LOAN AGREEMENT
($25,000,000.00 REVOLVING LOAN FACILITY)
DATED AS OF OCTOBER 28, 1998
AMONG
BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.,
AS BORROWER,
COMERICA BANK-TEXAS,
AS AGENT AND AS A LENDER,
AND
THE OTHER LENDERS NOW OR HEREAFTER
PARTIES HERETO
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TABLE OF CONTENTS
PAGE
----
1. DEFINITIONS............................................... 1
1.1 CERTAIN DEFINED TERMS............................... 1
1.2 MISCELLANEOUS....................................... 20
2. COMMITMENTS AND LOANS..................................... 21
2.1 LOANS............................................... 21
2.2 LETTERS OF CREDIT................................... 21
2.3 TERMINATIONS OR REDUCTIONS OF COMMITMENTS.......... 24
2.4 COMMITMENT FEES..................................... 25
2.5 SEVERAL OBLIGATIONS................................. 25
2.6 NOTES............................................... 25
2.7 USE OF PROCEEDS..................................... 26
3. BORROWINGS, PAYMENTS, PREPAYMENTS AND INTEREST OPTIONS.... 26
3.1 BORROWINGS.......................................... 26
3.2 PAYMENTS AND PREPAYMENTS............................ 26
3.3 INTEREST OPTIONS.................................... 27
4. PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS, ETC........... 31
4.1 PAYMENTS............................................ 31
4.2 PRO RATA TREATMENT.................................. 33
4.3 CERTAIN ACTIONS, NOTICES, ETC....................... 33
4.4 NON-RECEIPT OF FUNDS BY AGENT....................... 34
4.5 SHARING OF PAYMENTS, ETC............................ 34
5. CONDITIONS PRECEDENT...................................... 35
5.1 INITIAL LOANS AND LETTERS OF CREDIT................. 35
5.2 ALL LOANS AND LETTERS OF CREDIT..................... 36
6. REPRESENTATIONS AND WARRANTIES............................ 37
6.1 ORGANIZATION........................................ 37
6.2 FINANCIAL STATEMENTS................................ 37
6.3 ENFORCEABLE OBLIGATIONS; AUTHORIZATION.............. 37
6.4 OTHER DEBT.......................................... 38
6.5 LITIGATION.......................................... 38
6.6 TITLE............................................... 38
6.7 TAXES............................................... 38
6.8 REGULATIONS U AND X................................. 38
6.9 SUBSIDIARIES........................................ 38
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6.10 NO UNTRUE OR MISLEADING STATEMENTS.................. 38
6.11 ERISA............................................... 39
6.12 INVESTMENT COMPANY ACT.............................. 39
6.13 PUBLIC UTILITY HOLDING COMPANY ACT.................. 39
6.14 SOLVENCY............................................ 39
6.15 FISCAL YEAR......................................... 39
6.16 COMPLIANCE.......................................... 39
6.17 ENVIRONMENTAL MATTERS............................... 39
6.18 COLLATERAL COVERED.................................. 40
7. AFFIRMATIVE COVENANTS..................................... 40
7.1 TAXES, EXISTENCE, REGULATIONS, PROPERTY, ETC........ 40
7.2 FINANCIAL STATEMENTS AND INFORMATION................ 40
7.3 FINANCIAL TESTS..................................... 41
7.4 INSPECTION.......................................... 42
7.5 FURTHER ASSURANCES.................................. 42
7.6 BOOKS AND RECORDS................................... 42
7.7 INSURANCE........................................... 42
7.8 NOTICE OF CERTAIN MATTERS........................... 43
7.9 CAPITAL ADEQUACY.................................... 43
7.10 ERISA INFORMATION AND COMPLIANCE.................... 44
7.11 ADDITIONAL SECURITY DOCUMENTS....................... 44
8. NEGATIVE COVENANTS........................................ 45
8.1 BORROWED MONEY INDEBTEDNESS......................... 45
8.2 LIENS............................................... 45
8.3 CONTINGENT LIABILITIES.............................. 45
8.4 MERGERS, CONSOLIDATIONS AND DISPOSITIONS OF ASSETS.. 46
8.5 REDEMPTION, DIVIDENDS AND DISTRIBUTIONS............. 46
8.6 NATURE OF BUSINESS.................................. 46
8.7 TRANSACTIONS WITH RELATED PARTIES................... 46
8.8 LOANS AND INVESTMENTS............................... 46
8.9 SUBSIDIARIES........................................ 47
8.10 ORGANIZATIONAL DOCUMENTS............................ 47
8.11 UNFUNDED LIABILITIES................................ 47
8.12 OPERATING LEASE EXPENSES............................ 47
8.13 SALE/LEASEBACKS..................................... 47
8.14 SUBORDINATED INDEBTEDNESS........................... 47
8.15 NEGATIVE PLEDGES.................................... 47
8.16 ACQUISITIONS........................................ 48
9. DEFAULTS.................................................. 48
9.1 EVENTS OF DEFAULT................................... 48
II
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9.2 RIGHT OF SETOFF.................................... 50
9.3 COLLATERAL ACCOUNT................................. 51
9.4 PRESERVATION OF SECURITY FOR LETTER OF CREDIT
LIABILITIES....................................... 51
9.5 REMEDIES CUMULATIVE................................ 51
10. AGENT..................................................... 52
10.1 APPOINTMENT, POWERS AND IMMUNITIES................. 52
10.2 RELIANCE........................................... 53
10.3 DEFAULTS........................................... 53
10.4 MATERIAL WRITTEN NOTICES........................... 53
10.5 RIGHTS AS A LENDER................................. 53
10.6 INDEMNIFICATION.................................... 54
10.7 NON-RELIANCE ON AGENT AND OTHER LENDERS............ 54
10.8 FAILURE TO ACT..................................... 54
10.9 RESIGNATION OR REMOVAL OF AGENT.................... 55
10.10 NO PARTNERSHIP..................................... 55
10.11 AUTHORITY OF AGENT................................. 55
11. MISCELLANEOUS............................................. 56
11.1 WAIVER............................................. 56
11.2 NOTICES............................................ 56
11.3 EXPENSES, ETC...................................... 56
11.4 INDEMNIFICATION.................................... 57
11.5 AMENDMENTS, ETC.................................... 58
11.6 SUCCESSORS AND ASSIGNS............................. 58
11.7 LIMITATION OF INTEREST............................. 61
11.8 SURVIVAL........................................... 61
11.9 CAPTIONS........................................... 62
11,10 COUNTERPARTS....................................... 62
11.11 GOVERNING LAW; VENUE............................... 62
11.12 SEVERABILITY....................................... 62
11.13 TAX FORMS.......................................... 62
11.14 CONFLICTS BETWEEN THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS.................................. 63
11.15 LIMITATION ON CHARGES; SUBSTITUTE LENDERS;
NON-DISCRIMINATION............................. 63
11.16 CONFIDENTIALITY.................................... 64
11.17 JURY WAIVER........................................ 64
III
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EXHIBITS
--------
A -- Request for Extension of Credit
B -- Rate Designation Notice
C -- Revolving Note
D -- Assignment and Acceptance
E -- Compliance Certificate
F -- Borrowing Base Certificate
IV
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LOAN AGREEMENT
--------------
THIS LOAN AGREEMENT is made and entered into as of October 28, 1998 (the
"Effective Date"), by and among BOOTS & COOTS INTERNATIONAL WELL CONTROL, INC.,
a Delaware corporation (together with its permitted successors and assigns,
herein called the "Borrower"); each of the lenders which is or may from time to
time become a party hereto (individually, a "Lender" and, collectively, the
"Lenders")(the terms "Revolving Loan Lenders" and "Lenders" shall have the same
meaning hereunder), and COMERICA BANK-TEXAS ("Comerica"), as agent for the
Lenders (in such capacity, together with its successors in such capacity, the
"Agent").
The parties hereto agree as follows:
1. DEFINITIONS.
1.1 CERTAIN DEFINED TERMS.
In this Agreement, terms defined above shall have the meanings ascribed to
them above. Unless a particular term, word or phrase is otherwise defined or the
context otherwise requires, capitalized terms, words and phrases used herein or
in the Loan Documents (as hereinafter defined) have the following meanings (all
definitions that are defined in this Agreement or in the Loan Documents in the
singular have the same meanings when used in the plural and vice versa):
Accounts, Equipment, General Intangibles and Inventory shall have the
respective meanings assigned to them in the Uniform Commercial Code enacted in
the State of Texas as Sections 1 through 11 of the Texas Business and Commerce
Code, in force on the Effective Date.
Additional Interest means the aggregate of all amounts accrued or paid
pursuant to the Notes or any of the other Loan Documents (other than interest on
the Notes at the Stated Rate) which, under applicable laws, are or may be deemed
to constitute interest on the indebtedness evidenced by the Notes or any other
amounts owing under any Loan Document.
Additional Collateral shall have the meaning ascribed to such term in
Section 7.8 hereof.
Additional CollateraL Event shall have the meaning ascribed to such term in
Section 7.8 hereof.
Adjusted LIBOR means, with respect to each Interest Period applicable to a
LIBOR Borrowing, a rate per annum equal to the quotient, expressed as a
percentage, of (a) LIBOR with respect to such Interest Period divided by (b)
1.0000 minus the Eurodollar Reserve Requirement in effect on the first day of
such Interest Period.
Affiliate means any Person controlling, controlled by or under common
control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under
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common control with") means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of such Person,
whether through the ownership of voting securities or otherwise.
Agreement means this Loan Agreement, as it may from time to time be
amended, modified, restated or supplemented.
Annual Financial Statements means the annual financial statements of a
Person, including all notes thereto, which statements shall include a balance
sheet as of the end of the fiscal year relating thereto and an income statement
and a statement of cash flows for such fiscal year, all setting forth in
comparative form the corresponding figures from the previous fiscal year, all
prepared in conformity with GAAP in all material respects, and accompanied by
the opinion of independent certified public accountants of recognized national
standing, which shall state that such financial statements present fairly in all
material respects the financial position of such Person and, if such Person has
any Subsidiaries, its consolidated Subsidiaries as of the date thereof and the
results of its operations for the period covered thereby in conformity with
GAAP. Annual Financial Statements shall also include unaudited consolidating
financial statements for Borrower and its Subsidiaries, in Proper Form,
certified by the chief financial officer or other authorized officer of Borrower
as presenting fairly in all material respects the consolidating financial
position of the applicable Person.
Applications means all applications and agreements for Letters of Credit,
or similar instruments or agreements, in Proper Form, now or hereafter executed
by any Person in connection with any Letter of Credit now or hereafter issued or
to be issued under the terms hereof at the request of Borrower.
Assignment and Acceptance shall have the meaning ascribed to such term in
Section 11.6(b) hereof.
Bankruptcy Code means the United States Bankruptcy Code, as amended, and
any successor statute.
Base Rate means for any day a rate per annum equal to the lesser of (a) the
greater of (1) the Prime Rate for that day and (2) the Federal Funds Rate for
that day plus 1/2 of 1% or (b) the Ceiling Rate. If for any reason Agent shall
have determined (which determination shall be conclusive and binding, absent
manifest error) that it is unable to ascertain the Federal Funds Rate for any
reason, including, without limitation, the inability or failure of Agent to
obtain sufficient quotations in accordance with the terms hereof, the Base Rate
shall, until the circumstances giving rise to such inability no longer exist, be
the lesser of (a) the Prime Rate or (b) the Ceiling Rate.
Base Rate Borrowing means that portion of the principal balance of the
Loans at any time bearing interest at the Base Rate.
Borrowed Money Indebtedness means, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by
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bonds, debentures, notes or similar instruments evidencing borrowed money, (iii)
all obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person, (iv) all obligations
of such Person issued or assumed as the deferred purchase price of Property or
services (excluding trade debt and obligations of such Person to creditors for
raw materials, inventory, services and supplies and deferred payments for
services to employees and former employees incurred in the ordinary course of
such Person's business), (v) all lease obligations of such Person which have
been capitalized on the balance sheet of such Person in accordance with GAAP,
(vi) all obligations of others secured by any Lien on Property owned or acquired
by such Person, whether or not the obligations secured thereby have been
assumed, equal to the lesser of the amount of such obligation or the fair market
value of such Property, (vii) Interest Rate Risk Indebtedness of such Person,
(viii) all obligations of such Person in respect of outstanding letters of
credit issued for the account of such Person and (ix) all guarantees of such
Person.
Borrowing Base means, as at any date, the amount of the Borrowing Base
shown on the Borrowing Base Certificate then most recently delivered pursuant to
Section 7.2 hereof, determined by calculating the amount equal to:
(i) 80% of the aggregate amount of all Eligible Accounts of Borrower and
its Subsidiaries (other than Foreign Subsidiaries) at said date, plus
(ii) 50% of all Eligible Inventory of Borrower and its Subsidiaries (other
than Foreign Subsidiaries) at said date (determined at the lower of
cost or market on a consistent basis); provided that the amount
calculated pursuant to this clause (ii) shall not exceed
$10,000,000.00, plus
(iii)80% of the aggregate amount of all Eligible Equipment of Elmagco,
Inc. at said date; provided that no amounts shall be included in the
Borrowing Base by reason of this clause (iii) after November 20, 1998,
plus
(iv) prior to (but not after) November 20, 1998, $3,500,000.00.
In the absence of a current Borrowing Base Certificate, Agent shall determine
the Borrowing Base from time to time in its reasonable discretion, taking into
account all information reasonably available to it, and the Borrowing Base from
time to time so determined shall be the Borrowing Base for all purposes of this
Agreement until a current Borrowing Base Certificate, in Proper Form, is
furnished to and accepted by Agent.
Borrowing Base Certificate shall mean a certificate, duly executed by the
chief executive officer, chief financial officer, treasurer or controller of
Borrower, appropriately completed and in substantially the form of Exhibit F
hereto. Each Borrowing Base Certificate shall be effective only as accepted by
Agent (and with such revisions, if any, as Agent may reasonably require as a
condition to such acceptance).
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Business Day means any day other than a day on which commercial banks are
authorized or required to close in Dallas, Texas or Houston, Texas.
Ceiling Rate means, on any day, with respect to any Person, the maximum
nonusurious rate of interest permitted for that day by whichever of applicable
federal or Texas (or any jurisdiction whose usury laws are deemed to apply to
the Notes or any other Loan Documents despite the intention and desire of the
parties to apply the usury laws of the State of Texas) laws permits the higher
interest rate, stated as a rate per annum. On each day, if any, that Chapter 1D
establishes the Ceiling Rate, the Ceiling Rate shall be the "weekly rate
ceiling" (as defined in (S)303 of the Texas Finance Code ) for that day. Agent
may from time to time, as to current and future balances, implement any other
ceiling under the Texas Finance Code or Chapter 1D by notice to Borrower, if and
to the extent permitted by the Texas Finance Code or Chapter 1D. Without notice
to Borrower or any other person or entity, the Ceiling Rate shall automatically
fluctuate upward and downward as and in the amount by which such maximum
nonusurious rate of interest permitted by applicable law fluctuates.
Change of Control means a change resulting when any Unrelated Person or any
Unrelated Persons (other than any Person that Beneficially Owns at least 10% of
the aggregate voting power of all classes of Voting Stock of Borrower as of the
date hereof) acting together which would constitute a Group together with any
Affiliates or Related Persons thereof (in each case also constituting Unrelated
Persons) shall at any time either (i) Beneficially Own more than 50% of the
aggregate voting power of all classes of Voting Stock of Borrower or (ii)
succeed in having sufficient of its or their nominees elected to the Board of
Directors of Borrower such that such nominees, when added to any existing
directors remaining on the Board of Directors of Borrower after such election
who is an Affiliate or Related Person of such Person or Group, shall constitute
a majority of the Board of Directors of Borrower. As used herein (a)
"Beneficially Own" means "beneficially own" as defined in Rule 13d-3 of the
Securities Exchange Act of 1934, as amended, or any successor provision thereto;
provided, however, that, for purposes of this definition, a Person shall not be
deemed to Beneficially Own securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's Affiliates
until such tendered securities are accepted for purchase or exchange; (b)
"Group" means a "group" for purposes of Section 13(d) of the Securities Exchange
Act of 1934, as amended; (c) "Unrelated Person" means at any time any Person
other than Borrower or any Subsidiary of Borrower and other than any trust for
any employee benefit plan of Borrower or any Subsidiary of Borrower; (d)
"Related Person" of any Person shall mean any other Person owning (1) 5% or more
of the outstanding common stock of such Person or (2) 5% or more of the Voting
Stock of such Person; and (e) "Voting Stock" of any Person shall mean capital
stock of such Person which ordinarily has voting power for the election of
directors (or persons performing similar functions) of such Person, whether at
all times or only so long as no senior class of securities has such voting power
by reason of any contingency.
Chapter 1D means Chapter 1D of Title 79, Texas Rev. Civ. Stats. 1925, as
amended.
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Code means the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.
Collateral means all Property, tangible or intangible, real, personal or
mixed, now or hereafter subject to the Liens created pursuant to any of the
Security Documents.
Compliance Certificate shall have the meaning given to it in Section 7.2(c)
hereof.
Consolidated Current Assets means, on any date as of which the amount
thereof is to be determined, the total assets of Borrower and its Subsidiaries
which would be shown as current assets on a balance sheet of Borrower and its
Subsidiaries prepared in accordance with GAAP at such time.
Consolidated Current Liabilities means, on any date as of which the amount
thereof is to be determined, the total liabilities of Borrower and its
Subsidiaries which would be shown as current liabilities on a balance sheet of
Borrower and its Subsidiaries prepared in accordance with GAAP at such time.
Controlled Group means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with Borrower, are treated as a single employer under Section
414 of the Code.
Corporation means any corporation, limited liability company, partnership,
joint venture, joint stock association, business trust and other business
entity.
Cover for Letter of Credit Liabilities shall be effected by paying to Agent
immediately available funds, to be held by Agent in a collateral account
maintained by Agent at its Principal Office and collaterally assigned as
security for the financial accommodations extended pursuant to this Agreement
using documentation reasonably satisfactory to Agent, in the amount required by
any applicable provision hereof. Such amount shall be retained by Agent in such
collateral account until such time as in the case of the Cover being provided
pursuant to Sections 2.2(a) or 9.3 hereof, the applicable Letter of Credit shall
have expired and the Reimbursement Obligations, if any, with respect thereto
shall have been fully satisfied; provided, however, that at such time if a
Default or Event of Default has occurred and is continuing, Agent shall not be
required to release such amount in such collateral account until such Default or
Event of Default shall have been cured or waived.
Debt to EBITDA Ratio means, as of any day, the ratio of (a) Borrowed Money
Indebtedness of Borrower and its consolidated Subsidiaries as of such date to
(b) EBITDA for the 12 months ending on such date; provided however, that for
purposes of this ratio only, so long as Borrower shall have delivered to Agent
financial information satisfactory to the Super Majority Lenders regarding the
Property acquired which disclose the prior operating results of such Property,
the pro forma effect of any acquisition by Borrower or any of its consolidated
Subsidiaries of any Subsidiary during such 12-month period shall be included in
EBITDA as if such acquisition occurred on the first day of such period.
5
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Default means an Event of Default or an event which with notice or lapse of
time or both would, unless cured or waived, become an Event of Default.
Dollars and $ means lawful money of the United States of America.
EBITDA means, without duplication, for any period the consolidated net
earnings (excluding any extraordinary gains) of Borrower and its Subsidiaries
plus, to the extent deducted in calculating consolidated net income,
depreciation, amortization, other non-cash items, Interest Expense, and federal,
state and foreign income tax expense.
Eligible Accounts shall mean, as at any date of determination thereof, each
Account of Borrower or any of its Subsidiaries (other than Foreign Subsidiaries)
which is subject to a Lien created by any Security Document and on which Agent
shall have a first-priority perfected Lien (subject only to Permitted Liens)
which is at said date payable to Borrower or any such Subsidiary and which
complies with the following requirements: (a) (i) the subject goods have been
sold to an account debtor on an absolute sale basis on open account and not on
consignment, on approval or on a "sale or return" basis or subject to any other
repurchase or return agreement and no material part of the subject goods has
been returned, rejected, lost or damaged (provided that the foregoing shall not
disqualify accounts arising from goods sold with usual and customary sales
warranties or having warranty claims which are not material), (ii) the Account
is stated to be payable in Dollars and is not evidenced by chattel paper or an
instrument of any kind (unless Agent has a perfected first priority Lien
(subject only to Permitted Liens) on such chattel paper or instrument) and said
account debtor is not insolvent or the subject of any bankruptcy or insolvency
proceedings of any kind unless Borrower or its applicable Subsidiary, as the
case may be, has received a letter of credit, bond or other financial guarantee
in an amount equal to or greater than such Account issued by a Qualified
Institution and otherwise in form and substance satisfactory to Agent; (b) the
account debtor must be located in the United States, except for (x) Accounts as
to which Borrower or its applicable Subsidiary, as the case may be, has received
a letter of credit, bond or other financial guarantee in an amount equal to or
greater than such Account issued by a Qualified Institution and otherwise in
form and substance satisfactory to Agent and (y) other Accounts approved in
writing by Agent from major U.S. international companies' foreign domiciled
subsidiaries and affiliates (such approval not to be unreasonably withheld so
long as the aggregate amount of such Accounts does not exceed $4,375,000.00);
(c) it is a valid obligation of the account debtor thereunder and is not subject
to any offset or other defense on the part of such account debtor or to any
claim on the part of such account debtor denying liability thereunder (provided
that the foregoing shall not disqualify accounts arising from goods sold with
usual and customary sales warranties or having warranty claims which are not
material); (d) it is subject to no Lien whatsoever, except for the Liens created
or permitted pursuant to the Loan Documents; (e) it is evidenced by an invoice
submitted to the account debtor in timely fashion and in the normal course of
business; (f) it has not remained unpaid beyond 90 days after the date of the
invoice; (g) it does not arise out of transactions with an employee, officer,
agent, director or stockholder of Borrower or any of its Subsidiaries or any
Affiliate of Borrower or any of its Subsidiaries; (h) not more than 20% (or such
higher percentage as Agent may approve in writing for any particular account
debtor) of the other Accounts of the applicable account debtor or any of its
Affiliates fail to satisfy all of the requirements of an "Eligible Account"; (i)
inclusion of the
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applicable Account does not cause the total Eligible Accounts with respect to
the applicable account debtor and its Affiliates, in the aggregate, to exceed
10% of the total Eligible Accounts, and (j) each of the representations and
warranties set forth in the Security Documents executed by Borrower and its
Subsidiaries with respect thereto is true and correct in all material respects
on such date. In the event of any dispute under the foregoing criteria, about
whether an Account is or has ceased to be an Eligible Account, the decision of
Agent, made in good faith, shall be conclusive and binding, absent manifest
error.
Eligible Equipment shall mean, as at any date of determination thereof,
Equipment of Elmagco, Inc. which is subject to a Lien created by any Security
Documents and on which Agent shall have a first-priority perfected Lien (subject
only to Permitted Liens) and which complies with the following requirements:
(a) such Equipment shall be valued in accordance with GAAP and shall be within
the United States of America; (b) it is in good condition (ordinary wear and
tear excepted), meets all standards imposed by any Governmental Authority having
regulatory authority over it and/or its use and is currently usable in the
normal course of business of Elmagco, Inc.; (c) it is in the possession or
control of Elmagco, Inc., and (d) each of the representations and warranties set
forth in the Security Documents executed by Elmagco, Inc. with respect thereto
is true and correct in all material respects on such date. In the event of any
dispute under the foregoing criteria, about whether a portion of Equipment is or
has ceased to be Eligible Equipment, the decision of Agent, made in good faith,
shall be conclusive and binding, absent manifest error.
Eligible Inventory shall mean, as at any date of determination thereof,
Inventory of Borrower or any of its Subsidiaries (other than Foreign
Subsidiaries) which is subject to a Lien created by any Security Documents and
on which Agent shall have a first-priority perfected Lien (subject only to
Permitted Liens) and which complies with the following requirements: (a) such
Inventory shall be valued in accordance with GAAP and consist of (i) eligible
raw materials and (ii) finished goods, provided that all such Inventory shall be
within the United States of America; (b) it is in good condition, meets all
standards imposed by any Governmental Authority having regulatory authority over
it, its use and/or sale and is either currently usable or currently salable in
the normal course of business of the Borrower or its applicable Subsidiary, as
the case may be; (c) it is not in the possession or control of any warehouseman,
bailee, or any agent or processor for or customer of Borrower or any of its
Subsidiaries or, if it is, (i) Borrower or its applicable Subsidiary, as the
case may be, shall have notified, in a manner that effectively under applicable
law creates a valid and first priority Lien in favor of Agent in such Inventory,
such warehouseman, bailee, agent, processor or customer of Agent's Lien and (ii)
such warehouseman, bailee, agent, processor or customer has subordinated any
Lien it may claim therein and agreed to hold all such Inventory during the
continuance of an Event of Default for Agent's account subject to the Agent's
instructions, and (d) each of the representations and warranties set forth in
the Security Documents executed by Borrower and its Subsidiaries with respect
thereto is true and correct in all material respects on such date. In the event
of any dispute under the foregoing criteria, about whether a portion of
Inventory is or has ceased to be Eligible Inventory, the decision of Agent, made
in good faith, shall be conclusive and binding, absent manifest error.
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Environmental Claim means any third party (including Governmental
Authorities and employees) action, lawsuit, claim or proceeding (including
claims or proceedings at common law or under the Occupational Safety and Health
Act or similar laws relating to safety of employees) which seeks to impose
liability for (i) noise; (ii) pollution or contamination of the air, surface
water, ground water or land or the clean-up of such pollution or contamination;
(iii) solid, gaseous or liquid waste generation, handling, treatment, storage,
disposal or transportation; (iv) exposure to Hazardous Substances; (v) the
safety or health of employees or (vi) the manufacture, processing, distribution
in commerce or use of Hazardous Substances. An "Environmental Claim" includes,
but is not limited to, a common law action, as well as a proceeding to issue,
modify or terminate an Environmental Permit, or to adopt or amend a regulation
to the extent that such a proceeding attempts to redress violations of an
applicable permit, license, or regulation as alleged by any Governmental
Authority.
Environmental Liabilities means all liabilities arising from any
Environmental Claim, Environmental Permit or Requirement of Environmental Law
under any theory of recovery, at law or in equity, and whether based on
negligence, strict liability or otherwise, including but not limited to:
remedial, removal, response, abatement, investigative, monitoring, personal
injury and damage to Property or injuries to persons, and any other related
costs, expenses, losses, damages, penalties, fines, liabilities and obligations,
and all costs and expenses necessary to cause the issuance, reissuance or
renewal of any Environmental Permit including reasonable attorneys' fees and
court costs.
Environmental Permit means any permit, license, approval or other
authorization under any applicable Legal Requirement relating to pollution or
protection of health or the environment, including laws, regulations or other
requirements relating to emissions, discharges, releases or threatened releases
of pollutants, contaminants or hazardous substances or toxic materials or wastes
into ambient air, surface water, ground water or land, or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport, or handling of pollutants, contaminants or Hazardous Substances.
Equity Interests means equity interests in Borrower issued after the date
hereof upon terms issued on terms acceptable to Super Majority Lenders.
ERISA means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and all rules, regulations, rulings and interpretations
adopted by the Internal Revenue Service or the U.S. Department of Labor
thereunder.
Eurodollar Rate means for any day during an Interest Period for a LIBOR
Borrowing a rate per annum equal to the lesser of (a) the sum of (1) the
Adjusted LIBOR in effect on the first day of such Interest Period plus (2) the
then applicable Margin Percentage from time to time in effect and (b) the
Ceiling Rate. Each Eurodollar Rate is subject to adjustments as provided for in
Sections 3.3(c) and 11.15 hereof.
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Eurodollar Reserve Requirement means, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth [.0001]) which is in effect on such day for determining all
reserve requirements (including, without limitation, basic, supplemental,
marginal and emergency reserves) applicable to "Eurocurrency liabilities," as
currently defined in Regulation D. Each determination of the Eurodollar Reserve
Requirement by Agent shall be conclusive and binding, absent manifest error, and
may be computed using any reasonable averaging and attribution method.
Event of Default shall have the meaning assigned to it in Section 9.1
hereof.
Federal Funds Rate means, for any day, a fluctuating interest rate per
annum equal for such day 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 such day which is a
Business Day, the average of the quotations for such day on such transactions
received by Agent from three Federal funds brokers of recognized standing
selected by Agent in its sole and absolute discretion.
Financing Statements means all such Uniform Commercial Code financing
statements as Agent shall reasonably require, in Proper Form, duly executed by
Borrower (or any other applicable Obligor) to give notice of and to perfect or
continue perfection of Agent's Liens in any applicable Collateral, as any of the
foregoing may from time to time be amended, modified, supplemented or restated.
Foreign Subsidiaries means Subsidiaries of Borrower which are organized
under the laws of a jurisdiction other than the United States of America, any
State of the United States or any political subdivision thereof.
Funding Loss means, with respect to (a) Borrower's payment of principal of
a LIBOR Borrowing on a day prior to the last day of the applicable Interest
Period; (b) Borrower's failure to borrow a LIBOR Borrowing on the date specified
by Borrower; (c) Borrower's failure to make any prepayment of the Loans (other
than Base Rate Borrowings) on the date specified by Borrower, or (d) any
cessation of a Eurodollar Rate to apply to the Loans or any part thereof
pursuant to Section 3.3, in each case whether voluntary or involuntary, any
loss, expense, penalty, premium or liability actually incurred by any Lender
(including but not limited to any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by any Lender to
fund or maintain a Loan).
GAAP means, as to a particular Person, such accounting practice as, in the
opinion of independent certified public accountants of recognized national
standing regularly retained by such Person, conforms at the time to generally
accepted accounting principles, consistently applied for all periods after the
Effective Date so as to present fairly the financial condition, and results of
operations and cash flows, of such Person. If any change in any accounting
principle or practice is required by the Financial Accounting Standards Board,
all reports and financial statements required
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hereunder may be prepared in accordance with such change so long as Borrower
provides to Agent such disclosures of the impact of such change as Agent may
reasonably require. No such change in any accounting principle or practice
shall, in itself, cause a Default or Event of Default hereunder (but Borrower,
Agent and Lenders shall negotiate in good faith to replace any financial
covenants hereunder to the extent such financial covenants are affected by such
change in accounting principle or practice).
Governmental Authority means any foreign governmental authority, the United
States of America, any State of the United States, and any political subdivision
of any of the foregoing, and any central bank, agency, department, commission,
board, bureau, court or other tribunal having jurisdiction over Agent, any
Lender, any Obligor or their respective Property.
Guaranties means, collectively, (i) the Guaranties dated concurrently
herewith executed by each of the current Subsidiaries of Borrower (other than
Foreign Subsidiaries) in favor of Agent, for the benefit of Lenders, and (ii)
any and all other guaranties hereafter executed in favor of Agent, for the
benefit of Lenders, relating to the Obligations, as any of them may from time to
time be amended, modified, restated or supplemented.
Hazardous Substance means petroleum products and any hazardous or toxic
waste or substance defined or regulated as such from time to time by any law,
rule, regulation or order described in the definition of "Requirements of
Environmental Law".
Indebtedness means, without duplication, (a) all items which in accordance
with GAAP would be included in the liability section of a balance sheet (other
than trade accounts payable and accrued expenses (other than Interest Expense)
arising in the ordinary course of business) on the date as of which Indebtedness
is to be determined (excluding, to the extent applicable, capital stock,
surplus, surplus reserves and deferred credits); (b) all guaranties, letter of
credit contingent reimbursement obligations and other contingent obligations in
respect of, or any obligations to purchase or otherwise acquire, Indebtedness of
others, and (c) all Indebtedness secured by any Lien existing on any interest of
the Person with respect to which Indebtedness is being determined in Property
owned subject to such Lien whether or not the Indebtedness secured thereby shall
have been assumed, equal to the lesser of the amount of such obligation or the
fair market value of such Property; provided, that the term "Indebtedness" shall
not mean or include any Indebtedness in respect of which monies sufficient to
pay and discharge the same in full (either on the expressed date of maturity
thereof or on such earlier date as such Indebtedness may be duly called for
redemption and payment) shall be deposited with a depository, agency or trustee
reasonably acceptable to Agent in trust for the payment thereof.
Interest Coverage Ratio means, as of any day, the ratio of (a) the sum of
Interest Expense for the 12 months ending on such day plus net income of
Borrower and its consolidated Subsidiaries for such 12-month period to (b) the
sum of Interest Expense for such 12-month period plus Permitted Dividends paid
during such period.
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Interest Expense means, for any period, total interest expense accruing on
Borrowed Money Indebtedness of Borrower and its Subsidiaries during such period
(including interest expense attributable to capitalized leases and interest
incurred under interest rate swap, collar, cap or similar agreements providing
interest rate protection), determined in accordance with GAAP.
Interest Options means the Base Rate and each Eurodollar Rate, and
"Interest Option" means any of them.
Interest Payment Dates means (a) for Base Rate Borrowings, November 30,
1998 and the last day of each calendar month thereafter prior to the Maturity
Date and (b) for LIBOR Borrowings, the end of the applicable Interest Period and
the Maturity Date.
Interest Period means, for each LIBOR Borrowing, a period commencing on the
date such LIBOR Borrowing began and ending on the numerically corresponding day
which is, subject to availability as set forth in Section 3.3(c)(iii), 1, 2 or 3
months thereafter, as Borrower shall elect in accordance herewith; provided, (1)
unless Agent shall otherwise consent, no Interest Period with respect to a LIBOR
Borrowing shall commence on a date earlier than three (3) Business Days after
this Agreement shall have been fully executed; (2) any Interest Period with
respect to a LIBOR Borrowing which would otherwise end on a day which is not a
LIBOR Business Day shall be extended to the next succeeding LIBOR Business Day,
unless such LIBOR Business Day falls in another calendar month, in which case
such Interest Period shall end on the next preceding LIBOR Business Day; (3) any
Interest Period with respect to a LIBOR Borrowing which begins on the last LIBOR
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last LIBOR Business Day of the appropriate calendar month, and
(4) no Interest Period shall ever extend beyond the Maturity Date.
Interest Rate Risk Agreement means an interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or similar
arrangement entered into by Borrower or any of its Subsidiaries for the purpose
of reducing Borrower's or such Subsidiary's exposure to interest rate
fluctuations and not for speculative purposes, as it may from time to time be
amended, modified, restated or supplemented.
Interest Rate Risk Indebtedness means all obligations of Borrower with
respect to the program for the hedging of interest rate risk provided for in any
Interest Rate Risk Agreement.
Investment means the purchase or other acquisition of any securities or
Indebtedness of, or the making of any loan, advance, transfer of Property (other
than transfers in the ordinary course of business) or capital contribution to,
or the incurring of any liability (other than Accounts arising in the ordinary
course of business), contingently or otherwise, in respect of the Indebtedness
of, any Person.
Issuer means the issuer (or, where applicable, each issuer) of a Letter of
Credit under this Agreement.
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Key Agreements means any document or paper evidencing, securing or
otherwise relating to any Subordinated Indebtedness.
Legal Requirement means any law, statute, ordinance, decree, requirement,
order, judgment, rule, or regulation (or interpretation of any of the foregoing)
of, and the terms of any license or permit issued by, any Governmental
Authority, whether presently existing or arising in the future.
Letter of Credit shall have the meaning assigned to such term in Section
2.2(a) hereof.
Letter of Credit Liabilities means, at any time and in respect of any
Letter of Credit, the sum of (i) the amount available for drawings under such
Letter of Credit plus (ii) the aggregate unpaid amount of all Reimbursement
Obligations at the time due and payable in respect of previous drawings made
under such Letter of Credit. For the purpose of determining at any time the
amount described in clause (i), in the case of any Letter of Credit payable in a
currency other than Dollars, such amount shall be converted by Agent to Dollars
by any reasonable method, and such converted amount shall be conclusive and
binding, absent manifest error.
LIBOR means, for each Interest Period for any LIBOR Borrowing, the rate per
annum (rounded upwards, if necessary, to the nearest 1/16th of 1%) equal to the
average of the offered quotations appearing on Telerate Page 3750 (or if such
Telerate Page shall not be available, any successor or similar service as may be
selected by Agent and Borrower) as of 11:00 a.m., Dallas, Texas time (or as soon
thereafter as practicable) on the day two LIBOR Business Days prior to the first
day of such Interest Period for deposits in United States dollars having a term
comparable to such Interest Period and in an amount comparable to the principal
amount of the LIBOR Borrowing to which such Interest Period relates. If none of
such Telerate Page 3750 nor any successor or similar service is available, then
"LIBOR" shall mean, with respect to any Interest Period for any applicable LIBOR
Borrowing, the rate of interest per annum, rounded upwards, if necessary, to the
nearest 1/16th of 1%, quoted by Agent at or before 11:00 a.m., Dallas, Texas
time (or as soon thereafter as practicable), on the date two LIBOR Business Days
before the first day of such Interest Period, to be the arithmetic average of
the prevailing rates per annum at the time of determination and in accordance
with the then existing practice in the applicable market, for the offering to
Agent by one or more prime banks selected by Agent in its sole discretion, in
the London interbank market, of deposits in United States dollars for delivery
on the first day of such Interest Period and having a maturity equal to the
length of such Interest Period and in an amount equal (or as nearly equal as may
be) to the LIBOR Borrowing to which such Interest Period relates. Each
determination by Agent of LIBOR shall be conclusive and binding, absent manifest
error, and may be computed using any reasonable averaging and attribution
method.
LIBOR Borrowing means each portion of the principal balance of the Loans at
any time bearing interest at a Eurodollar Rate.
LIBOR Business Day means a Business Day on which transactions in United
States dollar deposits between lenders may be carried on in the London interbank
market.
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Lien means any mortgage, pledge, charge, encumbrance, security interest,
collateral assignment or other lien or restriction of any kind, whether based on
common law, constitutional provision, statute or contract, and shall include
reservations, exceptions, encroachments, easements, rights of way, covenants,
conditions, restrictions and other title exceptions.
Loans means the Revolving Loans provided for by Section 2.1 hereof. The
terms "Revolving Loans" and "Loans" shall have the same meaning hereunder.
Loan Documents means, collectively, this Agreement, the Notes, the
Guaranties, all Applica tions, the Security Documents, the Notice of Entire
Agreement, all instruments, certificates and agreements now or hereafter
executed or delivered by any Obligor to Agent or any Lender pursuant to any of
the foregoing or in connection with the Obligations or any commitment regarding
the Obligations, and all amendments, modifications, renewals, extensions,
increases and rearrangements of, and substitutions for, any of the foregoing.
Majority Lenders means, at any time while no Loans are outstanding, Lenders
having greater than 50% of the aggregate amount of Revolving Loan Commitments,
and at any time while Loans are outstanding, Lenders having greater than 50% of
the aggregate amount of Loans plus available Revolving Loan Commitments.
Margin Percentage means (i) on any day prior to January 1, 1999, 2.50% and
(ii) on and after October 1, 1998, the applicable per annum percentage set forth
at the appropriate intersection in the table shown below, based on the Debt to
EBITDA Ratio as of the last day of the most recently ended fiscal quarter of
Borrower calculated by Agent as soon as practicable after receipt by Agent of
all financial reports required under this Agreement with respect to such fiscal
quarter (including a Compliance Certificate) (provided, however, that if the
Margin Percentage is increased as a result of the reported Debt to EBITDA Ratio,
such increase shall be retroactive to the date that Borrower was obligated to
deliver such financial reports to Agent pursuant to the terms of this Agreement
and provided further, however, that if the Margin Percentage is decreased as a
result of the reported Debt to EBITDA Ratio, and such financial reports are
delivered to Agent not more than ten (10) calendar days after the date required
to be delivered pursuant to the terms of this Agreement, such decrease shall be
retroactive to the date that Borrower was obligated to deliver such financial
reports to Agent pursuant to the terms of this Agreement):
Debt to LIBOR Borrowings
EBITDA Ratio Margin Percentage
--------------------------------- -----------------
Greater than or equal to 4.00 2.75
Greater than or equal to 3.50 but
less than 4.00 2.50
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Greater than or equal to 3.00 but
less than 3.50 2.25
Greater than or equal to 2.50 but
less than 3.00 2.00
Less than 2.50 1.75
Material Adverse Effect means any material and adverse effect on the
ability of an Obligor to perform its obligations under any Loan Document to
which it is a party or on the business, condition (financial or otherwise),
results of operations, assets, liabilities or prospects of Borrower and its
Subsidiaries on a consolidated basis.
Maturity Date means the maturity of the Revolving Notes, October 31, 2000.
Maximum Revolving Loan Available Amount means, at any date, an amount equal
to the lesser of (i) the aggregate of the Revolving Loan Commitments or (ii) the
then effective Borrowing Base.
Monthly Financial Statements means the monthly financial statements of a
Person, which statements shall include a balance sheet as of the end of such
fiscal month and an income statement and a statement of cash flows for such
fiscal month and for the fiscal year to date, subject to normal year-end
adjustments, prepared in accordance with GAAP in all material respects except
that such statements are condensed and exclude detailed footnote disclosures and
certified by the chief financial officer or other authorized officer of such
Person as fairly presenting, in all material respects, the financial condition
of such person as of such date. As to Borrower only, Monthly Financial
Statements shall also include unaudited consolidating financial statements for
Borrower and its Subsidiaries, in Proper Form, certified by the chief financial
officer or other authorized officer of Borrower as presenting fairly in all
material respects the consolidating financial position of the applicable Person.
Notes shall have the meaning assigned to such term in Section 2.6 hereof.
The terms "Revolving Notes" and "Notes" shall have the same meaning hereunder.
Notice of Entire Agreement means a notice of entire agreement, in Proper
Form, executed by Borrower, each other Obligor and Agent, as the same may from
time to time be amended, modified, supplemented or restated.
Obligations means, as at any date of determination thereof, the sum of the
following: (i) the aggregate principal amount of Loans outstanding hereunder on
such date, plus (ii) the aggregate amount of the outstanding Letter of Credit
Liabilities hereunder on such date, plus (iii) all other outstanding
liabilities, obligations and indebtedness of any Obligor under this Agreement,
any Note, the Guaranties, all applications and the Security Documents on such
date.
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Obligors means Borrower and each Person now or hereafter executing a
Guaranty and/or a Security Agreement.
Organizational Documents means, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership and with respect to a trust, the instrument
establishing such trust and with respect to any other Person, the agreements or
instruments pursuant to which such Person was formed; in each case including any
and all modifications thereof and any and all future modifications thereof.
Past Due Rate means, on any day, a rate per annum equal to the lesser of
(i) the Ceiling Rate for that day or (ii) the Base Rate plus three percent (3%).
PBGC means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
Permitted Dividends means (i) dividends or distributions by a Subsidiary
of Borrower to Borrower or any other Subsidiary of Borrower, (ii) stock
dividends and (iii) so long as no Default or Event of Default shall have
occurred and be continuing (or would result therefrom), dividends payable under
the terms of the Equity Interests approved by the Super Majority Lenders.
Permitted Investments means: (a) readily marketable securities issued or
fully guaranteed by the United States of America with maturities of not more
than one year; (b) commercial paper rated "Prime 1" by Moody's Investors
Service, Inc. or "A-1" by Standard and Poor's Ratings Services with maturities
of not more than 180 days, and (c) certificates of deposit or repurchase
obligations issued by any U.S. domestic bank having capital surplus of at least
$100,000,000 or by any other financial institution acceptable to Agent, all of
the foregoing not having a maturity of more than one year from the date of
issuance thereof.
Permitted Liens means each of the following: (a) artisans' or mechanics'
Liens arising in the ordinary course of business, and Liens for taxes, but only
to the extent that payment thereof shall not at the time be due or if due, the
payment thereof is being diligently contested in good faith and adequate
reserves computed in accordance with GAAP have been set aside therefor; (b)
Liens in effect on the Effective Date and disclosed to the Lenders in the
financial statements delivered on or prior to the Effective Date pursuant to
Section 6.2 hereof or in a schedule hereto; (c) normal reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions and
encumbrances which do not secure Borrowed Money Indebtedness and which do not
materially impair the value or utility of the applicable Property; (d) Liens in
favor of Agent or any Lender under the Loan Documents, including, without
limitation, Liens securing Interest Rate Risk Indebtedness owed to one or more
of the Lenders (but not to any Person which is not, at such time, a Lender); (e)
Liens incurred or deposits made in the ordinary course of business (1) in
connection with workmen's compensation, unemployment insurance, social security
and other like laws, or (2) to secure insurance in the ordinary course of
business, the performance of bids, tenders, contracts, leases, licenses,
statutory obligations, surety, appeal and performance bonds and other similar
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obligations incurred in the ordinary course of business, not, in any of the
cases specified in this clause (2), incurred in connection with the borrowing of
money, the obtaining of advances or the payment of the deferred purchase price
of Property; (f) attachments, judgments and other similar Liens arising in
connection with court proceedings, provided that the execution and enforcement
of such Liens are effectively stayed and the claims secured thereby are being
actively contested in good faith with adequate reserves made therefor in
accordance with GAAP; (g) Liens imposed by law, such as landlords', carriers',
warehousemen's, mechanics', materialmen's and vendors' liens, incurred in good
faith in the ordinary course of business and securing obligations which are not
yet due or which are being contested in good faith by appropriate proceedings if
adequate reserves with respect thereto are maintained in accordance with GAAP;
(h) zoning restrictions, easements, licenses, reservations, provisions,
covenants, conditions, waivers, and restrictions on the use of Property, and
which do not in any case singly or in the aggregate materially impair the
present value or utility of the applicable Property; (i) Liens securing purchase
money Indebtedness permitted under Section 8.1 hereof and covering the Property
so purchased; (j) capital leases and sale/leaseback transactions permitted under
the other provisions of this Agreement, and (k) extensions, renewals and
replacements of Liens referred to in clauses (a) through (j) of this definition;
provided that any such extension, renewal or replacement Lien shall be limited
to the Property or assets covered by the Lien extended, renewed or replaced and
that the Borrowed Money Indebtedness secured by any such extension, renewal or
replacement Lien shall be in an amount not greater than the amount of the
Indebtedness secured by the Lien extended, renewed or replaced.
Person means any individual, Corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
Plan means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
and is either (a) maintained by Borrower or any member of the Controlled Group
for employees of Borrower or any member of the Controlled Group or (b)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
Borrower or any member of the Controlled Group is then making or accruing an
obligation to make contributions or has within the preceding five plan years
made contributions.
Prime Rate means, on any day, the prime rate for that day as determined
from time to time by Comerica. The Prime Rate is a reference rate and does not
necessarily represent the lowest or best rate or a favored rate, and Comerica,
Agent and each Lender disclaims any statement, representation or warranty to the
contrary. Comerica, Agent or any Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
Principal Office means the principal office of Agent in Dallas, Texas,
presently located at 1601 Elm Street, Dallas, Texas 75201.
Proper Form means in form and substance reasonably satisfactory to Agent.
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Property means any interest in any kind of property or asset, whether real,
personal or mixed, tangible or intangible.
Qualified Institution means (a) any bank or trust company which is
organized under the laws of any country which is a member of the Organization
for Economic Cooperation and Development or any political subdivision of any
such country; and having capital, surplus and undivided profits aggregating at
least $100,000,000.00 (or its equivalent in another currency) as of the date of
such Person's most recent financial reports, and (b) any other Person approved
in writing by Agent.
Quarterly Dates means the last day of each March, June, September and
December, provided that if any such date is not a Business Day, then the
relevant Quarterly Date shall be the next succeeding Business Day.
Rate Designation Date means that Business Day which is (a) in the case of
Base Rate Borrowings, 11:00 a.m., Dallas, Texas time, on the date one Business
Day preceding the date of such borrowing and (b) in the case of LIBOR
Borrowings, 11:00 a.m., Dallas, Texas time, on the date three LIBOR Business
Days preceding the first day of any proposed Interest Period.
Rate Designation Notice means a written notice substantially in the form of
Exhibit B.
Regulation D means Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and includes any successor or other
regulation relating to reserve requirements applicable to member banks of the
Federal Reserve System.
Regulatory Change means, with respect to any Lender, any change on or after
the Effective Date in any Legal Requirement (including, without limitation,
Regulation D) or the adoption or making on or after such date of any
interpretation, directive or request applying to a class of lenders including
such Lender under any Legal Requirements (whether or not having the force of
law) by any Governmental Authority.
Reimbursement Obligations means, as at any date, the obligations of
Borrower then outstanding, or which may thereafter arise, in respect of Letters
of Credit under this Agreement, to reimburse the applicable Issuers for the
amount paid by such Issuers in respect of any drawing under such Letters of
Credit, which obligations shall at all times be payable in Dollars
notwithstanding any such Letter of Credit being payable in a currency other than
Dollars.
Request for Extension of Credit means a request for extension of credit
duly executed by any responsible officer, which may include the president, the
chief executive officer, the chief financial officer, any vice president or the
treasurer of Borrower, appropriately completed and substantially in the form of
Exhibit A attached hereto.
Requirements of Environmental Law means all requirements imposed by any law
(including for example and without limitation The Resource Conservation and
Recovery Act and The Comprehensive Environmental Response, Compensation, and
Liability Act), rule, regulation, or
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order of any federal, state or local executive, legislative, judicial,
regulatory or administrative agency, board or authority in effect at the
applicable time which relate to (i) noise; (ii) pollution, protection or clean-
up of the air, surface water, ground water or land; (iii) solid, gaseous or
liquid waste gener ation, treatment, storage, disposal or transportation; (iv)
exposure to Hazardous Substances; (v) the safety or health of employees or (vi)
regulation of the manufacture, processing, distribution in commerce, use,
discharge or storage of Hazardous Substances.
Revolving Loan means a Loan made pursuant to Section 2.1 hereof. The terms
"Revolving Loan" and "Loan" shall have the same meaning hereunder.
Revolving Loan Availability Period means, for each Revolving Loan Lender,
the period from and including the Effective Date to (but not including) the
Revolving Loan Termination Date.
Revolving Loan Commitment means, as to any Lender, the obligation, if any,
of such Lender to make Revolving Loans and incur or participate in Letter of
Credit Liabilities in an aggregate principal amount at any one time outstanding
up to (but not exceeding) the amount, if any, set forth opposite such Lender's
name on the signature pages hereof under the caption "Revolving Loan
Commitment", or otherwise provided for in an Assignment and Acceptance Agreement
(as the same may be reduced from time to time pursuant to Section 2.3 hereof).
Revolving Loan Commitment Percentage means, as to any Revolving Loan
Lender, the percentage equivalent of a fraction the numerator of which is the
amount of such Lender's Revolving Loan Commitment and the denominator of which
is the aggregate amount of the Revolving Loan Commitments of all Lenders.
Revolving Loan Lender means each Lender with (i) prior to the Revolving
Loan Termination Date, a Revolving Loan Commitment and (ii) on and after the
Revolving Loan Termination Date, any outstanding Revolving Loan Obligations. The
terms "Revolving Loan Lender" and "Lender" shall have the same meaning
hereunder.
Revolving Loan Obligations means, as at any date of determination thereof,
the sum of the following (determined without duplication): (i) the aggregate
principal amount of Revolving Loans outstanding hereunder plus (ii) the
aggregate amount of the Letter of Credit Liabilities hereunder.
Revolving Loan Termination Date means the earlier of (a) the Maturity Date
or (b) the date specified or deemed specified by Agent in accordance with
Section 9.1 hereof.
Revolving Notes means the Notes of Borrower evidencing the Revolving Loans,
in substantially the form of Exhibit C hereto.
Scheduled Principal Payments means scheduled principal payments due with
respect to Borrowed Money Indebtedness of Borrower or any of its Subsidiaries
(other than any amounts due upon the maturity of the respective Notes) whether
such scheduled payment is due because of amortization or maturity of such
Borrowed Money Indebtedness.
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Secretary's Certificate means a certificate, in Proper Form, of the
Secretary or an Assistant Secretary of a corporation certifying (a) that
attached thereto are true and correct copies of resolutions of the Board of
Directors of such corporation authorizing the execution, delivery and
performance of the Loan Documents to be executed by such corporation; (b) the
incumbency and signature of the officer of such corporation executing such Loan
Documents on behalf of such corporation, and (c) that attached thereto are true
and correct copies of the Organizational Documents of such corporation.
Security Agreements means security agreements, each in Proper Form,
executed or to be executed by Borrower (or any other applicable Obligor) in
favor of Agent covering all of the real Property (other than real Property owned
as of the Effective Date) and material personal Property of Borrower and its
Subsidiaries (other than Foreign Subsidiaries), as the same may from time to
time be amended, modified, restated or supplemented. Notwithstanding the
foregoing, Borrower shall not be required to grant a Lien to Agent on more than
65% of the issued and outstanding equity interests owned by Borrower in its
Foreign Subsidiaries.
Security Documents means, collectively, the Security Agreements, the
Financing Statements and any and all other security documents now or hereafter
executed and delivered by any Obligor to secure all or any part of the
Obligations, as any of them may from time to time be amended, modified, restated
or supplemented.
Stated Rate means, with respect to any Lender, the effective weighted per
annum rate of interest applicable to the Loans made by such Lender; provided,
that if on any day such rate shall exceed the Ceiling Rate for that day, the
Stated Rate shall be fixed at the Ceiling Rate on that day and on each day
thereafter until the total amount of interest accrued at the Stated Rate on the
unpaid principal balances of the Notes plus the Additional Interest equals the
total amount of interest which would have accrued if there had been no Ceiling
Rate. If the Notes mature (or are prepaid) before such equality is achieved,
then, in addition to the unpaid principal and accrued interest then owing
pursuant to the other provisions of the Loan Documents, Borrower promises to pay
on demand to the order of the holder of each Note interest in an amount equal to
the excess (if any) of (a) the lesser of (i) the total interest which would have
accrued on such Note if the Stated Rate had been defined as equal to the Ceiling
Rate from time to time in effect and (ii) the total interest which would have
accrued on such Note if the Stated Rate were not so prohibited from exceeding
the Ceiling Rate, over (b) the total interest actually accrued on such Note to
such maturity (or prepayment) date. Without notice to Borrower or any other
Person, the Stated Rate shall automatically fluctuate upward and downward in
accordance with the provisions of this definition.
Subordinated Indebtedness means all Indebtedness of Borrower and its
Subsidiaries which has been subordinated on terms and conditions satisfactory to
the Super Majority Lenders, in their sole discretion, to the Obligations,
whether now existing or hereafter incurred. Indebtedness shall not be
considered as "Subordinated Indebtedness" unless and until Agent shall have
received copies of the documentation evidencing or relating to such Indebtedness
together with a subordination agreement, in Proper Form, duly executed by the
holder or holders of such Indebtedness and evidencing the terms and conditions
of subordination required by the Super Majority Lenders.
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Subsidiary means, as to a particular parent Corporation, any Corporation of
which more than 50% of the indicia of equity rights (whether outstanding capital
stock or otherwise) is at the time directly or indirectly owned by, such parent
Corporation.
Super Majority Lenders means, at any time while no Loans are outstanding,
Lenders having greater than 66-2/3% of the aggregate amount of Revolving Loan
Commitments, and at any time while Loans are outstanding, Lenders having greater
than 66-2/3% of the aggregate amount of Loans plus available Revolving Loan
Commitments.
Tangible Net Worth shall mean total assets (valued at cost less normal
depreciation), less (a) all intangibles and (b) all liabilities (excluding
contingent and indirect liabilities), all determined in accordance with GAAP.
The term "intangibles" shall include, without limitation, (1) deferred charges;
(2) the amount of any write-up in the book value of any acquired assets in
excess of fair market value and (3) the aggregate of all amounts appearing on
the assets side of any such balance sheet for franchises, licenses, permits,
patents, patent applications, copyrights, trademarks, trade names, goodwill,
treasury stock, experimental or organizational expenses and other like
intangibles. The term "liabilities" shall include, without limitation, (1)
Indebtedness secured by Liens on Property of the Person with respect to which
Tangible Net Worth is being computed, whether or not such Person is liable for
the payment thereof; (2) deferred liabilities, and (3) Capital Lease
Obligations. Tangible Net Worth shall be calculated on a consolidated basis.
Taxes shall have the meaning ascribed to it in Section 4.1(d) hereof.
Total Liabilities to Tangible Net Worth and Subordinated Indebtedness Ratio
means, as of any day, the ratio of (a) total liabilities (other than
Subordinated Indebtedness) of Borrower and its consolidated Subsidiaries as of
such date to (b) the sum of Tangible Net Worth as such date plus Subordinated
Indebtedness of Borrower and its consolidated Subsidiaries as of such date.
Unfunded Liabilities means, with respect to any Plan, at any time, the
amount (if any) by which (a) the present value of all benefits under such Plan
exceeds (b) the fair market value of all Plan assets allocable to such benefits,
all determined as of the then most recent actuarial valuation report for such
Plan, but only to the extent that such excess represents a potential liability
of any member of the Controlled Group to the PBGC or a Plan under Title IV of
ERISA. With respect to multi-employer Plans, the term "Unfunded Liabilities"
shall also include contingent liability for withdrawal liability under Section
4201 of ERISA to all multi-employer Plans to which Borrower or any member of a
Controlled Group for employees of Borrower contributes in the event of complete
withdrawal from such plans.
1.2 Miscellaneous. The words "hereof," "herein," and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not any particular provision of this Agreement.
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2. Commitments and Loans.
2.1 Loans. Each Lender severally agrees, subject to all of the terms and
conditions of this Agreement (including, without limitation, Sections 5.1 and
5.2 hereof), to make Loans under this Section to Borrower from time to time on
or after the Effective Date and during the Revolving Loan Availability Period,
in an aggregate principal amount at any one time outstanding (including its
Revolving Loan Commitment Percentage of all Letter of Credit Liabilities at such
time) up to but not exceeding such Lender's Revolving Loan Commitment Percentage
of the Maximum Revolving Loan Available Amount. Subject to the conditions in
this Agreement, any such Revolving Loan repaid prior to the Revolving Loan
Termination Date may be reborrowed pursuant to the terms of this Agreement;
provided, that any and all such Revolving Loans shall be due and payable in full
on the Revolving Loan Termination Date. Borrower, Agent and the Lenders agree
pursuant to Chapter 346 ("Chapter 346") of the Texas Finance Code, that Chapter
346 (which relates to open-end line of credit revolving loan accounts) shall not
apply to this Agreement, the Notes or any Obligation and that neither the Notes
nor any Obligation shall be governed by Chapter 346 or subject to its provisions
in any manner whatsoever. The aggregate of all Revolving Loans to be made by
the Lenders in connection with a particular borrowing shall be equal to the
lesser of (a) the remaining unused portion of the Revolving Loan Commitments or
(b) a multiple of $100,000.
2.2 Letters of Credit.
(a) Letters of Credit. Subject to the terms and conditions of this
Agreement, and on the condition that aggregate Letter of Credit Liabilities
shall never exceed $500,000, (i) Borrower shall have the right to, in addition
to Loans provided for in Section 2.1 hereof, utilize the Revolving Loan
Commitments from time to time during the Revolving Loan Availability Period by
obtaining the issuance of letters of credit for the account of Borrower if
Borrower shall so request in the notice referred to in Section 2.2(b)(i) hereof
(such letters of credit, as any of them may be amended, supplemented, extended
or confirmed from time to time, being herein collectively called the "Letters of
Credit)" and (ii) Comerica agrees to issue such Letters of Credit. Upon the
date of the issuance of a Letter of Credit, the applicable Issuer shall be
deemed, without further action by any party hereto, to have sold to each
Revolving Loan Lender, and each such Lender shall be deemed, without further
action by any party hereto, to have purchased from the applicable Issuer, a
participation, to the extent of such Lender's Revolving Loan Commitment
Percentage, in such Letter of Credit and the related Letter of Credit
Liabilities, which participation shall terminate on the earlier of the
expiration date of such Letter of Credit or the Revolving Loan Termination Date.
Any Letter of Credit that shall have an expiration date after the Revolving Loan
Termination Date shall be subject to Cover. Comerica or, with the prior
approval of Borrower and Agent, another Lender shall be the Issuer of each
Letter of Credit.
(b) Additional Provisions. The following additional provisions shall apply
to each Letter of Credit:
(i) Borrower shall give Agent notice requesting each issuance of a
Letter of Credit hereunder as provided in Section 4.3 hereof and shall
furnish such additional
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information regarding such transaction as Agent may reasonably request.
Upon receipt of such notice, Agent shall promptly notify each Revolving
Loan Lender of the contents thereof and of such Lender's Revolving Loan
Commitment Percentage of the amount of such proposed Letter of Credit.
(ii) No Letter of Credit may be issued if after giving effect thereto
the sum of (A) the aggregate outstanding principal amount of Revolving
Loans plus (B) the aggregate Letter of Credit Liabilities would exceed the
Maximum Revolving Loan Available Amount. On each day during the period
commencing with the issuance of any Letter of Credit and until such Letter
of Credit shall have expired or been terminated, the Revolving Loan
Commitment of each Revolving Loan Lender shall be deemed to be utilized for
all purposes hereof, including Section 2.4(a), in an amount equal to such
Lender's Revolving Loan Commitment Percentage of the amount then available
for drawings under such Letter of Credit (or any unreimbursed drawings
under such Letter of Credit).
(iii) Upon receipt from the beneficiary of any Letter of Credit of
any demand for payment thereunder, Agent shall promptly notify Borrower and
each Lender as to the amount to be paid as a result of such demand and the
payment date therefor. If at any time prior to the earlier of the
expiration date of a Letter of Credit or the Revolving Loan Termination
Date any Issuer shall have made a payment to a beneficiary of a Letter of
Credit in respect of a drawing under such Letter of Credit, each Revolving
Loan Lender will pay to Agent immediately upon demand by such Issuer at any
time during the period commencing after such payment until reimbursement
thereof in full by Borrower, an amount equal to such Lender's Revolving
Loan Commitment Percentage of such payment, together with interest on such
amount for each day from the date of demand for such payment (or, if such
demand is made after 11:00 a.m. Dallas time on such date, from the next
succeeding Business Day) to the date of payment by such Lender of such
amount at a rate of interest per annum equal to the Federal Funds Rate for
such period. To the extent that it is ultimately determined that the
Borrower is relieved of its obligation to reimburse the applicable Issuer
because of such Issuer's gross negligence or willful misconduct in
determining that documents received under any applicable Letter of Credit
comply with the terms thereof, the applicable Issuer shall be obligated to
refund to the paying Lenders all amounts paid to such Issuer to reimburse
Issuer for the applicable drawing under such Letter of Credit.
(iv) Borrower shall be irrevocably and unconditionally obligated
forthwith to reimburse Agent, on the date on which the Agent notifies
Borrower of the date and amount of any payment by the Issuer of any drawing
under a Letter of Credit, for the amount paid by any Issuer upon such
drawing, without presentment, demand, protest or other formalities of any
kind, all of which are hereby waived. Such reimbursement may, subject to
satisfaction of the conditions in Sections 5.1 and 5.2 hereof, the
limitation on size contained in Section 2.1 and to the Maximum Revolving
Loan Available Amount (after adjustment in the same to reflect the
elimination of the corresponding Letter of Credit Liability), be made by
the borrowing of Revolving Loans. Agent will pay to each Revolving Loan
Lender such Lender's Revolving Loan Commitment Percentage of all amounts
received from Borrower
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for application in payment, in whole or in part, of the Reimbursement
Obligation in respect of any Letter of Credit, but only to the extent such
Lender has made payment to Agent in respect of such Letter of Credit
pursuant to clause (iii) above.
(v) Borrower will pay to Agent at the Principal Office for the account
of each Revolving Loan Lender a letter of credit fee with respect to each
Letter of Credit equal to the greater of (x) $300 or (y) a per annum fee of
one percent (1%) multiplied by the face amount of each Letter of Credit
(and computed on the basis of the actual number of days elapsed in a year
composed of 360 days), in each case for the period from and including the
date of issuance of such Letter of Credit to and including the stated date
of expiration thereof, such fee to be due and payable in advance on the
date of the issuance thereof. Agent will pay to each Revolving Loan
Lender, promptly after receiving any payment in respect of letter of credit
fees referred to in this clause (v), an amount equal to the product of such
Lender's Revolving Loan Commitment Percentage times the amount of such
fees. In addition to and cumulative of the above described fees, Borrower
shall pay to Agent, for the account of the applicable Issuer, in advance on
the date of the issuance of the applicable Letter of Credit, a per annum
fronting fee in an amount equal to 1/8% of the face amount of the
applicable Letter of Credit (such fronting fee to be retained by the
applicable Issuer for its own account).
(vi) The issuance by the applicable Issuer of each Letter of Credit
shall, in addition to the conditions precedent set forth in Section 5
hereof, be subject to the conditions precedent (A) that such Letter of
Credit shall be in such form and contain such terms as shall be reasonably
satisfactory to Agent, and (B) that Borrower shall have executed and
delivered such Applications and other instruments and agreements relating
to such Letter of Credit as Agent shall have reasonably requested and are
not inconsistent with the terms of this Agreement. In the event of a
conflict between the terms of this Agreement and the terms of any
Application, the Agent, each Issuer, the Borrower and each Lender agree
that the terms hereof shall control.
(vii) Issuer will send to the Borrower and each Lender, immediately
upon issuance of any Letter of Credit issued by Issuer or any amendment
thereto, a true and correct copy of such Letter of Credit or amendment.
(c) Indemnification; Release. Borrower hereby indemnifies and holds
harmless Agent, each Revolving Loan Lender and each Issuer from and against any
and all claims, damages, losses, liabilities, costs or expenses which Agent,
such Lender or such Issuer may incur (or which may be claimed against Agent,
such Lender or such Issuer by any Person whatsoever), REGARDLESS OF WHETHER
CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY OF THE INDEMNIFIED PARTIES,
in connection with the execution and delivery of any Letter of Credit or
transfer of or payment or failure to pay under any Letter of Credit; provided
that Borrower shall not be required to indemnify or hold harmless any party
seeking indemnification for any claims, damages, losses, liabilities, costs or
expenses to the extent, but only to the extent, caused by (i) the willful
misconduct or gross negligence of the party seeking indemnification or
exoneration, or (ii) the failure by the party seeking indemnification to pay
under any Letter of Credit after the
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presentation to it of a request required to be paid under applicable law.
Borrower hereby releases, waives and discharges Agent, each Revolving Loan
Lender and each Issuer from any claims, causes of action, damages, losses,
liabilities, reasonable costs or expenses which may now exist or may hereafter
arise, REGARDLESS OF WHETHER CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE OF ANY
OF THE INDEMNIFIED PARTIES, by reason of or in connection with the failure of
Agent, any Issuer or any other Revolving Loan Lender to fulfill or comply with
its obligations to the other parties hereunder (but nothing herein contained
shall affect any rights Borrower may have against such defaulting party).
Nothing in this Section 2.2(c) is intended to limit the obligations of Borrower
under any other provision of this Agreement.
(d) Additional Costs in Respect of Letters of Credit. Subject to Sections
11.7 and 11.15 hereof, if as a result of any Regulatory Change there shall be
imposed, modified or deemed applicable any tax (other than any tax based on or
measured by net income), reserve, special deposit or similar requirement against
or with respect to or measured by reference to Letters of Credit issued or to be
issued hereunder or participations in such Letters of Credit, and the result
shall be to increase the cost to any Revolving Loan Lender of issuing or
maintaining any Letter of Credit or any participation therein, or materially
reduce any amount receivable by any Revolving Loan Lender hereunder in respect
of any Letter of Credit or any participation therein (which increase in cost, or
reduction in amount receivable, shall be the result of such Lender's reasonable
allocation of the aggregate of such increases or reductions resulting from such
event), then such Lender shall notify Borrower through Agent (which notice shall
be accompanied by a statement setting forth in reasonable detail the basis for
the determination of the amount due), and within 15 Business Days after demand
therefor by such Lender through Agent, Borrower shall pay to such Lender, from
time to time as specified by such Lender, such additional amounts as shall be
sufficient to compensate such Lender for such increased costs or reductions in
amount. Such statement as to such increased costs or reductions in amount
incurred by such Lender, submitted by such Lender to Borrower, shall be
conclusive as to the amount thereof, absent manifest error, and may be computed
using any reasonable averaging and attribution method. Each Lender will notify
Borrower through Agent of any event occurring after the date of this Agreement
which will entitle such Lender to compensation pursuant to this Section as
promptly as practicable after any executive officer of such Lender obtains
knowledge thereof and determines to request such compensation, and (if so
requested by Borrower through Agent) will designate a different lending office
of such Lender for the issuance or maintenance of Letters of Credit by such
Lender or will take such other action as Borrower may reasonably request if such
designation or action is consistent with the internal policy of such Lender and
legal and regulatory restrictions, can be undertaken at no additional cost
(unless Borrower agrees to pay such costs), will avoid the need for, or reduce
the amount of, such compensation and will not, in the sole opinion of such
Lender, be disadvantageous to such Lender (provided that such Lender shall have
no obligation so to designate a different lending office which is not located in
the United States of America).
2.3 Terminations or Reductions of Commitments.
(a) Mandatory. On the Revolving Loan Termination Date, all Revolving Loan
Commitments shall be terminated in their entirety.
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(b) Optional. Borrower shall have the right to terminate or reduce the
unused portion of the Revolving Loan Commitments at any time or from time to
time, provided that (i) Borrower shall give notice of each such termination or
reduction to Agent as provided in Section 4.3 hereof and (ii) each such partial
reduction shall be in an integral multiple of $500,000.
(c) No Reinstatement. No termination or reduction of the Revolving Loan
Commitments may be reinstated without the written approval of Agent and the
Lenders.
2.4 Commitment Fees.
(a) Borrower shall pay to Agent for the account of each Revolving Loan
Lender revolving loan commitment fees for the Revolving Loan Availability Period
at a rate per annum equal to 0.25%. Such revolving loan commitment fees shall
be computed (on the basis of the actual number of days elapsed in a year
composed of 360 days) on each day and shall be based on the excess of (x) the
aggregate amount of each Revolving Loan Lender's Revolving Loan Commitment for
such day over (y) the sum of (i) the aggregate unpaid principal balance of such
Lender's Revolving Note on such day plus (ii) the aggregate Letter of Credit
Liabilities as to such Lender for such day. Accrued revolving loan commitment
fees shall be payable in arrears on the Quarterly Dates prior to the Revolving
Loan Termination Date and on the Revolving Loan Termination Date.
(b) All past due fees payable under this Section shall bear interest at the
Past Due Rate.
2.5 Several Obligations. The failure of any Lender to make any Loan to be
made by it on the date specified therefor shall not relieve any other Lender of
its obligation to make its Loan on such date, but neither Agent nor any Lender
shall be responsible or liable for the failure of any other Lender to make a
Loan to be made by such other Lender or to participate in, or co-issue, any
Letter of Credit. Notwithstanding anything contained herein to the contrary, (a)
no Lender shall be required to make or maintain Revolving Loans at any time
outstanding if as a result the total Revolving Loan Obligations to such Lender
shall exceed the lesser of (1) such Lender's Revolving Loan Commitment
Percentage of all Revolving Loan Obligations and (2) such Lender's Revolving
Loan Commitment Percentage of the Maximum Revolving Loan Available Amount and
(b) if a Revolving Loan Lender fails to make a Revolving Loan as and when
required hereunder, then upon each subsequent event which would otherwise result
in funds being paid to the defaulting Lender, the amount which would have been
paid to the defaulting Lender shall be divided among the non-defaulting Lenders
ratably according to their respective shares of the outstanding Revolving Loan
Commitment Percentages until the Revolving Loan Obligations of each Revolving
Loan Lender (including the defaulting Lender) are equal to such Lender's
Revolving Loan Commitment Percentage of the total Revolving Loan Obligations.
2.6 Notes. The Revolving Loans made by each Lender shall be evidenced by
a single Revolving Note of Borrower in substantially the form of Exhibit C
hereto payable to the order of such Lender in a principal amount equal to the
Revolving Loan Commitment of such Lender, and otherwise duly completed. The
promissory notes described in this Section are each, together with all renewals,
extensions, modifications and replacements thereof and substitutions therefor,
called
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a "Note" and collectively called the "Notes". Each Lender is hereby authorized
by Borrower to endorse on the schedule (or a continuation thereof) that may be
attached to each Note of such Lender, to the extent applicable, the date,
amount, type of and the applicable period of interest for each Loan made by such
Lender to Borrower hereunder, and the amount of each payment or prepayment of
principal of such Loan received by such Lender, provided that any failure by
such Lender to make any such endorsement shall not affect the obligations of
Borrower under such Note or hereunder in respect of such Loan.
2.7 Use of Proceeds. The proceeds of the Revolving Loans shall be used to
refinance existing Borrowed Money Indebtedness of Borrower and for other working
capital and general corporate purposes. Neither Agent nor any Lender shall have
any responsibility as to the use of any proceeds of the Loans.
3. Borrowings, Payments, Prepayments and Interest Options.
3.1 Borrowings. Borrower shall give Agent notice of each borrowing to be
made hereunder as provided in Section 4.3 hereof and Agent shall promptly notify
each Lender of such request. Not later than 11:00 a.m. Dallas time on the date
specified for each such borrowing hereunder, each Lender shall make available
the amount of the Loan, if any, to be made by it on such date to Agent at its
Principal Office, in immediately available funds, for the account of Borrower.
Such amounts received by Agent will be held in an account maintained by Borrower
with Agent. The amounts so received by Agent shall, subject to the terms and
conditions of this Agreement, be made available to Borrower by wiring or
otherwise transferring, in immediately available funds, such amount to an
account designated by Borrower and approved by Agent.
3.2 Payments and Prepayments.
(a) Optional Prepayments. Except as provided in Section 3.3 hereof,
Borrower shall have the right to prepay, on any Business Day, in whole or in
part, without the payment of any premium, penalty or fee, any Loans at any time
or from time to time, provided that Borrower shall give Agent notice of each
such prepayment as provided in Section 4.3 hereof. Each optional prepayment on
a Loan shall be in an amount equal to an integral multiple of $100,000.
(b) Borrowing Base. Borrower shall from time to time on demand by Agent
prepay the Revolving Loans (or provide Cover for Letter of Credit Liabilities)
in such amounts as shall be necessary so that at all times the aggregate
outstanding amount of all Revolving Loan Obligations shall be less than or equal
to the Maximum Revolving Loan Available Amount.
(c) Interest Payments. Accrued and unpaid interest on the unpaid principal
balance of the Loans shall be due and payable on the Interest Payment Dates.
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(d) Payments and Interest on Reimbursement Obligations. Borrower will pay
to Agent for the account of each Lender the amount of each Reimbursement
Obligation as set forth in Section 2.2(b)(iv). Subject to Section 11.7 hereof,
Borrower will pay to Agent for the account of each Lender interest at the
applicable Past Due Rate on any Reimbursement Obligation and on any other amount
payable by Borrower hereunder to or for the account of such Lender (but, if such
amount is interest, only to the extent legally allowed), which shall not be paid
in full within five (5) days after the date due (whether at stated maturity, by
acceleration or otherwise), for the period commencing on the expiration of such
five (5) day period until the same is paid in full.
3.3 Interest Options
(a) Options Available. The outstanding principal balance of the Notes
shall bear interest at the Base Rate; provided, that (1) all past due amounts,
both principal and accrued interest, shall bear interest at the Past Due Rate,
and (2) subject to the provisions hereof, Borrower shall have the option of
having all or any portion of the principal balances of the Notes from time to
time outstanding bear interest at a Eurodollar Rate. The records of Agent and
each of the Lenders with respect to Interest Options, Interest Periods and the
amounts of Loans to which they are applicable shall be binding and conclusive,
absent manifest error. Interest on the Loans shall be calculated at the Base
Rate except where it is expressly provided pursuant to this Agreement that a
Eurodollar Rate is to apply. Interest on the amount of each advance against the
Notes shall be computed on the amount of that advance and from the date it is
made. Notwithstanding anything in this Agreement to the contrary, for the full
term of the Notes the interest rate produced by the aggregate of all sums paid
or agreed to be paid to the holders of the Notes for the use, forbearance or
detention of the debt evidenced thereby (including all interest on the Notes at
the Stated Rate plus the Additional Interest) shall not exceed the Ceiling Rate.
(b) Designation and Conversion. Borrower shall have the right to designate
or convert its Interest Options in accordance with the provisions hereof.
Provided no Event of Default has occurred and is continuing and subject to the
last sentence of Section 3.3(a) and the provisions of Section 3.3(c), Borrower
may elect to have a Eurodollar Rate apply or continue to apply to all or any
portion of the principal balance of the Notes. Each change in Interest Options
shall be a conversion of the rate of interest applicable to the specified
portion of the Loans, but such conversion shall not change the respective
outstanding principal balances of the Notes. The Interest Options shall be
designated or converted in the manner provided below:
(i) Borrower shall give Agent telephonic notice, promptly confirmed by a
Rate Designation Notice (and Agent shall promptly inform each Lender
thereof). Each such telephonic and written notice shall specify the
amount of the Loan which is the subject of the designation, if any;
the amount of borrowings into which such borrow ings are to be
converted or for which an Interest Option is designated; the proposed
date for the designation or conversion and the Interest Period or
Periods, if any, selected by Borrower. Such telephonic notice shall
be irrevocable and shall be given to Agent no later than the
applicable Rate Designation Date.
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(ii) No more than three (3) LIBOR Borrowings shall be in effect with
respect to the Revolving Loans at any time.
(iii) Each designation or conversion of a LIBOR Borrowing shall occur on a
LIBOR Business Day.
(iv) Except as provided in Section 3.3(c) hereof, no LIBOR Borrowing may be
converted to a Base Rate Borrowing or another LIBOR Borrowing on any
day other than the last day of the applicable Interest Period.
(v) Each request for a LIBOR Borrowing shall be in the amount equal to
$500,000 or an integral multiple of $100,000 in excess thereof.
(vi) Each designation of an Interest Option with respect to the Revolving
Notes shall apply to all of the Revolving Notes ratably in accordance
with their respective outstanding principal balances. If any Lender
assigns an interest in any of its Notes when any LIBOR Borrowing is
outstanding with respect thereto, then such assignee shall have its
ratable interest in such LIBOR Borrowing.
(c) Special Provisions Applicable to LIBOR Borrowings.
(i) Options Unlawful. If the adoption of any applicable Legal Requirement
after the Effective Date or any change after the Effective Date in any
applicable Legal Requirement or in the interpretation or administration thereof
by any Governmental Authority or compliance by any Lender with any request or
directive (whether or not having the force of law) issued after the Effective
Date by any central bank or other Governmental Authority shall at any time make
it unlawful or impossible for any Lender to permit the establishment of or to
maintain any LIBOR Borrowing, the commitment of such Lender to establish such
LIBOR Borrowing shall forthwith be canceled and Borrower shall on the last day
the Interest Period relating to any outstanding LIBOR Borrowing (or within such
earlier period as may be required by applicable law) (1) convert the LIBOR
Borrowing of such Lender to a Base Rate Borrowing; (2) pay all accrued and
unpaid interest to date on the amount so converted; and (3) pay any amounts
required to compensate each Lender for any additional cost or expense which any
Lender may incur as a result of such adoption of or change in such Legal
Requirement or in the interpretation or administration thereof and any Funding
Loss which any Lender may incur as a result of such conversion. If, when Agent
so notifies Borrower, Borrower has given a Rate Designation Notice specifying a
LIBOR Borrowing but the selected Interest Period has not yet begun, as to the
applicable Lender such Rate Designation Notice shall be deemed to be of no force
and effect, as if never made, and the balance of the Loans made by such Lender
specified in such Rate Designation Notice shall bear interest at the Base Rate
until a different available Interest Option shall be designated in accordance
herewith.
(ii) Increased Cost of Borrowings. Subject to Section 11.15, if the
adoption after the Effective Date of any applicable Legal Requirement or any
change after the Effective Date in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental
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Authority or compliance by any Lender with any request or directive (whether or
not having the force of law) issued after the Effective Date by any central bank
or Governmental Authority shall at any time as a result of any portion of the
principal balances of the Notes being maintained on the basis of a Eurodollar
Rate:
(1) subject any Lender to any Taxes, or any deduction or withholding
for any Taxes, on or from any payment due under any LIBOR
Borrowing or other amount due hereunder, other than income and
franchise taxes of the United States or its political subdivisions
or such other jurisdiction in which the applicable Lender has its
principal office or applicable lending office; or
(2) change the basis of taxation of payments due from Borrower to any
Lender under any LIBOR Borrowing (otherwise than by a change in
the rate of taxation of the overall net income of such Lender); or
(3) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement
included in the calculation of the applicable Eurodollar Rate),
special deposit requirement or similar requirement (including, but
not limited to, state law requirements) against assets of any
Lender, or against deposits with any Lender, or against loans made
by any Lender, or against any other funds, obligations or other
Property owned or held by any Lender; or
(4) impose on any Lender any other condition regarding any LIBOR
Borrowing;
and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such LIBOR Borrowing, or
reduce the amount of principal or interest received by any Lender, then, within
15 Business Days after demand by Agent (accompanied by a statement setting forth
in reasonable detail the applicable Lender's basis therefor), Borrower shall pay
to Agent additional amounts which shall compensate each Lender for such
increased cost or reduced amount. The determination by any Lender of the amount
of any such increased cost, increased reserve requirement or reduced amount
shall be conclusive and binding, absent manifest error. Borrower shall have the
right, if it receives from Agent any notice referred to in this paragraph, upon
three Business Days' notice to Agent (which shall notify each affected Lender),
either (i) to repay in full (but not in part) any borrowing with respect to
which such notice was given, together with any accrued interest thereon, or (ii)
to convert the LIBOR Borrowing which is the subject of the notice to a Base Rate
Borrowing; provided, that any such repayment or conversion shall be accompanied
by payment of (x) the amount required to compensate each Lender for the
increased cost or reduced amount referred to in the preceding paragraph; (y) all
accrued and unpaid interest to date on the amount so repaid or converted, and
(z) any Funding Loss which any Lender may incur as a result of such repayment or
conversion. Each Lender will notify Borrower through
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Agent of any event occurring after the date of this Agreement which will entitle
such Lender to compensation pursuant to this Section as promptly as practicable
after it obtains knowledge thereof and determines to request such compensation,
and (if so requested by Borrower through Agent) will designate a different
lending office of such Lender for the applicable LIBOR Borrowing or will take
such other action as Borrower may reasonable request if such designation or
action is consistent with the internal policy of such Lender and legal and
regulatory restrictions, will avoid the need for, or reduce the amount of, such
compensation and will not, in the sole opinion of such Lender, be
disadvantageous to such Lender (provided that such Lender shall have no
obligation so to designate a different lending office which is located in the
United States of America).
(iii) Inadequacy of Pricing and Rate Determination. If, for any reason with
respect to any Interest Period, Agent (or, in the case of clause 3 below, the
applicable Lender) shall have determined (which determination shall be
conclusive and binding upon Borrower, absent manifest error) that:
(1) Agent is unable through its customary general practices to
determine any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable market,
generally, Agent is not being offered deposits in United States
dollars in such market, for the applicable Interest Period and in
an amount equal to the amount of any applicable LIBOR Borrowing
requested by Borrower, or
(3) any applicable Eurodollar Rate will not adequately and fairly
reflect the cost to any Lender of making and maintaining such
LIBOR Borrowing hereunder for any proposed Interest Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any Rate
Designation Notice previously given by Borrower designating the applicable LIBOR
Borrowing which has not commenced as of the date of such notice from Agent shall
be deemed for all purposes hereof to be of no force and effect, as if never
given, and (B) until Agent shall notify Borrower that the circumstances giving
rise to such notice from Agent no longer exist, each Rate Designation Notice
requesting the applicable Eurodollar Rate shall be deemed a request for a Base
Rate Borrowing, and any applicable LIBOR Borrowing then outstanding shall be
converted, without any notice to or from Borrower, upon the termination of the
Interest Period then in effect with respect to it, to a Base Rate Borrowing.
(iv) Funding Losses. Borrower shall indemnify each Lender against and hold
each Lender harmless from any Funding Loss. Subject to Section 11.15, this
indemnity shall survive the payment of the Notes. Within 15 Business Days after
demand by Agent (accompanied by a certificate of such Lender setting forth in
reasonable detail the amount and calculation of the amount claimed as to any
Funding Losses, which shall be conclusive and binding upon Borrower, absent
manifest error), Borrower shall pay to Agent, for the account of such Lender,
the amount of such Funding Losses.
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(d) Funding Offices; Adjustments Automatic; Calculation Year. Any Lender
may, if it so elects, fulfill its obligation as to any LIBOR Borrowing by
causing a branch or affiliate of such Lender to make such Loan and may transfer
and carry such Loan at, to or for the account of any branch office or affiliate
of such Lender; provided, that in such event for the purposes of this Agreement
such Loan shall be deemed to have been made by such Lender and the obligation of
Borrower to repay such Loan shall nevertheless be to such Lender and shall be
deemed held by it for the account of such branch or affiliate. Without notice
to Borrower or any other Person, each rate required to be calculated or
determined under this Agreement shall automatically fluctuate upward and
downward in accordance with the provisions of this Agreement. Interest at the
Prime Rate shall be computed on the basis of the actual number of days elapsed
in a year consisting of 365 or 366 days, as the case may be. All other interest
required to be calculated or determined under this Agreement shall be computed
on the basis of the actual number of days elapsed in a year consisting of 360
days, unless the Ceiling Rate would thereby be exceeded, in which event, to the
extent necessary to avoid exceeding the Ceiling Rate, the applicable interest
shall be computed on the basis of the actual number of days elapsed in the
applicable calendar year in which accrued.
(e) Funding Sources. Notwithstanding any provision of this Agreement to
the contrary, each Lender shall be entitled to fund and maintain its funding of
all or any part of the Loans in any manner it sees fit, it being understood,
however, that for the purposes of this Agreement all determinations hereunder
shall be made as if each Lender had actually funded and maintained each LIBOR
Borrowing during each Interest Period through the purchase of deposits having a
maturity corresponding to such Interest Period and bearing an interest rate
equal to the Eurodollar Rate for such Interest Period.
4. Payments; Pro Rata Treatment; Computations, Etc.
4.1 Payments.
(a) Except to the extent otherwise provided herein, all payments of
principal, interest, Reimbursement Obligations and other amounts to be made by
Borrower hereunder, under the Notes and under the other Loan Documents shall be
made in Dollars, in immediately available funds, to Agent at the Principal
Office (or in the case of a successor Agent, at the principal office of such
successor Agent in the United States), not later than 11:00 a.m. Dallas time on
the date on which such payment shall become due (each such payment made after
such time on such due date to be deemed to have been made on the next succeeding
Business Day).
(b) Borrower shall, at the time of making each payment hereunder, under any
Note or under any other Loan Document, specify to Agent the Loans or other
amounts payable by Borrower hereunder or thereunder to which such payment is to
be applied. Each payment received by Agent hereunder, under any Note or under
any other Loan Document for the account of a Lender shall be paid promptly to
such Lender, in immediately available funds. If Agent fails to send to any
Lender the applicable amount by the close of business on the date any such
payment is received by Agent if such payment is received prior to 11:00 a.m.
Dallas time (or on the next succeeding Business Day
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with respect to payments which are received after 11:00 a.m. Dallas time), Agent
shall pay to the applicable Lender interest on such amount from such date at the
Federal Funds Rate.
(c) If the due date of any payment hereunder or under any Note falls on a
day which is not a Business Day, the due date for such payments (except as
otherwise provided in clause (2) of the definition of "Interest Period") shall
be extended to the next succeeding Business Day and interest shall be payable
for any principal so extended for the period of such extension.
(d) All payments by the Borrower hereunder or under any other Loan Document
shall be made free and clear of and without deduction for or on account of any
present or future income, stamp, or other taxes, fees, duties, withholding or
other charges of any nature whatsoever imposed by any taxing authority excluding
in the case of Agent, each Issuer and each Lender taxes imposed on or measured
by its net income or franchise taxes imposed by the jurisdiction in which it is
organized or through which it acts for purposes of this Agreement (such non-
excluded items being hereinafter referred to as "Taxes"). If as a result of any
change in law (or the interpretation thereof) after the date that Agent, the
applicable Issuer or the applicable Lender became a party to this Agreement, any
withholding or deduction from any payment to be made to, or for the account of,
such Person by any Obligor hereunder or under any other Loan Document is
required in respect of any Taxes pursuant to any applicable law, rule, or
regulation, then the Borrower will (i) pay to the relevant authority the full
amount required to be so withheld or deducted; (ii) to the extent available,
promptly forward to the Agent an official receipt or other documentation
reasonably satisfactory to the Agent evidencing such payment to such authority;
and (iii) pay to the Agent, for the account of each affected Person, such
additional amount or amounts as are necessary to ensure that the net amount
actually received by such Lender will equal the full amount such Person would
have received had no such withholding or deduction been required. Each such
Person shall determine such additional amount or amounts payable to it (which
determination shall, in the absence of manifest error, be conclusive and binding
on the Borrower). If Agent, any Issuer or any Lender becomes aware that any
such withholding or deduction from any payment to be made by any Obligor
hereunder or under any other Loan Document is required, then such Person shall
promptly notify the Agent and the Borrower thereof stating the reasons therefor
and the additional amount required to be paid under this Section. Each Lender
shall execute and deliver to the Agent and Borrower such forms as it may be
required to execute and deliver pursuant to Section 11.13 hereof. To the extent
that any such withholding or deduction results from the failure of a Lender to
provide a form required by Section 11.13 hereof (unless such failure is due to
some prohibition under applicable Legal Requirements), the Borrower shall have
no obligation to pay the additional amount required by clause (iii) above.
Anything in this Section notwithstanding, if any Lender elects to require
payment by the Borrower of any material amount under this Section, the Borrower
may, within 60 days after the date of receiving notice thereof and so long as no
Default shall have occurred and be continuing, elect to terminate such Lender as
a party to this Agreement; provided that, concurrently with such termination the
Borrower shall (i) if the Agent and each of the other Lenders shall consent, pay
that Lender all principal, interest and fees and other amounts owed to such
Lender through such date of termination or (ii) have arranged for another
financial institution approved by the Agent (such approval not to be
unreasonably withheld or delayed) as of such date, to become a substitute Lender
for all purposes under this Agreement in the manner provided in Section 11.6;
provided further that,
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prior to substitution for any Lender, the Borrower shall have given written
notice to the Agent of such intention and the Lenders shall have the option, but
no obligation, for a period of 60 days after receipt of such notice, to increase
their Commitments in order to replace the affected Lender in lieu of such
substitution.
4.2 Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing from the Lenders under Section 2.1 hereof shall be made
ratably from the Revolving Loan Lenders in accordance with their respective
Revolving Loan Commitments; (b) each payment of revolving loan commitment fees
shall be made for the account of the Revolving Loan Lenders, and each
termination or reduction of the Revolving Loan Commitments of the Revolving Loan
Lenders under Section 2.3 hereof shall be applied, pro rata, according to the
Revolving Loan Lenders' respective Revolving Loan Commitments; (c) each payment
by Borrower of principal of or interest on the Revolving Loans shall be made to
Agent for the account of the Lenders pro rata in accordance with the respective
unpaid principal amounts of the respective unpai principal amounts of such
Revolving Loans held by the Lenders, and (d) the Revolving Loan Lenders (other
than the applicable Issuer) shall purchase from the applicable Issuer
participations in each Letter of Credit to the extent of their respective
Revolving Loan Commitment Percentages.
4.3 Certain Actions, Notices, Etc. Notices to Agent of any termination or
reduction of Revolving Loan Commitments and of borrowings and optional
prepayments of Loans and requests for issuances of Letters of Credit shall be
irrevocable and shall be effective only if received by Agent not later than
11:00 a.m. Dallas time on the number of Business Days prior to the date of the
relevant termination, reduction, borrowing and/or prepayment specified below:
Number of Business Days
Prior Notice
-----------------------
Termination or Reduction of
Revolving Loan Commitments 5
Revolving Loan repayment same day
Borrowing at the Base Rate 1
Letter of Credit issuance 2
Prepayments required pursuant to
Section 3.2(b) same day
Selection of a Eurodollar Rate 3 LIBOR
Business Days
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Each such notice of termination or reduction shall specify the amount of the
applicable Revolving Loan Commitment to be terminated or reduced. Each such
notice of borrowing or prepayment shall specify the amount of the Loans to be
borrowed or prepaid and the date of borrowing or prepayment (which shall be a
Business Day). Agent shall promptly notify the affected Lenders of the contents
of each such notice.
4.4 Non-Receipt of Funds by Agent. Unless Agent shall have been notified
by a Lender or Borrower (the "Payor") prior to the date on which such Lender is
to make payment to Agent of the proceeds of a Loan (or funding of a drawing
under a Letter of Credit or reimbursement with respect to any drawing under a
Letter of Credit) to be made by it hereunder or Borrower is to make a payment to
Agent for the account of one or more of the Lenders, as the case may be (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to Agent, Agent may assume that the Required Payment has been made and
may, in reliance upon such assumption (but shall not be required to), make the
amount thereof available to the intended recipient on such date and, if the
Payor has not in fact made the Required Payment to Agent, the recipient of such
payment (or, if such recipient is the beneficiary of a Letter of Credit,
Borrower and, if Borrower fails to pay the amount thereof to Agent forthwith
upon demand, the Lenders ratably in proportion to their respective Revolving
Loan Commitment Percentages) shall, on demand, pay to Agent the amount made
available by Agent, together with interest thereon in respect of the period
commencing on the date such amount was so made available by Agent until the date
Agent recovers such amount at a rate per annum equal to the Federal Funds Rate
for such period.
4.5 Sharing of Payments, Etc. If a Lender shall obtain payment of any
principal of or interest on any Loan made by it under this Agreement, on any
Reimbursement Obligation or on any other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off (including, without
limitation, any right of setoff or Lien granted under Section 9