Exhibit 10.7
EXECUTION COPY
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
Among
TETRA TECHNOLOGIES, INC.
as Borrower,
THE FINANCIAL INSTITUTIONS
NAMED IN THIS CREDIT AGREEMENT
as Banks,
BANK OF AMERICA, N.A.,
as Administrative Agent for the Banks
and
BANK ONE, NA,
as Syndication Agent
$80,000,000
December 14, 2001
Arranged by:
BANC OF AMERICA SECURITIES, L.L.C.
TABLE OF CONTENTS
PAGE
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS........................1
1.1 Certain Defined Terms.......................................1
1.2 Computation of Time Periods................................16
1.3 Accounting Terms; Preparation of Financials................16
1.4 Types......................................................16
1.5 Interpretation.............................................16
ARTICLE 2. CREDIT FACILITIES......................................17
2.1 Revolving Credit Loan Facility.............................17
2.2 Swingline Facility.........................................19
2.3 Letter of Credit Facility..................................20
2.4 Fees.......................................................23
2.5 Interest...................................................24
2.6 Breakage Costs.............................................26
2.7 Increased Costs............................................27
2.8 Illegality.................................................28
2.9 Market Failure.............................................28
2.10 Advancing and Payments Generally; Computations.............28
2.11 Taxes......................................................31
2.12 Increase of Revolving Credit Commitments...................32
ARTICLE 3. CONDITIONS PRECEDENT...................................33
3.1 Conditions Precedent to Amendment and Restatement..........33
3.2 Conditions Precedent to Each Extension of Credit...........33
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.........................33
4.1 Organization...............................................33
4.2 Authorization..............................................34
4.3 Enforceability.............................................34
4.4 Absence of Conflicts and Approvals.........................34
4.5 Investment Companies.......................................34
4.6 Public Utilities...........................................34
4.7 Financial Condition........................................34
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TABLE OF CONTENTS
(Continued)
PAGE
4.8 Condition of Assets........................................35
4.9 Litigation.................................................35
4.10 Subsidiaries and Affiliates................................35
4.11 Laws and Regulations.......................................35
4.12 Environmental Compliance...................................35
4.13 ERISA......................................................36
4.14 Taxes......................................................36
4.15 True and Complete Disclosure...............................36
ARTICLE 5. COVENANTS..............................................36
5.1 Organization; Maintenance of Properties....................37
5.2 Reporting..................................................37
5.3 Inspection.................................................38
5.4 Use of Proceeds............................................39
5.5 Financial Covenants........................................39
5.6 Debt.......................................................40
5.7 Liens......................................................40
5.8 Other Obligations..........................................40
5.9 Corporate Transactions.....................................40
5.10 Distributions..............................................42
5.11 Transactions with Affiliates...............................42
5.12 Insurance..................................................42
5.13 Investments................................................42
5.14 Lines of Business; Distribution............................42
5.15 Compliance with Laws.......................................42
5.16 Environmental Compliance...................................43
5.17 ERISA Compliance...........................................43
5.18 Payment of Certain Claims..................................43
5.19 Subsidiaries...............................................43
5.20 Further Assurances.........................................44
5.21 Management.................................................44
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TABLE OF CONTENTS
(Continued)
PAGE
5.22 Foreign Subsidiaries.......................................44
ARTICLE 6. DEFAULT AND REMEDIES...................................44
6.1 Events of Default..........................................44
6.2 Termination of Commitments.................................46
6.3 Acceleration of Credit Obligations.........................46
6.4 Cash Collateralization of Letters of Credit................46
6.5 Default Interest...........................................46
6.6 Right of Setoff............................................46
0
6.7 Actions Under Credit Documents.............................47
6.8 Remedies Cumulative........................................47
6.9 Application of Payments....................................47
ARTICLE 7. THE AGENT AND ISSUING BANK.............................48
7.1 Authorization and Action...................................48
7.2 Reliance, Etc..............................................48
7.3 Affiliates.................................................49
7.4 Bank Credit Decision.......................................49
7.5 Expenses...................................................49
7.6 Indemnification............................................49
7.7 Successor Agent and Issuing Bank...........................50
7.8 Other Agents; Lead Managers................................50
ARTICLE 8. ARTICLE 8. MISCELLANEOUS...............................50
8.1 Expenses...................................................50
8.2 Indemnification............................................51
8.3 Modifications, Waivers, and Consents.......................51
8.4 Survival of Agreements.....................................52
8.5 Assignment and Participation...............................52
8.6 Notice.....................................................54
8.7 Choice of Law..............................................54
8.8 Forum Selection............................................54
8.9 Service of Process.........................................54
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TABLE OF CONTENTS
(Continued)
PAGE
8.10 Waiver of Jury Trial.......................................55
8.11 Counterparts...............................................55
8.12 Confidentiality............................................55
8.13 No Further Agreements......................................55
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EXHIBITS
Exhibit A - Form of Compliance Certificate
Exhibit B - Form of Borrowing Request
Exhibit C - Form of Continuation/Conversion Request
Exhibit D-1 - Form of Revolving Credit Note
Exhibit D-2 - Form of Swingline Note
Exhibit E - Form of Assignment and Acceptance
Exhibit F - Closing Documents List
Exhibit G - Form of Joinder Agreement
Exhibit H-1 - Form of New Bank Agreement
Exhibit H-2 - Form of Revolving Credit Commitment
Increase Agreement
SCHEDULES
Schedule I - Administrative Information
Schedule II - Disclosures
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SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
This Second Amended and Restated
Credit Agreement dated as of December 14,
2001 is among TETRA Technologies, Inc., a Delaware corporation, as Borrower, the
financial institutions named herein, as Banks, Bank of America, N.A., as
administrative agent ("Agent") for the Banks, and Bank One, NA, as Syndication
Agent, and is arranged by Banc of America Securities, L.L.C., as Lead Arranger
and Book Manager.
INTRODUCTION
A. The Borrower, the Banks and the Agent are parties to the First Amended
and Restated
Credit Agreement dated as of May 12, 2000, as amended by Amendment
No. 1 dated as of June 21, 2000, Amendment No. 2 dated as of July 28, 2000,
Amendment No. 3 and Consent dated as of November 3, 2000, and Amendment No. 4
and Consent dated as of December 31, 2000 (as amended, the "Existing
Credit
Agreement").
B. The parties to the Existing
Credit Agreement desire to amend and restate
the Existing
Credit Agreement as herein set forth.
C. To evidence the credit facility requested hereunder, the Borrower, the
Agent and the Banks have agreed that this Agreement is an amendment and
restatement of the Existing
Credit Agreement, not a new or substitute
credit
agreement or novation of the Existing Credit Agreement.
Now, therefore, the parties hereto agree as follows:
ARTICLE 1. DEFINITIONS AND ACCOUNTING TERMS.
1.1 CERTAIN DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (unless otherwise indicated, such meanings to
be equally applicable to both the singular and plural forms of the terms
defined):
"ACCOUNT DEBTOR" means a Person who is obligated on a Receivable.
"ACQUISITION" means the direct or indirect purchase or acquisition, whether
in one or more related transactions, of all or substantially all of the capital
stock of any Person or group of Persons or all or substantially all of the
assets, liabilities, and business of any Person or group of Persons.
"ADJUSTED CAPITAL EXPENDITURES" means, for each measurement period,
$10,000,000.
"ADJUSTED PRIME RATE" means, for any day, the fluctuating rate per annum of
interest equal to the greater of (a) the Prime Rate in effect on such day and
(b) the Federal Funds Rate in effect on such day plus 0.50%.
"ADVANCE" means a Revolving Credit Advance or a Swingline Advance.
"AFFILIATE" means, as to any Person, any other Person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person or any Subsidiary of such Person. The
term "control" (including the terms "controlled by" or "under common control
with") means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a Person, whether through
ownership, by contract, or otherwise.
"AGENT" means Bank of America in its capacity as an administrative agent
pursuant to Article 7 and any successor agent pursuant to Section 7.7.
"AGENT FEE LETTER" means the confidential letter agreement dated as of
September 27, 2001, among the Borrower, Bank of America, N.A. and Banc of
America Securities LLC, regarding certain fees owed by the Borrower to Bank of
America, N.A. and Banc of America Securities LLC, in connection with this
Agreement.
"AGREEMENT" means this Credit Agreement.
"APPLICABLE LENDING OFFICE" means, with respect to each Bank and for any
particular type of transaction, the office of such Bank set forth in SCHEDULE I
to this Agreement (or in the applicable Assignment and Acceptance by which such
Bank joined this Agreement) as its applicable lending office for such type of
transaction or such other office of such Bank as such Bank may from time to time
specify in writing to the Borrower and the Agent for such particular type of
transaction.
"APPLICABLE MARGIN" means, with respect to interest rates, letter of credit
fees, commitment fees, and leverage fees and as of any date of its
determination, an amount equal to the percentage amount per annum set forth in
the table below opposite the applicable ratio of (i) the consolidated Funded
Debt of the Borrower as of the end of the fiscal quarter then most recently
ended to (ii) the EBITDA of the Borrower for the four fiscal quarters then most
recently ended:
Debt to Applicable Margin Applicable Margin
Ebitda Libor Tranches Prime Rate Tranches
------ -------------- -------------------
LESS THAN .75 1.00% 0.00%
GREATER THAN OR EQUAL TO .75 but LESS THAN 1.00 1.125% 0.00%
GREATER THAN OR EQUAL TO 1.00 but LESS THAN 1.50 1.375% 0.00%
GREATER THAN OR EQUAL TO 1.50 but LESS THAN 2.00 1.625% 0.125%
GREATER THAN OR EQUAL TO 2.00 but LESS THAN 2.25 1.750% 0.250%
GREATER THAN OR EQUAL TO 2.25 2.00% 0.50%
Debt to Applicable Margin Applicable Margin
Ebitda Letter of Credit Fees Commitment Fees
------ --------------------- ---------------
LESS THAN .75 1.00% 0.25%
GREATER THAN OR EQUAL TO .75 but LESS THAN 1.00 1.125% 0.25%
GREATER THAN OR EQUAL TO 1.00 but LESS THAN 1.50 1.375% 0.25%
GREATER THAN OR EQUAL TO 1.50 but LESS THAN 2.00 1.625% 0.3125%
GREATER THAN OR EQUAL TO 2.00 but LESS THAN 2.25 1.750% 0.3750%
GREATER THAN OR EQUAL TO 2.25 2.00% 0.50%
Until the delivery of the December 31, 2001 financial statements to the Agent
pursuant to Section 5.2(b), the Applicable Margin shall be: 1.250% for LIBOR
Tranches, 0.00% for Prime Rate Tranches, 1.250% for Letter of Credit Fees, and
0.25% for Commitment. Thereafter, the Agent shall determine the Applicable
Margin based upon the most recent financial statements dated as of the end of a
fiscal quarter delivered to the Agent pursuant to Section 5.2(b). If such
statements are delivered when required hereunder, any adjustment to the
Applicable Margin shall
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become effective on the date of delivery of such financial statements. Upon any
change in the Applicable Margin, the Agent shall promptly notify the Borrower
and the Banks of the new Applicable Margin. If such financial statements are not
delivered when required hereunder, the Applicable Margin shall increase to the
maximum percentage amount set forth in the table above from such 45th day until
three days after such financial statements are received by the Agent; PROVIDED
that such increase shall not limit the Agent's capacity to declare a default
under this Agreement.
"ASSET SALE" means any sale, lease, sale and leaseback, assignment,
conveyance, transfer or other disposition of the assets or the capital stock of
any Subsidiary (excluding the disposition of the capital stock of Tetra
Micronutrients, Inc. or any of its assets or the capital stock of Damp Rid, Inc.
or any of its assets) that yields gross proceeds to the Borrower or any of its
Subsidiaries (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of
$5,000,000.
"ASSIGNMENT AND ACCEPTANCE" means an Assignment and Acceptance in
substantially the form of EXHIBIT E executed by an assignor Bank, an assignee
Bank, and the Agent, in accordance with Section 8.5.
"BANK OF AMERICA" means Bank of America, N.A., in its individual capacity.
"BANKS" means the lenders listed as Banks on the signature pages of this
Agreement and each Eligible Assignee that shall become a party to this Agreement
pursuant to Section 8.5(b).
"BORROWER" means TETRA Technologies, Inc., a Delaware corporation.
"BORROWER ACCOUNT" means the principal operating account of Borrower with
the Agent or any other account of Borrower with the Agent which is designated as
Borrower's "Borrower Account" in writing by the Borrower to the Agent.
"BORROWING" means any Revolving Credit Borrowing.
"BORROWING REQUEST" means a Borrowing Request in substantially the form of
EXHIBIT B executed by a Responsible Officer of the Borrower and delivered to the
Agent.
"BUSINESS DAY" means any Monday through Friday during which commercial
banks are open for business in Houston,
Texas, and Dallas,
Texas, and, if the
applicable Business Day relates to any LIBOR Tranche, on which dealings are
carried on in the London interbank market.
"CAPITAL EXPENDITURES" means, with respect to any Person and with respect
to any period of its determination, the consolidated expenditures of such Person
during such period that are required to be included in or are reflected by the
consolidated property, plant, or equipment accounts of such Person, or any
similar fixed asset or long term capitalized asset accounts of such Person, on
the consolidated balance sheet of such Person in conformity with GAAP, PROVIDED,
that Capital Expenditures shall not include expenditures deemed to occur in
connection with Permitted Acquisitions.
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"CAPITAL LEASES" means, with respect to any Person, any lease of any
property by such Person which would, in accordance with GAAP, be required to be
classified and accounted for as a capital lease on the balance sheet of such
Person.
"CHANGE OF CONTROL" means, with respect to the Borrower, the direct or
indirect acquisition after the date hereof by any Person or related Persons
constituting a group of (a) beneficial ownership of issued and outstanding
shares of Voting Securities of the Borrower, the result of which acquisition is
that such Person or such group possesses 30% or more of the combined voting
power of all then-issued and outstanding Voting Securities of the Borrower, or
(b) the power to elect, appoint, or cause the election or appointment of at
least a majority of the members of the board of directors of the Borrower;
provided, however, that the Borrower effects a reorganization pursuant to
Section 251(g) of the Delaware General Corporate Law, whereby, among other
things, its Voting Securities become owned by a holding company, such event
shall not constitute a "Change of Control."
"CLOSING DATE" means December 17, 2001.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"COLLATERAL" means any property of the Credit Parties subject to a Lien in
favor of the Agent securing the Credit Obligations.
"COMMONLY CONTROLLED ENTITY" means, with respect to any Person, any other
Person which is under common control with such Person within the meaning of
Section 414 of the Code.
"COMPLIANCE CERTIFICATE" means a compliance certificate executed by a
Responsible Officer of the Borrower in substantially the form of EXHIBIT A.
"CONTINUATION/CONVERSION REQUEST" means a Continuation/Conversion Request
in substantially the form of EXHIBIT C executed by a Responsible Officer of the
Borrower and delivered to the Agent.
"CREDIT DOCUMENTS" means this Agreement, the Notes, the Agent Fee Letter,
the Letter of Credit Documents, the Guaranty, the Security Documents, Derivative
with a Bank or an Affiliate of a Bank, the Interest Hedge Agreements, and each
other agreement, instrument, or document executed at any time in connection with
this Agreement.
"CREDIT OBLIGATIONS" means all principal, interest, fees, reimbursements,
indemnifications, and other amounts now or hereafter owed by the Borrower to the
Agent and the Banks (or with respect to Derivatives, including Interest Hedge
Agreements, any Affiliates of the Banks) under this Agreement, the Notes, the
Letter of Credit Documents, and the other Credit Documents and any increases,
extensions, and rearrangements of those obligations under any amendments,
supplements, and other modifications of the documents and agreements creating
those obligations.
"CREDIT PARTIES" means the Borrower and the Guarantors.
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"DEBT" means, with respect to any Person, without duplication, (a) the
Credit Obligations, (b) indebtedness of such Person for borrowed money, (c)
obligations of such Person evidenced by bonds, debentures, notes, or other
similar instruments, (d) obligations of such Person to pay the deferred purchase
price of property or services (other than trade debt and normal operating
liabilities incurred in the ordinary course of business), (e) obligations of
such Person as lessee under Capital Leases, (f) obligations of such Person under
or relating to letters of credit, guaranties, purchase agreements, or other
creditor assurances assuring a creditor against loss in respect of indebtedness
or obligations of others of the kinds referred to in clauses (b) through (e) of
this definition, and (g) nonrecourse indebtedness or obligations of others of
the kinds referred to in clauses (b) through (f) of this definition secured by
any Lien on or in respect of any property of such Person. For the purposes of
determining the amount of any Debt, the amount of any Debt described in clause
(f) of the definition of Debt shall be valued at the maximum amount of the
contingent liability thereunder and the amount of any Debt described in clause
(g) that is not covered by clause (f) shall be valued at the lesser of the
amount of the Debt secured or the book value of the property securing such Debt.
"DEBT SERVICE" means, with respect to any Person and for any period of its
determination, (a) the interest expense of such Person for such period,
including interest expense allocable to Capital Leases, plus (b) the scheduled
and required principal payments of Debt of such Person for such period,
including scheduled principal payments allocable to Capital Leases and, with
repect to the Borrower, excluding 15% of the principal of the Revolving Credit
Loans referenced in subpart (a) of the definition of "Fixed Charges."
"DEFAULT" means (a) an Event of Default or (b) any event or condition which
with notice or lapse of time or both would, unless cured or waived, become an
Event of Default.
"DEFAULT RATE" means, with respect to any amount due hereunder, a per annum
interest rate equal to (a) if such amount is either outstanding principal
accruing interest based upon a rate established elsewhere in this Agreement or
accrued but unpaid interest thereon, the sum of (i) the interest rate
established elsewhere in this Agreement from time to time for such principal
amount, including any applicable margin, plus (ii) 2.00% per annum or (b) in all
other cases, the Adjusted Prime Rate in effect from time to time plus the
Applicable Margin for Prime Rate Tranches in effect from time to time plus 2.00%
per annum.
"DERIVATIVES" means any swap, hedge, cap, collar, or similar arrangement
providing for the exchange of risks related to foreign exchanges or price
changes in any commodity, including money.
"DIVIDEND PAYMENTS" means, with respect to any Person and for any period of
its determination, any cash dividends or distributions paid by such Person on
the common, preferred, or other capital stock or equity interest of such Person
during such period plus any amounts paid by such Person for the purchase,
redemption, retirement, or other acquisition of such Person's capital stock
during such period.
"DOLLARS OR $" means lawful money of the United States of America.
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"EBITDA" means, with respect to any Person and for any period of its
determination, the consolidated net income of such Person for such period
(exclusive of any extraordinary gains), plus the consolidated interest expense,
income taxes, and depreciation, depletion and amortization of such Person for
such period.
"ELIGIBLE ASSIGNEE" means, with respect to any assignment hereunder at the
time of such assignment, any commercial bank organized under the laws of the
United States or any of the countries parties to the Organization for Economic
Cooperation and Development or any political subdivision of any thereof which
has primary capital (or its equivalent) of not less than $250,000,000, and which
is approved by the Agent and (provided that no Default or Event of Default
exists) the Borrower, such approvals not to be unreasonably withheld.
"ENVIRONMENTAL LAW" means all federal, state, and local laws, rules,
regulations, ordinances, orders, decisions, agreements, and other requirements
now or hereafter in effect relating to the pollution, destruction, loss, or
injury of the environment, the presence of any contaminant in the environment,
the protection, cleanup, remediation, or restoration of the environment, the
creation, handling, transportation, use, or disposal of any waste product in the
environment, exposure of Persons to any contaminant, waste, or hazardous
substance in the environment, and the health and safety of employees in relation
to their environment.
"EQUITY ISSUANCE" means any issuance of equity securities (including any
preferred equity securities) by the Borrower or any of its Subsidiaries other
than (a) equity securities issued to the Borrower or one of its Subsidiaries;
(b) equity securities issued pursuant to employee benefit or dividend
reinvestment plans in the ordinary course of business; and (c) equity securities
issued as consideration in connection with any investment by the Borrower or any
of its Subsidiaries in any other Person pursuant to which such Person shall
become a Subsidiary or shall be merged into or consolidated with the Borrower or
any of its Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT" has the meaning specified in Section 6.1.
"EXISTING CREDIT AGREEMENT" has the meaning set forth in the introduction
to this Agreement.
"EXISTING LETTERS OF CREDIT" means the standby letters of credit issued by
any Issuing Bank for the account of the Borrower prior to the date of this
Agreement which are listed in the attached SCHEDULE II.
"EXPIRATION DATE" means, with respect to any Letter of Credit, the date on
which such Letter of Credit will expire or terminate in accordance with its
terms.
"FEDERAL FUNDS RATE" means, for any period, a fluctuating per annum
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day
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which is a Business Day, the average of the quotations for any such day on
such transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FEDERAL RESERVE BOARD" means the Board of Governors of the Federal Reserve
System or any of its successors.
"FIXED CHARGES" means with respect to any Person and for any period of its
determination, the sum of (a) 15% of the average daily outstanding balance of
the Revolving Credit Loans and Swingline Advances for the quarter ending on the
last day of such period PLUS (b) without duplication, the consolidated Debt
Service of such Person for such period.
"FUNDED DEBT" means, with respect to any Person, the Debt of such Person,
limited, however, to the type of Debt described in subparts (a), (b), (c), (d)
and (e) of the definition thereof and reimbursement obligations respecting
letters of credit.
"GAAP" means United States generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with the requirements of
Section 1.3.
"GUARANTOR" means (a) the Subsidiaries of the Borrower listed in SCHEDULE
II that have executed the Guaranty, and (b) any future Subsidiaries of the
Borrower that join the Guaranty pursuant to Section 5.19.
"GUARANTY" means the Guaranty dated as of May 12, 2000, made on and after
the date of this Agreement by certain Subsidiaries of the Borrower in favor of
the Agent guaranteeing the Credit Obligations.
"HAZARDOUS MATERIALS" means any substance or material identified as a
hazardous substance pursuant to the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended and as now or hereafter in
effect; any substance or material regulated as a hazardous waste pursuant to the
Resource Conservation and Recovery Act of 1976, as amended and as now or
hereafter in effect; and any substance or material designated as a hazardous
substance or hazardous waste pursuant to any other Environmental Law.
"HIGHEST LAWFUL RATE" means the maximum lawful interest rate, if any, that
at any time or from time to time may be contracted for, charged, or received
under the laws applicable to the relevant Bank which are presently in effect or,
to the extent allowed by law, under such applicable laws which may hereafter be
in effect and which allow a higher maximum nonusurious interest rate than
applicable laws now allow. The "Highest Lawful Rate" under this Agreement shall
be the indicated rate ceiling under Section 303,305(b) of the
Texas Finance
Code, any other lawful rate ceiling exceeds the rate ceiling so determined, and
then the higher rate ceiling shall apply.
"INTANGIBLE ASSETS" means, with respect to any Person and as of any date of
its determination, the goodwill, patents, trade names, trade marks, copyrights,
franchises, experimental expense, organization expense, unamortized debt
discount and expense, the excess of cost of shares acquired over book value of
related assets, and such other assets of such Person as are properly classified
as "intangible assets" in accordance with generally accepted accounting
principles, and booked on the balance sheet of such Person.
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"INTEREST HEDGE AGREEMENTS" means any swap, hedge, cap, collar, or similar
arrangement between the Borrower and any Bank (or any Affiliate of any Bank)
providing for the exchange of risks related to price changes in the interest
rate on the Advances under this Agreement.
"INTEREST PERIOD" means, with respect to each LIBOR Tranche, the period
commencing on the date of such LIBOR Tranche and ending on the last day of the
period selected by the Borrower pursuant to the provisions below. The duration
of each such Interest Period shall be one, two, three, or six months, in each
case as the Borrower may select in the applicable Borrowing Request or
Continuation/Conversion Request (unless there shall exist any Default or Event
of Default, in which case the Borrower may only select one month Interest
Periods); provided, however, that:
(a) whenever the last day of any Interest Period would otherwise occur on a
day other than a Business Day, the last day of such Interest Period shall be
extended to occur on the next succeeding Business Day; provided that if such
extension would cause the last day of such Interest Period to occur in the next
following calendar month, the last day of such Interest Period shall occur on
the next preceding Business Day;
(b) any Interest Period which begins on the last Business Day of the
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the calendar month in which it would have ended if there were a
numerically corresponding day in such calendar month; and
(c) the Borrower may not select an Interest Period for any LIBOR Tranche
which ends after any date when outstanding principal amounts of any Revolving
Credit Loan must be repaid unless, after giving effect to such selection, the
aggregate outstanding principal amount of Prime Rate Tranches under such
Revolving Credit Loan and LIBOR Tranches under such Revolving Credit Loan having
Interest Periods which end on or before such repayment date shall be equal to or
greater than the principal amount due and payable on such date (and therefore in
no event shall any Interest Period for any LIBOR Tranche extend beyond the
applicable maturity date).
"INITIAL FINANCIAL STATEMENTS" means the financial statements of the
Borrower referred to in Section 4.7(a).
"INVENTORY" means and includes, as to any Person, all of such Person's then
owned or existing and future acquired or arising (a) goods intended for sale or
lease or for display or demonstration, (b) work in process, and (c) raw
materials and other materials and supplies of every nature and description used
or which might be used in connection with the manufacture, packing, shipping,
advertising, selling, leasing or furnishing of goods or otherwise used or
consumed in the conduct of business.
"ISSUING BANK" means Bank of America, any Bank which agrees at the request
of the Borrower to act as an issuer of a Letter of Credit hereunder, or any Bank
acting as a successor issuing bank pursuant to Section 7.7.
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"LETTER OF CREDIT" means any commercial or standby letter of credit issued
by any Issuing Bank for the account of the Borrower pursuant to the terms of
this Agreement, including the Existing Letters of Credit.
"LETTER OF CREDIT APPLICATION" means an Issuing Bank's standard form letter
of credit application for either a commercial or standby letter of credit, as
the case may be, which has been executed by a Borrower and accepted by such
Issuing Bank in connection with the issuance of a Letter of Credit.
"LETTER OF CREDIT APPLICATION AMENDMENT" means an Issuing Bank's standard
form application to amend a letter of credit for either a commercial or standby
letter of credit, as the case may be, which has been executed by a Borrower and
accepted by such Issuing Bank in connection with the increase or extension of a
Letter of Credit.
"LETTER OF CREDIT COLLATERAL ACCOUNT" means a special cash collateral
account pledged to the Agent containing cash deposited pursuant to Section 6.4
to be maintained with the Agent in accordance with Section 2.3(f).
"LETTER OF CREDIT DOCUMENTS" means all Letters of Credit, Letter of Credit
Applications, Letter of Credit Application Amendments, and agreements,
documents, and instruments entered into in connection with or relating thereto.
"LETTER OF CREDIT EXPOSURE" means, as of any date of its determination, the
aggregate outstanding undrawn amount of Letters of Credit plus the aggregate of
the reimbursement obligations of the Borrower under the Letter of Credit
Applications and this Agreement.
"LETTER OF CREDIT SUBLIMIT" means $15,000,000.
"LIBOR" means, for any LIBOR Tranche for any Interest Period therefor, the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "LIBOR" shall mean, for any LIBOR Tranche for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 a.m.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates.
"LIBOR TRANCHE" shall mean any Tranche which bears interest based upon the
LIBOR, as determined in accordance with Section 2.5.
"LIEN" means any mortgage, lien, pledge, charge, deed of trust, security
interest, encumbrance, or other type of preferential arrangement to secure or
provide for the payment of any obligation of any Person, whether arising by
contract, operation of law, or otherwise (including any title retention for such
purposes under any conditional sale agreement, any Capital Lease, or any other
title transfer or retention agreement).
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"MAJORITY BANKS" means, at any time, Banks holding more than 50% of the
then aggregate Revolving Credit Commitments; provided that if the Revolving
Credit Commitments have terminated, "Majority Banks" shall mean Banks having
more than 50% of the aggregate unpaid principal amount of the Revolving Credit
Advances and Letter of Credit Exposure at such time.
"MANDATORY REVOLVING BORROWING" means a Revolving Credit Borrowing
comprised of Prime Rate Tranche made to repay a Swingline Advance.
"MATERIAL ADVERSE EFFECT" means any material and adverse change in or
effect on (a) the consolidated assets, liabilities, financial condition,
business, operations, affairs, or circumstances of the Borrower from those
reflected in the most recent financial statements furnished by the Borrower
pursuant to Section 5.2(a) or from the facts represented or warranted in this
Agreement or any other Credit Document, or (b) the ability of the Borrower to
carry out its business or to meet its obligations under the Notes, this
Agreement, or any other Credit Document to which it is a party on a timely
basis.
"MEXICAN PLEDGE AGREEMENTS" means the Pledge Agreements dated as of August
31, 1997, as amended as of the date hereof, made by each of Tetra International,
Inc., a Delaware corporation, TETRA Agricultural Products, Inc., a
Texas
corporation, now named TETRA Micronutrients, Inc. and the Borrower in favor of
the Agent, pledging the stock of the Mexican Subsidiaries of such Pledgors as
security for the Credit Obligations.
"MINIMUM BORROWING AMOUNT" means, with respect to any Borrowing,
$1,000,000.
"MINIMUM BORROWING MULTIPLE" means $500,000.
"MINIMUM TRANCHE AMOUNT" means, with respect to any Tranche, $1,000,000.
"MINIMUM TRANCHE MULTIPLE" means $500,000.
"NET CASH PROCEEDS" means:
(a) with respect to any sale, transfer, or other disposition, including any
Asset Sale, of any of the Property of any Credit Party (including the sale or
transfer of stock or other equity interest by such Credit Party and property
insurance proceeds), all cash and investments described in clauses (e) through
(h) of the definition of Permitted Investments received by any Credit Party from
such sale, transfer, or other disposition after, without duplication, (i)
payment of, or provision for, all brokerage commissions, legal fees, accounting
fees, and other reasonable out-of-pocket fees and expenses actually incurred;
(ii) payment of, or provision for, taxes payable as a result of such
disposition, (iii) payment of any outstanding obligations relating to such
Property paid in connection with any such sale, transfer, or other disposition;
and (iv) recording of the amount of reserves required in accordance with GAAP
for indemnity or similar obligations of the Credit Parties directly related to
such sale, transfer, or other disposition and
(b) with respect to the issuance of any Equity Issuance, all cash received
by the Borrower or any of its Subsidiaries from such Equity Issuance after
payment of or deduction for
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(i) all underwriter's or placement agent's discounts and fees and (ii)
reasonable legal, accounting, and other fees and expenses of the Borrower or
such Subsidiary incurred in connection with the issuance of any such securities.
"NET WORTH" means, with respect to any Person and as of any date of its
determination, the excess of (a) the assets of such Person over (b) the
liabilities of such Person, and with respect to the Borrower, as recorded on the
Borrower's balance sheet prepared in accordance with GAAP.
"NEW BANK AGREEMENT" means an agreement entered into by an Eligible
Assignee, the Borrower, and the Agent, substantially in the form of Exhibit H-1.
"NOTE" means a Revolving Credit Note or a Swingline Note.
"PBGC" means Pension Benefit Guaranty Corporation or its successor.
"PERMITTED ACQUISITION" means an Acquisition made in compliance with
Section 5.9.
"PERMITTED DEBT" means all of the following Debt:
(a) Debt outstanding under the Credit Documents;
(b) Debt in the form of borrowed money set forth in the Initial Financial
Statements and in SCHEDULE II hereto and any extensions, renewals, or
replacements of the foregoing which do not increase the outstanding principal
amount thereof at the time of such extension, renewal, or replacement;
(c) Debt in the form of (i) purchase money indebtedness, including
indebtedness incurred in connection with a Permitted Acquisition, and (ii)
Capital Leases, in each case arising in the ordinary course of business and any
extensions, renewals, or replacements of either of the foregoing; PROVIDED that
such Debt does not exceed an aggregate outstanding amount equal to $20,000,000;
(d) $50,000,000 of unsecured senior notes issued on terms acceptable to the
Agent after the date hereof;
(e) Debt assumed in connection with a Permitted Acquisition; and
(f) Debt in the form of loans and advances made by the Borrower and
Subsidiaries of the Borrower to Subsidiaries of the Borrower to the extent
permitted by Section 5.13.
If any Debt qualifies for more than one of the foregoing clauses, the Borrower
may in its discretion allocate such Debt to any clause for which such Debt
qualifies.
"PERMITTED INVESTMENTS" means all of the following investments:
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(a) advances to or investments in Subsidiaries of the Borrower that hold
substantially all of their assets in the United States and are Guarantors,
including such investments occurring in connection with Permitted Acquisitions;
(b) Permitted Acquisitions;
(c) investments in Persons (other than those described in clause (a) above)
PROVIDED that the aggregate outstanding amount of all such investments at any
time shall not exceed 15% of the Borrower's consolidated Net Worth as of the end
of the fiscal quarter most recently ended, including, investments occurring in
connection with Permitted Acquisitions;
(d) investments set forth in SCHEDULE II hereto;
(e) investments in the form of loans, guaranties, open accounts, and other
extensions of trade credit in the ordinary course of business;
(f) investments in commercial paper and bankers' acceptances maturing in
twelve months or less from the date of issuance and which, at the time of
acquisition are rated A-2 or better by Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc., and P-2 or better by Xxxxx'x Investors Service,
Inc;
(g) investments in direct obligations of the United States, or investments
in any Person which investments are guaranteed by the full faith and credit of
the United States, in either case maturing in twelve months or less from the
date of acquisition thereof;
(h) investments in time deposits or certificates of deposit maturing within
one year from the date such investment is made, issued by a bank or trust
company organized under the laws of the United States or any state thereof
having capital, surplus, and undivided profits aggregating at least $250,000,000
or a foreign branch thereof and whose long-term certificates of deposit are, at
the time of acquisition thereof, rated A-2 by Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc., or Prime-2 by Xxxxx'x Investors Service, Inc.;
and
(i) investments in money market funds holding only obligations of the types
described in clauses (e)-(g) above and repurchase agreements having a term of
less than one year that are fully collateralized by obligations of the type
described in clauses (e)-(g) above provided that such repurchase agreements are
entered into with banks or trust companies described in clause (g).
In valuing any investments for the purpose of applying the limitations set forth
in this Agreement, the amount of such investments shall be determined from the
consolidated balance sheets of the Borrower.
"PERMITTED LIENS" means all of the following Liens:
(a) Liens securing the Credit Obligations;
(b) Liens described in SCHEDULE II attached hereto provided that no such
Lien is spread to cover any additional property or indebtedness;
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(c) Liens covering Property other than accounts receivable or inventory (as
such terms are defined in the
Texas Uniform Commercial Code) of any Restricted
Entity, securing purchase money debt permitted under clause (c) of the
definition of Permitted Debt, including Liens on such Property acquired in
connection with a Permitted Acquisition, provided that no such Lien is spread to
cover any such Property not purchased or leased in connection with the
incurrence of such Debt; and
(d) Liens arising in the ordinary course of business which are not incurred
in connection with the borrowing of money or the obtaining of advances or credit
and which do not materially detract from the value of the assets of any
Restricted Entity or materially interfere with the business of any Restricted
Entity, including to the extent they meet the foregoing requirements, (i) Liens
for taxes, assessments, or other governmental charges or levies; (ii) Liens in
connection with worker's compensation, unemployment insurance, or other social
security, old age pension, or public liability obligations; (iii) Liens in the
form of legal or equitable encumbrances deemed to exist by reason of negative
pledge covenants and other covenants or undertakings of like nature; (iv) Liens
in the form of landlords', vendors', carriers', warehousemen's, repairmen's,
mechanics', workmen's, materialmen's, construction, or other like Liens arising
by operation of law in the ordinary course of business or incident to the
construction or improvement of any property; and (v) Liens in the form of zoning
restrictions, easements, licenses, and other restrictions on the use of real
property or minor irregularities in title thereto which do not materially impair
the use of such property in the operation of the business of any Restricted
Entity or the value of such property.
"PERMITTED SALE" has the meaning assigned to such term in Section 5.9(d) of
this Agreement.
"PERSON" means an individual, partnership, corporation (including a
business trust), joint stock company, trust, unincorporated association, joint
venture, or other entity, or a government or any political subdivision or agency
thereof, or any trustee, receiver, custodian, or similar official.
"PLAN" means any (a) employee medical benefit plan under Section 3(1) of
ERISA, (b) employee pension benefit plan under Section 3(2) of ERISA, (c)
multiemployer plan under Section 4001(a)(3) of ERISA, and (d) employee account
benefit plan under Section 3(2) of ERISA.
"PLEDGE AGREEMENTS" means the U.S. Pledge Agreements, the Mexican Pledge
Agreements and the U.K. Pledge Agreements, together with any Pledge Agreements
made by any Restricted Entity under Section 5.22 with respect to the stock of
certain future Subsidiaries of the Restricted Entities which are not Guarantors.
"PLEDGORS" means Tetra International Incorporated, a Delaware corporation,
TETRA Micronutrients, Inc., a Delaware corporation, and the Borrower, together
with any other Restricted Entity that executes a Pledge Agreement under Section
5.22.
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"PRIME RATE" means, for any day, the fluctuating per annum interest rate in
effect on such day equal to the rate of interest publicly announced by the Agent
as its prime rate, whether or not the Borrower has notice thereof.
"PRIME RATE TRANCHE" shall mean any Tranche which bears interest based upon
the Adjusted Prime Rate, as determined in accordance with Section 2.5.
"PROHIBITED TRANSACTION" means any transaction set forth in Section 406 of
ERISA or Section 4975 of the Code.
"PROPERTY" of any Person means any property or assets (whether real,
personal, or mixed, tangible or intangible) of such Person.
"RATABLE SHARE" OR "PRO RATA SHARE" means, at any time with respect to any
Bank, either (a) the ratio (expressed as a percentage) of such Bank's Revolving
Credit Commitments at such time to the aggregate Revolving Credit Commitments at
such time or (b) if the Revolving Credit Commitments have been terminated, the
ratio (expressed as a percentage) of such Bank's aggregate outstanding Advances
and Letter of Credit Exposure at such time to the aggregate outstanding Advances
and Letter of Credit Exposure of all the Banks at such time.
"RECEIVABLES" means and includes, as to any Person, all of such Person's
then owned or existing and future acquired or arising (a) accounts, (b) chattel
paper (including, without limitation, installment sales contracts and personal
property leases), (c) contract rights, (d) rights to the payment of money or
other forms of consideration of any kind including, but not limited to, letters
of credit and the right to receive payment thereunder, tax refunds, insurance
proceeds, notes, drafts, instruments, documents, acceptances and all other
debts, obligations and liabilities in whatever form from any Person and
guaranties, security and Liens securing payment thereof, and (e) cash and
non-cash proceeds of any of the foregoing.
"RELATED PARTIES" means, with respect to any Person, such Person's
stockholders, directors, officers, employees, agents, Affiliates, successors,
and assigns, and their respective stockholders, directors, officers, employees,
and agents, and, with respect to any Person that is an individual, such Person's
family relations and heirs.
"REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA.
"RESPONSIBLE OFFICER" means, with respect to any Person, such Person's
Chief Executive Officer, President, Chief Financial Officer, Secretary,
Treasurer, or any other officer of such Person designated by any of the
foregoing in writing from time to time.
"RESTRICTED ENTITIES" means the Borrower and each Subsidiary of the
Borrower.
"REVOLVING CREDIT ADVANCE" means an advance of principal made by a Bank
under any Revolving Credit Borrowing.
"REVOLVING CREDIT BORROWING" means any aggregate amount of principal
advanced on the same day and pursuant to the same Borrowing Request under the
revolving credit facility created in Section 2.1.
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"REVOLVING CREDIT COMMITMENT" means, for any Bank, the amount set forth
below such Bank's name on the signature pages of this Agreement as its Revolving
Credit Commitment, or if such Bank has entered into any Assignment and
Acceptance since the date of this Agreement, as set forth for such Bank as its
Revolving Credit Commitment in the Register maintained by the Agent pursuant to
Section 8.5(c), in each case, as such amount may be reduced pursuant to Section
2.1(b) or terminated pursuant to Section 6.2, or increased pursuant to Section
2.12.
"REVOLVING CREDIT COMMITMENT INCREASE AGREEMENT" means an agreement entered
into by a Bank, the Borrower, and the Agent, substantially in the form of
Exhibit H-2.
"REVOLVING CREDIT LOAN" means the aggregate outstanding principal amount of
the Revolving Credit Borrowings.
"REVOLVING CREDIT MATURITY DATE" means December 14, 2004.
"REVOLVING CREDIT NOTE" means a promissory note of the Borrower payable to
the order of a Bank, in substantially the form of EXHIBIT D-1, evidencing the
indebtedness of the Borrower to such Bank resulting from Revolving Credit
Advances made by such Bank to the Borrower.
"SECURITY AGREEMENTS" means (a) the Amended and Restated Security Agreement
dated as of December 14, 2001 made by the Borrower in favor of the Agent
granting the Agent a security interest in certain personal property of the
Borrower to secure the Credit Obligations; (b) the Amended and Restated Security
Agreement dated as of December 14, 2001 made by the Borrower's domestic
Subsidiaries in favor of the Agent granting the Agent a security interest in
certain personal property of such Subsidiaries to secure the Credit Obligations;
and (c) any other security agreement or similar instrument granting the Agent a
security interest in the personal property of a Credit Party to secure the
Credit Obligations.
"SECURITY DOCUMENTS" means the Pledge Agreements, the Security Agreements
and any other document creating, perfecting, publishing notice of, or consenting
to Liens in favor of the Agent securing the Credit Obligations.
"SUBSIDIARY" means, with respect to any Person, any other Person, a
majority of whose outstanding Voting Securities (other than directors'
qualifying shares) shall at any time be owned by such Person or one or more
Subsidiaries of such person.
"SWINGLINE ADVANCE" means an advance made available to the Borrower by the
Swingline Bank pursuant to Section 2.2(c).
"SWINGLINE BANK" means Bank of America or any other Bank as a successor
Swingline Bank.
"SWINGLINE COMMITMENT" means the obligation of the Swingline Bank to make
Swingline Advances up to a maximum principal amount of $5,000,000.00 at any time
outstanding.
"SWINGLINE NOTE" means a promissory note in substantially the form of the
attached EXHIBIT D-2 duly executed by the Borrower and payable to the order of
the Swingline Bank evidencing the obligation of the Borrower to repay the
Swingline Advances.
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"SYNDICATION AGENT" means Bank One, NA.
"TANGIBLE NET WORTH" means, with respect to any Person and as of any date
of its determination, the Net Worth of such Person less the Intangible Assets of
such Person.
"TOTAL ACQUISITION CONSIDERATION" shall have the meaning set forth in
Section 5.5(e).
"TRANCHE" means any tranche of principal outstanding under a Revolving
Credit Loan accruing interest on the same basis whether created in connection
with new advances of principal under such Revolving Credit Loan or by the
continuation or conversion of existing tranches of principal under such
Revolving Credit Loan and shall include any Prime Rate Tranche and any LIBOR
Tranche.
"TYPE" has the meaning set forth in Section 1.4.
"U.K. PLEDGE AGREEMENTS" means the Deeds of Charge Over Shares to be dated
as of October 15, 1997, as amended as of the date hereof, made by each of TETRA
International Incorporated, a Delaware corporation, and the Borrower in favor of
the Agent, pledging the stock of the Subsidiaries of such Pledgors which are not
Guarantors as security for the Credit Obligations.
"U.S. PLEDGE AGREEMENTS" means (a) the Pledge Agreement dated as of May 12,
2000, as amended as of the date hereof, made by the Borrower pledging the equity
interests of its domestic Subsidiaries as security for the Credit Obligations;
(b) the Pledge Agreement dated as of May 12, 2000, amended as of the date
hereof, made by certain domestic Subsidiaries of the Borrower, pledging the
equity interests of their respective domestic Subsidiaries as security for the
Credit Obligations; and (c) any other pledge agreement or similar instrument
granting the Agent a security interest in the Borrower's domestic Subsidiaries
to secure the Credit Obligations.
"VOTING SECURITIES" means (a) with respect to any corporation, any capital
stock of the corporation having general voting power under ordinary
circumstances to elect directors of such corporation, (b) with respect to any
partnership, any partnership interest having general voting power under ordinary
circumstances to elect the general partner or other management of the
partnership, and (c) with respect to any other Person, such ownership interests
in such Person having general voting power under ordinary circumstances to elect
the management of such Person, in each case irrespective of whether at the time
any other class of stock, partnership interests, or other ownership interest
might have special voting power or rights by reason of the happening of any
contingency.
1.2 COMPUTATION OF TIME PERIODS. In this Agreement in the computation of
periods of time from a specified date to a later specified date, the word "from"
means "from and including" and the words "to" and "until" each means "to but
excluding."
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1.3 ACCOUNTING TERMS; PREPARATION OF FINANCIALS.
(a) All accounting terms, definitions, ratios, and other tests described
herein shall be construed in accordance with GAAP applied on a consistent basis
with those applied in the preparation of the Initial Financial Statements,
except as expressly set forth in this Agreement.
(b) The Restricted Entities shall prepare their financial statements in
accordance with GAAP applied on a consistent basis with those applied in the
preparation of the Initial Financial Statements, unless otherwise approved in
writing by the Agent.
1.4 TYPES. The "Type" of a Tranche refers to the determination whether such
tranche is a LIBOR Tranche or a Prime Rate Tranche.
1.5 INTERPRETATION. Article, Section, Schedule, and Exhibit references are
to this Agreement, unless otherwise specified. All references to instruments,
documents, contracts, and agreements are references to such instruments,
documents, contracts, and agreements as the same may be amended, supplemented,
and otherwise modified from time to time, unless otherwise specified. The word
"including" shall mean "including but not limited to." Whenever the Borrower has
an obligation under this Agreement and the Credit Documents the expense of
complying with that obligation shall be an expense of the Borrower unless
otherwise specified. Whenever any determination is to be made by the Agent or
any Bank, such determination shall be in such Person's sole discretion unless
otherwise specified in this Agreement. If any provision in this Agreement and
the Credit Documents is held to be illegal, invalid, not binding, or
unenforceable, such provision shall be fully severable and this Agreement and
the Credit Documents shall be construed and enforced as if such illegal,
invalid, not binding, or unenforceable provision had never comprised a part of
this Agreement and the Credit Documents, and the remaining provisions shall
remain in full force and effect. This Agreement and the Credit Documents have
been reviewed and negotiated by sophisticated parties with access to legal
counsel and shall not be construed against the drafter. In the event of a
conflict between this Agreement and any other Credit Documents, this Agreement
shall control.
ARTICLE 2. CREDIT FACILITIES.
2.1 REVOLVING CREDIT LOAN FACILITY.
(a) REVOLVING CREDIT COMMITMENT. Each Bank severally agrees, on the terms
and conditions set forth in this Agreement and for the purposes set forth in
Section 5.4, to make Revolving Credit Advances to the Borrower at such Bank's
ratable share of Revolving Credit Borrowings requested by the Borrower from time
to time on any Business Day during the period from the date of this Agreement
until the Revolving Credit Maturity Date provided that the outstanding principal
amount of Revolving Credit Advances made by such Bank plus such Bank's ratable
share of the Letter of Credit Exposure shall not exceed such Bank's Revolving
Credit Commitment. Revolving Credit Borrowings must be made in an amount equal
to or greater than the applicable Minimum Borrowing Amount and be made in
multiples of the Minimum Borrowing Multiple. Within the limits expressed in this
Agreement, the Borrower may from time to time borrow, prepay, and reborrow
Revolving Credit Borrowings. The
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indebtedness of the Borrower to the Banks resulting from the Revolving Credit
Advances made by the Banks shall be evidenced by Revolving Credit Notes made by
the Borrower.
(b) REDUCTION OF COMMITMENTS. The Borrower shall have the right, upon at
least 10 days' irrevocable written notice to the Agent, to terminate in whole or
reduce the unused portion of the Revolving Credit Commitments (such reductions
to be apportioned ratably among each Bank's Revolving Credit Commitment);
PROVIDED that each partial reduction shall be in the aggregate amount of
$5,000,000 or in integral multiples of $1,000,000 in excess thereof. Any such
reduction of the Revolving Credit Commitments shall be irrevocable, and amounts
by which the Revolving Credit Commitments are reduced hereunder shall not be
available for Advances following such reduction. Upon reduction of the Revolving
Credit Commitments under this paragraph, the commitment fee provided for in
Section 2.4(b) shall thereafter be computed on the basis of the Revolving Credit
Commitments, as so reduced. All Advances outstanding on the date of any
reduction in the Revolving Credit Commitments are subject to prepayment in
accordance with Section 2.1(d)(ii) below.
(c) METHOD OF ADVANCING. Each Revolving Credit Borrowing shall be made
pursuant to a Borrowing Request given by the Borrower to the Agent in writing or
by telecopy not later than the time required pursuant to Section 2.5(a) to
select the interest rate basis for the Revolving Credit Borrowing. Each
Borrowing Request shall be fully completed and shall specify the information
required therein, and shall be irrevocable and binding on the Borrower.
(d) PREPAYMENT; MANDATORY COMMITMENT REDUCTION.
(i) The Borrower may prepay the outstanding principal amount of the
Revolving Credit Loan pursuant to written notice given by the Borrower to
the Agent in writing or by telecopy not later than 11:00 a.m. (Dallas,
Texas time) (A) on the third Business Day before the date of the proposed
prepayment, in the case of the prepayment of any portion of the Revolving
Credit Loan which is comprised of LIBOR Tranches, or (B) on the same
Business Day of the proposed prepayment, in the case of the prepayment of
any portion of the Revolving Credit Loan comprised solely of Prime Rate
Tranches. Each such notice shall specify the principal amount and the
Tranches of the Revolving Credit Loan which shall be prepaid, the date of
the prepayment, and shall be irrevocable and binding on the Borrower.
Prepayments of the Revolving Credit Loan shall be made in integral
multiples of the Minimum Borrowing Multiple. If the prepayment would cause
the aggregate outstanding principal amount of any LIBOR Tranche comprising
the Revolving Credit Loan or the aggregate outstanding principal amount of
all Prime Rate Tranches comprising the Revolving Credit Loan, to be less
than the Minimum Tranche Amount, the prepayment must be in an amount equal
to the entire outstanding principal amount of such LIBOR Tranche under the
Revolving Credit Loan or the entire outstanding principal amount of all
such Prime Rate Tranches under the Revolving Credit Loan, as the case may
be. Upon receipt of any notice of prepayment, the Agent shall give prompt
notice of the intended prepayment to the Banks. For each such notice given
by the Borrower, the Borrower shall prepay the Revolving Credit Loan in the
specified amount on the specified date as set forth in such notice. The
Borrower shall have no right to prepay any principal amount of the
Revolving Credit Loan except as provided in this Section 2.1(d)(i).
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(ii) If the aggregate outstanding principal amount of the Revolving
Credit Loan PLUS the Swingline Advances PLUS the Letter of Credit Exposure
ever exceeds the Revolving Credit Commitment, the Borrower shall, to the
extent of such excess, immediately (A) prepay to the Swingline Bank the
outstanding Swingline Advances; (B) if the Swingline Advances have been
repaid in full, prepay to the Agent for the ratable benefit of the Banks
the outstanding principal of the Revolving Credit Loan; and (C) if the
Revolving Credit Loan has been repaid in full, make deposits into the
Letter of Credit Collateral Account to provide cash collateral for the
Letter of Credit Exposure, such that such excess is eliminated.
(iii) The Revolving Credit Commitments shall be permanently reduced by
an amount equal to 50% of (A) the Net Cash Proceeds of any Asset Sale by
the Borrower or any Subsidiary of the Borrower in excess of $5,000,000 per
sale and (B) the Net Cash Proceeds from the issuance of Permitted Debt
under clause (d) of the definition of Permitted Debt in excess of
$15,000,000.
(iv) Each prepayment of principal of any LIBOR Tranche under the
Revolving Credit Loan pursuant to this Section 2.1(d) shall be accompanied
by payment of all accrued but unpaid interest on the principal amount
prepaid and any amounts required to be paid pursuant to Section 2.6 as a
result of such prepayment.
(e) REPAYMENT. The Borrower shall pay to the Agent for the ratable benefit
of the Banks the aggregate outstanding principal amount of the Revolving Credit
Loan on the Revolving Credit Maturity Date.
2.2 SWINGLINE FACILITY.
(a) On the terms and conditions set forth in this Agreement, the Swingline
Bank agrees to from time-to-time on any Business Day during the period from the
Closing Date until the last Business Day occurring before the Revolving Credit
Maturity Date, make Swingline Advances in Dollars under the Swingline Note to
the Borrower (except that no Swingline Advance may mature after the Revolving
Credit Maturity Date), bearing interest at the Adjusted Prime Rate plus the
Applicable Margin, and in an aggregate principal amount outstanding at any time
not to exceed the Swingline Commitment; provided that the sum of (A) the
aggregate principal amount of outstanding Revolving Credit Advances plus (B) the
aggregate principal amount of outstanding Swingline Advances plus (C) the Letter
of Credit Exposure shall never exceed the aggregate Revolving Credit Commitments
at such time; and provided further that no Swingline Advance shall be made by
the Swingline Bank if the statements set forth in Section 3.2 are not true on
the date of such Swingline Advance, it being agreed by the Borrower that the
giving of the applicable Notice of Borrowing and the acceptance by the Borrower
of the proceeds of such Swingline Advance shall constitute a representation and
warranty by the Borrower that on the date of such Swingline Advance such
statements are true. Subject to the other provisions hereof, the Borrower may
from time-to-time borrow, prepay (in whole or in part) and reborrow Swingline
Advances.
(b) Except as provided in the following clause (c) below, each request for
a Swingline Advance shall be made pursuant to telephone notice to the Swingline
Bank given no later than
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1:00 p.m. (Dallas,
Texas time) on the date of the proposed Swingline Advance,
promptly confirmed by a completed and executed Notice of Borrowing telecopied to
the Agent. Each Swingline Advance shall be in an aggregate amount not less than
$100,000.00 and in integral multiples of $50,000.00 in excess thereof. The
Swingline Bank will promptly make the Swingline Advance available to the
Borrower at the Borrower's account with the Agent.
(c) The Borrower shall repay the outstanding principal amount of and all
accrued and unpaid interest on each Swingline Advance on the Revolving Credit
Maturity Date, provided that the Borrower may at any time prepay the Swingline
Advances by an amount not less than $100,000.00 and in integral multiples of
$50,000.00, provided that the Borrower shall give notice to the Agent by 1:00
p.m. (Dallas,
Texas time) on the date of such prepayment. The Borrower and the
Banks agree that at any time the Agent may give each Bank having a Revolving
Credit Commitment a notice of Mandatory Revolving Borrowing, and upon receipt of
such notice, each Bank having a Revolving Credit Commitment shall pay to the
Agent its pro rata Share of such Swingline Advance and such payment shall be
deemed to be a Prime Rate Tranche made pursuant to such Bank's Revolving Credit
Commitment, whether made before or after termination of the Revolving Credit
Commitments, acceleration of the Revolving Credit Advances, or otherwise, and
whether or not the conditions precedent in Section 3.2 have been satisfied at
the time of such Mandatory Revolving Borrowing. The Agent shall give each Bank
notice of such Mandatory Revolving Borrowing by 11:00 a.m. (Dallas,
Texas time)
on the date the Mandatory Revolving Borrowing is to be made. Each Bank having a
Revolving Credit Commitment shall, regardless of whether the conditions in
Section 3.2 have been met at the time of such Mandatory Revolving Borrowing and
regardless of whether there exists any Default or Event of Default, make its
Revolving Credit Advance available to the Agent for the account of the Swingline
Bank in immediately available funds by 3:00 p.m. (Dallas,
Texas time) on the
date requested, and the Borrower hereby irrevocably instructs the Swingline Bank
to apply the proceeds of such Mandatory Revolving Borrowing to the payment of
the outstanding Swingline Advances.
2.3 LETTER OF CREDIT FACILITY.
(a) COMMITMENT FOR LETTERS OF CREDIT. Each Issuing Bank shall, on the terms
and conditions set forth in this Agreement and for the purposes set forth in
Section 5.4, issue, increase, and extend Letters of Credit at the request of the
Borrower from time to time on any Business Day during the period from the date
of this Agreement until the Revolving Credit Maturity Date provided that (i) the
Letter of Credit Exposure shall not exceed the Letter of Credit Sublimit and
(ii) the aggregate outstanding principal amount of Revolving Credit Advances
PLUS the aggregate outstanding principal amount of Swingline Advances PLUS the
Letter of Credit Exposure shall not exceed the aggregate amount of the Revolving
Credit Commitments. No Letter of Credit may have an Expiration Date later than
12 months after its issuance date, and each Letter of Credit which is
self-extending beyond its Expiration Date must be cancelable upon at least 30
days notice given by the Issuing Bank for such Letters of Credit to the
beneficiary of such Letter of Credit. No Letter of Credit may have an Expiration
Date later than 12 months after the Revolving Credit Maturity Date unless
approved by such Issuing Bank for such Letters of Credit, the Agent, and the
Banks. Each Letter of Credit must be in form and substance acceptable to its
Issuing Bank. The indebtedness of the Borrower to each Issuing Bank resulting
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from Letters of Credit requested by the Borrower from such Issuing Bank shall be
evidenced by the Letter of Credit Applications made by the Borrower.
(b) REQUESTING LETTERS OF CREDIT. Each Letter of Credit shall be issued,
increased, or extended pursuant to a Letter of Credit Application or Letter of
Credit Application Amendment, as applicable, given by the Borrower to an Issuing
Bank in writing or by telecopy promptly confirmed in writing, such Letter of
Credit Application or Letter of Credit Application Amendment being given not
later than 11:00 a.m. (Dallas, Texas time) on the third Business Day before the
date of the proposed issuance, increase, or extension of the Letter of Credit.
Each Letter of Credit Application or Letter of Credit Application Amendment
shall be fully completed and shall specify the information required therein
(including the proposed form of the Letter of Credit or change thereto), and
shall be irrevocable and binding on the Borrower. Each Issuing Bank shall give
prompt notice to the Agent of the Letter of Credit Application or Letter of
Credit Application Amendment to which such Issuing Bank is a party, and the
Issuing Bank shall promptly inform the Agent of the proposed Letter of Credit or
change thereto. Subject to the satisfaction of all applicable conditions
precedent, such Issuing Bank shall before close of business on the date
requested by the Borrower for the issuance, increase, or extension of such
Letter of Credit issue, increase, or extend such Letter of Credit to the
specified beneficiary. Upon the date of the issuance, increase, or extension of
a Letter of Credit, the Issuing Bank for such Letter of Credit shall be deemed
to have sold to each other Bank and each other Bank shall be deemed to have
purchased from such Issuing Bank a ratable participation in the related Letter
of Credit. Each Issuing Bank shall notify the Agent of each Letter of Credit
issued, increased, or extended by it and the date and amount of each Bank's
participation in such Letter of Credit, and the Agent shall in turn notify the
Banks.
(c) REIMBURSEMENTS FOR LETTERS OF CREDIT. With respect to any Letter of
Credit and in accordance with the related Letter of Credit Application, the
Borrower agrees to pay to the Issuing Bank for such Letter of Credit on demand
of such Issuing Bank any amount due to such Issuing Bank under such Letter of
Credit Application (provided that fees due with respect to such Letter of Credit
shall be payable as specified in Section 2.4(b)). If the Borrower does not pay
upon demand of such Issuing Bank any amount due to such Issuing Bank under any
Letter of Credit Application, in addition to any rights such Issuing Bank may
have under such Letter of Credit Application, such Issuing Bank may upon written
notice to the Agent request the satisfaction of such obligation by the making of
a Revolving Credit Borrowing. Upon such request, the Borrower shall be deemed to
have requested the making of a Revolving Credit Borrowing in the amount of such
obligation and the transfer of the proceeds thereof to such Issuing Bank. Such
Revolving Credit Borrowing shall be comprised of a Prime Rate Tranche. The Agent
shall promptly forward notice of such Borrowing to the Borrower and the Banks,
and each Bank shall, in accordance with the procedures of Section 2.10, other
than limitations on the size of Revolving Credit Borrowings, and notwithstanding
the failure of any conditions precedent, make available such Bank's ratable
share of such Revolving Credit Borrowing to the Agent, and the Agent shall
promptly deliver the proceeds thereof to such Issuing Bank for application to
such Bank's share of the obligations under such Letter of Credit. The Borrower
hereby unconditionally and irrevocably authorizes, empowers, and directs such
Issuing Bank to make such requests for Revolving Credit Borrowings on behalf of
the Borrower, and the Banks to make Revolving Credit Advances to the Agent for
the benefit of such Issuing Bank in satisfaction of such obligations. The Agent
and each Bank may record and otherwise treat the
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making of such Revolving Credit Borrowings as the making of a Revolving Credit
Borrowing to the Borrower under this Agreement as if requested by the Borrower.
Nothing herein is intended to release the Borrower's obligations under any
Letter of Credit Application, but only to provide an additional method of
payment therefor. The making of any Revolving Credit Borrowing under this
Section 2.3(c) shall not constitute a cure or waiver of any Default or Event of
Default caused by the Borrower's failure to comply with the provisions of this
Agreement or any Letter of Credit Application.
(d) PREPAYMENTS OF LETTERS OF CREDIT. In the event that any Letters of
Credit shall be outstanding according to their terms after the Revolving Credit
Maturity Date, the Borrower shall pay to the Agent on the Revolving Credit
Maturity Date an amount equal to the Letter of Credit Exposure allocable to such
Letters of Credit to be held in the Letter of Credit Collateral Account and
applied in accordance with paragraph (g) below.
(e) OBLIGATIONS UNCONDITIONAL. The obligations of the Borrower and each
Bank under this Agreement and the Letter of Credit Applications to reimburse an
Issuing Bank for draws under Letters of Credit issued by such Issuing Bank and
to make other payments due in respect of Letters of Credit shall be
unconditional and irrevocable, and shall be paid strictly in accordance with the
terms of this Agreement and the Letter of Credit Applications under all
circumstances, including: (i) any lack of validity or enforceability of any
Letter of Credit Document; (ii) any amendment, waiver, or consent to departure
from any Letter of Credit Document; (iii) the existence of any claim, set-off,
defense, or other right which the Borrower or any Bank may have at any time
against any beneficiary or transferee of any Letter of Credit (or any Persons
for whom any such beneficiary or any such transferee may be acting), such
Issuing Bank, or any other person or entity, whether in connection with the
transactions contemplated in this Agreement or any unrelated transaction; (iv)
any statement or any other document presented under such Letter of Credit
proving to be forged, fraudulent, invalid, or insufficient in any respect or any
statement therein being untrue or inaccurate in any respect; or (v) payment by
such Issuing Bank under any Letter of Credit against presentation of a draft or
certificate which does not comply with the terms of such Letter of Credit;
provided, however, that nothing contained in this paragraph (d) shall be deemed
to constitute a waiver of any remedies of the Borrower or any Bank in connection
with the Letters of Credit or the Borrower's or such Bank's rights under
paragraph (e) below.
(f) LIABILITY OF ISSUING BANK. No Issuing Bank shall be liable or
responsible for: (i) the use which may be made of any Letter of Credit or any
acts or omissions of any beneficiary or transferee in connection therewith; (ii)
the validity, sufficiency, or genuineness of documents related to Letters of
Credit, or of any endorsement thereon, even if such documents should prove to be
in any or all respects invalid, insufficient, fraudulent, or forged; (iii)
payment by such Issuing Bank against presentation of documents which do not
strictly comply with the terms of a Letter of Credit, including failure of any
documents to bear any reference or adequate reference to the relevant Letter of
Credit; or (iv) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit (INCLUDING SUCH ISSUING BANK'S OWN
NEGLIGENCE); except that such Issuing Bank shall be liable to the Borrower or
any Bank to the extent of any direct, as opposed to consequential, damages
suffered by the Borrower or such Bank which the Borrower or such Bank proves
were caused by (A) such Issuing Bank's gross negligence or willful misconduct in
determining whether documents presented under a Letter of
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Credit comply with the terms of such Letter of Credit, (B) such Issuing Bank's
willful failure to make or delay in making lawful payment under any Letter of
Credit after the presentation to it of documentation strictly complying with the
terms and conditions of such Letter of Credit, or (C) such Issuing Bank's
negligence in the handling of money.
(g) LETTER OF CREDIT COLLATERAL ACCOUNT.
(i) If the Borrower is required to deposit funds in the Letter of
Credit Collateral Account pursuant to Sections 2.1(d)(ii), 2.3(d) or 6.4,
then the Borrower and the Agent shall establish the Letter of Credit
Collateral Account and the Borrower shall execute any documents and
agreements, including the Agent's standard form assignment of deposit
accounts, that the Agent requests in connection therewith to establish the
Letter of Credit Collateral Account and grant the Agent a first priority
security interest in such account and the funds therein. The Borrower
hereby pledges to the Agent and grants the Agent a security interest in the
Letter of Credit Collateral Account, whenever established, all funds held
in the Letter of Credit Collateral Account from time to time, and all
proceeds thereof as security for the payment of the Obligations.
(ii) So long as no Event of Default exists, (A) the Agent shall apply
the funds held in the Letter of Credit Collateral Account only to the
reimbursement of any reimbursement obligations and other obligations under
Letter of Credit Documents, (B) the Agent shall release to the Borrower at
the Borrower's written request funds held in the Letter of Credit
Collateral Account in an amount up to but not exceeding the excess, if any
(immediately prior to the release of any such funds), of the total amount
of funds held in the Letter of Credit Collateral Account over the Letter of
Credit Exposure, and (C) the Agent shall, at the unanimous written
direction of the Banks in their sole discretion, at any time release to the
Borrower any funds held in the Letter of Credit Collateral Account. During
the existence of any Default or Event of Default, the Agent may apply any
funds held in the Letter of Credit Collateral Account to any Credit
Obligations in any order determined by the Agent, regardless of any Letter
of Credit Exposure which may remain outstanding.
(iii) Funds held in the Letter of Credit Collateral Account shall be
invested in money market funds of the Agent or in another investment if
mutually agreed upon by the Borrower and the Agent, but the Agent shall
have no other obligation to make any other investment of the funds therein.
The Agent shall exercise reasonable care in the custody and preservation of
any funds held in the Letter of Credit Collateral Account and shall be
deemed to have exercised such care if such funds are accorded treatment
substantially equivalent to that which the Agent accords its own property,
it being understood that the Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with
respect to any such funds.
(h) EXISTING LETTERS OF CREDIT. Upon the date of the execution of this
Agreement, the Issuing Bank for each Existing Letter of Credit shall be deemed
to have sold to each other Bank and each other Bank shall be deemed to have
purchased from such Issuing Bank a ratable participation in each Existing Letter
of Credit, which shall thereafter be treated as a Letters of Credit under this
Agreement for all purposes. Each Issuing Bank for each Existing Letter of
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Credit shall arrange with the Agent and the Banks to prorate and ratably
distribute to the Banks the fees, if any, previously paid in advance to such
Issuing Bank with respect to such Existing Letters of Credit.
2.4 FEES.
(a) COMMITMENT FEES. The Borrower shall pay to the Agent for the ratable
benefit of the Banks a commitment fee in an amount equal to the product of (i)
the Applicable Margin for commitment fees calculated for the preceding quarter
multiplied by (ii) the average daily amount by which (x) the aggregate amount of
the Revolving Credit Commitments exceeds (y) the outstanding principal amount of
the Revolving Credit Loan plus the Letter of Credit Exposure. The commitment fee
shall be due and payable quarterly in arrears on the last day of each calendar
quarter commencing December 31, 2001 and on the Revolving Credit Maturity Date.
(b) FEES FOR LETTERS OF CREDIT. The Borrower agrees to pay (i) to the Agent
for the pro rata benefit of the Banks, a fee for each Letter of Credit equal to
the Applicable Margin for Letters of Credit on the face amount of such Letter of
Credit, with a minimum fee of $500, and (ii) to the Issuing Bank, a fee for each
Letter of Credit of 0.125% per annum of the face amount of such Letter of
Credit. Each such fee shall be calculated on a per annum basis in accordance
with Section 2.10(g) and shall be based on the maximum amount available to be
drawn from time to time under such Letter of Credit from the date of issuance of
the Letter of Credit until its Expiration Date and shall be payable quarterly in
arrears on the last day of each calendar quarter.
(c) AGENT FEE LETTER. The Borrower shall pay to the parties specified
therein the fees and other amounts payable under Agent Fee Letter and the letter
dated September 27, 2001 between the Agent and the Borrower.
2.5 INTEREST.
(a) ELECTION OF INTEREST RATE BASIS. The Borrower may select the interest
rate basis for each Borrowing in accordance with the terms of this Section
2.5(a):
(i) Under the Borrowing Request provided to the Agent in connection
with the making of each Borrowing under the Revolving Credit Loan, the
Borrower shall select the amount and the Type of the Tranches, and for each
LIBOR Tranche selected, any permitted Interest Period for each such LIBOR
Tranche, which will comprise such Borrowing, provided that (A) at no time
shall there be more than eight separate LIBOR Tranches outstanding under
the Revolving Credit Loan and (B) each Tranche must be in a principal
amount equal to or greater than the Minimum Tranche Amount and be made in
multiples of the Minimum Tranche Multiple. Such interest rate elections
must be provided to the Agent in writing or by telecopy not later than
11:00 a.m. (Dallas, Texas time) (A) on the third Business Day before the
date of any proposed Borrowing comprised of a LIBOR Tranche, or (B) on the
same day of any proposed Borrowing comprised solely of a Prime Rate
Tranche. The Agent shall promptly forward copies of such interest rate
elections to the Banks. In the case of any Borrowing comprised of a LIBOR
Tranche, upon determination by the Agent, the Agent shall promptly notify
the Borrower and the Banks of the applicable interest rate for such
Tranche.
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(ii) With respect to any Tranche under the Revolving Credit Loan, the
Borrower may continue or convert any portion of any LIBOR Tranche or Prime
Rate Tranche to form new LIBOR Tranches or Prime Rate Tranches under the
Revolving Credit Loan in accordance with this paragraph. Each such
continuation or conversion shall be made pursuant to a
Continuation/Conversion Request given by the Borrower to the Agent in
writing or by telecopy not later than 11:00 a.m. (Dallas, Texas time) on
the third Business Day before the date of the proposed continuation or
conversion. Each Continuation/Conversion Request shall be fully completed
and shall specify the information required therein, and shall be
irrevocable and binding on the Borrower. The Agent shall promptly forward
notice of the continuation or conversion to the Banks. In the case of any
continuation or conversion into LIBOR Tranches, upon determination by the
Agent, the Agent shall notify the Borrower and the Banks of the applicable
interest rate. Continuations and conversions of Tranches shall be made in
integral multiples of the Minimum Tranche Multiple. No continuation or
conversion shall be permitted if such continuation or conversion would
cause the aggregate outstanding principal amount of any LIBOR Tranche which
would remain outstanding or the aggregate outstanding principal amount of
all Prime Rate Tranches which would remain outstanding to be less than the
Minimum Tranche Amount. At no time shall there be more than eight separate
LIBOR Tranches outstanding under the Revolving Credit Loan. Any conversion
of an existing LIBOR Tranche is subject to Section 2.5. Subject to the
satisfaction of all applicable conditions precedent, the Agent and the
Banks shall before close of business on the date requested by the Borrower
for the continuation or conversion, make such continuation or conversion.
(iii) At the end of the Interest Period for any LIBOR Tranche, if the
Borrower has not continued or converted such LIBOR Tranche into new
Tranches as provided for in paragraph (ii) above, the Borrower shall be
deemed to have continued such LIBOR Tranche as a Prime Rate Tranche. Each
Prime Rate Tranche shall continue as a Prime Rate Tranche unless the
Borrower converts such Prime Rate Tranche as provided for in paragraph (ii)
above.
(b) LIBOR TRANCHES. Each LIBOR Tranche shall bear interest during its
Interest Period at a per annum interest rate equal to the lesser of (i) the
Highest Lawful Rate or (ii) the sum of the LIBOR for such Tranche plus the
Applicable Margin for LIBOR Tranches in effect from time to time. The Borrower
shall pay to the Agent for the ratable benefit of the Banks all accrued but
unpaid interest on each LIBOR Tranche on the last day of the applicable Interest
Period for such LIBOR Tranche (and with respect to LIBOR Tranches with Interest
Periods of greater than three months, on the date which is three months after
the first date of the Interest Period for such LIBOR Tranche), when required
upon prepayment as specified elsewhere in this Agreement, on any date when any
portion of any LIBOR Tranche is prepaid (but only to the extent of the portion
of any such LIBOR Tranche is prepaid), and on the Revolving Credit Maturity
Date.
(c) PRIME RATE TRANCHES. Each Prime Rate Tranche shall bear interest at a
per annum interest rate equal to the lesser of (i) the Highest Lawful Rate or
(ii) the Adjusted Prime Rate in effect from time to time plus the Applicable
Margin for Prime Rate Tranches in effect from time to time. The Borrower shall
pay to the Agent for the ratable benefit of the Banks all accrued but
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unpaid interest on outstanding Prime Rate Tranches on the last day of each
calendar quarter, when required upon prepayment as specified elsewhere in this
Agreement, on any date all Prime Rate Tranches are prepaid in full, and on the
Revolving Credit Maturity Date.
(d) USURY PROTECTION.
(i) Nothing contained in this Agreement or the Notes shall require the
Borrower to pay interest at a rate exceeding the Highest Lawful Rate. Each
provision in the Credit Documents and any other agreement executed in
connection herewith is expressly limited so that in no event whatsoever
shall the amount paid thereunder, or otherwise paid, by the Borrower for
the use, forbearance or detention of the money to be loaned under this
Agreement, exceed that amount of money which would cause the effective rate
of interest thereon to exceed the Highest Lawful Rate, and all amounts
payable under the Credit Documents or any other agreement executed in
connection herewith, or otherwise payable in connection therewith, shall be
subject to reduction so that such amounts paid or payable for the use,
forbearance or detention of money to be loaned under this Agreement shall
not exceed that amount of money which would cause the effective rate of
interest thereon to exceed the Highest Lawful Rate.
(ii) If the amount of interest payable for the account of any Bank on
any interest payment date in respect of the immediately preceding interest
computation period, computed pursuant to this Section 2.5, would exceed the
maximum amount permitted by applicable law to be charged by such Bank, the
amount of interest payable for its account on such interest payment date
shall be automatically reduced to such maximum permissible amount.
(iii) If the amount of interest payable for the account of any Bank in
respect of any interest computation period is reduced pursuant to clause
(d)(ii) above and the amount of interest payable for its account in respect
of any subsequent interest computation period, computed pursuant to this
Section 2.5, would be less than the maximum amount permitted by applicable
law to be charged by such Bank, then the amount of interest payable for its
account in respect of such subsequent interest computation period shall be
automatically increased to the maximum amount permitted by applicable law
to be charged by such Bank; PROVIDED that at no time shall the aggregate
amount by which interest paid for the account of any Bank has been
increased pursuant to this clause (d)(iii) exceed the aggregate amount by
which interest paid for its account has theretofore been reduced pursuant
to clause (d)(ii) of this Section.
(iv) In the event that maturity of the loans made hereunder is
accelerated for any reason, or in the event of any required or permitted
prepayment of such loans, then such consideration that constitutes interest
payable for the account of any Bank shall never include more than the
maximum amount permitted by applicable law to be charged by such Bank and
excess interest, if any, payable for the account of such Bank pursuant to
its Note, this Agreement or otherwise shall be canceled automatically as of
the date of such acceleration or prepayment and, if theretofore paid, shall
be credited on the loans made hereunder by such Bank (or, to the extent in
excess of such loans, refunded by such Bank to the Borrower).
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(v) It is further agreed that, without limitation of the foregoing,
all calculations of the rate of interest contracted for, charged or
received for the account of any Bank under the Note held by it, under this
Agreement, under any other agreement executed in connection herewith or
otherwise in connection with the loans made hereunder by or the Revolving
Credit Commitment of such Bank for the purpose of determining whether such
rate exceeds the Highest Lawful Rate, shall be made, to the extent
permitted by applicable usury law (now or hereafter enacted), by
amortizing, prorating and spreading in equal parts during the period of the
full stated terms of the loans evidenced by such Note all interest at any
time contracted for, charged or received by such Bank in connection
therewith.
2.6 BREAKAGE COSTS. If (i) any payment of principal on or any conversion of
any LIBOR Tranche is made on any date other than the last day of the Interest
Period for such LIBOR Tranche, whether as a result of any voluntary or mandatory
prepayment, any acceleration of maturity, or any other cause, (ii) any payment
of principal on any LIBOR Tranche is not made when due, or (iii) any LIBOR
Tranche is not borrowed, converted, or prepaid in accordance with the respective
notice thereof provided by the Borrower to the Agent, whether as a result of any
failure to meet any applicable conditions precedent for borrowing, conversion,
or prepayment, the permitted cancellation of any request for borrowing,
conversion, or prepayment, the failure of the Borrower to provide the respective
notice of borrowing, conversion, or prepayment, or any other cause not specified
above which is created by the Borrower, then the Borrower shall pay to each Bank
upon demand any amounts required to compensate such Bank for any losses, costs,
or expenses, including lost profits and administrative expenses, which are
reasonably allocable to such action, including losses, costs, and expenses
related to the liquidation or redeployment of funds acquired or designated by
such Bank to fund or maintain such Bank's ratable share of such LIBOR Tranche or
related to the reacquisition or redesignation of funds by such Bank to fund or
maintain such Bank's ratable share of such LIBOR Tranche following any
liquidation or redeployment of such funds caused by such action. A certificate
as to the amount of such loss, cost, or expense detailing the calculation
thereof and certifying that such Bank customarily charges such amounts to its
other customers in similar circumstances submitted by such Bank to the Borrower
shall be conclusive and binding for all purposes, absent manifest error.
2.7 INCREASED COSTS.
(a) COST OF FUNDS. If due to either (i) any introduction of, change in, or
change in the interpretation of any law or regulation after the date of this
Agreement or (ii) compliance with any guideline or request applying to banks
generally from any central bank or other governmental authority having
appropriate jurisdiction (whether or not having the force of law) given after
the date of this Agreement, there shall be any increase in the costs of any Bank
allocable to (x) committing to make any Advance or obtaining funds for the
making, funding, or maintaining of such Bank's ratable share of any LIBOR
Tranche in the relevant interbank market or (y) committing to make Letters of
Credit or issuing, funding, or maintaining Letters of Credit (including any
increase in any applicable reserve requirement specified by the Federal Reserve
Board, including those for emergency, marginal, supplemental, or other
reserves), then the Borrower shall pay to such Bank upon demand any amounts
required to compensate such Bank for such increased costs, such amounts being
due and payable upon demand by such Bank. A certificate as to the cause and
amount of such increased cost detailing the calculation of such cost
-27-
and certifying that such Bank customarily charges such amounts to its other
customers in similar circumstances submitted by such Bank to the Borrower shall
be conclusive and binding for all purposes, absent manifest error.
Notwithstanding the foregoing, the Borrower shall not be obligated to pay any
such amounts that accrued more than 90 days prior to delivery of such
certificate to the Borrower.
(b) CAPITAL ADEQUACY. If, due to either (i) any introduction of, change in,
or change in the interpretation of any law or regulation after the date of this
Agreement or (ii) compliance with any guideline or request applying to banks
generally from any central bank or other governmental authority having
appropriate jurisdiction (whether or not having the force of law) given after
the date of this Agreement, there shall be any increase in the capital
requirements of any Bank or its parent or holding company allocable to (x)
committing to make Advances or making, funding, or maintaining Advances or (y)
committing to make Letters of Credit or issuing, funding, or maintaining Letters
of Credit, as such capital requirements are allocated by such Bank, then the
Borrower shall pay to such Bank upon demand any amounts required to compensate
such Bank or its parent or holding company for such increase in costs (including
an amount equal to any reduction in the rate of return on assets or equity of
such Bank or its parent or holding company), such amounts being due and payable
upon demand by such Bank. A certificate as to the cause and amounts detailing
the calculation of such amounts and certifying that such Bank customarily
charges such amounts to its other customers in similar circumstances submitted
by such Bank to the Borrower shall be conclusive and binding for all purposes,
absent manifest error. Notwithstanding the foregoing, the Borrower shall not be
obligated to pay any such amounts that accrued more than 90 days prior to
delivery of such certificate to the Borrower.
2.8 ILLEGALITY. Notwithstanding any other provision in this Agreement, if
it becomes unlawful for any Bank to obtain deposits or other funds for making or
funding such Bank's ratable share of any LIBOR Tranche in the relevant interbank
market, such Bank shall so notify the Borrower and the Agent and such Bank's
commitment to create LIBOR Tranches shall be suspended until such condition has
passed, all LIBOR Tranches applicable to such Bank shall be converted to Prime
Rate Tranches as of the end of each applicable Interest Period or earlier if
necessary, and all subsequent requests for LIBOR Tranches shall be deemed to be
requests for Prime Rate Tranches with respect to such Bank.
2.9 MARKET FAILURE. Notwithstanding any other provision in this Agreement,
if the Agent determines that: (a) quotations of interest rates for the relevant
deposits referred to in the definition of "LIBOR" are not being provided in the
relevant amounts, or maturities for purposes of determining the rate of interest
referred to in the definition of "LIBOR" or (b) the relevant rates of interest
referred to in the definition of "LIBOR" which are used as the basis to
determine the rate of interest for LIBOR Tranches are not likely to adequately
cover the cost to any Bank of making or maintaining such Bank's ratable share of
any LIBOR Tranche, then if the Agent so notifies the Borrower, the commitment of
the Banks to make any Borrowing comprised of LIBOR Tranches shall be suspended
until such condition has passed, all LIBOR Tranches shall be converted to Prime
Rate Tranches as of the end of each applicable Interest Period or earlier if
necessary, and all subsequent requests for LIBOR Tranches shall be deemed to be
requests for Prime Rate Tranches.
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2.10 ADVANCING AND PAYMENTS GENERALLY; COMPUTATIONS.
(a) ADVANCING PROCEDURES. Time is of the essence in this Agreement and the
Credit Documents. All advances hereunder shall be made in Dollars. Upon receipt
of any Borrowing Request by the Agent, the Agent shall promptly forward notice
of the Borrowing to the Banks. Subject to the satisfaction of the applicable
conditions precedent, each Bank shall, before 1:00 p.m. (Dallas, Texas time) on
the date of the requested Borrowing, make available from its Applicable Lending
Office to the Agent at the Agent's Applicable Lending Office, in immediately
available funds, such Bank's ratable share of such Borrowing. Subject to the
satisfaction of all applicable conditions precedent, after receipt by the Agent
of such funds, the Agent shall, by 4:00 p.m. (Dallas, Texas time) on the date
requested for such Borrowing, make such Borrowing available to the Borrower in
immediately available funds at any account of Borrower which is designated in
writing by the Borrower to the Agent.
(b) AGENT RELIANCE ON BANKS IN ADVANCING. Unless the Agent shall have
received notice from a Bank before the date of any Borrowing that such Bank
shall not make available to the Agent such Bank's ratable share of such
Borrowing, the Agent may assume that such Bank has made its ratable share of
such Borrowing available to the Agent on the date of such Borrowing in
accordance with this Agreement and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a corresponding amount.
If and to the extent that such Bank shall not have so made its ratable share of
such Borrowing available to the Agent, such Bank agrees that it shall pay
interest on such amount for each day from the date such amount is made available
to the Borrower by the Agent until the date such amount is paid to the Agent by
such Bank at the Federal Funds Rate in effect from time to time, provided that
with respect to such Bank if such amount is not paid by such Bank by the end of
the second day after the Agent makes such amount available to the Borrower, the
interest rates specified above shall be increased by a per annum amount equal to
2.00% on the third day and shall remain at such increased rate thereafter.
Interest on such amount shall be due and payable by such Bank upon demand by the
Agent. If such Bank shall pay to the Agent such amount and interest as provided
above, such amount so paid shall constitute such Bank's Advance as part of such
Borrowing for all purposes of this Agreement even though not made on the same
day as the other Advances comprising such Borrowing. In the event that such Bank
has not repaid such amount by the end of the fifth day after such amount was
made available to the Borrower, the Borrower agrees to repay to the Agent on
demand such amount, together with interest on such amount for each day from the
date such amount was made available to the Borrower until the date such amount
is repaid to the Agent at the interest rate charged to the Borrower for such
Borrowing under the terms of this Agreement. The failure of any Bank to make
available its ratable share of any Borrowing shall not relieve any other Bank of
its obligation, if any, to make available its ratable share of such Borrowing.
No Bank shall be responsible for the failure of any other Bank to honor such
other Bank's obligations hereunder, including any failure to make available any
funds as part of any Borrowing; provided, however, that nothing herein shall
prejudice any right or cause of action that the Borrower has against any Bank
failing to so honor its obligations.
(c) PAYMENT PROCEDURES. Time is of the essence in this Agreement and the
Credit Documents. All payments hereunder shall be made in Dollars. The Borrower
shall make each payment under this Agreement and under the Notes not later than
1:00 p.m. (Dallas, Texas time) on the day when due to the Agent at the Agent's
Applicable Lending Office in immediately
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available funds. All payments by the Borrower hereunder shall be made without
any offset, abatement, withholding, deduction, counterclaim, or reduction. Upon
receipt of payment from the Borrower of any principal, interest, or fees due to
the Banks, the Agent shall promptly after receipt thereof distribute to the
Banks their ratable share of such payments for the account of their respective
Applicable Lending Offices. If and to the extent that the Agent shall not have
so distributed to any Bank its ratable share of such payments, the Agent agrees
that it shall pay interest on such amount for each day after the day when such
amount is made available to the Agent by the Borrower until the date such amount
is paid to such Bank by the Agent at the Federal Funds Rate in effect from time
to time, provided that if such amount is not paid by the Agent by the end of the
third day after the Borrower makes such amount available to the Agent, the
interest rates specified above shall be increased by a per annum amount equal to
2.00% on the fourth day and shall remain at such increased rate thereafter.
Interest on such amount shall be due and payable by the Agent upon demand by
such Bank. Upon receipt of other amounts due solely to the Agent, such Issuing
Bank, or a specific Bank, the Agent shall distribute such amounts to the
appropriate party to be applied in accordance with the terms of this Agreement.
(d) AGENT RELIANCE. Unless the Agent shall have received written notice
from the Borrower prior to any date on which any payment is due to the Banks
that the Borrower shall not make such payment in full, the Agent may assume that
the Borrower has made such payment in full to the Agent on such date and the
Agent may, in reliance upon such assumption, cause to be distributed to each
Bank on such date an amount equal to the amount then due such Bank. If and to
the extent the Borrower shall not have so made such payment in full to the
Agent, each Bank shall repay to the Agent forthwith on demand such amount
distributed to such Bank, together with interest thereon from the date such
amount is distributed to such Bank until the date such Bank repays such amount
to the Agent, at an interest rate equal to, the Federal Funds Rate in effect
from time to time, provided that with respect to such Bank, if such amount is
not repaid by such Bank by the end of the second day after the date of the
Agent's demand, the interest rates specified above shall be increased by a per
annum amount equal to 2.00% on the third day after the date of the Agent's
demand and shall remain at such increased rate thereafter.
(e) SHARING OF PAYMENTS. Each Bank agrees that if it should receive any
payment (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise) in respect of any obligation of the Borrower to pay principal,
interest, fees, or any other obligation incurred under the Credit Documents in a
proportion greater than the total amount of such principal, interest, fees, or
other obligation then owed and due by the Borrower to such Bank bears to the
total amount of principal, interest, fees, or other obligation then owed and due
by the Borrower to all of the Banks immediately prior to such receipt, then such
Bank receiving such excess payment shall purchase for cash without recourse from
the other Banks an interest in the obligations of the Borrower to such Banks in
such amount as shall result in a participation by all of the Banks, in
proportion with the Banks' respective pro rata shares, in the aggregate unpaid
amount of principal, interest, fees, or any such other obligation, as the case
may be, owed by the Borrower to all of the Banks; provided that if all or any
portion of such excess payment is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, in proportion with the Banks' respective pro rata shares, but
without interest.
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(f) AUTHORITY TO CHARGE ACCOUNTS. The Agent, if and to the extent payment
owed to the Agent or any Bank is not made when due, may charge from time to time
against any account of the Borrower with the Agent any amount so due. The Agent
agrees promptly to notify the Borrower after any such charge and application
made by the Agent provided that the failure to give such notice shall not affect
the validity of such charge and application.
(g) INTEREST AND FEES. Unless expressly provided for in this Agreement, all
computations of interest and fees shall be made on the basis of a 360 day year,
in each case for the actual number of days (including the first day, but
excluding the last day) occurring in the period for which such interest or fees
are payable; provided, however, that if the use of a 360 day year would cause
the interest contracted for, charged, or received hereunder to exceed the
Highest Lawful Rate, such computations shall instead be made on the basis of a
year of 365 or 366 days, as the case may be. Each determination by the Agent of
an interest rate or fee shall be conclusive and binding for all purposes, absent
manifest error.
(h) PAYMENT DATES. Whenever any payment shall be stated to be due on a day
other than a Business Day, such payment shall be made on the next succeeding
Business Day and such extension of time shall in such case be included in the
computation of interest or fees, as the case may be. If the time for payment for
an amount payable is not specified in this Agreement or in any other Credit
Document, the payment shall be due and payable on demand by the Agent or the
applicable Bank.
2.11 TAXES.
(a) NO DEDUCTION FOR CERTAIN TAXES. Any and all payments by the Borrower
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, other than taxes imposed on the income of and
franchise taxes imposed on the Agent, any Bank, or the Applicable Lending Office
thereof by any jurisdiction in which any such entity is a citizen or resident or
any political subdivision of such jurisdiction (all such nonexcluded taxes,
levies, imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable to the Agent, any Bank,
or the Applicable Lending Office thereof, (i) the sum payable shall be increased
as may be necessary so that, after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.11), such
Person receives an amount equal to the sum it would have received had no such
deductions been made; (ii) the Borrower shall make such deductions; and (iii)
the Borrower shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.
(b) OTHER TAXES. The Borrower agrees to pay any present or future stamp or
documentary taxes or any other excise or property taxes, charges, or similar
levies which arise from any payment made or from the execution, delivery, or
registration of, or otherwise with respect to, this Agreement or the other
Credit Documents (other than those which become due as a result of any Bank
joining this Agreement as a result of any Assignment and Acceptance, which shall
be paid by the Bank which becomes a Bank hereunder as a result of such
Assignment and Acceptance).
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(c) FOREIGN BANK WITHHOLDING EXEMPTION. Each Bank and Issuing Bank that is
not incorporated under the laws of the United States of America or a state
thereof agrees that it will deliver to the Borrower and the Agent on the date of
this Agreement or upon the effectiveness of any Assignment and Acceptance and
from time to time thereafter if requested in writing by the Borrower (i)
Internal Revenue Service Form W-8ECI, W-8BEN, W-8EXP, or W-8IMY as appropriate,
or any successor form prescribed by the Internal Revenue Service, certifying
that such Bank is entitled to benefits under an income tax treaty to which the
United States is a party which exempts such Bank from withholding tax on
payments of interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or business in
the United States, (ii) Internal Revenue Service Form W-9, as appropriate, or
any successor form prescribed by the Internal Revenue Service, and (iii) any
other form or certificate required by any taxing authority (including any
certificate required by Sections 871(h) and 881(c) of the Internal Revenue
Code), certifying that such Bank is entitled to an exemption from tax on
payments pursuant to this Agreement or any of the other Credit Documents If an
event (including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any delivery required by the preceding
sentence would otherwise be required which renders all such forms inapplicable
or which would prevent any Bank from duly completing and delivering any such
letter or form with respect to it and such Bank advises the Borrower and the
Agent that it is not capable of receiving payments without any deduction or
withholding of United States federal income tax, and, in the case of a Form W-9,
establishing an exemption from United States backup withholding tax, such Bank
shall not be required to deliver such letter or forms. The Borrower shall
withhold tax at the rate and in the manner required by the laws of the United
States with respect to payments made to a Bank failing to provide the requisite
Internal Revenue Service forms in a timely manner. Each Bank which fails to
provide to the Borrower in a timely manner such forms shall reimburse the
Borrower upon demand for any penalties paid by the Borrower as a result of any
failure of the Borrower to withhold the required amounts that are caused by such
Bank's failure to provide the required forms in a timely manner.
2.12 INCREASE OF REVOLVING CREDIT COMMITMENTS. On or before December 14,
2002, if no Event of Default then exists, the Borrower shall have the right,
without the consent of the Banks, to increase the aggregate amount of the
Revolving Credit Commitments by adding to this Agreement one or more lenders
that are Eligible Assignees (who shall, upon completion of the requirements
stated in this Section 2.13 constitute Banks hereunder), or by allowing one or
more Banks to increase their Revolving Credit Commitments hereunder, provided
that (a) the sum of the current Revolving Credit Commitments plus such added
Revolving Credit Commitments plus any increases in current Revolving Credit
Commitments shall not be greater than $110,000,000, (b) no Bank's Revolving
Credit Commitment shall be increased without the consent of such Bank, (c) no
Person shall be added to this Agreement without its consent, and (d) on the
effective date of any such increase or addition, there shall either be no
Revolving Credit Loans outstanding or arrangements satisfactory to the Agent
have been made to prepay all outstanding Revolving Credit Loans, together with
accrued interest thereon and any amounts payable pursuant to Section 2.6. Any
prepayment made by the Borrower in accordance with the preceding subparagraph
(d) of this Section 2.12 may be made with the proceeds of an Advance made by all
the Banks in connection with an increase in the Revolving Credit Commitments
pursuant to this Section 2.12. There shall be no fee paid to any Bank not
increasing its commitment in connection with an increase in the Revolving Credit
Commitment under this
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Section 2.12. The Borrower shall give the Agent five Business Days' notice of
the Borrower's intention to increase any Revolving Credit Commitment or add a
new lender pursuant to this Section 2.12. Such notice shall specify each new
lender, if any, the changes in amounts of Revolving Credit Commitments that will
result, the date on which such addition or change is to occur (which shall be a
Business Day), and such other information as is reasonably requested by the
Agent. Each new lender agreeing to be added to this Agreement, and each Bank
agreeing to increase its Revolving Credit Commitment, shall execute and deliver
to the Agent a New Bank Agreement in substantially the form of Exhibit H-1 or a
Revolving Credit Commitment Increase Agreement in substantially the form of
Exhibit H-2, pursuant to which it becomes a party hereto or increases its
Revolving Credit Commitment, as the case may be. In addition, an authorized
officer of the Borrower shall execute and deliver a Revolving Credit Note in the
principal amount of the Revolving Credit Commitment of each new lender, or a
replacement Revolving Credit Note in the principal amount of the increased
Revolving Credit Commitment of each Bank agreeing to increase its Revolving
Credit Commitment, as the case may be. Each such Revolving Credit Note shall be
dated the effective date of the pertinent New Bank Agreement or Revolving Credit
Commitment Increase Agreement, as the case may be, shall be properly completed,
and shall otherwise be in substantially the form of Exhibit D-1. Upon execution
and delivery to the Agent of the Revolving Credit Note and execution by the
Agent of the relevant New Bank Agreement or Revolving Credit Commitment Increase
Agreement, as the case may be, such new lender shall constitute a "Bank"
hereunder with a Revolving Credit Commitment as specified therein, or such
Bank's Revolving Credit Commitment shall increase as specified therein, as the
case may be, and the Agent shall notify the Banks of such addition or increase.
ARTICLE 3. CONDITIONS PRECEDENT.
3.1 CONDITIONS PRECEDENT TO AMENDMENT AND RESTATEMENT. This Agreement shall
become effective and the Existing Credit Agreement shall be amended and restated
as provided in this Agreement on the date the Agent sends notice to each Bank
and the Borrower that the following conditions precedent have been met:
(a) the Borrower shall have delivered or shall have caused to be delivered
the documents and other items listed on EXHIBIT F, together with any other
documents requested by the Agent to document the agreements and intent of the
Credit Documents, each in form and with substance satisfactory to the Agent;
(b) the Borrower shall have paid all fees and expenses due to the Banks
under this Agreement, including Section 2.4 and any fees and expenses of counsel
payable under Section 8.1; and
(c) all interest, fees, expenses, and other amounts then due and payable
under the Existing Credit Agreement shall have been paid to in full.
3.2 CONDITIONS PRECEDENT TO EACH EXTENSION OF CREDIT. The obligation of
each Bank to make any extension of credit under this Agreement, including the
making of any Advances, and the issuance, increase, or extension of any Letters
of Credit, shall be subject to the further conditions precedent that on the date
of such extension of credit:
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(a) REPRESENTATIONS AND WARRANTIES. As of the date of the making of any
extension of credit hereunder, the representations and warranties contained in
each Credit Document shall be true and correct in all material respects as of
such date (and the Borrower's request for the making of any extension of credit
hereunder shall be deemed to be a restatement, representation, and additional
warranty of the representations and warranties contained in each Credit Document
as of such date); and
(b) DEFAULT. As of the date of the making of any extension of credit
hereunder, there shall exist no Default or Event of Default, and the making of
the extension of credit would not cause or be reasonably expected to cause a
Default or Event of Default.
ARTICLE 4. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and each Bank, and with
each request for any extension of credit hereunder, including the making of any
Advances, and the issuance, increase, or extension of any Letters of Credit,
again represents and warrants to the Agent and each Bank, as follows:
4.1 ORGANIZATION. As of the date of this Agreement, each Restricted Entity
(a) is duly organized, validly existing, and in good standing under the laws of
such Person's respective jurisdiction of organization and (b) is duly licensed,
qualified to do business, and in good standing in each jurisdiction in which
such Person is organized, owns property, or conducts operations to the extent
that any failure to be so licensed, qualified, or in good standing could
reasonably be expected to cause a Material Adverse Effect.
4.2 AUTHORIZATION. The execution, delivery, and performance by each Credit
Party of the Credit Documents to which such Credit Party is a party and the
consummation of the transactions contemplated thereby (a) do not contravene the
organizational documents of such Credit Party, (b) have been duly authorized by
all necessary corporate or limited liability company action of each Credit
Party, and (c) are within each Credit Party's corporate or limited liability
company powers.
4.3 ENFORCEABILITY. Each Credit Document to which any Credit Party is a
party has been duly executed and delivered by each Credit Party which is a party
to such Credit Document and constitutes the legal, valid, and binding obligation
of each such Credit Party, enforceable against each such Credit Party in
accordance with such Credit Document's terms, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar laws at the time
in effect affecting the rights of creditors generally and subject to the
availability of equitable remedies.
4.4 ABSENCE OF CONFLICTS AND APPROVALS. The execution, delivery, and
performance by each Credit Party of the Credit Documents to which such Credit
Party is a party and the consummation of the transactions contemplated thereby,
(a) do not result in any violation or breach of any provisions of, or constitute
a default under, any note, indenture, credit agreement, security agreement,
credit support agreement, or other similar agreement to which such Credit Party
is a party or any other material contract or agreement to which such Credit
Party is a party, (b) do not violate any law or regulation binding on or
affecting such Credit Party, (c) do not
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require any authorization, approval, or other action by, or any notice to or
filing with, any governmental authority, and (d) do not result in or require the
creation or imposition of any Lien prohibited by this Agreement.
4.5 INVESTMENT COMPANIES. No Restricted Entity or Affiliate thereof is an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
4.6 PUBLIC UTILITIES. No Restricted Entity or Affiliate thereof 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. No Restricted Entity or Affiliate thereof is a regulated public
utility.
4.7 FINANCIAL CONDITION.
(a) The Borrower has delivered to the Agent the annual audited consolidated
financial statements of the Borrower dated as of December 31, 2000 ("Initial
Financial Statements"), including therein the balance sheet of the Borrower as
of such date and the statements of income, stockholders' equity, and cash flows
for the Borrower for the fiscal year ending on such date. These financial
statements are accurate and complete in all material respects and present fairly
the financial condition of the Borrower as of such date in accordance with GAAP.
(b) As of the date of the Initial Financial Statements, there were no
material contingent obligations, liabilities for taxes, unusual forward or
long-term commitments, or unrealized or anticipated losses of the Borrower or
any of the Borrower's Subsidiaries, except as disclosed in the Initial Financial
Statements, and adequate reserves for such items have been made in accordance
with GAAP. Since the date of the Initial Financial Statements, no change has
occurred in the condition, financial or otherwise, of the Borrower which would
have a Material Adverse Effect. No Default exists.
4.8 CONDITION OF ASSETS. Each Restricted Entity has good and indefeasible
title to substantially all of its owned property and valid leasehold rights in
all of its leased property, as reflected in the financial statements most
recently provided to the Agent, free and clear of all Liens except Permitted
Liens. Each Restricted Entity possesses and has properly approved, recorded, and
filed, where applicable, all permits, licenses, patents, patent rights or
licenses, trademarks, trademark rights, trade names rights, and copyrights which
are useful in the conduct of its business and which the failure to possess could
reasonably be expected to cause a Material Adverse Effect. The material
properties used or to be used in the continuing operations of each Restricted
Entity are in good repair, working order, and condition, normal wear and tear
excepted. The properties of each Restricted Entity have not been adversely
affected as a result of any fire, explosion, earthquake, flood, drought,
windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of property or cancellation of contracts, permits, or concessions by a
governmental authority, riot, activities of armed forces, or acts of God or of
any public enemy in any manner which (after giving effect to any insurance
proceeds) could reasonably be expected to have a Material Adverse Effect.
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4.9 LITIGATION. There are no actions, suits, or proceedings pending or, to
the knowledge of any Restricted Entity, threatened against any Restricted Entity
at law, in equity, or in admiralty, or by or before any governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign, or
any arbitrator which could reasonably be expected to result in a judgment or
liability not fully covered by insurance which would have a Material Adverse
Effect.
4.10 SUBSIDIARIES AND AFFILIATES. As of the date of this Agreement, the
Borrower has no Subsidiaries, except as disclosed in SCHEDULE II hereto. The
Borrower has no Subsidiaries which have not been disclosed in writing to the
Agent.
4.11 LAWS AND REGULATIONS. Each Restricted Entity has been and is in
compliance with all federal, state, and local laws and regulations which are
applicable to the operations and property of such Person and which the failure
to comply could reasonably be expected to have a Material Adverse Effect.
4.12 ENVIRONMENTAL COMPLIANCE. Each Restricted Entity has been and is in
compliance with all Environmental Laws and has obtained and is in compliance
with all related permits necessary for the ownership and operation of any such
Person's properties which the failure to be in compliance with could reasonably
be expected to have a Material Adverse Effect. Each Restricted Entity has never
received notice of and has never been investigated for any violation or alleged
violation of any Environmental Law in connection with any such Person's
presently or previously owned properties which threaten action or suggest
liabilities which could reasonably be expected to have a Material Adverse
Effect. Each Restricted Entity does not and has not created, handled,
transported, used, or disposed of any Hazardous Materials on or about any such
Person's properties (nor has any such Person's properties been used for those
purposes), except in compliance with all Environmental Laws and related permits;
has never been responsible for the release of any Hazardous Materials into the
environment in connection with any such Person's operations and have not
contaminated any properties with Hazardous Materials; and does not and has not
owned any properties contaminated by any Hazardous Materials, in each case in
any manner which could reasonably be expected to have a Material Adverse Effect.
For the purposes of this Section 4.12, any losses covered by the Borrower's
reserve for environmental losses set forth on its most recent consolidated
balance sheet shall be excluded in determining whether any Material Adverse
Effect has occurred.
4.13 ERISA. Each Restricted Entity is in compliance in all material
respects with all provisions of ERISA. No Restricted Entity participates in or
during the past five years has participated in any employee pension benefit plan
covered by Title IV of ERISA or any multiemployer plan under Section 4001(a)(3)
of ERISA. With respect to the Plans of the Restricted Entities, no material
Reportable Event or Prohibited Transaction has occurred and exists.
4.14 TAXES. Each Restricted Entity has filed all United States federal,
state, and local income tax returns and all other domestic and foreign tax
returns which are required to be filed by such Person and has paid, or provided
for the payment before the same became delinquent of, all taxes due pursuant to
such returns or pursuant to any assessment received by the such Person.
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The charges, accruals, and reserves on the books of the Restricted Entities in
respect of taxes are adequate in accordance with GAAP.
4.15 TRUE AND COMPLETE DISCLOSURE. All factual information furnished by or
on behalf of any Credit Party in writing to the Agent or any Bank in connection
with the Credit Documents and the transactions contemplated thereby is true and
accurate in all material respects on the date as of which such information was
dated or certified and does not contain any untrue statement of material fact or
omit to state any material fact necessary to make the statements contained
therein not misleading. All projections, estimates, and pro forma financial
information furnished by any Credit Party were prepared on the basis of
assumptions, data, information, tests, or conditions believed to be reasonable
at the time such projections, estimates, and pro forma financial information
were furnished.
ARTICLE 5. COVENANTS.
Until the Agent and the Banks receive irrevocable payment of the Credit
Obligations and have terminated this Agreement and each other Credit Document,
the Borrower shall comply with and cause compliance with the following
covenants:
5.1 ORGANIZATION; MAINTENANCE OF PROPERTIES. The Borrower shall cause each
Restricted Entity to (a) maintain itself as an entity (i) duly organized,
validly existing, and in good standing under the laws of each such Person's
respective jurisdiction of organization and (ii) duly licensed, qualified to do
business, and in good standing in each jurisdiction in which such Person is
organized, owns property, or conducts operations and which requires such
licensing or qualification and where failure to be so licensed, qualified, or in
good standing could reasonably be expected to have a Material Adverse Effect,
(b) maintain all franchises, licenses, rights, privileges, and intangible
properties necessary in the conduct of its business, if any, (c) duly observe
and conform to all material requirements of any governmental authorities
relative to the conduct of its business or the operation of its Property, if
such failure duly to observe and conform to said requirements would have a
Material Adverse Effect or is likely to result in criminal prosecution; and (d)
will at all times keep complete and accurate records of (i) Inventory on a basis
consistent with past practices of the Borrower, itemizing and describing the
kind, type and quantity of Inventory and the Borrower's cost therefor and
current pricing information for such Inventory, and (ii) all other Collateral on
a basis consistent with past practices of the Borrower.
5.2 REPORTING. The Borrower shall furnish to the Agent all of the
following:
(a) ANNUAL FINANCIAL REPORTS. As soon as available and in any event not
later than 90 days after the end of each fiscal year of the Borrower, (i) a copy
of the annual audit report for such fiscal year for the Borrower, including
therein the consolidated balance sheets of the Borrower as of the end of such
fiscal year and the consolidated statements of income, stockholders' equity, and
cash flows for the Borrower for such fiscal year, setting forth the consolidated
financial position and results of the Borrower for such fiscal year and
certified, without any qualification or limit of the scope of the examination of
matters relevant to the financial statements, by a nationally recognized
certified public accounting firm, (ii) separately reported information regarding
operating divisions and Subsidiaries of the Borrower that are not
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Guarantors, including a statement of dividends received by the Borrower and the
Guarantors from such non-guarantor Subsidiaries of the Borrower; and (iii) a
completed Compliance Certificate duly certified by a Responsible Officer of the
Borrower;
(b) QUARTERLY FINANCIAL REPORTS. As soon as available and in any event not
later than 45 days after the end of each fiscal quarter, (i) a copy of the
internally prepared consolidated financial statements of the Borrower for such
quarter and for the fiscal year to date period ending on the last day of such
quarter, including therein the consolidated balance sheets of the Borrower as of
the end of such month and the consolidated statements of income, and cash flows
for such quarter and for such fiscal year to date period, setting forth the
consolidated financial position and results of the Borrower for such quarter and
fiscal year to date period, all in reasonable detail and duly certified by a
Responsible Officer of the Borrower as having been prepared in accordance with
generally accepted accounting principles, including those applicable to interim
financial reports which permit normal year end adjustments and do not require
complete financial notes; (ii) separately reported information regarding
operating divisions and Subsidiaries of the Borrower that are not Guarantors,
including a statement of dividends received by the Borrower and the Guarantors
from such non-guarantor Subsidiaries of the Borrower; and (iii) a completed
Compliance Certificate duly certified by a Responsible Officer of the Borrower;
(c) SEC FILINGS. As soon as available and in any event not later than
thirty days after the filing or delivery thereof, copies of all financial
statements, reports, and proxy statements which the Borrower shall have sent to
its stockholders generally and copies of all regular and periodic reports, if
any, which any Restricted Entity shall have filed with the Securities and
Exchange Commission;
(d) DEFAULTS. Promptly, but in any event within five Business Days after
the discovery thereof, a notice of any facts known to any Restricted Entity
which constitute a Default, together with a statement of a Responsible Officer
of the Borrower setting forth the details of such facts and the actions which
the Borrower has taken and proposes to take with respect thereto;
(e) LITIGATION; MATERIAL CONTINGENT LIABILITIES; MATERIAL AGREEMENT
DEFAULTS. The Borrower shall provide to the Banks:
(i) promptly after the commencement thereof, notice of all actions,
suits, and proceedings before any court or governmental department,
commission, board, bureau, agency, or instrumentality, domestic or foreign,
affecting any Restricted Entity which, if determined adversely, could
reasonably be expected to have a Material Adverse Effect;
(ii) promptly after acquiring knowledge thereof, notice of any actual
or potential material contingent liabilities, including without limitation
any actual or potential material contingent liability in an amount which
equals or exceeds $1,000,000; and
(iii) promptly after obtaining knowledge thereof, notice of any breach
by any Restricted Entity of any contract or agreement which breach could
reasonably be expected to cause a Material Adverse Effect;
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(f) MATERIAL ADVERSE EFFECTS. Prompt written notice of any condition or
event of which any Restricted Entity has knowledge, which condition or event has
resulted in or could reasonably be expected to have a Material Adverse Effect;
and
(g) OTHER INFORMATION. Such other information respecting the business
operations or property of any Restricted Entity, financial or otherwise, or the
Collateral as the Agent or the Banks may from time to time request in their
reasonable discretion, including the items described above in this Section 5.2
at different times than specified above.
5.3 INSPECTION. The Borrower shall cause each Restricted Entity to permit
the Agent and the Banks to visit and inspect any of the properties of such
Restricted Entity, to examine all of such Person's books of account, records,
reports, and other papers, to make copies and extracts therefrom, and to discuss
their respective affairs, finances, and accounts with their respective officers,
employees, and independent public accountants all at such reasonable times and
as often as may be reasonably requested provided that the Borrower is given at
least one Business Day advance notice thereof and reasonable opportunity to be
present when independent public accountants or other third parties are
contacted.
5.4 USE OF PROCEEDS. The proceeds of Advances and Letters of Credit shall
be used by the Borrower only to refinance Borrower's existing indebtedness and
for general corporate and working capital purposes, Capital Expenditures,
Permitted Acquisitions, Permitted Investments, and other lawful corporate
purposes. The Borrower shall not, directly or indirectly, use any part of such
proceeds for any purpose which violates, or is inconsistent with, Regulations T,
U, or X of the Board of Governors of the Federal Reserve System.
5.5 FINANCIAL COVENANTS. The Agent shall determine compliance with the
following financial covenants based upon the most recent financial statements
dated as of the end of a fiscal quarter delivered to the Agent pursuant to
Section 5.2(b) (except when available at the time of testing the audited
financial statements delivered pursuant to Section 5.2(a) shall be used):
(a) FUNDED DEBT TO EBITDA RATIO. The Borrower shall not permit the ratio of
(i) the consolidated Funded Debt of the Borrower as of the last day of each
fiscal quarter to (ii) the consolidated EBITDA of the Borrower for the four
quarters then ended (plus, without duplication, the consolidated EBITDA for such
period of any Person or assets acquired by the Borrower by Acquisition during
such period to the extent permitted or under Section 5.9 below), to be greater
than 2.50 to 1.00;
(b) FIXED CHARGE COVERAGE RATIO. As of the last day of each fiscal quarter
of the Borrower beginning with the fiscal quarter ending September 30, 2001, the
Borrower shall not permit the ratio of (i)(A) the consolidated EBITDA of the
Borrower for the preceding four fiscal quarters then ended LESS (B) the
consolidated cash taxes paid by the Borrower for such period LESS (C) the
Adjusted Capital Expenditures for such period LESS (D) the consolidated Dividend
Payments of the Borrower for such period to (ii) the consolidated Fixed Charges
of the Borrower for such period, to be less than 1.25 to 1.00;
(c) TANGIBLE NET WORTH MINIMUM. The Borrower shall not permit its
consolidated Tangible Net Worth to be less than $125,578,000 plus an amount
equal to the sum of (a) 50% of
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the cumulative annual consolidated net earnings of the Borrower as of the end of
each fiscal quarter ending December 31, 2001 during which the Borrower has
positive net earnings (and therefore without reduction for any annual net
losses), plus (b) 100% of the net proceeds of any sale or issuance of any equity
securities of the Borrower (excluding any equity securities issued or imputed
with respect to any employee stock option plan, and including any equity
securities issued or transferred by the Borrower in connection with any
Acquisition) since September 30, 2001, to the extent such sale or issuance
increases the consolidated Tangible Net Worth of the Borrower;
(d) MINIMUM ASSET COVERAGE RATIO. The Borrower shall not permit the ratio
of (i) (A) 85% of its Receivables PLUS (B) 50% of its Inventory PLUS (C) 50% of
its net property, plants, and equipment to (ii) total Funded Debt to be less
than 1.25 to 1.00; and
(e) CAPITAL AND ACQUISITION EXPENDITURES. The Borrower shall not permit the
sum of (i) the aggregate consideration paid or incurred by all of the Restricted
Entities in connection with all Permitted Acquisitions during any continuous
four fiscal quarter period (including cash, indebtedness, assumed indebtedness,
and transaction related contractual payments such as amounts payable under
noncompete, consulting, and similar agreements, but excluding stock and
preferred stock of the Borrower) (the "Total Acquisition Consideration") plus
(ii) the aggregate amount of Capital Expenditures made by all of the Restricted
Entities during such period to exceed $80,000,000.
5.6 DEBT. The Borrower shall not permit any Restricted Entity to:
(a) create, assume, incur, suffer to exist, or in any manner become liable,
directly, indirectly, or contingently in respect of, any Debt other than
Permitted Debt; or
(b) make any unscheduled payment of principal, interest, or other amounts
owing with respect to any Debt of such Restricted Entity (other than the Credit
Obligations), or otherwise make any payment of any such amounts prior to the
date that such amounts become due and payable under the terms of the documents
creating such Debt without the prior written consent of the Agent.
5.7 LIENS. The Borrower shall not permit any Restricted Entity to (a)
create, assume, incur, or suffer to exist any Lien on any of its Property
whether now owned or hereafter acquired, or assign any right to receive its
income, except for Permitted Liens; or (b) enter into any agreement with any
Person (other than the Agent and the Banks pursuant to this Agreement)
restricting the capacity of the Borrower or any other Restricted Entity to
create Liens in favor of the Agent and the Banks.
5.8 OTHER OBLIGATIONS.
(a) The Borrower shall not permit any Restricted Entity to create, incur,
assume, or suffer to exist any obligations in respect of unfunded vested
benefits under any pension Plan or deferred compensation agreement; and
(b) The Borrower shall not permit any Restricted Entity to create, incur,
assume, or suffer to exist any obligations in respect of Derivatives, other than
Derivatives used by any
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Restricted Entity in such Restricted Entity's respective business operations in
aggregate notional quantities not to exceed the reasonably anticipated
consumption of such Restricted Entity of the underlying commodity for the
relevant period, but no Derivatives which are speculative in nature.
5.9 CORPORATE TRANSACTIONS. The Borrower shall not and shall not permit any
other Restricted Entity to (1) merge or consolidate with or be a party to a
merger or consolidation with any other Person, (2) make any Acquisition, (3)
assign, sell, lease, dispose of, or otherwise transfer any assets outside of the
ordinary course of business, including wholesale sales of accounts receivable,
or (4) enter into any binding agreement regarding any of the foregoing, provided
however that:
(a) any Restricted Entity organized under a jurisdiction of the United
States may be merged or consolidated with the Borrower or any other Restricted
Entity organized under a jurisdiction of the United States provided that, in any
such merger or consolidation to which the Borrower is a party, the Borrower
shall be the continuing or surviving corporation;
(b) any Restricted Entity may make any Acquisition (by purchase or merger)
provided that (i) the Restricted Entity is the acquiring or surviving entity (or
the surviving entity becomes a Subsidiary of the Borrower in the transaction),
(ii) the aggregate consideration paid or incurred by the Restricted Entity (in
either case including cash, indebtedness, assumed indebtedness, and transaction
related contractual payments such as amounts payable under noncompete,
consulting, and similar agreements, but excluding stock and preferred stock of
the Borrower) in connection with any Acquisition does not exceed (A) at any time
when the most recently determined maximum ratio for Debt to EBITDA as measured
by Section 5.5(a) plus, to the extent approved by the Agent, EBITDA for the
acquired business, calculated on a pro forma basis after giving effect to the
Acquisition is less than 1.50 to 1.00, $25,000,000, and (B) at any time when the
most recently determined maximum ratio for Debt to EBITDA as measured by Section
5.5(a) plus, to the extent approved by the Agent, EBITDA for the acquired
business, calculated on a pro forma basis after giving effect to the Acquisition
is greater than or equal to 1.50 to 1.00, $15,000,000, (iii) the Acquisition
would not cause an Event of Default under Section 5.5(e); PROVIDED, that if the
Borrower provides the information specified below and obtains the approval of
the Agent and the Majority Banks, any Acquisitions made by the Restricted
Entities during the applicable period and so approved by the Agent and the
Majority Banks shall be excluded from future calculations of the Total
Acquisition Consideration, (iv) no Default or Event of Default exists and the
Acquisition would not reasonably be expected to cause a Default or Event of
Default, (v) the acquired assets are in substantially the same business as the
Borrower or any of the Restricted Entities, and (vi) the transaction is not
hostile, as reasonably determined by the Majority Banks;
(c) any Restricted Entity organized under a jurisdiction of the United
States may sell, lease, assign, transfer, or otherwise dispose of any or all of
its assets (i) to the Borrower or (ii) to any other Restricted Entity organized
under a jurisdiction of the United States; and
(d) the Borrower and the other Restricted Entities may sell (i) the capital
stock of Tetra Micronutrients, Inc. or any of its assets or the capital stock of
Damp Rid, Inc. or any of its assets and (ii) Property (A) in the ordinary course
of business, (B) in any fiscal year of the
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Borrower in an amount not to exceed 10% of Tangible Net Worth as of the end of
the prior fiscal year (excluding the sale of the capital stock of Tetra
Micronutrients, Inc. and any of its assets or the capital stock of Damp Rid,
Inc. or any of its assets), or (C) with the prior written consent of the Agent
and the Majority Banks (any sale pursuant to the foregoing (d)(B) or (C) being a
"Permitted Sale").
If the Borrower requests the approval of the Agent and the Majority Banks for
any Acquisition pursuant to the provision in Section 5.9(b)(ii) above, the
Borrower must provide the following information to the Agent for distribution to
the Banks: (A) historical financial statements regarding the Acquisition,
including at a minimum: (x) historical financial statements for the immediately
preceding three fiscal years of the acquired assets, reviewed by an independent
certified public accounting firm reasonably acceptable to the Agent, and (y)
interim historical financial statements for the most recent fiscal quarter of
the acquired assets, duly certified by a Responsible Officer of the Borrower as
being, to the best of such Responsible Officer's knowledge after due inquiry,
accurate and complete and having been prepared in accordance with generally
accepted accounting principles, including those applicable to interim financial
reports which permit normal year end adjustments and do not require complete
financial notes; and (B) consolidated historical proforma financial statements
for the Borrower for the most recently completed four fiscal quarters of the
Borrower giving effect to the Acquisition, and the schedules and methods used to
prepare such proforma financial statements; (C) consolidated proforma financial
statements for the Borrower for the next four fiscal quarters of the Borrower
giving effect to the Acquisition, and the schedules and methods used to prepare
such proforma financial statements; and (D) such other information regarding the
acquired assets as the Agent or the Majority Banks may reasonably request.
5.10 DISTRIBUTIONS. The Borrower shall not, if a Default has occurred or
shall be caused hereby, (a) declare or pay any dividends; (b) purchase, redeem,
retire, or otherwise acquire for value any of its capital stock now or hereafter
outstanding; or make any distribution of assets to its stockholders as such,
whether in cash, assets, or in obligations of it; (c) allocate or otherwise set
apart any sum for the payment of any dividend or distribution on, or for the
purchase, redemption, or retirement of, any shares of its capital stock; or (d)
make any other distribution by reduction of capital or otherwise in respect of
any shares of its capital stock.
5.11 TRANSACTIONS WITH AFFILIATES. The Borrower shall not and shall not
permit any other Restricted Entity to enter into any transaction directly or
indirectly with or for the benefit of an Affiliate except transactions with an
Affiliate for funding of debt or equity or other advances, the leasing of
property, the rendering or receipt of services, or the purchase or sale of
inventory or other assets in the ordinary course of business if the monetary or
business consideration arising from such a transaction would be substantially as
advantageous to such Restricted Entity as the monetary or business consideration
which such Restricted Entity would obtain in a comparable arm's length
transaction.
5.12 INSURANCE. The Borrower shall cause each Restricted Entity to maintain
insurance with responsible and reputable insurance companies or associations
reasonably acceptable to the Agent in such amounts and covering such risks as
are (a) usually carried by companies engaged in similar businesses and owning
similar properties in the same general areas in which such Persons operate, or
(b) reasonable under circumstances unique to the Borrower. The Borrower
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shall deliver to the Agent certificates evidencing such policies or copies of
such policies at the Agent's request following a reasonable period to obtain
such certificates taking into account the jurisdiction where the insurance is
maintained.
5.13 INVESTMENTS. The Borrower shall not and shall not permit any other
Restricted Entity to make or hold any direct or indirect investment in any
Person, including capital contributions to the Person, investments in the debt
or equity securities of the Person, and loans, guaranties, trade credit, or
other extensions of credit to the Person, except for Permitted Investments.
5.14 LINES OF BUSINESS; DISTRIBUTION. The Borrower and its Subsidiaries
shall not change the character of their business, taken as a whole, as conducted
on the date of this Agreement or engage in any type of business not reasonably
related to such business as presently and normally conducted.
5.15 COMPLIANCE WITH LAWS. The Borrower shall and shall cause each
Restricted Entity to comply with all federal, state, and local laws and
regulations which are applicable to the operations and property of such Persons
and which the failure to comply with could reasonably be expected to have a
Material Adverse Effect.
5.16 ENVIRONMENTAL COMPLIANCE. The Borrower shall and shall cause each
Restricted Entity to comply with all Environmental Laws and obtain and comply
with all related permits necessary for the ownership and operation of any such
Person's properties which the failure to comply with could reasonably be
expected to have a Material Adverse Effect. The Borrower shall and shall cause
each Restricted Entity to promptly disclose to the Banks any notice to or
investigation of such Persons for any violation or alleged violation of any
Environmental Law in connection with any such Person's presently or previously
owned properties which represent liabilities which could reasonably be expected
to have a Material Adverse Effect. The Borrower shall not and shall not permit
any Restricted Entity to create, handle, transport, use, or dispose of any
Hazardous Materials on or about any such Person's properties except in
compliance with all Environmental Laws and related permits; release any
Hazardous Materials into the environment in connection with any such Person's
operations or contaminate any properties with Hazardous Materials; or own
properties contaminated by any Hazardous Materials, in each case if such action
could reasonably be expected to have a Material Adverse Effect. For the purposes
of this Section 5.16, any losses covered by the Borrower's reserve for
environmental losses set forth on its most recent consolidated balance sheet
shall be excluded in determining whether any Material Adverse Effect has
occurred.
5.17 ERISA COMPLIANCE. The Borrower shall and shall cause each Restricted
Entity to (a) comply in all material respects with all applicable provisions of
ERISA and prevent the occurrence of any Reportable Event or Prohibited
Transaction with respect to, or the termination of, any of their respective
Plans where the failure to do so could reasonably be expected to have a Material
Adverse Effect and (b) not create or participate in any employee pension benefit
plan covered by Title IV of ERISA or any multiemployer plan under Section
4001(a)(3) of ERISA.
5.18 PAYMENT OF CERTAIN CLAIMS. The Borrower shall and shall cause each
Restricted Entity to pay and discharge, before the same shall become delinquent,
(a) all taxes, assessments,
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levies, and like charges imposed upon any such Person or upon any such Person's
income, profits, or property by authorities having competent jurisdiction prior
to the date on which penalties attach thereto except for tax payments being
contested in good faith for which adequate reserves have been made and reported
in accordance with GAAP and which could not reasonably be expected to have a
Material Adverse Effect, (b) all lawful claims which are secured by or which, if
unpaid, would by law become secured by a Lien upon any such Person's property,
and (c) all trade payables and current operating liabilities, unless the same
are less than 90 days past due or are being contested in good faith, have
adequate reserves established and reported in accordance with GAAP, and could
not reasonably be expected to have a Material Adverse Effect.
5.19 SUBSIDIARIES. Upon the formation or acquisition of any new
wholly-owned Subsidiary or the conversion of an existing wholly-owned Subsidiary
into another type of entity in each case which is organized under a jurisdiction
of the United States, the Borrower shall cause (a) such Subsidiary to promptly
execute and deliver to the Agent a Joinder Agreement in substantially the form
of EXHIBIT G with such modifications thereto as the Agent may reasonably request
for the purpose of joining such Subsidiary as a party to the Guaranty and
providing to the Agent the rights of the Agent intended to be provided
thereunder; (b) such Subsidiary to promptly execute and deliver to the Agent (i)
a Security Agreement in the form of the Security Agreement executed by the
Borrower's domestic Subsidiaries on the date of this Agreement; (ii) if such
Subsidiary has any domestic Subsidiaries, a U.S. Pledge Agreement in the form of
the U.S. Pledge Agreement executed by the Borrower's domestic Subsidiaries on
the date of this Agreement granting an Acceptable Security Interest in the
equity interests of such Subsidiary's domestic Subsidiaries; and (iii) any other
security documents reasonably required under the terms of such Security
Agreement or such U.S. Pledge Agreement; and (c) the owner of such Subsidiary's
equity interests to grant an Acceptable Security Interest in such equity
interests. In connection therewith, the Borrower shall provide corporate
documentation and opinion letters reasonably satisfactory to the Agent
reflecting the corporate status of such new Subsidiary of the Borrower and the
enforceability of such agreements.
5.20 FURTHER ASSURANCES. Each Restricted Entity shall promptly cure any
defects in the creation and issuance of the Notes and the execution and delivery
of the other Credit Documents, including this Agreement. When requested by the
Agent, each Restricted Entity shall, at its own expense, promptly execute and
deliver or cause to be executed and delivered to the Agent all such other and
further documents, agreements, and instruments (a) to comply with or accomplish
the covenants and agreements in the Credit Documents, or (b) to correct any
omissions in the Credit Documents.
5.21 MANAGEMENT. The Borrower shall give the Agent written notification of
any change in the management structure of the Borrower simultaneously with such
change in management and disclosure to shareholders.
5.22 FOREIGN SUBSIDIARIES. The Borrower shall execute and deliver or cause
the applicable Restricted Entity to execute and deliver to the Agent the Pledge
Agreements, in form and substance reasonably satisfactory to the Agent and the
Majority Banks, for the purpose of pledging a minimum of 60% (and a maximum of
65%) of the stock of the Subsidiaries of the Pledgor which are not organized
under a jurisdiction of the United States as security for the
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Credit Obligations; PROVIDED that the Borrower may elect not to provide Pledge
Agreements with respect to the stock of such Subsidiaries whose assets
constitute, in the aggregate, 5% or less of the consolidated assets of the
Borrower. If at any time the aggregate assets of such Subsidiaries of the
Restricted Entities whose stock is not pledged to the Agent exceeds 5% of the
consolidated assets of the Borrower, the Borrower shall, within 30 days of the
earlier of knowledge of such excess by the Borrower or notice from the Agent,
provide Pledge Agreements with respect to additional foreign Subsidiaries
sufficient to cure such excess to the reasonable satisfaction of the Agent. In
connection with the foregoing, the Borrower shall provide corporate
documentation and opinion letters reasonably satisfactory to the Agent
reflecting the corporate status of such new foreign Subsidiary and the
enforceability of such agreements under the law of the jurisdiction of
organization of such new foreign Subsidiary.
ARTICLE 6. DEFAULT AND REMEDIES.
6.1 EVENTS OF DEFAULT. The occurrence of any of the following events shall
constitute an "Event of Default" under this Agreement and any other Credit
Document:
(a) PAYMENT FAILURE. The Borrower or any of it Subsidiaries (i) fails to
pay when due any principal amounts due under this Agreement or any other Credit
Document or (ii) fails to pay when due any interest, fees, reimbursements,
indemnifications, or other amounts due under this Agreement or any other Credit
Document and such failure has not been cured within five Business Days;
(b) FALSE REPRESENTATION. Any representation or warranty made by the
Borrower, any Credit Party, or any officer or partner thereof in this Agreement
or in any other Credit Document is materially false or erroneous at the time it
was made or deemed made;
(c) BREACH OF COVENANT. (i) Any breach by the Borrower of any of the
covenants contained in Sections 5.3, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10, 5.11, 5.12,
5.13, or 5.14 of this Agreement, (ii) any breach by the Borrower of any of the
covenants contained in Section 5.2(b) of this Agreement and such breach is not
cured within 5 days following the earlier of knowledge of such breach by the
Borrower or the receipt of written notice thereof from the Agent or any Bank, or
(iii) any breach by the Borrower of any of the other covenants contained in this
Agreement and such breach is not cured within 30 days following the earlier of
knowledge of such breach by the Borrower or the receipt of written notice
thereof from the Agent or any Bank;
(d) GUARANTY. (i) The Guaranty shall at any time and for any reason cease
to be in full force and effect or shall be contested by any party thereto, or
any Guarantor shall deny it has any further liability or obligation thereunder,
(ii) any breach by any Guarantor of any of the covenants contained in Section 1
of the Guaranty, or (iii) or any breach by any Guarantor of any other covenants
contained in the Guaranty or any other Credit Document and such breach is not
cured within 30 days following the earlier of knowledge of such breach by such
Guarantor or the receipt of written notice thereof from the Agent or any Bank;
(e) CROSS DEFAULT. (i) Any principal, interest, fees, or other amounts due
on any Debt of any Restricted Entity is not paid when due, whether by scheduled
maturity, required prepayment, acceleration, demand, or otherwise, and such
failure is not cured within the
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applicable grace period, if any, and the aggregate amount of all Debt of the
Restricted Entities so in default exceeds $5,000,000; (ii) any other event shall
occur or condition shall exist under any agreement or instrument relating to any
Debt of any Restricted Entity the effect of which is to accelerate or to permit
the acceleration of the maturity of any such Debt, whether or not any such Debt
is actually accelerated, and the aggregate amount of all Debt of the Restricted
Entities so in default exceeds 5,000,000; or (iii) any Debt of any Restricted
Entity shall be declared to be due and payable, or required to be prepaid (other
than by a regularly scheduled prepayment) prior to the stated maturity thereof,
and the aggregate amount of all Debt of the Restricted Entities so accelerated
exceeds $5,000,000;
(f) BANKRUPTCY AND INSOLVENCY. (i) There shall have been filed against any
Restricted Entity or any such Person's properties, without such Person's
consent, any petition or other request for relief seeking an arrangement,
receivership, reorganization, liquidation, or similar relief under bankruptcy or
other laws for the relief of debtors and such request for relief (A) remains in
effect for 60 or more days, whether or not consecutive, or (B) is approved by a
final nonappealable order, or (ii) any such Person consents to or files any
petition or other request for relief of the type described in clause (i) above
seeking relief from creditors, makes any assignment for the benefit of creditors
or other arrangement with creditors, or admits in writing such Person's
inability to pay such Person's debts as they become due (Events of Default under
clause (i) and (ii) collectively being referred to as "Bankruptcy Events of
Default");
(g) ADVERSE JUDGMENT. A judgment which has a Material Adverse Effect,
including without limitation any judgment in excess of $5,000,000 is rendered
against the Borrower or any other Restricted Entity and such judgment is not
discharged or stayed pending appeal within 45 days following its entry;
(h) CHANGE OF CONTROL. There shall occur any Change of Control; or
(i) SECURITY DOCUMENTS. Any Security Document shall at any time and for any
reason cease to create the Lien on the property purported to be subject to such
agreement in accordance with the terms of such agreement, or shall cease to be
in full force and effect, or shall be contested by any party thereto.
6.2 TERMINATION OF COMMITMENTS. Upon the occurrence of any Bankruptcy Event
of Default, all of the commitments of the Agent and the Banks hereunder shall
terminate. During the existence of any Event of Default other than a Bankruptcy
Event of Default, the Agent shall at the request of the Majority Banks declare
by written notice to the Borrower all of the commitments of the Agent and the
Banks hereunder terminated, whereupon the same shall immediately terminate.
6.3 ACCELERATION OF CREDIT OBLIGATIONS. Upon the occurrence of any
Bankruptcy Event of Default, the aggregate outstanding principal amount of all
loans made hereunder, all accrued interest thereon, and all other Credit
Obligations shall immediately and automatically become due and payable. During
the existence of any Event of Default other than a Bankruptcy Event of Default,
the Agent shall at the request of the Majority Banks declare by written notice
to the Borrower the aggregate outstanding principal amount of all loans made
hereunder, all accrued interest thereon, and all other Credit Obligations to be
immediately due and payable,
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whereupon the same shall become immediately due and payable. In connection with
the foregoing, except for the notice provided for above, the Borrower waives
notice of intent to demand, demand, presentment for payment, notice of
nonpayment, protest, notice of protest, grace, notice of dishonor, notice of
intent to accelerate, notice of acceleration, and all other notices.
6.4 CASH COLLATERALIZATION OF LETTERS OF CREDIT. Upon the occurrence of any
Bankruptcy Event of Default, the Borrower shall pay to the Agent an amount equal
to the Letter of Credit Exposure allocable to the Letters of Credit requested by
the Borrower to be held in the Letter of Credit Collateral Account for
disposition in accordance with Section 2.3(g). During the existence of any Event
of Default other than a Bankruptcy Event of Default, the Agent shall at the
request of the Majority Banks require by written notice to the Borrower that the
Borrower pay to the Agent an amount equal to the Letter of Credit Exposure
allocable to the Letters of Credit requested by the Borrower to be held in the
Letter of Credit Collateral Account for disposition in accordance with Section
2.3(f), whereupon the Borrower shall immediately pay to the Agent such amount.
6.5 DEFAULT INTEREST. If any Event of Default exists, the Agent shall at
the request of the Majority Banks declare by written notice to the Borrower that
the Credit Obligations specified in such notice shall bear interest beginning on
the date specified in such notice until paid in full at the applicable Default
Rate for such Credit Obligations, and the Borrower shall pay such interest to
the Agent for the benefit of the Agent and the Banks, as applicable, upon
demand.
6.6 RIGHT OF SETOFF. During the existence of an Event of Default, the Agent
and each Bank is hereby authorized at any time, to the fullest extent permitted
by law, to set off and apply any indebtedness owed by the Agent or such Bank to
the Borrower against any and all of the obligations of the Borrower under this
Agreement and the Credit Documents, irrespective of whether or not the Agent or
such Bank shall have made any demand under this Agreement or the Credit
Documents and although such obligations may be contingent and unmatured. The
Agent and each Bank, as the case may be, agrees promptly to notify the Borrower
after any such setoff and application made by such party provided that the
failure to give such notice shall not affect the validity of such setoff and
application.
6.7 ACTIONS UNDER CREDIT DOCUMENTS. Following an Event of Default, the
Agent shall at the request of the Majority Banks take any and all actions
permitted under the other Credit Documents, including the Guaranty and the
Pledge Agreements.
6.8 REMEDIES CUMULATIVE. No right, power, or remedy conferred to the Agent
or the Banks in this Agreement and the Credit Documents, or now or hereafter
existing at law, in equity, by statute, or otherwise, shall be exclusive, and
each such right, power, or remedy shall to the full extent permitted by law be
cumulative and in addition to every other such right, power, or remedy. No
course of dealing and no delay in exercising any right, power, or remedy
conferred to the Agent or the Banks in this Agreement and the Credit Documents,
or now or hereafter existing at law, in equity, by statute, or otherwise, shall
operate as a waiver of or otherwise prejudice any such right, power, or remedy.
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6.9 APPLICATION OF PAYMENTS. Prior to any payment default upon any maturity
date or any acceleration of the Credit Obligations, all payments made hereunder
shall be applied to the Credit Obligations as directed by the Borrower, subject
to the rules regarding the application of payments to certain Credit Obligations
provided for hereunder and in the Credit Documents. Following any payment
default upon any maturity date or any acceleration of the Credit Obligations,
all payments and collections shall be applied to the Credit Obligations in the
following order:
First, to the payment of the costs, expenses, reimbursements (other
than reimbursement obligations with respect to draws under Letters of
Credit), and indemnifications of the Agent that are due and payable
under the Credit Documents;
Then, ratably to the payment of the costs, expenses, reimbursements
(other than reimbursement obligations with respect to draws under
Letters of Credit), and indemnifications of the Banks that are due and
payable under the Credit Documents;
Then, ratably to the payment of all accrued but unpaid interest and
fees due and payable under the Credit Documents and obligations under
Interest Hedge Agreements;
Then, ratably to the payment of all outstanding principal and
reimbursement obligations for draws under Letters of Credit due and
payable under the Credit Documents;
Then, ratably to the payment of any other amounts due and owing with
respect to the Credit Obligations; and
Finally, any surplus held by the Agent and remaining after payment in
full of all the Credit Obligations and reserve for Credit Obligations
not yet due and payable shall be promptly paid over to the Borrower or
to whomever may be lawfully entitled to receive such surplus. All
applications shall be distributed in accordance with Section 2.10(a).
ARTICLE 7. THE AGENT AND ISSUING BANK
7.1 AUTHORIZATION AND ACTION. Each Bank hereby appoints and authorizes the
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement as are delegated to the Agent by the terms hereof and of
the other Credit Documents, together with such powers as are reasonably
incidental thereto. Statements under the Credit Documents that the Agent may
take certain actions, without further qualification, means that the Agent may
take such actions with or without the consent of the Banks or the Majority
Banks, but where the Credit Documents expressly require the determination of the
Banks or the Majority Banks, the Agent shall not take any such action without
the prior written consent thereof. As to any matters not expressly provided for
by this Agreement or any other Credit Document (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be required to
exercise any discretion or take any action, but shall be required to act or to
refrain from acting (and shall
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be fully protected in so acting or refraining from acting) upon the written
instructions of the Majority Banks, and such instructions shall be binding upon
all Banks and all holders of Notes; provided, however, that the Agent shall not
be required to take any action which exposes the Agent to personal liability or
which is contrary to this Agreement, any other Credit Document, or applicable
law.
7.2 RELIANCE, ETC. Neither the Agent, any Issuing Bank, nor any of their
respective Related Parties (for the purposes of this Section 7.2, collectively,
the "Indemnified Parties") shall be liable for any action taken or omitted to be
taken by any Indemnified Party under or in connection with this Agreement or the
other Credit Documents, INCLUDING ANY INDEMNIFIED PARTY'S OWN NEGLIGENCE, except
for any Indemnified Party's gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, the Agent and any Issuing Bank:
(a) may treat the payee of any Note as the holder thereof until the Agent
receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to the Agent; (b) may consult with legal counsel
(including counsel for the Borrower), independent public accountants, and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants, or experts; (c) makes no warranty or representation to any Bank and
shall not be responsible to any Bank for any statements, warranties, or
representations made in or in connection with this Agreement or the other Credit
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants, or conditions of this
Agreement or any other Credit Document on the part of the Credit Parties or to
inspect the property (including the books and records) of the Credit Parties;
(e) shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, genuineness, sufficiency, or value of this Agreement
or any other Credit Document; and (f) shall incur no liability under or in
respect of this Agreement or any other Credit Document by acting upon any
notice, consent, certificate, or other instrument or writing (which may be by
telecopier or telex) reasonably believed by it to be genuine and signed or sent
by the proper party or parties.
7.3 AFFILIATES. With respect to its Revolving Credit Commitments, the
Advances made by it, its interests in the Letters of Credit, and the Notes
issued to it, the Agent and any Issuing Bank shall have the same rights and
powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent. The term "Bank" or "Banks" shall, unless otherwise
expressly indicated, include the Agent and any Issuing Bank in their individual
capacity. The Agent, any Issuing Bank, and their respective Affiliates may
accept deposits from, lend money to, act as trustee under indentures of, and
generally engage in any kind of business with, any Credit Party, and any Person
who may do business with or own securities of any Credit Party, all as if the
Agent were not an agent hereunder and such Issuing Bank were not the issuer of
Letters of Credit hereunder and without any duty to account therefor to the
Banks.
7.4 BANK CREDIT DECISION. Each Bank acknowledges that it has, independently
and without reliance upon the Agent or any other Bank and based on the Initial
Financial Statements and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it shall, independently and without
reliance upon the Agent 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.
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7.5 EXPENSES. To the extent not paid by the Borrower, each Bank severally
agrees to pay to the Agent and any Issuing Bank on demand such Bank's ratable
share of the following: (a) all reasonable out-of-pocket costs and expenses of
the Agent and such Issuing Bank in connection with the preparation, execution,
delivery, administration, modification, and amendment of this Agreement and the
other Credit Documents, including the reasonable fees and expenses of outside
counsel for the Agent and such Issuing Bank with respect to advising the Agent
and such Issuing Bank as to their respective rights and responsibilities under
this Agreement and the Credit Documents, and (b) all out-of-pocket costs and
expenses of the Agent and such Issuing Bank in connection with the preservation
or enforcement of the rights of the Agent, such Issuing Bank, and the Banks
under this Agreement and the other Credit Documents, whether through
negotiations, legal proceedings, or otherwise, including fees and expenses of
counsel for the Agent and such Issuing Bank. The provisions of this paragraph
shall survive the repayment and termination of the credit provided for under
this Agreement and any purported termination of this Agreement which does not
expressly refer to this paragraph.
7.6 INDEMNIFICATION. To the extent not reimbursed by the Borrower, each
Bank severally agrees to protect, defend, indemnify, and hold harmless the
Agent, each Issuing Bank, and each of their respective Related Parties (for the
purposes of this Section 7.6, collectively, the "Indemnified Parties"), from and
against all demands, claims, actions, suits, damages, judgments, fines,
penalties, liabilities, settlements, and out-of-pocket costs and expenses,
including reasonable costs of attorneys and related costs of experts such as
accountants (collectively, the "Indemnified Liabilities"), actually incurred by
any Indemnified Party which are related to any litigation or proceeding relating
to this Agreement, the Credit Documents, or the transactions contemplated
thereunder, INCLUDING ANY INDEMNIFIED LIABILITIES CAUSED BY ANY INDEMNIFIED
PARTY'S OWN NEGLIGENCE, but not Indemnified Liabilities which are a result of
any Indemnified Party's gross negligence or willful misconduct. The provisions
of this paragraph shall survive the repayment and termination of the credit
provided for under this Agreement and any purported termination of this
Agreement which does not expressly refer to this paragraph.
7.7 SUCCESSOR AGENT AND ISSUING BANK. The Agent or any Issuing Bank may
resign at any time by giving written notice thereof to the Banks and the
Borrower. Upon receipt of notice of any such resignation, the Majority Banks
shall have the right to appoint a successor Agent or Issuing Bank with the
consent of the Borrower, which consent shall not be unreasonably withheld. If no
successor Agent or Issuing Bank shall have been so appointed by the Majority
Banks with the consent of the Borrower, and shall have accepted such
appointment, within 30 days after the retiring Agent's or Issuing Bank's giving
of notice of, then the retiring Agent or Issuing Bank may, on behalf of the
Banks and the Borrower, appoint a successor Agent or Issuing Bank, which shall
be, in the case of a successor agent, a commercial bank organized under the laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $500,000,000 and, in the case of an Issuing
Bank, a Bank. Upon the acceptance of any appointment as Agent or Issuing Bank by
a successor Agent or Issuing Bank, such successor Agent or Issuing Bank shall
thereupon succeed to and become vested with all the rights, powers, privileges,
and duties of the retiring Agent or Issuing Bank, and the retiring Agent or
Issuing Bank shall be discharged from any duties and obligations under this
Agreement and the other Credit Documents after such acceptance, except that the
retiring Issuing Bank shall remain the Issuing Bank with respect to any Letters
of Credit outstanding on the
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effective date of its resignation and the provisions affecting the Issuing Bank
with respect to such Letters of Credit shall inure to the benefit of the
retiring Issuing Bank until the termination of all such Letters of Credit. After
any Agent's or Issuing Bank's resignation hereunder as Agent or Issuing Bank,
the provisions of this Article 7 shall inure to such Person's benefit as to any
actions taken or omitted to be taken by such Person while such Person was Agent
or Issuing Bank under this Agreement and the other Credit Documents.
7.8 OTHER AGENTS; LEAD MANAGERS. None of the Banks identified on facing
page or signature pages of this Agreement as a Syndication Agent shall have any
right, power, obligation, liability, responsibility or duty under this Agreement
other than those applicable to all Banks as such. Without limiting the
foregoing, none of the Banks so identified shall have or be deemed to have any
fiduciary relationship with any Bank. Each Bank acknowledges that it has not
relied, and will not rely, on any Banks so identified in deciding to enter into
this Agreement or in taking or not taking action hereunder.
ARTICLE 8. MISCELLANEOUS.
8.1 EXPENSES. The Borrower shall pay on demand of the applicable party
specified herein (a) all reasonable out-of-pocket costs and expenses of the
Agent and each Issuing Bank in connection with the preparation, execution,
delivery, administration, modification, and amendment of this Agreement and the
other Credit Documents, including the reasonable fees and expenses of outside
counsel for the Agent and such Issuing Bank, but not for each Bank, and (b) all
out-of-pocket costs and expenses of the Agent, such Issuing Bank, and each Bank
in connection with the preservation or enforcement of their respective rights
under this Agreement and the other Credit Documents following any Event of
Default, whether through negotiations, legal proceedings, or otherwise,
including fees and expenses of counsel for the Agent, such Issuing Bank, and
each Bank. The provisions of this paragraph shall survive the repayment and
termination of the credit provided for under this Agreement and any purported
termination of this Agreement which does not expressly refer to this paragraph.
8.2 INDEMNIFICATION.
(a) The Borrower agrees to protect, defend, indemnify, and hold harmless
the Agent, each Issuing Bank, each Bank, and each of their respective Related
Parties (for the purposes of this Section 8.2, collectively, the "Indemnified
Parties"), from and against all demands, claims, actions, suits, damages,
judgments, fines, penalties, liabilities, settlements, and out-of-pocket costs
and expenses, including reasonable costs of attorneys and related costs of
experts such as accountants (collectively, the "Indemnified Liabilities"),
actually incurred by any Indemnified Party which are related to any litigation
or proceeding relating to this Agreement, the Credit Documents, or the
transactions contemplated thereunder, INCLUDING ANY INDEMNIFIED LIABILITIES
CAUSED BY ANY INDEMNIFIED PARTY'S OWN NEGLIGENCE, but not Indemnified
Liabilities which are a result of any Indemnified Party's gross negligence or
willful misconduct. The provisions of this paragraph shall survive the repayment
and termination of the credit provided for under this Agreement and any
purported termination of this Agreement which does not expressly refer to this
paragraph.
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(b) Within a reasonable period of time after any Indemnified Party receives
actual notice of the assertion of any claim or the commencement of any action,
or any threatened claim or action, which is covered by this Section 8.2, such
Indemnified Party shall, if indemnification with respect thereof is intended to
be sought from the Borrower under this Section 8.2, notify the Borrower of such
claim or action; provided that the failure to so notify the Borrower shall not
relieve the Borrower from any liability which the Borrower may have to such
Indemnified Party hereunder. If any such claim or action shall be brought or
threatened against an Indemnified Party by a third party, the Borrower shall be
entitled to participate in the defense thereof so long as no Event of Default
exists. No consent order or settlement shall be entered into by an Indemnified
Party with respect to any such third party claim or action prior to notification
of and consultation with the Borrower, so long as no Event of Default exists;
provided that the failure to so notify or consult with the Borrower shall not
relieve the Borrower from any liability which the Borrower may have to such
Indemnified Party hereunder.
8.3 MODIFICATIONS, WAIVERS, AND CONSENTS. No modification or waiver of any
provision of this Agreement or the Notes, nor any consent required under this
Agreement or the Notes, shall be effective unless the same shall be in writing
and signed by the Agent and Majority Banks and the Borrower, and then such
modification, waiver, or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no modification, waiver, or consent shall, unless in writing and signed by the
Agent, all the Banks, and the Borrower do any of the following: (a) waive any of
the conditions specified in Section 3.1 or 3.2, (b) increase the Revolving
Credit Commitments of the Banks, (c) forgive or reduce the amount or rate of any
principal, interest, fees, or other amounts payable under the Credit Documents,
or postpone or extend the time for payment thereof, (d) release any Guaranty or
any material amount of collateral securing the Credit Obligations, or (e) change
the percentage of Banks required to take any action under this Agreement, the
Notes, or the other Credit Documents, including any amendment of the definition
of "Majority Banks" or of this Section 8.3; PROVIDED however that upon any
Permitted Sale of Property constituting collateral securing the Credit
Obligations, the liens securing such collateral shall be released by the Agent
in accordance with Section 4.05 of the Security Agreements, without requirement
for the consent of the Banks. Notwithstanding anything to the contrary in this
Section 8.3, the Agent shall execute and deliver, on behalf of itself and the
Banks, releases of all collateral other than (i) the capital stock of the
Borrower's domestic Subsidiaries, (ii) 60% of the capital stock of the
Borrower's foreign Subsidiaries, and (iii) the Borrower's Inventory, Receivables
and related general intangibles. No modification, waiver, or consent shall,
unless in writing and signed by the Agent or any Issuing Bank affect the rights
or obligations of the Agent or such Issuing Bank, as the case may be, under the
Credit Documents. The Agent shall not modify or waive or grant any consent under
any other Credit Document if such action would be prohibited under this Section
8.3 with respect to the Credit Agreement or the Notes.
8.4 SURVIVAL OF AGREEMENTS. All representations, warranties, and covenants
of the Borrower in this Agreement and the Credit Documents shall survive the
execution of this Agreement and the Credit Documents and any other document or
agreement.
8.5 ASSIGNMENT AND PARTICIPATION. This Agreement and the Credit Documents
shall bind and inure to the benefit of the Borrower and their respective
successors and assigns and the
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Agent and the Banks and their respective successors and assigns. The Borrower
may not assign its rights or delegate its duties under this Agreement or any
Credit Document.
(a) ASSIGNMENTS. Any Bank may assign to one or more banks or other entities
all or any portion of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Revolving Credit
Commitments, the Advances owing to it, the Notes held by it, and the
participation interest in the Letters of Credit owned by it); provided, however,
that (i) each such assignment shall be of a constant, and not a varying,
percentage of all of such Bank's rights and obligations under this Agreement,
(ii) assignments of Revolving Credit Commitments shall be made in minimum
amounts of $5,000,000 and be made in integral multiples of $1,000,000 and the
assigning Bank, if it retains any Revolving Credit Commitments, shall maintain
at least $5,000,000 in Revolving Credit Commitments, (iii) each such assignment
shall be to an Eligible Assignee, (iv) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with the Notes subject to such
assignment, and (v) each Eligible Assignee (other than the Eligible Assignee of
the Agent) shall pay to the Agent a $3,500 administrative fee. 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 three Business Days after the execution thereof, (A) the assignee
thereunder shall be a party hereto for all purposes and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to such
Assignment and Acceptance, have the rights and obligations of a Bank hereunder
and (B) such Bank thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of such Bank's rights and obligations under this Agreement, such Bank
shall cease to be a party hereto).
(b) TERM OF ASSIGNMENTS. By executing and delivering an Assignment and
Acceptance, the Bank thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Acceptance, such Bank 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 of
value of this Agreement or any other instrument or document furnished pursuant
hereto; (ii) such Bank makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under this Agreement or any other instrument or document furnished pursuant
hereto; (iii) such assignee confirms that it has received a copy of this
Agreement, together with copies of the Initial Financial Statements 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 shall, independently and without reliance upon the Agent, such
Bank 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 the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
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(vi) such assignee agrees that it shall 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.
(c) THE REGISTER. The Agent shall maintain at its address referred to in
Section 8.6 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the Banks
and the Revolving Credit Commitments of each Bank from time to time (the
"Register"). The entries in the Register shall be conclusive and binding for all
purposes, absent manifest error, and the Borrower, the Agent, each Issuing Bank,
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 Borrower or any Bank at any reasonable time and
from time to time upon reasonable prior notice.
(d) PROCEDURES. Upon its receipt of an Assignment and Acceptance executed
by a Bank and an Eligible Assignee, together with the Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has been
completed in the appropriate form, (i) accept such Assignment and Acceptance,
(ii) record the information contained therein in the Register, and (iii) give
prompt notice thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower shall execute and deliver to the Agent in
exchange for the surrendered Notes a new Note to the order of such Eligible
Assignee in an amount equal to the Revolving Credit Commitment assumed by it
pursuant to such Assignment and Acceptance and, if such Bank has retained any
Revolving Credit Commitment hereunder, a new Note to the order of such Bank in
an amount equal to the Revolving Credit Commitment retained by it hereunder.
Such new Notes shall be dated the effective date of such Assignment and
Acceptance and shall be in the appropriate form.
(e) PARTICIPATION. Each Bank may sell participations to one or more banks
or other entities in or to all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its Revolving
Credit Commitments, the Advances owing to it, its participation interest in the
Letters of Credit, and the Notes held by it); provided, however, that (i) such
Bank's obligations under this Agreement (including, without limitation, its
Revolving Credit Commitments to the Borrower hereunder) shall remain unchanged,
(ii) such Bank shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Bank shall remain the holder of
any such Notes for all purposes of this Agreement, (iv) the Borrower, the Agent,
each Issuing Bank 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, and (v) such Bank shall not require the participant's consent to any
matter under this Agreement, except for change in the principal amount of the
Notes, reductions in fees or interest, extending the applicable maturity date,
or releasing any collateral or guarantor. The Borrower hereby agrees that
participants shall have the same rights under Sections 2.6, 2.7, 2.8, 2.9, 2.11
and 8.2 as a Bank to the extent of their respective participation.
8.6 NOTICE. All notices and other communications under this Agreement and
the Notes shall be in writing and mailed by certified mail (return receipt
requested), telecopied, telexed, hand delivered, or delivered by a nationally
recognized overnight courier, to the address for the appropriate party specified
in SCHEDULE I or at such other address as shall be designated by such party in a
written notice to the other parties. Mailed notices shall be effective when
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received. Telecopied or telexed notices shall be effective when transmission is
completed or confirmed by telex answerback. Delivered notices shall be effective
when delivered by messenger or courier. Notwithstanding the foregoing, notices
and communications to the Agent pursuant to Article 2 or 7 shall not be
effective until received by the Agent.
8.7 CHOICE OF LAW. This Agreement and the Notes have been prepared, are
being executed and delivered, and are intended to be performed in the State of
Texas, and the substantive laws of the State of Texas and the applicable federal
laws of the United States shall govern the validity, construction, enforcement,
and interpretation of this Agreement and the Notes; provided however, Chapter
346 the Texas Finance Code does not apply to this Agreement or the Notes. Each
Letter of Credit shall be governed by the Uniform Customs and Practice for
Documentary Credits, International Chamber of Commerce Publication No. 500 (1993
version).
8.8 FORUM SELECTION. THE BORROWER IRREVOCABLY CONSENTS TO THE JURISDICTION
OF THE COURTS OF THE STATE OF TEXAS AND OF ANY FEDERAL COURT LOCATED IN SUCH
STATE IN CONNECTION WITH ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THE CREDIT DOCUMENTS OR ANY TRANSACTIONS RELATED THERETO. THE BORROWER AGREES
AND SHALL NOT CONTEST THAT PROPER FORUM AND VENUE FOR ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THE CREDIT DOCUMENTS OR ANY TRANSACTIONS RELATING
THERETO ARE IN THE COURTS OF THE STATE OF TEXAS IN XXXXXX COUNTY, TEXAS, AND THE
FEDERAL COURTS LOCATED IN XXXXXX COUNTY, TEXAS. THE BORROWER IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE FOREGOING BASED UPON
CLAIMS THAT THE FOREGOING COURTS ARE AN INCONVENIENT FORUM.
8.9 SERVICE OF PROCESS. IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THE CREDIT DOCUMENTS OR ANY TRANSACTIONS RELATING THERETO, THE
BORROWER WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT, OR OTHER PROCESS OR
NOTICE AND AGREES THAT SERVICE BY FIRST CLASS MAIL, RETURN RECEIPT REQUESTED, TO
THE BORROWER AT ITS ADDRESS FOR NOTICES HEREUNDER, OR ANY OTHER FORM OF SERVICE
PROVIDED FOR IN THE TEXAS CIVIL PRACTICE LAW AND RULES THEN IN EFFECT SHALL
CONSTITUTE GOOD AND SUFFICIENT SERVICE UPON THE BORROWER.
8.10 WAIVER OF JURY TRIAL. THE BORROWER IRREVOCABLY WAIVES ANY RIGHT TO
TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THE CREDIT
DOCUMENTS OR ANY TRANSACTIONS RELATING THERETO.
8.11 COUNTERPARTS. This Agreement may be executed in multiple counterparts
which together shall constitute one and the same instrument.
8.12 CONFIDENTIALITY. Each Bank acknowledges that it shall receive
information regarding the Borrower's business operations and financial condition
which is not available to the public. Each Bank agrees to maintain the
confidentiality of such nonpublic information
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according to such Bank's standard practices for such nonpublic client
information, but such policies including the sharing of such information with
auditors, accountants, and legal advisors, and as required by law. Each Bank may
share such information with potential participants and assigns of its interests
under the Credit Documents if such transferees agree in writing to maintain the
confidentiality of such information in the same manner.
8.13 NO FURTHER AGREEMENTS. THIS WRITTEN AGREEMENT AND THE CREDIT DOCUMENTS
REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES.
THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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EXECUTED as of the date first above written.
BORROWER:
TETRA TECHNOLOGIES, INC.
By: /s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
Senior Vice President and Chief Financial Officer
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AGENT:
BANK OF AMERICA, N.A., as Agent
By: /s/ Xxxxxxx X. Xxxx
-------------------
Xxxxxxx X. Xxxx
Vice President
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BANKS:
BANK OF AMERICA, N.A.
By: /s/ Xxxx Xxxxxx
---------------
Xxxx Xxxxxx
Senior Vice President
Revolving Credit Commitment: $30,000,000.00
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BANK ONE, NA
By: /s/ Xxxx Xxxxx
--------------
Xxxx Xxxxx
Vice President
Revolving Credit Commitment: $30,000,000.00
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XXXXX FARGO BANK TEXAS, NATIONAL ASSOCIATION
By: /s/ Xxxxxx X. Xxxxxxxx III
--------------------------
Xxxxxx X. Xxxxxxxx III
Senior Relationship Manager
Revolving Credit Commitment: $20,000,000.00
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REAFFIRMATION OF GUARANTY
Each of the undersigned (each, a "Guarantor"), has executed the Guaranty
dated as of May 12, 2000 ("Guaranty"), guaranteeing payment of the Borrower's
obligations under the Credit Agreement and the Credit Documents and certain
other amounts in accordance with the Guaranty. Each Guarantor has reviewed this
Agreement, and hereby approves it. Each Guarantor represents and warrants that
such Guarantor knows of no defenses to the enforcement of the Guaranty and that
according to its terms the Guaranty will continue in full force and effect with
respect to the Credit Documents, as amended, following the execution of this
Agreement. The signature of this document does not indicate or establish a
requirement that the Guaranty requires the respective Guarantor's approval of
amendments and restatements to the Agreement, but has been furnished to the
Agent as a courtesy at the Agent's request. On the foregoing terms, this
Agreement is hereby approved:
TETRA APPLIED TECHNOLOGIES, INC.
TETRA INTERNATIONAL INCORPORATED
TETRA MICRONUTRIENTS, INC.
TETRA PROCESS SERVICES, L.C.
TETRA THERMAL, INC.
MARITECH RESOURCES, INC.
SEAJAY INDUSTRIES, INC.
AMERICAN MICROBIAL TECHNOLOGY, INC.
DAMP RID, INC.
By: /s/ Bass X. Xxxxxxx, Xx.
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Bass X. Xxxxxxx, Xx.
Secretary
TETRA INVESTMENT HOLDING CO., INC.
By: /s/ Xxxxx X. Xxxx
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Xxxxx X. Xxxx
Treasurer
T-PRODUCTION TESTING, LLC
By: TETRA APPLIED TECHNOLOGIES, INC., its sole member
By: /s/ Bass X. Xxxxxxx, Xx.
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Bass X. Xxxxxxx, Xx.
Secretary
TETRA REAL ESTATE, LLC
By: TETRA TECHNOLOGIES, INC.,
its sole member
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Senior Vice President and Chief Financial Officer
TETRA REAL ESTATE, LP
By: TETRA REAL ESTATE, LLC,
its general partner
By: TETRA TECHNOLOGIES, INC.,
its sole member
By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
Senior Vice President and Chief Financial Officer
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