any of the events or circumstances
specified in SECTION 9.01.
"EVENT OF LOSS" means, with respect to any property, any of
the following: (a) any loss, destruction or damage of such
property; (b) any institution of any proceedings for the
condemnation or seizure of such property or for the exercise
of any right of eminent domain; or (c) any actual
condemnation, seizure or taking, by exercise of the power of
eminent domain or otherwise, of such property, or confiscation
of such property or the requisition of the use of such
property.
"EXCESS CASH FLOW" means for any fiscal year (a) EBITDA of the
Company and its Subsidiaries for such fiscal year, LESS (b)
the sum of (i) Capital Expenditures actually made by the
Company and its Subsidiaries in such fiscal year, but only
14
to the extent permitted by SECTION 8.18, PLUS (ii) scheduled
principal payments to the Lenders in such fiscal year in
respect of the Term Loan and in respect of the Revolving Loan
during the fiscal year including the Revolving Loan
Termination Date, PLUS (iii) cash interest paid in such fiscal
year by the Company or any Subsidiary, PLUS (iv) cash income
taxes paid in such fiscal year by the Company or any
Subsidiary, PLUS (v) dividends paid by the Company in such
fiscal year in accordance with the terms of this Agreement,
PLUS (vi) voluntary principal payments to the Lenders in such
fiscal year in respect of the Term Loan, PLUS (vii) a working
capital allowance equal to the greater of either 32% of the
increase in working capital during such period, if any, OR
$1,500,000.
"EXCHANGE ACT" means the Securities Exchange Act of 1934 and
the regulations promulgated thereunder.
"FDIC" means the Federal Deposit Insurance Corporation, and
any Governmental Authority succeeding to any of its principal
functions.
"FEDERAL FUNDS RATE" means, for any day, the rate set forth in
the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Bank
of New York (including any such successor, "H.15(519)") on the
preceding Business Day opposite the caption "Federal Funds
(Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for
such day will be the arithmetic mean as determined by the
Agent of the rates for the last transaction in overnight
Federal funds arranged prior to 9:00 a.m. (Central time) on
that day by each of three leading brokers of Federal funds
transactions in Chicago selected by the Agent.
"FEE LETTER" has the meaning specified in SUBSECTION 2.12(a).
"FINTUBE ACQUISITION" means the acquisition by the Company of
essentially all of the assets of Fintube Limited Partnership,
a Delaware limited partnership, pursuant to the terms of the
Asset Purchase Agreement.
"FIXED CHARGE COVERAGE RATIO" means, as of any date of
determination, the ratio of (a) EBITDA for the period of four
fiscal quarters ending on such date to (b) Fixed Charges for
the period of four fiscal quarters ending on such
date.
"FIXED CHARGES" means, with respect to the Company and its
Subsidiaries on a consolidated basis, as of any date of
determination, (a) interest expenses paid or accrued on
outstanding Indebtedness for the period of four fiscal
quarters ending on the date of determination, plus (b)
principal payments on
15
Indebtedness required to be made in such period, (c) capital
expenditures of the Company for such period, (d) cash
dividends paid by the Company during such period, if any,
and (d) all the income taxes paid by the Company with cash
during such period; PROVIDED, that for the purposes of all
measurements through December 31, 2000, the amount
determined by reference to clause (a) shall be calculated
by aggregating interest expenses, for the period from
January 1, 2000 through the date of determination, dividing
such amount by the number of months in such period and
multiplying such result by 12.
"FLP" means Fintube Limited Partnership, a Delaware Limited
Partnership.
"FOREIGN SUBSIDIARY" means a Subsidiary organized under the
laws of a country other than the United States.
"FOREIGN SUBSIDIARY PLEDGE" means that certain Security and
Stock Pledge Agreement executed by the Company in favor of
Agent creating a pledge of 65% of the capital stock, units,
membership interests, partnership interests or other equity
interests of all of the Company's direct Foreign Subsidiaries.
"FRB" means the Board of Governors of the Federal Reserve
System, and any Governmental Authority succeeding to any of
its principal functions.
"FUNDED INDEBTEDNESS" of any Person means, without
duplication, (a) all Indebtedness of such Person other than
Indebtedness of the types referred to in clauses (c),(h) and
(i) of the definition of "Indebtedness", (b) all Contingent
Obligations of such Person with respect to Indebtedness of the
type referred to in clause (a) above of another Person and (c)
Indebtedness of the type referred to in clause (a) above of
any partnership or unincorporated joint venture for which such
Person is legally obligated or has a reasonable expectation of
being liable.
"FURTHER TAXES" means any and all present or future taxes,
levies, assessments, imposts, duties, deductions, fees,
withholdings or similar charges (including, without
limitation, net income taxes and franchise taxes), and all
liabilities with respect thereto, imposed by any jurisdiction
on account of amounts payable or paid pursuant to SECTION
4.01.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of
the Accounting Principles Board and the American Institute of
Certified Public Accountants and statements and pronouncements
of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within
the U.S. accounting
16
profession), which are applicable to the circumstances as of
the date of determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
state or other political subdivision thereof, any central bank
(or similar monetary or regulatory authority) thereof, any
entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled,
through stock or capital ownership or otherwise, by any of the
foregoing.
"GOVERNMENT CONTRACT" means a contract with any United States
Governmental Authority and pursuant to which the Company or
any of its Subsidiaries will be supplying services or goods
which are included in Inventory or Accounts of the Company or
any of its Subsidiaries.
"GOVERNMENT SUBCONTRACT" means each contract of the Company or
any of its Subsidiaries with a Person (other than the Company
or any of its Subsidiaries) for the supply of goods or
services to such Person pursuant to a Government Contract
between such Person and a United States Governmental
Authority.
"GUARANTORS" means ST Holdings and each of the Subsidiaries of
the Company from time to time party to the Subsidiary
Guaranty.
"GUARANTY OBLIGATION" has the meaning specified in the
definition of "Contingent Obligation."
"HAZARDOUS MATERIALS" means all those substances that are
regulated by, or which may form the basis of liability or a
standard of conduct under, any Environmental Law, including
any substance identified under any Environmental Law as a
pollutant, contaminant, hazardous waste, hazardous
constituent, special waste, hazardous substance, hazardous
material, or toxic substance, or petroleum or
petroleum-derived substance or waste.
"HONOR DATE" has the meaning specified in SUBSECTION 3.03(b).
"IMPORT LETTERS OF CREDIT AVAILABILITY" means 50% of Eligible
Import Letters of Credit issued under the L/C Commitment.
"INDEBTEDNESS" of any Person means, without duplication, (a)
all indebtedness for borrowed money; (b) all obligations
issued, undertaken or assumed as the deferred purchase price
of property or services (other than trade payables entered
into in the ordinary course of business on ordinary terms);
(c) all Contingent Obligations with respect to Surety
Instruments; (d) all obligations
17
evidenced by notes, bonds, debentures or similar
instruments, including obligations so evidenced incurred in
connection with the acquisition of property, assets or
businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement,
or incurred as financing, in either case with respect to
property acquired by the Person (even though the rights and
remedies of the seller or bank under such agreement in the
event of default are limited to repossession or sale of
such property); (f) all obligations with respect to capital
leases; (g) all indebtedness referred to in clauses (a)
through (f) above secured by (or for which the holder of
such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property
(including accounts and contract rights) owned by such
Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness; (h) all
preferred Capital Stock issued by such Person and required
by the terms thereof to be redeemed, or for which mandatory
sinking fund payments are due, by a fixed date; and (i) all
Guaranty Obligations in respect of indebtedness or
obligations of others of the kinds referred to in clauses
(a) through (h) above. For all purposes of this Agreement,
the Indebtedness of any Person shall include all recourse
Indebtedness of any partnership or joint venture in which
such Person is a general partner or a joint venturer.
"INDEMNIFIED LIABILITIES" has the meaning specified in SECTION
11.05.
"INDEMNIFIED PERSON" has the meaning specified in SECTION
11.05.
"INDEPENDENT AUDITOR" has the meaning specified in SUBSECTION
7.01(a).
"INSOLVENCY PROCEEDING" means, with respect to any Person, (a)
any case, action or proceeding with respect to such Person
before any court or other Governmental Authority relating to
bankruptcy, reorganization, insolvency, liquidation,
receivership, dissolution, winding-up or relief of debtors, or
(b) any general assignment for the benefit of creditors,
composition, marshaling of assets for creditors, or other,
similar arrangement in respect of its creditors generally or
any substantial portion of its creditors; in each case,
undertaken under U.S. Federal, state or foreign law, including
the Bankruptcy Code.
"INTEREST PAYMENT DATE" means, as to any Offshore Rate Loan,
the last day of each Interest Period applicable to such Loan
and, as to any Base Rate Loan, the last Business Day of each
calendar quarter; PROVIDED, HOWEVER, that if any Interest
Period for an Offshore Rate Loan exceeds three months, the
date that falls three months after the beginning of such
Interest Period and after each Interest Payment Date
thereafter is also an Interest Payment Date.
18
"INTEREST PERIOD" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted
into or continued as an Offshore Rate Loan, and ending on
the date one, two, three or six months thereafter as selected
by the Company in its Notice of Borrowing or Notice of
Conversion/Continuation;
PROVIDED that:
(a) if any Interest Period would otherwise
end on a day that is not a Business Day, that
Interest Period shall be extended to the following
Business Day unless the result of such extension
would be to carry such Interest Period into another
calendar month, in which event such Interest Period
shall end on the preceding Business Day;
(b) any Interest Period 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 the
calendar month at the end of such Interest Period;
(c) no Interest Period for the Term Loan
shall extend beyond the maturity date of the Term
Loan and no Interest Period for any Revolving Loan
shall extend beyond the date set forth in clause (a)
of the definition of Revolving Loan Termination Date;
and
(d) no Interest Period applicable to a Term
Loan or portion thereof shall extend beyond any date
upon which is due any scheduled principal payment in
respect of the Term Loans unless the aggregate
principal amount of Term Loans represented by Base
Rate Loans, or by Offshore Rate Loans having Interest
Periods that will expire on or before such date,
equals or exceeds the amount of such principal
payment.
"INVENTORY AVAILABILITY" shall mean, at any time, an amount
equal to (i) fifty percent (50%) of the Company's and each
Subsidiary's Eligible Inventory (excluding Master Steel
Inventory) valued at the lower of the Company's standard cost
(calculated in accordance with GAAP) or market value, less
such reserves as Agent in its sole but reasonable discretion
and in accordance with its customary business practices elects
to establish; plus (ii) seventy-five percent (75%) of the
Company's and each Subsidiary's Master Steel Inventory valued
at the lower of the Company's standard cost (calculated in
accordance with GAAP) or market value, less such reserves as
Agent in its sole but reasonable discretion and in accordance
with its customary business practices elects to
19
establish. Agent will notify Company in writing of any
reserves it elects to establish from time to time.
"INVESTMENTS" has the meaning specified in SECTION 8.04.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under
the Code.
"ISSUANCE DATE" has the meaning specified in SUBSECTION
3.01(a).
"ISSUE" means, with respect to any Letter of Credit, to issue
or to extend the expiry of, or to renew or increase the amount
of, such Letter of Credit; and the terms "ISSUED," "ISSUING"
and "ISSUANCE" have corresponding meanings.
"ISSUER" means, in respect of each Letter of Credit, BofA,
which has agreed to act as issuer of such Letter of Credit
hereunder.
"ISSUING LENDER" means, in respect of each Letter of Credit,
Bank of America, N.A. or any other Lender as permitted under
Section 3.01(b)(i) hereof.
"JOINT VENTURE" means a single-purpose corporation,
partnership, limited liability company, joint venture or other
similar legal arrangement (whether created by contract or
conducted through a separate legal entity) now or hereafter
formed by the Company or any of its Subsidiaries with another
Person in order to conduct a common venture or enterprise with
such Person.
"L/C ADVANCE" means each Revolving Lender's participation in
any L/C Borrowing in accordance with its Pro Rata Share.
"L/C AMENDMENT APPLICATION" means an application form for
amendment of outstanding standby or commercial documentary
letters of credit as shall at any time be in use at the
applicable Issuer, as such Issuer shall request.
"L/C APPLICATION" means an application form for issuances of
standby or commercial documentary letters of credit as shall
at any time be in use at the applicable Issuer, as such Issuer
shall request.
"L/C BORROWING" means an extension of credit resulting from a
drawing under any Letter of Credit which shall not have been
reimbursed on the date when made nor converted into a
Borrowing of Revolving Loans under SUBSECTION 3.03(b).
20
"L/C COMMITMENT" means the commitment of the Issuers to Issue,
and the commitment of the Revolving Lenders severally to
participate in, Letters of Credit from time to time Issued or
outstanding under ARTICLE III, in an aggregate amount not to
exceed on any date the amount of $7,500,000, as the same may
be reduced as a result of a reduction in the L/C Commitment
pursuant to SECTION 2.07; PROVIDED that the L/C Commitment
is a part of the Aggregate Revolving Loan Commitment, rather
than a separate, independent commitment.
"L/C OBLIGATIONS" means at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit then
outstanding, plus (b) the amount of all unreimbursed drawings
under all Letters of Credit, including all outstanding
L/C Borrowings.
"L/C-RELATED DOCUMENTS" means the Letters of Credit, the L/C
Applications, the L/C Amendment Applications and any other
document relating to any Letter of Credit, including any
standard form documents used by any Issuer for letter of
credit issuances.
"LENDER" has the meaning specified in the introductory clause
hereto. References to the "Lenders" shall include BofA,
including in its capacity as an Issuer and as Swing Line
Lender; for purposes of clarification only, to the extent that
BofA may have any rights or obligations in addition to those
of the Lenders due to its status as an Issuer or as Swing Line
Lender, its status as such will be specifically referenced.
"LENDING OFFICE" means, as to any Lender, the office or
offices of such Lender specified as its "Lending Office" or
"Domestic Lending Office" or "Offshore Lending Office", as the
case may be, on SCHEDULE 11.02, or such other office or
offices as such Lender may from time to time notify the
Company and the Agent.
"LETTERS OF CREDIT" means any letters of credit (whether
standby letters of credit or commercial documentary letters of
credit) issued by the Issuers pursuant to ARTICLE III,
including without limitation the existing letters of credit
set forth on SCHEDULE 1.01 hereto.
"LEVERAGE RATIO" means, as of any date of determination, the
ratio of (a) all Funded Indebtedness of the Company and its
Subsidiaries determined on a consolidated basis as of such
date, to (b) EBITDA for the period of four fiscal quarters
ending on such date.
"LIEN" means any security interest, mortgage, deed of trust,
pledge, hypothecation, assignment, charge or deposit
arrangement, encumbrance, lien
21
(statutory or other) or similar interest of any kind or
nature whatsoever in respect of any property (including those
created by, arising under or evidenced by any conditional
sale or other title retention agreement, the interest of a
lessor under a capital lease, any financing lease having
substantially the same economic effect as any of the
foregoing, or the filing of any financing statement
naming the owner of the asset to which such lien relates as
debtor, under the Uniform Commercial Code or any comparable
law) and any contingent or other agreement to provide any of
the foregoing, but not including the interest of a lessor
under an operating lease.
"LOAN" means an extension of credit by a Lender to the Company
under ARTICLE II or ARTICLE III in the form of a Revolving
Loan, Term Loan, Swing Line Loan
or L/C Advance.
"LOAN DOCUMENTS" means this Agreement, any Notes, the Fee
Letters, the L/CRelated Documents, the Collateral Documents,
the Rate Swap Documents and all other documents delivered to
the Agent or any Lender in connection
herewith.
"MARGIN STOCK" means "margin stock" as such term is defined in
Regulation T, U or X of the FRB.
"MASTER COIL INVENTORY" means unprocessed coil steel Inventory
of the Company or its Subsidiaries that would otherwise meet
the definition of Eligible Inventory.
"MATERIAL ADVERSE EFFECT" means (a) a material adverse change
in, or a material adverse effect upon, the operations,
business, properties, condition (financial or otherwise) or
prospects of the Company or the Company and its Subsidiaries
taken as a whole; (b) a material impairment of the ability of
the Company or any Subsidiary to perform under any Loan
Document and to avoid any Event of Default; or (c) a material
adverse effect upon the legality, validity, binding effect or
enforceability against the Company or any Subsidiary of any
Loan Document.
"MATERIAL SUBSIDIARY" means, at any time, any Subsidiary
having at such time total assets in excess of $3,000,000,
based to the extent applicable, upon the Company's most recent
annual or quarterly financial statements delivered to the
Agent pursuant to SECTION 7.01.
"MORTGAGE" means the two Real Estate Mortgages, Assignments,
Security Agreements and Financing Statements dated as of the
date hereof between the
22
Company and Agent creating a Lien on the Company's real
property or any interest in real property.
"MORTGAGED PROPERTY" means all property subject to a Lien
pursuant to the Mortgage.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", within the
meaning of Section 4001(a)(3) of ERISA, to which the Company
or any ERISA Affiliate makes, is making, or is obligated to
make contributions or, during the preceding three calendar
years, has made, or been obligated to make, contributions.
"NET BORROWING AVAILABILITY" means (a) the lesser of (i) the
Aggregate Revolving Loan Commitment or (ii) the Borrowing Base
less (b) the outstanding principal amount of all Revolving
Loans plus Swing Line Loans outstanding plus the Effective
Amount of all L/C Obligations.
"NET PROCEEDS" means (a) with respect to any Asset
Disposition, the sum of cash or readily marketable cash
equivalents received (including by way of a cash generating
sale or discounting of a note or receivable, but excluding any
other consideration received in the form of assumption by the
acquiring Person of debt or other obligations relating to the
properties or assets so disposed of or received in any other
non-cash form) therefrom, whether at the time of such
disposition or subsequent thereto, and, in the case of an
Asset Disposition, net of all payments made by the Company or
any of its Subsidiaries on any Indebtedness which is secured
by such assets pursuant to a Permitted Lien upon or with
respect to such assets or which must by the terms of such
Lien, or in order to obtain a necessary consent to such Asset
Disposition, or by applicable law be repaid out of the
proceeds from such Asset Disposition and net of all costs and
expenses in readying for sale the disposal of assets or
properties or (b) with respect to any sale or issuance of any
debt or equity securities of the Company or any Subsidiary,
cash or readily marketable cash equivalents received (but
excluding any other non-cash form) therefrom, whether at the
time of such disposition, sale or issuance or subsequent
thereto, net, in either case, of all legal, title and
recording tax expenses, commissions and other fees and all
costs and expenses incurred and all federal, state, local and
other taxes required to be paid or accrued as a liability as a
consequence of such transactions .
"NET WORTH" means the shareholders' equity or net worth of the
Company and its Subsidiaries as determined in accordance with
GAAP.
"NON-SURETY L/C'S" means letters of credit which are not
Surety L/C's.
23
"Note" or "Notes" mean the Revolving Notes and Term Notes.
"NOTICE OF BORROWING" means a notice in substantially the
form of EXHIBIT A.
"NOTICE OF CONVERSION/CONTINUATION" means a notice in
substantially the form of EXHIBIT B.
"OBLIGATIONS" means all advances, debts, liabilities,
obligations, covenants and duties arising under any Loan
Document owing by the Company to any Lender, the Agent,
or any Indemnified Person, whether direct or indirect
(including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter
arising.
"OFFSHORE RATE" means, for any Interest Period, with respect
to Offshore Rate Loans comprising part of the same Borrowing,
the rate of interest per annum (rounded upward to the next
1/16th of 1%) determined by the Agent as
follows:
Offshore Rate = LIBOR
------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"EURODOLLAR RESERVE PERCENTAGE" means for any day for any
Interest Period the maximum reserve percentage (expressed as a
decimal, rounded upward to the next 1/100th of 1%) in effect
on such day (whether or not applicable to any Lender) under
regulations issued from time to time by the FRB for
determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement)
with respect to Eurocurrency funding (currently referred to as
"Eurocurrency liabilities"); and
"LIBOR" means the rate of interest per annum determined by the
Agent to be the rate of interest at which dollar deposits in
the approximate amount of the amount of the Loan to be made or
continued as, or converted into, an Offshore Rate Loan by BofA
and having a maturity comparable to such Interest Period are
offered based on information presented to the Telerate Screen
as of 11:00 a.m. (London time) two (2) Business Days prior to
the commencement of such Interest Period; PROVIDED that if at
least two such offered rates appear on the Telerate Screen
(page 3750 or any successor screen) in respect of such
Interest Period, the arithmetic mean of all such rates (as
determined by the Agent) will be the rate used; PROVIDED
FURTHER, that if the Telerate System ceases to provide LIBOR
quotations, such rate shall be as the rate at which dollar
deposits in the approximate amount of the requested Offshore
Rate Loan for such Interest Period would be offered by BofA to
major banks in the London interbank
24
market at their request at approximately 11:00 a.m. (London
time) two Business Days prior to the commencement of such
Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date
of any change in the Eurodollar Reserve
Percentage.
"OFFSHORE RATE LOAN" means a Loan that bears interest based on
the Offshore Rate.
"ORGANIZATION DOCUMENTS" means, for any corporation, the
certificate or articles of incorporation, the bylaws, any
certificate of determination or instrument relating to the
rights of preferred shareholders of such corporation, any
shareholder rights agreement, and all applicable resolutions
of the board of directors (or any committee thereof) of such
corporation.
"OTHER TAXES" means any present or future stamp, court or
documentary taxes or any other excise or property taxes,
charges or similar levies which arise from any payment made
hereunder or from the execution, delivery, performance,
enforcement or registration of, or otherwise with respect to,
this Agreement or any other Loan Documents.
"PARTICIPANT" has the meaning specified in SUBSECTION
11.08(e).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal
functions under ERISA.
"PENSION PLAN" means a pension plan (as defined in Section
3(2) of ERISA) subject to Title IV of ERISA which the Company
or any ERISA Affiliate sponsors, maintains, or to which it
makes, is making, or is obligated to make contributions, or
otherwise has any liability, or in the case of a multiple
employer plan (as described in Section 4064(a) of ERISA) has
made contributions at any time during the immediately
preceding five (5) plan years.
"PERMITTED LIENS" has the meaning specified in SECTION 8.01.
"PERMITTED SWAP OBLIGATIONS" means all obligations (contingent
or otherwise) of the Company or any Subsidiary existing or
arising under Swap Contracts, provided that each of the
following criteria is satisfied: (a) such obligations are (or
were) entered into by such Person in the ordinary course of
business for the purpose of directly mitigating risks
associated with liabilities, commitments or assets held or
reasonably anticipated by such Person, or changes in the value
of
25
securities issued by such Person in conjunction with a
securities repurchase program not otherwise prohibited
hereunder, and not for purposes of speculation or taking a
"market view"; and (b) such Swap Contracts do not contain any
provision ("walk-away" provision) exonerating the
non-defaulting party from its obligation to make payments on
outstanding transactions to the defaulting party.
"PERSON" means an individual, partnership, corporation,
limited liability company, business trust, joint stock
company, trust, unincorporated association, joint venture or
Governmental Authority.
"PLAN" means an employee benefit plan (as defined in Section
3(3) of ERISA) which the Company or any ERISA Affiliate
sponsors or maintains or to which the Company or any ERISA
Affiliate makes, is making, or is obligated to make
contributions or otherwise has any liability and includes any
Pension Plan.
"PLEDGED COLLATERAL" has the meaning specified in the Foreign
Subsidiary Pledge Agreement, Domestic Subsidiary Pledge, and
ST Holdings Pledge Agreement.
"PRO FORMA FINANCIAL STATEMENTS" means (i) the unaudited pro
forma balance sheet for the Company and its Subsidiaries as of
September 30, 1999 and after giving effect to the Fintube
Acquisition and the transactions contemplated hereby and
reflecting estimated purchase price accounting adjustments,
prepared and provided by the Company, and, (ii) annual pro
forma projections for five years, prepared by the Company, in
each case in form and substance acceptable to the Agent, and
such other financial information relating to the Fintube
Acquisition as the Agent may reasonably request.
"PRO RATA REVOLVING SHARE" means, as to any Revolving Lender,
(a) at any time at which the Aggregate Revolving Loan
Commitment remains outstanding, the percentage equivalent
(expressed as a decimal rounded to the ninth decimal place) at
such time of such Lender's Revolving Loan Commitment divided
by the Aggregate Revolving Loan Commitment, and (b) after the
termination of the Aggregate Revolving Loan Commitment, the
percentage equivalent (expressed as a decimal, rounded to the
ninth decimal place) at such time of the principal amount of
such Lender's outstanding Revolving Loans (other than Swing
Line Loans) divided by the aggregate principal amount of the
outstanding Revolving Loans (other than Swing Line Loans) of
all the Lenders.
"PRO RATA SHARE" means, as to any Lender, (a) in respect of a
particular Loan and/or Commitment, (i) at any time at which
the Commitments in respect of such Loan remain outstanding,
the percentage equivalent (expressed as a decimal, rounded to
the ninth decimal place) at such time of such Lender's
26
Commitment in respect of such Loan divided by the combined
Commitments in respect of such Loan, and (ii) after the
termination of the Commitments in respect of such Loan, the
percentage equivalent (expressed as a decimal, rounded to the
ninth decimal place) at such time of the principal amount
outstanding of such Loans held by such Lender divided by the
aggregate principal amount outstanding of such Loans held by
all Lenders, and (b) in respect of all Loans and/or
Commitments, (i) at any time at which the Aggregate
Commitment (or any portion thereof) remains outstanding, the
percentage equivalent (expressed as a decimal, rounded to the
ninth decimal place) at such time of such Lender's Commitments
in respect of all Loans (and if any Term Loans are
outstanding, with the Term Loan Commitment deemed to be
outstanding to the extent of the principal amount of the
related Term Loan which is then outstanding) divided by the
Aggregate Commitment, and (b) after the termination of the
Aggregate Commitment, the percentage equivalent (expressed as
a decimal, rounded to the ninth decimal place) at such time of
the principal amount of such Lender's outstanding Loans
(including such Lender's ratable share of outstanding Swing
Line Loans and L/C Obligations) divided by the aggregate
principal amount of the outstanding Loans and L/C Obligations
of all of the Lenders.
"RATE SWAP DOCUMENTS" means, collectively, all Swap Contracts
entered into between the Company and any Lender or any
Affiliate thereof in respect of any portion of the
Obligations.
"RECEIVABLES AVAILABILITY" means at any time an amount equal
to eighty percent (80%) of the face amount (less maximum
discounts, credits and allowances which may be taken by or
granted to Account Debtors in connection therewith)
outstanding at such time under existing Eligible Accounts,
less such reserves as Agent in its reasonable discretion and
in accordance with its customary business practices elects to
establish less applied progress payments received from the
U.S. Government with respect to such Eligible Accounts for
goods sold to the U.S. Government. Agent shall notify the
Company in writing of any reserves it chooses to establish
from time to time.
"REPORTABLE EVENT" means, any of the events set forth in
Section 4043(c) of ERISA or the regulations thereunder, other
than any such event for which the 30-day notice requirement
under ERISA has been waived in regulations issued by the PBGC.
"REQUIRED LENDERS" means at any time Lenders then holding
at least 66-2/3% of the sum of (a) the then aggregate
unpaid principal amount of the Term Loans, PLUS (b) the
amount of the Aggregate Revolving Loan Commitment (or if
the Revolving Loan Commitment has been terminated, then the
aggregate principal
27
amount outstanding of Revolving Loans and Swing Line Loans,
plus the outstanding amount of L/C Obligations); PROVIDED,
that, if no principal amount of any Loan is then
outstanding, then "Required Lenders" shall mean Lenders
then having at least of the 66-2/3% Aggregate Revolving
Loan Commitment.
"REQUIRED REVOLVING LENDERS" means at any time Revolving
Lenders then holding at least 66-2/3% of the then aggregate
unpaid principal amount of the Revolving Loans (other than
Swing Line Loans), or, if no such principal amount is then
outstanding, Revolving Lenders then having at least 66-2/3%
of the Aggregate Revolving Loan Commitment.
"REQUIREMENT OF LAW" means, as to any Person, any law
(statutory or common), treaty, rule or regulation or
determination of an arbitrator or of a Governmental Authority,
in each case applicable to or binding upon the Person or any
of its property or to which the Person or any of its property
is subject.
"RESPONSIBLE OFFICER" means the chief executive officer, the
president, the chief financial officer or the treasurer of the
Company, or any other officer having substantially the same
authority and responsibility.
"REVOLVING LENDER" means any Lender having a Revolving Loan
Commitment.
"REVOLVING LOAN" has the meaning specified in SUBSECTION
2.01(b).
"REVOLVING LOAN COMMITMENT", as to each Revolving Lender, has
the meaning specified in SUBSECTION 2.01(b).
"REVOLVING NOTE" means a promissory note executed by the
Company in favor of a Lender pursuant to SUBSECTION 2.02(b),
in substantially the form of EXHIBIT E-1.
"REVOLVING LOAN TERMINATION DATE" means the earlier to occur
of:
(a) December 31, 2005; and
(b) the date on which the Aggregate Revolving
Loan Commitment terminates in accordance
with the provisions of this Agreement.
"SAME DAY FUNDS" means (a) with respect to disbursements and
payments in Dollars, immediately available funds, and (b) with
respect to disbursements and payments in an offshore currency,
same day or other funds as may be determined by the Agent to
be customary in the place of disbursement or
28
payment for the settlement of international banking
transactions in the relevant Offshore Currency.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal
functions.
"SECURITY AGREEMENT" means that certain Security Agreement
dated as of the date hereof between the Company and the Agent.
"SOLVENT" means, as to any Person at any time, that (a) the
fair value of the property of such Person is greater than the
amount of such Person's liabilities (including disputed,
contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section
101(31) of the Bankruptcy Code; (b) the present fair saleable
value of the property of such Person is not less than the
amount that will be required to pay the probable liability of
such Person on its debts as they become absolute and matured;
(c) such Person is able to realize upon its property and pay
its debts and other liabilities (including disputed,
contingent and unliquidated liabilities, but applying the
reasonably anticipated liability, after giving effect to
payments under insurance policies and indemnity agreements
which such Person reasonably expects to receive) as they
mature in the normal course of business; (d) such Person does
not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such
debts and liabilities mature; and (e) such Person is not
engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's
property would constitute unreasonably small capital.
"ST HOLDINGS" means Lone Star ST Holdings, Inc., a Delaware
corporation.
"ST HOLDINGS GUARANTY" means that certain Guaranty Agreement
dated as of the date hereof by ST Holdings in favor of the
Agent and the Lenders.
"ST HOLDINGS PLEDGE" means the Security and Stock Pledge
Agreement dated as of the date hereof between ST Holdings and
the Agent.
"STATED AMOUNT" means the stated or face amount of a Letter of
Credit to the extent available at the time for drawing
(subject to presentment of all requested documents), as the
same may be increased or decreased from time to time in
accordance with the terms of such Letter of Credit.
"SUBSIDIARY" of a Person means any corporation, association,
partnership, limited liability company, joint venture or other
business entity of which more than 50% of the voting stock,
membership interests or other equity interests (in
29
the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or
more of the Subsidiaries of the Person, or a combination
thereof. Unless the context otherwise clearly requires,
references herein to a "Subsidiary" or "Subsidiaries" refer
to a Subsidiary or Subsidiaries of the Company.
"SUBSIDIARY GUARANTY" means that certain Subsidiary Guaranty
dated as of the date hereof by certain of the Subsidiaries in
favor of the Agent and the Lenders.
"SUBSIDIARY SECURITY AGREEMENT" means that certain Security
Agreement to be executed by a Material Subsidiary as specified
in SECTION 7.14.
"SURETY BONDS" means all bonds issued for the account of the
Company or any Subsidiary to assure the performance thereby
(or to the extent issued in the ordinary course of business,
any other Person) under any contract entered into in the
ordinary course of business.
"SURETY INSTRUMENTS" means all letters of credit (including
standby and commercial), banker's acceptances, bank
guaranties, shipside bonds, performance bonds, Surety Bonds
and similar instruments.
"SURETY L/C'S" means letters of credit which are issued for
the account of the Company or any Subsidiary to provide credit
support, in the ordinary course of business, for (a) a
contract bid by any such Person, (b) the performance by any
such Person under any contract, (c) any warranty extended by
any such Person and (d) the repayment of advance payments made
to any such Person.
"SWAP CONTRACT" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap,
basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap or option, bond,
note or xxxx option, interest rate option, forward foreign
exchange transaction, cap, collar or floor transaction,
currency swap, cross-currency rate swap, swaption, currency
option or any other, similar transaction (including any option
to enter into any of the foregoing) or any combination of the
foregoing, and, unless the context otherwise clearly requires,
any master agreement relating to or governing any or all of
the foregoing.
"SWAP TERMINATION VALUE" means, in respect of any one or more
Swap Contracts, after taking into account the effect of any
legally enforceable netting agreement relating to such Swap
Contracts, (a) for any date on or after the date such Swap
Contracts have been closed out and termination value(s)
determined in accordance therewith, such termination value(s),
and (b) for any date prior to the date referenced in clause
(a) the amount(s) determined as the xxxx-to-market
30
value(s) for such Swap Contracts, as determined by the
Company based upon one or more mid-market or other readily
available quotations provided by any recognized dealer in
such Swap Contracts (which may include any Lender).
"SWING LINE COMMITMENT" means at any time, the obligation of
the Swing Line Lender to make Swing Line Loans pursuant to
SECTION 2.05.
"SWING LINE LENDER" means BofA, in its capacity as provider
of the Swing Line Loans.
"SWING LINE LOAN" means a Loan made by the Swing Line Lender
hereunder that is not a Revolving Loan or a Term Loan.
"SWING LINE NOTE" means a promissory note in substantially the
form of EXHIBIT F.
"SWING LINE RATE" means, at any time, for each Swing Line
Loan, (a) the Base Rate in effect as of the Business Day of
the making of a Swing Line Loan PLUS (b) the Applicable Base
Rate Margin in respect of Revolving Loans then in effect.
"TAXES" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings
or similar charges, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent,
respectively, taxes imposed on or measured by its net income
by the jurisdiction (or any political subdivision thereof)
under the laws of which such Lender or the Agent, as the case
may be, is organized or maintains a lending office.
"TERM LOAN" has the meaning specified in SUBSECTION 2.01(a).
"TERM LOAN COMMITMENT" means, as to each Lender, such Lender's
Term Loan Commitment, as specified on SCHEDULE 2.01.
"TERM LOAN TERMINATION DATE" means the earlier to occur of:
(a) December 31, 2005; and
(b) the date on which the Term Loan Commitment
terminates in accordance with this
Agreement.
"TERM NOTE" means a promissory note executed by the Company in
favor of a Lender pursuant to SUBSECTION 2.02(b), in
substantially the form of EXHIBIT E-2.
31
"TRANSACTION DOCUMENTS" means the Loan Documents and the
Acquisition Documents.
A "TYPE" of Loan means its status as either a Base Rate Loan
or an Offshore Rate Loan.
"UCC" means the Uniform Commercial Code as in effect in the
State of Oklahoma.
"UNFUNDED PENSION LIABILITY" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over
the current value of that Plan's assets, determined in
accordance with the assumptions used for funding the Pension
Plan pursuant to Section 412 of the Code for the applicable
plan year.
"UNITED STATES" and "U.S." each means the United States of
America.
"VOTING STOCK" of any Person as of any date means the Capital
Stock of such Person that is entitled to vote in the election
of the board of directors (or other governing body) of such
Person.
"WHOLLY-OWNED SUBSIDIARY" means any corporation in which
(other than directors' qualifying shares required by law) 100%
of the capital stock of each class having ordinary voting
power, and 100% of the capital stock of every other class, in
each case (or, in the case of Persons other than corporations,
membership interests or other equity interests), at the time
as of which any determination is being made, is owned,
beneficially and of record, by the Company, or by one or more
of the other Wholly-Owned Subsidiaries, or both.
"WORKING CAPITAL" means (a) Current Assets, LESS (b) Current
Liabilities.
"YEAR 2000 PROBLEM" means any significant risk that computer
hardware, software or equipment containing embedded microchips
essential to the business or operations of the Company or any
of its Subsidiaries will not, in the case of dates or time
periods occurring after December 31, 1999, function at least
as efficiently and reliably as in the case of times or time
periods occurring before January 1, 2000, including the making
of accurate leap year calculations.
1.02 OTHER INTERPRETIVE PROVISIONS. (a) The meanings of defined
terms are equally applicable to the singular and plural forms of the defined
terms.
(b) The words "hereof", "herein", "hereunder" and similar
words refer to this Agreement as a whole and not to any particular
provision of this Agreement; and
32
subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures, notices
and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation."
(iii) In the computation of periods of time from a
specified date to a later specified date, the word
"from" means "from and including"; the words "to" and
"until" each mean "to but excluding", and the word
"through" means "to and including."
(iv) The term "property" includes any kind of
property or asset, real, personal or mixed, tangible
or intangible.
(d) Unless otherwise expressly provided herein, (i) references
to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and
other modifications thereto, but only to the extent such amendments and
other modifications are not prohibited by the terms of any Loan
Document, and (ii) references to any statute or regulation are to be
construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation
of this Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and shall each be performed in accordance with their terms.
(g) Unless otherwise expressly provided, any reference to any
action of the Agent or the Lenders by way of consent, approval or
waiver shall be deemed modified by the phrase "in its/their sole
discretion."
(h) This Agreement and the other Loan Documents are the result
of negotiations among and have been reviewed by counsel to the Agent,
the Company and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Lenders or the
Agent merely because of the Agent's or Lenders' involvement in their
preparation.
33
1.03 ACCOUNTING PRINCIPLES. (a) Unless the context otherwise clearly
requires, all accounting terms not expressly defined herein shall be construed,
and all financial computations required under this Agreement shall be made, in
accordance with GAAP, consistently applied.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Company.
(c) In the event that any changes in GAAP occur after the date
of this Agreement and such changes result in a material variation in
the method of calculation of financial covenants or other terms of this
Agreement, then the Company, the Agent and the Lenders agree to amend
such provisions of this Agreement so as to equitably reflect such
changes so that the criteria for evaluating the Company's financial
condition will be the same after such changes as if such changes had
not occurred.
ARTICLE II
THE CREDITS
2.01 AMOUNTS AND TERMS OF COMMITMENTS. (a) TERM LOAN. Each Lender
severally agrees, on the terms and conditions set forth herein, to make a single
loan to the Company (each such loan, a "TERM LOAN") on the Closing Date in an
amount not to exceed such Lender's Term Loan Commitment as set forth on SCHEDULE
2.01. Amounts borrowed as a Term Loan which are repaid or prepaid by the Company
may not be reborrowed.
(b) THE REVOLVING CREDIT. Each Revolving Lender severally
agrees, on the terms and conditions set forth herein, to make loans to
the Company (each such loan, a "REVOLVING LOAN") from time to time on
any Business Day during the period from the Closing Date to the
Revolving Loan Termination Date, in an aggregate amount not to exceed
at any time outstanding the amount set forth on SCHEDULE 2.01 (such
amount, as the same may be reduced under SECTION 2.07 or as a result of
one or more assignments under SECTION 11.08, the Revolving Lender's
"REVOLVING LOAN COMMITMENT"); PROVIDED, HOWEVER, that, after giving
effect to any Borrowing of Revolving Loans, the Effective Amount of all
outstanding Revolving Loans, together with Swing Line Loans outstanding
at such time and the Effective Amount of all L/C Obligations, shall not
at any time exceed the lesser of (i) the Aggregate Revolving Loan
Commitment or (ii) the Borrowing Base; AND PROVIDED FURTHER, that the
Effective Amount of the Revolving Loans of any Revolving Lender plus
the participation of such Revolving Lender in the Effective Amount of
all L/C Obligations plus such Revolving Lender's Pro Rata Revolving
Share of any outstanding Swing Line Loans shall not at any time exceed
such Revolving Lender's Revolving Loan Commitment. Within the limits of
each Revolving Lender's Commitment, and subject to the other terms and
conditions hereof,
34
the Company may borrow under this SUBSECTION 2.01(b), prepay under
SECTION 2.08 and reborrow under this SUBSECTION 2.01(b).
2.02 LOAN ACCOUNTS. (a) The Loans made by each Lender and the Letters
of Credit Issued by the Issuer shall be evidenced by one or more accounts or
records maintained by such Lender or Issuer, as the case may be, in the ordinary
course of business. The accounts or records maintained by the Agent, the Issuer
and each Lender shall be conclusive absent manifest error of the amount of the
Loans made by the Lenders to the Company and the Letters of Credit Issued for
the account of the Company, and the interest and payments thereon. Any failure
so to record or any error in doing so shall not, however, limit or otherwise
affect the obligation of the Company hereunder to pay any amount owing with
respect to the Loans or any Letter of Credit.
(b) The Company shall issue to each Lender notes in the form
of EXHIBIT E-1 in the case of Revolving Loans and/or EXHIBIT E-2 in the
case of Term Loans (each, a "NOTE" and collectively, the "NOTES") to
evidence such Lender's Loans (or, in the case of Swing Line Loans, in
the form of EXHIBIT F). Each Lender may, instead of or in addition to
maintaining a loan account, endorse on the schedule annexed to its
Note(s) the date, amount and maturity of each Loan made by it and the
amount of each payment of principal made by the Company with respect
thereto. Each such Lender is irrevocably authorized by the Company to
endorse its Note(s) or Swing Line Note, as applicable, and each
Lender's record shall be conclusive absent manifest error; PROVIDED,
HOWEVER, that the failure of a Lender to make, or an error in making, a
notation thereon with respect to any Loan shall not limit or otherwise
affect the obligations of the Company hereunder or under any such Note
or Swing Line Note to such Lender.
2.03 PROCEDURE FOR BORROWING. (a) Each Borrowing shall be made upon the
Company's irrevocable notice delivered to the Agent in the form of a Notice of
Borrowing (which notice must be received by the Agent prior to 11:00 a.m.
(Central time) (i) three Business Days prior to the requested Borrowing Date, in
the case of Offshore Rate Loans; and (ii) one Business Day prior to the
requested Borrowing Date (or in the case of the initial Credit Extension, at the
option of the Agent, on the requested Borrowing Date), in the case of Base Rate
Loans, specifying:
(A) the amount of the Borrowing, which shall
be for Offshore Rate Loans in an aggregate minimum of
$1,000,000 or any multiple of $100,000 in excess
thereof and for Base Rate Loans in an aggregate
minimum of $500,000 or any multiple of $100,000 in
excess thereof;
(B) the requested Borrowing Date, which
shall be a Business Day;
35
(C) the Type of Loans comprising the
Borrowing; and
(D) with respect to Offshore Rate Loans, the
duration of the Interest Period for 1, 2, 3 or 6
months that is to be applicable to such Loans
included in such notice. If the Notice of Borrowing
fails to specify the duration of the Interest Period
for any Borrowing comprised of Offshore Rate Loans,
such Interest Period shall be three months;
PROVIDED, HOWEVER, that with respect to the Borrowing to be made on the
Closing Date, such Borrowing will consist of Base Rate Loans only.
(b) The Agent will promptly notify each applicable Lender of
its receipt of any Notice of Borrowing and, in respect of Borrowings of
Revolving Loans, of the amount of such Revolving Lender's Pro Rata
Revolving Share of that Borrowing.
(c) Each Lender will make the amount of its Pro Rata Share of
each Borrowing available to the Agent for the account of the Company at
the Agent's Payment Office by 1:00 p.m. (Central time) on the Borrowing
Date requested by the Company in funds immediately available to the
Agent. The proceeds of all such Loans will then be made available to
the Company by the Agent at such office by crediting the account of the
Company on the books of BofA with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by
the Agent.
(d) After giving effect to any Borrowing, unless the Agent
shall otherwise consent, there may not be more than six different
Interest Periods in effect.
(e) The Company hereby authorizes the Lenders and the Agent to
accept Notices of Borrowing based on telephonic notices made by any
person or persons the Agent or any Lender in good faith believes to be
acting on behalf of the Company. The Company agrees to deliver promptly
to the Agent a written confirmation of each telephonic notice, signed
by a Responsible Officer or an authorized designee. If the written
confirmation differs in any material respect from the telephonic
notice, the records of the Agent and the Lenders shall govern absent
manifest error.
2.04 CONVERSION AND CONTINUATION ELECTIONS. (a) The Company may,
upon irrevocable notice to the Agent in accordance with SUBSECTION 2.04(b):
(i) elect, as of any Business Day, in the case of
Base Rate Loans, or as of the last day of the applicable
Interest Period, in the case of any other Type of Revolving
Loans or Term Loans, to convert any such Loans (or any part
thereof in an amount not less than $1,000,000 or that is in an
integral multiple of $100,000 in excess thereof for Offshore
Rate Loans and not less than
36
$500,000 or that is in an integral multiple of $100,000 in
excess thereof for Base Rate Loans) into Loans of any other
Type; or
(ii) elect as of the last day of the applicable
Interest Period, to continue any Revolving Loans or Term Loans
having Interest Periods expiring on such day (or any part
thereof in an amount not less than $1,000,000 or that is in an
integral multiple of $100,000 in excess thereof for Offshore
Rate Loans);
PROVIDED, that if at any time the aggregate amount of Offshore Rate
Loans in respect of any Borrowing is reduced, by payment, prepayment,
or conversion of part thereof to be less than $1,000,000 such Offshore
Rate Loans shall automatically convert into Base Rate Loans, and on and
after such date the right of the Company to continue such Loans as, and
convert such Loans into, Offshore Rate Loans shall terminate.
(b) The Company shall deliver a Notice of
Conversion/Continuation to be received by the Agent not later than
11:00 a.m. (Central time) at least (i) three Business Days in advance
of the Conversion/Continuation Date, if the Loans are to be converted
into or continued as Offshore Rate Loans; and (ii) at least one
Business Day in advance of the Conversion/Continuation Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(i) the proposed Conversion/Continuation Date;
(ii) the aggregate amount of Loans to be
converted or continued;
(iii) the Type of Loans resulting from the proposed
conversion or continuation; and
(iv) other than in the case of conversions into
Base Rate Loans, the duration of the requested
Interest Period.
(c) If upon the expiration of any Interest Period applicable
to Offshore Rate Loans, the Company has failed to select timely a new
Interest Period to be applicable to such Offshore Rate Loans, as the
case may be, or if any Default or Event of Default then exists, the
Company shall be deemed to have elected to convert such Offshore Rate
Loans into Base Rate Loans effective as of the expiration date of such
Interest Period.
(d) The Agent will promptly notify each applicable Lender of
its receipt of a Notice of Conversion/Continuation, or, if no timely
notice is provided by the Company, the Agent will promptly notify each
applicable Lender of the details of any automatic conversion. All
conversions and continuations shall be made ratably
37
according to the respective outstanding principal amounts of the Loans
with respect to which the notice was given held by each Lender.
(e) Unless the Required Lenders otherwise consent, during the
existence of a Default or Event of Default, the Company may not elect
to have a Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, unless the Agent shall otherwise consent, there may not be more
than six (6) different Interest
Periods in effect.
(g) The Company hereby authorizes the Lenders and the Agent to
accept Notices of Conversion/Continuation based on telephonic notices
made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Company. The Company agrees to
deliver promptly to the Agent a written confirmation of each telephonic
notice, signed by a Responsible Officer. If the written confirmation
differs in any material respect from the telephonic notice, the records
of the Agent and the Lenders shall govern absent manifest error.
2.05 THE SWING LINE LOANS. Subject to the terms and conditions hereof,
the Swing Line Lender agrees to make Swing Line Loans to the Company from time
to time prior to the Revolving Loan Termination Date in an aggregate principal
amount at any one time outstanding not to exceed $4,000,000; PROVIDED, that
after giving effect to any such Swing Line Loan, the Effective Amount of all
Revolving Loans, Swing Line Loans and L/C Obligations at such time would not
exceed the lesser of (i) the Aggregate Revolving Loan Commitment or (ii) the
Borrowing Base at such time. Prior to the Revolving Loan Termination Date, the
Company may use the Swing Line Commitment by borrowing, prepaying the Swing Line
Loans in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. All Swing Line Loans shall bear interest at the Swing Line
Rate and shall not be entitled to be converted into Loans that bear interest at
any other rate.
2.06 PROCEDURE FOR SWING LINE LOANS. (a) The Company may borrow under
the Swing Line Commitment on any Business Day until the Revolving Loan
Termination Date; PROVIDED, that the Company shall give the Swing Line Lender
irrevocable written notice signed by a Responsible Officer or an authorized
designee (which notice must be received by the Swing Line Lender prior to 11:00
a.m. (Central time)) with a copy to the Agent specifying the amount of the
requested Swing Line Loan, which shall be in a minimum amount of $100,000 or a
whole multiple of $50,000 in excess thereof. The proceeds of the Swing Line Loan
will be made available by the Swing Line Lender to the Company in immediately
available funds at the office of the Swing Line Lender by 1:00 p.m. (Central
time) on the date of such notice. The Company may at any time and from time to
time, prepay the Swing Line Loans, in whole or in part, without premium or
penalty, by notifying the Swing Line Lender prior to 11:00 a.m. (Central time)
on any Business Day of the date and amount of prepayment with a copy to
38
the Agent. If any such notice is given, the amount specified in such notice
shall be due and payable on the date specified therein. Partial prepayments
shall be in an aggregate principal amount of $100,000 or a whole multiple of
$50,000 in excess thereof.
(b) The Swing Line Lender may in its sole discretion (or
will at the direction of the Company) on any Business Day, on behalf
of the Company (which hereby irrevocably directs the Swing Line
Lender to act on its behalf) request the Agent to notify each
Revolving Lender to make a Base Rate Loan in an amount equal to such
Revolving Lender's Pro Rata Revolving Share of the aggregate
principal amount of the Swing Line Loans outstanding on the date
such notice is given. Unless any of the events described in
SUBSECTION 9.01(f) OR (g) shall have occurred with respect to the
Company (in which event the procedures of paragraph (d) of this
SECTION 2.06 shall apply) each Revolving Lender shall make the
proceeds of its Revolving Loan available to the Agent for the
account of the Swing Line Lender at the Agent's Payment Office in
funds immediately available prior to 1:00 p.m. (Central time) on the
Business Day next succeeding the date such notice is given. The
proceeds of such Revolving Loans shall be immediately applied to
repay the outstanding Swing Line Loans. Effective on the day such
Revolving Loans are made, the portion of the Swing Line Loans so
paid shall no longer be outstanding as Swing Line Loans and shall no
longer be due under the Swing Line Note. The Company shall pay to
the Swing Line Lender, promptly following the Swing Line Lender's
demand, the amount of its outstanding Swing Line Loans to the extent
amounts received from the Revolving Lenders are not sufficient to
repay in full such outstanding Swing Line Loans.
(c) Notwithstanding anything herein to the contrary, the Swing
Line Lender (i) shall not be obligated to make any Swing Line Loan if
the conditions set forth in ARTICLE V have not been satisfied and (ii)
shall not make any requested Swing Line Loan if, prior to 11:00 a.m.
(Central time) on the date of such requested Swing Line Loan, it has
received a written notice from the Agent or any Revolving Lender
directing it not to make further Swing Line Loans because one or more
of the conditions specified in ARTICLE V are not then satisfied.
(d) If prior to the making of a Revolving Loan required to be
made by SUBSECTION 2.06(b) an Event of Default described in SUBSECTION
9.01(f) OR 9.01(g) shall have occurred and be continuing with respect
to the Company, each Revolving Lender will, on the date such Revolving
Loan was to have been made pursuant to the notice described in
SUBSECTION 2.06(b), purchase an undivided participating interest in the
outstanding Swing Line Loans in an amount equal to its Pro Rata
Revolving Share of the aggregate principal amount of Swing Line Loans
then outstanding. Each Revolving Lender will immediately transfer to
the Agent for the benefit of the Swing Line Lender, in immediately
available funds, the amount of its participation.
39
(e) Whenever, at any time after a Revolving Lender has
purchased a participating interest in a Swing Line Loan, the Swing Line
Lender receives any payment on account thereof, the Swing Line Lender
will distribute to the Agent for delivery to each Revolving Lender its
participating interest in such amount (appropriately adjusted, in the
case of interest payments, to reflect the period of time during which
such Revolving Lender's participating interest was outstanding and
funded); PROVIDED, HOWEVER, that in the event that such payment
received by the Swing Line Lender is required to be returned, such
Revolving Lender will return to the Agent for delivery to the Swing
Line Lender any portion thereof previously distributed by the Swing
Line Lender to it.
(f) Each Lender's obligation to make the Revolving Loans
referred to in SUBSECTION 2.06(b) and to purchase participating
interests pursuant to SUBSECTION 2.06(d) shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense
or other right which such Revolving Lender or the Company may have
against the Swing Line Lender, the Company or any other Person for any
reason whatsoever, (ii) the occurrence or continuance of a Default or
an Event of Default, (iii) any adverse change in the condition
(financial or otherwise) of the Company, (iv) any breach of this
Agreement or any other Loan Document by the Company, any Subsidiary or
any other Lender, or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
(g) The Company shall repay any Swing Line Loan in full no
later than seven (7) days after such loan is made either by converting
the Loan to a Revolving Loan or repaying the Swing Line Loan by other
means not prohibited by this Agreement.
2.07 VOLUNTARY TERMINATION OR REDUCTION OF REVOLVING LOAN COMMITMENTS.
(a) The Company may, upon not less than five Business Days' prior notice to the
Agent, terminate the Revolving Loan Commitments, or permanently reduce the
Revolving Loan Commitments by an amount of $1,000,000 or any multiple of
$1,000,000 in excess thereof; UNLESS, after giving effect thereto and to any
prepayments of Loans made on the effective date thereof,
(i) the Effective Amount of all Revolving Loans,
Swing Line Loans and L/C Obligations together would exceed the
amount of the Aggregate Revolving Loan Commitment then in
effect, or
(ii) the Effective Amount of all L/C Obligations
then outstanding would exceed the L/C Commitment. Once
reduced in accordance with this Section, the Revolving Loan
Commitments may not be increased. Any reduction of the
Revolving Loan Commitments shall be applied to each
Revolving Lender according to its Pro Rata Revolving Share.
If and to the extent specified by the
40
Company in the notice to the Agent, some or all of the
reduction in the Revolving Loan Commitments shall be
applied to reduce the L/C Commitment. All accrued
commitment and letter of credit fees to, but not including,
the effective date of any reduction or termination of
Revolving Loan Commitments, shall be paid on the effective
date of such reduction or termination.
(b) At no time shall the Swing Line Commitment exceed the
Aggregate Revolving Loan Commitment, and any reduction of the
Aggregate Revolving Loan Commitment which reduces the Aggregate
Revolving Loan Commitment below the then-current amount of the Swing
Line Commitment shall result in an automatic corresponding reduction
of the Swing Line Commitment to the amount of the Aggregate
Revolving Loan Commitment, as so reduced, without any action on the
part of the Swing Line Lender. At no time shall the Swing Line
Commitment exceed the Revolving Loan Commitment of the Swing Line
Lender, and any reduction of the Aggregate Revolving Loan Commitment
which reduces the Revolving Loan Commitment of the Swing Line Lender
below the then-current amount of the Swing Line Commitment shall
result in an automatic corresponding reduction of the Swing Line
Commitment to the amount of the Revolving Loan Commitment of the
Swing Line Lender, as so reduced, without any action on the part of
the Swing Line Lender.
2.08 OPTIONAL PREPAYMENTS. Subject to SECTION 4.04, the Company may, at
any time or from time to time, upon not less than two (2) Business Days'
irrevocable notice to the Agent, in respect of Offshore Rate Loans, and in
respect of Base Rate Loans, by not later than 11:00 a.m. (Central time) on the
prepayment date, prepay Loans in whole or in part, in minimum amounts of
$1,000,000 or any multiple of $100,000 in excess thereof for Offshore Rate Loans
and in minimum amounts of $500,000 or any multiple of $100,000 in excess thereof
for Base Rate Loans. Such notice of prepayment shall specify the date and amount
of such prepayment, which Loans are to be prepaid and the Type(s) of such Loans
to be prepaid. The Agent will promptly notify each Lender of its receipt of any
such notice, and of such Lender's Pro Rata Share of such prepayment. If such
notice is given by the Company, the Company shall make such prepayment and the
payment amount specified in such notice shall be due and payable on the date
specified therein, together, in the case of Offshore Rate Loans, with accrued
interest to each such date on the amount prepaid and any amounts required
pursuant to SECTION 4.04. Optional prepayments shall be applied to Term Loans in
the inverse order of maturity. Optional Prepayments shall be applied to each
Lender according to its Pro Rata Share.
2.09 MANDATORY PREPAYMENTS OF LOANS. (a) If on any date the Effective
Amount of L/C Obligations exceeds the L/C Commitment, the Company shall Cash
Collateralize on such date the outstanding Letters of Credit in an amount equal
to the excess of the maximum amount then available to be drawn under the Letters
of Credit over the Aggregate L/C Commitment. Subject to SECTION 4.04, if on any
date after giving effect to any Cash Collateralization made on such date
pursuant to the preceding sentence, the Effective Amount
41
of all Revolving Loans, Swing Line Loans and Term Loans then outstanding plus
the Effective Amount of all L/C Obligations exceeds the Aggregate Commitment,
the Company shall immediately, and without notice or demand, prepay the
outstanding principal amount of the Revolving Loans and L/C Advances by an
amount equal to the applicable excess.
(b) Within five (5) Business Days after the end of each
fiscal quarter, the Company shall prepay the Loans in an amount
equal to 100% of the sum of (a) the Net Proceeds realized upon all
Asset Dispositions made by the Company or any Subsidiary in such
fiscal quarter, the insurance proceeds received by the Company or
any Subsidiary in such fiscal quarter following a casualty involving
such Person's property, and the payments received by the Company or
any Subsidiary in such fiscal quarter from a condemnation of such
Person's property, aggregating in excess of $500,000, to the extent
any of the foregoing Net Proceeds are not applied (or committed to
be applied) within 180 days after the consummation or receipt
thereof, as applicable, to the purchase of similar assets that are
not classified as current assets under GAAP and are used or useful
in the business of the Company and its Subsidiaries or to the repair
or restoration of such Person's property. The amount of such
prepayment shall be applied first to the then outstanding principal
balance of the Term Loans in inverse order of maturity and then to
the then outstanding Revolving Loans. The Revolving Loan Commitment
of each Lender shall automatically be reduced by an amount equal to
such Lender's Pro Rata Revolving Share of the amount of the
prepayment pursuant to this SUBSECTION 2.09(b), if any, applied to
the Revolving Loans. All accrued commitment fees to, but not
including the effective date of any reduction or termination of the
Revolving Loan Commitments, shall be paid on the effective date of
such reduction or termination.
(c) On each January 31st, beginning January 31, 2001, the
Company shall prepay the Loans in an amount equal to 50% of the Excess
Cash Flow, if any, generated by the Company and its Subsidiaries during
the immediately preceding fiscal year of the Company. All prepayments
shall be applied first to the Term Loans and then to Revolving Loans as
specified in SECTION 2.09(g) hereof.
(d) If the Company or any Subsidiary shall incur any
Indebtedness (other than Indebtedness permitted to be incurred by
SUBSECTION 8.05), the Company shall promptly notify the Agent of the
estimated Net Proceeds of such issuance to be received by the Company
or such Subsidiary in respect thereof. Promptly upon, and in no event
later than three (3) days after, receipt by the Company or such
Subsidiary of Net Proceeds of such incurrence, the Company shall prepay
the Obligations in an amount equal to 100% of such Net Proceeds.
(e) If the Company or any Subsidiary shall issue new common
or preferred equity, the Company shall promptly notify the Agent of
the estimated Net Proceeds of such issuance to be received by the
Company or such Subsidiary in respect thereof.
42
Promptly upon, and in no event later than three (3) days after,
receipt by the Company or such Subsidiary of Net Proceeds of such
issuance, the Company shall prepay the Obligations in an amount
equal to 50% of such Net Proceeds.
(f) If at any time on or after December 31, 2001, the
Obligations exceed the Borrowing Base, PLUS 80% of the appraised value
of the Company's and its Subsidiaries' real estate and 50% of the book
value of the Company's and its Subsidiaries' property, plant and
equipment other than real estate, the Company shall immediately and
without notice or demand, prepay the outstanding Term Loans and then
the Revolving Loans by an amount equal to the applicable excess.
(g) Any prepayments pursuant to SUBSECTIONS 2.09(d)-(f) shall
be applied first to the outstanding principal balance of the Term Loans
in inverse order of maturity, and then to the outstanding principal
balance of the Revolving Loans (without any reduction in the Revolving
Loan Commitment of any Lender). The Borrower shall pay, together with
each prepayment under this SECTION 2.09, accrued interest on the amount
prepaid and any amounts required pursuant to SECTION 4.03 to reimburse
Agent for any breakage or redeployment costs incurred by Lenders
relating prepayments of Offshore Rate Loans.
2.10 REPAYMENT. (a) Term Loans. The Company shall repay the Term
Loans on each date set forth below as follows (each a "PRINCIPAL PAYMENT DATE"):
DATE TERM LOAN PAYMENT
-------- -----------------
3/31/00 $1,500,000
6/30/00 $1,500,000
9/30/00 $1,500,000
12/31/00 $1,500,000
3/31/01 $1,500,000
6/30/01 $1,500,000
9/30/01 $1,500,000
12/31/01 $1,500,000
3/31/02 $1,500,000
6/30/02 $1,500,000
9/30/02 $1,500,000
12/31/02 $1,500,000
3/31/03 $1,750,000
6/30/03 $1,750,000
9/30/03 $1,750,000
12/31/03 $1,750,000
3/31/04 $1,750,000
43
6/30/04 $1,750,000
9/30/04 $1,750,000
12/31/04 $1,750,000
3/31/05 $1,750,000
6/30/95 $1,750,000
9/30/05 $1,750,000
12/31/05 $1,750,000
Total $39,000,000
(b) THE REVOLVING CREDIT. The Company shall repay to the
Lenders on the Revolving Loan Termination Date the aggregate principal
amount of Revolving Loans outstanding on such date.
2.11 INTEREST. (a) Each Revolving Loan and Term Loan shall bear
interest on the outstanding principal amount thereof from the applicable
Borrowing Date at a rate per annum equal to the Offshore Rate or the Base Rate,
as the case may be (and subject to the Company's right to convert to other Types
of Loans under SECTION 2.04), PLUS the Applicable Offshore Rate Margin or the
Applicable Base Rate Margin, as applicable.
(b) Interest on each Revolving Loan and Term Loan shall be
paid in arrears on each Interest Payment Date. Interest on Base Rate
Loans shall also be paid on the date of any payment (including
prepayment) in full thereof. Interest on Offshore Rate Loans shall also
be paid on the date of any prepayment of Loans under SECTION 2.08 or
2.09 for the portion of the Loans so prepaid and upon payment
(including prepayment) in full thereof. During the existence of any
Event of Default, interest on all Loans shall be paid on demand of the
Agent at the request or with the consent of the Required Lenders.
(c) Notwithstanding subsection (a) of this Section, if any
amount of principal of or interest on any Loan, or any other amount
payable hereunder or under any other Loan Document is not paid in full
when due (whether at stated maturity, by acceleration, demand or
otherwise), the Company agrees to pay interest on such unpaid principal
or other amount, from the date such amount becomes due until the date
such amount is paid in full, and after as well as before any entry of
judgment thereon to the extent permitted by law, payable on demand, at
a fluctuating rate per annum equal to the Base Rate, plus the
Applicable Base Rate Margin, plus two percent (2.0%).
(d) Anything herein to the contrary notwithstanding, the
obligations of the Company to any Lender hereunder shall be subject to
the limitation that payments of interest shall not be required for any
period for which interest is computed hereunder, to the extent (but
only to the extent) that contracting for or receiving such payment by
such Lender would be contrary to the provisions of any law applicable
to such Lender
44
limiting the highest rate of interest that may be lawfully
contracted for, charged or received by such Lender, and in such
event the Company shall pay such Lender interest at the highest rate
permitted by applicable law.
2.12 FEES. In addition to certain fees described in SECTION 3.08:
(a) ARRANGEMENT FEES. The Company shall pay such fees to
the Agent as are required by the letter agreement ("FEE LETTER")
between the Company and Agent dated December 10, 1999.
(b) COMMITMENT FEES. The Company shall pay to the Agent for
the account of each Revolving Lender a commitment fee on the average
daily unused portion of such Revolving Lender's Revolving Loan
Commitment, computed on a quarterly basis in arrears on the last
Business Day of each calendar quarter based upon the daily utilization
for that quarter as calculated by the Agent, equal to the Applicable
Commitment Fee Percentage. For purposes of calculating utilization
under this subsection, the Revolving Loan Commitments shall be deemed
used to the extent of the Effective Amount of Revolving Loans then
outstanding (excluding any outstanding Swing Line Loans), plus the
Effective Amount of L/C Obligations then outstanding. Such commitment
fee shall accrue from the date hereof to the Revolving Loan Termination
Date and shall be due and payable quarterly in arrears on the last
Business Day of each calendar quarter commencing on March 31, 2000
through the Revolving Loan Termination Date, with the final payment to
be made on the Revolving Loan Termination Date; PROVIDED that, in
connection with any reduction or termination of Revolving Loan
Commitments under SECTION 2.07, the accrued commitment fee calculated
for the period ending on such date shall also be paid on the date of
such reduction or termination, with the following quarterly payment
being calculated on the basis of the period from such reduction or
termination date to such quarterly payment date. The commitment fees
provided in this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time during which
one or more conditions in ARTICLE V are not met.
2.13 COMPUTATION OF FEES AND INTEREST. (a) All computations of interest
for Base Rate Loans when the Base Rate is determined by BofA's "prime rate"
shall be made on the basis of a year of 365 or 366 days, as the case may be, and
actual days elapsed. All other computations of fees and interest shall be made
on the basis of a 360-day year and actual days elapsed (which results in more
interest being paid than if computed on the basis of a 365-day year). Interest
and fees shall accrue during each period during which interest or such fees are
computed from the first day thereof to the last day thereof.
(b) Each determination of an interest rate by the Agent shall
be conclusive and binding on the Company and the Lenders in the absence
of manifest error.
45
(c) FACILITY FEE. Each Lender whose Aggregate Commitment is
equal to or greater than $15,000,000 shall receive a Facility Fee
payable at Closing by the Agent in an amount equal to .45% of such
Aggregate Commitment. Each Lender whose Aggregate Commitment is equal
to or less than $10,000,000 shall receive a Facility Fee payable at the
Closing by the Agent in an amount equal to .35% of such Aggregate
Commitment.
2.14 PAYMENTS BY THE COMPANY. (a) All payments to be made by the
Company shall be made without set-off, recoupment or counterclaim. Except as
otherwise expressly provided herein, all payments by the Company shall be
made to the Agent for the account of the Lenders at the Agent's Payment
Office, and shall be made in dollars and in immediately available funds, no
later than 11:00 a.m. (Central time) on the date specified herein. The Agent
will promptly distribute to each Lender its applicable share of such payment
in like funds as received which, except as otherwise expressly provided
herein, shall be based upon such Lender's Pro Rata Share of the Loans in
respect of which such payment has been made. Any payment received by the
Agent later than 1:00 p.m. (Central time) shall be deemed to have been
received on the following Business Day and any applicable interest or fee
shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other
than a Business Day, such payment shall be made on the following
Business Day, and such extension of time shall in such case be included
in the computation of interest or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior
to the date on which any payment is due to the Lenders that the
Company will not make such payment in full as and when required, the
Agent may assume that the Company has made such payment in full to
the Agent on such date in immediately available funds and the Agent
may (but shall not be so required), in reliance upon such
assumption, distribute to each Lender on such due date an amount
equal to the amount then due such Lender. If and to the extent the
Company has not made such payment in full to the Agent, each Lender
shall repay to the Agent on demand such amount distributed to such
Lender, together with interest thereon at the Federal Funds Rate for
each day from the date such amount is distributed to such Lender
until the date repaid.
2.15 PAYMENTS BY THE LENDERS TO THE AGENT. (a) Unless the Agent
receives notice from a Lender on or prior to the Closing Date or, with respect
to any Borrowing after the Closing Date, at least one Business Day prior to the
date of such Borrowing, that such Lender will not make available as and when
required hereunder to the Agent for the account of the Company the amount of
that Lender's Pro Rata Share of the Borrowing, the Agent may assume that each
Lender has made such amount available to the Agent in immediately available
funds on the Borrowing Date and the Agent may (but shall not be so required), in
reliance upon such assumption, make available to the Company on such date a
corresponding
46
amount. If and to the extent any Lender shall not have made its full amount
available to the Agent in immediately available funds and the Agent in such
circumstances has made available to the Company such amount, that Lender
shall on the Business Day following such Borrowing Date make such amount
available to the Agent, together with interest at the Federal Funds Rate for
each day during such period. A notice of the Agent submitted to any Lender
with respect to amounts owing under this subsection (a) shall be conclusive,
absent manifest error. If such amount is so made available, such payment to
the Agent shall constitute such Lender's Loan on the date of Borrowing for
all purposes of this Agreement. If such amount is not made available to the
Agent on the Business Day following the Borrowing Date, the Agent will notify
the Company of such failure to fund and, upon demand by the Agent, the
Company shall pay such amount to the Agent for the Agent's account, together
with interest thereon for each day elapsed since the date of such Borrowing,
at a rate per annum equal to the interest rate applicable at the time to the
Loans comprising such Borrowing. The Company may, subject to the provisions
of SECTION 2.05 AND 2.06, utilize the proceeds of a Swing Line Loan to make
such payment to the Agent.
(b) The failure of any Lender to make any Loan on any
Borrowing Date shall not relieve any other Lender of any obligation
hereunder to make a Loan on such Borrowing Date, but no Lender shall be
responsible for the failure of any other Lender to make the Loan to be
made by such other Lender on any Borrowing Date.
2.16 SHARING OF PAYMENTS, ETC. If, other than as expressly provided
elsewhere herein, any Lender shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Lender shall immediately (a) notify the Agent of
such fact, and (b) purchase from the other Lenders such participations in the
Loans made by them as shall be necessary to cause such purchasing Lender to
share the excess payment pro rata with each of them; PROVIDED, HOWEVER, that if
all or any portion of such excess payment is thereafter recovered from the
purchasing Lender, such purchase shall to that extent be rescinded and each
other Lender shall repay to the purchasing Lender the purchase price paid
therefor, together with an amount equal to such paying Lender's ratable share
(according to the proportion of (i) the amount of such paying Lender's required
repayment to (ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing Lender in respect
of the total amount so recovered. The Company agrees that any Lender so
purchasing a participation from another Lender may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
set-off, but subject to SECTION 11.10) with respect to such participation as
fully as if such Lender were the direct creditor of the Company in the amount of
such participation. The Agent will keep records (which shall be conclusive and
binding in the absence of manifest error) of participations purchased under this
Section and will in each case notify the Lenders following any such purchases or
repayments.
47
2.17 SECURITY GUARANTIES. (a) All obligations of the Company and
the Guarantors under this Agreement, the Notes and all other Loan Documents
shall be secured in accordance with the Collateral Documents.
(b) All obligations of the Company under this Agreement, each
of the Notes and all other Loan Documents shall be unconditionally
guaranteed by the Guarantors pursuant to the Subsidiary Guaranty and
the ST Holdings Guaranty.
ARTICLE III
THE LETTERS OF CREDIT
3.01 THE LETTER OF CREDIT SUBFACILITY. (a) On the terms and conditions
set forth herein (i) the Issuer agrees, (A) from time to time on any Business
Day, during the period from the Closing Date to the day which is five days prior
to the Revolving Loan Termination Date, to issue Letters of Credit for the
account of the Company in an aggregate Stated Amount at any one time that,
together with the aggregate Stated Amount of all other outstanding Letters of
Credit issued pursuant hereto, does not exceed the L/C Commitment, and to amend
or renew Letters of Credit previously issued by it, in accordance with
SUBSECTIONS 3.02(c) and 3.02(d), and (b) to honor drafts under the Letters of
Credit; and (ii) the Lenders severally agree to participate in Letters of Credit
Issued for the account of the Company; provided, that the Issuer shall not be
obligated to Issue, and no Revolving Lender shall be obligated to participate
in, any Letter of Credit if as of the date of Issuance of such Letter of Credit
(the "ISSUANCE DATE") (1) the Effective Amount of all L/C Obligations plus the
Effective Amount of all Revolving Loans and of all Swing Line Loans exceeds the
lesser of (i) Aggregate Revolving Loan Commitment and (ii) the Borrowing Base at
such time, (2) the participation of any Lender in the Effective Amount of all
L/C Obligations plus the Effective Amount of the Revolving Loans of such Lender
and such Revolving Lender's Pro Rata Revolving Share of any outstanding Swing
Line Loans exceeds such Lender's Commitment, or (3) the Effective Amount of L/C
Obligations exceeds the L/C Commitment. Within the foregoing limits, and subject
to the other terms and conditions hereof, the Company's ability to obtain
Letters of Credit shall be fully revolving, and, accordingly, the Company may,
during the foregoing period, obtain Letters of Credit to replace Letters of
Credit which have expired or which have been drawn upon and reimbursed.
(b) The Issuer is under no obligation to, and shall not, Issue
any Letter of Credit if:
(i) any order, judgment or decree of any Governmental
Authority or arbitrator shall by its terms purport to enjoin
or restrain the Issuer from Issuing such Letter of Credit, or
any Requirement of Law applicable to the Issuer or any request
or directive (whether or not having the force of law) from any
48
Governmental Authority with jurisdiction over the Issuer
shall prohibit, or request that the Issuer refrain from,
the Issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon the Issuer
with respect to such Letter of Credit any restriction,
reserve or capital requirement (for which the Issuer is not
otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon the Issuer any
unreimbursed loss, cost or expense which was not applicable
on the Closing Date and which the Issuer in good xxxxx
xxxxx material to it; provided, however, that in such event
any of the other Lenders may, in their sole discretion,
with the consent of the Company, become an Issuing Lender
hereunder;
(ii) the Issuer has received written notice from any
Revolving Lender, the Agent or the Company, on or prior to the
Business Day prior to the requested date of Issuance of such
Letter of Credit, that one or more of the applicable
conditions contained in ARTICLE V is not then satisfied;
(iii) the expiry date of any requested Letter of
Credit is (A) more than 365 days after the date of Issuance,
unless the Required Revolving Lenders have approved such
expiry date in writing, or (B) after the date which is five
days prior to the Revolving Loan Termination Date, unless all
of the Revolving Lenders have approved such expiry date in
writing;
(iv) the expiry date of any requested Letter of
Credit is prior to the maturity date of any financial
obligation to be supported by the requested Letter of Credit;
(v) any requested Letter of Credit does not provide
for drafts, or is not otherwise in form and substance
acceptable to the Issuer; or
(vi) such Letter of Credit is to be denominated in a
currency other than Dollars.
3.02 ISSUANCE, AMENDMENT AND RENEWAL OF LETTERS OF CREDIT. (a) Each
Letter of Credit shall be issued upon the irrevocable written request of the
Company received by the Issuer (with a copy sent by the Company to the Agent) at
least four days (or such shorter time as the Issuer may agree in a particular
instance in its sole discretion) prior to the proposed date of issuance. Each
such request for issuance of a Letter of Credit shall be by facsimile, confirmed
immediately in an original writing, in the form of an L/C Application (or such
other form as shall be acceptable to the Issuer), and shall specify in form and
detail satisfactory to the Issuer: (i) the proposed date of issuance of the
Letter of Credit (which shall be a Business Day); (ii) the face amount of the
Letter of Credit; (iii) the expiry date of the Letter of Credit; (iv) the name
and address of the beneficiary thereof; (v) the documents to be presented by the
beneficiary of the Letter of Credit in case of any drawing thereunder; (vi) the
full text of any
49
certificate to be presented by the beneficiary in case of any drawing
thereunder; and (vii) such other matters as the Issuer may require.
(b) At least two Business Days prior to the Issuance of any
Letter of Credit (or such shorter time as the Agent may agree in a
particular instance in its sole discretion), the Issuer will confirm
with the Agent (by telephone or in writing) that the Agent has
received a copy of the L/C Application or L/C Amendment Application
from the Company and, if not, the Issuer will provide the Agent with
a copy thereof. Unless the Issuer has received notice on or before
the Business Day immediately preceding the date the Issuer is to
issue a requested Letter of Credit from the Agent (A) directing the
Issuer not to issue such Letter of Credit because such issuance is
not then permitted under SUBSECTION 3.01(a) as a result of the
limitations set forth in clauses (1) through (3) thereof or
SUBSECTION 3.01(b)(ii); or (B) that one or more conditions specified
in ARTICLE V are not then satisfied; then, subject to the terms and
conditions hereof, the Issuer shall, on the requested date, issue a
Letter of Credit for the account of the Company in accordance with
the Issuer's usual and customary business practices.
(c) From time to time while a Letter of Credit is outstanding
and prior to the Revolving Loan Termination Date, the Issuer will, upon
the written request of the Company received by the Issuer (with a copy
sent by the Company to the Agent) at least three days (or such shorter
time as the Issuer may agree in a particular instance in its sole
discretion) prior to the proposed date of amendment, amend any Letter
of Credit issued by it. Each such request for amendment of a Letter of
Credit shall be made by facsimile, confirmed immediately in an original
writing, made in the form of an L/C Amendment Application and shall
specify in form and detail satisfactory to the Issuer: (i) the Letter
of Credit to be amended; (ii) the proposed date of amendment of the
Letter of Credit (which shall be a Business Day); (iii) the nature of
the proposed amendment; and (iv) such other matters as the Issuer may
require. The Issuer shall be under no obligation to amend any Letter of
Credit if: (A) the Issuer would have no obligation at such time to
issue such Letter of Credit in its amended form under the terms of this
Agreement; or (B) the beneficiary of any such letter of Credit does not
accept the proposed amendment to the Letter of Credit. The Agent will
promptly notify the Revolving Lenders of the receipt by it of any L/C
Application or L/C Amendment Application.
(d) The Issuer and the Lenders agree that, while a Letter of
Credit is outstanding and prior to the Revolving Loan Termination Date,
at the option of the Company and upon the written request of the
Company received by the Issuer (with a copy sent by the Company to the
Agent) at least five days (or such shorter time as the Issuer may agree
in a particular instance in its sole discretion) prior to the proposed
date of notification of renewal, the Issuer shall be entitled to
authorize the automatic renewal of any Letter of Credit issued by it.
Each such request for renewal of a Letter of Credit shall be made by
facsimile, confirmed immediately in an original writing, in
50
the form of an L/C Amendment Application, and shall specify in form
and detail satisfactory to the Issuer: (i) the Letter of Credit to
be renewed; (ii) the proposed date of notification of renewal of the
Letter of Credit (which shall be a Business Day); (iii) the revised
expiry date of the Letter of Credit; and (iv) such other matters as
the Issuer may require. The Issuer shall be under no obligation so
to renew any Letter of Credit if: (A) the Issuer would have no
obligation at such time to issue or amend such Letter of Credit in
its renewed form under the terms of this Agreement; or (B) the
beneficiary of any such Letter of Credit does not accept the
proposed renewal of the Letter of Credit. If any outstanding Letter
of Credit shall provide that it shall be automatically renewed
unless the beneficiary thereof receives notice from the Issuer that
such Letter of Credit shall not be renewed, and if at the time of
renewal the Issuer would be entitled to authorize the automatic
renewal of such Letter of Credit in accordance with this SUBSECTION
3.02(d) upon the request of the Company but the Issuer shall not
have received any L/C Amendment Application from the Company with
respect to such renewal or other written direction by the Company
with respect thereto, the Issuer shall nonetheless be permitted to
allow such Letter of Credit to renew, and the Company and the
Lenders hereby authorize such renewal, and, accordingly, the Issuer
shall be deemed to have received an L/C Amendment Application from
the Company requesting such renewal.
(e) The Issuer may, at its election (or as required by the
Agent at the direction of the Required Revolving Lenders) and upon
reasonable prior written notice to the Company and subject to the terms
of the applicable Letter of Credit, deliver any notices of termination
or other communications to any Letter of Credit beneficiary or
transferee, and take any other action as necessary or appropriate, at
any time and from time to time, in order to cause the expiry date of
such Letter of Credit to be a date not later than the date which is
five days prior to the Revolving Loan Termination Date.
(f) This Agreement shall control in the event of any
conflict with any L/C-Related Document (other than any Letter of
Credit).
(g) The Issuer will also deliver to the Agent, concurrently
or promptly following its delivery of a Letter of Credit, or amendment
to or renewal of a Letter of Credit, to an advising bank or a
beneficiary, a true and complete copy of each such Letter of Credit
or amendment to or renewal of a Letter of Credit.
3.03 RISK PARTICIPATIONS, DRAWINGS AND REIMBURSEMENTS. (a) Immediately
upon the Issuance of each Letter of Credit, each Revolving Lender shall be
deemed to, and hereby irrevocably and unconditionally agrees to, purchase from
the Issuer a participation in such Letter of Credit and each drawing thereunder
in an amount equal to the product of (i) the Pro Rata Revolving Share of such
Revolving Lender, times (ii) the maximum amount available to be drawn under such
Letter of Credit and the amount of such drawing, respectively. For purposes of
SUBSECTION 2.01(b), each Issuance of a Letter of Credit shall be deemed to
utilize
51
the Revolving Loan Commitment of each Revolving Lender by an amount equal to
the amount of such participation.
(b) In the event of any request for a drawing under a
Letter of Credit by the beneficiary or transferee thereof, the
Issuer will promptly notify the Company. The Company shall reimburse
the Issuer prior to 11:00 a.m. (Central time), on each date that any
amount is paid by the Issuer under any Letter of Credit (each such
date, an "HONOR DATE"), in an amount in Dollars equal to the amount
so paid by the Issuer. In the event the Company fails to reimburse
the Issuer the full amount of any drawing under any Letter of Credit
by 11:00 a.m. (Central time) on the Honor Date, the Issuer will
promptly notify the Agent and the Agent will promptly notify each
Lender thereof, and the Company shall be deemed to have requested
that Base Rate Loans in an amount equal to such unreimbursed amount
be made by the Revolving Lenders to be disbursed on the Honor Date
under such Letter of Credit, subject to the amount of the unutilized
portion of the Aggregate Revolving Loan Commitment and subject to
the conditions set forth in SECTION 5.02. Any notice given by the
Issuer or the Agent pursuant to this SUBSECTION 3.03(b) may be oral
if immediately confirmed in writing (including by facsimile);
provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.
(c) Each Revolving Lender shall upon any notice pursuant to
SUBSECTION 3.03(b) make available to the Agent for the account of the
relevant Issuer an amount in Dollars and in immediately available funds
equal to its Pro Rata Revolving Share of the Dollar Equivalent of the
amount of the drawing, whereupon the participating Revolving Lenders
shall (subject to SUBSECTION 3.03(d)) each be deemed to have made a
Revolving Loan consisting of a Base Rate Loan to the Company in that
amount. If any Revolving Lender so notified fails to make available to
the Agent for the account of the Issuer the amount of such Revolving
Lender's Pro Rata Share of the Dollar Equivalent of the amount of the
drawing by no later than 1:00 p.m. (Central time) on the Honor Date,
then interest shall accrue on such Revolving Lender's obligation to
make such payment, from the Honor Date to the date such Revolving
Lender makes such payment, at a rate per annum equal to the Federal
Funds Rate in effect from time to time during such period. The Agent
will promptly give notice of the occurrence of the Honor Date, but
failure of the Agent to give any such notice on the Honor Date or in
sufficient time to enable any Revolving Lender to effect such payment
on such date shall not relieve such Revolving Lender from its
obligations under this SECTION 3.03.
(d) With respect to any unreimbursed drawing that is not
converted into Revolving Loans consisting of Base Rate Loans to the
Company in whole or in part, because of the Company's failure to
satisfy the conditions set forth in SECTION 5.02 or for any other
reason, the Company shall be deemed to have incurred from the Issuer an
L/C Borrowing in the Dollar Equivalent of the amount of such drawing,
which L/C Borrowing shall be due and payable on demand (together with
interest) and shall bear
52
interest at a rate per annum equal to the Base Rate, plus the
Applicable Base Rate Margin, plus 2.0% per annum, and each Revolving
Lender's payment to the Issuer pursuant to SUBSECTION 3.03(c) shall
be deemed payment in respect of its participation in such L/C
Borrowing and shall constitute an L/C Advance from such Revolving
Lender in satisfaction of its participation obligation under this
SECTION 3.03.
(e) Each Revolving Lender's obligation in accordance with
this Agreement to make the Revolving Loans or L/C Advances, as
contemplated by this SECTION 3.03, as a result of a drawing under a
Letter of Credit, shall be absolute and unconditional and without
recourse to the Issuer and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment,
defense or other right which such Revolving Lender may have against
the Issuer, the Company or any other Person for any reason
whatsoever; (ii) the occurrence or continuance of a Default, an
Event of Default or a Material Adverse Effect; or (iii) any other
circumstance, happening or event whatsoever, whether or not similar
to any of the foregoing; PROVIDED, however, that each Revolving
Lender's obligation to make Revolving Loans under this SECTION 3.03
is subject to the conditions set forth in SECTION 5.02.
3.04 REPAYMENT OF PARTICIPATIONS. (a) Upon (and only upon) receipt by
the Agent for the account of the Issuer of immediately available funds in
Dollars from the Company (i) in reimbursement of any payment made by the Issuer
under the Letter of Credit with respect to which any Revolving Lender has paid
the Agent for the account of the Issuer for such Revolving Lender's
participation in the Letter of Credit pursuant to SECTION 3.03 or (ii) in
payment of interest thereon, the Agent will promptly pay to each Revolving
Lender, in the same funds as those received by the Agent for the account of the
Issuer, the amount of such Revolving Lender's Pro Rata Revolving Share of such
funds, and the Issuer shall receive the amount of the Pro Rata Revolving Share
of such funds of any Revolving Lender that did not so pay the Agent for the
account of the Issuer.
(b) If the Agent or the Issuer is required at any time to
return to the Company, or to a trustee, receiver, liquidator,
custodian, or any official in any Insolvency Proceeding, any portion of
the payments made by the Company to the Agent for the account of the
Issuer pursuant to SUBSECTION 3.04(a) in reimbursement of a payment
made under the Letter of Credit or interest or fee thereon, each
Revolving Lender shall, on demand of the Agent, forthwith return to the
Agent or the Issuer the amount of its Pro Rata Revolving Share of any
amounts so returned by the Agent or the Issuer plus interest thereon
from the date such demand is made to the date such amounts are returned
by such Revolving Lender to the Agent or the Issuer, at a rate per
annum equal to the Federal Funds Rate in effect from time to time.
3.05 ROLE OF THE ISSUER. (a) Each Lender and the Company agree that, in
paying any drawing under a Letter of Credit, the Issuer shall not have any
responsibility to obtain any document (other than any sight draft and
certificates expressly required by the Letter of
53
Credit) or to ascertain or inquire as to the validity or accuracy of any such
document or the authority of the Person executing or delivering any such
document.
(b) No Agent-Related Person nor any of the respective
correspondents, participants or assignees of the Issuer shall be liable
to any Lender for: (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders (including
the Required Lenders or Required Revolving Lenders, as applicable);
(ii) any action taken or omitted in the absence of gross negligence or
willful misconduct; or (iii) the due execution, effectiveness, validity
or enforceability of any L/C-Related Document.
(c) The Company hereby assumes all risks of the acts or
omissions of any beneficiary or transferee with respect to its use of
any Letter of Credit; PROVIDED, however, that this assumption is not
intended to, and shall not, preclude the Company's pursuing such rights
and remedies as it may have against the beneficiary or transferee at
law or under any other agreement. No Agent-Related Person, nor any of
the respective correspondents, participants or assignees of the Issuer,
shall be liable or responsible for any of the matters described in
clauses (i) through (vii) of SECTION 3.06; PROVIDED, however, anything
in such clauses to the contrary notwithstanding, that the Company may
have a claim against the Issuer, and the Issuer may be liable to the
Company, to the extent, but only to the extent, of any direct, as
opposed to consequential or exemplary, damages suffered by the Company
which the Company proves were caused by the Issuer's willful misconduct
or gross negligence or the Issuer's willful failure to pay under any
Letter of Credit after the presentation to it by the beneficiary of a
sight draft and certificate(s) strictly complying with the terms and
conditions of a Letter of Credit. In furtherance and not in limitation
of the foregoing: (i) the Issuer may accept documents that appear on
their face to be in order, without responsibility for further
investigation, regardless of any notice or information to the contrary;
and (ii) the Issuer shall not be responsible for the validity or
sufficiency of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to
be invalid or ineffective for any reason.
3.06 OBLIGATIONS ABSOLUTE. The obligations of the Company under
this Agreement and any L/C-Related Document to reimburse the Issuer for a
drawing under a Letter of Credit, and to repay any L/C Borrowing and any
drawing under a Letter of Credit converted into Revolving Loans, shall be
unconditional and irrevocable, and shall be paid strictly in accordance with
the terms of this Agreement and each such other L/C-Related Document under
all circumstances, including the following:
(i) any lack of validity or enforceability of
this Agreement or any L/C-Related Document;
54
(ii) any material change in the time, manner or
place of payment of, or in any other material term of, all or
any of the obligations of the Company in respect of any
Letter of Credit or any other material amendment or waiver
of or any consent to material departure from all or any of the
L/C-Related Documents;
(iii) the existence of any claim, set-off, defense or
other right that the Company may have at any time against any
beneficiary or any transferee of any Letter of Credit (or any
Person for whom any such beneficiary or any such transferee
may be acting), the Issuer or any other Person, whether in
connection with this Agreement, the transactions contemplated
hereby or by the L/CRelated Documents or any unrelated
transaction;
(iv) any draft, demand, certificate or other document
presented under any Letter of Credit proving to be forged,
fraudulent, invalid or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect;
or any loss or delay in the transmission or otherwise of any
document required in order to make a drawing under any Letter
of Credit;
(v) any payment by the Issuer under any Letter of
Credit against presentation of a draft or certificate that
does not strictly comply with the terms of any Letter of
Credit without the written consent of the Company; or any
payment made by the Issuer under any Letter of Credit to any
Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor
to any beneficiary or any transferee of any Letter of Credit,
including any arising in connection with any Insolvency
Proceeding;
(vi) any exchange, release or non-perfection of any
collateral, or any release or amendment or waiver of or
consent to departure from any other guarantee, for all or any
of the obligations of the Company in respect of any Letter of
Credit; or
(vii) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing, including any
other circumstance that might otherwise constitute a defense
available to, or a discharge of, the Company or a guarantor.
3.07 CASH COLLATERAL PLEDGE. Upon (i) the request of the Agent, (A) if
the Issuer has honored any full or partial drawing request on any Letter of
Credit and such drawing has resulted in an L/C Borrowing hereunder, or (B) if,
as of the Revolving Loan Termination Date, any Letters of Credit may for any
reason remain outstanding and partially or wholly undrawn, (ii) the occurrence
of the circumstances described in SUBSECTION 2.09(a) requiring the
55
Company to Cash Collateralize Letters of Credit, or (iii) the termination of
the Aggregate Commitment, then, the Company shall immediately Cash
Collateralize the L/C Obligations in an amount equal to the L/C Obligations.
3.08 LETTER OF CREDIT FEES. (a) The Company shall pay to the Agent
for the account of each of the Revolving Lenders a stand-by letter of credit
fee with respect to the Letters of Credit equal to the Applicable Offshore
Rate Margin for Revolving Loans times the average daily maximum amount
available to be drawn of the outstanding stand-by Letters of Credit, computed
on a quarterly basis in arrears on the last Business Day of each calendar
quarter based upon stand-by Letters of Credit outstanding for that quarter as
calculated by the Agent. Such stand-by letter of credit fees shall be due and
payable quarterly in arrears on the last Business Day of each calendar
quarter during which stand-by Letters of Credit are outstanding, commencing
on the first such quarterly date to occur after the Closing Date, through the
Revolving Loan Termination Date (or such later date upon which the
outstanding stand-by Letters of Credit shall expire), with the final payment
to be made on the Revolving Loan Termination Date (or such later expiration
date).
(b) The Company shall pay to the Agent for the account of each
of the Revolving Lenders a Letter of Credit fee with respect to the
commercial documentary Letters of Credit equal to 0.25% times the
negotiated amount, payable at the time of each negotiation, as
calculated by the Agent.
(c) The Company shall pay to the Issuer a letter of credit
fronting fee for each Letter of Credit in an amount equal to the
greater of 0.125% of the amount of each Letter of Credit or $300. Such
Letter of Credit fronting fee shall be due and payable on each date
of Issuance of a Letter of Credit.
(d) The Company shall pay to the applicable Issuer from time
to time on demand the normal issuance, presentation, amendment and
other processing fees, and other standard costs and charges, of such
Issuer relating to letters of credit as from time to time in effect.
3.09 PRIOR LETTERS OF CREDIT. In order to allow the Company to complete
the Fintube Acquisition, the Lenders agree to assume the responsibility for all
letters of credit previously issued on behalf of FLP as listed on the attached
SCHEDULE 3.09. Lenders direct Agent to issue at the Closing Letters of Credit
hereunder in conformity with the L/C Commitment hereunder to the issuers of the
letters of credit described on the attached SCHEDULE 3.09 in order to cause the
Lenders to assume all liability for such previously issued letters of credit.
3.10 UNIFORM CUSTOMS AND PRACTICE. The Uniform Customs and Practice for
Documentary Credits as published by the International Chamber of Commerce most
recently at the time of issuance of any Letter of Credit shall (unless otherwise
expressly provided in the Letters of Credit) apply to the Letters of Credit.
56
ARTICLE IV
TAXES, YIELD PROTECTION AND ILLEGALITY
4.01 TAXES. (a) Any and all payments by the Company to each Lender
or the Agent under this Agreement and any other Loan Document shall be made
free and clear of, and without deduction or withholding for, any Taxes. In
addition, the Company shall pay all Other Taxes.
(b) If the Company shall be required by law to deduct or
withhold any Taxes, Other Taxes or Further Taxes from or in respect of
any sum payable hereunder to any Lender or the Agent, then:
(i) the sum payable shall be increased as necessary
so that, after making all required deductions and withholdings
(including deductions and withholdings applicable to
additional sums payable under this Section), such Lender or
the Agent, as the case may be, receives and retains an amount
equal to the sum it would have received and retained had no
such deductions or withholdings been made;
(ii) the Company shall make such deductions and
withholdings;
(iii) the Company shall pay the full amount deducted
or withheld to the relevant taxing authority or other
authority in accordance with applicable law; and
(iv) the Company shall also pay to each Lender or
the Agent for the account of such Lender, at the time interest
is paid, Further Taxes in the amount that the respective
Lender specifies as necessary to preserve the after-tax yield
the Lender would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed.
(c) The Company agrees to indemnify and hold harmless each
Lender and the Agent for the full amount of (i) Taxes, (ii) Other
Taxes, and (iii) Further Taxes in the amount that the respective Lender
reasonably specifies as necessary to preserve the after-tax yield the
Lender would have received if such Taxes, Other Taxes or Further Taxes
had not been imposed, and any liability (including penalties, interest,
additions to tax and expenses) arising therefrom or with respect
thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted; provided, however, that Agent shall, to
the extent possible, notify the Company of the imposition of such Taxes
and allow the Company the right to contest such Taxes, as long as the
Company pays all expenses and costs associated therewith and the Taxes
are, in the Agent's sole discretion, subject to being reasonably
contested. Payment under this
57
indemnification shall be made within 30 days after the date the Lender
or the Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by the
Company of Taxes, Other Taxes or Further Taxes, the Company shall
furnish to each Lender or the Agent the original or a certified
copy of a receipt evidencing payment thereof, or other evidence
of payment satisfactory to such Lender or the Agent.
(e) If the Company is required to pay any amount to any Lender
or the Agent pursuant to subsection (b) or (c) of this Section, then
such Lender shall use reasonable efforts (consistent with legal and
regulatory restrictions) to change the jurisdiction of its Lending
Office so as to eliminate any such additional payment by the Company
which may thereafter accrue, if such change in the sole judgment of
such Lender is not otherwise disadvantageous to such Lender.
4.02 ILLEGALITY. (a) If any Lender determines that the introduction of
any Requirement of Law, or any change in any Requirement of Law, or in the
interpretation or administration of any Requirement of Law, has made it
unlawful, or that any central bank or other Governmental Authority has asserted
that it is unlawful, for any Lender or its applicable Lending Office to make
Offshore Rate Loans, then, on notice thereof by the Lender to the Company
through the Agent, any obligation of that Lender to make Offshore Rate Loans
shall be suspended until the Lender notifies the Agent and the Company that the
circumstances giving rise to such determination no longer exist.
(b) If a Lender determines that it is unlawful to maintain any
Offshore Rate Loan, the Company shall, upon its receipt of notice of
such fact and demand from such Lender (with a copy to the Agent),
prepay in full such Offshore Rate Loans of that Lender then
outstanding, together with interest accrued thereon and amounts
required under SECTION 4.04, either on the last day of the Interest
Period thereof, if the Lender may lawfully continue to maintain such
Offshore Rate Loans to such day, or immediately, if the Lender may not
lawfully continue to maintain such Offshore Rate Loan. If the Company
is required to so prepay any Offshore Rate Loan, then concurrently with
such prepayment, the Company shall borrow from the affected Lender, in
the amount of such repayment, a Base Rate Loan.
(c) If the obligation of any Lender to make or maintain
Offshore Rate Loans has been so terminated or suspended, the Company
may elect, by giving notice to the Lender through the Agent that all
Loans which would otherwise be made by the Lender as Offshore Rate
Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section,
the affected Lender shall designate a different Lending Office with
respect to its Offshore Rate
58
Loans if such designation will avoid the need for giving such notice
or making such demand and will not, in the judgment of the Lender,
be illegal.
4.03 INCREASED COSTS AND REDUCTION OF RETURN. (a) If any Lender
determines that, due to either (i) the introduction of or any change (other
than any change by way of imposition of or increase in reserve requirements
included in the calculation of the Offshore Rate) in or in the interpretation
of any law or regulation or (ii) the compliance by that Lender with any
guideline or request from any central bank or other Governmental Authority
(whether or not having the force of law), there shall be any increase in the
cost to such Lender of agreeing to make or making, funding or maintaining any
Offshore Rate Loans or participating in Letters of Credit, or, in the case of
the Issuer, any increase in the cost to the Issuer of agreeing to issue,
issuing or maintaining any Letter of Credit or of agreeing to make or making,
funding or maintaining any unpaid drawing under any Letter of Credit, then
the Company shall be liable for, and shall from time to time, upon demand
(with a copy of such demand to be sent to the Agent), pay to the Agent for
the account of such Lender, additional amounts as are reasonably sufficient
to compensate such Lender for such increased costs.
(b) If any Lender shall have determined that (i) the
introduction of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, or (iii) any change in the interpretation
or administration of any Capital Adequacy Regulation by any central
bank or other Governmental Authority charged with the interpretation or
administration thereof, or (iv) compliance by the Lender (or its
Lending Office) or any corporation controlling the Lender with any
Capital Adequacy Regulation, affects or would affect the amount of
capital required or expected to be maintained by the Lender or any
corporation controlling the Lender and (taking into consideration such
Lender's or such corporation's policies with respect to capital
adequacy and such Lender's desired return on capital) determines that
the amount of such capital is materially increased as a consequence of
its Commitment, loans, credits or obligations under this Agreement,
then, upon demand of such Lender to the Company through the Agent, the
Company shall pay to the Lender, from time to time as reasonably
specified by the Lender, additional amounts reasonably sufficient to
compensate the Lender for such increase.
4.04 FUNDING LOSSES. The Company shall reimburse each Lender
and hold each Lender harmless from any loss or expense which the Lender may
sustain or incur as a consequence of:
(a) the failure of the Company to make on a timely basis
any payment of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert
a Loan after the Company has given (or is deemed to have given) a
Notice of Borrowing or a Notice of Conversion/ Continuation;
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(c) the failure of the Company to make any prepayment in
accordance with any notice delivered under SECTION 2.08;
(d) the prepayment (including pursuant to SECTION 2.09) or
other payment (including after acceleration thereof) of an Offshore
Rate Loan on a day that is not the last day of the relevant Interest
Period other than any prepayment required pursuant to Section 4.02; or
(e) the automatic conversion under SECTION 2.04 of any
Offshore Rate Loan to a Base Rate Loan on a day that is not the last
day of the relevant Interest Period; including any such loss or
expense arising from the liquidation or reemployment of funds
obtained by it to maintain its Offshore Rate Loans or from fees
payable to terminate the deposits from which such funds were
obtained. For purposes of calculating amounts payable by the Company
to the Lenders under this Section and under SUBSECTION 4.03(a), each
Offshore Rate Loan made by a Lender (and each related reserve,
special deposit or similar requirement) shall be conclusively deemed
to have been funded at the LIBOR used in determining the Offshore
Rate for such Offshore Rate Loan by a matching deposit or other
borrowing in the interbank eurodollar market for a comparable amount
and for a comparable period, whether or not such Offshore Rate Loan
is in fact so funded.
4.05 INABILITY TO DETERMINE RATES. If the Agent reasonably determines
that for any reason adequate and reasonable means do not exist for determining
the Offshore Rate for any requested Interest Period with respect to a proposed
Offshore Rate Loan, or that the Offshore Rate applicable pursuant to SUBSECTION
2.11(a) for any requested Interest Period with respect to a proposed Offshore
Rate Loan does not adequately and fairly reflect the cost to the Lenders of
funding such Loan, the Agent will promptly so notify the Company and each
Lender. Thereafter, the obligation of the Lenders to make or maintain Offshore
Rate Loans hereunder shall be suspended until the Agent revokes such notice in
writing. Upon receipt of such notice, the Company may revoke without cost or
penalty any Notice of Borrowing or Notice of Conversion/Continuation then
submitted by it. If the Company does not revoke such Notice, the Lenders shall
make, convert or continue the Loans, as proposed by the Company, in the amount
specified in the applicable notice submitted by the Company, but such Loans
shall be made, converted or continued as Base Rate Loans instead of Offshore
Rate Loans, as the case may be.
4.06 CERTIFICATES OF LENDERS. Any Lender claiming reimbursement or
compensation under this ARTICLE IV shall deliver to the Company (with a copy to
the Agent) a certificate setting forth in reasonable detail the amount payable
to the Lender hereunder.
4.07 SUBSTITUTION OF BANKS. Upon the receipt by the Company from any
Lender (an "AFFECTED LENDER") of a claim for compensation under SECTION 4.03, of
notice that it cannot make Offshore Rate Loans under SECTION 4.02, or of a claim
for Taxes or Further Taxes under
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SECTION 4.01, then the Agent, at the Company's direction, shall: (i) request
the Affected Lender to use good faith efforts to obtain a replacement bank or
financial institution satisfactory to the Company to acquire and assume all
or a ratable part of all of such Affected Lender's Loans and Commitments at
the face amount thereof (a "REPLACEMENT LENDER"); (ii) request one more of
the other Lenders to acquire and assume all or part of such Affected Lender's
Loans and Commitments; or (iii) designate a Replacement Lender. Any such
designation of a Replacement Lender under clause (i) or (iii) shall be
subject to the prior written consent of the Agent (which consent shall not be
unreasonably withheld).
4.08 SURVIVAL. The agreements and obligations of the Company in
this ARTICLE IV shall survive the payment of all other Obligations.
ARTICLE V
CONDITIONS PRECEDENT
5.01 CONDITIONS OF INITIAL CREDIT EXTENSIONS. The obligation of
each Lender to make its initial Credit Extension hereunder is subject to the
condition that the Agent shall have received on or before the date of the
initial Credit Extension all of the following, in form and substance
satisfactory to the Agent and each Lender, and in sufficient copies for each
Lender and to the fulfillment of each of the following conditions:
(a) CREDIT AGREEMENT AND NOTES. This Agreement, the Notes,
the Swing Line Note and all other Loan Documents executed by each
party thereto;
(b) RESOLUTIONS; INCUMBENCY.
(i) Copies of the resolutions of the board of
directors of the Company, ST Holdings and each Subsidiary
party to a Loan Document authorizing the transactions
contemplated hereby, certified as of the Closing Date by the
Secretary or an Assistant Secretary of such Person; and
(ii) A certificate of the Secretary or Assistant
Secretary of the Company, ST Holdings and each Subsidiary
party to a Loan Document certifying the names and true
signatures of the officers of the Company, ST Holdings or such
Subsidiary authorized to execute, deliver and perform, as
applicable, this Agreement, and all other Loan Documents to be
delivered by it hereunder;
(c) ORGANIZATION DOCUMENTS; GOOD STANDING. Each of the
following documents:
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(i) the articles or certificate of incorporation and
the bylaws of the Company, ST Holdings and each Subsidiary
party to any Loan Document as in effect on the Closing Date,
certified by the Secretary or Assistant Secretary of the
Company or such Subsidiary as of the Closing Date; and
(ii) a good standing certificate or certificate of
status for the Company, ST Holdings and each Subsidiary party
to any Loan Document from the Secretary of State (or similar,
applicable Governmental Authority) of its state of
incorporation and such other states as shall be reasonably
requested by Agent;
(d) LEGAL OPINIONS.
(i) an opinion of Xxxxxxxx & Xxxxxx, counsel to the
Company, ST Holdings and the Company's Subsidiaries addressed
to the Agent and the Lenders in a form satisfactory to Agent
and its counsel;
(ii) such additional opinions as Agent shall
reasonably request.
(e) PAYMENT OF FEES. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and
payable on the Closing Date, together with Attorney Costs of BofA to
the extent invoiced prior to or on the Closing Date, plus such
additional amounts of Attorney Costs as shall constitute BofA's
reasonable estimate of Attorney Costs incurred or to be incurred by it
through the closing proceedings (provided that such estimate shall not
thereafter preclude final settling of accounts between the Company and
BofA); including any such costs, fees and expenses arising under or
referenced in SECTIONS 2.12 and 11.04;
(f) CERTIFICATE. A certificate signed by a Responsible
Officer, dated as of the Closing Date, stating that:
(i) the representations and warranties contained in
ARTICLE VI are true and correct on and as of such date, as
though made on and as of such date;
(ii) no Default or Event of Default exists or would
result from the Credit Extension; and
(iii) there has occurred since September 30, 1999, no
event or circumstance that has resulted or could reasonably be
expected to result in a Material Adverse Effect;
(g) CONSUMMATION OF THE FINTUBE ACQUISITION. The Fintube
Acquisition has been or is being consummated substantially
simultaneously herewith in accordance with
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the Asset Purchase Agreement all applicable Requirements of Law for a
net cash purchase price not in excess of $86,000,000 as the Base
Purchase Price (as defined in the Asset Purchase Agreement), none of
the Acquisition Documents shall have been materially altered, amended
or otherwise changed or supplemented without the prior written consent
of the Agent (which consent shall not be unreasonably withheld), no
material conditions to closing set forth therein have been waived
without notice to and consent of the Agent prior to the Closing and the
final financial results of FLP shall be substantially in accordance
with the financial projections previously provided to the Agent and the
Lenders;
(h) APPROVALS AND CONSENTS. All requisite or necessary
Governmental Authorities and third parties of a material nature shall
have approved or consented to the Fintube Acquisition to the extent
required and/or all applicable waiting periods shall have expired
(including pursuant to Xxxx-Xxxxx Xxxxxx), all such approvals and
consents shall remain in effect, there shall be no governmental or
judicial action, actual or threatened, that has a reasonable likelihood
of restraining, preventing or imposing burdensome conditions on the
Fintube Acquisition and no law or regulation shall be applicable which
in the judgment of the Agent could have such effect;
(i) COLLATERAL DOCUMENTS. The Collateral Documents, executed
by the Company, ST Holdings and certain Subsidiaries, in appropriate
form for recording, where necessary, together with:
(i) copies of all UCC-l financing statements to be
filed, registered or recorded to perfect the security
interests of the Agent for the benefit of the Lenders, and
other filings, registrations and recordings necessary and
advisable to perfect the Liens of the Agent for the benefit of
the Lenders in accordance with applicable law;
(ii) written advice relating to such Lien and
judgment searches as the Agent shall have requested, and such
termination statements or other documents as may be necessary
to confirm that the Collateral is subject to no other Liens in
favor of any Persons (other than Permitted Liens);
(iii) all certificates and instruments representing
the Pledged Collateral and stock and note transfer powers
executed in blank with signatures guaranteed as the Agent
may specify;
(iv) to the extent requested by the Agent, funds
sufficient to pay any filing or recording tax or fee in
connection with any and all UCC-1 financing statements and the
Mortgages (except the Oklahoma mortgage tax which will be paid
by the Agent);
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(v) with respect to the Mortgaged Property, an ALTA
Form B (or other form acceptable to the Agent and the Lenders)
mortgagee policy of title insurance or a binder issued by a
title insurance company satisfactory to the Agent insuring (or
undertaking to insure, in the case of a binder) that the
Mortgages create and constitute a valid first Lien against the
Mortgaged Property in favor of the Agent, subject only to
exceptions reasonably acceptable to the Agent, with such
endorsements and affirmative insurance as the Agent may
reasonably request;
(vi) evidence that the Agent has been named as loss
payee under all policies of casualty insurance, and as
additional insured under all policies of liability insurance,
required by the Mortgage (or arrangements therefor
satisfactory to the Agent);
(vii) flood insurance and earthquake insurance, to
the extent applicable, on terms reasonably satisfactory to the
Agent (or arrangements therefor satisfactory to the Agent);
(viii) current ALTA surveys and surveyor's
certification as to all Mortgaged Property to the extent
reasonably required by the Agent, each in form and substance
reasonably satisfactory to the Agent;
(ix) proof of payment (or arrangements therefor
satisfactory to the Agent) of all title insurance premiums,
documentary stamp or intangible taxes, and recording fees
payable in connection with the recording of any Mortgage or
the issuance of the title insurance policies (whether due on
the Closing Date or in the future) including sums due in
connection with any future advances;
(x) such consents, estoppels, subordination
agreements, waivers and other documents and instruments
executed by landlords, tenants, bailees, warehousemen and
other Persons party to material contracts relating to any
Collateral as to which the Agent shall be granted a Lien for
the benefit of the Lenders, as requested by the Agent;
(xi) evidence that all other actions necessary or, in
the opinion of the Agent, desirable to perfect and protect the
first priority Lien created by the Collateral Documents, and
to enhance the Agent's ability to preserve and protect its
interests in and access to the Collateral, have been taken (or
arrangements therefor satisfactory to the Agent have been
made); and
(xii) Lock Box Agreement between the Company and
Agent.
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(j) INSURANCE POLICIES. Standard lenders' payable endorsements
with respect to the insurance policies or other instruments or
documents evidencing insurance coverage on the properties of the
Company in accordance with SECTION 6.18 (or arrangements therefor
satisfactory to the Agent);
(k) ENVIRONMENTAL REVIEW. Such environmental site assessments
with respect to the real property of the Company and its Subsidiaries
as shall be reasonably requested by the Agent;
(l) REPAYMENT OF PRIOR INDEBTEDNESS. All outstanding
Indebtedness of the Company, FLP or any of their Subsidiaries not
specified on SCHEDULE 8.05 or otherwise permitted by SECTION 8.05 shall
have been paid in full and all Liens securing such Indebtedness shall
have been terminated;
(m) CORPORATE PROCEEDINGS. (i) All corporate and legal
proceedings and all instruments and agreements to be executed by the
Company and each of its Subsidiaries in connection with the
transactions contemplated by this Agreement and the Loan Documents
shall be reasonably satisfactory in form and substance to the Agent,
and the Agent shall have received all information and copies of all
certificates, documents and papers, including good standing
certificates, bring-down certificates and any other records of
corporate proceedings and governmental approvals, if any, which the
Agent reasonably may have requested in connection therewith, such
documents and papers, where appropriate, to be certified by proper
corporate or governmental authorities;
(ii) The ownership and capital structure (including
without limitation, the terms of any capital stock, options,
warrants or other securities issued by the Company, ST
Holdings or any of its Subsidiaries) of the Company, ST
Holdings and the Company's Subsidiaries shall be in form and
substance reasonably satisfactory to the Agent and the
Lenders.
(n) TAX AND ACCOUNTING ASPECTS OF TRANSACTIONS. (i) The
Company shall have delivered to the Agent and each Lender the financial
statements as provided in SUBSECTION 6.11(a) AND (b) in form and
substance satisfactory to the Agent and the Required Lenders; and
(ii) The consolidated financial statements of each of
FLP and Lone Star Technologies, Inc. and their respective
subsidiaries for their fiscal years ended 1996, 1997 and 1998,
including balance sheets, income and cash flow statements
audited by independent public accountants of recognized
national standing and prepared in conformity with GAAP;
interim quarterly financial statements for the period ending
September 30, 1999, monthly working capital detail for the
trailing twelve (12) months and first projected fiscal year of
the Company, a pro forma balance sheet of the Company and its
subsidiaries as of
65
the Closing after giving effected to the Closing of the
Fintube Acquisition and the transactions contemplated by this
Agreement and reflecting estimated purchase price accounting
adjustments, annual projections for the Company's acquisition
of the Fintube Acquisition and such other information related
thereto reasonably requested by the Agent; and
(iii) an initial Notice of Borrowing and Borrowing
Base Certificate.
(o) SOLVENCY. The Agent shall have received a solvency
certificate from a Responsible Officer addressed to the Agent and each
of the Lenders and dated the Closing Date and supporting the
conclusions, that, after giving effect to the Fintube Acquisition and
the incurrence of all financing contemplated herein, the Company is not
insolvent and will not be rendered insolvent by the indebtedness
incurred in connection herewith, will not be left with unreasonably
small capital with which to engage in its respective businesses and
will not have incurred debts beyond its ability to pay such debts in
the ordinary course as they mature and become due;
(p) YEAR 2000. Information confirming that the Company's and
its Subsidiaries' material computer applications and those of its key
vendors and customers will, on a timely basis, adequately address the
Year 2000 Problem in all material respects;
(q) LITIGATION. There shall be no litigation or administrative
proceedings or other legal or regulatory developments, actual or
threatened, that, in the judgment of the Agent, could reasonably be
expected to have a material adverse effect on the business, assets,
liabilities, operations, properties, prospects or condition (financial
or otherwise) of or relating to (i) the Company, FLP and their
respective Subsidiaries, (ii) the ability of the Company or any of its
Subsidiaries to perform their obligations under the Loan Documents,
(iii) the ability of the parties to consummate the Fintube Acquisition
or (iv) the validity or enforceability of any of the Loan Documents or
the rights, remedies and benefits available to the Agent and the
Lenders under the Loan Documents, and no injunction or other
restraining order shall have been issued or a hearing therefor be
pending or noticed with respect to the Company, FLP or any of their
respective subsidiaries concerning the Fintube Acquisition, the Loan
Documents or the transactions contemplated hereby or thereby;
(r) NO MATERIAL ADVERSE CHANGE. There shall not have occurred
or become known to the Company or FLP any material adverse condition
affecting, or material adverse change with respect to, (i) the results
of operations, condition (financial or otherwise), or prospects of the
Company and its Subsidiaries, taken as a whole, since September 30,
1999 or (ii) the results of operations or condition (financial or
otherwise) of FLP and its Subsidiaries, taken as a whole, since
September 30, 1999.
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(s) BORROWING AVAILABILITY. Evidence satisfactory to the Agent
that, as of the Closing Date, Net Borrowing Availability is not less
than $5,000,000 after giving effect to the initial Revolving Loan (on a
pro forma basis, with trade payables continuing to be paid in
accordance with current practices and with expenses and liabilities
being paid in the ordinary course of business and without acceleration
of sales); and
(t) OTHER DOCUMENTS. Such other approvals, opinions, documents
or materials as the Agent or any Lender may reasonably request.
(u) FINANCIAL RATIO AT CLOSING. At Closing, the Company's
Leverage Ratio will not exceed 3.00 to 1.
5.02 CONDITIONS TO ALL CREDIT EXTENSIONS. The obligation of each
Revolving Lender to make any Revolving Loan to be made by it (including its
initial Revolving Loan) and the obligation of the Issuer to Issue any Letter of
Credit (including the initial Letter of Credit) is subject to the satisfaction
of the following conditions precedent on the relevant Borrowing Date or Issuance
Date:
(a) NOTICE, APPLICATION. The Agent shall have received a
Notice of Borrowing or in the case of any Issuance of any Letter of
Credit, the Issuer and the Agent shall have received an L/C Application
or L/C Amendment Application, as required under SECTION 3.02;
(b) CONTINUATION OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties in ARTICLE VI shall be true and correct
in all material respects on and as of such Borrowing Date or Issuance
Date with the same effect as if made on and as of such Borrowing Date
or Issuance Date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall
be true and correct as of such earlier date); and
(c) NO EXISTING DEFAULT. No Default or Event of Default
shall exist or shall result from such Borrowing or Issuance.
Each Notice of Borrowing and L/C Application or L/C Amendment
Application submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of
each such notice and as of each Borrowing Date or Issuance Date, as
applicable, that the conditions in this SECTION 5.02 are satisfied.
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ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company represents and warrants to the Agent and each Lender
that both before and after giving effect to the consummation of the
transactions contemplated by the Transaction Documents:
6.01 CORPORATE EXISTENCE AND POWER. The Company, ST Holdings and
each of its Material Subsidiaries:
(a) is a corporation duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation;
(b) has the power and authority and all governmental licenses,
authorizations, consents and approvals to own its assets, to carry on
its business and to execute, deliver, and perform its obligations under
the Transaction Documents to which it is a party;
(c) is duly qualified as a foreign corporation and is licensed
and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its
business requires such qualification or license; and
(d) is in compliance with all Requirements of Law; except, in
each case referred to in clause (c) or clause (d), to the extent that
the failure to do so could not reasonably be expected to have a
Material Adverse Effect.
6.02 CORPORATE AUTHORIZATION; NO CONTRAVENTION. The execution, delivery
and performance by the Company, its Subsidiaries, and ST Holdings of this
Agreement and each other Transaction Document to which such Person is party,
have been duly authorized by all necessary corporate action, and do not and
will not:
(a) contravene the terms of any of that Person's Organization
Documents;
(b) conflict with or result in any breach or contravention of,
or the creation of any Lien under, any document evidencing any
Contractual Obligation to which such Person is a party other than the
Transaction Documents or any order, injunction, writ or decree of any
Governmental Authority to which such Person or its property is subject;
or
(c) violate any Requirement of Law.
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6.03 GOVERNMENTAL AUTHORIZATION. No approval, consent, exemption,
authorization, or other action by, or notice to, or filing with, any
Governmental Authority (except those that have been obtained and remain in
effect and for recordings or filings in connection with the Liens granted to the
Agent under the Collateral Documents) is necessary or required in connection
with the execution, delivery or performance by, or enforcement against, the
Company or any of its Subsidiaries of the Agreement or any other Transaction
Document, except to the extent the failure to obtain such could not reasonably
be expected to have a Material Adverse Effect.
6.04 BINDING EFFECT. This Agreement and each other Loan Document to
which the Company or any of its Subsidiaries or ST Holdings is a party
constitute the legal, valid and binding obligations of the Company, any of its
Subsidiaries and ST Holdings to the extent it is a party thereto, enforceable
against such Person in accordance with their respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.
6.05 LITIGATION. There are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Company, threatened or
contemplated, at law, in equity, in arbitration or before any Governmental
Authority, against the Company, or its Subsidiaries or ST Holdings or any of
their respective properties:
(a) which purport to affect or pertain to this Agreement or
any other Transaction Document, or any of the transactions contemplated
hereby or thereby; or
(b) except as disclosed on SCHEDULE 6.05, as to which there
exists a substantial likelihood of an adverse determination, which
determination could reasonably be expected to have a Material Adverse
Effect. No injunction, writ, temporary restraining order or any order
of any nature has been issued by any court or other Governmental
Authority purporting to enjoin or restrain the execution, delivery or
performance of this Agreement or any other Transaction Document, or
directing that the transactions provided for herein or therein not be
consummated as herein or therein provided.
6.06 NO DEFAULT. No Default or Event of Default exists or would result
from the incurring of any Obligations by the Company or from the grant or
perfection of the Liens of the Agent and the Lenders on the Collateral. As of
the Closing Date, neither the Company nor any Subsidiary is in default under or
with respect to any Contractual Obligation in any respect which, individually or
together with all such defaults, could reasonably be expected to have a Material
Adverse Effect, or that would, if such default had occurred after the Closing
Date, create an Event of Default under SECTION 9.01.
6.07 ERISA COMPLIANCE. Except as specifically disclosed in SCHEDULE
6.07:
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(a) Each Plan is in compliance in all material respects with
the applicable provisions of ERISA, the Code and other federal or state
law. Each Plan which is intended to qualify under Section 401(a) of the
Code has received a favorable determination letter from the IRS and to
the best knowledge of the Company, nothing has occurred which would
cause the loss of such qualification. The Company and each ERISA
Affiliate has made all required contributions to any Plan subject to
Section 412 of the Code, and no application for a funding waiver or an
extension of any amortization period pursuant to Section 412 of the
Code has been made with respect to any Plan.
(b) There are no pending or, to the best knowledge of Company,
threatened claims, actions or lawsuits, or action by any Governmental
Authority, with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect. There
has been no prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or
could reasonably be expected to result in a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is
reasonably expected to occur; (ii) no Pension Plan
has any Unfunded Pension Liability; (iii) neither
the Company nor any ERISA Affiliate has incurred, or
reasonably expects to incur, any liability under
Title IV of ERISA with respect to any Pension Plan
(other than premiums due and not delinquent under
Section 4007 of ERISA); (iv) neither the Company
nor any ERISA Affiliate has incurred, or reasonably
expects to incur, any liability (and no event has
occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such
liability) under Section 4201 or 4243 of ERISA
with respect to a Multiemployer Plan; and (v)
neither the Company nor any ERISA Affiliate has
engaged in a transaction that could be subject
to Section 4069 or 4212(c) of ERISA.
6.08 USE OF PROCEEDS; MARGIN REGULATIONS. The proceeds of the Loans are
to be used solely for the purposes set forth in and permitted by SECTION 7.12
and SECTION 8.07. Neither the Company nor any Subsidiary is generally engaged in
the business of purchasing or selling Margin Stock or extending credit for the
purpose of purchasing or carrying Margin Stock.
6.09 TITLE TO PROPERTIES. The Company and each Material Subsidiary have
good record and marketable title in fee simple to, or valid leasehold interests
in, all real property necessary or used in the ordinary conduct of their
respective businesses, except for such defects in title as could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, the property of the Company and its
Subsidiaries is subject to no Liens, other than Permitted Liens.
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6.10 TAXES. The Company and its Subsidiaries have filed all Federal and
other material tax returns and reports required to be filed, and have paid all
Federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their properties, income or assets
otherwise due and payable, except those which are being contested in good faith
by appropriate proceedings and for which adequate reserves have been provided in
accordance with GAAP. There is no proposed tax assessment against the Company or
any Subsidiary that would, if made, have a Material Adverse Effect.
6.11 FINANCIAL CONDITION. (a) To the best of the Company's knowledge
the audited consolidated financial statements of FLP and its Subsidiaries dated
for fiscal years ended 1996, 1997 and 1998, and the related consolidated
statements of income or operations, shareholders' equity and cash flows for the
fiscal years ended on such dates and the unaudited consolidated financial
statements of FLP and its Subsidiaries dated September 30, 1999, and the related
consolidated statements of income or operations, shareholders' equity and cash
flows for the nine months ended on that date:
(i) were prepared in accordance with GAAP
consistently applied throughout the period covered thereby,
except for the absence of footnotes and as otherwise expressly
noted therein, subject, in the case of such unaudited
financial statements, to ordinary, good faith year end
adjustments;
(ii) fairly present the financial condition of the
FLP and its Subsidiaries, as applicable, as of the date
thereof and results of operations for the period covered
thereby; and
(iii) except as specifically disclosed in SCHEDULE
6.11 or SCHEDULE 8.08 show all material indebtedness and other
liabilities of the Company, its Subsidiaries, ST Holdings,
Fintube and its Subsidiaries, as applicable, as of the
date thereof.
(b) The unaudited Pro Forma Financial Statements are attached
hereto as SCHEDULE 6.11. As of the date of the Agreement, the Pro Forma
Financial Statements (other than the projections contained therein)
fairly represent FLP and its Subsidiaries' assets, liabilities,
financial condition and results of operations on a consolidated basis
in accordance with GAAP (except for the absence of footnotes and
statements of cash flow and recognizing such Pro Forma Financial
Statements involve estimated purchase price accounting adjustments),
consistently applied and taking into account the transactions
contemplated by the Transaction Documents. The projections contained
in the Pro Forma Financial Statements represent good faith estimates
of the future financial performance of the Company and its
Subsidiaries.
(c) Since September 30, 1999, there has been no Material
Adverse Effect.
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6.12 ENVIRONMENTAL MATTERS. (a) Except as specifically disclosed in
SCHEDULE 6.12, the on-going operations of the Company and each of its
Subsidiaries and ST Holdings comply in all respects with all Environmental Laws,
except such non-compliance which would not (if enforced in accordance with
applicable law) result in liability in excess of $1,000,000 in the aggregate
(exclusive of amounts payable under insurance policies and indemnity agreements
which the Company or such Subsidiary reasonably expects to receive).
(b) Except as specifically disclosed in SCHEDULE 6.12, the
Company and each of its Subsidiaries have obtained all licenses,
permits, authorizations and registrations required under any
Environmental Law ("ENVIRONMENTAL PERMITS") and necessary for their
respective ordinary course operations, except where the failure could
not reasonably be expected to have a Material Adverse Effect, all such
Environmental Permits are in good standing, and the Company and each of
its Subsidiaries are in compliance with all material terms and
conditions of such Environmental Permits.
(c) Except as specifically disclosed in SCHEDULE 6.12, none of
the Company, any of its Subsidiaries or any of their respective present
property or operations, is subject to any outstanding written order
from or agreement with any Governmental Authority, nor subject to (i)
any judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material or (ii) to
the extent that it could reasonably be expected to have a Material
Adverse Effect, any claim, proceeding or written notice from any Person
regarding any Environmental Law, Environmental Claim or Hazardous
Material.
(d) Except as specifically disclosed in SCHEDULE 6.12, there
are no Hazardous Materials or other conditions or circumstances
existing with respect to any property of the Company or any Subsidiary,
or arising from operations prior to the Closing Date, of the Company or
any of its Subsidiaries that would reasonably be expected to give rise
to Environmental Claims with a potential liability of the Company and
its Subsidiaries in excess of $1,000,000 in the aggregate for all such
conditions, circumstances and properties (exclusive of amounts payable
under insurance policies and indemnity agreements which the Company or
such Subsidiary reasonably expects to receive). Except as disclosed in
SCHEDULE 6.12, (i) neither the Company nor any Subsidiary has any
underground storage tanks (x) that are not properly registered or
permitted under applicable Environmental Laws, or (y) that are leaking
or disposing of Hazardous Materials off-site, which in any such case
could reasonably be expected to have a Material Adverse Effect, and
(ii) the Company and its Subsidiaries have met all material
notification requirements under applicable Environmental Laws.
6.13 COLLATERAL DOCUMENTS. (a) The provisions of each of the Collateral
Documents are effective to create in favor of the Agent for the benefit of the
Lenders, a legal, valid and enforceable first priority security interest in all
right, title and interest of the Company and its Subsidiaries in the collateral
described therein, subject only to any Permitted Liens.
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(b) Each Mortgage when delivered will be effective to grant to
the Agent for the benefit of the Lenders a legal, valid and enforceable
lien on all the right, title and interest of the mortgagor under such
Mortgage in the mortgaged property described therein. When each such
Mortgage is duly recorded in the offices listed on the schedule to such
Mortgage and the mortgage recording fees and taxes in respect thereof
are paid and compliance is otherwise had with the formal requirements
of state law applicable to the recording of real estate mortgages
generally, each such mortgaged property, subject to the encumbrances
and exceptions to title set forth therein and any Permitted Liens and
except as noted in the title policies delivered to the Agent pursuant
to SECTION 5.01, is subject to a legal, valid, enforceable and
perfected first priority lien; and when financing statements have been
filed in the offices specified in such Mortgage, such Mortgage also
creates a legal, valid, enforceable and perfected first lien on, and
security interest in, all right, title and interest of the Company or
such Subsidiary under such Mortgage in all personal property and
fixtures covered by such Mortgage, subject to no other Liens, except
the encumbrances and exceptions to title set forth therein and except
as noted in the title policies delivered to the Agent pursuant to
SECTION 5.01, and Permitted Liens.
(c) All representations and warranties of the Company and any
of its Subsidiaries party thereto contained in the Collateral Documents
are true and correct.
6.14 RESTRICTED ENTITIES. None of the Company, any Person
controlling the Company, or any Subsidiary, is an "Investment Company" within
the meaning of the Investment Company Act of 1940. The Company is not
subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other Federal or state statute or regulation limiting
its ability to incur Indebtedness.
6.15 NO BURDENSOME RESTRICTIONS. Neither the Company, ST Holdings
nor any Subsidiary is a party to or bound by any Contractual Obligation, or
subject to any restriction in any Organization Document, or any Requirement
of Law, which could reasonably be expected to have a Material Adverse Effect.
6.16 COPYRIGHTS, PATENTS, TRADEMARKS AND LICENSES, ETC. The
Company, ST Holdings and their Material Subsidiaries own or are licensed or
otherwise have the right to use all of the patents, trademarks, service
marks, trade names, copyrights, contractual franchises, authorizations and
other rights that are reasonably necessary for the operation of their
respective businesses, without conflict with the rights of any other Person,
except where the failure could not reasonably be expected to have a Material
Adverse Effect. To the best knowledge of the Company, no slogan or other
advertising device, product, process, method, substance, part or other
material now employed, or now contemplated to be employed, by the Company, ST
Holdings or any Subsidiary infringes upon any rights held by any other
Person. Except as specifically disclosed in SCHEDULE 6.16, no claim or
litigation regarding any of the
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foregoing is pending or, to the knowledge of the Company, threatened, and no
patent, invention, device, application, principle or any statute, law, rule,
regulation, standard or code applicable to copyrights, patents, trademarks
and licenses is pending or, to the knowledge of the Company, proposed, which,
in either case, could reasonably be expected to have a Material Adverse
Effect.
6.17 CAPITALIZATION; SUBSIDIARIES. As of the Closing Date, after
giving effect to the consummation of the transactions contemplated by the
Transaction Documents, the Company has no Subsidiaries other than those
specifically disclosed in part (a) of SCHEDULE 6.17 hereto and has no equity
investments in any other corporation or entity other than those specifically
disclosed in part (b) of SCHEDULE 6.17. The capitalization of the Company and
its Subsidiaries as of the Closing Date is as set forth on part (a) of
SCHEDULE 6.17.
6.18 INSURANCE. Except as specifically disclosed in SCHEDULE 6.18,
the properties of the Company, ST Holdings and their respective Subsidiaries
are insured with financially sound and reputable insurance companies not
Affiliates of the Company, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in
similar businesses and are similarly situated.
6.19 SWAP OBLIGATIONS. Neither the Company, ST Holdings nor any of
its Subsidiaries has incurred any outstanding obligations under any Swap
Contracts, other than Permitted Swap Obligations. The Company has undertaken
its own independent assessment of its consolidated assets, liabilities and
commitments and has considered appropriate means of mitigating and managing
risks associated with such matters and has not relied on any swap
counterparty or any Affiliate of any swap counterparty in determining whether
to enter into any Swap Contract.
6.20 ACQUISITION DOCUMENTS. The Company has delivered to the Agent
true, complete and correct copies of the Acquisition Documents (including all
schedules, exhibits, annexes, amendments, supplements, modifications and all
other material documents delivered pursuant thereto or in connection
therewith). The Acquisition Documents as originally executed and delivered by
the parties thereto have not been amended, waived, supplemented or modified
without the consent of the Agent. To the Company's knowledge, the
representations and warranties of the parties set forth therein are true and
correct in all material respects as of the date thereof. On the date of this
Agreement, neither the Company nor, to the Company's knowledge, any other
party to any of the Acquisition Documents is in default in the performance of
or compliance with any provisions under the Acquisition Documents. The
Fintube Acquisition is being consummated contemporaneously with the initial
Borrowing Date in accordance with applicable laws and regulations.
6.21 SOLVENCY. The Company and each of its Material Subsidiaries
are Solvent.
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6.22 YEAR 2000 COMPLIANCE. The Company, ST Holdings and their
respective Subsidiaries have conducted a comprehensive review and assessment
of its computer applications, and have made inquiry of their material
suppliers, vendors and customers, with respect to any defect in computer
software, data bases, hardware, controls and peripherals related to the
occurrence of the year 2000 or the use of any date after December 31, 1999 in
connection therewith. Based on the foregoing review, assessment and inquiry,
the Company believes that no such defect could reasonably be expected to have
a Material Adverse Effect.
6.23 FULL DISCLOSURE. None of the representations or warranties made
by the Company or any Subsidiary in the Loan Documents as of the date such
representations and warranties are made or deemed made, and none of the
statements contained in any exhibit, report, statement or certificate
furnished by or on behalf of the Company, ST Holdings or any of their
respective Subsidiaries in connection with the Loan Documents (including the
offering and disclosure materials delivered by or on behalf of the Company to
the Lenders prior to the Closing Date), contains any untrue statement of a
material fact or omits any material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they are made, not misleading as of the time when made or
delivered.
ARTICLE VII
AFFIRMATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any
Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, unless the Required Lenders waive compliance
in writing:
7.01 FINANCIAL STATEMENTS. The Company shall deliver to the Agent, in
form and detail satisfactory to the Agent and the Required Lenders, with
sufficient copies for each Lender:
(a) as soon as available, but not later than 90 days after the
end of each fiscal year (commencing with the fiscal year ended December
31, 2000), a copy of the audited consolidated balance sheet of the
Company and its Subsidiaries as at the end of such year and the related
consolidated statements of income, shareholders' equity and cash flows
for such year, setting forth in each case in comparative form the
figures for the previous fiscal year, and accompanied by the opinion of
a nationally-recognized independent public accounting firm
("INDEPENDENT AUDITOR") reasonably acceptable to Agent which report
shall state that such consolidated financial statements present fairly
the financial position for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years. Such opinion shall
not be qualified or limited
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because of a restricted or limited examination by the Independent
Auditor of any material portion of the Company's or any
Subsidiary's records;
(b) as soon as available, but not later than 45 days after the
end of each of the first three fiscal quarters of each fiscal year
(commencing with the fiscal quarter ended March 31, 2000), a copy of
the unaudited consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal quarter and the related
consolidated statements of income, shareholders' equity and cash flows
for the period commencing on the first day and ending on the last day
of such fiscal quarter, together with a consolidating income statement
for such period, and certified by a Responsible Officer as fairly
presenting, in accordance with GAAP (subject to ordinary, good
faith year-end audit adjustments and the absence of footnotes),
the financial position and the results of operations of the Company
and the Subsidiaries; and
(c) as soon as available, but not later than 15 days after the
end of each month (commencing with the month ending January 31, 2000),
a Borrowing Base Certificate as of the end of the immediately preceding
fiscal quarter, substantially in the form of EXHIBIT G and certified by
a Responsible Officer to be true and correct as of the date thereof; In
the event of a material change in the size or scope of the Eligible
Inventory, Eligible Accounts and Eligible Import Letters of Credit of
the Company and its Subsidiaries, or in the event of a circumstance
having a Material Adverse Effect upon the Collateral or the operations
of the Company, the Agent may in its discretion require the submission
of a Borrowing Base Certificate at intervals more frequent than
monthly.
7.02 CERTIFICATES; OTHER INFORMATION. The Company shall furnish
to the Agent, with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial statements
referred to in SUBSECTION 7.01(a), a certificate of the Independent
Auditor stating that in making the examination necessary therefor no
knowledge was obtained of any Default or Event of Default, except as
specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in SUBSECTIONS 7.01(a) and (b), a Compliance Certificate
executed by a Responsible Officer;
(c) concurrently with the delivery of the financial statements
referred to in SUBSECTION 7.01(a), (i) a consolidating balance sheet
and income statement for such year (which need not be audited) and, in
the case of such income statement, setting forth in comparative form
the figures for the previous fiscal year, and (ii) a budget for the
next succeeding four fiscal quarters; and
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(d) promptly, such additional information regarding the
business, financial or corporate affairs of the Company or any
Subsidiary as the Agent, at the request of any Lender, may from time to
time reasonably request.
7.03 NOTICES. The Company shall promptly notify the Agent:
(a) of the occurrence of any Default or Event of Default, and
of the occurrence or existence of any event or circumstance that
foreseeably will become a Default or Event of Default;
(b) of any matter that has resulted or may reasonably be
expected to result in a Material Adverse Effect, including (i) any
breach or non-performance of, or any default under, a Contractual
Obligation of the Company or any Subsidiary; (ii) any dispute,
litigation, investigation, proceeding or suspension between the Company
or any Subsidiary and any Governmental Authority; or (iii) the
commencement of, or any material development in, any litigation or
proceeding affecting the Company or any Subsidiary; including pursuant
to any applicable Environmental Laws;
(c) of the occurrence of any of the following events affecting
the Company or any ERISA Affiliate (but in no event more than 10 days
after such event becomes known to an officer of the Company or any
Subsidiary), and deliver to the Agent a copy of any notice with respect
to such event that is filed with a Governmental Authority and any
notice delivered by a Governmental Authority to the Company or any
ERISA Affiliate with respect to such event:
(i) an ERISA Event;
(ii) a material increase in the Unfunded Pension
Liability of any Pension Plan;
(iii) the adoption of, or the commencement of
contributions to, any Plan subject to Section 412 of the Code
by the Company or any ERISA Affiliate resulting in a material
contribution obligation; or
(iv) the adoption of any amendment to a Plan subject
to Section 412 of the Code, if such amendment results in a
material increase in contributions or Unfunded Pension
Liability;
(d) of any material change in accounting policies or financial
reporting practices by the Company or any of its consolidated
Subsidiaries; and
(e) upon, but in no event later than 15 days after, any
officer of the Company or any Subsidiary becoming aware of (i) any and
all enforcement,
77
investigation, cleanup, removal or other governmental or regulatory
actions instituted, completed or threatened against the Company or
any Subsidiary or any of their respective properties pursuant to
any applicable Environmental Laws which could reasonably be expected
to have a Material Adverse Effect, (ii) all other material
Environmental Claims, and (iii) any environmental or similar condition
on any real property adjoining or in the vicinity of the property of
the Company or any Subsidiary that could reasonably be anticipated to
cause such property of the Company or such Subsidiary or any part
thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such property under any Environmental Laws
that could reasonably be expected to have a Material Adverse Effect.
Each notice under this Section shall be accompanied by a written
statement by a Responsible Officer setting forth details of the
occurrence referred to therein, and stating what action the Company or
any affected Subsidiary proposes to take with respect thereto and at
what time.
7.04 PRESERVATION OF CORPORATE EXISTENCE, ETC. The Company
shall, and shall cause each Subsidiary to:
(a) preserve and maintain in full force and effect its
corporate existence and good standing under the laws of its state or
jurisdiction of incorporation, except to the extent otherwise expressly
permitted herein;
(b) preserve and maintain in full force and effect all
governmental rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its business
except in connection with transactions permitted by SECTION 8.03 and
sales of assets permitted by SECTION 8.02;
(c) use reasonable efforts, in the ordinary course of
business, to preserve its business organization and goodwill; and
(d) preserve or renew all of its registered patents,
trademarks, trade names and service marks, the non-preservation of
which could reasonably be expected to have a Material Adverse Effect.
The Company shall cause each Subsidiary which is a Wholly-Owned
Subsidiary as of the date hereof to continue to exist as a Wholly-Owned
Subsidiary so long as it shall be a Subsidiary.
7.05 MAINTENANCE OF PROPERTY. The Company shall maintain, and shall
cause each Subsidiary to maintain, and preserve all its property which is used
or useful in its business in reasonably good working order and condition,
ordinary wear and tear excepted, and make all necessary repairs thereto and
renewals and replacements thereof except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
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7.06 INSURANCE. In addition to insurance requirements set forth in
the Collateral Documents, the Company shall maintain, and shall cause each
Subsidiary to maintain, with financially sound and reputable independent
insurers, insurance with respect to its properties and business against loss
or damage of the kinds customarily insured against by Persons engaged in the
same or similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other Persons;
including workers' compensation insurance, public liability and property and
casualty insurance which amount shall not be materially reduced by the
Company in the absence of 30 days' prior written notice to the Agent. All
casualty insurance maintained by the Company shall name the Agent as loss
payee and all liability insurance shall name the Agent as additional insured
for the benefit of the Lenders, as their interests may appear. Upon request
of the Agent or any Lender, the Company shall furnish the Agent, with
sufficient copies for each Lender, at reasonable intervals (but not more than
once per calendar year) a certificate of a Responsible Officer of the Company
(and, if requested by the Agent, any insurance broker of the Company) setting
forth the nature and extent of all insurance maintained by the Company and
its Subsidiaries in accordance with this Section or any Collateral Documents
(and which, in the case of a certificate of a broker, were placed through
such broker).
7.07 PAYMENT OF OBLIGATIONS. The Company shall, and shall cause each
Subsidiary to, pay and discharge as the same shall become due and payable,
all their respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental charges
or levies upon it or its properties or assets, unless the same are
being contested in good faith by appropriate proceedings and adequate
reserves in accordance with GAAP are being maintained by the Company
or such Subsidiary; and
(b) all lawful claims which, if unpaid, would by law become a
Lien upon its property.
7.08 COMPLIANCE WITH LAWS. The Company shall comply, and shall cause
each Subsidiary to comply, in all material respects with all Requirements of Law
of any Governmental Authority having jurisdiction over it or its business
(including the Federal Fair Labor Standards Act), except such as may be
contested in good faith or as to which a bona fide dispute may exist.
7.09 COMPLIANCE WITH ERISA. The Company shall, and shall cause each of
its ERISA Affiliates to: (a) maintain each Plan in compliance in all material
respects with the applicable provisions of ERISA, the Code and other federal or
state law; (b) cause each Plan which is qualified under Section 401(a) of the
Code to maintain such qualification; and (c) make all required contributions to
any Plan subject to Section 412 of the Code.
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7.10 INSPECTION OF PROPERTY AND BOOKS AND RECORDS. The Company shall
maintain and shall cause each Subsidiary to maintain proper books of record and
account, in which full, true and correct entries in conformity with GAAP
consistently applied shall be made of all financial transactions and matters
involving the assets and business of the Company and such Subsidiary. The
Company shall permit, and shall cause each Subsidiary to permit, representatives
and independent contractors of the Agent or any Lender to visit and inspect any
of their respective properties, to examine their respective corporate, financial
and operating records, and make copies thereof or abstracts therefrom, to
perform collateral audits, and to discuss their respective affairs, finances and
accounts with their respective directors, officers, and independent public
accountants, all at such reasonable times during normal business hours
and as often as may be reasonably desired, upon reasonable advance notice to the
Company. The Company shall pay or reimburse the expenses of the Agent incurred
in connection with the foregoing not to exceed $10,000 in any fiscal year;
PROVIDED, HOWEVER, the Company shall have no obligation to pay or reimburse the
expenses of any Lender incurred in connection with the foregoing; PROVIDED,
further, when an Event of Default exists the Agent or any Lender may do any of
the foregoing at the expense of the Company at any time during normal business
hours and without advance notice.
7.11 ENVIRONMENTAL LAWS. (a) The Company shall, and shall cause each
Subsidiary to, conduct its operations and keep and maintain its property in
compliance with all Environmental Laws, the violation of which could reasonably
be expected to result in liability to the Company and its Subsidiaries in excess
of $1,000,000 in the aggregate (net of any payments under insurance policies or
indemnity agreements which the Company or such Subsidiary reasonably expects to
receive).
(b) Upon the written request of the Agent or any Lender, the
Company shall submit and cause each of its Subsidiaries to submit, to
the Agent with sufficient copies for each Lender, at the Company's sole
cost and expense, at reasonable intervals, a report providing an update
of the status of any environmental, health or safety compliance, hazard
or liability issue identified in any notice or report required pursuant
to SUBSECTION 7.03(e), that could, individually or in the aggregate,
result in liability in excess of $1,000,000 (net of any payments under
insurance policies or indemnity agreements which the Company or such
Subsidiary reasonably expects to receive).
7.12 USE OF PROCEEDS. The Company shall use the proceeds of the Loans
(a) to finance in part the Fintube Acquisition and to pay certain fees and
expenses related thereto; (b) to refinance existing Indebtedness of Fintube;(c)
for working capital; (d) to finance capital expenditures; and (e) other general
corporate purposes.
7.13 FURTHER ASSURANCES. (a) The Company shall ensure that all written
information, exhibits and reports furnished to the Agent or the Lenders do not
and will not contain any untrue statement of a material fact and do not and will
not omit to state any material fact or any fact necessary to make the statements
contained therein not misleading in
80
light of the circumstances in which made, and will promptly disclose to the
Agent and the Lenders and correct any defect or error that may be discovered
therein or in any Loan Document or in the execution, acknowledgment or
recordation thereof.
(b) Promptly upon request by the Agent or the Required
Lenders, the Company shall (and shall cause any of its Subsidiaries to)
do, execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register, any and all such further acts, deeds,
conveyances, security agreements, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers, certificates,
assurances and other instruments the Agent or such Lenders, as the
case may be, may reasonably require from time to time in order (i)
to carry out more effectively the purposes of this Agreement or any
other Loan Document, (ii) to subject to the Liens created by any of
the Collateral Documents any of the properties, rights or interests
covered by any of the Collateral Documents, (iii) to perfect and
maintain the validity, effectiveness and priority of any of the
Collateral Documents and the Liens intended to be created thereby,
and (iv) to better assure, convey, grant, assign, transfer, preserve,
protect and confirm to the Agent and Lenders the rights granted or now
or hereafter intended to be granted to the Lenders under any Loan
Document or under any other document executed in connection therewith.
7.14 ADDITIONAL GUARANTIES AND PERSONAL PROPERTY PLEDGE. Effective upon
any Person becoming a Material Subsidiary (other than any Foreign Subsidiary),
such Person shall: (i) join as a guarantor under the Subsidiary Guaranty, as a
debtor under the Subsidiary Security Agreement and as a mortgagor under the
Mortgage pursuant to amendments or other instruments thereto in form and
substance acceptable to the Agent and (ii) provide an intercompany note to the
extent such exists to the Company which shall be pledged to the Agent pursuant
to the Security Agreement; PROVIDED, that if all Domestic Subsidiaries which are
not party to the Subsidiary Guaranty, the Subsidiary Security Agreement and
Subsidiary Mortgage hold 10% or more of the total assets of the Company and its
Subsidiaries, then such Domestic Subsidiaries shall promptly execute the
Subsidiary Guaranty, the Subsidiary Security Agreement and Mortgage so that,
upon such execution, such 10% threshold is no longer exceeded. The Company shall
promptly notify the Agent at any time at which, in accordance with this SECTION
7.14, any Subsidiary shall be required to join as a guarantor under the
Subsidiary Guaranty.
7.15 ADDITIONAL PLEDGE AND SECURITY INTERESTS. Effective upon any
Person becoming a Material Subsidiary (other than any indirect Foreign
Subsidiary), the shareholder or shareholders thereof, shall pledge the stock or
other equity interests thereof to the Agent pursuant to documentation reasonably
acceptable to the Agent; PROVIDED, that the Company will only be required to
pledge, under the Foreign Subsidiary Pledge, 65% of the equity interests of any
direct Foreign Subsidiary. Any such Person (other than a Foreign Subsidiary)
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shall grant Liens on all of its other Collateral consistent with the
Subsidiary Security Agreement and Subsidiary Mortgage.
7.16 ADDITIONAL REAL PROPERTY. Concurrent with (a) the acquisition
by the Company or any Domestic Subsidiary of any parcel of property which has
a fair market value in excess of $500,000 or (b) the acquisition or lease by
the Company or any Domestic Subsidiary of any parcel of property which, in
the Agent's determination, is otherwise of significant value to the
operations of the Company and its Subsidiaries, unless the Required Lenders
shall otherwise direct, the Company shall, or shall cause such Domestic
Subsidiary to, execute and deliver to the Agent a Mortgage on such parcel or
leasehold substantially in the form of the applicable Mortgages executed and
delivered on the date hereof, together with such other of the items specified
in SUBSECTION 5.01(i) as shall be applicable thereto, in each case in form
and substance reasonably acceptable to the Agent.
7.17 GOVERNMENT CONTRACTS. The Company shall (i) deliver or cause to
be delivered to the Agent a list in the form of SCHEDULE 7.18 of each
Government Contract and Government Subcontract which has a remaining contract
value in excess of $500,000, and any amendments thereto, to which the Company
or any of its Subsidiaries is a party and (ii) notify the Agent of (A) the
name and address of any surety with respect to any such Government Contract
or Subcontract to which the Company or any of its Subsidiaries is a party and
(B) the cancellation or early termination of any of such Government Contracts
or, Subcontracts.
7.18 FLP FINANCIAL STATEMENTS. The Company shall deliver the audited
consolidated financial statements of FLP dated December 31, 1999, and the
related consolidated statements of income or operations, shareholders' equity
and cash flows for the fiscal year ended on that date to the Agent no later
than the date which is sixty (60) days after the date of the initial Credit
Extension hereunder.
7.19 INTEREST RATE PROTECTION. Within ninety (90) Business Days of
the Closing Date, the Company shall enter into an interest rate swap, cap or
collar (i) covering an initial notional principal amount of at least
$19,500,000, (ii) for a maximum interest rate with respect to such notional
amount no greater than three percent (3%) in excess of the interest rate
applicable to Offshore Rate Loans on the Closing Date, (iii) with a term
ending no earlier than three (3) years from the Closing Date, and (iv) on
such other terms and conditions as shall be reasonably satisfactory to the
Agent.
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ARTICLE VIII
NEGATIVE COVENANTS
So long as any Lender shall have any Commitment hereunder, or any
Loan or other Obligation shall remain unpaid or unsatisfied, or any Letter of
Credit shall remain outstanding, unless the Required Lenders waive compliance
in writing:
8.01 LIMITATION ON LIENS. The Company shall not, and shall not
suffer or permit any Subsidiary to, directly or indirectly, make, create,
incur, assume or suffer to exist any Lien upon or with respect to any part of
its property, whether now owned or hereafter acquired, other than the
following ("PERMITTED LIENS"):
(a) any Lien existing on property of the Company, ST Holdings
or any Subsidiary on the Closing Date and set forth in SCHEDULE 8.01
securing or reflecting Indebtedness outstanding on such date;
(b) any Lien created under any Loan Document;
(c) Liens for taxes, fees, assessments or other governmental
charges which are not delinquent or remain payable without penalty, or
to the extent that non-payment thereof is permitted by SECTION 7.07,
provided that no notice of lien has been filed or recorded under the
Code;
(d) carriers', warehousemen's, mechanics', landlords',
materialmen's, repairmen's or other similar Liens arising in the
ordinary course of business which are not delinquent or remain payable
without penalty or which are being contested in good faith and by
appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property subject thereto;
(e) Liens (other than any Lien imposed by ERISA) consisting of
pledges or deposits required in the ordinary course of business in
connection with workers' compensation, unemployment insurance and other
social security legislation;
(f) Liens on the property of the Company or its Subsidiaries
or ST Holdings securing (i) the non-delinquent performance of bids,
trade contracts (other than for borrowed money), leases, statutory
obligations, (ii) Contingent Obligations in connection with performance
bonds, Surety Bonds and appeal bonds, and (iii) other non-delinquent
obligations of a like nature, in each case, incurred in the ordinary
course of business; PROVIDED that all such Liens in the aggregate could
not reasonably be expected to cause a Material Adverse Effect;
(g) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount, and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the businesses of the
Company and its Subsidiaries;
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(h) Liens securing obligations in respect of capital leases on
assets subject to such leases, provided that such capital leases are
otherwise permitted hereunder;
(i) Liens arising solely by virtue of any statutory or common
law provision relating to banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds maintained
with a creditor depository institution; PROVIDED THAT (i) such deposit
account is not a dedicated cash collateral account and is not subject
to restrictions against access by the Company or any Subsidiary in
excess of those set forth by regulations promulgated by the FRB, and
(ii) such deposit account is not intended by the Company or any
Subsidiary to provide collateral to the depository institution;
(j) Liens in favor of customs and revenue authorities arising
as a matter of law to secure payment of customs duties in connection
with the importation of goods;
(k) Liens securing other obligations of the Company and its
Subsidiaries not to exceed in the aggregate at any one time outstanding
$500,000.
8.02 DISPOSITION OF ASSETS. The Company shall not, and shall not suffer
or permit any Subsidiary to, directly or indirectly, (x) issue any equity
interests of any Subsidiary to any Person which is not the Company or a
Subsidiary or (y) sell, assign, lease, convey, transfer or otherwise dispose of
(whether in one or a series of transactions) any property, including accounts
and notes receivable, with or without recourse (each, an "ASSET DISPOSITION"),
or enter into any agreement to do any of the foregoing, except:
(a) dispositions of inventory, or used, worn-out or surplus
equipment, all in the ordinary course of business;
(b) the sale of equipment to the extent that such equipment is
exchanged for credit against the purchase price of similar replacement
equipment, or the proceeds of such sale are reasonably promptly applied
to the purchase price of such replacement equipment;
(c) Asset Dispositions by any Subsidiary to any Wholly-Owned
Subsidiary that is party to the Subsidiary Guaranty;
(d) sale/leaseback transactions involving an aggregate
consideration not to exceed $1,000,000 after the date hereof; and
(e) dispositions not otherwise permitted hereunder which are
made for fair market value; PROVIDED, that (i) at the time of any
disposition, no Event of Default shall exist or shall result from such
disposition, and (ii) the aggregate value of all assets so
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sold by the Company and its Subsidiaries after the date hereof, shall
not exceed $1,000,000 in any transaction or $2,000,000 in any fiscal
year.
8.03 CONSOLIDATIONS AND MERGERS. The Company shall not, and shall not
suffer or permit any Subsidiary to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to or in favor of any Person, except:
(a) any Subsidiary may merge with the Company, provided that
(i) the Company shall be the continuing or surviving corporation, or
with any one or more Subsidiaries, and (ii) if any transaction shall be
between a Subsidiary and a Wholly-Owned Subsidiary, the Wholly-Owned
Subsidiary shall be the continuing or surviving corporation;
(b) another Person organized under the laws of any state of
the United States may merge with or consolidate into the Company or any
Subsidiary so long as (i) no Default or Event of Default shall have
occurred and be continuing either before or after giving effect to such
transaction (determined in respect of SECTIONS 8.16, 8.17 and 8.18 on a
pro forma basis as of the last day of the prior fiscal quarter), (ii)
the Company or such Subsidiary is the surviving Person, and (iii) all
applicable legal requirements have been satisfied; and
(c) any Subsidiary may sell all or substantially all of its
assets (upon voluntary liquidation or otherwise), to the Company or
another Wholly-Owned Subsidiary.
8.04 LOANS AND INVESTMENTS. The Company shall not purchase or
acquire, or suffer or permit any Subsidiary to purchase or acquire, or make
any commitment therefor, any capital stock, equity interest, or any
obligations or other securities of, or any interest in, any Person, or make
or commit to make any Acquisitions, or make or commit to make any advance,
loan, extension of credit or capital contribution to or any other investment
in, any Person including any Affiliate of the Company (together,
"INVESTMENTS"), except for:
(a) Investments held by the Company or any Subsidiary in the
form of cash equivalents or short term marketable securities;
(b) extensions of credit in the nature of accounts receivable
or notes receivable arising from the sale or lease of goods or services
in the ordinary course of business;
(c) Investments by the Company or any Subsidiary in
Wholly-Owned Subsidiaries party to the Subsidiary Guaranty; or in a
Subsidiary that is not a party to
85
the Subsidiary Guaranty as long as the aggregate of such Investments
in any one direct Subsidiary and its Subsidiaries does not exceed
$500,000 subsequent to the Closing Date; or unsecured loans made by
any Subsidiary to the Company;
(d) Investments incurred in order to consummate Acquisitions
otherwise permitted herein, PROVIDED that (i) the cash consideration
for Acquisitions undertaken by the Company and its Subsidiaries shall
not exceed $2,000,000 in the aggregate in any one fiscal year, but no
more than $5,000,000 in the aggregate during the term of this
Agreement, (ii) such Acquisitions are undertaken in accordance with all
applicable Requirements of Law, (iii) the prior, effective written
consent or approval to such Acquisition of the board of directors or
equivalent governing body of the acquiree is obtained, (iv) the Person
or business which is the subject of such Acquisition is in the
same or similar line of business as the Company and its Subsidiaries,
and (v) such Acquisition consists exclusively of (A) assets located in
the United States or (B) a Person organized under the laws of the
United States or any state thereof;
(e) Investments constituting Permitted Swap Obligations or
payments or advances under Swap Contracts relating to Permitted Swap
Obligations;
(f) advances to vendors and customers of the Company and its
Subsidiaries, or suppliers to such vendors, to enable such vendors,
customers and suppliers to purchase goods or parts to be processed and
sold to the Company and its Subsidiaries in the ordinary course of
business and consistent with past practices;
(g) Investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and
customers and in settlement of delinquent obligations of, and other
disputes with, customers and suppliers arising in the ordinary course
of business;
(h) Investments of a nature not contemplated by the foregoing
clauses hereof that are outstanding as of the Closing Date and set
forth in SCHEDULE 8.04 hereto; and
(i) other Investments not exceeding $500,000 in the
aggregate after the Closing Date.
8.05 LIMITATION ON INDEBTEDNESS. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(a) Indebtedness incurred pursuant to this Agreement;
(b) Indebtedness consisting of Contingent Obligations
permitted pursuant to SECTION 8.08;
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(c) Indebtedness existing on the Closing Date and set
forth in SCHEDULE 8.05;
(d) Indebtedness incurred in connection with leases permitted
pursuant to SECTION 8.09;
(e) (i) unsecured Indebtedness owed to the Company by any
Subsidiary so long as it is (A) evidenced by a note
pledged to the Agent and (B) incurred in accordance
with SECTION 8.04 and (ii) unsecured Indebtedness
owed by the Company or any Subsidiary to a Subsidiary
so long as it is incurred in accordance with SECTION
8.04;
(f) other Indebtedness with an aggregate principal amount not
to exceed $500,000 at any time outstanding; and
(g) Indebtedness incurred in the form of loans from Lone Star
Technologies, Inc., provided that such loans are expressly subordinated
to all Obligations of the Company owed to the Lenders and are otherwise
made on terms and conditions acceptable to the Agent, including, but
not limited to including all such loans as Indebtedness pursuant to the
various ratios and covenants contained in this Agreement.
8.06 TRANSACTIONS WITH AFFILIATES. The Company shall not, and shall not
suffer or permit any Subsidiary to, enter into any transaction (including
purchasing property or services from or selling property or services to any
Affiliate of the Company that is not a subsidiary, unless such transaction is
not otherwise prohibited by this Agreement, is entered into upon fair and
reasonable arm's length terms and conditions (or terms and conditions more
favorable to the Company) which are fully disclosed to the Agent, and is in
accordance with all applicable laws. The Lenders acknowledge that transactions
under the Company's present cost sharing agreement with Lone Star Technologies,
Inc. satisfy the foregoing requirements as long as such payments do not exceed
$1,000,000 during any fiscal year or otherwise create default under other
provisions of the Agreement.
8.07 USE OF PROCEEDS. The Company shall not, and shall not suffer or
permit any Subsidiary to, use any portion of the proceeds of any Loan or any
Letter of Credit, directly or indirectly, (i) to purchase or carry Margin Stock,
(ii) to repay or otherwise refinance indebtedness of the Company or others
incurred to purchase or carry Margin Stock, (iii) to extend credit for the
purpose of purchasing or carrying any Margin Stock, or (iv) to acquire any
security in any transaction that is subject to Section 13 or 14 of the Exchange
Act.
8.08 CONTINGENT OBLIGATIONS. The Company shall not, and shall not
suffer or permit any Subsidiary to, create, incur, assume or suffer to exist
any Contingent Obligations except:
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(a) endorsements for collection or deposit in the ordinary
course of business;
(b) Permitted Swap Obligations;
(c) Contingent Obligations of the Company and its Subsidiaries
existing as of the Closing Date and listed in SCHEDULE 8.08;
(d) Contingent Obligations with respect to Indebtedness of the
Company's Wholly-Owned Subsidiaries permitted pursuant to SECTION 8.05;
(e) Contingent Obligations with respect to Surety Instruments
incurred by the Company and its Subsidiaries (including on behalf of
third parties) in the ordinary course of business; and
(f) other Contingent Obligations not exceeding at any time
$500,000 in the aggregate in respect of the Company and its
Subsidiaries together.
8.09 LEASE OBLIGATIONS. The Company shall not, and shall not
suffer or permit any Subsidiary to, create or suffer to exist any obligations
for the payment of rent for any property under lease or agreement to lease,
except for:
(a) leases of the Company and of Subsidiaries in existence on
the Closing Date and any renewal, extension or refinancing thereof;
(b) operating leases for real or personal property entered
into by the Company or any Subsidiary after the Closing Date in the
ordinary course of business;
(c) leases entered into by the Company or any Subsidiary after
the Closing Date pursuant to sale-leaseback transactions permitted
under SUBSECTION 8.05; and
(d) capital leases other than those permitted under clauses
(a) and (c) of this Section, entered into by the Company or any
Subsidiary after the Closing Date to finance the acquisition of
equipment; provided that the annual rental payments for all such
capital leases shall not exceed in any fiscal year $500,000.
8.10 RESTRICTED PAYMENTS. The Company shall not, and shall not
suffer or permit any Subsidiary to, declare or make any dividend payment or
other distribution of assets, properties, cash, rights, obligations or
securities on account of any shares of any class of its capital stock, or
purchase, redeem or otherwise acquire for value any shares of its capital
stock or any warrants, rights or options to acquire such shares, now or
hereafter outstanding (collectively, "Restricted Equity Payments"); except
that any Subsidiary may declare and make
88
dividend payments and other distributions to its shareholders on a pro rata
basis and the Company may:
(a) declare and make dividend payments or other distributions
payable solely in its common stock;
(b) declare and make dividend payments or other distributions
necessary to make tax payments actually made to the U.S. as a result of
the Company's income; and
(c) purchase, redeem or otherwise acquire shares of its common
stock or warrants or options to acquire any such shares with the
proceeds received from the substantially concurrent issue of new shares
of its common stock.
8.11 ERISA. The Company shall not, and shall not suffer or permit any
of its ERISA Affiliates to: (a) engage in a prohibited transaction or violation
of the fiduciary responsibility rules with respect to any Plan which has
resulted or could reasonably expected to result in liability of the Company in
an aggregate amount in excess of $1,000,000; or (b) engage in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.
8.12 CHANGE IN BUSINESS. The Company shall not, and shall not suffer or
permit any Subsidiary to, engage in any material line of business substantially
different from those lines of business carried on by the Company and its
Subsidiaries on the date hereof.
8.13 ACCOUNTING CHANGES. The Company shall not, and shall not suffer or
permit any Subsidiary to, (a) make any significant change in accounting
treatment or reporting practices, except (i) as required by GAAP, (ii) a change
in the depreciation method employed thereby to straight line depreciation, (iii)
a change in a Subsidiary's accounting treatment or reporting practices to
conform the accounting practices or reporting practices of newly acquired
Subsidiaries to the methods used by the Company, and (iv) any other change which
does not affect the calculations required to determine compliance with SECTION
8.16, 8.17 or 8.18, or (b) change the fiscal year of the Company or of any
Subsidiary.
8.14 AMENDMENTS TO CHARTER AND AGREEMENTS. The Company will not, nor
will it permit any Subsidiary or ST Holdings to,(a) directly or indirectly
prepay, defease or in substance defease, purchase, redeem, retire or
otherwise acquire, any such Indebtedness,(b) make any amendment or
modification to any terms or provisions of its Certificate or Articles of
Incorporation or bylaws which is materially adverse to the Agent or the
Lenders without the prior written consent of the Agent or (c) issue any
preferred stock.
8.15 NET WORTH. The Company shall not permit its consolidated Net Worth
as determined on the last day of each fiscal quarter to be less than the sum of
(a) $40,000,000, PLUS (b) the aggregate Net Proceeds of all offerings and sales
of equity securities by the
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Company or any Subsidiary after the Closing Date PLUS (c) 75% of positive net
income for each fiscal quarter of the Company ending after the Closing Date.
8.16 LEVERAGE RATIO. The Company shall not permit its Leverage
Ratio as determined as of the last day of each fiscal quarter in any period
set forth below to be greater than the ratio set forth below for such period:
PERIOD RATIO
1/1/2000 through 12/30/2000 3.25:1
12/31/2000 through 12/31/01 2.75:1
12/31/2001 and thereafter 2.25:1
8.17 FIXED CHARGE COVERAGE RATIO. The Company shall not permit its
Fixed Charge Coverage Ratio determined as of the last day of each fiscal quarter
in any period set forth below to be less than the ratio set forth below for such
period:
PERIOD RATIO
1/1/00 through 12/30/02 1.10:1
12/31/02 and thereafter 1.25:1
8.18 CAPITAL EXPENDITURES. (a) The Company will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
during any fiscal year set forth below the Company and its Subsidiaries may
make Capital Expenditures so long as the aggregate amount so made by the
Company and its Subsidiaries (on a consolidated basis) during any such fiscal
year does not exceed the amount set forth opposite such fiscal year below:
FISCAL YEAR ENDING AMOUNT
------------------ ------
December 31, 2000 $5,000,000
December 31, 2001 $7,000,000
December 31, 2002 $7,000,000
December 31, 2003 $7,000,000
December 31, 2004 $7,000,000
December 31, 2005 $7,000,000
(b) Notwithstanding the foregoing, in the event that
the amount of Capital Expenditures permitted to be made by the
Company and its Subsidiaries pursuant to clause (i) above in
any fiscal year (before giving effect to any increase in such
permitted expenditures amount pursuant to this clause (ii) is
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greater than the amount of such Capital Expenditures made by
the Company and its Subsidiaries during such fiscal year, such
excess (the "ROLLOVER AMOUNT") may be carried forward and used
to make Capital Expenditures in the next succeeding fiscal
year.
8.19 RESTRICTIVE AGREEMENTS. The Company shall not, nor shall it permit
any of its Subsidiaries to, enter into any indenture, agreement, instrument or
other arrangement which directly or indirectly prohibits or restrains, or has
the effect of prohibiting or restraining, or imposes materially adverse
conditions upon, the ability of any Subsidiary to (a) pay dividends or make
other distributions (i) on its Capital Stock or (ii) with respect to any other
interest or participation in, or measured by, its profits, (b) make loans or
advances to the Company or any Subsidiary, (c) repay loans or advances from the
Company or any Subsidiary or (d) transfer any of its properties or assets to the
Company or any Subsidiary.
ARTICLE IX
EVENTS OF DEFAULT
9.01 EVENT OF DEFAULT. Any of the following shall constitute an "EVENT
OF DEFAULT":
(a) NON-PAYMENT. The Company fails to pay, (i) when and as
required to be paid herein, any amount of principal of any Loan or of
any L/C Obligation, or (ii) within five (5) days after the same becomes
due, any interest, fee or any other amount payable hereunder or under
any other Loan Document; or
(b) REPRESENTATION OR WARRANTY. Any representation or warranty
by the Company or any Subsidiary made or deemed made herein or in any
other Loan Document, or contained in any certificate, document or
financial or other statement by the Company, any Subsidiary, or any
Responsible Officer, furnished at any time under this Agreement, or in
or under any other Loan Document, is incorrect in any material respect
on or as of the date made or deemed made; or
(c) SPECIFIC DEFAULTS. The Company fails to perform or observe
any term, covenant or agreement contained in any of SECTION 7.01, 7.02,
7.03 or 7.09 or in ARTICLE VIII; or
(d) OTHER DEFAULTS. The Company or any Subsidiary party
thereto fails to perform or observe any other term or covenant
contained in this Agreement or any other Loan Document, and such
default shall continue unremedied for a period of thirty (30) days
after the date upon which written notice thereof is given to the
Company by the Agent or any Lender provided that such thirty day period
shall be extended for an additional thirty days so long as the Company
is diligently engaged in attempting to
91
cure such default and Agent has not determined in its reasonable
discretion that such default is not curable; or
(e) CROSS-DEFAULT. (i) The Company or any Subsidiary (A) fails
to make any payment in respect of any Indebtedness or Contingent
Obligation (other than in respect of Swap Contracts), having an
aggregate principal amount (including undrawn committed or available
amounts and including amounts owing to all creditors under any combined
or syndicated credit arrangement) of more than $1,000,000 when due
(whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise) and such failure continues after the applicable
grace or notice period, if any, specified in the relevant document on
the date of such failure; or (B) fails to perform or observe any other
condition or covenant, or any other event shall occur or condition
exist, under any agreement or instrument relating to any such
Indebtedness or Contingent Obligation, and such failure continues after
the applicable grace or notice period, if any, specified in the
relevant document on the date of such failure if the effect of such
failure, event or condition is to cause, or to permit the holder or
holders of such Indebtedness or beneficiary or beneficiaries of such
Indebtedness (or a trustee or agent on behalf of such holder or
holders or beneficiary or beneficiaries) to cause such Indebtedness
to be declared to be due and payable, or to be required to be
repurchased, prior to its stated maturity, or such Contingent
Obligation to become payable or cash collateral in respect thereof
to be demanded; (ii) there occurs under any Swap Contract an Early
Termination Date (as defined in such Swap Contract) resulting from
(1) any event of default under such Swap Contract as to which the
Company or any Subsidiary is the Defaulting Party (as defined in
such Swap Contract) or (2) any Termination Event (as so defined) as
to which the Company or any Subsidiary is an Affected Party (as so
defined) and, in either event, the Swap Termination Value owed by
the Company or such Subsidiary as a result thereof is greater than
$1,000,000 or (iii) the Company or any Subsidiary fails to perform
or observe any condition or covenant under any contract providing
for the issuance of, or reimbursement of amounts in respect of,
Surety Instruments (other than Non-Surety L/C's), which in such
event requires the making of payments in excess of $1,000,000 in the
aggregate, net of the proceeds of insurance policies and indemnity
agreements in favor of the Company or any Subsidiary and received or
reasonably expected to be received thereby; or
(f) INSOLVENCY; VOLUNTARY PROCEEDINGS. The Company or any
Material Subsidiary (i) ceases or fails to be solvent, or generally
fails to pay, or admits in writing its inability to pay, its debts as
they become due, subject to applicable grace periods, if any, whether
at stated maturity or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
92
(g) INVOLUNTARY PROCEEDINGS. (i) Any involuntary Insolvency
Proceeding is commenced or filed against the Company or any Subsidiary,
or any writ, judgment, warrant of attachment, execution or similar
process, is issued or levied against a substantial part of the
Company's or any Subsidiary's properties, and any such proceeding or
petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released, vacated
or fully bonded within 60 days after commencement, filing or levy; (ii)
the Company or any Subsidiary admits the material allegations of a
petition against it in any Insolvency Proceeding, or an order for
relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company or any Subsidiary
acquiesces in the appointment of a receiver, trustee, custodian,
conservator, liquidator, mortgagee in possession (or agent therefor),
or other similar Person for itself or a substantial portion of its
property or business; or
(h) ERISA. (i) An ERISA Event shall occur with respect to a
Pension Plan or Multiemployer Plan which has resulted or could
reasonably be expected to result in liability of the Company or any
ERISA Affiliate under Title IV of ERISA to such Pension Plan or
Multiemployer Plan or to the PBGC in an aggregate amount for all such
Pension Plans and Multiemployer Plans in excess of $1,000,000; (ii) the
aggregate amount of Unfunded Pension Liability among all Pension Plans
and Multiemployer Plans at any time exceeds $5,000,000 (determined, in
respect of Multiemployer Plans, by reference to the Unfunded Pension
Liability for which the Company or any ERISA Affiliate may be liable)
and could reasonably be expected to have a Material Adverse Effect; or
(iii) the Company or any ERISA Affiliate shall fail to pay when due,
after the expiration of any applicable grace period, any installment
payment with respect to its withdrawal liability under Section 4201 of
ERISA under a Multiemployer Plan in an aggregate amount in excess of
$1,000,000; or
(i) MONETARY JUDGMENTS. One or more non-interlocutory
judgments, noninterlocutory orders, decrees or arbitration awards is
entered against the Company or any Subsidiary involving in the
aggregate a liability (to the extent not covered by independent
third-party insurance as to which the insurer does not dispute
coverage) as to any single or related series of transactions, incidents
or conditions, of $1,000,000 or more, and the same shall remain
unsatisfied, unvacated and unstayed pending appeal for a period of 30
days after the entry thereof; or
(j) NON-MONETARY JUDGMENTS. Any non-monetary judgment, order
or decree is entered against the Company or any Subsidiary which does
or would reasonably be expected to have a Material Adverse Effect, and
there shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or
(k) CHANGE OF CONTROL. There occurs any Change of Control; or
93
(l) LOSS OF LICENSES. Any Governmental Authority revokes or
fails to renew any license, permit or franchise of the Company or any
Material Subsidiary, or the Company or any Material Subsidiary for any
reason loses any license, permit or franchise, or the Company or any
Material Subsidiary suffers the imposition of any restraining order,
escrow, suspension or impound of funds in connection with any
proceeding (judicial or administrative) with respect to any license,
permit or franchise and any of the foregoing has or could reasonably be
expected to have a Material Adverse Effect; or
(m) GUARANTOR DEFAULTS. Any Guarantor fails in any material
respect to perform or observe any term, covenant or agreement in the
Subsidiary Guaranty or the ST Holdings Guaranty; or the Subsidiary
Guaranty or the ST Holdings Guaranty is for any reason partially
(including with respect to future advances) or wholly revoked or
invalidated, or otherwise ceases to be in full force and effect, or any
Guarantor or any other Person contests in any manner the validity or
enforceability thereof or denies that it has any further liability or
obligation thereunder; or any event described at subsections (f) or (g)
of this Section occurs with respect to any Guarantor; or
(n) COLLATERAL.
(i) any material provision of any Collateral Document
shall for any reason cease to be valid and binding on or
enforceable against the Company or any Subsidiary party
thereto or the Company or any Subsidiary shall so state in
writing or bring an action to limit its obligations or
liabilities thereunder; or
(ii) any Collateral Document shall for any reason
(other than pursuant to the terms thereof) cease to create a
valid security interest in a material part of the Collateral
purported to be covered thereby or such security interest
shall for any reason cease to be a perfected and first
priority security interest subject only to Permitted Liens.
9.02 REMEDIES. If any Event of Default occurs, the Agent shall, at
the request of, or may, with the consent of, the Required Lenders,
(a) declare the Commitment of each Lender to make Loans and
any obligation of the Issuer to Issue Letters of Credit to be
terminated, whereupon such Commitments and obligation shall be
terminated;
(b) declare an amount equal to the maximum aggregate amount
that is or at any time thereafter may become available for drawing
under any outstanding Letters of Credit (whether or not any beneficiary
shall have presented, or shall be entitled at such time to present, the
drafts or other documents required to draw under such Letters of
Credit) to be immediately due and payable, and declare the unpaid
principal amount of
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all outstanding Loans, all interest accrued and unpaid thereon, and
all other amounts owing or payable hereunder or under any other Loan
Document to be immediately due and payable, without presentment,
demand, protest or other notice of any kind (except as otherwise
expressly provided herein), all of which are hereby expressly waived
by the Company; and
(c) exercise on behalf of itself and the Lenders all rights
and remedies available to it and the Lenders under the Loan Documents
or applicable law; PROVIDED, HOWEVER, that upon the occurrence of any
event specified in subsection (f) or (g) of SECTION 9.01 (in the case
of clause (i) of subsection (g) upon the expiration of the 60-day
period mentioned therein), the obligation of each Lender to make Loans
and any obligation of the Issuer to Issue Letters of Credit shall
automatically terminate and the unpaid principal amount of all
outstanding Loans and all interest and other amounts as aforesaid
shall automatically become due and payable without further act of the
Agent, the Issuer or any Lender.
9.03 RIGHTS NOT EXCLUSIVE. The rights provided for in this Agreement
and the other Loan Documents are cumulative and are not exclusive of any
other rights, powers, privileges or remedies provided by law or in equity, or
under any other instrument, document or agreement now existing or hereafter
arising.
ARTICLE X
THE AGENT
10.01 APPOINTMENT AND AUTHORIZATION; "AGENT". (a) Each Lender hereby
irrevocably (subject to SECTION 10.09) appoints, designates and authorizes the
Agent to take such action on its behalf under the provisions of this Agreement
and each other Loan Document and to exercise such powers and perform such duties
as are expressly delegated to it by the terms of this Agreement or any other
Loan Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent. Without limiting the generality of the
foregoing sentence, the use of the term "agent" in this Agreement with reference
to the Agent is not intended to connote any fiduciary or other implied (or
express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
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(b) Each Issuer shall act on behalf of the Lenders with
respect to any Letters of Credit Issued by it and the documents
associated therewith until such time and except for so long as the
Agent may agree at the request of the Required Lenders to act for such
Issuer with respect thereto; PROVIDED, HOWEVER, that such Issuer shall
have all of the benefits and immunities (i) provided to the Agent in
this ARTICLE X with respect to any acts taken or omissions suffered by
the Issuer in connection with Letters of Credit Issued by it or
proposed to be Issued by it and the application and agreements for
letters of credit pertaining to the Letters of Credit as fully as if
the term "Agent", as used in this ARTICLE X, included such Issuer with
respect to such acts or omissions, and (ii) as additionally provided in
this Agreement with respect to such Issuer.
10.02 DELEGATION OF DUTIES. The Agent may execute any of its duties
under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
10.03 LIABILITY OF AGENT. None of the Agent-Related Persons shall (a)
be liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (b) be responsible in any manner to any of the Lenders for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or for the value of
or title to any Collateral, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of the Company or any other party to any Loan Document to
perform its obligations hereunder or thereunder. No Agent-Related Person shall
be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Company or any of the Company's Subsidiaries or
Affiliates.
10.04 RELIANCE BY AGENT. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
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satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Required Lenders and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Lenders.
(b) For purposes of determining compliance with the conditions
specified in SECTION 5.01, each Lender that has executed this Agreement
shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by the Agent
to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender.
10.05 NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default, except
with respect to defaults in the payment of principal, interest and fees required
to be paid to the Agent for the account of the Lenders, unless the Agent shall
have received written notice from a Lender or the Company referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". The Agent will notify the Lenders of its
receipt of any such notice. The Agent shall take such action with respect to
such Default or Event of Default as may be requested by the Required Lenders in
accordance with ARTICLE IX; PROVIDED, HOWEVER, that unless and until the Agent
has received any such request, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable or in the best interest
of the Lenders.
10.06 CREDIT DECISION. Each Lender acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon any AgentRelated
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, the value of and title to any Collateral, and all
applicable bank regulatory laws relating to the transactions contemplated
hereby, and made its own decision to enter into this Agreement and to extend
credit to the Company hereunder. Each Lender also represents that it will,
independently and without reliance upon any Agent-Related Person and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of the Company. Except for notices, reports and other documents
expressly herein required to be furnished to the Lenders by the Agent, the Agent
shall not
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have any duty or responsibility to provide any Lender with any credit or
other information concerning the business, prospects, operations, property,
financial and other condition or creditworthiness of the Company which may
come into the possession of any of the Agent-Related Persons.
10.07 INDEMNIFICATION OF AGENT. Whether or not the transactions
contemplated hereby are consummated, the Lenders shall indemnify upon demand
the Agent-Related Persons (to the extent not reimbursed by or on behalf of
the Company and without limiting the obligation of the Company to do so), in
accordance with such Lender's Pro Rata Share of all Loans and Commitments,
from and against any and all Indemnified Liabilities; PROVIDED, HOWEVER, that
no Lender shall be liable for the payment to the Agent-Related Persons of any
portion of such Indemnified Liabilities resulting from such Person's gross
negligence or willful misconduct. Without limitation of the foregoing, each
Lender shall reimburse the Agent upon demand for its ratable share of any
costs or out-of-pocket expenses (including Attorney Costs) 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, this Agreement, any other Loan Document,
or any document contemplated by or referred to herein, to the extent that the
Agent is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive the payment of all Obligations
hereunder and the resignation or replacement of the Agent.
10.08 AGENT IN INDIVIDUAL CAPACITY. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent or an Issuer
hereunder and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, BofA or its Affiliates may
receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to its Loans, BofA
shall have the same rights and powers under this Agreement as any other Lender
and may exercise the same as though it were not the Agent or an Issuer.
10.09 SUCCESSOR AGENT. The Agent may, and at the request of the
Required Lenders shall, resign as Agent upon 30 days' notice to the Lenders. If
the Agent resigns under this Agreement, the Required Lenders shall appoint from
among the Lenders a successor agent for the Lenders subject, so long as no Event
of Default has occurred and is then continuing, to the consent of the Company,
which shall not be unreasonably withheld or delayed. If no successor agent is
appointed prior to the effective date of the resignation of the Agent, the Agent
may appoint, after consulting with the Lenders and the Company, a successor
agent from among the Lenders. Upon the acceptance of its appointment as
successor agent hereunder, such successor agent shall succeed to all the rights,
powers and duties of the
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retiring Agent and the term "Agent" shall mean such successor agent and the
retiring Agent's appointment, powers and duties as Agent shall be terminated.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this ARTICLE X and SECTIONS 11.04 and 11.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement. If no successor agent has accepted appointment as Agent by the
date which is 30 days following a retiring Agent's notice of resignation, the
retiring Agent's resignation shall nevertheless thereupon become effective
and the Lenders shall perform all of the duties of the Agent hereunder until
such time, if any, as the Required Lenders appoint a successor agent as
provided for above. Notwithstanding the foregoing, however, BofA may not be
removed as the Agent at the request of the Required Lenders unless BofA shall
also simultaneously be replaced as an "Issuer" (if any letters of credit
Issued by BofA are then outstanding) hereunder pursuant to documentation in
form and substance reasonably satisfactory to BofA.
10.10 WITHHOLDING TAX. (a) (i) If any Lender is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Lender claims
exemption from, or a reduction of U.S. withholding tax under Sections 1441 or
1442 of the Code, such Lender agrees with and in favor of the Agent and the
Company, to deliver to the Agent and the Company:
(A) if such Lender claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, two properly
completed and executed copies of IRS Form 1001 before the payment of
any interest in the first calendar year and before the payment of any
interest in each third succeeding calendar year during which interest
may be paid under this Agreement;
(B) if such Lender claims that interest paid under this
Agreement is exempt from United States withholding tax because it is
effectively connected with a United States trade or business of such
Lender, two properly completed and executed copies of IRS Form 4224
before the payment of any interest is due in the first taxable year of
such Lender and in each succeeding taxable year of such Lender during
which interest may be paid under this Agreement; and
(C) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such lender agrees to promptly notify the Agent and the Company of any change in
circumstances which would modify or render invalid any claimed exemption or
reduction.
(ii) if any foreign Lender claims exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", such Lender agrees with and in
favor of the Agent and the Company to deliver to the Agent and the
Company a Form W-8, or any subsequent versions thereof
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or successors thereto (and, if such Lender delivers a Form W-8, a
certificate representing that such Lender is not a "bank" for purposes
of Section 881(c) of the Code, is not a 10 percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Code) of the Company and is
not a controlled foreign corporation related to the Company (within
the meaning of Section 864(d)(4) of the Code)).
(b) If any Lender claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
1001 and such Lender sells, assigns, grants a participation in, or
otherwise transfers all or part of the Obligations of the Company to
such Lender, such Lender agrees to notify the Agent of the percentage
amount in which it is no longer the beneficial owner of Obligations of
the Company to such Lender. To the extent of such percentage amount,
the Agent will treat such Lender's IRS Form 1001 as no longer valid.
(c) If any Lender claiming exemption from United States
withholding tax by filing IRS Form 4224 with the Agent sells, assigns,
grants a participation in, or otherwise transfers all or part of the
Obligations of the Company to such Lender, such Lender agrees to
undertake sole responsibility for complying with the withholding tax
requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Lender is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to
such Lender an amount equivalent to the applicable withholding tax
after taking into account such reduction. However, if the forms or
other documentation required by subsection (a) of this Section are not
delivered to the Agent, then the Agent may withhold from any interest
payment to such Lender not providing such forms or other documentation
an amount equivalent to the applicable withholding tax imposed by
Sections 1441 and 1442 of the Code, without reduction.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did
not properly withhold tax from amounts paid to or for the account of
any Lender (because the appropriate form was not delivered or was not
properly executed, or because such Lender failed to notify the Agent of
a change in circumstances which rendered the exemption from, or
reduction of, withholding tax ineffective, or for any other reason)
such Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any
jurisdiction on the amounts payable to the Agent under this Section,
together with all costs and expenses (including Attorney Costs). The
obligation of the Lenders under this subsection shall survive the
payment of all Obligations and the resignation or replacement of the
Agent.
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10.11 COLLATERAL MATTERS. (a) The Agent is authorized on behalf of all
the Lenders, without the necessity of any notice to or further consent from the
Lenders, from time to time to take any action with respect to any Collateral or
the Collateral Documents which may be necessary to perfect and maintain
perfected the security interest in and Liens upon the Collateral granted
pursuant to the Collateral Documents.
(b) The Lenders irrevocably authorize the Agent, at its option
and in its discretion, to release any Lien granted to or held by the
Agent upon any Collateral (i) upon termination of the Commitments and
payment in full of all Loans and all other Obligations known to the
Agent and payable under this Agreement or any other Loan Document; (ii)
constituting property sold or to be sold or disposed of as part of or
in connection with any disposition permitted hereunder; (iii)
constituting property in which the Company or any Subsidiary owned no
interest at the time the Lien was granted or at any time thereafter;
(iv) constituting property leased to the Company or any Subsidiary
under a lease which has expired or been terminated in a transaction
permitted under this Agreement or is about to expire and which has not
been, and is not intended by the Company or such Subsidiary to be,
renewed or extended; (v) consisting of an instrument evidencing
Indebtedness or other debt instrument, if the indebtedness evidenced
thereby has been paid in full; or (vi) if approved, authorized or
ratified in writing by the Required Lenders or all the Lenders, as the
case may be, as provided in SUBSECTION 11.01(f). Upon request by the
Agent at any time, the Lenders will confirm in writing the Agent's
authority to release particular types or items of Collateral pursuant
to this SUBSECTION 10.11(b), provided that the absence of any such
confirmation for whatever reason shall not affect the Agent's rights
under this SECTION 10.11.
(c) Each Lender agrees with and in favor of each other (which
agreement shall not be for the benefit of the Company or any
Subsidiary) that the Company's obligation to such Lender under this
Agreement and the other Loan Documents is not and shall not be secured
by any real property collateral now or hereafter acquired by such
Lender other than the real property described in the Mortgages.
ARTICLE XI
MISCELLANEOUS
11.01 AMENDMENTS AND WAIVERS. No amendment or waiver of any provision
of this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company or any applicable Subsidiary therefrom, shall be
effective unless the same shall be in writing and signed by the Required Lenders
(or by the Agent at the written request of the Required Lenders) and the Company
and acknowledged by the Agent, and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose
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for which given; PROVIDED, HOWEVER, that no such waiver, amendment, or
consent shall, unless in writing and signed by all the Lenders and the
Company and acknowledged by the Agent, do any of the following:
(a) increase or extend the Commitment of any Lender (or
reinstate any Commitment terminated pursuant to SECTION 9.02);
(b) postpone or delay any date fixed by this Agreement or any
other Loan Document for any payment of principal, interest, fees or
other amounts due to the Lenders (or any of them) hereunder or under
any other Loan Document including without limitation any mandatory
prepayment required pursuant to SUBSECTION 2.09(b);
(c) reduce the principal of, or the rate of interest specified
herein on any Loan, or (subject to clause (iii) below) any fees or
other amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for
the Lenders or any of them to take any action hereunder or reduce the
percentage specified in the definition of "Required Lenders" or,
without the consent of each Revolving Lender, "Required Revolving
Lenders"; or
(e) amend this Section, or SECTION 2.16, or any provision
herein providing for consent or other action by all Lenders; or
(f) release all or substantially all of the Collateral except
as otherwise may be provided in the Collateral Documents or except
where the consent of the Required Lenders only is specifically provided
for; or
(g) release any or all of the Guarantors;
and, PROVIDED FURTHER, that (i) no amendment, waiver or consent shall,
unless in writing and signed by the Issuer in addition to the Required
Lenders or all the Lenders, as the case may be, affect the rights or
duties of the Issuer under this Agreement or any L/CRelated Document
relating to any Letter of Credit Issued or to be Issued by it, (ii) no
amendment, waiver or consent shall, unless in writing and signed by the
Agent in addition to the Required Lenders or all the Lenders, as the
case may be, affect the rights or duties of the Agent under this
Agreement or any other Loan Document, and (iii) no amendment, waiver or
consent shall, unless in writing and signed by the Swing Line Lender in
addition to the Required Lenders or all the Lenders, as the case may
be, affect the rights or duties of the Swing Line Lender under this
Agreement or any other Loan Document , and (iv) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing
executed by the parties thereto.
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11.02 NOTICES. (a) All notices, requests, consents, approvals, waivers
and other communications shall be in writing (including, unless the context
expressly otherwise provides, by facsimile transmission, provided that any
matter transmitted by the Company by facsimile (i) shall be immediately
confirmed by a telephone call to the recipient at the number specified on
SCHEDULE 11.02, and (ii) shall be followed promptly by delivery of a hard copy
original thereof) and mailed, faxed or delivered, to the address or facsimile
number specified for notices on SCHEDULE 11.02; or, as directed to the Company
or the Agent, to such other address as shall be designated by such party in a
written notice to the other parties, and as directed to any other party, at such
other address as shall be designated by such party in a written notice to the
Company and the Agent.
(b) All such notices, requests and communications shall, when
transmitted by overnight delivery, or faxed, be effective when
delivered for overnight (next-day) delivery, or transmitted in legible
form by facsimile machine, respectively, or if mailed or delivered,
upon delivery; except that notices pursuant to ARTICLE II, III or X to
the Agent shall not be effective until actually received by the Agent,
and notices pursuant to ARTICLE III to any Issuer shall not be
effective until actually received by such Issuer at the address
specified on SCHEDULE 11.02.
(c) Any agreement of the Agent and the Lenders herein to
receive certain notices by telephone or facsimile is solely for the
convenience and at the request of the Company. The Agent and the
Lenders shall be entitled to rely on the authority of any Person
purporting to be, a Person authorized by the Company to give such
notice and the Agent and the Lenders shall not have any liability to
the Company or other Person on account of any action taken or not taken
by the Agent or the Lenders in reliance upon such telephonic or
facsimile notice. The obligation of the Company to repay the Loans and
L/C Obligations shall not be affected in any way or to any extent by
any failure by the Agent and the Lenders to receive written
confirmation of any telephonic or facsimile notice or the receipt by
the Agent and the Lenders of a confirmation which is at variance with
the terms understood by the Agent and the Lenders to be contained in
the telephonic or facsimile notice.
11.03 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Agent or any Lender, any right, remedy,
power or privilege hereunder, shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
11.04 COSTS AND EXPENSES. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent
and an Issuer) within five Business Days after demand (subject to
SUBSECTION 5.01(e)) for all reasonable costs and
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expenses incurred by BofA (including in its capacity as Agent and
Issuer) in connection with the development, preparation, delivery,
administration, syndication and execution of, and any amendment,
supplement, waiver or modification to (in each case, whether or not
consummated), this Agreement, any Loan Document and any other
documents prepared in connection herewith or therewith, and the
consummation of the transactions contemplated hereby and thereby,
including reasonable Attorney Costs incurred by BofA (including in
its capacity as Agent and an Issuer) with respect thereto, except to
the extent the Loan Documents specifically provide that fees or
expenses are to be paid by the Agent;
(b) pay or reimburse the Agent and each Lender within five
Business Days after demand (subject to SUBSECTION 5.01(e)) for all
reasonable costs and expenses (including Attorney Costs) incurred by
them in connection with the enforcement, attempted enforcement, or
preservation of any rights or remedies under this Agreement or any
other Loan Document during the existence of an Event of Default or
after acceleration of the Loans (including in connection with any
"workout" or restructuring regarding the Loans, and including in
any Insolvency Proceeding or appellate proceeding); and
(c) pay or reimburse BofA (including in its capacity as Agent)
within five Business Days after demand (subject to SUBSECTION 5.01(e))
for all reasonable appraisal, audit (including collateral audits),
environmental inspection and review (including the allocated cost of
such internal services), search and filing costs, fees and expenses,
incurred or sustained by BofA (including in its capacity as Agent) in
connection with the matters referred to under subsections (a) and (b)
of this Section.
11.05 COMPANY INDEMNIFICATION. (a) The Company shall indemnify, defend
and hold the Agent-Related Persons, and each Lender and each of its respective
officers, directors, employees, counsel, agents and attorneys-in-fact (each, an
"INDEMNIFIED PERSON") harmless from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
charges, expenses and disbursements (including Attorney Costs) of any kind or
nature whatsoever which may at any time (including at any time following
repayment of the Loans, the termination of the Letters of Credit and the
termination, resignation or replacement of the Agent or replacement of any
Lender or assignment by any Lender of its Loans or Commitments) be imposed on,
incurred by or asserted against any Indemnified Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
Insolvency Proceeding or appellate proceeding) related to or arising out of this
Agreement or the Loans or Letters of Credit or the use of the proceeds thereof
or related to any Offshore Currency transactions entered into in connection
herewith, whether or not any Indemnified Person is a party thereto (all the
foregoing, collectively, the "INDEMNIFIED LIABILITIES"); PROVIDED, that the
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Company shall have no obligation hereunder to any Indemnified Person with
respect to Indemnified Liabilities resulting from the gross negligence or
willful misconduct of such Indemnified Person. The agreements in this Section
shall survive payment of all other Obligations.
(b) (i) The Company shall indemnify, defend and hold harmless
each Indemnified Person, from and against any and all
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses or disbursements
(including Attorney Costs and the allocated cost of internal
environmental audit or review services), which may be incurred
by or asserted against such Indemnified Person in connection
with or arising out of any pending or threatened
investigation, litigation or proceeding, or any action
reasonably taken by any Person, with respect to any
Environmental Claim arising out of or related to any property,
whether or not subject to a Mortgage in favor of the Agent or
any Lender, or arising out of or related to any operations of
the Company or any Subsidiary. No action taken by legal
counsel chosen by the Agent or any Lender in defending against
any such investigation, litigation or proceeding or requested
remedial, removal or response action shall vitiate or in any
way impair the Company's obligation and duty hereunder to
indemnify and hold harmless the Agent and each Lender.
(ii) In no event shall any site visit, observation,
or testing by the Agent or any Lender (or any contractee of
the Agent or any Lender) be deemed a representation or
warranty that Hazardous Materials are or are not present in,
on, or under, the site, or that there has been or shall be
compliance with any Environmental Law. Neither the Company nor
any other Person is entitled to rely on any site visit,
observation, or testing by the Agent or any Lender. Neither
the Agent nor any Lender owes any duty of care to protect the
Company or any other Person against, or to inform the Company
or any other party of, any Hazardous Materials or any other
adverse condition affecting any site or property. The Agent or
any Lender may, at its discretion, disclose to the Company or
any other Person any report or findings made as a result of,
or in connection with, any site visit, observation, or testing
by the Agent or any Lender. The Company understands and agrees
that the Agent and the Lenders make no warranty or
representation to the Company or any other Person regarding
the truth, accuracy or completeness of any such report or
findings that may be disclosed. The Company also understands
that, depending upon the results of any site visit,
observation or testing by the Agent or any Lender and
disclosed to the Company, the Company may have a legal
obligation to notify one or more environmental agencies of the
results and that such reporting requirements are site-specific
and are to be evaluated by the Company without advice or
assistance from the Agent or any Lender.
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(c) Survival; Defense. The obligations in this Section shall
survive payment of all other Obligations. At the election of any
Indemnified Person, the Company shall defend such Indemnified Person
using legal counsel reasonably satisfactory to such Indemnified Person
in such Person's sole discretion, at the sole cost and expense of the
Company. All amounts owing under this Section shall be paid within 30
days after demand.
11.06 MARSHALING; PAYMENTS SET ASIDE. Neither the Agent nor the
Lenders shall be under any obligation to xxxxxxxx any assets in favor of the
Company or any other Person or against or in payment of any or all of the
Obligations. To the extent that the Company makes a payment to the Agent or
the Lenders, or the Agent or the Lenders exercise their right of set-off, and
such payment or the proceeds of such set-off or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Lender in its discretion) to be repaid to a trustee, receiver
or any other party, in connection with any Insolvency Proceeding or
otherwise, then (a) to the extent of such recovery the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such set-off
had not occurred, and (b) each Lender severally agrees to pay to the Agent
upon demand its pro rata share of any amount so recovered from or repaid by
the Agent.
11.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that the Company may not assign or transfer any
of its rights or obligations under this Agreement without the prior written
consent of the Agent and each Lender.
11.08 ASSIGNMENTS, PARTICIPATIONS, ETC. (a) Any Lender may, with the
written consent of the Company at all times other than during the existence of
an Event of Default and the Agent, the Swing Line Lender and, in respect of
assignments of Revolving Loans or a Revolving Loan Commitment, each Issuer with
an outstanding Letter of Credit, which consents shall not be unreasonably
withheld or delayed, at any time assign and delegate to one or more Eligible
Assignees (each an "ASSIGNEE") all, or any part of all, of the Loans, the
Commitments, the L/C Obligations and the other rights and obligations of such
Lender hereunder, in a minimum amount of $5,000,000 or if less, the total amount
of such Lender's outstanding Loans and/or Commitments (provided that (x) no
written consent of the Company, the Agent, the Swing Line Lender or any Issuer
shall be required in connection with any assignment and delegation by a Lender
to an Eligible Assignee that is an Affiliate of such Lender or any Approved
Fund, (y) no consent of the Swing Line Lender or any Issuer shall be required in
respect of any assignment and delegation consisting solely of Term Loans and (z)
assignments must be made ratably as between the Revolving Loans and the Term
Loans); PROVIDED, HOWEVER, that the Company and the Agent may continue to deal
solely and directly with such Lender in connection with the interest so assigned
to an Assignee until (i) written notice of such assignment, together with
payment instructions, addresses and related
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information with respect to the Assignee, shall have been given to the
Company and the Agent by such Lender and the Assignee; (ii) such Lender and
its Assignee shall have delivered to the Company and the Agent an Assignment
and Acceptance in the form of EXHIBIT D ("ASSIGNMENT AND ACCEPTANCE")
together with any Note or Notes subject to such assignment and (iii) the
assignor Lender or Assignee has paid to the Agent a processing fee in the
amount of $3,500; PROVIDED, that in the case of contemporaneous assignments
by a Lender to more than one fund managed by the same investment advisor,
only a single fee of $3,500 shall be payable for all such contemporaneous
assignments.
(b) From and after the date that the Agent notifies the
assignor Lender that it has received (and, if required, provided its
consent with respect to) an executed Assignment and Acceptance and
payment of the above-referenced processing fee, (i) the Assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder (including without limitation any obligations
under SECTION 10.11) have been assigned to it pursuant to such
Assignment and Acceptance, shall have the rights and obligations of a
Lender under the Loan Documents, and (ii) the assignor Lender shall,
to the extent that rights and obligations hereunder and under the other
Loan Documents have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations
under the Loan Documents.
(c) Within five Business Days after its receipt of notice by
the Agent that it has received an executed Assignment and Acceptance
and payment of the processing fee, (and, if required, provided that it
consents to such assignment in accordance with SUBSECTION 11.08(a)),
the Company shall execute and deliver to the Agent new Notes evidencing
such Assignee's assigned Loans and Commitment and, if the assignor
Lender has retained a portion of its Loans and its Commitment,
replacement Notes in the principal amount of the Loans retained by the
assignor Lender (such Notes to be in exchange for, but not in payment
of, the Notes held by such Lender). Immediately upon each Assignee's
making its processing fee payment under the Assignment and Acceptance,
this Agreement shall be deemed to be amended to the extent, but only to
the extent, necessary to reflect the addition of the Assignee and the
resulting adjustment of the Commitments arising therefrom. The
Commitment allocated to each Assignee shall reduce such Commitments of
the assigning Lender PRO TANTO.
(d) The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the
names and addresses of the Lenders and the Commitments of, and
principal amount of the Loans owing to, each Lender from time to time.
The entries in such register shall be conclusive, in the absence of
manifest error, and the Company, the Agent and the Lenders shall treat
each person whose name is recorded in such register as the owner of the
Commitments and the Loans recorded therein for all purposes of this
Agreement. The register shall be
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available for inspection by the Company, any Lender and their
representatives, at any reasonable time and from time to time upon
reasonable prior notice.
(e) Any Lender may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "PARTICIPANT")
participating interests in any Loans, the Commitment of that Lender and
the other interests of that Lender (the "ORIGINATING LENDER") hereunder
and under the other Loan Documents; PROVIDED, HOWEVER, that (i) the
originating Lender's obligations under this Agreement shall remain
unchanged, (ii) the originating Lender shall remain solely responsible
for the performance of such obligations, (iii) the Company, each Issuer
and the Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender's rights
and obligations under this Agreement and the other Loan Documents, and
(iv) no Lender shall transfer or grant any participating interest under
which the Participant has rights to approve any amendment to, or any
consent or waiver with respect to, this Agreement or any other Loan
Document, except to the extent such amendment, consent or waiver would
require unanimous consent of the Lenders as described in clause (a)
(but only in respect of any increase of any Commitment of any
Originating Lender), (b) or (c) of the FIRST PROVISO to SECTION 11.01.
In the case of any such participation, the Participant shall be
entitled to the benefit of SECTIONS 4.01, 4.03 and 11.05 as though it
were also a Lender hereunder, and if amounts outstanding under this
Agreement are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of
Default, each Participant shall be deemed to have the right of
set-off in respect of its participating interest in amounts owing
under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under
this Agreement.
(f) Notwithstanding any other provision in this Agreement, (i)
any Lender may at any time create a security interest in, or pledge,
all or any portion of its rights under and interest in this Agreement
and the Notes held by it in favor of any Federal Reserve Bank in
accordance with Regulation A of the FRB or U.S. Treasury Regulation 31
CFR Section 203.14, and such Federal Reserve Bank may enforce such
pledge or security interest in any manner permitted under applicable
law and (ii) any Lender that is a fund that invests in bank loans may,
without the consent of the Agent or the Company, pledge all or any
portion of its rights under and interest in this Agreement to any
trustee or to any other representative of holders of obligations owed
or securities issued by such fund as security for such obligations or
securities; PROVIDED, that any transfer to any Person upon the
enforcement of such pledge or security interest may only be made
subject to SECTION 11.08.
11.09 CONFIDENTIALITY. Each Lender agrees to take and to cause its
Affiliates to take normal and reasonable precautions and exercise due care to
maintain the confidentiality of all information provided to it by the Company or
any Subsidiary, or by the Agent on the
108
Company's or such Subsidiary's behalf, under this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Company or any Subsidiary; except
to the extent such information (i) was or becomes generally available to the
public other than as a result of disclosure by the Lender or its Affiliates,
or (ii) was or becomes available on a non-confidential basis from a source
other than the Company, provided that such source is not bound by a
confidentiality agreement with the Company known to the Lender; PROVIDED,
HOWEVER, that any Lender may disclose such information (A) at the request or
pursuant to any requirement of any Governmental Authority to which the Lender
is subject or in connection with an examination of such Lender by any such
authority; (B) pursuant to subpoena or other court process; (C) when required
to do so in accordance with the provisions of any applicable Requirement of
Law; (D) to the extent reasonably required in connection with any litigation
or proceeding to which the Agent, any Lender or their respective Affiliates
may be party; (E) to the extent reasonably required in connection with the
exercise of any remedy hereunder or under any other Loan Document; (F) to
such Lender's independent auditors and other professional advisors; (G) to
any Participant or Assignee, actual or potential, provided that such Person
agrees in writing to keep such information confidential to the same extent
required of the Lenders hereunder; (H) as to any Lender or its Affiliate, as
expressly permitted under the terms of any other document or agreement
regarding confidentiality to which the Company or any Subsidiary is party or
is deemed party with such Lender or such Affiliate; (I) to its Affiliates;
and (J) to the National Association of Insurance Commissioners or any similar
organization or any nationally recognized rating agency that requires access
to information about such Lender's investment portfolio in connection with
ratings issued with respect to such Lender.
11.10 SET-OFF. In addition to any rights and remedies of the Lenders
provided by law, if an Event of Default exists or the Loans have been
accelerated, each Lender is authorized at any time and from time to time,
without prior notice to the Company, any such notice being waived by the Company
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held by, and other indebtedness at any time owing by, such Lender to or for the
credit or the account of the Company against any and all Obligations owing to
such Lender, now or hereafter existing, irrespective of whether or not the Agent
or such Lender shall have made demand under this Agreement or any Loan Document
and although such Obligations may be contingent or unmatured. Each Lender agrees
promptly to notify the Company and the Agent after any such set-off and
application made by such Lender; PROVIDED, HOWEVER, that the failure to give
such notice shall not affect the validity of such set-off and application.
11.11 AUTOMATIC DEBITS OF FEES. With respect to any commitment
fee, arrangement fee, letter of credit fee or other fee, or any other cost or
expense (including Attorney Costs) due and payable to the Agent, any Issuer,
BofA or under the Loan Documents, the Company hereby irrevocably authorizes
BofA to debit any deposit account of the Company with BofA in
109
an amount such that the aggregate amount debited from all such deposit
accounts does not exceed such fee or other cost or expense; PROVIDED, that so
long as no Event of Default has occurred and is continuing, BofA has given
notice to the Company thereof not later than 9:00 a.m. (Central time) on the
date of such debit. If there are insufficient funds in such deposit accounts
to cover the amount of the fee or other cost or expense then due, such debits
will be reversed so as not to create an overdraft (in whole or in part, in
BofA's sole discretion) and such amount not debited shall be deemed to be
unpaid. No such debit under this Section shall be deemed a set-off.
11.12 NOTIFICATION OF ADDRESSES, LENDING OFFICES, ETC. Each Lender
shall notify the Agent in writing of any changes in the address to which notices
to the Lender should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
11.13 COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
11.14 SEVERABILITY. The illegality or unenforceability of any provision
of this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
11.15 NO THIRD PARTIES BENEFITTED. This Agreement is made and entered
into for the sole protection and legal benefit of the Company, the Lenders, the
Agent and the AgentRelated Persons, and their permitted successors and assigns,
and no other Person shall be a direct or indirect legal beneficiary of, or have
any direct or indirect cause of action or claim in connection with, this
Agreement or any of the other Loan Documents.
11.16 GOVERNING LAW AND ARBITRATION.
(a) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF OKLAHOMA (WITHOUT
REGARD TO PRINCIPLES OF CONFLICTS OF LAW OF THAT STATE); PROVIDED
HOWEVER ANY ISSUE OR ISSUES RELATING TO THE AMOUNT OR RATE OF INTEREST
THAT MAY BE LAWFULLY CONTRACTED FOR, CHARGED, TAKEN, RESERVED, OR
RECEIVED HEREUNDER OR UNDER ANY OF THE OTHER LOAN DOCUMENTS SHALL BE
GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
OKLAHOMA; PROVIDED FURTHER THAT THE ADMINISTRATIVE AGENT AND THE BANKS
SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
110
(b) ARBITRATION. ANY CONTROVERSY OR CLAIM BETWEEN OR AMONG THE
PARTIES HERETO INCLUDING BUT NOT LIMITED TO THOSE ARISING OUT OF OR
RELATING TO THIS AGREEMENT, OR ANY RELATED AGREEMENT OR INSTRUMENTS,
INCLUDING ANY CLAIM BASED ON OR ARISING FROM AN ALLEGED TORT, SHALL BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL
ARBITRATION ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW), THE
RULES OF PRACTICE AND PROCEDURE FOR THE ARBITRATION OF COMMERCIAL
DISPUTES OF J.A.M.S./ENDISPUTE OR ANY SUCCESSOR THEREOF ("J.A.M.S.")
AND THE "SPECIAL RULES" SET FORTH BELOW. IN THE EVENT OF ANY
INCONSISTENCY, THE SPECIAL RULES SHALL CONTROL. JUDGMENT UPON ANY
ARBITRATION AWARD MAY BE ENTERED IN ANY COURT HAVING JURISDICTION. ANY
PARTY TO THIS AGREEMENT MAY BRING AN ACTION, INCLUDING A SUMMARY OR
EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY CONTROVERSY OR CLAIM
TO WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING JURISDICTION OVER
SUCH ACTION.
SPECIAL RULES. THE ARBITRATION SHALL BE CONDUCTED IN THE
COUNTY OF TULSA, OKLAHOMA AND ADMINISTERED BY J.A.M.S WHO WILL APPOINT
AN ARBITRATOR; IF J.A.M.S. IS UNABLE OR LEGALLY PRECLUDED FROM
ADMINISTERING THE ARBITRATION, THEN THE AMERICAN ARBITRATION
ASSOCIATION WILL SERVE. ALL ARBITRATION HEARINGS WILL BE COMMENCED
WITHIN 90 DAYS OF THE DEMAND FOR ARBITRATION; FURTHER THE ARBITRATOR
SHALL ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTENT THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.
RESERVATION OF RIGHTS. NOTHING IN THIS ARBITRATION PROVISION
SHALL BE DEEMED TO (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE
APPLICABLE STATUTES OF LIMITATIONS OR REPOSE AND ANY WAIVERS CONTAINED
IN THIS INSTRUMENT, AGREEMENT OR DOCUMENT; OR (II) BE A WAIVER BY ANY
LENDER OR THE AGENT, OF THE PROTECTION AFFORDED TO THEM BY 12 U.S.C.
SEC. 91 OR ANY SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE
RIGHT OF ANY LENDER OR THE AGENT HERETO (A) TO EXERCISE SELF HELP
REMEDIES SUCH AS (BUT NOT LIMITED TO) SETOFF OR (B) TO FORECLOSE
AGAINST ANY REAL OR PERSONAL PROPERTIES COLLATERAL, OR (C) TO OBTAIN
FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES SUCH AS (BUT NOT LIMITED
TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE APPOINTMENT OF A
RECEIVER,
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THE AGENT MAY EXERCISE SUCH SELF HELP RIGHTS, FORECLOSE UPON SUCH
PROPERTY OR OBTAIN SUCH PROVISIONAL OR ANCILLARY REMEDIES BEFORE,
DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING BROUGHT
PURSUANT TO THIS INSTRUMENT, AGREEMENT OR DOCUMENT. NEITHER THIS
EXERCISE OF SELF HELP REMEDIES NOR THE INSTITUTION OR MAINTENANCE OF AN
ACTION FOR FORECLOSURE OR PROVISIONAL OR ANCILLARY REMEDIES SHALL
CONSTITUTE A WAIVER OF THE RIGHT OF ANY PARTY, INCLUDING THE CLAIMANT
IN ANY SUCH ACTION, TO ARBITRATE THE MERITS OF THE CONTROVERSY OR CLAIM
OCCASIONING RESORT TO SUCH REMEDIES.
IN THE EVENT THAT THE FOREGOING ARBITRATION PROVISION IS NOT
UPHELD FOR ANY REASON AND THE PARTIES RESORT TO A COURT OF LAW TO
SETTLE THEIR DISPUTE, EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND OR CAUSE OF
ACTION ARISING UNDER THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS, OR IN
ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE
PARTIES HERETO WITH RESPECT TO THIS AGREEMENT OR THE LOAN DOCUMENTS,
OR THE TRANSACTIONS RELATED HERETO OR THERETO, WHETHER NOW EXISTING
OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL
WITHOUT A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR
COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY
JURY.
11.17 ENTIRE AGREEMENT. (a) This Agreement, together with the other
Loan Documents, embodies the entire agreement and understanding among the
Company, the Lenders and the Agent, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written, relating to
the subject matter hereof and thereof.
112
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered in Tulsa, Oklahoma by their proper and duly
authorized officers as of the day and year first above written.
FINTUBE TECHNOLOGIES, INC.
By: /s/ Rhys J. Best
Name: Rhys J. Best
Title: Chairman & President
000
XXXX XX XXXXXXX, X.X., as Agent
By: /s/ J. Xx Xxxxxx
Name: J. Xx Xxxxxx
Title: Sr. Vice President
BANK OF AMERICA, N.A., as a Lender and
as Swing Line Lender
By: /s/ J. Xx Xxxxxx
Name: J. Xx Xxxxxx
Title: Sr. Vice President
000
XXXX XXX, XXXXX, N.A. as a Lender and
Documentation Agent
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Vice President
115
THE F&M BANK & TRUST COMPANY, as a
Lender
By: /s/ Xxxx X. Xxxxxx
Name: Xxxx X. Xxxxxx
Title: Senior Vice Pres.
116
MID-FIRST BANK, N.A., as a Lender
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: V.P.
Exhibits and Schedules (except Schedule 2.01) are not filed with this Credit
Agreement. Registrant agrees to furnish supplementally a copy of any omitted
Exhibit or Schedule to the Commission upon request.
117
SCHEDULE 2.01
Term Loan Commitment
Bank of America, N.A. $15,864,407
Bank One, Texas, N.A. $13,220,339
The F&M Bank & Trust Company $6,610,169
Mid-First Bank $3,305,085
REVOLVING LOAN COMMITMENT
Bank of America, N.A. $8,135,594
Bank One, Texas, N.A. $6,779,661
The F&M Bank & Trust Company $3,389,830
Mid-First Bank $1,694,915
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