EXHIBIT 10.1
CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of February 22, 1996, is among: (i) BANCTEC
USA, INC., a Delaware corporation ("Borrower"); (ii) BANCTEC, INC., a Delaware
corporation ("Parent") which owns all of the outstanding stock of Borrower;
(iii) the current Domestic Subsidiaries (as defined below) of Parent which are
listed as such on the signature pages hereof (collectively, the "Other Domestic
Subsidiaries"); (iv) the banks listed on the signature pages hereof (the
"Banks"); and (v) TEXAS COMMERCE BANK NATIONAL ASSOCIATION, a national banking
association (in its capacity as agent for the Banks, together with its
successors and assigns in such capacity, "Agent," in its capacity as Funds
Administrator, the "Funds Administrator" and, in its individual capacity,
"TCB").
RECITALS:
A. Borrower, Parent and the Other Domestic Subsidiaries have requested
that the Banks extend credit to Borrower to enable it to borrow (i) on a
revolving credit basis up to $50,000,000 and (ii) on a term basis
$43,445,447.59, all on the terms and conditions set forth herein.
B. The Banks are willing to extend credit to Borrower, and TCB is willing
to serve as Agent and Funds Administrator, upon and subject to the terms and
provisions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
SECTION 1.1. CERTAIN DEFINED TERMS. As used in this Agreement, the
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following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"ACQUISITION" means an Investment in capital stock or other equity
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securities (or securities convertible into, exchangeable for or evidencing any
right or option to purchase or otherwise acquire any such stock or securities)
of any Person if, afterward, such Person would be a Subsidiary, or any
acquisition of all or a significant portion of the Property of any Person,
CREDIT AGREEMENT PAGE 1
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that at such time was not a wholly-owned Subsidiary, whether such Investment or
acquisition was effected by purchase, exchange, Combination or otherwise.
"ADDITIONAL COSTS" has the meaning assigned to it in Section 5.1(a).
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"ADMINISTRATIVE QUESTIONNAIRE" means an Administrative Questionnaire in
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substantially the form of EXHIBIT "A" hereto, which each Bank shall complete and
provide to Agent.
"ADVANCE" means an advance of funds by Bank to Borrower pursuant to
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Articles II or III.
"ADVANCE REQUEST FORM" means a certificate, in substantially the form of
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EXHIBIT "B" hereto, properly completed and signed by Borrower requesting
Advances.
"AFFILIATE" means any Person that, directly or indirectly, controls, or is
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controlled by or under common control with, another Person. For the purposes of
this definition, "control" (including the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the power to
direct or cause the direction of the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities or by
contract or otherwise. Without limiting the generality of the foregoing, a
Subsidiary of a Person is an Affiliate of that Person.
"AGENT" has the meaning assigned to it in the first paragraph of this
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Agreement.
"AGREEMENT" means this Credit Agreement, as it may be modified or amended
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from time to time hereafter in accordance with the provisions hereof.
"ALTERNATE BASE RATE" means, at any time, the greater of (a) the Base Rate,
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or (b) the Federal Funds Rate plus one-half of one percent (1/2%).
"ALTERNATE CURRENCY" means French francs, British pounds sterling, Japanese
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yen, Australian dollars, Canadian dollars, German deutschemarks, Netherlands
guilders, Swedish krona and the currency of any other foreign country agreed to
by all of the Banks.
"ALTERNATE CURRENCY LENDING OFFICE" means the office of each Bank specified
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as its Alternate Currency Lending Office for each Alternate Currency below its
name on the signature pages hereof or such other office of such Bank as such
Bank may from time to time specify to Agent and Borrower.
"ALTERNATE CURRENCY LOAN" means a portion of any Loan which is funded in
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Alternate Currency and bears interest at the Alternate Currency Rate.
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"ALTERNATE CURRENCY BASE RATE" means for any Interest Period for each
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Alternate Currency Loan, a rate per annum equal to the per annum rate of
interest determined by the Agent (rounded upward to the nearest 0.01%) to be the
rate per annum at which deposits in the relevant Alternate Currency are offered
by the Alternate Currency Lending Office of Agent to a prime bank in the
interbank domestic alternate currency market at 10:00 a.m. (Central Time) two
Business Days before the first day of such Interest Period, for a period equal
to such Interest Period in an amount substantially equal to the amount of the
relevant Alternate Currency Loan to be outstanding during such Interest Period.
"ALTERNATE CURRENCY RATE" means a rate per annum (rounded upwards, if
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necessary, to the nearest 1/100th of 1%) determined by Agent to be equal to the
Alternate Currency Base Rate for such Alternate Currency Loan for the Interest
Period for such Alternate Currency Loan plus the applicable Interest Rate
Adjustment Factor as of the beginning date of such Interest Period.
"APPLICABLE LENDING OFFICE" means with respect to each Bank, such Bank's
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Domestic Lending Office for the portions of the Loans bearing interest at the
Alternate Base Rate and the CD Rate, such Bank's Eurodollar Lending Office for
the portions of the Loans bearing interest at the Eurodollar Rate and such
Bank's Alternate Currency Lending Office for the portions of the Loans made in
Alternate Currency.
"APPLICABLE REVOLVING CREDIT RATE" means at any time (a) with respect to
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Eurodollar Loans, a rate per annum equal to the Eurodollar Rate, (b) with
respect to Base Rate Loans, a rate per annum equal to the Alternate Base Rate
and (c) with respect to Alternate Currency Loans, a rate per annum equal to the
Alternate Currency Rate.
"APPLICABLE TERM RATE" means at any time, (a) with respect to Eurodollar
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Loans, a rate per annum equal to the Eurodollar Rate, (b) with respect to CD
Rate Loans, a rate per annum equal to the CD Rate, (c) with respect to Base Rate
Loans, a rate per annum equal to the Alternate Base Rate and (d) with respect to
Alternate Currency Loans, a rate per annum equal to the Alternate Currency Rate.
"ASSESSMENT RATE" means for any day the annual assessment rate in effect on
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such day which is payable by a member of the Bank Insurance Fund classified as
well capitalized and within supervisory subgroup "B" (or a comparable successor
assessment risk classification) within the meaning of 12 C.F.R. (S) 327.3 and
327.4 (or any successor provision) to the Federal Deposit Insurance Corporation
(or any successor) for such Corporation's (or such successor's) insuring time
deposits at offices of such institution in the U.S.
"ASSIGNMENT AND ACCEPTANCE" has the meaning assigned to it in Section
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12.11(c).
"AUTHORIZATIONS" has the meaning assigned to it in Section 8.9.
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"BANK" means each of the banks listed on the signature pages of this
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Agreement.
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"BASE RATE" means at anytime, the rate of interest per annum then most
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recently announced by TCB as its prime rate and thereafter entered into the
minutes of TCB's Loan and Discount Committee, automatically fluctuating upward
and downward with and at the time specified in each such announcement without
special notice to Borrower. The Base Rate is a reference rate and does not
necessarily represent the lowest or best rate actually charged to any customer.
TCB may make commercial or other loans at rates of interest at, above or below
the Base Rate.
"BASE RATE LOAN" means a portion of any Loan which bears interest at a rate
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based upon the Alternate Base Rate as determined pursuant to Section 4.4.
"BOARD" means the Board of Governors of the U.S. Federal Reserve System.
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"BORROWER" has the meaning assigned to it in the first paragraph of this
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Agreement.
"BORROWINGS" means for any Person: (a) all indebtedness (including, in the
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case of the Obligated Parties, the Obligations), whether or not represented by
bonds, debentures, notes, securities or other evidences of indebtedness, for the
repayment of money borrowed, (b) all indebtedness representing deferred payment
of the purchase price of property or assets, (c) all indebtedness under any
capital lease, (d) all indebtedness under guaranties, endorsements, assumptions,
or other contractual contingent obligations, including any letters of credit, or
obligations in respect of, or to purchase or otherwise acquire, indebtedness of
others, (e) all indebtedness secured by a Lien existing on property owned,
subject to such Lien, whether or not the indebtedness secured thereby shall have
been assumed by the owner thereof and (f) all amendments, renewals, extensions,
modifications and refundings of any indebtedness or obligations referred to
above in (a), (b), (c), (d) or (e).
"BUSINESS DAY" means a day other than (i) Saturday, (ii) Sunday, or (iii)
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any other day on which banks are required or authorized to close in Dallas or
Houston, Texas, or any city in which an Alternate Currency Loan is to be paid or
advanced.
"CASH TAXES" means income Taxes actually paid during the applicable period.
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"CD QUOTED RATE" means the rate of interest per annum determined by Agent
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to be the average (rounded upward to the nearest whole multiple of one sixteenth
of one percent) of the interest rates quoted by the Reference Banks as of
approximately 10:00 a.m. Central Time (or as soon thereafter as practicable) on
the beginning date of such Interest Period by a total of three dealers in
certificates of deposit in an amount comparable to the CD Rate Loan to which
such Interest Period applies and having a maturity comparable to such Interest
Period. If any Reference Bank does not furnish a timely quotation, Agent shall
determine the relevant interest rate on the basis of the quotation or quotations
furnished by the remaining Reference Bank or Reference Banks. If none of such
quotations is available on a timely basis, the provisions of
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Section 5.4 shall apply. The determination by Agent of the rate of interest per
annum provided hereby shall be conclusive absent manifest error.
"CD RATE" means for any CD Rate Loan, a rate per annum (rounded upwards, if
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necessary, to the nearest l/100th of 1%) equal to (i) the CD Quoted Rate for
such CD Rate Loan for the Interest Period for such CD Rate Loan divided by 1.0
minus the CD Reserve Requirement for such CD Rate Loan for such Interest Period,
plus (ii) the Assessment Rate, plus (iii) the Interest Rate Adjustment Factor as
of the beginning date of such Interest Period.
"CD RATE LOAN" means a portion of any Loan which bears interest at a rate
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based upon the CD Rate.
"CD RESERVE REQUIREMENT" means for any CD Rate Loan and for any Interest
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Period therefor, the average maximum rate at which reserves (including any
marginal, supplemental, or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits in excess of $l,000,000,000 in
respect of nonpersonal time deposits in Dollars in New York City having original
maturities and principal amounts comparable to the relevant CD Rate Loan and its
Interest Period, and in the amount of $100,000 or more. Without limiting the
effect of the foregoing, the CD Reserve Requirement shall reflect any other
reserves required to be maintained by such member banks by reason of any
Regulatory Change.
"CENTRAL TIME" means Central Standard Time or Central Daylight Savings
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Time, as the case may be.
"CLOSING DATE" means February 22, 1996 or such other date upon which
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Borrower and Agent may agree.
"COMBINATION" means any merger, consolidation, amalgamation or share
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exchange involving two or more Persons.
"COMMITMENT" means as to any Bank, such Bank's Revolving Credit Commitment.
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"COMMITMENT FEE" means the following fee per annum, based on a 360-day year
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and the actual number of days elapsed, according to Borrower's Debt to
Capitalization Ratio shown below:
Debt to Capitalization Ratio Commitment Fee
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Less than .25 to 1.0 .1875%
From .25 to 1.0 to .35 to 1.0 .2250%
Above .35 to 1.0 to .45 to 1.0 .2500%
Above .45 to 1.0 .3000%
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"CONSOLIDATED TANGIBLE ASSETS" means net assets of Borrower, Parent and
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each of their respective Subsidiaries, on a consolidated basis, less the sum of
(a) any surplus resulting from any write-up of assets, (b) goodwill, including
any amounts, however designated, representing the excess of the purchase price
paid for assets acquired over the book value assigned thereto by Borrower, (c)
patents, trademarks, service marks, trade names and copyrights, and (d) other
intangible assets.
"CURRENT FINANCIALS" means the consolidated Financial Statements of Parent
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and its Subsidiaries for the fiscal year ended March 26, 1995 and the six months
ended September 24, 1995.
"DEBT" means for any Person, all liabilities to any other Person,
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including, without limitation, all Borrowings and all other debts, claims and
indebtedness, contingent, fixed or otherwise, heretofore, now or from time to
time hereafter owing, due or payable, however evidenced, created, incurred,
acquired or owing and however arising, whether under written or oral agreement,
operation of law, or otherwise.
"DEBTOR RELIEF LAW" means any conservatorship, bankruptcy, moratorium,
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rearrangement, receivership, insolvency, fraudulent transfer, reorganization or
similar debtor relief Laws from time to time in effect generally affecting the
Rights of creditors.
"DEBT SERVICE" means, for any period, (a) scheduled payments of principal
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on all consolidated Debt plus (b) interest expense.
"DEBT TO CAPITALIZATION RATIO" means a ratio of (i) consolidated long term
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Debt, including the current maturities thereof but excluding Offset Debt in an
amount not to exceed $10,000,000, to (ii) the sum of consolidated long term
Debt, including the current maturities thereof but excluding Offset Debt in an
amount not to exceed $10,000,000, plus consolidated stockholders' equity, in
each case, of Parent and its Subsidiaries.
"DEBT TO EBITDA RATIO" means the ratio of (i) consolidated long term Debt,
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including the current maturities thereof but excluding Offset Debt in an amount
not to exceed $10,000,000, of Parent and its Subsidiaries, to EBITDA.
"DEFAULT" means any Event of Default and any other event which, with the
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lapse of time or giving of notice or both, would constitute an Event of Default.
"DEFAULT RATE" means the lesser of the Maximum Rate or the sum of the Base
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Rate in effect from day to day plus three percent (3%).
"DISPOSITION" means any sale, lease, assignment, transfer or other
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disposition by any Person, or any grant by any Person of any Right or option to
purchase or otherwise acquire, any of its Property, except any sale, lease,
assignment, transfer or other disposition of inventory or
CREDIT AGREEMENT PAGE 6
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equipment effected in the ordinary course of the Person's business (including,
without limitation, the sale or trade-in of equipment and the sale or other
disposal of excess, obsolete or worn out equipment).
"DISTRIBUTION" means for any Person (a) with respect to any capital stock
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issued by such Person, the retirement, redemption, purchase or other acquisition
for value of any such stock, (b) the declaration or payment of any dividend or
other distribution on or with respect to any such stock, other than a dividend
which takes the form of capital stock issued by such Person or a cash payment in
lieu of issuing fractional shares, not to exceed $25,000 in the aggregate in any
twelve month period, and (c) any other payment by such Person with respect to
stock.
"DOLLARS AND $" means lawful money of the U.S.
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"DOLLAR EQUIVALENT" means (i) the equivalent in Dollars of any Alternate
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Currency and (ii) the equivalent in any Alternate Currency of Dollars. For
purposes of this Agreement, Dollar Equivalent shall be determined by using the
quoted spot rate at which TCB or any affiliate of TCB offers to exchange Dollars
for such Alternate Currency at 10:00 a.m. (Central Time) two Business Days prior
to the date on which such equivalent is to be determined pursuant to the
provisions of this Agreement. The Agent shall notify each affected Bank of such
determination on such date. The Dollar Equivalent of each Loan made in an
Alternate Currency shall be recalculated hereunder on each date it is necessary
to determine the unused portion of each Bank's Commitment or any Loans
outstanding on such date.
"DOMESTIC LENDING OFFICE" means the office of each Bank specified as its
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Domestic Lending Office below its name on the signature pages hereof or such
other office as such Bank may from time to time specify to Agent and Borrower.
"DOMESTIC SUBSIDIARY" means any Subsidiary of Borrower or Parent which is
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not a Foreign Subsidiary, including those Domestic Subsidiaries listed on the
signature pages of this Agreement. Borrower and each of its Domestic
Subsidiaries is a Domestic Subsidiary of Parent.
"EBITDA" means, for any period, Parent's Net Income for such period from
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continuing operations, exclusive (without duplication) of (i) extraordinary
items, as determined under GAAP, and (ii) $85,000,000 in pre-tax expenses and
charges accrued for the quarter ended December 31, 1995, but without deducting
from such Net Income federal, state, foreign and local income Taxes,
depreciation, amortization, and interest expense (including, without limitation,
all interest with respect to capitalized lease obligations and all capitalized
interest).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
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amended, together with all regulations issued pursuant thereto.
CREDIT AGREEMENT PAGE 7
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"EURODOLLAR LENDING OFFICE" means the office of each Bank specified as its
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Eurodollar Lending Office below its name on the signature pages hereof or such
other office of such Bank as such Bank may from time to time specify to Agent
and Borrower.
"EURODOLLAR LOAN" means a portion of any Loan which bears interest at a
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rate based upon the Eurodollar Rate as determined by Section 4.4.
"EURODOLLAR RATE" means a rate per annum (rounded upwards, if necessary, to
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the nearest l/100th of 1%) determined by Agent to be equal to (i) the Interbank
Offered Rate for such Eurodollar Loan for the Interest Period for such
Eurodollar Loan divided by 1.0 minus the Eurodollar Reserve Requirement for such
Eurodollar Loan for such Interest Period plus (ii) the applicable Interest Rate
Adjustment Factor as of the beginning date of such Interest Period.
"EURODOLLAR RESERVE REQUIREMENT" means for any Eurodollar Loan and for any
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Interest Period therefor, the average maximum rate at which reserves (including
any marginal, supplemental, or emergency reserves) are required to be maintained
during such Interest Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding $1,000,000,000 against
"eurocurrency liabilities" (as such term is used in Regulation D). Without
limiting the effect of the foregoing, the Eurodollar Reserve Requirement shall
reflect any other reserves required to be maintained by such member banks by
reason of any Regulatory Change against (a) any category of liabilities which
includes deposits by reference to which the Eurodollar Rate is to be determined
as provided in the definition of "Interbank Offered Rate" in this Section 1.1,
or (b) any category of extensions of credit or other assets which include
Eurodollar Loans.
"EVENT OF DEFAULT" means any of the events listed in Section 10.1 of this
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Agreement.
"EXCHANGE ACT" means the Securities and Exchange Act of 1934, as amended.
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"EXISTING PARENT CREDIT AGREEMENT" means the Second Amended and Restated
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Credit Agreement, dated as of December 28, 1994, among Parent, Parent's Domestic
Subsidiaries named therein (including Borrower), the Banks named therein
(including Borrower), and TCB as Agent and as Funds Administrator.
"FEDERAL FUNDS RATE" means for any day, the rate per annum (rounded
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upwards, if necessary, to the nearest l/100th of 1%) determined by Agent to be
equal to the weighted average of the rates on overnight federal funds
transactions with member banks of the Federal Reserve System arranged by federal
funds brokers on such day, as published by the Federal Reserve Bank of New York,
New York on the Business Day next succeeding such day or if such rates are not
published for any day, the average of the rates charged to the Reference Banks
on such day on such transactions. The determination by Agent of the rate of
interest per annum provided above shall be conclusive absent manifest error.
CREDIT AGREEMENT PAGE 8
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"FINANCIAL STATEMENTS" means balance sheets, income statements, statements
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of stockholders' equity and statements of cash flows.
"FIRA" has the meaning assigned to it in Section 8.14.
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"FOREIGN SUBSIDIARY" means any Subsidiary which is organized under the laws
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of a jurisdiction other than the U.S. or any state thereof.
"FUNDS ADMINISTRATOR" has the meaning assigned to it in the first paragraph
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of this Agreement.
"GAAP" means generally accepted accounting principles for financial
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reporting in the U.S.
"GUARANTORS" means Parent, the Other Domestic Subsidiaries listed on the
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signature pages of this Agreement and each other Domestic Subsidiary of Borrower
or Parent that becomes a Domestic Subsidiary of Borrower or Parent after the
execution of this Agreement, it being contemplated that every Domestic
Subsidiary (other than Borrower), now or hereafter existing, shall execute a
Guaranty for the benefit of the Banks.
"GUARANTY" means, collectively, a Guaranty Agreement executed by Parent for
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the benefit of the Banks, in substantially the form of EXHIBIT "C-1" hereto, and
a Guaranty Agreement executed by each other Guarantor for the benefit of the
Banks, in substantially the form of EXHIBIT "C-2" hereto, as the same may be
supplemented, amended or otherwise modified from time to time.
"IMPOSITIONS" has the meaning assigned to it in Section 9.6.
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"INITIAL NOTICE OF BORROWING" means the notice of borrowing dated as of
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February 16, 1996 delivered by Borrower to Banks which specifies the amounts and
Interest Periods (which for the initial Advances covered thereby only may differ
from the requirements in the definition of Interest Period) for the initial
Advances to be made hereunder on the Closing Date.
"INTERBANK OFFERED RATE" means the rate of interest per annum determined by
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Agent to be the average (rounded upward to the nearest whole multiple of one
sixteenth of one percent) of the interest rates quoted by the Reference Banks at
approximately 11:00 a.m. New York time (or as soon thereafter as practicable) on
the day two (2) Business Days prior to the first day of the Interest Period for
such Eurodollar Loan for the offering by the Reference Banks to leading banks in
whatever interbank market may be selected by the Reference Banks, in their sole
discretion, of Dollar deposits having a term comparable to such Interest Period
and in an amount comparable to the principal amount of the respective Eurodollar
Loans of the Reference Banks to which such Interest Period relates. If any
Reference Bank is not participating in any Eurodollar Loan during the Interest
Period therefor (pursuant to Section 5.1 or 5.2 or 5.3 hereof
CREDIT AGREEMENT PAGE 9
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or for any other reason), the Eurodollar Rate for such Eurodollar Loans for such
Interest Period shall be determined by reference to the amount of the Eurodollar
Loan that such Reference Bank would have made had it been participating in such
Eurodollar Loan. If any Reference Bank does not furnish a timely quotation,
Agent shall determine the relevant interest rate on the basis of the quotation
or quotations furnished by the remaining Reference Bank or Reference Banks. If
none of such quotations is available on a timely basis, the provisions of
Section 5.4 shall apply. The determination by Agent of the rate of interest per
annum provided hereby shall be conclusive absent manifest error.
"INTERCOMPANY LOANS" means loans or advances by Borrower to Parent or to
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one or more Subsidiaries of Borrower or Parent, or by Parent to Borrower or one
or more Other Domestic Subsidiaries of Parent, except that Intercompany Loans do
not include intercompany accounts receivable of up to $10 million reclassified
for regulatory purposes as short term intercompany advances.
"INTEREST OR CURRENCY OPTION" has the meaning assigned to it in Section
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4.3.
"INTEREST PAYMENT DATE" means (a) with respect to any Base Rate Loan, the
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earlier of (i) the last Business Day of each March, June, September and
December, commencing on the first such day to occur after an Advance has been
made, any portion of which bears interest at a rate based on the Base Rate or
after an Alternate Currency Loan, CD Rate Loan or Eurodollar Loan has been
converted to a Base Rate Loan or (ii) the day upon which such Base Rate Loan is
converted to an Alternate Currency Loan, CD Rate Loan or Eurodollar Loan, and
(b) with respect to any Alternate Currency Loan, Eurodollar Loan or CD Rate
Loan, on the last day of the Interest Period.
"INTEREST PERIOD" means for any Alternate Currency Loan, Eurodollar Loan or
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CD Rate Loan (i) initially, the period commencing on the day an Advance has been
made, any portion of which bears interest at a rate based on the Alternate
Currency Rate, the Eurodollar Rate or the CD Rate or on the day that a Base Rate
Loan has been converted to an Alternate Currency Loan, a Eurodollar Loan or CD
Rate Loan and in each case ending on the numerically corresponding day one, two,
three, four, five or six months thereafter, as selected by Borrower in its
written notice to Agent or as otherwise determined pursuant to this Agreement,
and (ii) thereafter, each period commencing on the last day of the immediately
preceding Interest Period for such or Alternate Currency Loan, Eurodollar Loan,
CD Rate Loan and ending on the numerically corresponding day one, two, three,
four, five or six months thereafter as selected by Borrower in its written
notice to Agent or as otherwise determined pursuant to this Agreement, provided
that the foregoing provisions relating to Interest Periods are subject to the
following:
(a) If any Interest Period would otherwise end on a day which is not
a Business Day, such Interest Period shall end on the next succeeding
Business Day, except
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that if the next Business Day would fall in the next calendar month, the
Interest Period shall end on the immediately preceding Business Day;
(b) any Interest Period that begins on the last day of a calendar
month (or on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end on the
last Business Day of a calendar month;
(c) if any Interest Period for any Alternate Currency Loan,
Eurodollar Loan or CD Rate Loan would, but for this paragraph (c), include
a date on which a payment of principal is due, then (i) such Interest
Period for that portion of the principal as is required to be repaid on
such date shall end on such date unless a Base Rate Loan is outstanding in
an amount at least equal to the portion of the principal as is required to
be repaid on such date and (ii) the remainder (if any) of the principal
amount of such Alternate Currency Loan, Eurodollar Loan or CD Rate Loan
shall have an Interest Period determined as otherwise provided in this
definition;
(d) any Interest Period which would otherwise extend beyond the
Termination Date shall end on the Termination Date;
(e) if Borrower fails to give Agent written notice of the length of
an Interest Period, Borrower shall be deemed to have selected an Interest
Period which is of the same duration as the Interest Period then ended, or,
as to the first Interest Period for any Loan, Borrower shall be deemed to
have selected a three month Interest Period; and
(f) no Interest Period shall extend for a period less than one month.
"INTEREST RATE ADJUSTMENT FACTOR" means the following:
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(a) With respect to the Revolving Credit Loan:
Debt to Capitalization Ratio Interest Rate Adjustment Factor
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Less than .25 to 1.0 .400%
From .25 to 1.0 to .35 to 1.0 .500%
Above .35 to 1.0 to .45 to 1.0 .625%
Above .45 to 1.0 .875%
(b) With respect to the Term Loan:
Debt to Capitalization Ratio Interest Rate Adjustment Factor
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Less than .25 to 1.0 0.625%
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From .25 to 1.0 to .35 to 1.0 0.750%
Above .35 to 1.0 to .45 to 1.0 0.875%
Above .45 to 1.0 1.125%
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as amended
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and in effect from time to time, and the regulations promulgated thereunder.
"INVESTMENT" of any Person means any investment by means of any direct or
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indirect (a) loan, advance, guarantee (a guarantee to be deemed an Investment
equal to the principal amount of the Debt guaranteed), capital contribution, or
transfer of assets (other than for an amount equal to the fair value of the
assets transferred payable in cash within ninety days of such sale) by such
Person, or (b) purchase or other acquisition for consideration by such Person of
evidences of indebtedness, capital stock or other securities of any other
Person.
"LAWS" means all applicable statutes, laws, ordinances, regulations,
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orders, writs, injunctions, or decrees of the U.S., any state or commonwealth,
any nation or country, any territory or possession, or any Tribunal, all as
amended and in effect from time to time.
"LIEN" means any claim, mortgage, pledge, assignment, hypothecation, trust,
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security interest, encumbrance, lien or charge of any kind (including, without
limitation, any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any lease in the nature thereof, or the
interest of the lessor under any capital lease).
"LITIGATION" means any proceeding, claim, lawsuit, action or investigation
----------
by or before any Tribunal.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranties, and any
--------------
and all other agreements or instruments now or hereafter executed and delivered
by Borrower or any other Person in connection with guaranteeing, securing or
otherwise supporting payment or performance of, this Agreement, any Note, or any
Guaranty, as they may be supplemented, amended or otherwise modified from time
to time.
"LOAN" means the Revolving Credit Loan or the Term Loan, including the
----
Commitments, and "LOANS" means those two Loans collectively, including the
-----
Commitments.
"MARGIN STOCK" has the meaning assigned to that term in Regulation U.
------------
"MATERIAL ADVERSE EFFECT" means any effect that is material and adverse to
-----------------------
the business, financial condition or operations of Borrower, Parent and their
respective Subsidiaries considered as a whole.
CREDIT AGREEMENT PAGE 12
----------------
"MAXIMUM RATE" means the maximum rate of nonusurious interest permitted
------------
from day to day by applicable law, including as to Article 5069-1.4, Vernon's
Texas Civil Statutes (and as the same may be incorporated by reference in other
Texas statutes), but otherwise without limitation, that rate based upon the
"indicated rate ceiling" and calculated after taking into account any and all
relevant fees, payments, and other charges incurred in connection with the Loan
Documents which are deemed to be interest under applicable law.
"NET INCOME" means for any period, the consolidated net income of Parent
----------
and its Subsidiaries for such period, provided that there shall be excluded: (a)
any net income (or net loss) of any Person in which Parent has an ownership
interest other than its Subsidiaries, except to the extent that any such income
has actually been received by Borrower in the form of cash dividends or similar
distributions; and (b) any net gains or losses on the sale or other disposition,
not in the ordinary course of business, of investments and other capital assets,
provided that there shall also be excluded any related charges for Taxes thereon
and other costs associated with the sale.
"NOTES" means, collectively, the Revolving Credit Notes and the Term Notes.
-----
"OBLIGATED PARTY" means Borrower and each of the Guarantors.
---------------
"OBLIGATIONS" means all loans, advances, debts, liabilities, obligations,
-----------
covenants and duties of Borrower and each other Obligated Party to Agent or the
Banks or any of them of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, arising under any of the
Loan Documents, whether or not for the payment of money, whether arising by
reason of an extension of credit, opening of a letter of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, attorneys' fees and any other
sums chargeable to any of the Obligated Parties under any of the Loan Documents.
"OFFICERS' CERTIFICATE" means for any Person, a certificate executed by (i)
---------------------
the Chairman, President or any Vice President and (ii) the Secretary or any
Assistant Secretary of such Person.
"OFFSET DEBT" means Debt of any Foreign Subsidiary of Parent (i) that is
-----------
owed to a financial institution located outside of the U.S. that is a customer
of Parent or any of its Subsidiaries and (ii) the proceeds of which have been
deposited with and are held by the financial institutions.
"OTHER DOMESTIC SUBSIDIARY" means a Domestic Subsidiary of Parent other
-------------------------
than Borrower.
"PARENT" has the meaning assigned to it in the first paragraph of this
------
Agreement.
CREDIT AGREEMENT PAGE 13
----------------
"PAYMENT OFFICE" means Agent's account at Texas Commerce Bank National
--------------
Association, Loan Syndication Services, 0000 Xxxxxx, Xxxxx Xxxxx, XX 46,
Xxxxxxx, Xxxxx 00000.
"PERMITTED INVESTMENT" means an Investment in any of the following:
--------------------
(a) securities issued or directly and fully guaranteed or insured by the U.S.,
any agency or instrumentality thereof (provided that the full faith and credit
of the U.S. is pledged in support thereof) or Puerto Rico having maturities of
not more than 12 months from the date of settlement:
(b) time deposits, certificates of deposit and bankers' acceptances,
in each case with maturities of not more than twelve months from the date
of settlement, (i) of any commercial bank incorporated in the U.S. of
recognized standing having capital and surplus in excess of $100,000,000,
(ii) which are fully insured by the Federal Deposit Insurance Corporation,
or (iii), in the case of Investments by any Foreign Subsidiary of Parent,
of any foreign branch of a U.S. bank or any foreign bank whose commercial
paper is rated at least A-2 or the equivalent by Standard & Poor's
Corporation, at least P-2 or the equivalent by Moody's Investor's Service,
Inc. or, in the case of any foreign bank, at least an equivalent rating by
a rating agency with an international standing comparable to Standard &
Poor's Corporation or Moody's Investor's Service, Inc.;
(c) securities by any U.S. state or subdivision or agency thereof
rated at least AAA or the equivalent thereof by Standard & Poor's
Corporation or at least Aaa or the equivalent thereof by Xxxxx'x Investors
Service, Inc. having maturities of not more than 12 months from the date of
settlement;
(d) commercial paper issued by any Person incorporated in the U.S.
rated at least A-2 or the equivalent thereof by Standard & Poor's
Corporation or at least P-2 or the equivalent thereof by Xxxxx'x Investors
Service, Inc. and in each case maturing not more than 12 months after the
date of acquisition or loan participations purchased on a non-recourse
basis in unsecured loans of corporations incorporated in the U.S. which
issue commercial paper of the type described above;
(e) shares of money market funds substantially all of whose assets
are comprised of securities of the types described in clauses (a) through
(c) above;
(f) eurodollar deposits, provided that (i) such deposits mature
within 12 months or less after the date of such investment, (ii) such
deposits are issued by commercial banks whose commercial paper is rated A-2
or its equivalent or better by Standard & Poor's Corporation or P-2 or its
equivalent or better by Xxxxx'x Investors Service, Inc., and (iii) such
deposits must be purchased in the U.S.;
CREDIT AGREEMENT PAGE 14
----------------
(g) repurchase agreements respecting any of the securities described
in clauses (a), (b), (c), and (f) above with banks incorporated under the
laws of the United States or of any State thereof whose commercial paper
ratings are A-2 or its equivalent or better by Standard & Poor's
Corporation or P-2 or its equivalent or better by Xxxxx'x Investors
Service, Inc.; provided, however, that the collateral therefor is actually
transferred or that the collateral therefor is held in custody by a
domestic commercial bank having total assets of not less than
$1,000,000,000 and confirmation is received from such bank that such
collateral is being held as security for the repurchase obligation;
(h) time deposits, certificates of deposit and bankers' acceptances,
in each case with maturities of not more than 60 months from the date of
settlement, of any commercial bank domiciled in Puerto Rico which are fully
insured by the Federal Deposit Insurance Corporation; or
(i) common stock of Parent.
"PERMITTED LIENS" means to the extent reflected and provided for on the
---------------
grantor's books and records and not impairing the operations of Borrower or any
performance hereunder or contemplated hereby, (i) Liens arising by operation of
Law for Taxes not yet due and payable, (ii) mechanic's, materialman's, shipper's
or warehouseman's Liens for services or materials for which payment is not yet
due, (iii) Liens on and limited to specific items of equipment or parcels of
real estate acquired hereafter that secure purchase money Borrowings permitted
hereunder, (iv) Liens consisting of zoning restrictions, easements or other
restrictions on the use of real estate, none of which is violated by existing
land use to the extent it could be expected to have a Material Adverse Effect,
(v) the following, if the validity or amount thereof is being contested in good
faith and by appropriate and lawful proceedings of which Borrower has given
prior notice to Agent and for which appropriate reserves have been established
and so long as levy and execution have been and continue to be effectively
stayed: Liens for taxes due and payable; Liens upon and defects in title to real
or personal property; Liens of mechanics, materialmen, shippers, warehousemen,
carriers and landlords; Liens for judgments; and (vi) pledges or deposits made
to secure payment of worker's compensation, or to participate in any fund in
connection with worker's compensation, unemployment insurance, or other social
security programs.
"PERSON" means any individual, sole proprietorship, partnership, joint
------
venture, trust, unincorporated organization, association, limited liability
company, corporation, company, institution, entity, party or government (whether
national, federal, state, county, city, municipal, or otherwise, including,
without limitation, any instrumentality, division, agency, body or department
thereof).
"PLAN" means any employee benefit plan or other plan maintained by any
----
Obligated Party for employees of Borrower and covered by Title IV of ERISA.
CREDIT AGREEMENT PAGE 15
----------------
"PRO RATA" means as to any Bank, (i) as applied to considerations involving
--------
any one of the Loans, such Bank's ratable share of such Loan expressed by the
percentage identified opposite its name as to such Loan on the signature pages
hereof, and (ii) as applied to considerations involving all of the Loans, such
Bank's ratable share of the sum of the Revolving Credit Commitment plus all
principal amounts outstanding under the Term Loan, expressed as a percentage of
such sum determined by Agent as of the applicable time.
"PROPERTY" means any interest in any kind of property or asset, whether
--------
real, personal or mixed, tangible or intangible, and whether now owned or
hereafter acquired.
"RECEIVABLES" means, for any Person, all of such Person's presently
-----------
existing and hereafter arising or acquired accounts, receivables and present and
future Rights of such Person to payment for goods sold or leased or for services
rendered, including, without limitation, those which are not evidenced by
instruments or chattel paper, and whether or not they have been earned by
performance; proceeds of any letters of credit on which such Person is named as
beneficiary; contract rights; chattel paper; instruments; documents; insurance
proceeds; and all such obligations whatsoever owing to such Person, together
with all instruments and all documents of title representing any of the
foregoing, all Rights in any merchandise or goods which any of the same may
represent, and all right, title, security and guaranties with respect to each of
the foregoing, including, without limitation, any right of stoppage in transit.
"RII" means Recognition International, Inc., a Delaware corporation which
---
was acquired by Parent through the RII Merger and subsequently merged into
Borrower as of December 31, 1995.
"RII MERGER" means the merger of RII with BTEC Merger Subsidiary, Inc.
----------
pursuant to the Agreement and Plan of Merger dated as of May 19, 1995 among
Parent, BTEC Merger Subsidiary, Inc. and RII.
"REFERENCE BANKS" means TCB and NationsBank of Texas, N.A.
---------------
"REGISTER" has the meaning assigned to it in Section 12.11(e).
--------
"REGULATION D" means Regulation D of the Board, as the same is from time to
------------
time in effect, and all official rulings and interpretations thereunder or
thereof.
"REGULATION G" means Regulation G of the Board, as the same is from time to
------------
time in effect, and all official rulings and interpretations thereunder or
thereof.
"REGULATION T" means Regulation T of the Board, as the same is from time to
------------
time in effect, and all official rulings and interpretations thereunder or
thereof.
CREDIT AGREEMENT PAGE 16
----------------
"REGULATION U" means Regulation U of the Board, as the same is from time to
------------
time in effect, and all official rulings and interpretations thereunder or
thereof.
"REGULATION X" means Regulation X of the Board, as the same is from time to
------------
time in effect, and all official rulings and interpretations thereunder or
thereof.
"REGULATORY CHANGE" means with respect to any Bank, any change on or after
-----------------
the date of this Agreement in any U.S. federal, state, or foreign Laws
(including Regulation D) or the adoption or making on or after such date of any
interpretation, directive, or request applying to a class of banks or other
lending institutions (including Bank) of or under any U.S. federal, state, or
foreign Laws (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"REPORTABLE EVENT" has the meaning assigned to that term in Title IV of
----------------
ERISA.
"REQUISITE BANKS" means (i) as applied to considerations involving any one
---------------
of the Loans, Banks whose Pro Rata percentages relating to such Loan together
equal at least 66-2/3 percent, and (ii) as applied to considerations involving
all of the Loans, Banks whose Pro Rata percentages relating to all Loans
together equal at least 66-2/3 percent; provided, however, that in all instances
-----------------
providing for Rights of Requisite Banks under Article IX, Section 10.2, Section
10.3, Section 11.1 and Section 11.8, Requisite Banks shall be determined
pursuant to (ii) above.
"REVOLVING CREDIT COMMITMENT" has the meaning assigned to it in Section
---------------------------
2.1.
"REVOLVING CREDIT LOAN" means the loan made or to be made pursuant to
---------------------
Section 2.1.
"REVOLVING CREDIT MAXIMUM COMMITMENT" has the meaning assigned to it in
-----------------------------------
Section 2.1.
"REVOLVING CREDIT NOTE" has the meaning assigned to it in Section 2.2.
---------------------
"RIGHTS" means rights, remedies, powers and privileges.
------
"SEC" means the U.S. Securities and Exchange Commission.
---
"SEC FILING" means a report or statement filed with the SEC pursuant to
----------
Sections 13, 14, or 15(d) of the Exchange Act and the regulations thereunder, or
a registration statement filed with the SEC pursuant to the Securities Act of
1933, as amended, and the regulations thereunder.
"SUBSIDIARY" means, with respect to any Person, any Person of which more
----------
than fifty percent (50%) of the issued and outstanding equity interests having
voting power (without regard to the occurrence of a contingency) for the
election of directors, managers or the equivalent
CREDIT AGREEMENT PAGE 17
----------------
thereof is at the time owned or controlled, directly or indirectly, by such
Person or one or more Subsidiaries of such Person or a combination thereof.
"TAXES" means all taxes, assessments, fees, levies, imposts, duties,
-----
deductions, withholdings, or other charges of any nature whatsoever from time to
time or at anytime imposed by any Laws or Tribunal.
"TCB" means Texas Commerce Bank National Association, a national banking
---
association, in its individual capacity.
"TERM COMMITMENT" has the meaning assigned to it in Section 3.1.
---------------
"TERM LOAN" means the loan made pursuant to Section 3.1.
---------
"TERM LOAN COMMITMENT" has the meaning assigned to it in Section 3.1.
--------------------
"TERM NOTES" has the meaning assigned to it in Section 3.2.
----------
"TERMINATION DATE" means (a) with respect to the Revolving Credit
----------------
Commitment of each Bank, the earlier of (i) December 31, 2000, (ii) the date on
which the Revolving Credit Commitment of each Bank is terminated by notice from
Borrower to Agent pursuant to Section 2.6, or (iii) the date on which the
Revolving Credit Loan is terminated or accelerated pursuant to Article X; and
(b) with respect to the Term Loan, the earlier of (i) December 31, 1999, or (ii)
the date on which the Term Loan is terminated or accelerated pursuant to Article
X.
"TRIBUNAL" means any federal, state, municipal or other governmental
--------
department, judicial body, commission, board, bureau, agency or instrumentality
of the U.S. or of any state, commonwealth, nation, territory, possession,
county, parish or municipality, whether now or hereafter constituted or
existing.
"UCC" means the Uniform Commercial Code as enacted in the State of Texas,
---
as amended.
"U.S." means the United States of America.
----
SECTION 1.2. ACCOUNTING AND OTHER TERMS. All accounting and financial
--------------------------
terms used in any of the Loan Documents, and the compliance with each covenant
contained herein which relates to financial matters, shall be determined in
accordance with GAAP, except to the extent that a deviation therefrom is
expressly stated therein. If compliance with any covenant contained herein is
affected by a change in GAAP, such covenant shall be modified to take into
account the change in question. All other terms contained in this Agreement
shall, unless the context indicates otherwise, have the meanings provided for by
the UCC to the extent the same are defined therein.
CREDIT AGREEMENT PAGE 18
----------------
ARTICLE II.
THE REVOLVING CREDIT LOAN
SECTION 2.1. REVOLVING CREDIT LOAN. From the Closing Date through the
---------------------
Termination Date applicable to the Revolving Credit Loan, upon the terms and
conditions and in reliance upon the representations and warranties hereinafter
set forth, each Bank, severally and not jointly (except as provided in Section
11.7), agrees to make one or more Advances under the Revolving Credit Loan to
Borrower from time to time in an aggregate principal amount at any time
outstanding not to exceed its Revolving Credit Commitment. The "Revolving
Credit Commitment" of each Bank equals its Pro Rata share of $50,000,000 (or, as
to portions thereof which are Alternate Currency Loans, the Dollar Equivalent
thereof), subject to any reductions under Section 2.6 (herein called the
"Revolving Credit Maximum Commitment"). Subject to the foregoing limitations
and other terms and provisions of this Agreement, Borrower may borrow, repay,
prepay and reborrow hereunder.
SECTION 2.2. REVOLVING CREDIT NOTES.
----------------------
(a) The Advances made by each Bank under the Revolving Credit Loan shall
be evidenced by a single promissory note (the "Revolving Credit Note")
substantially in the form of EXHIBIT "D" attached hereto, payable to the order
of each Bank in a principal amount equal to its Pro Rata share of the Revolving
Credit Maximum Commitment and dated the Closing Date.
(b) The principal of the Revolving Credit Loan shall be due and payable on
the Termination Date applicable to the Revolving Credit Loan.
(c) The outstanding principal amount of the Revolving Credit Loan shall
bear interest prior to maturity at a varying rate per annum from day to day
equal to the lesser of (i) the Maximum Rate, or (ii) the Applicable Revolving
Credit Rate; provided, however, if at any time the rate of interest specified in
clause (ii) preceding shall exceed the Maximum Rate, thereby causing the
interest on the Revolving Credit Loan to be limited to the Maximum Rate, then
any subsequent reduction in the Applicable Revolving Credit Rate shall not
reduce the rate of interest on the Revolving Credit Loan below the Maximum Rate
until the aggregate amount of interest accrued on the Revolving Credit Loan
equals the aggregate amount of interest that would have accrued on the Revolving
Credit Loan if the interest rate specified in clause (ii) preceding had at all
times been in effect. Each change in the rate of interest charged on the
Revolving Credit Loan shall become effective, without notice to Borrower, upon
the effective date of each change in the Applicable Revolving Credit Rate or the
Maximum Rate, as the case may be.
CREDIT AGREEMENT PAGE 19
----------------
(d) Accrued and unpaid interest on the Revolving Credit Loan shall be due
and payable on each Interest Payment Date and at maturity. All past due
principal and interest shall bear interest at the Default Rate.
SECTION 2.3. BORROWING PROCEDURE.
-------------------
(a) Each request for Advances under the Revolving Credit Loan shall be, in
the aggregate, in a minimum principal amount of $500,000 (or, as to portions
thereof which are Alternate Currency Loans, the Dollar Equivalent thereof).
(b) With respect to Advances under the Revolving Credit Loan that are to
be Alternate Currency Loans, Eurodollar Loans or CD Rate Loans, Borrower shall
notify Agent and the Funds Administrator of the request for such Advances by
delivering an Advance Request Form to Agent and the Funds Administrator prior to
11:00 A.M., Central Time, at least three Business Days prior to the date on
which such Advances are to be made. The Advance Request Form shall specify: (i)
the requested date of the Advances (which shall be a Business Day), (ii) the
aggregate amount of the Advances, (iii) the Interest or Currency Option
applicable to such Advances, it being agreed that only one Interest or Currency
Option shall apply to the Advances made on any one day, and (iv) the duration of
the Interest Period for any Eurodollar Loan or CD Rate Loan. Agent and the Funds
Administrator shall accept telephonic requests for such Advances, provided that
(i) Borrower promptly confirms such request by delivering an Advance Request
Form to Agent and the Funds Administrator setting forth the same information
that Borrower provided in its telephonic request, and (ii) such acceptance shall
not constitute a waiver of Agent's and the Funds Administrator's right to
require prior delivery of an Advance Request Form in connection with subsequent
Advances under the Revolving Credit Loan.
(c) With respect to Advances under the Revolving Credit Loan that are to
be Base Rate Loans, Borrower shall notify Agent and the Funds Administrator of
the request for such Advances by delivering an Advance Request Form to Agent and
the Funds Administrator prior to 11:00 A.M., Central Time, at least one Business
Day prior to the date on which such Advances are to be made. The Advance Request
Form shall set forth the information described in Section 2.3(b) above. Agent
and the Funds Administrator shall accept telephonic requests for such Advances
at any time prior to 12:00 noon, Central Time on the day of the requested
Advances, provided that (i) Borrower promptly confirms such request by
delivering an Advance Request Form to Agent and the Funds Administrator setting
forth the same information that Borrower provided in its telephonic request, and
(ii) such acceptance shall not constitute a waiver of Agent's and the Funds
Administrator's right to require delivery of an Advance Request Form in
connection with subsequent Advances under the Revolving Credit Loan.
(d) The foregoing shall not be applicable to Advances requested pursuant
to the Initial Notice of Borrowing.
CREDIT AGREEMENT PAGE 20
----------------
SECTION 2.4. DISBURSEMENT OF ADVANCES. Promptly after the Funds
------------------------
Administrator receives an Advance Request Form (or telephonic notice in lieu
thereof) requesting Advances under the Revolving Credit Loan, the Funds
Administrator shall notify each Bank of the requested Advances. Each Bank shall
make its Pro Rata portion of the aggregate amount of requested Advances
available to the Funds Administrator, at the Payment Office or, as to Alternate
Currency Loans, at the Funds Administrator's office for such Alternate Currency
as designated from time to time by Agent, in immediately available funds for the
account of Borrower, not later than 2:00 P.M., Central Time, on the date of the
requested Advances. After the Funds Administrator's receipt of such funds and
upon fulfillment of the applicable conditions precedent in Article VII, the
Funds Administrator shall make the proceeds of such Advances available to
Borrower before 2:00 P.M., Central Time or, as to Alternate Currency Loans,
before noon in the city in which such Alternate Currency Loan is being advanced,
by crediting the same in immediately available funds to an account of Borrower
maintained with the Funds Administrator. Advances made by each Bank under the
Revolving Credit Loan shall be made and maintained at each Bank's Applicable
Lending Office.
SECTION 2.5. USE OF PROCEEDS. The proceeds of the Revolving Credit Loan
---------------
shall be used by Borrower for its general corporate purposes and for
Intercompany Loans; provided, however, that no proceeds of the Revolving Credit
Loan shall be used (a) to make optional prepayments on the Term Loan, (b) to
purchase or carry any Margin Stock or to extend credit to others for the purpose
of purchasing or carrying Margin Stock, (c) for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry
Margin Stock, or (d) for any other purpose which might constitute this
transaction a "purpose credit" within the meaning of Regulation U.
SECTION 2.6. COMMITMENT FEE; REDUCTION OR TERMINATION OF REVOLVING CREDIT
------------------------------------------------------------
COMMITMENT. Borrower agrees to pay to Agent for the account of the Banks the
----------
Commitment Fee on the average daily unused portion of the Revolving Credit
Maximum Commitment, calculated by deducting from the Revolving Credit Maximum
Commitment all outstanding Advances under the Revolving Credit Loan for the
period from and including the date hereof to and including the Termination Date
applicable to the Revolving Credit Loan. Such fee shall be payable on the last
Business Day of each March, June, September, and December, with the next payment
due March 29, 1996, and ending on the Termination Date applicable to the
Revolving Credit Loan. Borrower shall have the right at any time to terminate
in whole or from time to time to reduce irrevocably in part the Revolving Credit
Maximum Commitment, upon not less than three Business Days prior notice to Agent
specifying the effective date thereof, whether a termination or reduction is
being made, and the amount of any partial reduction. Each partial reduction
shall be at least $500,000 or Dollar Equivalent, and Borrower shall
simultaneously prepay the amount by which the unpaid principal amount of the
Revolving Credit Loan exceeds the Revolving Credit Maximum Commitment (after
giving effect to such notice) plus accrued interest on the principal amount so
prepaid. Any termination of the Revolving Credit Maximum Commitment that
reduces the amount of the Revolving Credit Maximum
CREDIT AGREEMENT PAGE 21
----------------
Commitment below the aggregate principal amount of the Alternate Currency Loans
and Eurodollar Loans then outstanding may be made only on the last day of the
respective Interest Periods for such Alternate Currency Loans or Eurodollar
Loans, unless Borrower also pays any compensation due the Banks under this
Agreement on account of such termination on a day other than the last day of an
Interest Period.
ARTICLE III.
TERM LOAN
SECTION 3.1. TERM LOAN. Upon the terms and conditions and in reliance
---------
upon the representations and warranties hereinafter set forth, each Bank
severally and not jointly (except as provided in Section 11.7), agrees to make
the Term Loan in an aggregate principal amount not to exceed its Term Loan
Commitment. The "Term Loan Commitment" of each Bank shall equal its Pro Rata
share of $43,445,447.59. The Term Loan shall be funded in one Advance on the
Closing Date in accordance with the Initial Notice of Borrowing. The proceeds
of the Term Loan shall be loaned by Borrower to Parent and used by Parent to pay
off the Acquisition Facility Loan (as defined in the Existing Parent Credit
Agreement) in its entirety.
SECTION 3.2. TERM NOTES.
----------
(a) The obligation of Borrower to repay the Term Loan shall be evidenced by
notes (the "Term Notes"), substantially in the form of EXHIBIT "E" hereto, one
of which shall be payable to the order of each Bank in a principal amount equal
to its Pro Rata share of the Term Loan Commitment and dated the Closing Date.
The outstanding principal amount of the Term Loan shall be due and payable in 16
substantially equal consecutive quarterly installments on the last Business Day
of each March, June, September and December in each year, commencing on March
29, 1996 and ending on December 31, 1999; provided, however, that the last such
installment shall be in the amount necessary to repay in full the unpaid
principal amount of the Term Loan.
(b) The outstanding principal amount of the Term Loan shall bear interest
prior to maturity at a varying rate per annum from day to day equal to the
lesser of (i) the Maximum Rate, or (ii) the Applicable Term Rate; provided,
however, if at any time the rate of interest specified in clause (ii) preceding
shall exceed the Maximum Rate, thereby causing the interest on the Term Loan to
be limited to the Maximum Rate, then any subsequent reduction in the Applicable
Term Rate shall not reduce the rate of interest on the Term Loan below the
Maximum Rate until the aggregate amount of interest accrued on the Term Loan
equals the aggregate amount of interest that would have accrued on the Term Loan
if the interest rate specified in clause (ii) preceding had at all times been in
effect. Each change in the rate of interest charged on the Term Loan shall
become effective, without notice to Borrower, upon the
CREDIT AGREEMENT PAGE 22
----------------
effective date of each change in the Applicable Term Rate or the Maximum Rate,
as the case may be.
(c) Accrued and unpaid interest on the Term Loan shall be due and payable
on each Interest Payment Date and at maturity. All past due principal and
interest shall bear interest at the Default Rate.
ARTICLE IV.
PAYMENTS AND CONVERSIONS
SECTION 4.1. METHOD OF PAYMENT. All payments of principal, interest and
-----------------
other sums to be made by Borrower hereunder and under the Notes (other than with
respect to Alternate Currency Loans) shall be made to Agent, in Dollars, in
immediately available funds, not later than 12:00 noon, Central Time, on the
date on which such payment shall become due. Each payment received after such
time on such due date shall be deemed to have been made on the next succeeding
Business Day. All payments of principal, interest and other sums to be made by
Borrower hereunder and under the Notes with respect to Alternate Currency Loans
shall be made to Agent, in such Alternate Currency, in immediately available
funds, before the close of the banking day, on the date on which such payment
shall become due. Each payment received after such time on such due date shall
be deemed to have been made on the next succeeding Business Day. Whenever any
payment hereunder or under any Note shall be stated to be due on a day that is
not a Business Day, such payment shall be made on the next succeeding Business
Day and interest or any fee, as the case may be, shall continue to accrue during
such extension, provided that if, in the case of an Alternate Currency Loan, a
Eurodollar Loan or CD Rate Loan, the next succeeding Business Day is in the next
calendar month, such payment shall be made on the immediately preceding Business
Day. Borrower shall, at the time of making each payment hereunder or under any
Note with respect to an Alternate Currency Loan, specify to Agent the bank or
payment office at which such payment will be made, which must be the bank or
payment office Agent has specified for payments in the type of Alternate
Currency in question. Borrower shall, at the time of making each payment
hereunder or under any Note, specify to Agent the amounts payable by Borrower
hereunder to which such payment is to be applied (and in the event that it fails
to so specify, or if an Event of Default has occurred and is continuing, Agent
may apply such payment in such order and manner as the Requisite Banks may
direct, but subject to Section 11.3 hereof). Each payment received by Agent
hereunder or under any Note shall be paid promptly to the Banks in accordance
with Section 12.3, in immediately available funds, for the account of each
Bank's Applicable Lending Office for the Loan in respect of which such payment
is made.
SECTION 4.2. OPTIONAL PREPAYMENTS. Borrower may, on at least three
--------------------
Business Days prior written notice to Agent, prepay the principal of the Term
Loan in whole or in part, at any time or from time to time, without premium or
penalty (except as provided in Sections 5.5 and
CREDIT AGREEMENT PAGE 23
----------------
12.5), with accrued interest to the date of prepayment on the principal amount
so prepaid, provided that: (a) an Alternate Currency Loan, a Eurodollar Loan or
CD Rate Loan may be prepaid only on the last day of the Interest Period relating
thereto, unless Borrower also pays any compensation due the Banks under this
Agreement on account of its prepaying on a day other than the last day of an
Interest Period; (b) each partial prepayment on the Term Loan and each payment
on the Revolving Credit Loan shall be in the principal amount of $100,000 (or
the full outstanding amount, if less than $100,000) or Dollar Equivalent; and
(c) prepayments on the Term Loan shall be applied to installments in inverse
order of their maturities and may not be reborrowed.
SECTION 4.3. SELECTION AND CONVERSION OF INTEREST OR CURRENCY OPTIONS.
--------------------------------------------------------
Subject to the terms of Section 5.4 and the other terms and provisions of this
Agreement, Borrower has the option (i) of having all or any portion of the Term
Loan bear interest at a rate based on the CD Rate, the Alternate Base Rate or
the Eurodollar Rate, (ii) of having all or any portion of the Revolving Credit
Loan bear interest at a rate based on the Alternate Base Rate or the Eurodollar
Rate and (iii) of having all or any portion of each of the Loans be in Dollars
or Alternate Currency (individually herein called an "Interest or Currency
Option" and collectively called the "Interest or Currency Options"); provided,
however, (a) with respect to each request for Advances under the Revolving
Credit Loan, Borrower can have only one Interest or Currency Option in effect
for the aggregate amount of the Advances requested on the date of the Advances,
and Borrower may convert Base Rate Loans under the Revolving Credit Loan and
Base Rate Loans and CD Rate Loans under the Term Loan to Eurodollar Loans or
Alternate Currency Loans as provided and subject to the limitations set forth
below at any time after the third day following the date of the Advances which
make up such Base Rate Loans or CD Rate Loan; (b) each Eurodollar Loan or
Alternate Currency Loan shall be in an amount not less than $500,000 or its
Dollar Equivalent; (c) each CD Rate Loan shall be in an amount not less than
$500,000; and (d) no more than an aggregate of twenty Interest Periods and
Interest or Currency Options shall be outstanding at any time under the Loans.
Borrower may, subject to the limitations set forth above, from time to time
convert a Loan to another permitted rate or to another currency by giving Agent
irrevocable written notice of its election to convert at least three Business
Days prior to the requested conversion date, specifying the date of conversion,
the amount of the Loans subject to the Interest or Currency Option, the
applicable Interest or Currency Option and, with respect to the conversion of
Base Rate Loans to CD Rate Loans, Eurodollar Loans or Alternate Currency Loans,
the duration of the Interest Period selected with respect thereto; provided,
however, that (x) an Alternate Currency Loan, Eurodollar Loan or CD Rate Loan
may be converted only on the last day of the Interest Period pertaining thereto,
unless Borrower also pays any compensation due the Banks under this Agreement,
if any, on account of such conversion on a day other than the last day of an
Interest Period, and (y) a Base Rate Loan may not be converted when a Default
has occurred and is continuing. Upon the expiration of any Interest Period
applicable to an Alternate Currency Loan, Eurodollar Loan or CD Rate Loan, the
Alternate Currency Loan, Eurodollar Loan or CD Rate Loan shall be continued for
an Interest Period having the same duration as the Interest Period then ended
unless Borrower shall have given Agent a notice of conversion with respect
thereto in accordance
CREDIT AGREEMENT PAGE 24
----------------
with this Section; provided, however, no Alternate Currency Loan, Eurodollar
Loan or CD Rate Loan shall be continued as such if a Default has occurred and is
continuing. Upon the occurrence of an Event of Default, Agent may convert all
Alternate Currency Loans, Eurodollar Loans or CD Rate Loans to Base Rate Loans
in Dollars at the end of the respective Interest Periods thereof.
SECTION 4.4. INTEREST COMPUTATIONS; NOTICE OF BASE RATE CHANGE. All
-------------------------------------------------
payments of interest on Alternate Currency Loans and Eurodollar Loans shall be
computed on the per annum basis of a year of 360 days (365 days for British
pounds sterling) and for the actual number of days (including the first day but
excluding the last day) elapsed, unless such calculations would result in a rate
in excess of the Maximum Rate, in which case interest shall be calculated on a
per annum basis of 365 or 366 days, as the case may be. All payments of
interest on Base Rate Loans shall be computed on the per annum basis of a year
of 365 days or 366 days, as the case may be. All payments of interest on CD
Rate Loans shall be computed on the per annum basis of a year of 360 days.
ARTICLE V.
SPECIAL PROVISIONS; ILLEGALITY
SECTION 5.1. ADDITIONAL COSTS.
----------------
(a) From time to time, within 10 Business Days after the receipt by Borrower of
a certificate of a Bank containing the information described in this Section
5.1(a), Borrower shall pay compensation for Additional Costs to Agent for the
account of such Bank. The term "Additional Costs" means material increases in
costs or material reductions in amounts receivable by a Bank which, in either
case, are attributable to (i) such Bank's making or maintaining of any Alternate
Currency Loans, Eurodollar Loans or CD Rate Loans, (ii) such Bank's obligation
to charge Borrower interest on the Loans at the rate based on the Alternate
Currency Rate, Eurodollar Rate or CD Rate, or (iii) any reduction in any amount
receivable by such Bank hereunder in respect of any Alternate Currency Loans,
Eurodollar Loans or CD Rate Loans such obligation, in each case resulting from a
Regulatory Change which:
(1) changes the basis of taxation of any amount payable to such Bank
under this Agreement or any of its Notes in respect of any of such
Alternate Currency Loans or Eurodollar Loans (other than changes which
affect Taxes measured by or imposed on the overall net income of such Bank
or of its Applicable Lending Office for any of such Alternate Currency
Loans or Eurodollar Loans by the jurisdiction in which such Bank has its
principal office or such Applicable Lending Office); or
CREDIT AGREEMENT PAGE 25
----------------
(2) imposes or modifies any reserve, special deposit, minimum capital
ratio or similar requirements (other than any existing CD Reserve
Requirements or Eurodollar Reserve Requirements) relating to any extensions
of credit or other assets of, or any deposits with or other liabilities of,
such Bank (including any of such CD Rate Loans, Eurodollar Loans or any
deposits referred to in the definition of "CD Rate" or "Interbank Offered
Rate" in Section 1.1 hereof); or
(3) imposes any other condition affecting this Agreement (or any of
such extensions of credit or liabilities or commitments).
Each determination of the materiality of an Additional Cost shall be made by the
affected Bank in its sole judgment. A Bank's determination of the amounts
necessary to pay Additional Costs and of the reasons for the existence of
Additional Costs shall be made in such Bank's exercise of reasonableness and
good faith. Each Bank will notify Borrower through Agent of any event occurring
after the date of this Agreement which will entitle such Bank to compensation
pursuant to this Section 5.1(a) as promptly as practicable after it obtains
knowledge thereof. Such Bank will use good faith reasonable efforts to
designate a different Applicable Lending Office for the Alternate Currency Loans
or Eurodollar Loans of such Bank or make any other mechanical change in funding
Loans hereunder if such designation or change will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole opinion of such Bank,
be disadvantageous to such Bank (provided that such Bank shall have no
obligation to so designate an Applicable Lending Office located in the U. S.).
Each Bank will furnish Borrower through Agent with a certificate (which shall be
conclusive, absent manifest error, as to the matters stated therein) stating the
change that has occurred or other conditions that have been imposed on such Bank
that entitles the Bank to compensation hereunder, the amount the Bank has
determined to be necessary to compensate it for the Additional Costs and the
manner in which such amount has been calculated. If any Bank requests
compensation from Borrower under this Section 5.1(a), Borrower may, by notice to
such Bank through Agent, suspend the obligation of such Bank to make an
Alternate Currency Loan or to charge Borrower interest on the Loans at a rate
based on the Eurodollar Rate or CD Rate, as the case may be, until the
Regulatory Change giving rise to such request ceases to be in effect (in which
case the provisions of Sections 5.4 hereof shall be applicable). Any amounts
received by Agent from Borrower pursuant to this Section 5.1 shall be disbursed
by Agent in immediately available funds to the Banks requesting such amounts.
(b) Without limiting the effect of the foregoing provisions of this
Section 5.1, in the event that, by reason of any Regulatory Change, any Bank
either (i) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Bank which includes deposits by reference to which the interest rate on
Alternate Currency Loans, Eurodollar Loans or CD Rate Loans is determined
as provided in this Agreement or a category of extensions of credit or other
assets of such Bank which includes Alternate Currency Loans, Eurodollar Loans or
CD Rate Loans or (ii) becomes subject to restrictions on the amount of such
category of liabilities or assets which it may hold,
CREDIT AGREEMENT PAGE 26
----------------
then, if such Bank so elects by notice to Borrower (with a copy to the Funds
Administrator and to Agent), the obligation of such Bank to make Alternate
Currency Loans or to charge Borrower interest on the Loans at a rate based on
the CD Rate or the Eurodollar Rate, as the case may be, shall be suspended until
the date such Regulatory Change ceases to be in effect (in which case the
provisions of Section 5.4 hereof shall be applicable).
(c) If Borrower becomes obligated to pay additional amounts to any Bank
pursuant to this Section 5.1 as a result of any condition described herein,
then, unless such Bank has theretofore taken steps to remove or cure, and has
removed or cured, the conditions creating the cause for such obligation to pay
such additional amounts, Borrower may designate another Bank which is entitled
to be an assignee of a Bank's interest under Section 12.11 and is reasonably
acceptable to the Agent to purchase the Obligation of such Bank and such Bank's
Rights hereunder, without recourse to or warranty by, or expense to, such Bank,
for a purchase price equal to the outstanding principal amount of the Loans
payable to such Bank plus any accrued but unpaid interest on such Loans and any
other amounts accrued but unpaid in respect of that Bank's commitment. Any such
purchase shall be in accordance with and subject to the provisions of Section
12.11.
SECTION 5.2. LIMITATIONS ON TYPES OF INTEREST OR CURRENCY OPTIONS.
----------------------------------------------------
Anything herein to the contrary notwithstanding, with respect to any Alternate
Currency Loan, Eurodollar Loan or CD Rate Loan, the Banks shall be under no
obligation to make Alternate Currency Loans or to charge interest on the Loans
at a rate based on the CD Rate or the Eurodollar Rate, as the case may be, or
maintain any Alternate Currency Loans, CD Rate Loans or Eurodollar Loans, as the
case may be, for as long as such event or condition continues, if:
(a) Agent determines (which determination shall be conclusive) that quotations
of interest rates for the relevant deposits referred to in the definition of
"Interbank Offered Rate" in Section 1.1 hereof are not being provided by the
Reference Banks in the relevant amounts or for the relevant maturities for
purposes of determining the rate of interest for Eurodollar Loans for Interest
Periods therefor as provided in this Agreement, or
(b) Agent determines (which determination shall be conclusive) that
quotations of interest rates for the CD Quoted Rate described in Section
1.1 hereof are not being offered to Agent by dealers in certificates of
deposit as contemplated herein in the relevant amounts or for the relevant
maturities for purposes of determining the rate of interest for CD Rate
Loans for Interest Periods therefor as provided in this Agreement, or
(c) Agent determines (which determination shall be conclusive) that
quotations of interest rates for loans made in Alternate Currency are not
being offered to Agent upon the basis of which the rates of interest for
Alternate Currency Loans are to be
CREDIT AGREEMENT PAGE 27
----------------
determined, do not accurately reflect the cost to the Banks of making or
maintaining such Alternate Currency Loans for Interest Periods therefor, or
(d) the Requisite Banks determine (which determination shall be
conclusive) and notify Agent that the relevant rates of interest referred
to in the definitions of CD Quoted Rate or Interbank Offered Rate in
Section 1.1 hereof, upon the basis of which the rates of interest for CD
Rate Loans or Eurodollar Loans are to be determined, do not accurately
reflect the cost to the Banks of making or maintaining such CD Rate Loans
or Eurodollar Loans for Interest Periods therefor, or
(e) there occurs on or before the date an Alternate Currency Loan is
to be made any material adverse change in national or international
financial, political or economic conditions or currency exchange rates or
exchange controls which would in the opinion of Agent make it impracticable
for the Alternate Currency Loan to be denominated in the Alternate Currency
specified by Borrower.
Agent shall promptly notify Borrower and each Bank of the occurrence of any of
such events or conditions.
SECTION 5.3. ILLEGALITY. Notwithstanding any other provision of this
----------
Agreement to the contrary, in the event that it becomes unlawful for any Bank at
its Applicable Lending Office to (a) honor its obligation to charge interest on
the Loans at a rate based on the Eurodollar Rate or (b) make or maintain
Alternate Currency Loans or Eurodollar Loans hereunder, then such Bank shall
promptly notify Borrower thereof through Agent and such Bank's obligation to
charge interest on the Loans at a rate based on the Eurodollar Rate and maintain
Alternate Currency Loans or Eurodollar Loans hereunder shall be suspended until
such time as such Bank at its Applicable Lending Office may again lawfully
charge interest on the loans at a rate based on the Eurodollar Rate and maintain
Alternate Currency Loans or Eurodollar Loans (in which case the provisions of
Section 5.4 hereof shall be applicable); provided, however, that each Bank shall
use good faith reasonable efforts to specify a new Applicable Lending Office for
Alternate Currency Loans and Eurodollar Loans of such Bank with a view to
effecting compliance with the applicable law.
SECTION 5.4. SUBSTITUTE RATES. If the obligation of any Bank to charge
-----------------
interest on the Loans at a rate based on the CD Rate or the Eurodollar Rate or
make or maintain Alternate Currency Loans, CD Rate Loans or Eurodollar Loans
shall be suspended pursuant to Sections 5.1, 5.2 or 5.3 hereof, (i) all amounts
of the Loans which would otherwise be made or maintained by such Bank as
Alternate Currency Loans or Eurodollar Loans shall be made or maintained instead
as CD Rate Loans or Base Rate Loans in Dollars (and, if an event referred to in
Sections 5.1 or 5.3 hereof has occurred and such Bank so requests by notice to
Borrower [with a copy to Agent and the Funds Administrator], each Alternate
Currency Loan or Eurodollar Loan of such Bank then outstanding shall be
automatically converted into a CD Rate Loan or Base Rate Loan in Dollars on the
date specified by such Bank in such notice), and (ii)
CREDIT AGREEMENT PAGE 28
----------------
all amounts of the Loans which would otherwise be made or maintained by such
Bank as CD Rate Loans shall be made or maintained instead as Base Rate Loans or
Eurodollar Loans (and, if an event referred to in Sections 5.1(b) or 5.3 hereof
has occurred and such Bank so requests by notice to Borrower with a copy to
Agent, each CD Rate Loan of such Bank then outstanding shall be automatically
converted into a Base Rate Loan or Eurodollar Loan on the date specified by such
Bank in such notice). The decision between the alternative substitute interest
rates or currencies specified in (i) and (ii) above shall be made by Borrower,
except that Agent shall be permitted to select an alternative if Borrower fails
to do so within three business days after written notice from Agent.
SECTION 5.5. COMPENSATION. Within 10 Business Days after the receipt by
------------
Borrower of a certificate of a Bank containing the information described in this
Section 5.5 which shall be delivered to Borrower through Agent, Borrower shall
pay to Agent for the account of such Bank, from time to time, such amount or
amounts as shall be sufficient (in the reasonable opinion of such Bank) to
compensate it for any loss, cost, liability, or expense which such Bank
determines in its sole discretion is material and incurred by it as a result of:
(a) any payment, prepayment, or conversion of an Alternate Currency Loan, CD
Rate Loan or a Eurodollar Loan made by such Bank on a date other than the last
day of an Interest Period for such Alternate Currency Loan, CD Rate Loan or
Eurodollar Loan;
(b) any failure by Borrower to borrow Advances which were to be
Alternate Currency Loans or which were to bear interest at a rate based on
the CD Rate or Eurodollar Rate and were to be made by such Bank on the date
for such borrowing specified in the relevant Advance Request Form; or
(c) any failure by Borrower to make any payment or prepayment on a CD
Rate Loan or Eurodollar Loan on the date due;
(d) any failure to pay any Alternate Currency Loan in the Alternate
Currency in which it was made;
such compensation to include, without limitation, (i) any loss or reasonable
expense sustained or incurred in liquidating or employing deposits from third
Persons acquired to effect or maintain such Alternate Currency Loan or
Eurodollar Loan or any part thereof, (ii) an amount equal to the excess, if any
of (A) its cost of obtaining the funds for the Alternate Currency Loan, CD Rate
Loan or Eurodollar Loan being paid, prepaid or converted or not borrowed (based
on the Alternate Currency Rate, the CD Rate or Eurodollar Rate applicable
thereto) for the period from the date of such payment, prepayment or conversion
or failure to
CREDIT AGREEMENT PAGE 29
----------------
borrow) over (B) the amount of interest (as reasonably determined by such Bank)
that would be realized by such Bank in re-employing the funds so paid, prepaid
or converted or not borrowed for such period or Interest Period, as the case may
be, (iii) any loss incurred in liquidating or closing out any foreign currency
contract undertaken by such Bank in funding or maintaining such Alternate
Currency Loan, and (iv) any loss arising from any change in the value of Dollars
in relation to any such Alternate Currency Loan which was not paid on the date
due between the date such payment was due and the date of payment, or which was
not paid in the Alternate Currency in which it was made, all as determined by
such Bank in its good faith discretion), but otherwise without penalty. A Bank
must request compensation under this Section 5.5 (1) as promptly as practicable
after it obtains knowledge of the event which entitles it to compensation
pursuant to this Section 5.5, but in any event within 180 days after it obtains
such knowledge and (2) pursuant to a certificate which sets forth the amount
such Bank is entitled to receive pursuant to this Section 5.5 and the basis for
determining such amount, which certificate shall be conclusive as to the matters
set forth therein in the absence of manifest error. Any amounts received by
Agent from Borrower pursuant to this Section 5.5 shall be disbursed by Agent in
immediately available funds to the Banks requesting such amounts.
SECTION 5.6. CAPITAL ADEQUACY. If after the date hereof, any Bank shall
----------------
have determined that the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any other Regulatory
Change or compliance by any Bank (or its Applicable Lending Office) with any
request or directive regarding capital adequacy (whether or not having the force
of law), has or would have the effect of reducing the rate of return on such
Bank's capital as a consequence of its obligations hereunder to a level below
that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy), then from time to time, within 10 Business Days after receipt
by Borrower of a certificate of a Bank containing the information described in
this Section 5.6 which shall be delivered to Borrower through Agent and shall be
conclusive as to the matters set forth therein absent manifest error, Borrower
shall pay to Agent such additional amount or amounts as will compensate such
Bank for such reduction. In determining such amount, such Bank may use any
reasonable averaging and attribution methods. A certificate of any Bank
claiming compensation under this Section (a) shall identify the Regulatory
Change, the amount that such Bank has reasonably determined will compensate it
for any such Regulatory Change and the way in which such amount has been
calculated, (b) shall be delivered to Borrower through Agent as promptly as
practical after the Bank obtains knowledge of the Regulatory Change which
entitled it to compensation pursuant to this Section, and (c) shall be
conclusive as to the matters set forth therein in the absence of manifest error.
Any amounts received by Agent from Borrower pursuant to this Section 5.6 shall
be disbursed by Agent in immediately available funds to the Banks requesting
such amounts.
CREDIT AGREEMENT PAGE 30
----------------
ARTICLE VI.
SET-OFF AND GUARANTIES
SECTION 6.1. SET-OFF. Upon the occurrence of any Event of Default, Agent
-------
and each Bank are hereby authorized at any time and from time to time to set-off
and apply any and all deposits (time or demand, provisional or final) at any
time held and other indebtedness at any time owing by Agent or any Bank or any
Affiliate of Agent or any Bank to or for the credit or the account of any
Obligated Party against any and all of the obligations, indebtedness and
liability of any Obligated Party under any Loan Document irrespective of whether
Agent or any Bank shall have made any demand under any Loan Document and
although such obligations may be contingent and unmatured. The rights of Agent
and each Bank under this Section are in addition to other rights and remedies
(including, without limitation, other rights of set-off) which Agent or any Bank
may have. If after a set-off pursuant to this Section 6.1 Borrower delivers to
Agent evidence satisfactory to the Requisite Banks of the amount of funds that
were acquired pursuant to such set-off and that were being held at such time by
Borrower, Parent or any of their respective Subsidiaries to pay the Obligated
Parties' obligations for employee withholding and unemployment taxes, then Agent
and each Bank exercising a right of set-off agrees to pay the amount of such
funds to the governmental agency to whom such obligations are owed.
SECTION 6.2. GUARANTY OF THE OBLIGATIONS.
---------------------------
(a) Parent and each current Domestic Subsidiary shall become a Guarantor by
executing and delivering to Agent a Guaranty. Borrower shall cause each Person
which becomes a Domestic Subsidiary after the execution hereof to execute a
Guaranty concurrently with becoming a Domestic Subsidiary. The validity and
enforceability of each Guaranty are not diminished, extinguished or adversely
affected by the execution of this Agreement or by the execution of subsequent
guaranties, and are hereby ratified in all respects by the Guarantors.
(b) Each Guarantor shall be jointly and severally liable under its
Guaranty for the full amount of the Obligations, subject to the "Maximum Amount"
of such Guarantor's liability specified in its Guaranty. The relative benefits
received by each of the Guarantors under this Agreement shall be deemed to be in
the same proportion as the "Maximum Amount" of such Guarantor (as defined in its
Guaranty) bears to the arithmetic sum of the "Maximum Amounts" of all of the
Guarantors. None of the Guarantors will exercise any right of contribution
against any other Guarantor until all the Obligations shall have been paid in
full.
ARTICLE VII.
CONDITIONS PRECEDENT
SECTION 7.1. EXECUTION OF THIS AGREEMENT. In addition to the requirements
---------------------------
set forth in Section 7.2, the obligation of each Bank to make its Pro Rata share
of the Term Loan and the
CREDIT AGREEMENT PAGE 31
----------------
first Advance under the Revolving Credit Loan is subject to the conditions
precedent that Agent shall have received on or prior to the Closing Date all of
the following, each dated (unless otherwise indicated) the Closing Date, in form
and substance satisfactory to Agent and its counsel and in sufficient numbers
for each Bank and, in the case of any actions required to be taken, evidence, in
form and substance satisfactory to Agent and its counsel, that the following
required actions have been taken or conditions exist:
(a) Good Standing and Authority. Evidence from the appropriate Tribunals of
---------------------------
the jurisdiction of incorporation of each of Borrower and Parent, each dated
within 30 days of the date of this Agreement, to the effect that each such
Obligated Party is duly incorporated and existing and is in good standing with
respect to the payment of franchise and similar Taxes in such jurisdiction
(accompanied by an Officers' Certificate of such Obligated Party to the same
effect);
(b) The Notes. The Notes payable to each of the Banks, duly executed
---------
by Borrower;
(c) Guaranties. A Guaranty to Agent for the benefit of the Banks
----------
duly executed by each Guarantor;
(d) Opinion of Counsel. A legal opinion from the general counsel for
------------------
the Obligated Parties in the form attached hereto as EXHIBIT "F"; and
(e) No Litigation; Consummation of Transaction No injunction,
------------------------------------------
preliminary injunction, or temporary restraining order shall exist which
prohibits or may prohibit the transactions allowed herein or any other
related transaction, and no litigation or similar proceeding (including
without limitation any litigation or other proceeding seeking any type of
injunction, any type of restraining order or any similar remedy) shall
exist with respect to the transactions contemplated herein which, if
adversely determined, could in the reasonable judgment of Agent have any
Material Adverse Effect.
SECTION 7.2. ANY REVOLVING CREDIT ADVANCE. The obligation of each Bank to
----------------------------
make each Advance under the Revolving Credit Loan is subject to the following
conditions precedent:
(a) Advance Request Form. The Funds Administrator and Agent shall have
--------------------
received an Advance Request Form executed by an authorized officer of Borrower,
all of the statements in which shall be true and correct on and as of the date
of the requested Advances. Each Advance Request Form shall be delivered at the
time and otherwise in accordance with Section 2.3. The Initial Notice of
Borrowing satisfies the requirements hereof for the Advances covered thereby.
CREDIT AGREEMENT PAGE 32
----------------
(b) No Default. As of the date of the making of such Advance, no
----------
Default exists;
(c) Compliance with Agreement. The Obligated Parties shall have
-------------------------
performed and complied with all agreements and conditions contained herein
that are required to be performed or complied with at or prior to the date
of such Advance;
(d) Representations and Warranties. The representations and
------------------------------
warranties contained in Article VIII shall be true in all material respects
on the date of making of such Advance with the same force and effect as
though made on and as of that date, and the request by Borrower for such
Advance shall constitute a representation by Borrower that such
representations and warranties are true and correct as of the date of such
request; provided, however, that for purposes of this subsection (d), (i)
on or after the date on which Borrower delivers its audited Financial
Statements to Agent and the Funds Administrator pursuant to Section 9.1(a),
the reference in the first sentence of Section 8.4(a) to the Current
Financials shall be a reference to the audited Financial Statements most
recently delivered to the Agent and Funds Administrator by Borrower
pursuant to Section 9.1(a) prior to the date of such Advance, and (ii) in
each representation and warranty in Article VIII that makes reference to a
Schedule, the representation under this subsection (d) that such
representation and warranty in Article VIII shall be true in all material
respects on the date of the Advance shall take into account any subsequent
amendments or changes to the Schedule (i) to which Agent or the Funds
Administrator has consented, which consent shall not be withheld
unreasonably, (ii) which reflect changes allowed by the terms of this
Agreement, or (iii) which reflect changes which could not be expected to
have a Material Adverse Effect;
(e) Proceedings Satisfactory. All proceedings taken in connection
------------------------
with the transactions contemplated by the Loan Documents shall be
reasonably satisfactory to Agent and its counsel, and all Loan Documents
shall be in form and substance satisfactory to Agent and its counsel;
(f) Change. No event shall have occurred since the date hereof with
------
respect to any of the Obligated Parties or any of their Subsidiaries which
could be expected to have a Material Adverse Effect; and
(g) Additional Information. Agent shall have received such
----------------------
additional documents, certificates from Obligated Parties, instruments, and
other information as Agent or its legal counsel, Xxxxxxx & Xxxxxx, L.L.P.,
may request.
CREDIT AGREEMENT PAGE 33
----------------
ARTICLE VIII.
REPRESENTATIONS AND WARRANTIES
To induce Agent and the Banks to enter into this Agreement and to make the
Loans, the Obligated Parties hereby jointly and severally represent and warrant
to Agent and the Banks as follows:
SECTION 8.1. ORGANIZATION, STANDING, QUALIFICATION. Each Obligated Party
-------------------------------------
(a) is a corporation duly organized, validly existing and in good standing under
the laws of its jurisdiction of incorporation, (b) has all requisite corporate
power to conduct its business and to execute and deliver, and perform its
obligations under, the Loan Documents, and (c) is duly qualified to transact
business as a foreign corporation in each jurisdiction in which the nature of
the activities conducted by it or the nature of the assets owned by it would
make such qualification necessary, except where the failure to so qualify could
not be expected to have a Material Adverse Effect.
SECTION 8.2. AUTHORIZATION, ENFORCEABILITY, ETC.
----------------------------------
(a) The execution, delivery and performance by each of the Obligated Parties of
the Loan Documents have been duly authorized by all necessary corporate action
and do not and will not (i) violate any provision of any agreement, law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award
presently in effect to which any Obligated Party is a party or is subject; (ii)
result in, or require the creation or imposition of, any Lien (other than a
Permitted Lien) upon or with respect to any asset now owned by any Obligated
Party; or (iii) result in a breach of or constitute default by any Obligated
Party, and no Obligated Party is in default, under any indenture, loan or credit
agreement or any other agreement or instrument to which any Obligated Party is a
party or by which it or any of its assets may be bound or affected, which breach
or default could be expected to have a Material Adverse Effect. No Person other
than an Obligated Party is in default to the extent that an Obligated Party
could be materially and adversely affected under any indenture, loan or credit
agreement or any other material agreement or instrument to which any Obligated
Party is a party or by which it or any of its assets may be bound or affected.
(b) No approval, authorization, order, license, permit, franchise or
consent of or registration, declaration, qualification or filing with any
Tribunal is required in connection with the execution, delivery and performance
by each Obligated Party of the Loan Documents, or, if any such requirement
exists, it has been satisfied, and proof of such satisfaction has been furnished
to Agent.
CREDIT AGREEMENT PAGE 34
----------------
(c) The Loan Documents, when duly executed and delivered by each Obligated
Party required to execute the same, will constitute legal, valid and binding
obligations of each Obligated Party, enforceable against each Obligated Party in
accordance with their respective terms except as the enforceability thereof may
be limited by Debtor Relief Laws.
SECTION 8.3. OWNERSHIP OF SUBSIDIARIES AND NAMES; JOINT VENTURES. The
---------------------------------------------------
extent of the Obligated Parties' ownership of the capital stock of or equity
interest in, and jurisdiction of, organization of, each of their respective
Subsidiaries is as set forth on SCHEDULE 8.3 and, except as set forth thereon,
none of the Obligated Parties has any other Subsidiaries. All of the issued and
outstanding shares of capital stock of Parent and each of its Subsidiaries are
duly authorized, validly issued, fully paid and non-assessable. There are no
outstanding contracts, options, warrants, instruments, documents or agreements
binding upon any Subsidiary described on SCHEDULE 8.3 granting to any Person or
group of Persons any right to purchase or acquire shares of the capital stock of
any such Subsidiary except as permitted by Article IX.
SECTION 8.4. FINANCIAL STATEMENTS AND BUSINESS CONDITION.
-------------------------------------------
(a) The Current Financials fairly present the consolidated financial condition
and the results of operations of Parent and its Subsidiaries as of, and for the
portion of the fiscal year ending on, the dates thereof, all in accordance with
GAAP. There were no material liabilities, direct or indirect, fixed or
contingent, of the Obligated Parties as of the dates of the Current Financials
which are not reflected therein or in the notes thereto, which were required to
be shown by GAAP. Except for transactions directly related to, or specifically
contemplated by, the Loan Documents and transactions heretofore disclosed in
writing to Agent, there have been no changes in the financial condition of
Borrower, Parent or any of their respective Subsidiaries from that shown in the
Current Financials between such dates and the date hereof which could be
expected to have a Material Adverse Effect.
(b) As of the Date of this Agreement, and after giving effect to the
transactions contemplated by this Agreement, the making of the Loans by the
Banks and the execution and delivery of the Guaranty Agreements by the
Guarantors (i) none of the Obligated Parties or, except as disclosed in writing
to Agent before the execution of this Agreement, any of their Subsidiaries will
be insolvent and the aggregate fair market value of the assets of the Obligated
Parties (including the fair market value of their equity interest in their
respective Subsidiaries) will exceed Borrower's liabilities (including without
limitation contingent liabilities) by at least $10,000,000 and (ii) each of the
Obligated Parties will be able to pay its Debts as they mature. None of the
Obligated Parties intends to incur, or believes that it will incur, Debt that
will be beyond its ability to pay as such Debt matures. None of the Obligated
Parties is engaged in any business or transaction, or is about to engage in any
business or transaction, for which such Obligated Party, after consummation of
the above described transactions, has (a) an unreasonably small capital or (b)
remaining assets that are unreasonably small in relation to the business
transaction.
CREDIT AGREEMENT PAGE 35
----------------
SECTION 8.5. TAXES. Each Obligated Party has filed all Tax returns
-----
required to have been filed and has paid all Taxes shown to be due and payable
on such returns, including interest and penalties, and all other Taxes which are
payable by it, to the extent the same have become due and payable, unless (a)
the amount, applicability or validity thereof is currently being contested by an
Obligated Party in good faith by appropriate action diligently conducted, and
such Obligated Party has set aside on its books reserves (segregated to the
extent required by GAAP) deemed by it to be adequate with respect thereto or (b)
the failure to have made such filings or payments could not be expected to have
a Material Adverse Effect. No income Tax liability of any Obligated Party has
been asserted by the Internal Revenue Service or other taxing authority for
Taxes in excess of those already paid, or, if such liability has been asserted,
(i) the amount, applicability or validity thereof is currently being contested
by an Obligated Party in good faith by appropriate action diligently conducted,
and such Obligated Party has set aside on its books reserves (segregated to the
extent required by GAAP) deemed by it to be adequate with respect thereto or
(ii) all such asserted liabilities could not be expected to have a Material
Adverse Effect.
SECTION 8.6. TITLE TO PROPERTIES; LIENS. Each Obligated Party has good
--------------------------
and marketable title to all assets purported to be owned by it (except for minor
defects in title and minor encumbrances not in any case materially detracting
from the value of the assets affected thereby), and all such assets are free and
clear of all Liens other than Liens permitted by Section 9.21.
SECTION 8.7. LEASES. All material leases under which any Obligated Party
------
is lessee or tenant are in full force and effect, and there does not exist any
default or potential default thereunder except to the extent that any such lease
or default or potential default thereunder could not be expected to have a
Material Adverse Effect.
SECTION 8.8. BUSINESS; COMPLIANCE. Each Obligated Party has performed and
--------------------
complied with all material obligations required to be performed by it and is not
in default under, any license, permit, order, authorization, grant, order or
regulation except to the extend that such nonperformance, noncompliance or
default could not be expected to have a Material Adverse Effect.
SECTION 8.9. FRANCHISES, PATENTS, TRADEMARKS AND OTHER RIGHTS. The
------------------------------------------------
Obligated Parties have all franchises, permits, licenses, patents, trademarks,
service marks, trade names, copyrights and other authority (collectively, the
"Authorizations") as are necessary to enable them to carry on their respective
businesses as now being conducted; there has not been a default under any of the
Authorizations that could be expected to have a Material Adverse Effect; and
none of the Authorizations conflict with the rights of other Persons, which
conflict could be expected to have a Material Adverse Effect.
SECTION 8.10. LITIGATION, PROCEEDINGS, ETC. As of the date hereof, except
----------------------------
as set forth on SCHEDULE 8.10 attached hereto, (a) there is no Litigation
pending, or to the knowledge of the
CREDIT AGREEMENT PAGE 36
----------------
Obligated Parties, threatened against or affecting, the transactions
contemplated hereby, any Obligated Party or any Obligated Party's assets at law
or in equity, or before or by any Tribunal, which Litigation could be expected
to have a Material Adverse Effect, (b) no accidents, acts or actions have
occurred which involve any claim not fully covered by insurance or provided for
by adequate reserves established by and reflected in the Current Financials
which could be expected to have a Material Adverse Effect, and (c) no Obligated
Party is in default with respect to any order, writ, injunction or decree of any
Tribunal which could be expected to have a Material Adverse Effect.
SECTION 8.11. COMPLIANCE WITH LAW. The business and operations of each
-------------------
Obligated Party have been and are being conducted in accordance with all Laws
and orders of any Tribunal or arbitrator, except to the extent that any
noncompliance could not be expected (either individually or collectively) to
result in a Material Adverse Effect.
SECTION 8.12. EMPLOYEE BENEFIT PLANS. Based upon ERISA and the regulations
----------------------
and published interpretations thereunder, each Obligated Party is in compliance
with the applicable provisions of ERISA, except where such noncompliance could
not be expected to have a Material Adverse Effect. No Reportable Event has
occurred with respect to any Plan, except for Reportable Events which could not
be expected to have a Material Adverse Effect.
SECTION 8.13. USE OF PROCEEDS. Proceeds of the Loans shall be used as set
---------------
forth in Sections 2.5 or 3.1.
SECTION 8.14. RELATIONSHIP TO THE BANKS. No Person having "control" (as
-------------------------
such term is defined in the Financial Institutions Regulatory and Interest Rate
Control Act of 1978 ("FIRA"), or in regulations promulgated pursuant thereto) of
any Obligated Party is an "executive officer", "director" or "person who
directly or indirectly or in concert with one or more persons, owns, controls,
or has the power to vote more than ten percent (10%) of any class of voting
securities" (as such terms are defined in FIRA or in any regulations promulgated
pursuant thereto) of any of the Banks.
SECTION 8.15. INVESTMENT COMPANY ACT. No Obligated Party or Affiliate of
----------------------
any Obligated Party is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 8.16. PUBLIC UTILITY HOLDING COMPANY ACT. No Obligated Party or
----------------------------------
Affiliate of any Obligated Party is a "holding company," or a "subsidiary
company" of a "holding company," or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
SECTION 8.17. GOVERNMENT REGULATION. Neither any Obligated Party nor any
---------------------
Affiliate of any Obligated Party is subject to regulation under the Federal
Power Act, the Interstate
CREDIT AGREEMENT PAGE 37
----------------
Commerce Act (as any of the preceding acts have been amended) or any other Law
(other than Regulation X) which regulates the incurring by any Obligated Party
of Borrowings.
SECTION 8.18. REGULATION U. None of the Obligated Parties is engaged
------------
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying Margin Stock. None of the
Obligated Parties nor any Person acting on behalf of the Obligated Parties has
taken or will take any action which might cause any of the Loans to violate
Regulation U or any other regulation of the Board or to violate the Exchange Act
or any rule or regulation thereunder, in each case as now in effect or as the
same may hereafter be in effect.
SECTION 8.19. ENVIRONMENTAL LAWS. The Obligated Parties, and the
------------------
Properties that they own, lease or occupy are in compliance with all Laws
relating to pollution control and environmental contamination, including, but
not limited to, all Laws governing the generation, use, collection, treatment,
storage, transportation, recovery, removal, discharge or disposal of hazardous
wastes, except where noncompliance could not be expected to have a Material
Adverse Effect, and none of the Obligated Parties has been alleged to be in
violation of, nor has been subject to any administrative or judicial proceedings
pursuant to such Laws that could be expected to have a Material Adverse Effect.
SECTION 8.20. LABOR DISPUTES; COMPLIANCE. Except as set forth on SCHEDULE
--------------------------
8.20 hereto, (a) no strike, slowdown, picketing, work stoppage or other labor
dispute against or affecting any Obligated Party, or premises of any of them
exists or is pending or, to its knowledge, threatened, (b) no application for
certification of a collective bargaining agent is pending, (c) there is no
lockout of any employees by any Obligated Party, nor is any such action
contemplated by any of them, (d) each Obligated Party has complied in all
material respects with all Laws relating to employment, wages, hours, benefits,
collective bargaining, the payment of social security and similar taxes, and
occupational safety and health except where noncompliance could not be expected,
individually or in the aggregate, to result in a Material Adverse Effect and (e)
no Obligated Party is liable for the payment of Taxes, fines, penalties or other
amounts, however designated, for failure to comply with any of the foregoing
employment Laws which individually or in the aggregate could be expected to have
a Material Adverse Effect.
SECTION 8.21. BENEFIT TO OBLIGATED PARTIES. The operations of the
----------------------------
Obligated Parties are interrelated and interdependent and, therefore, loans or
extensions of credit to any one Obligated Party will produce direct financial
benefits to the other Obligated Parties. The value of the consideration
received and to be received by Borrower and each Guarantor as a result of such
Obligated Parties entering into this Agreement and the other Loan Documents to
which they are a party is reasonably worth at least as much as its liability and
obligations of such Obligated Party hereunder and under the other Loan Documents
to which it is a party and such liability and obligations have benefited and may
reasonably be expected to benefit each Obligated Party directly.
CREDIT AGREEMENT PAGE 38
----------------
SECTION 8.22. EXISTING PARENT CREDIT AGREEMENT. As of the date of this
--------------------------------
Agreement, no Default exists under the Existing Parent Credit Agreement or any
of the documents relating thereto.
ARTICLE IX.
COVENANTS
The Obligated Parties, jointly and severally, covenant and agree that, as
long as the Obligations or any part thereof are outstanding or any Bank has any
commitment hereunder, each of them will perform and observe all, and not permit
or suffer any nonperformance or failure of any, of the following covenants,
unless Requisite Banks shall otherwise consent in writing (which consent may be
withheld or refused for any reason):
SECTION 9.1. FINANCIAL STATEMENTS. Borrower will furnish to the Agent and
--------------------
the Funds Administrator:
(a) As soon as available, and in any event within 120 days after the end of
each fiscal year of Parent, Financial Statements of Parent and its Subsidiaries
for such fiscal year showing on a consolidated basis the financial position,
results of operations and cash flows as of the end of such fiscal year and for
the 12-month period then ended, in each case setting forth the comparable
information for the preceding fiscal year, all in reasonable detail and
accompanied by the report of Xxxxxx Xxxxxxxx & Co. or other independent
certified public accountants of recognized standing chosen by Parent and
consented to by Agent (provided Agent's consent shall not unreasonably be
withheld), based on an audit using generally accepted auditing standards, that
the Financial Statements present fairly, in all material respects, the
consolidated financial position, results of operations and cash flows of Parent
and its Subsidiaries for the respective periods in conformity with GAAP
consistently applied. The report required hereby shall not be qualified on the
basis that Parent is not a going concern or otherwise qualified or limited
because of restricted or limited examination by the accountants of any material
portion of the records of Parent.
(b) As soon as available, and in any event within 60 days after the
last day of each of the first three fiscal quarters of each fiscal year of
Parent, Financial Statements showing on a consolidated basis the financial
position, results of operations and cash flows of Parent and its
Subsidiaries as of, and for the period from the beginning of the current
fiscal year to, such last day, in each case setting forth comparable
information for the corresponding period of the preceding fiscal year and
all in reasonable detail.
(c) As soon as available, and in any event within 60 days after the
last day of each of the first three fiscal quarters of each fiscal year of
Parent and within 120 days
CREDIT AGREEMENT PAGE 39
----------------
after the last day of each fiscal year of Parent, balance sheets and income
statements showing on a consolidating basis the financial position and
results of operations of Borrower, Parent and each of their respective
Subsidiaries as of, and for the period from the beginning of the current
fiscal year to, such last day, in form satisfactory to Agent.
SECTION 9.2. CERTIFICATES; SEC FILINGS; OTHER INFORMATION. Borrower will
--------------------------------------------
observe all of the following:
(a) Concurrently with the delivery of the Financial Statements referred to in
Subsections 9.1(a), 9.1(b), and 9.1(c), Borrower will furnish to Agent a
certificate of an authorized officer of Borrower in the form attached hereto as
EXHIBIT "G" (i) stating that no Default has occurred and is continuing or, if
such officer has knowledge of a Default, the nature thereof and specifying the
steps taken or proposed to remedy such Default, (ii) showing in reasonable
detail the calculations showing compliance with Sections 9.15, 9.16, 9.17, 9.18,
and 9.20, using GAAP consistently applied with the Financial Statements as of
March 26, 1995, and (iii) with respect to the certificates delivered in
connection with the Financial Statements referred to in Subsection 9.1(b) and
9.1(c), certifying that the Financial Statements attached have been prepared in
accordance with GAAP consistently applied (except in those circumstances
disclosed therein where GAAP has not been consistently applied in the current
period in relation to the preceding period) and fairly present, in all material
respects (subject to year-end audit adjustments), the financial condition and
results of operations of Parent and its Subsidiaries, on a consolidated or
consolidating basis, as the case may be, at the date and for the periods
indicated therein.
(b) Concurrently with the delivery of the Financial Statements
referred to in Subsection 9.1(a), Borrower will also furnish to Agent a
certificate of the independent accountants referred to therein to the
effect that no Default has occurred with respect to the covenants contained
in Sections 9.15, 9.16, 9.17, 9.18, 9.20, 9.21 and 9.24, or, if such
accountants have knowledge of a Default with respect to any such Section,
specifying the nature thereof.
(c) As soon as available, Parent will furnish to Agent copies (i) of
Parent's SEC Filings, (ii) of Parent's annual, quarterly and other reports
to stockholders, the New York Stock Exchange or any securities exchange on
which any of its securities are traded, (iii) of orders issued by any
Tribunal in any Litigation to which any Obligated Party or any of their
respective Subsidiaries is a party, and (iv) of press releases or other
statements made available generally by Parent or any of its Subsidiaries to
the public generally concerning material developments in the business or
affairs of Parent or any of its Subsidiaries.
CREDIT AGREEMENT PAGE 40
----------------
(d) Borrower will furnish promptly to Agent such additional
information concerning any of the Obligated Parties or any of their
respective Subsidiaries as Agent may reasonably request.
SECTION 9.3. TRANSACTIONS WITH AFFILIATES. No Obligated Party will
----------------------------
engage, or permit any of its Subsidiaries to engage, in any transaction
(including, without limitation, the purchase, sale or exchange of property or
the rendering of any service) with any Affiliate except in the ordinary course
of and pursuant to the reasonable requirements of business and upon fair and
reasonable terms. Any management compensation arrangement approved by the
Parent's board of directors shall be deemed to be on fair and reasonable terms.
SECTION 9.4. PRESERVATION OF EXISTENCE, PROPERTIES AND BUSINESS.
--------------------------------------------------
(a) Except as otherwise contemplated herein, each Obligated Party will, and
will cause each of its Subsidiaries to, preserve and maintain its corporate
existence.
(b) Except as otherwise permitted herein or except where the failure to do
so could not be expected to have a Material Adverse Effect, each Obligated Party
will, and will cause each of its Subsidiaries to, (i) preserve and maintain all
of its leases, franchises, qualifications and Rights that are necessary or
desirable in the ordinary conduct of its business, (ii) operate and maintain in
good condition and repair, ordinary wear and tear excepted, all of its
Properties which are necessary or material in accordance with sound business
practices in the proper conduct of its business, and (iii) conduct its business
as presently conducted in accordance with good business practices.
(c) None of the Obligated Parties will dissolve or liquidate except
following a Disposition to another Obligated Party which is not a Foreign
Subsidiary of Parent.
SECTION 9.5. BUSINESS COMBINATIONS.
---------------------
(a) Neither Borrower nor Parent will effect any Combination with any other
Person (including any other Obligated Party) unless (i) Borrower or Parent, as
the case may be, is the continuing or surviving corporation of the Combination;
(ii) no Default shall have occurred and be continuing immediately prior to, and
after giving effect to, the Combination; (iii) the corporate officers of
Borrower or Parent, as the case may be, shall not substantially change as a
result of the Combination; (iv) the other party to the Combination shall be
engaged in substantially the same business engaged in by Borrower or Parent, as
the case may be, immediately prior to the Combination; (v) there shall have been
executed, delivered and filed such instruments, agreements, documents and papers
as may be reasonably requested by Agent or any Bank to preserve and protect
their Rights under the Loan Documents; and (vi) Borrower or Parent, as the case
may be, has delivered to Agent an Officer's Certificate, in form and
CREDIT AGREEMENT PAGE 41
----------------
substance reasonably satisfactory to Agent, to the effect that the conditions
stated in clauses (i) through (v) preceding have been satisfied.
(b) No Subsidiary of Parent will effect any Combination with any other
Person (including any other Obligated Party) unless (i) no Default shall have
occurred and be continuing immediately prior to, or after giving effect to, the
Combination; (ii) after the Combination, Parent will remain the direct or
indirect owner of all of the outstanding capital stock and other equity
securities of the continuing or surviving corporation; (iii) the other party to
the Combination shall be engaged in substantially the same business engaged in
by Parent or such Subsidiary immediately prior to the Combination; (iv) there
shall have been executed, delivered and filed such instruments, agreements,
documents and papers as may be reasonably requested by Agent or any Bank to (x)
make the continuing or surviving corporation a party to this Agreement and other
appropriate Loan Documents, and (y) preserve and protect their Rights under the
Loan Documents; and (v) Parent has delivered to Agent an Officer's Certificate,
in form and substance reasonably satisfactory to Agent to the effect that the
conditions stated in clauses (i) through (iv) preceding have been satisfied;
provided that any Foreign Subsidiary of RII may merge into, become a wholly
--------
owned Subsidiary of, or merge with a wholly owned Subsidiary of ScanData N.V.
(c) Except as otherwise permitted herein, no Obligated Party may effect
any Disposition if such Disposition, individually and in the aggregate for all
Obligated Parties, would involve all or substantially all of the Consolidated
Tangible Assets as reflected in the most recent Financial Statement delivered to
Agent pursuant to this Agreement; provided that an Obligated Party may effect
--------
such a Disposition if the proceeds of such Disposition are either (i) reinvested
in the business of one or more Obligated Parties, (ii) used to pay or prepay
Debt of an Obligated Party or (iii) invested in Investments permitted by Section
9.20.
SECTION 9.6. PAYMENT OF TAXES AND CLAIMS. Each Obligated Party will pay
---------------------------
or discharge, and will cause each of its Subsidiaries (but only to the extent
that the Subsidiary's assets shall be sufficient for the purpose) to pay or
discharge, at or before maturity or before they become delinquent (a) all Taxes,
levies, assessments, vault, water and sewer rents, rates, charges, levies,
permits, inspection and license fees and other governmental and quasi-
governmental charges and any penalties or interest for nonpayment thereof,
heretofore, or hereafter imposed or which may become a lien upon any property
owned by Parent, any Obligated Party or any of their respective Subsidiaries or
arising with respect to the occupancy, use, possession or leasing thereof
(collectively the "Impositions") and (b) all lawful Debts, including without
limitation all claims for labor, material or supplies except to the extent that
failure to pay or discharge the items set forth in (a) and (b) could not be
expected to have a Material Adverse Effect; provided, however, that neither
Parent nor any other Obligated Party nor any of their respective Subsidiaries
shall be required to pay or discharge any claim for labor, material, or supplies
or any Imposition which is being contested in good faith by appropriate
proceedings diligently pursued, and for which adequate reserves in conformity
with GAAP have been established.
CREDIT AGREEMENT PAGE 42
----------------
SECTION 9.7. INSPECTION RIGHTS. At any reasonable time and from time to
-----------------
time, upon not less than three Business Days written notice from Agent or any
Bank to Borrower or Parent, each Obligated Party will permit and will cause each
of its Subsidiaries to permit, representatives of Agent or such Bank to (a)
examine and make copies of the books and records of, and (b) to discuss the
business, operations, and financial condition of, such Obligated Party and its
Subsidiaries with their respective officers and with their independent certified
public accountants, in each case at reasonable times and at the expense of Agent
or such Bank.
SECTION 9.8. KEEPING BOOKS AND RECORDS. Each Obligated Party will
-------------------------
maintain, and will cause each of its Subsidiaries to maintain, books of record
and account in conformity with GAAP (except for books of record and account of
any Foreign Subsidiary, which shall be kept in conformity with generally
accepted accounting principles in its jurisdiction of organization).
SECTION 9.9. COMPLIANCE WITH LAWS. Each Obligated Party will comply, and
--------------------
will cause each of its Subsidiaries to comply, with all Laws and orders of any
Tribunal or arbitrator except to the extent that any noncompliance could not be
expected (either individually or collectively) to result in a Material Adverse
Effect.
SECTION 9.10. COMPLIANCE WITH AGREEMENTS. Each Obligated Party will
--------------------------
comply, and will cause each of its Subsidiaries to comply, in all respects with
all indentures, mortgages, deeds of trust and other agreements binding on it or
affecting its properties or business, except to the extent that any
noncompliance could not be expected (either individually or collectively) to
result in a Material Adverse Effect.
SECTION 9.11. NOTICES. Each Obligated Party will promptly notify, and
-------
will cause each of its Subsidiaries to promptly notify, Agent of:
(a) the commencement of any Litigation against any of the Obligated
Parties or any of their respective Subsidiaries that reasonably could be
expected to have a Material Adverse Effect;
(b) the occurrence of a default or event of default under any
instrument or agreement evidencing any material Debt of any of the
Obligated Parties or any of their respective Subsidiaries;
(c) any other matter that reasonably could be expected to have a
Material Adverse Effect;
(d) The occurrence or anticipated occurrence of any Reportable Event
arising in connection with any Plan or any other potential material
liability with respect to any Plan of any Obligated Party; and
(e) The occurrence of any Default.
CREDIT AGREEMENT PAGE 43
----------------
Any notification required by this Section 9.11 shall be accompanied by an
Officers' Certificate of the applicable Person setting forth the details of the
specified events and the action which the applicable Person proposes to take
with respect thereto.
SECTION 9.12. COMPLIANCE WITH ERISA AND THE INTERNAL REVENUE CODE. Each
---------------------------------------------------
Obligated Party will comply with all material requirements of ERISA and the
Internal Revenue Code, if applicable, so as not to give rise to any liability
thereunder for noncompliance, except to the extent that any noncompliance could
not be expected (either individually or collectively) to result in a Material
Adverse Effect.
SECTION 9.13. COMPLIANCE WITH REGULATIONS G, T, U AND X. Neither any
-----------------------------------------
Obligated Party nor any Person acting on its behalf will take any action which
might cause this Agreement or any of the other Loan Documents to violate, and
the Obligated Parties will take all actions necessary to cause compliance with,
Regulations G, T, U and X and the Exchange Act, in each case as now in effect or
as the same may hereafter be in effect.
SECTION 9.14. FURTHER ASSURANCES. Each Obligated Party will execute and
------------------
deliver, and will cause each of its Subsidiaries to execute and deliver, such
further instruments, agreements and documents and take such further action as
may be reasonably requested by Agent to carry out the provisions and purposes of
this Agreement and the other Loan Documents.
SECTION 9.15. LIMITATION ON SUBSIDIARY BORROWINGS. No Subsidiary of
-----------------------------------
Parent (other than Borrower) will incur, create, assume, have outstanding,
guarantee or otherwise be or become directly or indirectly liable with respect
to any Borrowings in excess of $30,000,000 in the aggregate at any time
outstanding, other than Intercompany Loans and Offset Debt.
SECTION 9.16. MINIMUM CASH FLOW COVERAGE RATIO. Parent and its
--------------------------------
Subsidiaries will maintain on a consolidated basis: a ratio of (i) EBITDA minus
Cash Taxes to (ii) Debt Service, determined as of the end of each March, June,
September and December, in each case for the preceding 12-month period, of not
less than 2.0 to 1.0.
SECTION 9.17. MAXIMUM DEBT TO EBITDA RATIO. Parent and its Subsidiaries
----------------------------
will maintain, on a consolidated basis, a Debt to EBITDA Ratio, determined as of
the end of each March, June, September, and December, in each case for the
preceding 12-month period, of not more than 2.25 to 1.0.
SECTION 9.18. MAXIMUM DEBT TO CAPITALIZATION RATIO. Parent and its
------------------------------------
Subsidiaries will maintain on a consolidated basis a Debt to Capitalization
Ratio not to exceed .50 to 1.0 as of the end of any fiscal quarter.
SECTION 9.19. AMENDMENT OF CORPORATE DOCUMENTS. No Obligated Party will
--------------------------------
amend its certificate or articles of incorporation or bylaws as in effect on the
date hereof if the effect of such amendment might reasonably be construed to
adversely affect the rights of any Bank
CREDIT AGREEMENT PAGE 44
----------------
under any of the Loan Documents, or the ability of any of the Obligated Parties
to perform fully its obligations under this Agreement and the Loan Documents.
SECTION 9.20. INVESTMENTS. No Obligated Party will have, or permit or
-----------
suffer any of its Subsidiaries to have, directly or indirectly, any Investment
(including without limitation any Acquisition or any Investment resulting
therefrom) other than:
(a) Permitted Investments;
(b) Receivables;
(c) Investments (including without limitation Intercompany Loans) in
Subsidiaries of Parent; provided, however, that the aggregate amount of
such Investments in Foreign Subsidiaries of Parent shall not exceed at any
one time $40,000,000 plus those Investments by RII in its Foreign
Subsidiaries made prior to the RII Merger;
(d) loans or other extensions of credit to employees provided such
loans and extensions of credit to employees do not exceed in the aggregate
for Parent and its Subsidiaries an amount equal to $l,000,000;
(e) promissory notes received in connection with any Disposition
permitted by Section 9.5(c);
(f) additional Investments in any of the categories referred to in
Subsections (a) through (e) above in excess of the amounts therein
permitted and additional Investments of any other nature; provided that at
the time of any such Investment and after giving effect thereto the
aggregate unliquidated amount of Investments of the Obligated Parties
permitted only by this subsection (f) shall not exceed $1,000,000; and
(g) the 7- 1/4% convertible subordinated debentures due 2011 issued
by RII, if purchased from Persons that are not Affiliates of any Obligated
Party in open-market transactions.
SECTION 9.21. NEGATIVE PLEDGE. No Obligated Party shall, at any time,
---------------
create, incur, assume or permit to exist any Lien on any of its Property, other
than:
(a) Permitted Liens;
(b) those Liens listed on SCHEDULE 9.21; and
CREDIT AGREEMENT PAGE 45
----------------
(c) purchase money Liens upon or in Property acquired by Borrower
after December 31, 1995 or Liens existing in such Property at the time of
acquisition thereof, or, in the case of any Person which thereafter becomes
a Subsidiary of Parent, Liens upon or in its Property existing at the time
such Person becomes such a Subsidiary, provided that (i) no such Lien
extends or shall extend to or cover any Property of Parent or any of its
Subsidiaries, as the case may be, other than the Property then being
acquired and fixed improvements then or thereafter erected thereon, (ii)
the aggregate principal amount of all Debt of Parent and its Subsidiaries
secured by all Liens described in this Subsection (c) shall not exceed in
the aggregate $10,000,000 at any one time outstanding, and (iii) no such
Lien or Debt secured thereby shall be extended, refunded or renewed.
SECTION 9.22. AGREEMENTS. None of the Obligated Parties will enter into
----------
any agreement containing any provisions which would be violated or breached by
the performance of the obligations or duties of any Person under the Loan
Documents.
SECTION 9.23. INSURANCE. Parent and its Subsidiaries shall each maintain,
---------
with companies rated A+ or better by Best & Company, insurance policies (i)
insuring their assets against loss by fire, explosion, theft and other risks and
casualties as are currently insured against and (ii) insuring it and Agent as
representative of the Banks against liability for personal injury and property
damages relating to the Properties of Parent and its Subsidiaries, such policies
to be in such amounts and covering such risks as are currently insured against,
subject to availability at commercially reasonable rates.
SECTION 9.24. PURCHASES OF PARENT STOCK. None of the Obligated Parties
-------------------------
shall repurchase any Parent stock, unless thereafter Obligated Parties will be
in compliance with all of the covenants in the Loan Documents.
ARTICLE X.
DEFAULT
SECTION 10.1. EVENTS OF DEFAULT. Each of the following shall be deemed an
-----------------
"Event of Default".
(a) Borrower shall fail to pay within five days of the date due any
payment Obligation or any part thereof.
(b) Any representation or warranty made by any of the Obligated
Parties in Article VIII of this Agreement, or made (or deemed made pursuant
to Section 7.3(d)) by any of the Obligated Parties (or any of their
respective officers) in any Loan Document,
CREDIT AGREEMENT PAGE 46
----------------
certificate, report, notice or financial statement furnished at any time
pursuant to Article VII of this Agreement, shall be false, misleading or
erroneous in any material respect when made or deemed to have been made.
(c) Any Obligated Party shall fail to perform, observe or comply with
any of the covenants contained in Sections 9.4(c), 9.5, 9.11, 9.13, 9.15,
9.16, 9.17, 9.18, 9.19, 9.20, 9.21, 9.22 and 9.24 of this Agreement or
Borrower shall fail to comply with Section 9.4(a).
(d) Borrower shall fail to perform, observe or comply with any
covenant, agreement or term contained in this Agreement or any other Loan
Document other than those specified in Subsections (a) and (c) above, and
such failure shall remain unremedied for five consecutive Business Days
following written notice thereof by Agent to Borrower.
(e) Any of the Obligated Parties or any of their respective
Subsidiaries shall commence a voluntary proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any Debtor Relief Law or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or a substantial
part of its property or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary
case or other proceeding commenced against it or shall make a general
assignment for the benefit of creditors or shall generally fail to pay its
debts as they become due or shall admit in writing its inability to pay its
debts as they become due or shall take any corporate action to authorize
any of the foregoing.
(f) An involuntary proceeding shall be commenced against any of the
Obligated Parties or any of their respective Subsidiaries seeking
liquidation, reorganization, or other relief with respect to it or its
debts under any Debtor Relief Law or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official for it or a
substantial part of its property, and such involuntary proceeding (i) shall
not have been duly contested within 30 days after the commencement of the
proceeding or (ii), if duly contested within such 30 days, shall for any
reason remain undismissed and unstayed for a period of 90 days after the
commencement of the proceeding.
(g) Any of the Obligated Parties or any of their respective
Subsidiaries shall fail to discharge within a period of 30 days after the
commencement thereof any attachment, sequestration, or similar proceeding
or proceedings involving an aggregate amount in excess of $1,000,000
against any of its assets or properties.
(h) Any of the Obligated Parties or any of their respective
Subsidiaries shall fail to satisfy and discharge any final non-appealable
judgment or judgments against it
CREDIT AGREEMENT PAGE 47
----------------
for the payment of money in an aggregate amount in excess of $1,000,000
prior to the time any Lien arising as a result thereof attaches to any of
its assets.
(i) Any of the Obligated Parties or any of their respective
Subsidiaries shall fail to pay when due and after the passage of any
applicable notice and cure periods any principal of or interest on any
Borrowings the total principal amount of which is equal to or in excess of
$1,000,000 (other than the Obligations) or any event or condition shall
occur which results in the acceleration of the maturity of any such
Borrowings.
(j) Any of the Obligated Parties or any of their respective
Subsidiaries shall fail to pay when due and after the passage of any
applicable notice and cure periods any principal of or interest on any
Borrowings from any of the Banks (other than the Obligations) or any event
or condition shall occur which results in the acceleration of the maturity
of any such Borrowings.
(k) This Agreement or any other Loan Document shall cease to be in
full force and effect or shall be declared null and void or the validity or
enforceability thereof shall be contested or challenged by any Obligated
Party or any of their respective Subsidiaries, or any Obligated Party shall
deny that it has any further liability or obligation under any of the Loan
Documents; provided no Event of Default shall be deemed to have occurred
under this Subsection (j) if the event occurring under this Subsection (j)
occurred as a result of an act or failure to act by Agent or any Bank or
until 30 days after the occurrence thereof if the event occurring was
caused by a Person other than an Obligated Party.
SECTION 10.2. REMEDIES. Upon the occurrence of an Event of Default,
--------
Agent may and shall, at the direction of Requisite Banks, do any one or
more of the following:
(a) Acceleration. Declare the unpaid principal of and accrued and unpaid
------------
interest on the Notes and any of the other obligations of the Obligated Parties
under the Loan Documents immediately due and payable, and the same shall
thereupon become due and payable, without notice, demand, resentment, notice of
dishonor, notice of acceleration, notice of intent to accelerate, protest, or
other formalities of any kind, all of which are hereby expressly waived by
Borrower.
(b) Termination of Commitments to Advance. Terminate the Commitments
-------------------------------------
of the Bank hereunder without notice to Borrower and the other Obligated
Parties.
(c) Judgment. Reduce any claim to judgment.
--------
CREDIT AGREEMENT PAGE 48
----------------
(d) Rights. Exercise any and all rights and remedies afforded by the
------
laws of the State of Texas or any other jurisdiction, by any of the Loan
Documents, by equity, or otherwise .
(e) Application of Payments and Proceeds. Apply any and all amounts
------------------------------------
held in accounts for, or received in payment of the obligations of, the
Obligated parties under the Loan Documents to the Obligations, in such
order and manner as Requisite Banks may direct, or hold any such amount as
additional security for repayment of the Obligations, notwithstanding any
instruction to the contrary by Borrower or any other Obligated Party;
provided that the Obligated Parties shall remain liable to Bank for any
deficiency.
Provided, however, that upon the occurrence of an Event of Default under
Subsection (e) or (f) of Section 10.1, the Commitments of all Banks hereunder
shall automatically terminate, and the unpaid principal of and accrued and
unpaid interest on the Notes and all of the other obligations of the Obligated
Parties under the Loan Documents shall thereupon become immediately due and
payable without notice, demand, presentment, notice of dishonor, notice of
acceleration, notice of intent to accelerate, protest, or other formalities of
any kind, all of which are hereby waived by Borrower. Upon the occurrence of
any such Event of Default, Banks may exercise all rights and remedies available
to them at law or in equity, under the Loan Documents, or otherwise.
SECTION 10.3. PERFORMANCE BY AGENT. If Borrower or any other Obligated
--------------------
Party shall fail to perform any covenant, duty, or agreement in accordance with
the terms of the Loan Documents, and such failure shall remain unremedied for
five consecutive Business Days following written notice thereof by Agent, Agent
may at the direction of Requisite Banks perform, or attempt to perform, such
covenant, duty, or agreement on behalf of Borrower or any other Obligated Party.
In such event, Agent shall give the applicable Obligated Party prompt written
notification of its intent to perform or attempt to perform such covenant, duty
or agreement and Borrower shall at the request of Agent, promptly pay any amount
expended by Banks or Agent on its behalf in such performance or attempted
performance to Agent, for the account of Agent or the Banks who actually
expended such amounts, together with interest thereon at the Default Rate
through the date of such expenditure by Agent or the Banks (as appropriate)
until paid. Notwithstanding the foregoing, it is expressly agreed that neither
Agent nor any Bank shall have any liability or responsibility for the
performance of any obligations of Borrower or any other Obligated Party under
the Loan Documents.
ARTICLE XI.
THE AGENT
SECTION 11.1. APPOINTMENT, POWERS AND IMMUNITIES. In order to expedite
----------------------------------
the various transactions contemplated by this Agreement, the Banks hereby
appoint TCB to act as their
CREDIT AGREEMENT PAGE 49
----------------
Agent hereunder and under each of the other Loan Documents. TCB consents to such
appointment and agrees to perform the duties of Agent as specified herein. The
Banks authorize and direct Agent to take such action in their name and on their
behalf under the terms and provisions of the Loan Documents and to exercise such
rights and powers thereunder as are specifically delegated to or required of
Agent for the Banks, together with such rights and powers as are reasonably
incidental thereto. Agent is hereby expressly authorized as Agent on behalf of
itself and the other Banks:
(a) To receive on behalf of each of the Banks any payment of
principal, interest, fees or other amounts paid pursuant to this Agreement
and the Notes and to distribute to each Bank its share of all payments so
received as provided in this Agreement;
(b) To receive all documents and items to be furnished under the Loan
Documents;
(c) To act as nominee for and on behalf of the Banks in and under the
Loan Documents;
(d) To arrange for the means whereby the funds of the Banks are to be
made available to Borrower;
(e) To distribute to the Banks information, requests, notices,
payments, prepayments, documents, and other items received from Borrower,
the other Obligated Parties and other Persons;
(f) To execute and deliver to Borrower, the other Obligated Parties
and other Persons all requests, demands, approvals, notices, and consents
received from the Banks;
(g) To the extent permitted by the Loan Documents, to exercise on
behalf of each Bank all rights and remedies of the Banks upon the
occurrence of any Event of Default specified in the Loan Documents; and
(h) To take such other actions as may be requested by Requisite
Banks.
Agent (i) shall have no duties or responsibilities except those expressly set
forth in this Agreement and the other Loan Documents, and shall not by reason of
this Agreement or any other Loan Document be a trustee for any Bank, (ii) shall
not be required to initiate or conduct any litigation or collection proceedings
hereunder or under any other Loan Document except to the extent requested by
Requisite Banks, and (iii) shall not be responsible for any action taken or
omitted to be taken by it or by any of its officers, directors, agents or
employees hereunder or under any other Loan Document, except for its own gross
negligence or willful misconduct and that of its officers, directors, agents or
employees while acting within the scope of their
CREDIT AGREEMENT PAGE 50
----------------
employment or agency. As to any matters not expressly provided for by this
Agreement, Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder in accordance with instructions signed by
Requisite Banks, and such instructions of Requisite Banks in any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 11.2. RIGHTS AS A BANK. With respect to its Commitment to lend
----------------
hereunder and Advances made by it, Agent in its capacity as a Bank and not as
Agent shall have the same rights and powers hereunder as the other Banks and may
exercise the same as though it were not Agent for the Banks, and the term "Bank"
or "Banks" shall, unless the context otherwise indicates, include Agent in its
individual capacity. Agent and its Affiliates may (without having to account
therefor to any bank) accept deposits from, lend money to, provide financial
advisory and merchant banking services to, and generally engage in any kind of
banking, depositary, trust, financial advisory or other business with Borrower,
any other Obligated Party, any of their respective Affiliates and any of their
officers, directors and employees as if it were not acting as Agent, and Agent
may accept fees and other consideration from Borrower, any other Obligated
Party, any of their respective Affiliates and any of their officers, directors
and employees (in addition to the agency or arrangements fees heretofore agreed
to between Borrower and Agent) for services in connection with this Agreement or
otherwise without having to account for the same to the Banks.
SECTION 11.3. SHARING OF PAYMENTS. All payments of principal and interest
-------------------
received in payment of amounts owing in connection with the Loans shall be
promptly distributed by Agent to the Banks, each Bank to receive its Pro Rata
portion of each Loan in immediately available funds. Any and all other amounts
received by Agent as payment on the Obligations shall be promptly distributed to
the Banks, each Bank to receive its Pro Rata portion thereof in immediately
available funds unless this Agreement or any other Loan Document directs that
Agent distribute such amounts in an alternative manner. If any Bank shall
obtain payment of any principal of or interest on any Loan made by it to
Borrower under this Agreement or payment of any other Obligations under the Loan
Documents then owed by Borrower or any other Obligated Party to such Bank
through the exercise of any right of set-off, banker's lien, counterclaim or
similar right, or otherwise, it shall promptly purchase from the other Banks
participations in that Loan made by the other Banks hereunder in such amounts,
and make such other adjustments from time to time such that each Bank shall
share the benefit of such payment (net of any expenses which may be incurred by
such Bank in obtaining or preserving such benefit) in accordance with its Pro
Rata portion thereof. To such end all of the Banks shall make appropriate
adjustments among themselves (by the resale of participations sold or otherwise)
if such payment is rescinded or must otherwise be restored. Each Obligated
Party agrees, to the fullest extent it may effectively do so under applicable
law, that any Bank so purchasing a participation in the Loans made by the other
Banks may exercise all rights of set-off, banker's lien, counterclaim, or
similar rights with respect to such participation as fully as if such Bank were
a direct holder of Loans to Borrower in the amount of such participation.
Nothing contained herein shall require any Bank to exercise any such right or
affect the right
CREDIT AGREEMENT PAGE 51
----------------
of any Bank to exercise and retain the benefits of exercising any such right
with respect to any other indebtedness or obligation of Borrower or any other
Obligated Party.
SECTION 11.4. NO LIABILITY OF AGENT OR FUNDS ADMINISTRATOR; INDEMNITY.
-------------------------------------------------------
Neither Agent, nor the Funds Administrator, nor any of their Affiliates,
officers, directors, employees or agents shall be liable for any action taken or
omitted to be taken by it or them hereunder or otherwise in connection with this
Agreement, except for its or their own gross negligence or willful misconduct.
The Banks hereby agree to indemnify Agent and the Funds Administrator against
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including attorneys' fees), and disbursement of any kind
or nature whatsoever (to the extent not paid by Borrower and to the extent not
attributable to Agent's, the Funds Administrator's, or their Affiliates',
officers', directors', employees' or agents' gross negligence or willful
misconduct) resulting from any action taken or omitted to be taken by Agent or
the Funds Administrator on their own behalf or on behalf of the other Banks
under the Loan Documents; provided that each Bank shall only be liable to Agent
and the Funds Administrator for its Pro Rata portion of the amounts due Agent or
the Funds Administrator as a result of the indemnification provided for herein.
THE EXPRESS INTENTION OF THE BANKS IS THAT AGENT AND THE FUNDS ADMINISTRATOR
SHALL BE INDEMNIFIED HEREUNDER FROM AND HELD HARMLESS AGAINST ALL OF SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS,
COSTS, EXPENSES (INCLUDING ATTORNEYS' FEES) AND DISBURSEMENTS OF ANY KIND OR
NATURE ARISING OUT OF OR RESULTING FROM THE ORDINARY, SOLE OR CONTRIBUTORY
NEGLIGENCE OF AGENT OR THE FUNDS ADMINISTRATOR. Each Bank agrees that it has,
independently and without reliance on Agent, the Funds Administrator or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own credit analysis of Borrower and decision to enter into
this Agreement and that it will, independently and without reliance upon Agent,
the Funds Administrator or any other Bank, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
analysis and decisions in taking or not taking action under this Agreement or
any of the other Loan Documents. Neither Agent nor the Funds Administrator shall
be responsible to the Banks for any recitals, statements, representations, or
warranties contained in this Agreement, or in any other Loan Document, or of the
value, validity, effectiveness, genuineness, enforceability, or sufficiency of
this Agreement or any other Loan Document or for any failure by Borrower or any
Obligated Party to perform any of its obligations under this Agreement or any
other Loan Document. Neither Agent nor the Funds Administrator shall be required
to keep itself informed as to the performance or observance by Borrower or any
Obligated Party of this Agreement or any other Loan Document or to inspect the
properties or books of Borrower or any Obligated Party.
SECTION 11.5. AGENT'S EMPLOYEES; FUNDS ADMINISTRATOR. Agent may execute
--------------------------------------
any and all duties under the Loan Documents by or through agents or employees
and shall be entitled to advice of counsel pertaining to all matters thereunder.
Without limiting the rights of Agent under the preceding sentence, Agent may
execute any and all of its duties under the Loan
CREDIT AGREEMENT PAGE 52
----------------
Documents through the Funds Administrator, in which case the Funds Administrator
shall be entitled to the Rights under the Loan Documents available to Agent if
Agent had executed such duties.
SECTION 11.6. RELIANCE BY AGENT. Agent shall be entitled to rely on any
-----------------
notice, consent, certificate, schedule, affidavit, letter, telegram, teletype
message, statement, order or other document believed to be genuine and correct
and to have been signed or sent by the proper Person or Persons and upon advice
and statements of legal counsel, independent accountants and other experts.
Agent and the Obligated Parties may deem and treat the original Banks hereunder
as the owners of their respective Notes for all purposes hereof until receipt by
Agent and the Obligated Parties of notice of assignment or transfer of any
interest therein by any Bank. Any request, authority or consent of any holder of
any of the Notes shall be conclusive and binding on any subsequent holder,
transferee, or assignee of such Notes.
SECTION 11.7. SEVERAL COMMITMENTS. Except as expressly provided in this
-------------------
Section 11.7, the obligations of the Banks under this Agreement are several.
The default by any Bank in making an Advance in accordance with its Commitment
shall not relieve the other Banks of their obligations under this Agreement. In
the event of any default by any Bank in making an Advance, each nondefaulting
Bank shall be obligated to make its Advance but shall not be obligated to
advance the amount which the defaulting Bank was required to advance hereunder;
provided, however, that TCB shall have the obligation to make such defaulting
Bank's Advance available to Borrower, will be entitled to all interest
attributable thereto until reimbursed therefor, and will be deemed to be the
holder of the outstanding indebtedness represented thereby for purposes of
determining Requisite Banks and for determining Pro Rata portions. In no event
shall any Bank other than TCB be required to advance any amount or amounts which
shall in the aggregate exceed such Bank's Commitment. Nothing in this Section
shall be construed as releasing, modifying, or waiving the obligation of each
Bank to forward to Agent funds to meet all requested Advances pursuant to the
terms of the Loan Documents.
SECTION 11.8. SUCCESSOR AGENT. Subject to the appointment and acceptance
---------------
of a successor Agent as provided below, Agent may resign at any time by giving
notice thereof to the Banks and Borrower, and should Agent (a) fail or refuse to
take any action hereunder requested by the required percentage of Banks, (b) be
declared insolvent or (c) in its individual capacity as a Bank sell, assign or
otherwise participate (otherwise than to its Affiliates) its right, title and
interest in the Loans and the Loan Documents such that, after giving effect to
such sales, assignments or participations, its Pro Rata share of all of the
Loans is reduced below 6.49%, the Requisite Banks shall have the right to
appoint a successor Agent acceptable to Borrower. If no successor Agent shall
have been appointed hereunder within 30 days after Agent's notice of resignation
or removal, then the resigning or removed Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a commercial bank organized under the
laws of the U.S. or any State thereof and having a combined capital and surplus
of at least $100,000,000. Upon the acceptance of this appointment as successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all rights, powers, privileges,
CREDIT AGREEMENT PAGE 53
----------------
immunities, and duties of the resigning or removed Agent, and the resigning or
removed Agent shall be discharged from its duties and obligations under this
Agreement and the other Loan Documents. After any Agent's resignation or removal
as Agent, the provisions of Article XI shall continue in effect for its benefit
in respect of any actions taken or omitted to be taken by it while it was Agent.
ARTICLE XII.
MISCELLANEOUS
SECTION 12.1 AMENDMENTS, ETC. No amendment or waiver of any provision of
---------------
this Agreement or any Note, nor consent to any departure by any Obligated Party
from any provision of this Agreement or any Note, is effective unless it is in
writing and signed by the Requisite Banks in all cases, and then, in any case,
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment,
waiver or consent shall, unless in writing and signed by all the Banks, do any
of the following: (a) waive any of the conditions specified in Article VII (if
and to the extent that the Advance which is the subject of such waiver would
involve an increase in the aggregate outstanding amount of Loans over the
aggregate amount of Loans outstanding immediately prior to such Advance), (b)
reduce or increase the amount or alter the terms of the Commitments of any Banks
or subject any Banks to any additional obligations, (c) reduce the principal of,
or rate or amount of interest applicable to any Loan other than as provided in
this Agreement, or any fees hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Notes or any fees hereunder, (e)
change this Section 12.1, (f) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the number of Banks, which
shall be required for the Banks or any of them to take any action hereunder, or
(g) release any Guaranty or any collateral securing the Obligations; and
provided, that no amendment, waiver or consent shall, unless in writing and
signed by Agent in addition to the Banks required above to take such action,
affect the rights or duties of Agent under this Agreement or any Note.
SECTION 12.2. NOTICES. All notices and other communications provided for
-------
herein (including, without limitation, any modifications of, or waivers or
consents under, this Agreement) shall be given or made by telex, telegraph,
telecopy, cable or in writing and telexed, telecopied, telegraphed, cabled,
mailed, or delivered to the intended recipient at the "Address for Notices"
specified below its name on the signature pages hereof; or, as to any party at
such other address as shall be designated by such party in a notice to each
other party given in accordance with this Section. Except as otherwise provided
in this Agreement, all such communications shall be deemed to have been duly
given when transmitted by telex or telecopied, subject to telephone confirmation
of receipt, or delivered to the telegraph or cable office, subject to telephone
confirmation of receipt, or when personally delivered or, in the case of a
mailed notice return receipt requested, upon receipt, in each case given or
addressed as aforesaid.
CREDIT AGREEMENT PAGE 54
----------------
SECTION 12.3. NO WAIVER; REMEDIES. No failure on the part of any Bank or
-------------------
Agent to exercise, and no delay in exercising, any right hereunder or under any
Note shall operate as a waiver thereof; nor shall any single or partial exercise
of any such right, or any abandonment or discontinuance of any steps to enforce
such right, preclude any other or further exercise thereof or the exercise of
any other right. No notice to or demand on the Obligated Party in any case
shall entitle the Obligated Party to any other or further notice or demand in
similar or other circumstances. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
SECTION 12.4. COSTS, EXPENSES AND TAXES. Each Obligated Party agrees to
-------------------------
pay on demand (i) all costs and expenses of Agent in connection with the
preparation, execution, delivery and administration of this Agreement, the Notes
and all other Loan Documents to be delivered hereunder, including, without
limitation, the reasonable fees and out-of-pocket expenses of counsel for Agent
with respect thereto and with respect to advising Agent as to its rights and
responsibilities under this Agreement, the Notes and the other Loan Documents,
and any modification, supplement or waiver of any of the terms of this
Agreement, and (ii) all reasonable costs and expenses of Agent (including
reasonable counsels' fees) in connection with the enforcement of this Agreement,
the Notes and any other Loan Document. In addition, each Obligated Party shall
pay any and all stamp and other Taxes payable or determined to be payable in
connection with the execution and delivery of this Agreement and the Notes and
the other documents to be delivered hereunder, and agrees to save Agent and each
Bank harmless from and against any and all liabilities with respect to or
resulting from any delay in paying or omission to pay such Taxes, if any, which
may be payable or determined to be payable in connection with the execution and
delivery of this Agreement, any Note and any other Loan Document. Without
prejudice to the survival of any other obligations of the Obligated Parties
under this Agreement, the Notes or any other Loan Document, the obligations of
Obligated Parties under this Section 12.4 shall survive the termination of this
Agreement and repayment of the Notes.
SECTION 12.5. INDEMNITY.
---------
(a) Each of the Obligated Parties shall indemnify Agent, the Funds
Administrator, the Banks and each Affiliate thereof and their respective
directors, officers, employees, attorneys and agents ("Indemnitee") from, and
hold each of them harmless against, any and all actions, suits, proceedings
(including any investigations or inquiries), claims, losses, liabilities,
damages or expenses of any kind or nature whatsoever (INCLUDING WITHOUT
LIMITATION, THOSE ARISING OUT OF THE ORDINARY, SOLE OR CONTRIBUTORY NEGLIGENCE
OF ANY INDEMNITEE) which may be incurred by or asserted against or involve any
Indemnitee as a result of or arising out of or in any way related to (i) any of
the Loan Documents, any of the Loans or any actual or proposed use by any of the
Obligated Parties of any of the proceeds of any extension of credit by the Bank
hereunder or any breach by any of the Obligated Parties of any of the Loan
Documents or (ii) any Litigation (including any threatened Litigation) relating
CREDIT AGREEMENT PAGE 55
----------------
to any of the foregoing, and the Obligated Parties shall reimburse and, upon
demand by any Indemnitee, shall pay or reimburse such Indemnitee for any legal
or other expenses (including allocated costs of internal counsel) incurred by
such Indemnitee in connection with investigating, defending or preparing to
defend any pending or threatened Litigation (including any inquiry or
investigation); provided, however, no Obligated Party shall be obligated to pay
or make reimbursement for any settlement to which Borrower has not consented
(which consent will not be unreasonably withheld); and, provided, further, no
Obligated Party shall be liable for any liability, loss, damage or expense to
any Indemnitee if it has been determined by a final decision (after all appeals
and the expiration of time to appeal) by a court of competent jurisdiction that
such liability, loss, damage or expense resulted from the gross negligence or
willful misconduct of such Indemnitee. None of Agent and the Banks shall be
responsible or liable to any other Person for consequential damages which may be
alleged as a result of any of the Loan Documents.
(b) Without prejudice to the survival of any other obligations of the
Obligated Parties under any of the Loan Documents, the obligations of the
Obligated Parties under this Section 12.5 shall survive the termination of this
Agreement and payment of the Notes.
SECTION 12.6. FEES. In addition to any other fees provided for herein,
----
Parent agrees to pay to TCB for TCB's own account in immediately available
funds all fees described in the agreements between TCB and Parent.
SECTION 12.7. GOVERNING LAW. This Agreement, all Notes and all other
-------------
documents executed in connection herewith, shall be deemed to be contracts and
agreements executed by the Obligated Parties, Agent and the Banks under the laws
of the State of Texas and of the U.S. and for all purposes shall be construed in
accordance with, and governed by, the laws of said State and of the U.S.
Without limitation of the foregoing, nothing in this Agreement or in the Notes
shall be deemed to constitute a waiver of any rights which Bank may have under
applicable federal legislation relating to the amount of interest which Bank may
contract for, take, receive or charge in respect of any Loans, including any
right to take, receive, reserve and charge interest at the rate allowed by the
law of the state where Bank is located. Agent, the Banks and the Obligated
Parties further agree that insofar as the provisions of Article 1.4, Subtitle 1,
Title 79, of the Revised Civil Statutes of Texas, 1925, as amended, are
applicable to the determination of the Maximum Rate with respect to the Notes,
the indicated rate ceiling computed from time to time pursuant to Section (a) of
such Article shall apply to the Notes; provided, however, that to the extent
permitted by such Article, Agent may from time to time by notice from Agent to
the Obligated Parties and Borrower revise the election of such interest rate
ceiling as such ceiling affects the then current or future balances of the Loans
outstanding under the Notes. The provisions of Chapter 15 of Subtitle 3 of the
said Title 79 do not apply to this Agreement or any Note issued hereunder.
SECTION 12.8. MAXIMUM INTEREST RATE. No provision of this Agreement or of
---------------------
any other Loan Document shall require the payment or permit the collection of
interest in excess of the
CREDIT AGREEMENT PAGE 56
----------------
maximum permitted by applicable Law. If any excess of interest in such respect
is hereby provided for, or shall be adjudicated to be so provided, in any Loan
Document or otherwise in connection with this loan transaction, the provisions
of this Section shall govern and prevail and neither Borrower nor the sureties,
guarantors, successors, or assigns of Borrower shall be obligated to pay the
excess amount of such interest or any other excess sum paid for the use,
forbearance, or detention of sums loaned pursuant hereto. In the event Agent or
any Bank ever receives, collects, or applies as interest any such sum, such
amount which would be in excess of the maximum amount permitted by applicable
law shall be applied as a payment and reduction of the principal of the
indebtedness evidenced by the Notes; and, if the principal of the Notes has been
paid in full, any remaining excess shall forthwith be paid to Borrower. In
determining whether or not the interest paid or payable exceeds the Maximum
Rate, Borrower and Bank shall, to the extent permitted by applicable law, (a)
characterize any non-principal payment as an expense, fee, or premium rather
than as interest, (b) exclude voluntary prepayments and the effects thereof, and
(c) amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the entire contemplated term of the indebtedness
evidenced by the Notes so that interest for the entire term does not exceed the
Maximum Rate. In addition to the foregoing, the Bank shall be permitted to cure
any violation or alleged violation of applicable usury laws in any manner
permitted by Tex. Rev. Civ. Stat. Xxx. article 5069-1.06.
SECTION 12.9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
------------------------------------------
representations, warranties and covenants contained herein or in any of the
Loan Documents, or made in writing by the Obligated Parties in connection
herewith, shall survive the execution and delivery of this Agreement and of the
Notes, and will bind and inure to the benefit of the respective successors and
assigns of the parties hereto, whether so expressed or not, provided that the
undertaking of the Banks to make Loans to the Obligated Parties shall not inure
to the benefit of any successor or assign of the Obligated Parties.
SECTION 12.10. BINDING EFFECT. This Agreement shall become effective when
--------------
it shall have been executed by the Obligated Parties, Agent, and when Agent
shall have been notified by each Bank that such Bank has executed it and
thereafter shall be binding upon and inure to the benefit of the Obligated
Parties, Agent, and each Bank and their respective successors and assigns.
SECTION 12.11. SUCCESSORS AND ASSIGNS PARTICIPATIONS.
-------------------------------------
(a) Whenever in this Agreement any of the parties hereto is referred to, such
reference shall be deemed to include the successors and permitted assigns of
such party; and all covenants, promises and agreements by or on behalf of the
Obligated Parties, Agent or the Banks that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and assigns. None
of the Obligated Parties may assign or transfer any of its Rights or obligations
hereunder without the written consent of all the Banks.
CREDIT AGREEMENT PAGE 57
----------------
(b) Each Bank may, with the prior written consent of Agent (except for
participations to a Bank's Affiliates) but without the consent of the Obligated
Parties, sell participations to one or more banks or other entities in all or a
portion of its Rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitment and the Loans owing to it and the
Notes held by it); provided, however, that (i) such Bank's obligations under
this Agreement shall remain unchanged, (ii) such Bank shall remain solely
responsible to the other parties hereto for the performance of such obligations,
(iii) the participating banks or other entities shall be entitled to the cost
protection provisions contained in Article V and Section 12.4, but only to the
extent that such protection would have been available to such Bank, calculated
as if no such participations had been sold, and (iv) the Obligated Parties,
Agent and the other Banks shall continue to deal solely and directly with such
Bank in connection with such Bank's Rights and obligations under this Agreement;
provided further, that such Bank shall retain the sole Right and responsibility
to enforce the obligations of the Obligated Parties relating to the Loans
including, without limitation, the right to approve any amendment, modification
or waiver of any provision of this Agreement; but such Bank may grant a
participant rights (which shall be no greater than Bank's rights insofar as
Borrower is concerned) with respect to (y) amendments, modifications or waivers
with respect to any fees payable hereunder (including, without limitation, the
amount and the dates fixed for the payment of any such fees) or the amount of
principal or the rate of interest payable on, or the dates fixed for any payment
of principal of or interest on, the Loans and (z) any extension of the
Termination Date.
(c) Each Bank may assign, with the prior written consent of the Obligated
Parties (which shall not be unreasonably withheld) to one or more assignees, all
or a portion of its interests, Rights, and obligations under this Agreement
(including, without limitation, all or a portion of its Commitment and the same
portion of the Loans at the time owing to it and the Notes held by it);
provided, however, that (i) each such assignment shall be of a constant, and not
a varying, percentage of all the assigning Bank's rights and obligations under
this Agreement and shall be in a minimum principal amount of $5,000,000, (ii)
the amount of the Commitment of the assigning Bank remaining after each such
assignment (determined as of the date of the Assignment and Acceptance) shall be
in a minimum principal amount of $5,000,000 and (iii) the parties to each such
assignment shall execute and deliver to Agent, for its acceptance and recording
in the Register, an Assignment and Acceptance in the form of EXHIBIT "H" hereto
(an "Assignment and Acceptance"), together with a properly completed
Administrative Questionnaire, any Notes subject to such assignment and a
processing and recordation fee of $2,000; and provided, further, that in the
case of an assignment by a Bank to one or more of the Bank's Affiliates, neither
the consent of the Obligated Parties nor the $2,000 processing and recordation
fee shall be required. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five Business Days after the execution
thereof (x) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and obligations of a
Bank hereby, and (y) the assignor Bank thereunder shall, to the extent provided
in such Assignment and Acceptance (and in the case of an Assignment and
Acceptance
CREDIT AGREEMENT PAGE 58
----------------
covering all of the remaining portion of an assigning Bank's rights and
obligations under this Agreement, such Bank shall cease to be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the Bank
assignor thereunder and the assignee shall confirm to and agree with each other
and the other parties hereto as follows: (i) other than the representation and
warranty that it is the legal and beneficial owner of the interest being
assigned thereby free and clear of any adverse claim, such Bank assignor makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement or any other instrument or document
furnished pursuant hereto; (ii) such Bank assignor makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Obligated Parties or the performance or observance of its respective
obligations under this Agreement or any other instrument or document furnished
pursuant hereto or thereto; (iii) such assignee confirms that it has received a
copy of this Agreement together with copies of the Financial Statements referred
to in Sections 8.4 or 9.1 and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance; (iv) such assignee will, independently and
without reliance upon Agent, such Bank assignor or any other Bank and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement; (v) such assignee appoints and authorizes Agent to take such
action on behalf of such assignee and to exercise such powers under this
Agreement as are delegated to Agent by the terms hereof, together with such
powers as are reasonably incidental thereto; (vi) such assignee agrees that it
will perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Bank and (vii)
each assignee organized under the laws of a jurisdiction outside the U.S.,
agrees to provide the forms prescribed by the Internal Revenue Service of the
U.S. certifying as to the assignee's exemption from U.S. withholding taxes with
respect to all payments to be made to the assignee under the Agreement or such
other documents as are necessary to indicate that all such payments are subject
to such tax at a rate reduced by an applicable tax treaty.
(e) Agent shall maintain at its office a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Banks and the Commitment of, and principal amount of the
Advances owing to, each Bank from time to time (the "Register"). The entries in
the Register shall be conclusive, in the absence of manifest error, and the
Obligated Parties, Agent and the Banks may treat each person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Agreement.
The Register shall be available for inspection by the Obligated Parties or any
Bank at any reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Bank and an assignee together with any Notes subject to such
assignment and the written consent to
CREDIT AGREEMENT PAGE 59
----------------
such assignment, Agent shall, if such Assignment and Acceptance has been
completed and is precisely in the form of EXHIBIT "K" hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein in the
Register and (iii) give prompt notice thereof to the Banks and the Obligated
Parties. Within five Business Days after receipt of such notice, Borrower shall
execute and deliver to Agent in exchange for the surrendered Notes new Notes to
the order of such assignee in an amount equal to its portion of the Commitment
assumed by it pursuant to such Assignment and Acceptance and, if the assigning
Bank has retained any Commitment hereunder, new Notes to the order of the
assigning Bank in an amount equal to the Commitment retained by it hereunder.
Such new Notes shall be in an aggregate principal amount equal to the aggregate
principal amount of such surrendered Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of EXHIBIT "D" or EXHIBIT "E", as applicable, hereto. Cancelled Notes shall be
returned to Borrower. Borrower shall not be liable for the expenses incurred by
the assigning Bank and assignee with respect to the delivery of new Notes to the
assignee.
(g) Agent and each Bank shall preserve the confidentiality of any
confidential information relating to the Obligated Parties received from the
Obligated Parties. Notwithstanding any other provision herein, any Bank may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this Section 12.11 disclose to the assignee or
participant or proposed assignee or participant any information relating to the
Obligated Parties furnished to such Bank by or on behalf of the Obligated
Parties; provided, that prior to any such disclosure, each such assignee or
participant or proposed assignee or participant shall agree to preserve the
confidentiality of any confidential information relating to the Obligated
Parties received from such Bank.
SECTION 12.12. INVALID PROVISIONS. If any provision of any of the Loan
------------------
Documents is held to be illegal, invalid or unenforceable under any present or
future Laws effective during the term thereof, such provision shall be fully
severable; the appropriate Loan Documents shall be construed and enforced as if
such illegal, invalid or unenforceable provision had never comprised a part
thereof; and the remaining provisions thereof shall remain in full force and
effect and shall not be affected by the illegal, invalid or unenforceable
provision or by its severance therefrom. Furthermore, in lieu of such illegal,
invalid or unenforceable provision there shall be added automatically as a part
of such Loan Document a provision as similar in terms to such illegal, invalid
or unenforceable provision as may be possible and be legal, valid and
enforceable.
SECTION 12.13. NUMBER AND GENDER OF WORDS. Whenever in any of the Loan
--------------------------
Documents the singular number is used, the same shall include the plural, where
appropriate, and vice versa, and words of any gender shall include each other
gender where appropriate.
SECTION 12.14. DESCRIPTIVE HEADINGS. The section headings appearing in
--------------------
this Agreement have been inserted for convenience only and shall be given no
substantive meaning or significance whatever in construing the terms and
provisions of this Agreement.
CREDIT AGREEEMNT PAGE 60
----------------
SECTION 12.15. EXECUTION IN COUNTERPARTS. This Agreement may be executed
-------------------------
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
SECTION 12.16. LETTER OF CREDIT ADVANCES. In accordance with the terms of
-------------------------
this Agreement, each of the parties hereto acknowledges and agrees that any
amounts advanced by TCB pursuant to letters of credit issued in favor of one or
more Obligated Parties will constitute "Obligations" hereunder and will be
subject to and entitled to the benefits of the Events of Default and related
rights and remedies under Article X hereof. Each letter of credit shall be
evidenced by a separate written agreement, and nothing herein shall obligate TCB
to issue any letter of credit of behalf of any Obligated Party.
SECTION 12.17. ENTIRE AGREEMENT. THIS AGREEMENT (INCLUDING THE EXHIBITS
----------------
AND SCHEDULES HERETO), THE OTHER LOAN DOCUMENTS, AND THE FEE AGREEMENTS REFERRED
TO IN SECTION 12.6 CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A)
OF THE TEXAS BUSINESS AND COMMERCE CODE AND REPRESENT THE FINAL AGREEMENT AMONG
THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS,
OR SUBSEQUENT ORAL AGREEMENTS BETWEEN THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
--------
BANCTEC USA, INC., a Delaware corporation
By: _____________________________________
Xxxxxxxx Xxxxxx
Senior Vice President
PARENT:
------
BANCTEC, INC., a Delaware corporation
CREDIT AGREEMENT PAGE 61
----------------
By: _________________________________________
Xxxxxxxx Xxxxxx
Senior Vice President and Chief Financial
Officer
CREDIT AGREEMENT PAGE 62
----------------
OTHER DOMESTIC SUBSIDIARIES:
---------------------------
BANCTEC (EXPORT), INC.,
a Virgin Islands corporation
By: _________________________________________
Xxxxxxxx Xxxxxx
Senior Vice President
BANCTEC (MANAGEMENT), INC.,
a Delaware corporation
By: _________________________________________
Xxxxxxxx Xxxxxx
Senior Vice President and Chief Financial
Officer
BANCTEC (PUERTO RICO), INC.,
a Delaware corporation
By: _________________________________________
Xxxxxxxx Xxxxxx
Senior Vice President
BANCTEC THIRD PARTY MAINTENANCE,
INC., a Texas corporation
By: _________________________________________
Xxxxxxxx Xxxxxx
Senior Vice President
CREDIT AGREEMENT PAGE 63
----------------
RECOGNITION JAPAN INC.
a Delaware corporation
By: _________________________________________
Xxxxxxxx Xxxxxx
Senior Vice President
AGENT/TCB/FUND ADMINISTRATOR:
----------------------------
TEXAS COMMERCE BANK
NATIONAL ASSOCIATION,
a national banking association,
By: _________________________________________
Xxxx X. Xxxxxx
Senior Vice President
Address for Notices as Agent:
Texas Commerce Tower
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Address for Notices as Funds
Administrator:
000 Xxxx Xxxxxx
Mail Station 8 TCBS 27
Xxxxxxx, Xxxxx 00000
CREDIT AGREEMENT PAGE 64
----------------
Pro Rata Percentage TEXAS COMMERCE BANK NATIONAL
TERM LOAN 38.68477105% ASSOCIATION
REVOLVING CREDIT LOAN 20.0%
By: __________________________________________
Xxxx X. Xxxxxx
Senior Vice President
Address for Notices:
c/o Texas Commerce Bank
National Association
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Domestic Lending Office:
c/o Texas Commerce Bank
National Association
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Eurodollar Lending Office:
c/o Texas Commerce Bank
National Association
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Alternate Currency Lending Office:
c/o Texas Commerce Bank
National Association
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
CREDIT AGREEMENT PAGE 65
----------------
