EXHIBIT 10.27
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED CREDIT AGREEMENT dated as of
December 14, 1998 (this "AGREEMENT") is among COMFORT SYSTEMS USA, INC., a
Delaware corporation (the "COMPANY"), the Subsidiaries of the Company listed on
the signature pages hereto as Guarantors (together with each other person who
subsequently becomes a Guarantor, collectively the "GUARANTORS"), the banks and
other financial institutions listed on the signature pages hereto under the
caption "BANKS" (together with each other person who becomes a Bank,
collectively the "BANKS"), and BANK ONE, TEXAS, N.A., individually as a Bank
("BOT") and as administrative agent for the other Banks (in such capacity
together with any other Person who becomes the administrative agent, the
"ADMINISTRATIVE AGENT"), BANKERS TRUST COMPANY, individually as a Bank ("BTCO")
and as syndication agent for the other Banks (in such capacity together with any
other Person who becomes the syndication agent, the "SYNDICATION AGENT"),
NATIONSBANK, N.A., individually as a Bank ("NB") and as documentation agent for
the other Banks (in such capacity together with any other Person who becomes the
documentation agent, the "DOCUMENTATION AGENT"; and together with the
Administrative Agent and the Syndication Agent, the "AGENTS"), CREDIT LYONNAIS,
individually as a Bank and as Co-Agent, NATIONAL CITY BANK, individually as a
Bank and as Co-Agent, and THE BANK OF NOVA SCOTIA, individually as a Bank and as
Co-Agent (collectively, "Co-Agents").
WHEREAS, the Company, Guarantors, BOT and the Administrative Agent
are parties to the Existing Credit Agreement (this and other terms used in these
recitals without definition being used as defined in SECTION 1.1), which
provides for a revolving credit facility pursuant to which BOT and the Banks
named therein committed to make loans of up to $175,000,000.00, including a
letter of credit facility not to exceed $10,000,000.00, to the Company for
general corporate purposes, including working capital, financing permitted
acquisitions and the issuance of letters of credit.
WHEREAS, the Company has requested the Banks to further amend and
restate the Existing Credit Agreement to modify certain terms and conditions
thereof, including, without limitation, to increase the revolving credit
facility to $300,000,000.00, to provide for the pledge and grant of a perfected
First Priority security interest in favor of the Administrative Agent with
respect to substantially all the accounts receivable and inventory of the
Company and its Subsidiaries and all the shares of capital stock of the
Company's domestic Subsidiaries and 65% of the capital stock of the Company's
foreign Subsidiaries, and the addition and replacement of Agents and certain
Banks, all as set forth herein.
WHEREAS, to facilitate the transactions contemplated hereby, all
Banks under the Existing Credit Agreement, pursuant to a Master Assignment
Agreement, have agreed to assign to BOT all of their existing loans and existing
commitments under the Existing Credit Agreement and BOT, pursuant to such Master
Assignment Agreement, has agreed to assign to each Bank under this Agreement the
Commitments set forth on the signature pages hereto.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth herein, the Company, the Guarantors, the Agents and the
Banks agree as follows:
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION
SECTION 1.1. DEFINITIONS. As used in this Agreement, the
following terms shall have the following meanings:
"ADMINISTRATIVE AGENT" has the meaning specified in the
introduction to this Agreement.
"ADMINISTRATIVE QUESTIONNAIRE" means the questionnaire attached
hereto as EXHIBIT 1.1(A) to be completed by each Bank and returned to the
Administrative Agent.
"ADVANCE" means an advance, pursuant to a Notice of Advance,
comprised of a single Type of Loans from all the Banks (or resulting from
a conversion or conversions on the same date having, in the case of
Eurodollar Rate Advances, the same Interest Period (except as otherwise
provided in this Agreement)), made by all of the Banks concurrently to the
Company.
"ADVANCE DATE" means, with respect to each Advance, the Business Day
upon which the proceeds of such Advance are to be made available to the
Company.
"AFFILIATE" means any other Person directly or indirectly controlling
(including all directors and officers of such Person), controlled by, or
under direct or indirect common control with such Person.
"AGENTS" has the meaning specified in the introduction to this
Agreement.
"AGREEMENT" has the meaning specified in the introduction to this
Agreement.
"ALTERNATE BASE RATE" means, for any date, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a)
the Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and
(b) the Prime Rate in effect on such day. For purposes hereof, the term
"PRIME RATE" means, as of a particular date, the prime rate of BOT most
recently announced by BOT and in effect on such date, automatically
fluctuating upward or downward, as the case may be, with and at the time
of each change therein without notice to the Company or any other Person,
which prime rate may not necessarily represent the lowest or best rate
actually charged to a customer. "FEDERAL FUNDS EFFECTIVE RATE" means, for
any day, the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it. If, for any reason, the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the
Federal Funds Effective Rate, including the inability or failure of the
Administrative Agent to obtain sufficient quotations in accordance with
the terms hereof, the Alternate Base Rate shall be
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determined without regard to clause (a) of the first sentence of this
definition until the circumstances giving rise to such inability no longer
exist. Any change in the Alternate Base Rate due to a change in the Prime
Rate or the Federal Funds Effective Rate shall be effective on the
effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"ALTERNATE BASE RATE ADVANCE" means any Advance bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with
the provisions of ARTICLE II.
"APPLICABLE LENDING OFFICE" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of an Alternate Base Rate
Advance and such Bank's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"APPLICATION FOR LETTER OF CREDIT" means a letter of credit
application in a form satisfactory to the Issuing Bank.
"ASSET SALE" means the sale, transfer or other disposition for value,
whether voluntary or involuntary, by the Company or any of its
Subsidiaries to any Person other than the Company or any of its
wholly-owned Subsidiaries of (i) any of the stock of any of the Company's
Subsidiaries, (ii) substantially all of the Assets of any division or line
of business of the Company and its Subsidiaries, or (iii) any other Assets
of the Company or any of its Subsidiaries (other than (a) inventory and
surplus or obsolete assets sold in the ordinary course of business and (b)
any such other Assets to the extent that the aggregate value of such
Assets sold in any single transaction or related series of transactions is
equal to $500,000 or less).
"ASSETS" (whether or not capitalized) means any interest in any kind
of property or asset, whether real, personal or mixed, or tangible or
intangible.
"ASSIGNMENT AND ACCEPTANCE" has the meaning specified in
SECTION 12.10(C).
"BANK" has the meaning provided in the introduction to this
Agreement.
"BANKRUPTCY CODE" has the meaning specified in SECTION 10.1(E).
"BOARD" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"BOT" means Bank One, Texas, N.A., 910 Travis, 7th Floor, Houston,
Texas 77002.
"BTCO" means Bankers Trust, One Bankers Trust Plaza, 130 Liberty
Street, New York, New York 10006.
"BUSINESS DAY" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of Texas) on which most banks are
open for business in Houston, Texas.
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"CAPITALIZED LEASE OBLIGATIONS" means all lease or rental obligations
which, pursuant to GAAP, are capitalized for balance sheet purposes.
"CERCLA" means the comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, state and local
analogs, and all rules and regulations and requirements thereunder in each
case as now or hereafter in effect.
"CHANGE OF CONTROL" means any of (i) the acquisition by any Person
(other than the shareholders on the Effective Date), or two or more
Persons acting in concert, after the Effective Date of beneficial
ownership of 50% or more of the outstanding shares of voting stock of the
Company, (ii) during any period of 24 consecutive months, beginning on the
Effective Date, the ceasing of those individuals (the "CONTINUING
DIRECTORS") who (a) were directors of the Company on the first day of each
such period or (b) subsequently became directors of the Company and whose
initial nomination for election subsequent to that date was approved by a
majority of the Continuing Directors then on the board of directors of the
Company, to constitute a majority of the board of directors of the Company
at any time during such period, (iii) all or substantially all of the
assets of the Company and its Subsidiaries are sold in a single
transaction or series of related transactions to any Persons or (iv) the
Company merges or consolidates with or into any other Person except as
permitted hereunder.
"CODE" means the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.
"COLLATERAL" means, collectively, all of the personal property
(including capital stock) in which Liens are purported to be granted
pursuant to the Collateral Documents as security for the Obligations.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account Agreement
executed and delivered by the Company and Administrative Agent on the
Effective Date, substantially in the form of EXHIBIT 1.1(b) annexed
hereto, as such Collateral Account Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"COLLATERAL DOCUMENTS" means the Collateral Account Agreement, the
Company Pledge Agreement, the Company Security Agreement, the Subsidiary
Pledge Agreements, the Subsidiary Security Agreements and all other
instruments or documents delivered by the Company or any Guarantor
pursuant to this Agreement or any of the other Loan Documents in order to
grant to the Administrative Agent, on behalf of the Banks, a Lien on the
Collateral as security for the Obligations.
"COMMITMENT" and "COMMITMENTS" means the obligation of each of the
Banks to enter into and perform this Agreement, to make available the
Loans and to issue or participate in the Letters of Credit to the Company
in the amounts shown on the signature page of each Bank hereto and all
other duties and obligations of the Banks hereunder.
"COMMITMENT FEE" has the meaning specified in SECTION 4.1(A).
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"COMPANY" has the meaning specified in the introduction to this
Agreement.
"COMPANY PLEDGE AGREEMENT" means the Company Pledge Agreement
executed and delivered by the Company on the Effective Date, substantially
in the form of EXHIBIT 1.1(C) annexed hereto, as such Company Pledge
Agreement may thereafter be amended, supplemented or otherwise modified
from time to time.
"COMPANY SECURITY AGREEMENT" means the Company Security Agreement
executed and delivered by the Company on the Effective Date, substantially
in the form of EXHIBIT 1.1(D) annexed hereto, as such Company Security
Agreement may thereafter be amended, supplemented or otherwise modified
from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the
form of EXHIBIT 1.1(E) annexed hereto delivered to the Administrative
Agent and the Banks by the Company pursuant to SECTION 7.1(D).
"CONSOLIDATED NET WORTH" means, at any date, an amount equal to the
consolidated stockholders' equity of the Company and its subsidiaries
determined in accordance with GAAP as of such date.
"CONVERSION" or "CONVERT" (in each case whether or not capitalized)
means the changing of a Eurodollar Rate Advance to an Alternate Base Rate
Advance or vice versa in accordance with the provisions hereof.
"CREDIT EVENT" means the making of any Advance or the issuance or
extension of any Letter of Credit.
"CUMULATIVE CONSOLIDATED NET INCOME" means, as of any date of
determination, (x) the consolidated net income (or loss) of the Company
and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, LESS (y) any Restricted Subordinated Debt Payments (other than
interest payments) in respect of any Subordinated Debt existing on the
Effective Date made during the period (taking as one accounting period)
commencing on the Effective Date and ending on the last day of the most
recent fiscal quarter for which financial statements have been delivered
pursuant to Section 6.1.
"CURRENT ASSETS" and "CURRENT LIABILITIES" means, as to the Company
and its Subsidiaries determined on a consolidated basis, at any time the
aggregate current assets or current liabilities (other than the repayment
of the Loans) of the Company, each as determined in accordance with GAAP.
"DEFAULT" means the occurrence of any event which with or without the
giving of notice or the passage of time or both could become an Event of
Default.
"DEFAULT RATE" means the lesser of (i) the Highest Lawful Rate and
(ii) with respect to (a) Alternate Base Rate Advances, the rate per annum
which would otherwise be applicable plus two percent (2.00%), and (b)
Eurodollar Rate Advances, the rate per annum which would otherwise be
applicable plus three percent (3.00%).
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"DESIGNATED PAYMENT DATE" means March 31, June 30, September 30 and
December 31 of each year; PROVIDED, HOWEVER, if a Designated Payment Date
shall be a day which is not a Business Day, such Designated Payment Date
shall be the next succeeding Business Day, and such extension of time
shall be included in determining the amount to be paid on such date.
"DOCUMENTATION AGENT" has the meaning specified in the
introduction to this Agreement.
"DOMESTIC LENDING OFFICE" means, with respect to any Bank, the office
of such Bank, designated from time to time as its "Domestic Lending
Office" hereunder.
"EBITDA" means, for any period, the consolidated pre-tax income for
such period, plus the aggregate amount which was deducted for such period
in determining such consolidated, pre-tax income in respect of Interest
Expense (including amortization of debt discount, imputed interest and
capitalized interest), depreciation and amortization, provided, the
calculations of EBITDA after the acquisition of assets or entities
permitted under Section 8.5(d) shall include pro forma adjustments
consistent with the regulations and practices of the United States
Securities and Exchange Commission (whether or not applicable) to account
for such acquired entity's historical EBITDA for the relevant period or
similar adjustments in the case of an asset acquisition.
"EFFECTIVE DATE" means the date on or before December 14, 1998, on
which all conditions to make an Advance set forth in SECTION 5.1 are first
met or waived in accordance with SECTION 12.1 hereof.
"ELIGIBLE ASSIGNEE" means (a) any Bank; (b) a commercial bank
organized under the laws of the United States, or any state thereof, and
having total assets in excess of $250,000,000.00; (c) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development or any successor
organization, or a political subdivision of any such country, and having
total assets in excess of $1,000,000,000.00; PROVIDED that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the Organization
for Economic Cooperation and Development or any successor organization;
(d) the central bank of any country which is a member of the Organization
for Economic Cooperation and Development or any successor organization;
and (e) any other bank or similar financial institution approved by the
Administrative Agent, the Majority Banks and the Company, which consent of
the Company shall not be unreasonably withheld.
"ENVIRONMENTAL LAWS" means federal, state or local laws, rules or
regulations, and any judicial or administrative interpretations thereof,
including any judicial or administrative order, judgment, permit,
approval, decision or determination pertaining to conservation or
protection of the environment in effect at the time in question, including
the Clean Air Act, CERCLA, the Federal Water Pollution Control Act, the
Occupational Safety and Health Act, the Resource Conservation and Recovery
Act, the Safe Drinking Water Act, the Toxic Substances Control Act, the
Superfund Amendment
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and Reauthorization Act of 1986, the Hazardous Materials Transportation
Act, and comparable state and local laws, and other environmental
conservation and protection laws.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
the regulations promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) which is either a member of the same "controlled group" or
under "common control," within the meaning of Section 414 of the Code and
the regulations thereunder, with the Company and (b) any Subsidiary of the
Company.
"EUROCURRENCY LIABILITIES" has the meaning specified in
Regulation D as in effect from time to time.
"EURODOLLAR LENDING OFFICE" means, with respect to each Bank. the
branches or affiliates of such Bank designated as its "Eurodollar Lending
Office" from time to time hereunder.
"EURODOLLAR RATE" means, with respect to any Eurodollar Rate Advance,
the rate (rounded to 1/16 of 1%) at which dollar deposits approximately
equal in principal amount to the entire portion of such Advance and for a
maturity equal to the applicable Interest Period are offered in
immediately available funds to the Administrative Agent by prime banks in
whatever Eurodollar interbank market may be selected by the Administrative
Agent in its sole and absolute discretion at the time of determination and
in accordance with the then usual practice in such market at approximately
10:00 a.m. (Houston, Texas time) two Business Days prior to the
commencement of such Interest Period.
"EURODOLLAR RATE ADVANCE" means any Advance bearing interest at a
rate determined by reference to the Eurodollar Rate in accordance with the
provisions of Article II.
"EVENTS OF DEFAULT" has the meaning specified in SECTION 10.1.
"EXISTING CREDIT AGREEMENT" means that certain Credit Agreement by
and among the Company, Guarantors, BOT, the Administrative Agent and
certain of the Banks dated as of July 2, 1997, as such credit agreement
was amended and restated by that certain First Amended and Restated Credit
Agreement dated as of September 22, 1997 and by that certain Second
Amended and Restated Credit Agreement dated as of April 14, 1998, and as
such credit agreement was further amended by that certain First Amendment
to Second Amended and Restated Credit Agreement dated as of June 30, 1998.
"FEDERAL FUNDS EFFECTIVE RATE" has the meaning specified in the
definition of the term "ALTERNATE BASE RATE."
"FEES" has the meaning specified in SECTION 4.1.
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"FINANCIAL CONDITION CERTIFICATE" means the certificate substantially
in the form of EXHIBIT 1.1(F) annexed hereto, dated the Effective Date,
delivered by the Company pursuant to SECTION 5.1(I).
"FINANCIALS" has the meaning specified in SECTION 5.1(H).
"FIRST PRIORITY" means, with respect to any Lien purported to be
created in any Collateral pursuant to any Collateral Document, that (i)
such Lien has priority over any other Lien on such Collateral (other than
Permitted Liens which as a matter of statutory law have priority over any
other Lien irrespective of the prior perfection or filing of such other
Lien) and (ii) such Lien is the only Lien (other than Permitted Liens and
Liens otherwise permitted pursuant to SECTION 8.4) to which such
Collateral is subject.
"FUNDED SENIOR DEBT" means all indebtedness for borrowed money
evidenced by a written document and subject to required payments of
interest and/or principal exclusive of Subordinated Debt.
"GAAP" means generally accepted accounting principles as in effect
from time to time as set forth in the opinions, statements and
pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the Financial Accounting
Standards Board and such other Persons who shall be approved by a
significant segment of the accounting profession and concurred in by the
independent certified public accountants certifying any audited financial
statements of the Company.
"GUARANTEED OBLIGATIONS" has the meaning specified in SECTION 9.1.
"GUARANTORS" has the meaning provided in the introduction to this
Agreement.
"GUARANTY" means the obligations contained in ARTICLE IX hereof and
in any document containing similar obligations executed by subsequent
Guarantors.
"HAZARDOUS MATERIALS" means (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable
federal, state or local law or regulation, (b) hazardous substances, as
defined in CERCLA, or in any applicable state or local law or regulation,
(c) gasoline, or any other petroleum product or by-product, (d) toxic
substances, as defined in the Toxic Substances Control Act of 1976, or in
any applicable federal, state or local law or regulation, (e) asbestos or
asbestos containing materials, or (f) insecticides, fungicides, or
rodenticides, as defined in the Federal Insecticide, Fungicide, and
Rodenticide Act of 1975, or in any applicable federal, state or local law
or regulation, as each such act, statute or regulation may be amended from
time to time.
"HIGHEST LAWFUL RATE" means, as to any Bank, the maximum nonusurious
rate of interest that, under applicable law, may be contracted for, taken,
reserved, charged or received by such Bank on the Loans or under the Loan
Documents at any time or from time to time. If the maximum rate of
interest which, under applicable law, any of the Banks are permitted to
charge the Company on the Loans shall change after the date hereof, to the
extent permitted by applicable law, the Highest Lawful Rate shall be
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automatically increased or decreased, as the case may be, as of the
effective time of such change without notice to the Company or any other
Person.
"INDEBTEDNESS" means, without duplication, (a) all indebtedness for
borrowed money (whether by loan or the issuance and sale of debt
securities or letters of credit issued under this facility, banker's
acceptances or quasi equity issues) or for the deferred purchase price of
property or services, (b) all indebtedness created or arising under any
conditional sale or other title retention agreement with respect to
property, (c) all Capitalized Lease Obligations, (d) hedge or swap
agreements and Interest Rate Agreements (at a mark to market valuation);
and (e) obligations under direct or indirect guaranties in respect of, and
obligations (contingent or otherwise) to purchase or otherwise acquire, or
otherwise to assure a creditor against loss in respect to indebtedness or
obligations of another Person of the kinds referred to in clauses (a)
through (d) above.
"INFORMATION SYSTEMS AND EQUIPMENT" means all computer hardware,
firmware and software, as well as other information processing systems, or
any equipment containing embedded microchips, whether directly or owned,
licensed, leased, operated or otherwise controlled by the Company or any
of its Subsidiaries, including through third-party service providers, and
which, in whole or in part, are used, operated, relied upon, or integral
to, the Company's or any of its Subsidiaries' conduct of their business.
"INTEREST EXPENSE" means, with respect to the Company and its
Subsidiaries determined on a consolidated basis, for any period the total
interest expense for such period determined in conformity with GAAP
including any interest expense attributable to Capitalized Lease
Obligations.
"INTEREST PERIOD" has the meaning specified in SECTION 2.11.
"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement, interest rate
hedging agreement or other similar agreement or arrangement designed to
protect against fluctuations in interest rates to which the Company and
any Bank are parties.
"INVESTMENT" means, as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of the assets, stock or other
securities of any other Person, or any direct or indirect loan, advance or
capital contribution by such Person to any other Person, and any other
item which would be classified as an "investment" on a balance sheet of
such Person in accordance with GAAP, including any direct or indirect
contribution by such Person of property or assets to a joint venture,
partnership or other business entity in which such Person retains an
interest.
"ISSUING BANK" means, for each Letter of Credit, the Bank that agrees
or is otherwise obligated to issue such Letter of Credit, determined as
provided in Section 3.2(c).
"LETTER OF CREDIT" has the meaning specified in SECTION 3.1 (A).
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"LETTER OF CREDIT FEE" means the following computed on the undrawn
face amount of each Letter of Credit (i) a 1/8% per annum fronting fee
payable to the Issuing Bank and (ii) a fee payable to the Issuing Bank for
the ratable benefit of the Banks equal to the greater of (a) $500.00 or
(b) a rate per annum determined in accordance with the grid set forth
below as a function of the ratio of Total Funded Debt on the last day of
the immediately preceding fiscal quarter to EBITDA for the consecutive
four fiscal quarters ending on the last day of such fiscal quarter:
TOTAL FUNDED DEBT/EBITDA
RATIO LETTER OF CREDIT FEE
--------------------------------------------------------------
(greater than or equal to) 3.00 2.500%
(greater than or equal to) 2.50 but <3.00 2.000%
(greater than or equal to) 2.00 but <2.50 1.750%
(greater than or equal to) 1.50 but <2.00 1.500%
(greater than or equal to) 1.00 but < 1.50 1.250%
<1.00 1.000%
Any Letter of Credit Fees expressed as a rate per annum shall be
calculated on the basis of a 365 day-year.
"LETTER OF CREDIT OBLIGATIONS" means at any time the sum of (a) the
aggregate then undrawn and unexpired amount of outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit
not reimbursed pursuant to SECTION 3.3(C).
"LETTER OF CREDIT REQUEST" has the meaning specified in SECTION
3.2(A).
"LIEN" means, when used with respect to any Person, any mortgage,
lien, charge, pledge, security interest, attachment or encumbrance of any
kind (whether voluntary or involuntary and whether imposed or created by
operation of law or otherwise) upon, or pledge of, any of its property or
assets, whether now owned or hereafter acquired, or any lease intended as
security, any capital lease in the nature of the foregoing, any
conditional sale agreement or other title retention agreement, in each
case, for the purpose, or having the effect, of protecting a creditor
against loss or securing the payment or performance of an obligation.
"LOAN" and "LOANS" has the meaning assigned thereto in SECTION 2.1.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Letters of
Credit (and any applications for, or reimbursement agreements or other
documents or certificates executed by the Company in favor of an Issuing
Bank relating to, the Letters of Credit), the Guaranty, the Collateral
Documents, the Notice of Advance, and the corporate resolutions
authorizing the Loan Documents.
"MAJORITY BANKS" means Banks holding at least 51% of the Advances
outstanding under the Loans, or, if no Advances are outstanding, Banks
holding such percentage of the Total Commitment (notwithstanding any
reduction or termination of the Total
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Commitment) or if there are no Advances or Commitments outstanding, Banks
holding such percentage of outstanding Letters of Credit.
"MARGIN" means with respect to any Advance, the percentage determined
in accordance with the following table as a function of the ratio of Total
Funded Debt on the last day of the immediately preceding fiscal quarter to
EBITDA for the consecutive four fiscal quarters ending on the last day of
such fiscal quarter:
TOTAL FUNDED DEBT/ EURODOLLAR RATE ALTERNATE BASE
EBITDA RATIO ADVANCE RATE ADVANCE
--------------------------------------------------------------------------
(greater than or equal to) 3.00 2.500% 1.250%
(greater than or equal to) 2.50 but <3.00 2.000% 0.750%
(greater than or equal to) 2.00 but <2.50 1.750% 0.500%
(greater than or equal to) 1.50 but <2.00 1.500% 0.250%
(greater than or equal to) 1.00 but <1.50 1.250% 0.000%
<1.00 1.000% 0.000%
; PROVIDED that for the Margin Period from the Effective Date
through the date that the first Compliance Certificate is delivered
pursuant to SECTION 7.1(D), the applicable Margin shall be 1.500% for
Eurodollar Rate Advances and 0.250% for Alternate Base Rate Advances.
"MARGIN PERIOD" means (a) the period from the Effective Date through
the date that the first quarterly financial statements are delivered
pursuant to SECTION 7.1(A) and (b) thereafter, a period commencing on the
date on which the quarterly or annual financial statements of the Company
are required to be delivered pursuant to SECTION 7.1(A) or SECTION 7.1(B)
as the case may be, and ending on the next date a financial statement is
required to be so delivered.
"MASTER ASSIGNMENT AGREEMENT" means that certain Master Assignment
Agreement, substantially in the form of EXHIBIT 1.1(G) annexed hereto,
among the Company, the banks under the Existing Credit Agreement, the
Banks under this Agreement and the Agents pursuant to which all banks
under the Existing Credit Agreement assign their commitments to the
Administrative Agent, and the Administrative Agent assigns to each Bank
under this Agreement, and each such Bank purchases from the Administrative
Agent, the Loans and the Commitments set forth on the signature pages
hereto.
"MATERIAL ADVERSE EFFECT" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), (a) a material
adverse effect on the business, operations, properties, assets or
condition (financial or otherwise) of the Company and its Subsidiaries
taken as a whole or (b) the impairment of the ability of the Company and
the Guarantors to perform, or of any Agent or any Bank to enforce, the
Obligations.
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"MATERIAL SUBSIDIARY" means a Subsidiary of the Company that has
annual revenues or Assets with a book value of $5,000,000 or more for the
most recently ended fiscal year.
"MATURITY DATE" means November 1, 2001.
"MAXIMUM GUARANTEED AMOUNT" means for each Guarantor the maximum
amount which any Guarantor could pay under the Guaranty without having
such payment set aside as a fraudulent transfer or conveyance or similar
action under the Bankruptcy Code or any applicable state or foreign law.
"MULTIEMPLOYER PLAN" means any plan which is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA).
"NB" means NationsBank, N.A., 700 Louisiana Street, Houston, Texas
77002.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, cash
payments (including any cash received by way of deferred payment pursuant
to, or by monetization of, a note receivable or otherwise, but only as and
when so received) received from such Asset Sale, net of any bona fide
direct costs incurred in connection with Asset Sale, including (i) income
taxes reasonably estimated to be actually payable within two years of the
date of such Asset Sale as a result of any gain recognized in connection
with such Asset Sale and (ii) payment of the outstanding principal amount
of, premium or penalty, if any, and interest on any Indebtedness (other
than the Loans) that is secured by a Lien on the stock or assets in
question and that is required to be repaid under the terms thereof as a
result of such Asset Sale.
"NOTE" and "NOTES" have the meaning specified in SECTION 2.2.
"NOTICE OF ADVANCE" has the meaning provided in SECTION 2.3(A).
"NOTICE OF CONVERSION" has the meaning provided in SECTION 2.5.
"NOTICE OF DEFAULT" has the meaning specified in SECTION 10.2.
"OBLIGATIONS" means all the obligations of every nature of the
Company and each Guarantor owed to Agents, Banks or any of them now or
hereafter existing under the Loan Documents, whether for principal,
interest, Fees, expenses, indemnification or otherwise.
"OTHER ACTIVITIES" has the meaning specified in SECTION 11.3.
"OTHER FINANCINGS" has the meaning specified in SECTION 11.3.
"OTHER HEDGING AGREEMENT" shall mean any foreign exchange contract,
currency swap agreements, commodity agreements or other similar agreements
or arrangements designed to protect against the fluctuations in currency
values to which the Company is a party.
12
"PAYMENT OFFICE" means the office of the Administrative Agent located
at 910 Travis, Houston, Texas 77002, or such other office as the
Administrative Agent may hereafter designate in writing as such to the
other parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"PERMITTED INVESTMENTS" means, as to any Person:
(a) securities issued or directly and fully guaranteed or
insured by the United States or any agency or instrumentality
thereof (PROVIDED that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more
than twelve months from the date of acquisition thereof,
(b) time deposits and certificates of deposit with maturities
of not more than twelve months from the date of acquisition by such
Person which deposits or certificates are either: (a) fully insured
by the Federal Deposit Insurance Corporation or (b) in any Bank or
other commercial bank incorporated in the United States or any U.S.
branch of any other commercial bank, in each case having capital,
surplus and undivided profits aggregating $100,000,000.00 or more
with a long-term unsecured debt rating of at least A- from Standard
& Poor's Ratings Group or A3 from Moody's Investors Service,
(c) commercial paper issued by any Person incorporated in the
United States rated at least A2 or the equivalent thereof by
Standard & Poor's Ratings Group or at least P2 or the equivalent
thereof by Moody's Investors Service and, in each case, maturing not
more than 270 days after the date of issuance,
(d) investments in money market mutual funds having assets in
excess of $2,000,000,000.00 substantially all of whose assets are
comprised of securities of the types described in clauses (a)
through (c) above, and
(e) repurchase or reverse purchase agreements respecting
obligations with a term of not more than seven days for underlying
securities of the types described in clause (a) above entered into
with any bank listed in or meeting the qualifications specified in
clause (b) above.
"PERMITTED LIENS" shall mean: (a) Liens for taxes, assessments,
levies or other governmental charges not yet due or which are being
contested in good faith by appropriate proceedings and for which adequate
reserves are maintained in accordance with GAAP; (b) Liens in connection
with worker's compensation, unemployment insurance or other social
security, old age pension or public liability obligations not yet due or
which are being contested in good faith by appropriate proceedings and for
which adequate reserves are maintained in accordance with GAAP; (c)
operator's, vendors', carriers', warehousemen's, repairmen's, mechanics',
workers', materialmen's or other like Liens arising by operation of law in
the ordinary course of business (or deposits to obtain the release of any
such Lien) and securing amounts not yet due or which are being contested
in good faith by appropriate proceedings and for which adequate reserves
are
13
maintained in accordance with GAAP; (d) deposits to secure insurance in
the ordinary course of business; (e) deposits to secure the performance of
bids, tenders, contracts (other than contracts for the payment of money or
the deferred purchase price of goods or services), leases, licenses,
franchises, trade contracts, statutory obligations, surety and appeal
bonds and performance bonds and other obligations of a like nature
incurred in the ordinary course of business; (f) easements, rights of way,
covenants, restrictions, reservations, exceptions, encroachments, zoning
and similar restrictions and other similar encumbrances (other than to
secure the payment of borrowed money or the deferred purchase price of
goods or services) or title defects, in each case incurred in the ordinary
course of business which, in the aggregate, are not substantial in amount,
and which do not in any case singly or in the aggregate materially detract
from the value or usefulness of the Property subject thereto for the
business conducted by the Company and its Subsidiaries or materially
interfere with the ordinary conduct of the business of the Company and its
Subsidiaries; (g) bankers' liens arising by operation of law; and (h)
inchoate Liens arising under ERISA to secure contingent liabilities of the
Company and its Subsidiaries.
"PERSON" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a foreign or
domestic state or political subdivision thereof or any agency of such
state or subdivision.
"PLAN" means any employee pension benefit plan (as defined in Section
3(2) of ERISA), subject to Title IV of ERISA or Section 412 of the Code,
other than a Multiemployer Plan, with respect to which the Company or an
ERISA Affiliate contributes or has an obligation or liability to
contribute, including any such plan that may have been terminated.
"PLEDGED COLLATERAL" means, collectively, the "PLEDGED COLLATERAL" as
defined in the Company Pledge Agreement and the Subsidiary Pledge
Agreements.
"PRESCRIBED FORMS" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time,
be prescribed by law and which, pursuant to applicable provisions of the
Code or an income tax treaty between the United States and the country of
residence of the Bank providing the form(s) or statement(s), permit each
of the Company and the Administrative Agent to make payments hereunder for
the account of such Bank free of deduction or withholding of income and
other taxes, or with deduction or withholding of income or other taxes at
a reduced rate under an applicable tax treaty.
"PRIME RATE" has the meaning set forth in the definition of
Alternate Base Rate.
"PROPERTY" (whether or not capitalized) means any interest in any
kind of property or asset, whether real, personal or mixed, or tangible or
intangible.
"RELEASE" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing
into the environment
14
(including the abandonment or discarding of barrels, containers and other
closed receptacles).
"REPORTABLE EVENT" means an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30-day notice requirement has
not been waived by the PBGC.
"REQUIREMENTS OF ENVIRONMENTAL LAWS" means, as to any Person, the
requirements of any applicable Environmental Law relating to or affecting
such Person or the condition or operation of such Person's business or its
properties, both real and personal.
"RESERVE PERCENTAGE" means, for any Interest Period and for any Bank,
the reserve percentage applicable during such Interest Period under
regulations issued from time to time by the Board (or if more than one
such percentage is so applicable, the daily average for such percentages
for those days in such Interest Period during which any such percentage
shall be so applicable) for determining the actual reserve requirement
(including any marginal, supplemental or emergency reserves) for such Bank
in respect of liabilities or assets consisting of or including
Eurocurrency Liabilities.
"RESPONSIBLE OFFICER" means, with respect to the Company, the
chairman of the board of directors, president, any vice president, chief
executive officer, chief operating officer, treasurer or chief financial
officer of the Company.
"RESTRICTED SUBORDINATED DEBT PAYMENTS" means any payment or
prepayment of principal of, premium or penalty, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, any
Subordinated Indebtedness.
"SOLVENT" means, with respect to any Person, that as of the date of
determination both (a) (i) the then fair saleable value of the property of
such Person is (y) greater than the total amount of liabilities (including
contingent liabilities) of such Person and (z) not less than the amount
that will be required to pay the probable liabilities on such Person's
then existing debts as they become absolute and matured considering all
financing alternatives and potential asset sales reasonably available to
such Person; (ii) such Person's capital is not unreasonably small in
relation to its business or any contemplated or undertaken transaction;
and (iii) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (b) such Person is "solvent" within the
meaning given that term and similar terms under applicable laws relating
to fraudulent transfers and conveyances. For purposes of this definition,
the amount of any contingent liability at any time shall be computed as
the amount that, in light of all of the facts and circumstances existing
at such time, represents the amount that can reasonably be expected to
become an actual or matured liabilty.
"SUBSIDIARY" means and includes, with respect to any Person, (a) any
corporation more than 50% of whose stock of any class or classes having by
the terms thereof
15
ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class
or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person, directly or indirectly and (b) any partnership, association, joint
venture or other entity in which such Person, directly or indirectly, has
greater than 50% of the equity interest. Unless otherwise provided or the
context otherwise requires, the term "Subsidiary" or "Subsidiaries" shall
mean a Subsidiary or Subsidiaries of the Company.
"SUBSIDIARY PLEDGE AGREEMENT" means each Subsidiary Pledge Agreement
executed and delivered by an existing Guarantor on the Effective Date or
executed and delivered by any additional Guarantor from time to time
thereafter in accordance with SECTION 7.8, in each case substantially in
the form of EXHIBIT 1.1(H) annexed hereto, as such Subsidiary Pledge
Agreement may be amended, supplemented or otherwise modified from time to
time, and "SUBSIDIARY PLEDGE Agreements" means all such Subsidiary
Security Agreements.
"SUBSIDIARY SECURITY AGREEMENT" means each Subsidiary Security
Agreement executed and delivered by an existing Guarantor on the Effective
Date or executed and delivered by any additional Guarantor from time to
time thereafter in accordance with SECTION 7.8, in each case substantially
in the form of EXHIBIT 1.1(I) annexed hereto, as such Subsidiary Security
Agreement may be amended, supplemented or otherwise modified from time to
time, and "SUBSIDIARY SECURITY AGREEMENTS" means all such Subsidiary
Security Agreements.
"SUBORDINATED DEBT" means any Indebtedness of the Company or any
subsidiary of the Company which is expressly and validly subordinated to
the obligations of the Company hereunder and under the Notes and other
Loan Documents pursuant to terms and conditions substantially in the form
of the attached EXHIBIT 1.1(J).
"SYNDICATION AGENT" has the meaning specified in the introduction
to this Agreement.
"TOTAL COMMITMENT" means the sum of the Commitments for each Bank
totaling a maximum of $300,000,000.00 for all Banks.
"TOTAL FUNDED DEBT" means Funded Senior Debt plus Subordinated
Debt.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
"UNUTILIZED COMMITMENT" means the Total Commitment less Letter of
Credit Obligations less the outstanding Advances under the Loan, as same
may be reduced pursuant to SECTION 2.16.
"YEAR 2000 COMPLIANT" means that all Information Systems and
Equipment accurately process date data (including, but not limited to,
calculating, comparing and sequencing), before, during and after the year
2000, as well as same and multi-century
16
dates, or between the years 1999 and 2000, taking into account all leap
years, including the fact that the year 2000 is a leap year, except where
a failure to so process would not have a Material Adverse Effect, and
further, that when used in combination with, or interfacing with, other
Information Systems and Equipment, shall accurately accept, release and
exchange date data , except where a failure to so accept, release and
exchange would not have a Material Adverse Effect, and shall in all
material respects continue to function in the same manner as it performs
today, except where a failure to function would not cause a Material
Adverse Effect, and shall not otherwise impair the accuracy or
functionality of Information Systems and Equipment, except where an
impairment would not have a Material Adverse Effect.
SECTION 1.2. TYPES OF ADVANCES. Advances hereunder are
distinguished by "Type". The Type of an Advance refers to the determination
whether such Advance is a Eurodollar Rate Advance or an Alternate Base Rate
Advance.
SECTION 1.3. ACCOUNTING TERMS. All accounting terms not defined herein
shall be construed in accordance with GAAP, as applicable, and all calculations
required to be made hereunder and all financial information required to be
provided hereunder shall be done or prepared in accordance with GAAP.
SECTION 1.4. SCHEDULES. Schedules hereto may be updated by the
Company from time to time to reflect transactions and other matters not
prohibited by the Loan Documents.
ARTICLE II
THE LOANS
SECTION 2.1. THE LOANS. Subject to the terms and conditions hereof,
each Bank severally agrees at any time and from time to time on and after the
Effective Date and prior to the Maturity Date, to make and maintain a loan or
loans (together with any Advances under a Letter of Credit described in Article
III, a "LOAN" and collectively, the "LOANS") to the Company not to exceed at any
time outstanding the maximum amount of its Commitment, which Loans (i) shall, at
the option of the Company, be made and maintained pursuant to one or more
Advances comprised of Alternate Base Rate Advances or Eurodollar Rate Advances;
PROVIDED that, except as otherwise specifically provided herein, all Advances
made simultaneously under the Loan shall be of the same Type, (ii) in the case
of Eurodollar Rate Advances, shall be made in the minimum amount of
$1,000,000.00 and integral multiples of $100,000.00 and, in the case of
Alternate Base Rate Advances, in the minimum amount of $100,000.00 and integral
multiples thereof, or, in either case, in the remaining balance of the Total
Commitment, (iii) may be repaid and, so long as no Default or Event of Default
exists hereunder, reborrowed, at the option of the Company in accordance with
the provisions hereof, and (iv) shall, in the aggregate at any time outstanding
and together with all Letter of Credit Obligations, not exceed the Total
Commitment. There shall be no further Advances after the Maturity Date.
SECTION 2.2. THE NOTES. The Loans shall be evidenced by a Note
in favor of each Bank (individually a "NOTE" and collectively, the "NOTES"),
substantially in the form of EXHIBIT 2.2(A).
17
SECTION 2.3. NOTICE OF ADVANCE.
(a) Whenever the Company desires an Advance, it shall give written notice
thereof (a "NOTICE OF ADVANCE") (or telephonic notice promptly confirmed
in writing) to the Administrative Agent (i) in the case of an Alternate
Base Rate Advance, not later than 11:00 a.m. (Houston, Texas time) on the
date of such Advance and (ii) in the case of a Eurodollar Rate Advance,
not later than noon (Houston, Texas time) three Business Days prior to the
date of such Advance. Each Notice of Advance shall be irrevocable and
shall be in the form of EXHIBIT 2.3 hereto, specifying (i) the aggregate
principal amount of the Advance to be made, (ii) the date of such Advance
(which shall be a Business Day), (iii) whether it is to be an Alternate
Base Rate Advance or a Eurodollar Rate Advance and (iv) if the proposed
Advance is to be a Eurodollar Rate Advance, the initial Interest Period to
be applicable thereto.
(b) The Administrative Agent shall promptly give the Banks written notice
or telephonic notice (promptly confirmed in writing) of each proposed
Advance, of each Bank's proportionate share thereof and of the other
matters covered by each Notice of Advance.
SECTION 2.4. DISBURSEMENT OF FUNDS FOR LOANS.
(a) No later than 1:00 p.m. (Houston, Texas time) on any Advance Date for
Loans, each Bank shall make available its pro rata portion of the amount
of such Advance in U.S. dollars and in immediately available funds at the
Payment Office. At such time, the Administrative Agent shall credit the
amounts so received to the general deposit account of the Company
maintained with the Administrative Agent in immediately available funds or
as otherwise directed by the Company.
(b) Unless the Administrative Agent shall have been notified by any Bank
prior to disbursement of the Advance by the Administrative Agent that such
Bank does not intend to make available to the Administrative Agent such
Bank's portion of the Advance to be made on such date, the Administrative
Agent may assume that such Bank has made such amount available to the
Administrative Agent on such Advance Date and the Administrative Agent
may, in reliance upon such assumption, make available to the Company a
corresponding amount. If such corresponding amount is not in fact made
available to the Administrative Agent by such Bank and the Administrative
Agent has made available same to the Company, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Bank. If such Bank does not pay such corresponding amount forthwith upon
the Administrative Agent's demand therefor, the Administrative Agent shall
promptly notify the Company, and the Company shall pay such corresponding
amount to the Administrative Agent within two (2) Business Days after
demand therefor. The Administrative Agent shall also be entitled to
recover from such Bank or the Company, as the case may be, interest on
such corresponding amount from the date such corresponding amount was made
available by the Administrative Agent to the Company to the date such
corresponding amount is recovered by the Administrative Agent, at a rate
per annum equal to (i) as to the Company, the Alternate Base Rate or the
Eurodollar Rate PLUS the applicable Margin, as
18
appropriate or (ii) as to any Bank, the Federal Funds Effective Rate on
the date of such Advance for a period of three (3) days and thereafter at
the Alternate Base Rate or the Eurodollar Rate PLUS the applicable Margin,
as appropriate. Nothing herein shall be deemed to relieve any Bank from
its obligation to fulfill its Commitments hereunder or to prejudice any
rights which the Company may have against any Bank as a result of any
default by such Bank hereunder.
SECTION 2.5. CONVERSIONS AND CONTINUANCES. The Company shall have the
option to convert or continue on any Business Day all or a portion of the
outstanding principal amount of one Type of Advance for any Loan into another
Type of Advance; PROVIDED, no Advances may be converted into or continued as
Eurodollar Rate Advances if a Default or Event of Default is in existence on the
date of the conversion or continuation. Any continuation of an Advance as the
same Type of Advance in the same amount shall be effected by the Company giving
notice to the Administrative Agent, in writing, or by telephone promptly
confirmed in writing, of its intention to continue such Advance as an Advance of
the same Type. Each such conversion shall be effected by the Company giving the
Administrative Agent written notice (each a "NOTICE OF CONVERSION"),
substantially in the form of EXHIBIT 2.5 hereto, prior to noon (Houston, Texas
time) at least (a) three (3) Business Days prior to the date of such conversion
in the case of conversion into or continuance as Eurodollar Rate Advances and
(b) prior to 11:00 a.m. (Houston, Texas time) one Business Day prior to the date
of conversion in the case of a conversion into Alternate Base Rate Advances,
specifying each Advance (or portions thereof) to be so converted and, if to be
converted into or continued as Eurodollar Rate Advances, the Interest Period to
be initially applicable thereto. The Administrative Agent shall thereafter
promptly notify each Bank of such Notice of Conversion.
SECTION 2.6. VOLUNTARY PREPAYMENTS. The Company shall have the right
to voluntarily prepay any Loan in whole or in part at any time on the following
terms and conditions: (a) no Eurodollar Rate Advance may be prepaid prior to the
last day of its Interest Period unless, simultaneously therewith, the Company
pays to the Administrative Agent for the benefit of the Banks, all sums
necessary to compensate the Banks for all costs and expenses resulting from such
prepayment, as reasonably determined by the Banks, including but not limited to
those costs described in SECTIONS 2.10(F), 2.14, and SECTION 2.15 hereof; and
(b) each prepayment pursuant to this section shall be applied first, to the
payment of accrued and unpaid interest, and then, to the outstanding principal
of such Advances.
SECTION 2.7. MANDATORY REPAYMENTS. The Loans shall be repaid and/or
the Commitments shall be permanently reduced, in the amounts and under the
circumstances set forth below, all such repayments and/or reductions to be
applied as set forth below:
(a) NET ASSET SALE PROCEEDS. No later than (i) the first Business Day
following the date of receipt by the Company or any of its Subsidiaries of
any Net Asset Sale Proceeds in respect of any Asset Sale in excess of
$5,000,000 for any single transaction or related series of transactions
the Company shall repay the Loans and the Revolving Loan Commitments shall
be permanently reduced in an aggregate amount equal to such Net Asset Sale
Proceeds and (ii) the first Business Day following the 360th day after
receipt by the Company or any Subsidiary of any Net Asset Sale Proceeds in
respect of any Asset Sale of $5,000,000 or less for any single transaction
or related series of transactions
19
the Company shall repay the Loans and the Revolving Loan Commitments shall
be permanently reduced in an aggregate amount equal to the amount of such
Net Asset Sale Proceeds that were not reinvested in the business of the
Company or any of its Subsidiaries on or before such date;
(b) LOANS AND LETTER OF CREDIT OBLIGATIONS IN EXCESS OF TOTAL COMMITMENT.
The Company shall repay Loans on any day on which the aggregate
outstanding principal amount of the Loans together with the outstanding
Letter of Credit Obligations exceeds the Total Commitment, in the amount
of such excess; and
(c) REPAYMENT UPON MATURITY. The aggregate amount under the Notes (and all
accrued, unpaid interest) shall be due and payable, and the Commitments
shall terminate on the Maturity Date.
SECTION 2.8. METHOD AND PLACE OF PAYMENT. Except as otherwise
specifically provided herein, all payments under this Agreement due from the
Company shall be made to the Administrative Agent for the benefit of the Banks
not later than 11:00 a.m. (Houston, Texas time) on the date when due and shall
be made in lawful money of the United States in immediately available funds at
the Payment Office.
SECTION 2.9. PRO RATA ADVANCES. All Advances under this Agreement
shall be incurred from the Banks pro rata, on the basis of their respective
Commitments. It is understood that no Bank shall be responsible for any default
by any other Bank in its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Bank to fulfill its commitments
hereunder.
SECTION 2.10. INTEREST.
(a) Subject to SECTION 12.8, the Company agrees to pay interest on the
total outstanding principal balance of all Alternate Base Rate Advances
from the date of each respective Advance to maturity (whether by
acceleration or otherwise) at a rate per annum which shall at all times be
equal to the lesser of (i) the Highest Lawful Rate and (ii) the Alternate
Base Rate in effect from time to time plus the Margin for Alternate Base
Rate Advances, which Margin shall be adjusted on the first day of each
Margin Period. If the Alternate Base Rate is based on the Prime Rate,
interest shall be computed on the basis of the actual number of days
elapsed over a year of 365 or 366 days, as the case may be. If the
Alternate Base Rate is based on the Federal Funds Effective Rate, interest
shall be computed on the basis of the actual number of days elapsed over a
year of 360 days.
(b) Subject to SECTION 12.8, the Company agrees to pay interest on the
total outstanding principal balance of all Eurodollar Rate Advances from
the date of each respective Advance to maturity (whether by acceleration
or otherwise) at a rate per annum (computed on the basis of the actual
number of days elapsed over a year of 360 days) which shall, during each
Interest Period applicable thereto, be equal to the lesser of (i) the
Highest Lawful Rate and (ii) the applicable Eurodollar Rate for such
Interest
20
Period plus the Margin for Eurodollar Rate Advances. The applicable
Eurodollar Rate shall be fixed for each Interest Period and shall not
change during said Interest Period, but the applicable Margin, which is
added to said Eurodollar Rate to determine the total interest payable to
the Banks, shall be adjusted, if applicable under the definition of
"Margin", effective on the first day of each Margin Period, whether or not
said adjustment occurs at a time other than the beginning of an Interest
Period.
(c) Subject to SECTION 12.8, overdue principal and, to the extent
permitted by law, overdue interest in respect of any Advance and all other
overdue amounts owing hereunder shall bear interest for each day that such
amounts are overdue at a rate per annum equal to the Default Rate.
(d) Interest on each Advance shall accrue from and including the date of
such Advance to but excluding the date of any repayment thereof and shall
be payable (i) in respect of Eurodollar Rate Advances (A) on the last day
of the Interest Period (as defined below) applicable thereto and, in the
case of any Interest Period in excess of three (3) months, the date that
is three months after the commencement of such Interest Period, and (B) on
the date of any voluntary or mandatory repayment or any conversion or
continuance, (ii) in respect of Alternate Base Rate Advances (A) on each
Designated Payment Date, and (B) on the date of any voluntary or mandatory
repayment of such Advances on the principal amount repaid and (iii) in
respect of each Advance, at maturity (whether by acceleration or
otherwise) and, after maturity, on demand.
(e) The Administrative Agent, upon determining the Eurodollar Rate for any
Interest Period. shall notify the Company thereof. Each such determination
shall, absent manifest error, be final and conclusive and binding on all
parties hereto. In addition, prior to the due date for the payment of
interest on any Advances set forth in the immediately preceding paragraph,
the Administrative Agent shall notify the Company of the amount of
interest due by the Company on all outstanding Advances on the applicable
due date, but any failure of the Administrative Agent to so notify the
Company shall not reduce the Company's liability for the amount owed.
(f) The Company shall pay to the Administrative Agent for the account of
each Bank, so long as such Bank shall be required under regulations of the
Board to maintain reserves with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities, additional interest
on the unpaid principal amount of such Bank's share of each Eurodollar
Rate Advance, from the date of such Advance until such principal amount is
paid in full, at an interest rate per annum equal at all times during the
Interest Period for such Advance to the lesser of (i) the Highest Lawful
Rate and (ii) the remainder obtained by subtracting (A) the Eurodollar
Rate for such Interest Period from (B) the rate obtained by dividing such
Eurodollar Rate referred to in clause (A) above by that percentage equal
to 100% minus the Reserve Percentage of such Bank for such Interest
Period. Such additional interest shall be determined by such Bank as
incurred and shall be payable upon demand therefor by the Bank to the
Company. Each determination by such Bank of additional interest due under
this Section shall be conclusive and binding for all purposes in the
absence of manifest error.
21
SECTION 2.11. INTEREST PERIODS.
(a) At the time the Company gives any Notice of Advance or Notice of
Conversion or provides notice of its intent to continue a loan as the same
Type in respect of the making of, or conversion into, a Eurodollar Rate
Advance, the Company shall have the right to elect, by giving the
Administrative Agent on the dates and at the times specified in SECTION
2.3 or SECTION 2.5, as the case may be, notice of the interest period
(each an "INTEREST PERIOD") applicable to such Eurodollar Rate Advance,
which Interest Period shall be either a one, two, three or six month
period; PROVIDED that:
(i) the initial Interest Period for any Eurodollar Rate Advance
shall commence on the date of such Eurodollar Rate Advance
(including the date of any conversion thereto or continuance thereof
pursuant to SECTION 2.5); each Interest Period occurring thereafter
in respect of such Eurodollar Rate Advance shall commence on the
expiration date of the immediately preceding Interest Period;
(ii) if any Interest Period relating to a Eurodollar Rate Advance
begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period, such
Interest Period shall end on the last Business Day of such calendar
month;
(iii) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; PROVIDED, that if there are no more
Business Days in that month, the Interest Period shall expire on the
preceding Business Day;
(iv) no Interest Period for Advances shall extend beyond the
applicable Maturity Date; and
(v) the Company shall be entitled to have a maximum of ten (10)
separate Eurodollar Rate Advances hereunder for all Loans
outstanding at any one time.
(b) If, upon the expiration of any Interest Period applicable to a
Eurodollar Rate Advance, the Company has failed to elect a new Interest
Period to be applicable to such Advance as provided above, the Company
shall be deemed to have elected to convert such Advance into an Alternate
Base Rate Advance effective as of the expiration date of such current
Interest Period.
SECTION 2.12. INTEREST RATE NOT ASCERTAINABLE. In the event that the
Administrative Agent shall determine (which determination shall, absent manifest
error, be final, conclusive and binding upon all parties) that on any date for
determining the Eurodollar Rate for any Interest Period, by reason of any
changes arising after the date of this Agreement affecting the Eurodollar
interbank market or the Administrative Agent's position in such market, adequate
and fair means do not exist for ascertaining the applicable interest rate on the
basis provided for in the definition of Eurodollar Rate, then, and in any such
event, the Administrative Agent shall forthwith give notice to the Company and
to the Banks of such determination. Until the
22
circumstances giving rise to the suspension described herein no longer exist,
the obligations of the Banks to make Eurodollar Rate Advances shall be
suspended.
SECTION 2.13. CHANGE IN LEGALITY.
(a) Notwithstanding anything to the contrary herein contained, if any
change in any law or regulation or in the interpretation thereof by any
governmental authority charged with the administration or interpretation
thereof shall make it unlawful for any Bank or its Eurodollar Lending
Office to make or maintain any Eurodollar Rate Advance or to give effect
to its obligations as contemplated hereby, then, by prompt written notice
to the Company, such Bank may:
(i) declare that Eurodollar Rate Advances will not thereafter be
made by such Bank hereunder, whereupon the Company shall be
prohibited from requesting Eurodollar Rate Advances from such Bank
hereunder unless such declaration is subsequently withdrawn,
PROVIDED, such request for a Eurodollar Rate Advance shall, if the
Company so indicates, be automatically converted (as to such Bank)
into a request for an Alternate Base Rate Advance and the affected
Bank or Banks shall respond thereto as provided herein; and
(ii) require that all outstanding Eurodollar Rate Advances made by
such Bank be converted to Alternate Base Rate Advances, in which
event (A) all such Eurodollar Rate Advances shall be automatically
converted to Alternate Base Rate Advances as of the effective date
of such notice as provided in paragraph (b) below if required by
applicable law or regulation, or if not so required, at the end of
the current Interest Period and (B) all payments and prepayments of
principal which would otherwise have been applied to repay the
converted Eurodollar Rate Advances shall instead be applied to repay
the Alternate Base Rate Advances resulting from the conversion of
such Eurodollar Rate Advances.
(b) For purposes of this Section, a notice to the Company by the
Administrative Agent pursuant to paragraph (a) above shall be effective on
the date of receipt thereof by the Company.
SECTION 2.14. INCREASED COSTS, TAXES OR CAPITAL ADEQUACY
REQUIREMENTS.
(a) If any change in the application or effectiveness of any applicable
law or regulation or compliance by any Bank with any applicable guideline
or request issued after the date hereof from any central bank or
governmental authority having jurisdiction over such Bank (whether or not
having the force of law) (i) shall change the basis of taxation of
payments to such Bank of the principal of or interest on any Eurodollar
Rate Advance made by such Bank or any other fees or amounts payable
hereunder with respect to Eurodollar Rate Advances (other than taxes
imposed on the overall net income of such Bank or its Applicable Lending
Office or franchise taxes imposed upon it by the jurisdiction in which
such Bank or its Applicable Lending Office has an office), (ii) shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement with respect to Eurodollar Rate Advances against assets of,
deposits with or for the
23
account of, or credit extended by, such Bank (without duplication of any
amounts paid pursuant to SECTION 2.10(F) or (iii) shall impose on such
Bank any other condition affecting this Agreement with respect to
Eurodollar Rate Advances or any Eurodollar Rate Advance made by such Bank,
and the result of any of the foregoing shall be to increase the cost to
such Bank of maintaining its Commitment or of making or maintaining any
Eurodollar Rate Advance or to reduce the amount of any sum received or
receivable by such Bank hereunder (whether of principal, interest or
otherwise) in respect thereof by an amount deemed in good faith by such
Bank to be material, then the Company shall pay to such Bank such
additional amount as will compensate it for such increase or reduction
within ten (10) days after notice thereof pursuant to Section 2.14(c).
(b) If any Bank shall have determined in good faith that any change in any
law, rule, regulation or guideline regarding capital adequacy, or any
change therein or any change in the interpretation or administration
thereof or compliance with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency has or would have the effect of reducing
the rate of return on the capital of such Bank as a consequence of, or
with reference to, such Bank's obligations hereunder to a level below that
which it could have achieved but for such adoption, change or compliance
by an amount deemed by such Bank to be material, then, from time to time,
the Company shall pay to the Administrative Agent for the benefit of such
Bank such additional amount as will reasonably compensate it for such
reduction within ten (10) days after notice thereof pursuant to SECTION
2.14(C).
(c) Each Bank will notify the Company through the Administrative Agent of
any event occurring after the date of this Agreement which will entitle it
to compensation pursuant to this Section, as promptly as practicable after
it becomes aware thereof and determines to request compensation and in any
case, within 120 days after becoming aware thereof. A certificate setting
forth in reasonable detail the amount necessary to compensate the Bank in
question as specified in paragraph (a) or (b) above, as the case may be,
and the calculation of such amount shall be delivered to the Company and
shall be conclusive absent manifest error. The failure on the part of any
Bank to demand increased compensation with respect to any Interest Period
shall not constitute a waiver of the right to demand compensation
thereafter within the 120 day time limit set forth above. Each Bank
agrees, to the extent it may lawfully do so without incurring additional
costs, to use its best efforts to minimize costs arising under this
section by designating another lending office for the Loans affected,
PROVIDED no Bank shall be required to do so.
(d) In the event any Bank gives a notice to the Company pursuant to
SECTION 2.13 or 2.14 that it cannot fund certain Loans or that such
funding will be at an increased cost, or is unable to deliver the
Prescribed Forms as required by SECTION 2.17 below, the Company may give
notice in response, with copies to the Administrative Agent, that it
wishes to seek one or more banks to replace such Bank in accordance with
the provisions set forth in SECTION 12.10. Each Bank giving such a notice
agrees that, at the request of the Company, it will assign all of its
interests hereunder and under the Notes and the Commitment to a
designated, Eligible Assignee for the full amount then owing to it, all in
accordance with SECTION 12.10. Thereafter, said assignee shall have all of
the rights
24
hereunder and obligations of the Assigning Bank (except as otherwise
expressly set forth herein) and such Bank shall have no further
obligations to the Company hereunder.
(e) Any notice given pursuant to this SECTION 2.14 shall be deemed to
contain a representation by the Bank issuing such notice that the
increased costs and charges are common to substantially all of the loan
customers of such Bank and are not unique to the Company.
SECTION 2.15. EURODOLLAR ADVANCE PREPAYMENT AND DEFAULT Penalties.
Subject to SECTION 12.8, the Company shall indemnify each Bank against any loss
or expense (excluding loss of anticipated profits) which it may sustain or incur
as a consequence of (a) an Advance of, or a conversion from or into, Eurodollar
Rate Advances that does not occur on the date specified therefor in a Notice of
Advance or Notice of Conversion or (b) any payment, prepayment or conversion of
a Eurodollar Rate Advance required by any other provision of this Agreement or
otherwise made on a date other than the last day of the applicable Interest
Period. Such loss or expense shall include an amount equal to the excess
determined by each Bank of (i) its cost of obtaining the funds for the Advance
being paid, prepaid or converted or not borrowed (based on the Eurodollar Rate)
for the period from the date of such payment. prepayment or conversion or
failure to borrow to the last day of the Interest Period for such Advance (or,
in the case of a failure to borrow, the Interest Period for the Advance which
would have commenced on the date of such failure to borrow) OVER (ii) the amount
of interest (as determined by each Bank) that would be realized in reemploying
the funds so paid, prepaid or converted or not borrowed for such period or
Interest Period, as the case may be. The Administrative Agent, on behalf of the
Banks, will notify the Company of any loss or expense which will entitle the
Banks to compensation pursuant to this Section, as promptly as possible after it
becomes aware thereof, but failure to so notify shall not affect the Company's
liability therefor. A certificate of any Bank setting forth any amount which it
is entitled to receive pursuant to this Section shall be delivered to the
Company and shall be conclusive absent manifest error if such determination is
made on a reasonable basis. The Company shall pay to the Administrative Agent
for the account of the Banks the amount shown as due on any certificate within
ten (10) days after its receipt of the same. Without prejudice to the survival
of any other obligations of the Company hereunder, the obligations of the
Company under this Section shall survive the termination of this Agreement and,
with respect to the assigning Bank, the assignment of any of the Notes, in each
case for one hundred and twenty (120) days.
SECTION 2.16. VOLUNTARY REDUCTION OF COMMITMENT. Upon at least three
(3) Business Days' prior written notice, the Company shall have the right,
without premium or penalty, to reduce or terminate the Commitments, in whole or
in part, in the amount of $5,000,000.00 or integral multiples thereof.
SECTION 2.17. TAX FORMS. With respect to any Bank which is organized
under the laws of a jurisdiction outside the United States, on the date of the
initial Advance hereunder or on the date it becomes a party hereto, and from
time to time thereafter if requested by the Company or the Administrative Agent,
each such Bank shall provide the Administrative Agent and the Company with the
Prescribed Forms. Unless the Company and the Administrative Agent have received
such Prescribed Forms, the Administrative Agent and the Company if required by
applicable law or regulation, may withhold taxes from payments under the Loan
25
Documents at the applicable rate in the case of payments to or for any Bank
organized under the laws of a jurisdiction outside the United States; PROVIDED
the Company shall, unless otherwise directed in writing by the Administrative
Agent or unless otherwise required by law, make all payments in full to the
Administrative Agent without deducting any withholding or similar taxes. If the
Company is required by law to deduct or withhold any taxes from any Payment, the
Company shall: (a) make such deduction or withholding; (b) pay the amount so
deducted or withheld to the appropriate taxing authority not later than the date
when due (irrespective of the rate of such deduction or withholding); (c)
deliver to the relevant Administrative Agent or Bank, as the case may be,
promptly and in any event within 30 days after the date on which such taxes
become due, original tax receipts and other evidence satisfactory to such
Administrative Agent or Bank, as the case may be, of the payment when due of the
full amount of such taxes; and (d) pay to the respective Administrative Agent or
Bank, forthwith upon any request by such Administrative Agent or Bank, therefor
from time to time, such additional amounts as may be necessary so that such
Administrative Agent or Bank, as the case may be, receives, free and clear of
all taxes, the full amount of such Payment stated to be due under this
Agreement, the Notes or the other Loan Documents as if no such deduction or
withholding had been made. The Company hereby indemnifies each Agent and each
Bank, and holds each of them harmless for, any taxes and any loss, cost, damage,
penalty or expense whatsoever arising from any failure of the Company to make,
or delay in making, any deduction or withholding of taxes, or its failure to pay
when due the amount so deducted or withheld to the appropriate taxation
authority or its failure otherwise to comply with the terms and conditions of
this Section.
ARTICLE III
LETTERS OF CREDIT
SECTION 3.1. LETTERS OF CREDIT.
(a) Subject to and upon the terms and conditions herein set forth, the
Issuing Bank agrees that it will, at any time and from time to time on or
after the Effective Date and prior to the Maturity Date, following its
receipt of a Letter of Credit Request and Application for Letter of
Credit, issue for the account of the Company and in support of the
obligations of the Company or any of its Subsidiaries, one or more standby
and/or commercial letters of credit (the "LETTERS OF Credit") payable on a
sight basis, up to a maximum amount outstanding at any one time for all
Letters of Credit of $10,000,000.00; PROVIDED that the Issuing Bank shall
not issue any Letter of Credit if at the time of such issuance: (i) Letter
of Credit Obligations shall be greater than an amount which, when added to
the sum of all Advances then outstanding plus Letter of Credit
Obligations, would exceed the Total Commitment or (ii) the expiry date or,
in the case of any Letter of Credit containing an expiry date that is
extendible at the option of the Issuing Bank, the initial expiry date, of
such Letter of Credit is a date that is later than the Maturity Date.
(b) The Issuing Bank shall neither renew or extend nor permit the renewal
or extension of any Letter of Credit (which renewal or extension will not
be for any period ending after the Maturity Date) if any of the conditions
precedent to such renewal set forth in Section 5.2 are not satisfied or
waived or, after giving effect to such renewal, the expiry date of such
Letter of Credit would be a date that is later than five (5) Business Days
prior to the Maturity Date.
26
SECTION 3.2. LETTER OF CREDIT REQUESTS.
(a) Whenever the Company desires that a Letter of Credit be issued for its
account or that the existing expiry date shall be extended, it shall give
the Issuing Bank (with copies to be sent to the Administrative Agent and
each Bank) (i) in the case of a Letter of Credit to be issued, at least
five (5) Business Days' prior written request therefor and (ii) in the
case of the extension of the existing expiry date of any Letter of Credit,
at least five (5) Business Days prior to the date on which the Issuing
Bank must notify the beneficiary thereof that the Issuing Bank does not
intend to extend such existing expiry date. Each such request shall be
executed by the Company and shall be in the form of EXHIBIT 3.2 attached
hereto (each a "LETTER OF CREDIT REQUEST") and shall be accompanied by an
Application for Letter of Credit therefor, completed to the reasonable
satisfaction of the Issuing Bank, and such other certificates, documents
and other papers and information as the Issuing Bank or the Administrative
Agent may reasonably request. Each Letter of Credit shall be denominated
in U.S. dollars, shall expire no later than the date specified in SECTION
3.1, shall not be in an amount greater than is permitted under clause (i)
of SECTION 3.1(A) and shall be in such form as may be reasonably approved
from time to time by the Issuing Bank and the Company.
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Company that such Letter of Credit may
be issued in accordance with, and will not violate the requirements of
this Agreement. Unless the Issuing Bank has received notice from any Bank
before it issues the respective Letter of Credit or extends the existing
expiry date of a Letter of Credit that one or more of the conditions
specified in ARTICLE V are not then satisfied, or that the issuance of
such Letter of Credit would violate this Agreement, then the Issuing Bank
shall issue the requested Letter of Credit for the account of the Company
in accordance with the Issuing Bank's usual and customary practices. Upon
its issuance of any Letter of Credit or the extension of the existing
expiry date of any Letter of Credit, as the case may be, the Issuing Bank
shall promptly notify the Company and the Administrative Agent and the
Administrative Agent shall notify each Bank of such issuance or extension,
which notices shall be accompanied by a copy of the Letter of Credit
actually issued or a copy of any amendment extending the existing expiry
date of any Letter of Credit, as the case may be.
(c) Upon receipt by a proposed Issuing Bank of a Letter of Credit Request
pursuant to Section 3.2(a) requesting the issuance of a Letter of Credit,
(a) in the event the Administrative Agent is the proposed Issuing Bank,
the Administrative Agent shall be the Issuing Bank with respect to such
Letter of Credit, notwithstanding the fact that the Letter of Credit
Obligations with respect to such Letter of Credit and with respect to all
other Letters of Credit issued by the Administrative Agent, when
aggregated with the Administrative Agent's outstanding Loans, may exceed
the Administrative Agent's Commitments; and (b) in the event any other
Bank is the proposed Issuing Bank, such Bank shall promptly notify the
Company and the Administrative Agent whether or not, in its sole
discretion, it has elected to issue such Letter of Credit, and (1) if such
Bank so elects to issue such Letter of Credit, it shall be the Issuing
Bank with respect thereto and (2) if such Bank fails to so promptly notify
the Company and the Administrative Agent or declines to issue such Letter
of Credit, the Company may request the Administrative
27
Agent or another Bank to be the Issuing Bank with respect to such Letter
of Credit in accordance with the provisions of this Section 3.2.
SECTION 3.3. LETTER OF CREDIT PARTICIPATIONS.
(a) All Letters of Credit issued subsequent hereto shall be deemed to have
been sold and transferred by the Issuing Bank to each Bank, and each Bank
shall be deemed irrevocably and unconditionally to have purchased and
received from the Issuing Bank, without recourse or warranty, an undivided
interest and participation, (to the extent of such Bank's percentage
participation in the Commitment) in each such Letter of Credit (including
extensions of the expiry date thereof), each substitute Letter of Credit,
each drawing made thereunder and the obligations of the Company under this
Agreement and the other Loan Documents with respect thereto, and any
security therefor or guaranty pertaining thereto.
(b) In determining whether to pay under any Letter of Credit, the Issuing
Bank shall have no obligation relative to the Banks other than to confirm
that any documents required to be delivered under such Letter of Credit
appear to have been delivered and that they appear to comply on their face
with the requirements of such Letter of Credit.
(c) In the event that the Issuing Bank makes any payment under any Letter
of Credit, the same shall be considered an Alternate Base Rate Advance
without further action by any Person. The Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each Bank
thereof. Each Bank shall immediately pay to the Administrative Agent for
the account of the Issuing Bank the amount of such Lender's percentage
participation of such Advance. If any Bank shall not have so made its
percentage participation available to the Administrative Agent, such
Lender agrees to pay interest thereon, for each day from such date until
the date such amount is paid at the lesser of (i) the Federal Funds
Effective Rate and (ii) the Highest Lawful Rate.
(d) The Issuing Bank shall not be liable for, and the obligations of the
Company and the Banks to make payments to the Administrative Agent for the
account of the Issuing Bank with respect to Letters of Credit shall not be
subject to, any qualification or exception whatsoever, including any of
the following circumstances:
(i) any lack of validity or enforceability of this Agreement or
any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Company may have at any time against a beneficiary named
in a Letter of Credit, any transferee of any Letter of Credit, the
Administrative Agent, any Issuing Bank, any Bank, or any other
Person, whether in connection with this Agreement, any Letter of
Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the
Company and the beneficiary named in any such Letter of Credit);
28
(iii) any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Loan Documents; or
(v) the occurrence of any Default or Event of Default.
(e) The Issuing Bank shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message
or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by such Issuing Bank's gross
negligence or willful misconduct. IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT SUCH ISSUING BANK, ITS OFFICERS, DIRECTORS, EMPLOYEES
AND AGENTS (OTHER THAN WITH RESPECT TO ANY CLAIMS BY THE ISSUING BANK
AGAINST ANY SUCH OFFICER, DIRECTOR, EMPLOYEE OR AGENT THEREOF) SHALL BE
INDEMNIFIED AND HELD HARMLESS FROM, SUBJECT TO THE SAME TYPE OF
PROTECTIONS SET FORTH IN SECTION 11.5(B), ANY ACTION TAKEN OR OMITTED BY
SUCH PERSON UNDER OR IN CONNECTION WITH ANY LETTER OF CREDIT OR ANY
RELATED DRAFT OR DOCUMENT ARISING OUT OF OR RESULTING FROM SUCH PERSON'S
SOLE OR CONTRIBUTORY NEGLIGENCE, BUT NOT FROM THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF SUCH PERSON AS DETERMINED BY A COURT OF COMPETENT
JURISDICTION. The Company agrees that any action taken or omitted by the
Issuing Bank under or in connection with any Letter of Credit or the
related drafts or documents, if done in accordance with the standards of
care specified in the Uniform Customs and Practice for Documentary Credits
(1993 Revision), International Chamber of Commerce, Publication No. 500
(and any subsequent revisions thereof approved by a Congress of the
International Chamber of Commerce and adhered to by the Issuing Bank) or
any other comparable or successor publication or document and, to the
extent not inconsistent therewith, the Uniform Commercial Code of the
State of New York, shall not result in any liability of the Issuing Bank
to the Company.
SECTION 3.4. INCREASED COSTS.
(a) Notwithstanding any other provision herein, but subject to SECTION
12.8, if any Bank shall have determined in good faith that any change
after the Effective Date of any law, rule, regulation or guideline or the
application or effectiveness of any applicable law or regulation or any
change after the Effective Date in the interpretation or administration
thereof, or compliance by any Bank (or any lending office of such Bank)
with any applicable guideline or request from any central bank or
governmental authority (whether or not having the force of law) issued
after the Effective Date either (i) shall impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement
against Letters of Credit issued, or participated in, by any Bank or (ii)
shall impose on any Bank any other conditions affecting this Agreement or
any Letter of Credit; and the result of any of the foregoing is to
increase the cost to any Bank of issuing, maintaining or participating in
any Letter of Credit, or reduce the amount received or receivable by any
Bank hereunder with respect to Letters of Credit, by an amount deemed by
such Lender to be material, then, from time to time, the Company shall pay
to the
29
Administrative Agent for the account of such Lender such additional amount
or amounts as will reasonably compensate such Lender for such increased
cost or reduction by such Lender.
(b) Each Bank will notify the Company through the Administrative Agent of
any event occurring after the date of this Agreement which will entitle
such Bank to compensation pursuant to subsection (a) above, as promptly as
practicable. A certificate of such Lender (i) stating that the
compensation sought to be recovered pursuant to this SECTION 3.4 is
generally being charged to other similarly situated customers and (ii)
setting forth in reasonable detail such amount or amounts as shall be
necessary to compensate such Bank as specified in subsection (a) above may
be delivered to the Company (with a copy to the Administrative Agent) and
shall be conclusive absent manifest error. The Company shall pay to the
Administrative Agent for the account of such Bank the amount shown as due
on any such certificate upon demand; PROVIDED that with respect to events
occurring prior to any notice given under this SECTION 3.4(B), such Bank
shall only be entitled to recover compensation for such events occurring
over a period of 120 days.
(c) Except as expressly provided in SECTION 3.4(B), failure on the part of
any Bank to demand compensation for any increased costs or reduction in
amounts received or receivable or reduction in return on capital with
respect to any Letter of Credit shall not constitute a waiver of such
Bank's rights to demand compensation for any increased costs or reduction
in amounts received or receivables or reduction in return on capital with
respect to such Letter of Credit.
SECTION 3.5. CONFLICT BETWEEN APPLICATIONS AND AGREEMENT. To the
extent that any provision of any application related to any Letter of Credit is
inconsistent with the provisions of this Agreement, the provisions of this
Agreement shall control.
ARTICLE IV
FEES
SECTION 4.1. FEES. Subject to SECTION 12.8 hereof, the Company
agrees to pay the following fees (the "FEES"):
(a) The Company agrees to pay to the Administrative Agent for the ratable
account of the Banks a Commitment fee (the "COMMITMENT FEE") for the
period from and including the Effective Date to the Maturity Date computed
at a rate per annum determined by the grid set forth below and calculated
on the basis of a 360 day-year on the daily average of the Unutilized
Commitment of each Bank; PROVIDED that for the Margin Period from the
Effective Date through the date that the first Compliance Certificate is
delivered pursuant to SECTION 7.1(D), the applicable Commitment Fee shall
be 0.375%. The rate for the Commitment Fee shall be adjusted on the first
day of each Margin Period. Commitment Fees shall be due and payable in
arrears on each Designated Payment Date commencing on the first such date
following the Effective Date and on the Maturity Date.
30
TOTAL FUNDED DEBT/ COMMITMENT FEE
EBITDA RATIO RATE
- ------------------------------------------------------------------
(greater than or equal to) 3.00 0.500%
(greater than or equal to) 2.50 but < 3.00 0.500%
(greater than or equal to) 2.00 but < 2.50 0.375%
(greater than or equal to) 1.50 but < 2.00 0.375%
(greater than or equal to) 1.00 but < 1.50 0.375%
< 1.00 0.250%
(b) The Letter of Credit Fees shall be due and payable at the time the
Issuing Bank is to issue or renew any Letter of Credit. The Letter of
Credit Fee shall be adjusted, if applicable under the definition of
"Letter of Credit Fee", on the first day of each Margin Period; provided
that for the Margin Period from the Effective Date through the date that
the first Compliance Certificate is delivered pursuant to SECTION 7.1(D),
the applicable Letter of Credit Fee shall be 1.500%.
(c) The fees described in those certain fee letters between the Company
and BTCo, NB and BOT and any of their resepctive Affiliates.
ARTICLE V
CONDITIONS PRECEDENT
SECTION 5.1. CONDITIONS PRECEDENT TO THE INITIAL ADVANCE. The
obligation of each Bank to make its initial Advance to the Company is subject
to, in addition to the conditions precedent specified in subsection 5.2, the
prior or concurrent satisfaction of the following conditions:
(a) LOAN AND OTHER RELATED DOCUMENTS. On or before the Effective Date, the
Company shall, and shall cause each Guarantor to, deliver to the Agents
the following, all in form and substance satisfactory to the Agents, and,
where relevant, executed by all appropriate parties:
(i) this Agreement (which includes the Guaranty) and all other
Loan Documents;
(ii) one Note for each Bank;
(iii) a Notice of Advance with respect to the initial Advance
meeting the requirements of SECTION 2.3(A);
(iv) a certificate of an officer and of the secretary or an
assistant secretary of the Company and of each Guarantor, as
applicable, dated as of the Effective Date certifying, (i) true and
complete copies of each of (1) the articles or certificate of
incorporation, marked as filed with the applicable governmental
authorities and as amended and in effect, of the Company and each of
the Guarantors not party to the Existing Credit Agreement, (2) the
bylaws, as amended and in effect, of the Company and each of the
Guarantors not party to the Existing Credit Agreement and (3) the
resolutions adopted by the board of directors of the Company and
each
31
of the Guarantors (A) authorizing the execution, delivery and
performance by the Company and each of its Subsidiaries of this
Agreement and the other Loan Documents to which it is or will be a
party and, in the case of the Company, the Advances to be made
hereunder, (B) approving the forms of the Loan Documents to which it
is or will be a party and which will be delivered at or prior to the
date of the initial Advance and (C) authorizing officers of the
Company and each of its Subsidiaries to execute and deliver the Loan
Documents to which it is or will be a party and any related
documents, including, any agreement contemplated by this Agreement,
in each case as being in full force and effect without modification
or amendment, (ii) that the articles or certificate of incorporation
and bylaws of each of the Guarantors party to the Existing Credit
Agreement have not been amended, supplemented, or otherwise modified
since April 14, 1998, except as attached to such certificate, (iii)
the incumbency and specimen signatures of the officers of the
Company and each of its Subsidiaries executing any documents on its
behalf, and (iv) that since December 31, 1997 there has been no
change in the businesses, operations, properties, assets,
liabilities, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole which could reasonably
be expected to have a Material Adverse Effect.
(v) on or before the Effective Date, the Company, each bank under
the Existing Credit Agreement, BOT, as administrative agent under
the Existing Credit Agreement, each Bank under this Agreement and
the Agents shall have executed and delivered the Master Assignment
Agreement and on the Effective Date, each such bank, BOT, Bank and
Agent shall have sold, purchased and/or assigned such loans and/or
commitments pursuant to the Master Assignment Agreement such that
each Bank's pro rata share of the Loans and/or Commitments shall be
as set forth on the signature pages hereto.
(b) SECURITY INTERESTS IN PERSONAL PROPERTY. The Agents shall have
received evidence satisfactory to them that the Company and the Guarantors
shall have taken or caused to be taken all such actions, executed and
delivered or caused to be executed and delivered all such agreements,
documents and instruments, and made or caused to be made all such filings
and recordings (other than the filing or recording of the items described
in clauses (iii) and (iv) below) that may be necessary or, in the opinion
of the Agents, desirable in order to create in favor of the Administrative
Agent, for the benefit of the Banks, a valid and (upon such filing and
recording) perfected First Priority security interest in the entire
Collateral. Such actions shall include the following:
(i) SCHEDULES TO COLLATERAL DOCUMENTS. Delivery to the
Administrative Agent of accurate and complete schedules to all of
the applicable Collateral Documents;
(ii) STOCK CERTIFICATES AND INSTRUMENTS. Delivery to the
Administrative Agent of (a) certificates (which certificates shall
be accompanied by irrevocable undated stock powers, duly endorsed in
blank and otherwise satisfactory in form and substance to the
Agents) representing substantially all capital stock pledged
pursuant to the Company Pledge Agreement and the Subsidiary Pledge
Agreements and (b) substantially all promissory notes or other
instruments (duly
32
endorsed, where appropriate, in a manner satisfactory to the Agents)
evidencing any Collateral;
(iii) LIEN SEARCHES AND UCC TERMINATION STATEMENTS. Delivery to the
Administrative Agent of (a) the results of a recent search, by a
Person satisfactory to the Agents, of all jurisdictions where
filings to perfect are material or a material portion of the
Collateral are located, together with copies of all such filings
disclosed by such search; and (b) UCC termination statements duly
executed by all applicable Persons for filing in all applicable
jurisdictions as may be necessary to terminate any effective UCC
financing statements or fixture filings disclosed in such search and
affecting a material portion of the Collateral (other than any such
financing statements or fixture filings in respect of Liens
permitted to remain outstanding pursuant to the terms of this
Agreement);
(iv) UCC FINANCING STATEMENTS. Delivery to the Administrative Agent
of UCC financing statements duly executed by the Company and each
applicable Guarantor with respect to all Collateral of the Company
or such Guarantor, for filing in all jurisdictions as may be
necessary or, in the opinion of the Agents, desirable to perfect the
security interests created in such Collateral pursuant to the
Collateral Documents; and
(v) OPINIONS OF LOCAL COUNSEL. Delivery to the Administrative Agent
of an opinion of counsel (which counsel shall be reasonably
satisfactory to the Agents) under the laws of Texas and such other
jurisdictions as Agents may reasonably request, in each case with
respect to the creation and perfection of the security interests in
favor the Administrative Agent on behalf of the Banks in such
Collateral and such other matters governed by the laws of such
jurisdiction regarding such security interests as the Agents may
reasonably request, in each case in form and substance reasonably
satisfactory to the Agents.
(c) NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS. The Company and
its Subsidiaries shall have obtained all authorizations, consents,
approvals, licenses or exemptions of or have made all filings or
registrations with any court or governmental department, commission,
board, bureau, agency or instrumentality, domestic or foreign, and shall
have obtained all consents of other Persons, in each case that are
necessary or advisable in connection with the transactions contemplated
hereby and the continued operation of the businesses conducted by the
Company and its Subsidiaries in substantially the same manner as conducted
prior to the Effective Date, and each shall be in full force and effect,
in each case other than those the failure to obtain, which either
individually or in the aggregate, would not be reasonably likely to have a
Material Adverse Effect;
(d) OPINION OF BRACEWELL & PATTERSON, L.L.P. The Banks shall have received
originally executed copies of one or more favorable written opinions
addressed to the Agents and the Banks from Bracewell & Patterson, L.L.P.,
counsel to the Company and the Guarantors dated as of the Effective Date,
substantially in the form of EXHIBIT 5.1(D)
33
annexed hereto and such other matters as the Agents acting on behalf of
the Banks may reasonably request;
(e) OPINION OF O'MELVENY & MYERS LLP. The Banks shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Myers LLP, dated as of the Effective Date, substantially in
the form of EXHIBIT 5.1(E) annexed hereto and as to such other matters as
the Agents acting on behalf of the Banks may reasonably request;
(f) PAYMENT OF FEES. The Company shall have paid to the Administrative
Agent, for distribution as appropriate to the Agents and the Banks, the
Fees payable on the Effective Date referred to in Section 4.1 and all
reasonable fees and expenses (including the reasonable fees and expenses
of O'Melveny & Myers LLP) agreed upon by such parties to be paid on the
Effective Date;
(g) GOOD STANDING AND RELATED CERTIFICATES. On or prior to the Effective
Date, the Agents shall have received certificates of appropriate public
officials as to the existence, good standing and qualification to do
business as a foreign corporation, as applicable, of the Company and its
Subsidiaries in each jurisdiction in which the ownership of its properties
or the conduct of its business requires such qualifications and where the
failure to so qualify would have a Material Adverse Effect; and
(h) FINANCIAL STATEMENTS; PRO FORMA BALANCE SHEET. On or prior to the
Effective Date, the Banks shall have received from the Company (i) the
audited financial statements of the Company and its Subsidiaries for the
twelve (12) months ended December 31, 1997 consisting of a balance sheet
and related consolidated statements of income, stockholders' equity and
cash flows for such period, (ii) the unaudited financial statements of the
Company and its Subsidiaries for the fiscal periods most recently ended
prior to the Effective Date (including without limitation monthly income
statements for any such period of less than three months), in each case
consisting of a balance sheet and the related consolidated statements of
income, stockholders' equity and cash flows for such periods, all in
reasonably detail and certified by the chief financial officer of the
Company that they fairly present the financial condition of the Company
and its Subsidiaries for such periods and the results of their operations
and their cash flows for such periods, subject to changes resulting from
audit and normal year-end adjustments, (iii) pro forma consolidated
balance sheets of the Company and its Subsidiaries as at September 30,
1998, prepared in accordance with GAAP and reasonably reflecting the
transactions contemplated hereby, which pro forma financial statements
shall be in form and substance reasonably satisfactory to the Agents, and
(iv) projected consolidated financial statements of the Company and its
Subsidiaries for the three-year period after the Effective Date consisting
of a balance sheet and consolidated statements of income, shareholders'
equity and cash flows, which projected financial statements shall be in
form and substance reasonably satisfactory to the Agents (such financial
statements and information described in clauses (i) through (iv) above are
hereinafter collectively referred to as the "FINANCIALS");
34
(i) SOLVENCY ASSURANCES. On the Effective Date, as to the Company and its
Subsidiaries, the Agents and the Banks shall have received a Financial
Condition Certificate with appropriate attachments, demonstrating that,
after giving effect to the consummation of the transactions contemplated
hereby, the Company and its Subsidiaries will be Solvent;
(j) NO DISRUPTION OF FINANCIAL AND CAPITAL MARKETS. There shall have been
no material adverse change after October 28, 1998 to the syndication
markets for credit facilities similar to the credit facilities provided
herein and there shall not have occurred and be continuing a material
disruption of or material adverse change in financial, banking or capital
markets that would have an adverse effect on such syndication market, in
each case as determined by the Agents in their sole discretion.
(k) DUE DILIGENCE. The results of Agents' continuing financial, legal, tax
and accounting due diligence investigations with respect to the Company
and its Subsidiaries and the other transactions contemplated hereunder
shall be satisfactory in all respects to the Agents and the other Banks,
and any supplemental business or financial due diligence that the Agents
reasonably determine have become necessary shall not have disclosed
information not previously disclosed to the Agents which causes the
results of such diligences not to be satisfactory in all respects to the
Agents and the other Banks. The Agents and the other Banks shall also have
received any information reasonably necessary to conduct their continuing
due diligence.
(l) EVIDENCE OF INSURANCE. Agents shall have received a certificate from
the Company's insurance broker or other evidence satisfactory to them that
all insurance required to be maintained pursuant to Section 7.3 is in full
force and effect and that the Administrative Agent on behalf of the Banks
has been named as additional insured and/or loss payee thereunder to the
extent required under Section 7.3.
The acceptance of the benefits of the initial Credit Event shall
constitute a representation and warranty by the Company to the Administrative
Agent and each of the Banks that, all of the conditions specified in this
Section above shall have been satisfied or waived as of that time.
SECTION 5.2. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation
of the Banks to make any Advance is, including, without limitation, the initial
Advance, subject to the further conditions precedent that on the date of such
Credit Event:
(a) The representations and warranties set forth in ARTICLE VI and in each
of the Collateral Documents shall be true and correct in all material
respects as of, and as if such representations and warranties were made
on, the date of the proposed Advance (unless such representation and
warranty expressly relates to an earlier date or is no longer true and
correct solely as a result of transactions permitted by the Loan
Documents), and the Company shall be deemed to have certified to the
Administrative Agent and the Banks that such representations and
warranties are true and correct in all material respects by submitting a
Notice of Advance.
35
(b) The Company shall have complied with the provisions of SECTION 2.3
hereof.
(c) No Default or Event of Default shall have occurred and be continuing
or would result from such Credit Event.
(d) No Material Adverse Effect shall have occurred since the delivery of
the most recent financial statements delivered pursuant to SECTION 7.1.
(e) The Administrative Agent shall have received such other approvals or
documents as the Administrative Agent or the Banks may reasonably request.
The acceptance of the benefits of each such Credit Event shall
constitute a representation and warranty by the Company to the Administrative
Agent and each of the Banks that all of the conditions specified in this Section
above exist as of that time.
SECTION 5.3. DELIVERY OF DOCUMENTS. All of the Notes, certificates,
legal opinions and other documents and papers referred to in this ARTICLE V,
unless otherwise specified, shall be delivered to the Administrative Agent for
the account of each of the Banks and, except for the Notes, in sufficient
counterparts for each of the Banks and shall be reasonably satisfactory in form
and substance to the Banks.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Company, as to itself and each of its Subsidiaries, makes, on or
as of the occurrence of each Credit Event (except to the extent such
representations or warranties relate to an earlier date or are no longer true
and correct in all material respects solely as a result of transactions not
prohibited by the Loan Documents), the following representations and warranties
to the Administrative Agent and the Banks:
SECTION 6.1. ORGANIZATION AND QUALIFICATION. Each of the Company and
its Subsidiaries (a) is duly formed or organized, validly existing and is in
good standing under the laws of the state of its organization, (b) has the power
to own its property and to carry on its business as now conducted, except where
the failure to do so would not have a Material Adverse Effect and (c) is duly
qualified to do business and is in good standing in every jurisdiction in which
the failure to be so qualified would have a Material Adverse Effect.
SECTION 6.2. AUTHORIZATION AND VALIDITY. Each of the Company and its
Subsidiaries has the corporate power and authority to execute, deliver and
perform its obligations hereunder and under the other Loan Documents to which it
is a party and all such action has been duly authorized by all necessary
corporate proceedings on its part. The Loan Documents to which each of the
Company and its Subsidiaries is a party have been duly and validly executed and
delivered by such Person and constitute a valid and legally binding agreement of
such Person enforceable in accordance with the respective terms thereof, except,
in each case, as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to or affecting the enforcement of creditors' rights generally, and by general
principles of equity regardless of whether such enforceability is a proceeding
in equity or at law.
36
SECTION 6.3. GOVERNMENTAL CONSENTS. No authorization, consent,
approval, license or exemption of or filing or registration with any court or
governmental department. commission, board, bureau, agency or
instrumentality, domestic or foreign, is necessary for the valid execution,
delivery or performance by the Company or any Subsidiary of any Loan Document.
SECTION 6.4. CONFLICTING OR ADVERSE AGREEMENTS OR RESTRICTIONS.
Neither the Company nor any Subsidiary is a party to any contract or agreement
or subject to any restriction which would reasonably be expected to have a
Material Adverse Effect. Neither the execution nor delivery of the Loan
Documents nor compliance with the terms and provisions hereof or thereof will be
contrary to the provisions of, or constitute a default under (a) the charter or
bylaws of the Company or any of its Subsidiaries or (b) any law, regulation,
order, writ, injunction or decree of any court or governmental instrumentality
that is applicable to the Company or any of its Subsidiaries or (c) any material
agreement to which the Company or any of its Subsidiaries is a party or by which
it is bound or to which it is subject.
SECTION 6.5. TITLE TO ASSETS. Each of the Company and its Subsidiaries
has good title to all material personalty and good and indefeasible title to all
material realty as reflected on the Company's and the Subsidiaries' books and
records as being owned by them, except for properties disposed of in the
ordinary course of business, subject to no Liens, except those permitted
hereunder, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. All of such assets have been and are being
maintained by the appropriate Person in good working condition in accordance
with industry standards, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect.
SECTION 6.6. LITIGATION. No proceedings against or affecting the
Company or any Subsidiary are pending or, to the knowledge of the Company,
threatened before any court or governmental agency or department which involve a
reasonable material risk of having a Material Adverse Effect, individually or in
the aggregate, except those listed on SCHEDULE 6.6 hereof.
SECTION 6.7. FINANCIAL STATEMENTS. Prior to the Effective Date, the
Company has furnished to the Banks the Financials. The Financials have been
prepared in conformity with GAAP consistently applied (except as otherwise
disclosed in such financial statements) throughout the periods involved and
present fairly, in all material respects, the consolidated financial condition
of the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations for the periods then ended. As of the
Effective Date, no Material Adverse Effect has occurred since December 31, 1997.
SECTION 6.8. DEFAULT. Neither the Company nor any Subsidiary is in
default under any material provisions of any instrument evidencing any
Indebtedness or of any agreement relating thereto, or in default in any respect
under any order, writ, injunction or decree of any court, or in default in any
respect under or in violation of any order, injunction or decree of any
governmental instrumentality, in each case in such manner as to cause a Material
Adverse Effect.
37
SECTION 6.9. INVESTMENT COMPANY ACT. Neither the Company nor any
Subsidiary is, or is directly or indirectly controlled by or acting on behalf of
any Person which is, an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended.
SECTION 6.10. PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company
nor any Subsidiary is a non-exempt "holding company," or subject to regulation
as such, or, to the knowledge of the Company's or such Subsidiary's officers, an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 6.11. ERISA. No accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA), that would cause a Material
Adverse Effect whether or not waived, exists or is expected to be incurred with
respect to any Plan. No liability to the PBGC (other than required premium
payments) has been or is expected by the Company to be incurred with respect to
any Plan by the Company or any ERISA Affiliate that would cause a Material
Adverse Effect. Neither the Company nor any ERISA Affiliate has incurred any
withdrawal liability under Title IV of ERISA with respect to any Multi-Employer
Plans.
SECTION 6.12. TAX RETURNS AND PAYMENTS. Each of the Company and its
Subsidiaries has filed all federal income tax returns and other tax returns,
statements and reports (or obtained extensions with respect thereto) which are
required to be filed and has paid or deposited or made adequate provision, in
accordance with GAAP for the payment of all taxes (including estimated taxes
shown on such returns, statements and reports) which are shown to be due
pursuant to such returns, except for such taxes as are being contested in good
faith and by appropriate proceedings.
SECTION 6.13. ENVIRONMENTAL MATTERS. Each of the Company and its
Subsidiaries (a) possesses all environmental, health and safety licenses,
permits, authorizations, registrations, approvals and similar rights necessary
under law or otherwise for the Company or such Subsidiary to conduct its
operations as now being conducted (other than those with respect to which the
failure to possess or maintain would not, individually or in the aggregate for
the Company and such Subsidiaries, reasonably be expected to have a Material
Adverse Effect) and (b) each of such licenses, permits, authorizations,
registrations, approvals and similar rights is valid and subsisting, in full
force and effect and enforceable by the Company or such Subsidiary, and each of
the Company and its Subsidiaries is in compliance with all effective terms,
conditions or other provisions of such permits, authorizations, registrations,
approvals and similar rights except for such failure or noncompliance that,
individually or in the aggregate for the Company and such Subsidiaries, would
not reasonably be expected to have a Material Adverse Effect. Except as
disclosed on SCHEDULE 6.13, on the Effective Date, neither the Company nor any
of its Subsidiaries has received any notices of any violation of, noncompliance
with, or remedial obligation under, Requirements of Environmental Laws (which
violation or non-compliance has not been cured), and there are no writs,
injunctions, decrees, orders or judgments outstanding, or lawsuits, claims,
proceedings, investigations or inquiries pending or, to the knowledge of the
Company or any Subsidiary, threatened, relating to the ownership, use,
condition, maintenance or operation of, or conduct of business related to, any
property owned, leased or operated by the Company or such
38
Subsidiary or other assets of the Company or such Subsidiary, other than those
violations, instances of noncompliance, obligations, writs, injunctions,
decrees, orders, judgments, lawsuits, claims, proceedings, investigations or
inquiries that, individually or in the aggregate for the Company and such
Subsidiaries, would not have a Material Adverse Effect. Except as disclosed on
Schedule 6. 13, there are no material obligations, undertakings or liabilities
arising out of or relating to Environmental Laws to which the Company or any of
its Subsidiaries has agreed, assumed or retained, or by which the Company or any
of its Subsidiaries is adversely affected, by contract or otherwise and,
further, except as disclosed on SCHEDULE 6.13, neither the Company nor any of
its Subsidiaries has received a written notice or claim to the effect that the
Company or any of its Subsidiaries is or may be liable to any other Person as
the result of a Release or threatened Release of a Hazardous Material which, in
either case, could reasonably be expected to have a Material Adverse Effect.
SECTION 6.14. PURPOSE OF LOANS
(a) The proceeds of the Loan will be used solely for general corporate
purposes, including working capital, to finance acquisitions permitted
hereunder, and for Letters of Credit.
(b) None of the proceeds of any Advance will be used directly or
indirectly for the purpose of purchasing or carrying any "margin stock"
within the meaning of Regulation U or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or
carry any margin stock.
SECTION 6.15. FRANCHISES AND OTHER RIGHTS. The Company and each of its
Subsidiaries has all franchises, permits, licenses and other authority as are
necessary to enable them to carry on their respective businesses as now being
conducted and is not in default in respect thereof where the absence of such or
any such default could reasonably be expected to have a Material Adverse Effect,
individually or in the aggregate.
SECTION 6.16. SUBSIDIARIES AND ASSETS. The Subsidiaries listed on
SCHEDULE 6.16 are all of the Subsidiaries of the Company as of the Effective
Date and the address given for such Guarantors is the correct mailing address as
of the Effective Date. The Company shall update such SCHEDULE 6.16 within thirty
(30) days of new Subsidiaries being added.
SECTION 6.17. SOLVENCY. After giving effect to the initial Advance
hereunder and all other Indebtedness of the Company existing at the time of such
Advance, the Company and its Subsidiaries, viewed as a consolidated entity, is
Solvent.
SECTION 6.18. PAYMENT OF CERTAIN INDEBTEDNESS. The Company has (a)
repaid in full all of the Indebtedness described on SCHEDULE 8.3(B)(II) and (b)
obtained, and where applicable recorded in all appropriate locations, releases
of Liens for all real and personal property securing same.
SECTION 6.19. MATTERS RELATING TO COLLATERAL .
(a) CREATION, PERFECTION AND PRIORITY OF LIENS. The execution and delivery
of the Collateral Documents by the Company and the Guarantors, together
with (i) the actions taken on or prior to the date hereof pursuant to
SECTION 5.1(B) and (ii) the delivery to the
39
Administrative Agent of any Pledged Collateral not delivered to the
Administrative Agent at the time of execution and delivery of the
applicable Collateral Document (all of which Pledged Collateral has been
so delivered) are effective to create in favor of the Administrative Agent
for the benefit of the Banks, as security for the respective Secured
Obligations (as defined in the applicable Collateral Document in respect
of any Collateral), a valid and perfected First Priority Lien on all of
the Collateral, and all filings and other actions necessary or desirable
to perfect and maintain the perfection and First Priority status of such
Liens have been duly made or taken and remain in full force and effect,
other than the filing of any UCC financing statements delivered to the
Administrative Agent for filing (but not yet filed) and the periodic
filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of the Administrative Agent.
(b) GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) pledge or grant by the Company
or any Guarantor of the Liens purported to be created in favor of the
Administrative Agent pursuant to any of the Collateral Documents or (ii)
the exercise by the Administrative Agent of any rights or remedies in
respect of any Collateral (whether specifically granted or created
pursuant to any of the Collateral Documents or created or provided for by
applicable law), except for filings or recordings contemplated by SECTION
6.19(A) and except as may be required, in connection with the disposition
of any Pledged Collateral, by laws generally affecting the offering and
sale of securities.
(c) ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed in
favor of the Administrative Agent as contemplated by SECTION 6.19(A) or
filed in connection with a Permitted Lien, no effective UCC financing
statement, fixture filing or other instrument similar in effect covering a
substantial portion of the Collateral is on file in any filing or
recording office.
(d) MARGIN REGULATIONS. The pledge of the Pledged Collateral pursuant to
the Collateral Documents does not violate Regulation T, U or X of the
Board of Governors of the Federal Reserve System.
(e) INFORMATION REGARDING COLLATERAL. All information supplied to the
Agents by or on behalf of the Company or any Guarantor with respect to any
of the Collateral (in each case taken as a whole with respect to any
particular Collateral) is accurate and complete in all material respects.
SECTION 6.20. YEAR 2000 COMPLIANCE All Information Systems and
Equipment are either (i) Year 2000 Compliant, or (ii) any reprogramming,
remediation, or any other corrective action necessary to make such Information
Systems and Equipment Year 2000 Compliant, including the internal testing of all
such Information Systems and Equipment, will be completed by either (x) July 1,
1999 with respect to the Company and its Subsidiaries existing on the Effective
Date or (y) within 45 days after the date of creation or acquisition of any
Subsidiary of the Company created or acquired after the Effective Date, but in
any event no later than December 31, 1999. Further, to the extent that such
reprogramming/ remediation and testing
40
action is required, the cost thereof, as well as the cost of the reasonably
foreseeable consequences of failure to become Year 2000 Compliant, to the
Company and its Subsidiaries (including, without limitation, reprogramming
errors and the failure of other systems or equipment) will not result in a
Default or Material Adverse Effect.
ARTICLE VII
AFFIRMATIVE COVENANTS
The Company, as to itself and each of its Subsidiaries, covenants
and agrees that on and after the date hereof and for so long as this Agreement
is in effect and until the Notes have been paid in full and the Commitments have
terminated:
SECTION 7.1. INFORMATION COVENANTS. The Company will furnish
to each Bank:
(a) As soon as available, and in any event within forty-five (45) days
after the close of each fiscal quarter, the consolidated balance sheet of
the Company and its Subsidiaries as of the end of such period and the
related consolidated statements of income and cash flow for such period,
setting forth, in each case, comparative consolidated figures for the
related periods in the prior fiscal year, all of which shall be certified
by the treasurer, chief financial officer, or chief executive officer of
the Company as fairly presenting in all material respects, the financial
position of the Company and its Subsidiaries as of the end of such period
and the results of their operations for the period then ended in
accordance with GAAP, subject to changes resulting from normal year-end
audit adjustments. In addition to the foregoing, the Company shall also
provide at such time, summary balance sheet and operating income
information with respect to each direct Subsidiary fairly representing in
all material respects, the financial position of each direct Subsidiary as
of the end of such period and the results of their operations for the
period then ended.
(b) As soon as available, and in any event within one hundred twenty (120)
days after the close of each fiscal year of the Company, the audited
consolidated balance sheets of the Company as at the end of such fiscal
year and the related consolidated and statements of income, stockholders
equity and cash flows for such fiscal year, setting forth. in each case
comparative figures for the preceding fiscal year and certified by Arthur
Andersen or other independent certified public accountants of recognized
national standing, whose report shall be without limitation as to the
scope of the audit and reasonably satisfactory in substance to the Banks.
In addition to the foregoing, the Company shall cause each Subsidiary to
deliver summary income statements within one hundred twenty (120) days
after the close of each fiscal year of the Company.
(c) Promptly after any Responsible Officer of the Company obtains
knowledge thereof, notice of:
(i) any material violation of, noncompliance with, or remedial
obligations under, Requirements of Environmental Laws that could
cause a Material Adverse Effect;
41
(ii) any Release or threatened material Release of Hazardous
Materials affecting any property owned, leased or operated by the
Company or any of its Subsidiaries that could cause a Material
Adverse Effect;
(iii) any event or condition which constitutes a Default or an Event
of Default;
(iv) any condition or event which, in the opinion of management of
the Company, would reasonably be expected to have a Material Adverse
Effect;
(v) any Person having given any written notice to the Company or
taken any other action with respect to a claimed material default or
event under any material instrument or material agreement;
(vi) the institution of any litigation which might reasonably be
expected in the good faith judgment of the Company either to have a
Material Adverse Effect or result in a final, non-appealable
judgment or award in excess of $1,000,000.00 with respect to any
single cause of action; and
(vii) all ERISA notices required by SECTION 7.7;
such notice shall specify the nature and period of existence thereof and
specifying the notice given or action taken by such Person and the nature of any
such claimed default, event or condition and, in the case of an Event of Default
or Default, what action has been taken, is being taken or is proposed to be
taken with respect thereto.
(d) At the time of the delivery of the financial statements provided for
in SECTIONS 7.1(A) and 7.1(B), a Compliance Certificate of a Responsible
Officer to the effect that, no Default or Event of Default exists or, if
any Default or Event of Default does exist, specifying the nature and
extent thereof and the action that is being taken or that is proposed to
be taken with respect thereto, which certificate shall set forth the
calculations required to establish whether the Company was in compliance
with the provisions of SECTIONS 8.10 through 8.14 as at the end of such
fiscal period or year, as the case may be.
(e) Promptly following request by the Administrative Agent such
environmental reports, studies and audits of the Company's procedures and
policies, assets and operations in respect of Environmental Laws as the
Administrative Agent may reasonably request.
(f) Promptly upon receipt thereof, a copy of any report or letter
submitted to the Company by its independent accountants in connection with
any regular or special audit of the Company's records.
(g) From time to time and with reasonable promptness, such other
information or documents as the Administrative Agent or any Bank through
the Administrative Agent may reasonably request.
SECTION 7.2. BOOKS, RECORDS AND INSPECTIONS. The Company and its
Subsidiaries will maintain, and will permit, or cause to be permitted, any
Person designated by
42
any Bank or the Banks to visit and inspect any of the properties of the Company
and its Subsidiaries, to examine the corporate books and financial records of
the Company and its Subsidiaries and make copies thereof or extracts therefrom
and to discuss the affairs, finances and accounts of any such corporations with
the officers of the Company and its Subsidiaries and with their independent
public accountants, all at such reasonable times and as often as the
Administrative Agent or such Bank may reasonably request. Such inspections shall
be at the expense of the Bank or Banks requesting same unless there is in
existence a Default at the time of such request in which event such expense
shall be at the expense of the Company.
SECTION 7.3. INSURANCE AND MAINTENANCE OF PROPERTIES.
(a) Each of the Company and its Subsidiaries will keep reasonably
adequately insured by financially sound and reputable insurers all of its
material property, which is of a character, and in amounts and against
such risks, usually and reasonably insured by similar Persons engaged in
the same or similar businesses, including, without limitation, insurance
against fire, casualty and any other hazards normally insured against.
Each of the Company and its Subsidiaries will at all times maintain
insurance against its liability for injury to Persons or property, which
insurance shall be by financially sound and reputable insurers and in such
amounts and form as are customary for corporations of established
reputation engaged in the same or a similar business and owning and
operating similar properties. The Company shall provide the Administrative
Agent a listing of all such insurance and such other certificates and
other evidence thereof, on or prior to the Effective Date hereof and
annually thereafter. Each policy of insurance that insures against loss or
damage with respect to any Collateral or against losses due to business
interruption shall name the Administrative Agent for the benefit of the
Banks as the loss payee thereunder for any covered loss in excess of
$500,000 and shall provide for at least thirty (30) days (fifteen (15)
days in the event of non-payment of premium) prior written notice to the
Administrative Agent of any modification or cancellation of such policy.
(b) Each of the Company and its Subsidiaries will cause all of its
material properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all
reasonably necessary repairs, renewals and replacements thereof, all as in
the reasonable judgment of such Person may be reasonably necessary so that
the business carried on in connection therewith may be properly conducted
at all times, except where such failure could not reasonably be expected
to have a Material Adverse Effect.
SECTION 7.4. PAYMENT OF TAXES. Each of the Company and its
Subsidiaries will pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties attach thereto,
except for such amounts that are being contested in good faith and by
appropriate proceedings, except where such failure could not reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate.
SECTION 7.5. CORPORATE EXISTENCE. Each of the Company and its
Subsidiaries will do all things necessary to preserve and keep in full force and
effect (a) the
43
existence of the Company, and (b) unless the failure to do so would not
reasonably be expected to have a Material Adverse Effect, individually or in the
aggregate, the rights and franchises of each of the Company and its
Subsidiaries.
SECTION 7.6. COMPLIANCE WITH STATUTES. Each of the Company and its
Subsidiaries will comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except to the extent the failure to do so would not reasonably
be expected to have a Material Adverse Effect.
SECTION 7.7. ERISA. Promptly after any Responsible Officer of the
Company or any of its Subsidiaries knows or has reason to know any of the
following items are true the Company will deliver or cause to be delivered to
the Banks a certificate of the chief financial officer of the Company setting
forth details as to such occurrence and such action, if any, the Company or its
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Company or its ERISA
Affiliate with respect thereto: that a Reportable Event has occurred or that an
application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard; that a Multiemployer
Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that any required contribution to a Plan or
Multiemployer Plan has not been or may not be timely made; that proceedings may
be or have been instituted under Section 4069(a) of ERISA to impose liability on
the Company or an ERISA Affiliate or under Section 4042 of ERISA to terminate a
Plan or appoint a trustee to administer a Plan; that the Company or any ERISA
Affiliate has incurred or may incur any liability (including any contingent or
secondary liability) on account of the termination of or withdrawal from a Plan
or a Multiemployer Plan; and that the Company or an ERISA Affiliate may be
required to provide security to a Plan under Section 401(a)(29) of the Code.
SECTION 7.8. ADDITIONAL SUBSIDIARIES. The Company will cause any
Person that becomes a Material Subsidiary subsequent to the Effective Date,
within thirty (30) Business Days after becoming a Material Subsidiary, (A) to
execute and deliver (i) a Guaranty or a counterpart of this Agreement and
deliver same to the Administrative Agent (together with certificates and all
other instruments for such Material Subsidiary as required by SECTION 5.1(A)(IV)
hereof); (ii) a Subsidiary Pledge Agreement or a counterpart of a Subsidiary
Pledge Agreement executed by each such new Guarantor; and (iii) a Subsidiary
Security Agreement or a counterpart of a Subsidiary Security Agreement executed
by each such new Guarantor; PROVIDED if said Material Subsidiary is not
incorporated under the laws of the United States or one of its states or
territories, no such Guaranty, Subsidiary Pledge Agreement or Subsidiary
Security Agreement, will be required if the Company makes arrangements,
satisfactory to the Administrative Agent, in its sole discretion, regarding
restrictions on transfer of funds or other assets by the Company or any
Subsidiary to said new foreign Material Subsidiary; and (B) to take all such
other further actions and executed all such further documents and instruments
(including actions, documents and instruments comparable to those described in
SECTION 5.1(B)) as may be necessary or, in the opinion of the Administrative
Agent, desirable to create in favor of the Administrative Agent, for the benefit
of the Banks, a valid and perfected First Priority Lien on all of the personal
property assets of such Subsidiary described in the applicable forms of the
Collateral Documents.
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SECTION 7.9. YEAR 2000 COMPLIANCE. The Company will ensure that its
and its Subsidiaries' Information Systems and Equipment are Year 2000 Compliant
(x) at all times after July 1, 1999 with respect to the Company and its
Subsidiaries existing on the Effective Date or (y) within 45 days after the date
of creation or acquisition of any Subsidiary of the Company created or acquired
after the Effective Date, but in any event no later than December 31, 1999,
except insofar as the failure to do so will not result in a Material Adverse
Effect, and shall notify the Administrative Agent and any Bank promptly upon
detecting any failure of the Information Systems and Equipment to be Year 2000
Compliant. In addition, the Company shall provide the Agents and any Bank with
such information about its year 2000 computer readiness (including, without
limitation, information as to contingency plans, budgets and testing results) as
such Agent or such Bank may reasonably request.
ARTICLE VIII
NEGATIVE COVENANTS
The Company covenants and agrees, as to itself and, except as
otherwise provided herein, each of its Subsidiaries, that on and after the date
hereof and for so long as this Agreement is in effect and until the Commitments
have terminated:
SECTION 8.1. CHANGE IN BUSINESS. The Company will not, and will not
permit any of its Subsidiaries to, engage in any businesses not of the same
general type or reasonably related thereto as those conducted by the Company on
the Effective Date.
SECTION 8.2. CONSOLIDATION, MERGER OR SALE OF ASSETS. Except as
disclosed to the Administrative Agent on or before the Effective Date, the
Company will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve their affairs, or enter into any transaction of merger or
consolidation, or enter into any Asset Sales, except for (a) mergers permitted
under SECTION 8.5(D), so long as the Company is the surviving entity and so long
as no Event of Default occurs immediately before or after such merger, (b)
mergers by the Company with any of its wholly-owned Subsidiaries and mergers by
the Company's wholly-owned Subsidiaries with another of the Company's
wholly-owned Subsidiaries, so long as the Company is the surviving entity and so
long as no Event of Default occurs immediately before or after such merger, and
(c) mergers by a wholly-owned Subsidiary of the Company with another Person in
connection with an Investment permitted under SECTION 8.5(D), so long as the
relevant Subsidiary is the surviving entity and so long as no Event of Default
occurs immediately before or after such merger.
SECTION 8.3. INDEBTEDNESS. Neither the Company nor any
Subsidiary of the Company will create, incur, assume or permit to exist any
Indebtedness of the Company or any Subsidiary except:
(a) Indebtedness existing hereunder;
(b) Indebtedness existing on the Effective Date not otherwise permitted in
this Section 8.3 listed on SCHEDULE 8.3(B)(I) and (II);
(c) Indebtedness arising as a result of the endorsement in the ordinary
course of business of negotiable instruments in the course of collection;
45
(d) accounts payable and unsecured, current and long-term, liabilities
(including accrued insurance related liabilities), not the result of
indebtedness for borrowed money, to vendors, suppliers and other Persons
for goods and services in the ordinary course of business;
(e) agreements to acquire any Person or assets entered into by the Company
or any of its Subsidiaries in anticipation of acquiring such Person or
assets if such acquisition is not prohibited by this Agreement, and so
long as the Indebtedness represented by such agreements is not otherwise
prohibited hereunder;
(f) intercompany Indebtedness of any Subsidiary of the Company to the
Company or any other Subsidiary and Indebtedness of the Company to any
Subsidiary of the Company provided that same is subordinate to the
Obligations in the manner provided in SECTION 8.5 hereof;
(g) current and deferred taxes;
(h) other Indebtedness not in excess of $5,000,000.00 in the aggregate at
any time outstanding;
(i) Subordinated Debt incurred by the Company or any of its Subsidiaries
solely in connection with Investments permitted by SECTION 8.5(D) and
Subordinated Debt incurred to refinance the then outstanding aggregate
principal amount of any such Subordinated Debt incurred solely in
connection with Investments permitted by SECTION 8.5(D); PROVIDED that
such refinancing Subordinated Debt (1) shall be in an aggregate principal
amount not to exceed the then outstanding aggregate principal amount of
such Subordinated Indebtedness to be refinanced plus the amount of accrued
and unpaid interest thereon; (2) shall not mature earlier than twelve
months after the Maturity Date; and (3) shall contain such other terms and
conditions that are not more favorable to the holders of such refinancing
Subordinated Debt than to the holders of the Subordinated Debt being
refinanced;
(j) Indebtedness assumed or acquired in connection with Investments
permitted under SECTION 8.5(D); provided that all of such Indebtedness in
excess of three percent (3%) of the net book value of the assets acquired
in any such Investment shall be retired within 60 days after the date of
such Investment;
(k) renewals and extensions with the same lenders (in the same or lesser
principal amount on similar terms and conditions) of any Indebtedness
listed in subparagraphs (a) through (i) but excluding (h) above;
(l) vehicle leases not to exceed $10,000,000.00 in face value; and
(m) Indebtedness under Interest Rate Agreements and Other Hedging
Agreements to which the Company and any Bank are parties; PROVIDED that
the Company or any of its Subsidiaries may enter into Interest Rate
Agreements and Other Hedging Agreements with lenders other than Banks so
long as such Interest Rate Agreements and Other
46
Hedging Agreements are unsecured and are entered into in the ordinary
course of business for non-speculative purposes.
SECTION 8.4. LIENS AND RELATED MATTERS.
(a) PROHIBITION ON LIENS. Neither the Company nor any Subsidiary of the
Company will create, incur, assume or suffer to exist any Lien upon or
with respect to any of its property or assets of any kind whether now
owned or hereafter acquired, except:
(i) Liens existing on the Effective Date and listed on SCHEDULE
8.4(A);
(ii) Liens existing on the Effective Date securing currently secured
Indebtedness permitted under SECTION 8.3(B) or (h) above;
(iii) Permitted Liens;
(iv) Liens securing Indebtedness permitted under SECTION 8.3(H) and
8.3(J);
(v) Liens granted pursuant to the Collateral Documents; and
(vi) any renewal, extension or replacement of any Lien referred to
above with the same lenders; PROVIDED that no Lien arising or
existing as a result of such extension, renewal or replacement shall
be extended to cover any property not theretofore subject to the
Lien being extended, renewed or replaced; and PROVIDED FURTHER that
the principal amount of the Indebtedness secured thereby shall not
exceed the principal amount of the Indebtedness so secured at the
time of such extension, renewal or replacement.
(b) EQUITABLE LIEN IN FAVOR OF LENDERS. If the Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted
by the provisions of subsection 8.4(a), it shall make or cause to be made
effective provision whereby the Obligations will be secured by such Lien
equally and ratably with any and all other Indebtedness secured thereby as
long as any such Indebtedness shall be so secured; PROVIDED that,
notwithstanding the foregoing, this covenant shall not be construed as a
consent by Majority Banks to the creation or assumption of any such Lien
not permitted by the provisions of SECTION 8.4(A).
(c) NO FURTHER NEGATIVE PLEDGES. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to an Asset Sale, neither
the Company nor any of its Subsidiaries shall enter into any agreement
(other than an agreement prohibiting only the creation of Liens securing
Subordinated Indebtedness) prohibiting the creation or assumption on any
Lien upon any of its properties or assets, whether now or owned or
hereafter acquired.
SECTION 8.5. INVESTMENTS. Neither the Company nor any
Subsidiary will, directly or indirectly, make or own any Investment in any
Person, except:
47
(a) Permitted Investments;
(b) Investments owned on the Effective Date as set forth on SCHEDULE
8.5(B), including Investments in the Subsidiaries, direct and indirect;
(c) Investments arising out of loans and advances for expenses, travel per
diem and similar items in the ordinary course of business to officers,
directors and employees and intercompany Indebtedness permitted by SECTION
8.3(F);
(d) Investments in the stock, warrants, stock appreciation rights, other
securities and/or other assets of domestic entities engaged in the same
general type of business as the Company on the Effective Date, (i) in
which the Company or one of its wholly owned Subsidiaries is the surviving
entity, (ii) at a time when no Default or Event of Default exists
hereunder, (iii) the cash portion of the purchase price for any one such
Investment does not exceed $15,000,000.00, and (iv) the aggregate cash
portion of the purchase price of all such Investments shall not exceed
$60,000,000.00 in any given two consecutive fiscal quarters;
(e) other Investments having cost to the Company and its Subsidiaries not
exceeding $500,000.00 in the aggregate at any one time outstanding during
the term of this Agreement,
(f) Investments in the form of stock buybacks allowed under SECTION 8.6;
and
(g) Investments in capital stock of wholly-owned Subsidiaries of the
Company.
SECTION 8.6. RESTRICTED PAYMENTS. The Company will not (i) pay any
dividend or other distribution, direct or indirect, on account of, or redeem,
retire, purchase or guaranty the value of or make any other acquisition, direct
or indirect, of any shares of any class of stock of the Company, or of any
warrants, rights or options to acquire any such shares, now or hereafter
outstanding, except to the extent that the consideration therefor consists
solely of shares of stock (including warrants, rights or options relating
thereto) of the Company or is approved by the Majority Banks, and (ii) make any
Restricted Subordinated Debt Payments; PROVIDED the Company may (a) purchase the
stock of departing officers and employees upon their departure in a maximum,
aggregate amount not to exceed $500,000.00 in the aggregate measured over the
entire period any Loans are outstanding under this Agreement or such larger
amount at the Administrative Agent's written consent, (b) make payments of
regularly scheduled interest in respect of any Subordinated Indebtedness, in
accordance with the terms of and to the extent required by, and subject to the
subordination provisions contained in, the documents establishing and evidencing
such Subordinated Indebtedness, and (c) so long as no Event of Default shall
have occurred and be continuing or occurs as a result thereof, make Restricted
Subordinated Debt Payments (other than interest payments) in respect of
Subordinated Debt existing on the Effective Date only in an aggregate amount not
to exceed at any time (x) 50% of Cumulative Consolidated Net Income at such time
LESS (y) the amount of Restricted Subordinated Debt Payments (other than
interest payments) made pursuant to this clause (c) following the last day of
the most recent fiscal quarter for which financial statements have been
delivered pursuant to Section 6.1.
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SECTION 8.7. CHANGE IN ACCOUNTING. The Company will not and will not
permit any Subsidiary to, change its method of accounting including a change of
the Company's fiscal year except for (a) changes permitted by GAAP in which the
Company's auditors concur, (b) changes with respect to any Person or assets
acquired by the Company to conform with the Company's policies and procedures
and which are permitted by GAAP or (c) changes required by GAAP. The Company
shall advise the Administrative Agent in writing promptly upon making any
material change to the extent same is not disclosed in the financial statements
required under SECTION 7.1 hereof. In the event of any such change, the Company,
the Banks and the Administrative Agent agree to negotiate amendments to SECTIONS
8.10 through 8.14 hereof (and related definitions, if relevant) so as to
equitably reflect such changes thereon with the intended result that the
criteria for evaluating the financial condition of the Company and its
Subsidiaries shall be substantially the same after such changes as before.
SECTION 8.8. CHANGE OF CERTAIN INDEBTEDNESS. The Company will not, and
will not permit any of its Subsidiaries after the occurrence and during the
continuance of any Event of Default to make any voluntary prepayments of
principal or interest on any other of the Company's Indebtedness.
SECTION 8.9. TRANSACTIONS WITH AFFILIATES. The Company will not,
directly or indirectly, engage in any transaction with any Affiliate, including
the purchase, sale or exchange of assets or thc rendering of any service, except
in the ordinary course of business or pursuant to the reasonable requirements of
its business and, in each case, upon terms that are no less favorable than those
which might be obtained in an arm's-length transaction at the time from
non-Affiliates.
SECTION 8.10. FUNDED SENIOR DEBT TO EBITDA RATIO. The Company will not
as of the last day of any fiscal quarter permit the ratio of its total Funded
Senior Debt on such day to EBITDA for the rolling four (4) quarters then ended
to be greater than 2.50 to 1.00 at any time during the term hereof.
SECTION 8.11. TOTAL FUNDED DEBT TO EBITDA RATIO. The Company will not
as of the last day of any fiscal quarter permit the ratio of (i) its Total
Funded Debt on such day to (ii) EBITDA for the four consecutive fiscal quarters
then ended to be greater than 3.50 to 1.00 at any time during the term hereof.
SECTION 8.12. MINIMUM NET WORTH. The Company will not permit, as of
the last day of the fiscal quarter ending December 31, 1998, its Consolidated
Net Worth to be less than $282,000,000. The Company will not permit, as of the
last day of any fiscal quarter commencing with fiscal quarter ending March 31,
1999, its Consolidated Net Worth to be less than the sum of (i) $300,000,000
PLUS (ii) seventy-five percent (75%) of the cumulative quarterly consolidated
net income of the Company for each such fiscal quarter during which the Company
has positive consolidated net income PLUS (iii) one hundred percent (100%) of
the net proceeds received by the Company from any sale or issuance of any equity
securities of, or any other additions to capital by, the Company or its
Subsidiaries.
SECTION 8.13. CAPITAL EXPENDITURES. The Company will not permit total
consolidated capital expenditures (including Capitalized Lease Obligations but
exclusive of (x)
49
Investments permitted under SECTION 8.5(D) and (y) consolidated capital
expenditures with respect to casualty loss replacements) to be greater than the
lesser of (i) $30,000,000.00 or (ii) two percent (2.00%) of gross revenues (pro
forma gross revenues with respect to permitted acquisitions) for any fiscal year
during the term hereof.
SECTION 8.14. INTEREST COVERAGE RATIO. The Company will not permit as
of the last day of any fiscal quarter the ratio of EBITDA for the four
consecutive fiscal quarters ended on such day to cash Interest Expense for such
period to be less than 4.00 to 1.00. This interest coverage ratio shall be
calculated on a rolling four quarter basis.
For purposes of calculating the ratios in SECTIONS 8.10 and 8.11,
the calculations of Total Funded Debt and Funded Senior Debt after the
acquisition of assets or entities permitted under this Agreement shall include
pro forma adjustments to account for such acquired entity's historical Total
Funded Debt and Funded Senior Debt for the relevant period.
ARTICLE IX
GUARANTY
SECTION 9.1. GUARANTY. In consideration of, and in order to induce the
Banks to make the Loans and the Issuing Bank to issue Letters of Credit
hereunder, the Guarantors hereby absolutely, unconditionally and irrevocably,
jointly and severally, guarantee the punctual payment and performance when due,
whether at stated maturity, by acceleration or otherwise, of the Obligations,
and all other obligations and covenants of the Company now or hereafter existing
under this Agreement, the Notes and the other Loan Documents whether for
principal, interest (including interest accruing or becoming owing both prior to
and subsequent to the commencement of any proceeding against or with respect to
the Company under any chapter of the Bankruptcy Code), Fees, commissions,
expenses (including reasonable attorneys' fees and expenses) or otherwise, and
all reasonable costs and expenses, if any, incurred by the Administrative Agent
or any Bank in connection with enforcing any rights under this Guaranty (all
such obligations being the "GUARANTEED OBLIGATIONS",) and agree to pay any and
all reasonable expenses incurred by each Bank and the Administrative Agent in
enforcing this Guaranty; PROVIDED that notwithstanding anything contained herein
or in any of the Loan Documents to the contrary, the maximum liability of each
Guarantor hereunder and under the other Loan Documents shall in no event exceed
such Guarantor's Maximum Guaranteed Amount, PROVIDED FURTHER, each Guarantor
shall be unconditionally required to pay all amounts demanded of it hereunder
prior to any determination of such Maximum Guaranteed Amount and the recipient
of such payment, if so required by a final non-appealable order of a court of
competent jurisdiction. shall then be liable for the refund of any excess
amounts. If any such rebate or refund is ever required, all other Guarantors
(and the Company) shall be fully liable for the repayment thereof to the maximum
extent allowed by applicable law. This Guaranty is an absolute, unconditional,
present and continuing guaranty of payment and not of collectibility and is in
no way conditioned upon any attempt to collect from the Company or any other
action, occurrence or circumstance whatsoever. Each Guarantor agrees that the
Guaranteed Obligations may at any time and from time to time exceed the Maximum
Guaranteed Amount of such Guarantor without impairing this Guaranty or affecting
the rights and remedies of the Banks hereunder.
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SECTION 9.2. CONTINUING GUARANTY. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement, the Notes and the other Loan Documents. Each Guarantor agrees
that the Guaranteed Obligations and Loan Documents may be extended or renewed,
and Loans repaid and reborrowed in whole or in part, without notice to or assent
by such Guarantor, and that it will remain bound upon this Guaranty
notwithstanding any extension, renewal or other alteration of any Guaranteed
Obligations or Loan Documents, or any repayment and reborrowing of Loans. To the
maximum extent permitted by applicable law, the obligations of each Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms hereof under any
circumstances whatsoever, including:
(a) any extension, renewal, modification, settlement, compromise, waiver
or release in respect of any Guaranteed Obligations;
(b) any extension, renewal, amendment, modification, rescission, waiver or
release in respect of any Loan Documents;
(c) any release, exchange, substitution, non-perfection or invalidity of,
or failure to exercise rights or remedies with respect to, any direct or
indirect security for any Guaranteed Obligations, including the release of
any Guarantor or other Person liable on any Guaranteed Obligations;
(d) any change in the corporate existence, structure or ownership of the
Company, any Guarantor, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Company, such Guarantor, any other
Guarantor or any of their respective assets;
(e) the existence of any claim, defense, set-off or other rights or
remedies which such Guarantor at any time may have against the Company, or
the Company or such Guarantor may have at any time against the
Administrative Agent, any Bank, any other Guarantor or any other Person,
whether in connection with this Guaranty, the Loan Documents, the
transactions contemplated thereby or any other transaction other than by
the payment in full by the Company of the Guaranteed Obligations after the
termination of the Commitments of the Banks;
(f) any invalidity or unenforceability for any reason of this Agreement or
other Loan Documents, or any provision of law purporting to prohibit the
payment or performance by the Company, such Guarantor or any other
Guarantor of the Guaranteed Obligations or Loan Documents, or of any other
obligation to the Administrative Agent or any Bank; or
(g) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing.
SECTION 9.3. EFFECT OF DEBTOR RELIEF LAWS. If after receipt of any
payment of, or proceeds of any security applied (or intended to be applied) to
the payment of all or any part of the Guaranteed Obligations, the Administrative
Agent or any Bank is for any reason compelled to surrender or voluntarily
surrenders such payment or proceeds to any Person (a)
51
because such payment or application of proceeds is or may be avoided,
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, fraudulent conveyance, fraudulent transfer, impermissible
set-off or a diversion of trust funds or (b) for any other similar reason,
including (i) any judgment, decree or order of any court or administrative body
having jurisdiction over the Administrative Agent, any Bank or any of their
respective properties or (ii) any settlement or compromise of any such claim
effected by the Administrative Agent or any Bank with any such claimant
(including the Company), then the Guaranteed Obligations or part thereof
intended to be satisfied shall be reinstated and continue, and this Guaranty
shall continue in full force as if such payment or proceeds have not been
received, notwithstanding any revocation thereof or the cancellation of any Note
or any other instrument evidencing any Guaranteed Obligations or otherwise; and
the Guarantors, jointly and severally, shall be liable to pay the Administrative
Agent and the Banks, and hereby do indemnify the Administrative Agent and the
Banks and hold them harmless for the amount of such payment or proceeds so
surrendered and all expenses (including reasonable attorneys' fees, court costs
and expenses attributable thereto) incurred by the Administrative Agent or any
Bank in the defense of any claim made against it that any payment or proceeds
received by the Administrative Agent or any Bank in respect of all or part of
the Guaranteed Obligations must be surrendered. The provisions of this paragraph
shall survive the termination of this Guaranty, and any satisfaction and
discharge of the Company by virtue of any payment, court order or any federal or
state law.
SECTION 9.4. WAIVER OF SUBROGATION. Notwithstanding any payment or
payments made by any Guarantor hereunder, or any set-off or application by the
Administrative Agent or any Bank of any security or of any credits or claims, no
Guarantor will assert or exercise any rights of the Administrative Agent or any
Bank or of such Guarantor against the Company to recover the amount of any
payment made by such Guarantor to the Administrative Agent or any Bank hereunder
by way of any claim, remedy or subrogation, reimbursement, exoneration,
contribution, indemnity, participation or otherwise arising by contract, by
statute, under common law or otherwise, and such Guarantor shall not have any
right of recourse to or any claim against assets or property of the Company, in
each case unless and until the Obligations of the Company guaranteed hereby have
been fully and finally satisfied. Until such time, each Guarantor hereby
expressly waives any right to exercise any claim, right or remedy which such
Guarantor may now have or hereafter acquire against the Company that arises
under this Agreement or any other Loan Document or from the performance by any
Guarantor of the Guaranty hereunder including any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution, indemnification or
participation in any claim, right or remedy of the Administrative Agent or any
Bank against the Company, or any security that the Administrative Agent or any
Bank now has or hereafter acquires, whether or not such claim, right or remedy
arises in equity, under contract, by statute, under common law or otherwise. If
any amount shall be paid to a Guarantor by the Company or another Guarantor
after payment in full of the Obligations, and the Obligations shall thereafter
be reinstated in whole or in part and the Administrative Agent or any Bank
forced to repay and sums received by any of them in payment of the Obligations,
this Guaranty shall be automatically reinstated and such amount shall be held in
trust for the benefit of the Administrative Agent and the Banks and shall
forthwith be paid to the Administrative Agent to be credited and applied to the
Guaranteed Obligations, whether matured or unmatured. The provisions of this
paragraph shall survive the termination of this Guaranty, and any satisfaction
and discharge of the Company by virtue of any payment, court order or any
federal or state law.
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SECTION 9.5. SUBORDINATION. If any Guarantor becomes the holder of any
indebtedness payable by the Company or another Guarantor, each Guarantor hereby
subordinates all indebtedness owing to it from the Company to all indebtedness
of the Company to the Administrative Agent and the Banks, and agrees that during
the continuance of any Event of Default it shall not accept any payment on the
same until payment in full of the Obligations of the Company under this
Agreement and the other Loan Documents after the termination of the Commitments
of the Banks and shall in no circumstance whatsoever attempt to set-off or
reduce any obligations hereunder because of such indebtedness. If any amount
shall nevertheless be paid in violation of the foregoing to a Guarantor by the
Company or another Guarantor prior to payment in full of the Guaranteed
Obligations, such amount shall be held in trust for the benefit of the
Administrative Agent and the Banks and shall forthwith be paid to the
Administrative Agent to be credited and applied to the Guaranteed Obligations,
whether matured or unmatured.
SECTION 9.6. WAIVER. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and waives presentment, demand of
payment, notice of intent to accelerate, notice of dishonor or nonpayment and
any requirement that the Administrative Agent or any Bank institute suit,
collection proceedings or take any other action to collect the Guaranteed
Obligations, including any requirement that the Administrative Agent or any Bank
protect, secure, perfect or insure any Lien against any property subject thereto
or exhaust any right or take any action against the Company or any other Person
or any collateral (it being the intention of the Administrative Agent, the Banks
and each Guarantor that this Guaranty is to be a guaranty of payment and not of
collection). It shall not be necessary for the Administrative Agent or any Bank,
in order to enforce any payment by any Guarantor hereunder, to institute suit or
exhaust its rights and remedies against the Company, any other Guarantor or any
other Person, including others liable to pay any Guaranteed Obligations, or to
enforce its rights against any security ever given to secure payment thereof.
Each Guarantor hereby expressly waives to the maximum extent permitted by
applicable law each and every right to which it may be entitled by virtue of the
suretyship laws of the State of Texas, including any and all rights it may have
pursuant to Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the Texas
Civil Practice and Remedies Code and Chapter 34 of the Texas Business and
Commerce Code. Each Guarantor hereby waives marshaling of assets and
liabilities, notice by the Administrative Agent or any Bank of any indebtedness
or liability to which such Bank applies or may apply any amounts received by
such Bank, and of the creation, advancement, increase, existence, extension,
renewal, rearrangement or modification of the Guaranteed Obligations. Each
Guarantor expressly waives, to the extent permitted by applicable law, the
benefit of any and all laws providing for exemption of property from execution
or for valuation and appraisal upon foreclosure.
SECTION 9.7. FULL FORCE AND EFFECT. This Guaranty is a continuing
guaranty and shall remain in full force and effect until all of the Obligations
of the Company under this Agreement and the other Loan Documents and all other
amounts payable under this Guaranty have been paid in full (after the
termination of the Commitments of the Banks). All rights, remedies and powers
provided in this Guaranty may be exercised, and all waivers contained in this
Guaranty may be enforced, only to the extent that the exercise or enforcement
thereof does not violate any provisions of applicable law which may not be
waived.
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ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1. EVENTS OF DEFAULT. The following events shall
constitute Events of Default ("EVENTS OF DEFAULT") hereunder:
(a) any installment of principal is not paid when due; or any payment of
interest or Fees is not paid on the date on which such payment is due and
such failure continues for a period of five (5) days; or
(b) any representation or warranty made or deemed made by the Company or
any Subsidiary herein or in any of the Loan Documents or other document,
certificate or financial statement delivered in connection with this
Agreement or any other Loan Document shall prove to have been incorrect in
any material respect when made or deemed made or reaffirmed, as the case
may be; or
(c) the Company shall fail to perform, comply or observe or cause any
Subsidiary, to fail to perform, comply or observe (i) any term, duty or
covenant contained in ARTICLE VIII of this Agreement; or (ii ) any other
term, duty or covenant contained elsewhere in this Agreement or in any of
the Loan Documents and such failure continues for a period of thirty (30)
days after receipt by the Company and such Guarantor of notice from the
Administrative Agent or any Bank of such default; or
(d) the Company or any Subsidiary shall (i) fail to make (whether as
primary obligor or as guarantor or other surety) any principal payment of
or interest or premium, if any, on any instruments of Indebtedness in
excess of $2,500,000 in the aggregate allowed hereunder outstanding beyond
any period of grace provided with respect thereto or (ii) shall fail to
duly observe, perform or comply with any agreement with any Person or any
term or condition of any instrument of Indebtedness in excess of
$2,500,000 in the aggregate, if the effect of such failure is to cause, or
to permit the holder or holders to cause, such obligations to become due
prior to any stated maturity; or
(e) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i)
relief in respect of the Company or any Subsidiary, or of a substantial
part of the property or assets of the Company or any Subsidiary, under
Title 11 of the United States Code, as now or hereafter in effect, or any
successor thereto (the "BANKRUPTCY CODE"), or any other federal or state
bankruptcy, insolvency, receivership or similar law, (ii) the appointment
of a receiver, trustee, custodian, sequestrator, conservator or similar
official for the Company or any Subsidiary or for a substantial part of
the property or assets of the Company or any Subsidiary or (iii) the
winding-up or liquidation of the Company or any Subsidiary; and such
proceeding or petition shall continue undismissed for 60 days or an order
or decree approving or ordering any of the foregoing shall be entered; or
(f) the Company or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under the Bankruptcy Code
or any other federal or state bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or
54
fail to contest in a timely and appropriate manner, any proceeding or the
filing of any petition described in clause (e) above, (iii) apply for or
consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for the Company or any
Subsidiary or for a substantial part of the property or asses of the
Company or any Subsidiary, (iv) file an answer admitting the material
allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become
unable, or admit in writing its inability or fail generally to pay is
debts as they become due or (vii) take any action for the purpose of
effecting any of the foregoing; or
(g) a judgment or order, which with other outstanding judgments and orders
against the Company and its Subsidiaries equal or exceed $1,000,000.00 in
the aggregate (to the extent not covered by insurance as to which the
respective insurer has acknowledged coverage), shall be entered against
the Company or any Subsidiary and (i) within 30 days after entry thereof
such judgment shall not have been paid or discharged or execution thereof
stayed pending appeal or, within 30 days after the expiration of any such
stay, such judgment shall not have been paid or discharged or (ii) any
enforcement proceeding shall have been commenced (and not stayed) by any
creditor or upon such judgment; or
(h) a Change of Control shall occur; or
(i) at any time after the execution and delivery thereof, (i) the Guaranty
for any reason, other than the satisfaction in full of all Obligations,
shall cease to be in full force and effect (other than in accordance with
its terms) or shall be declared to be null and void, (ii) any Collateral
Document shall cease to be in full force and effect (other than by reason
of a release of Collateral thereunder in accordance with the terms hereof
or thereof, the satisfaction in full of the Obligations or any other
termination of such Collateral Document in accordance with the terms
hereof or thereof) or shall be declared null and void, or the
Administrative Agent shall not have or shall cease to have a valid and
perfected First Priority Lien in any material amount of Collateral
purported to be covered thereby, in each case for any reason other than
the failure of the Administrative Agent or any Bank to take any action
within its control, or (iii) the Company or any Guarantor shall contest
the validity or enforceability of any Loan Document in writing or deny in
writing that it has any further liability, including with respect to
future Advances by the Banks, under any Loan Document to which it is a
party.
SECTION 10.2. PRIMARY REMEDIES. In any such event, and at any time
after the occurrence of any of the above described events, the Administrative
Agent, if directed by the Majority Banks, shall by written notice to the Company
(a "NOTICE OF DEFAULT") take any or all of the following actions; PROVIDED, that
if an Event of Default specified in SECTION 10.1 (E) or SECTION 10.1(F) shall
occur, the following shall occur automatically without the giving of any Notice
of Default: (a) declare the Commitments terminated, whereupon the Commitments
shall forthwith terminate immediately and any Commitment Fee and any other owing
and unpaid Fee shall forthwith become due and payable without any other notice
of any kind; (b) declare (i) the principal of and any accrued and unpaid
interest in respect of all Advances, (ii) an amount equal to the maximum amount
that may at any time be drawn under all Letters of Credit then outstanding
(whether or not any beneficiary under any such Letter of Credit shall have
presented, or shall be entitled at such time to present, the drafts or other
documents or certificates required
55
to draw under such Letter of Credit), and (iii) all other Obligations owing
hereunder, to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, notice of demand or of dishonor and non-payment,
protest, notice of protest, notice of intent to accelerate, declaration or
notice of acceleration or any other notice of any kind (except as herein
expressly provided), all of which are hereby waived by the Company; (c) set off
any assets or money of the Company or any Guarantor in its or any Banks'
possession against the Obligations; and (d) exercise any rights or remedies
under any document securing any of the Loan Documents or under any applicable
state or federal law. Any amounts described in clause (b)(ii) above, when
received by the Administrative Agent, shall be held by the Administrative Agent
pursuant to the terms of the Collateral Account Agreement and shall be applied
as therein provided.
SECTION 10.3. OTHER REMEDIES. Upon the occurrence and during the
continuance of any Event of Default, the Administrative Agent may proceed to
protect and enforce its and the Banks' rights, either by suit in equity or by
action at law or both, whether for the specific performance of any covenant or
agreement contained in this Agreement or in any other Loan Document or in aid of
the exercise of any power granted in this Agreement or in any other Loan
Document; or may proceed to enforce the payment of all amounts owing to the
Banks under the Loan Documents and any accrued and unpaid interest thereon in
the manner set forth herein or therein; it being intended that no remedy
conferred herein or in any of the other Loan Documents is to be exclusive of any
other remedy, and each and every remedy contained herein or in any other Loan
Document shall be cumulative and shall be in addition to every other remedy
given hereunder and under the other Loan Documents or now or hereafter existing
at law or in equity or by statute or otherwise.
ARTICLE XI
THE AGENTS
SECTION 11.1. AUTHORIZATION AND ACTION. Each Bank hereby irrevocably
appoints and authorizes each Agent to act on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are specifically
delegated to or required of such Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. Each Agent may perform any of its
duties hereunder by or through its agents and employees. The duties of each
Agent shall be mechanical and administrative in nature; no Agent shall have by
reason of this Agreement or any other Loan Documents a fiduciary relationship in
respect of any Bank; and nothing in this Agreement or any other Loan Document,
expressed or implied is intended to, or shall be so construed as to, impose upon
any Agent any obligations in respect of this Agreement or any other Loan
Document except as expressly set forth herein or therein. As to any matters not
expressly provided for by this Agreement, the Notes or the other Loan Documents
(including enforcement or collection of the Notes), no Agent shall be required
to exercise any discretion or take any action, but shall be required to act or
to refrain from acting (and shall be fully protected in so acting or refraining
from acting) upon the instructions of the Majority Banks, and such instructions
shall be binding upon the Banks and all holders of Notes and the Obligations;
PROVIDED, that no Agent shall be required to take any action which exposes such
Agent to personal liability and shall not be required or entitled to take any
action which is contrary to any of the Loan Documents or applicable law.
SECTION 11.2. AGENTS' RELIANCE.
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(a) None of the Agents nor any of its directors, officers, agents or
employees shall be liable to the Banks for any action taken or omitted to
be taken by it or them under or in connection with this Agreement, the
Notes or any of the other Loan Documents (i) with the consent or at the
request of the Majority Banks or (ii) in the absence of its or their own
gross negligence or willful misconduct, IT BEING THE EXPRESS INTENTION OF
THE PARTIES HERETO THAT EACH AGENT AND ITS DIRECTORS, OFFICERS, AGENTS AND
EMPLOYEES SHALL HAVE NO LIABILITY TO THE BANKS FOR ACTIONS AND OMISSIONS
UNDER THIS SECTION RESULTING FROM THEIR SOLE ORDINARY OR CONTRIBUTORY
NEGLIGENCE.
(b) Without limitation of the generality of the foregoing, each Agent: (i)
may treat the payee of each Note and the Obligations as the holder thereof
until the Administrative Agent receives written notice of the assignment
or transfer thereof signed by such payee and in form satisfactory to the
Agents; (ii) may consult with legal counsel (including counsel for the
Company), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel,
accountants or experts; (iii) makes no warranty or representation to any
Bank and shall not be responsible to any Bank for any statements,
warranties or representations made in or in connection with this
Agreement, any Note or any other Loan Document; (iv) except as otherwise
expressly provided herein, shall not have any duty to ascertain or to
inquire as to the performance or observance of any of the terms, covenants
or conditions of this Agreement, any Note or any other Loan Document or to
inspect the property (including the books and records) of the Company; (v)
shall not be responsible to any Bank for the due execution, legality,
validity, enforceability, collectibility, genuineness, sufficiency or
value of this Agreement, any Note, any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; (vi) shall
not be responsible to any Bank for the perfection or priority of any Lien
securing the Obligations; and (vii) shall incur no liability under or in
respect of this Agreement, any Note or any other Loan Document by acting
upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, telecopier or cable) reasonably believed by it
to be genuine and signed or sent by the proper party or parties.
SECTION 11.3. AGENT AND AFFILIATES. Without limiting the right of any
other Bank to engage in any business transactions with the Company or any of its
Affiliates, with respect to their Commitments, the Loans made by them and the
Notes issued to them, BOT, BTCo and NB and each other Bank who may become the
Administrative Agent, Syndication Agent or Documentation Agent, as the case may
be, shall have the same rights and powers under this Agreement and its Notes as
any other Bank and may exercise the same as though it was not an Agent; and the
term "Bank" or "Banks" shall, unless otherwise expressly indicated, include BOT,
BTCo and NB and any such other Bank, in their individual capacities. BOT, BTCo
and NB, each other Person who becomes the Administrative Agent, the Syndication
Agent or the Documentation Agent, as the case may be, and their respective
Affiliates may be engaged in, or may hereafter engage in, one or more loan,
letter of credit. leasing or other financing activity not the subject of this
Agreement (collectively, the "OTHER FINANCINGS") with the Company, any
Subsidiary or any of its Affiliates, or may act as trustee on behalf of, or
depositary for, or otherwise engage in other business transactions with the
Company, any Subsidiary or any of its Affiliates (all Other Financings and other
such business transactions being collectively, the
57
"OTHER ACTIVITIES") with no responsibility to account therefor to the Banks.
Without limiting the rights and remedies of the Banks specifically set forth
herein, no other Bank by virtue of being a Bank hereunder shall have any
interest in (a) any Other Activities, (b) any present or future guaranty by or
for the account of the Company not contemplated or included herein, (c) any
present or future offset exercised by an Agent in respect of any such Other
Activities, (d) any present or future property taken as security for any such
Other Activities or (e) any property now or hereafter in the possession or
control of any Agent which may be or become security for the Obligations of the
Company hereunder and under the Notes by reason of the general description of
indebtedness secured, or of property contained in any other agreements,
documents or instruments related to such Other Activities; PROVIDED, HOWEVER,
that if any payment in respect of such guaranties or such property or the
proceeds thereof shall be applied to reduction of the Obligations evidenced
hereunder and by the Notes, then each Bank shall be entitled to share in such
application according to its pro rata portion of such Obligations.
SECTION 11.4. BANK CREDIT DECISION. Each Bank acknowledges and agrees
that it has, independently and without reliance upon any Agent or any other Bank
and based on the financial statements referred to in SECTION 7.1 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
and agrees that it will, independently and without reliance upon any Agent or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents.
SECTION 11.5. AGENTS' INDEMNITY.
(a) No Agent shall be required to take any action hereunder or to
prosecute or defend any suit in respect of this Agreement, the Notes or
any other Loan Document unless indemnified to Agents' satisfaction by the
Banks against loss, cost, liability and expense. If any indemnity
furnished to the Agents shall become impaired, it may call for additional
indemnity and cease to do the acts indemnified against until such
additional indemnity is given. In addition, the Banks agree to indemnify
the Agents (to the extent not reimbursed by the Company), ratably
according to the respective aggregate principal amounts of the Notes then
held by each of them (or if no Notes are at the time outstanding, ratably
according to the respective amounts of the Commitments), from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against any
Agent in any way relating to or arising out of this Agreement or any
action taken or omitted by any Agent under this Agreement, the Notes and
the other Loan Documents. Without limitation of the foregoing, each Bank
agrees to reimburse each Agent promptly upon demand for its ratable share
of any out-of-pocket expenses (including reasonable counsel fees) incurred
by such Agent in connection with the preparation, execution,
administration, or enforcement of, or legal advice in respect of rights or
responsibilities under, this Agreement, the Notes and the other Loan
Documents to the extent that such Agent is not reimbursed for such
expenses by the Company. The provisions of this Section shall survive the
termination of this Agreement, the payment of the Obligations and/or the
assignment of any of the Notes.
58
(b) Notwithstanding the foregoing, no Bank shall be liable under this
Section to the Administrative Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements due to the Administrative Agent resulting from
the Administrative Agent's gross negligence or willful misconduct. EACH
BANK AGREES, HOWEVER, THAT IT EXPRESSLY INTENDS, UNDER THIS SECTION, TO
INDEMNIFY THE ADMINISTRATIVE AGENT RATABLY AS AFORESAID FOR ALL SUCH
LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS,
SUITS, COSTS, EXPENSES AND DISBURSEMENTS ARISING OUT OF OR RESULTING FROM
THE ADMINISTRATIVE AGENT'S SOLE ORDINARY OR CONTRIBUTORY NEGLIGENCE.
SECTION 11.6. SUCCESSOR AGENTS. Each Agent may resign at any time by
giving written notice thereof to the Banks and the Company and may be removed as
an Agent under this Agreement, the Notes and the other Loan Documents at any
time with or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor Agent
with, so long as no Event of Default exists, the consent of the Company, which
will not be unreasonably withheld. If no successor Agent shall have been so
appointed by the Majority Banks, and shall have accepted such appointment,
within 30 calendar days after the retiring Agent's giving of notice of
resignation or the Majority Banks' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be an Eligible Assignee. Upon the acceptance of any appointment as an
Agent hereunder and under the Notes and the other Loan Documents by a successor
Agent, such successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations under this
Agreement, the Notes and the other Loan Documents. After any retiring Agent's
resignation or removal as an Agent hereunder and under the Notes and the other
Loan Documents, the provisions of this ARTICLE XI shall inure to its benefit as
to any actions taken or omitted to be taken by it while it was an Agent under
this Agreement, the Notes and the other Loan Documents.
SECTION 11.7. NOTICE OF DEFAULT. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Bank or the
Company referring to this Agreement, describing such Default or Event of Default
and stating that such notice is a "notice of default." If an Agent receives such
notice, such Agent shall give notice thereof to the Banks; PROVIDED HOWEVER, if
such notice is received from a Bank, such Agent also shall give notice thereof
to the Company. Each Agent shall be entitled to take action or refrain from
taking action with respect to such Default or Event of Default as provided in
SECTION 10.1 and SECTION 10.2.
SECTION 11.8. COLLATERAL DOCUMENTS AND GUARANTIES. Each Bank hereby
further authorizes the Administrative Agent, on behalf of and for the benefit of
the Banks, to enter into each Collateral Document as secured party and to be the
agent for and representative of the Banks under the Guaranty, and each Bank
agrees to be bound by the terms of each Collateral Document and the Guaranty;
PROVIDED that the Administrative Agent shall not (i) enter into or consent to
any material amendment, modification, termination or waiver of any provision
contained in any Collateral Document or the Guaranty or (ii) release any
Collateral (except as otherwise expressly permitted or required pursuant to the
terms of this Agreement or the
59
applicable Collateral Document), in each case without the prior consent of
Majority Banks (or, if required pursuant to Section 12.1, all Banks); PROVIDED
FURTHER, HOWEVER, that, without further written consent or authorization from
the Banks, the Administrative Agent may execute any documents or instruments
necessary to (a) release any Lien encumbering any item of Collateral that is the
subject of a sale or other disposition of assets permitted by this Agreement or
to which Majority Banks have otherwise consented or (b) release any Guarantor
from the Guaranty if all of the capital stock of such Guarantor is sold to any
Person (other than an Affiliate of the Company) pursuant to a sale or other
disposition permitted hereunder or to which Majority Banks have otherwise
consented. Anything contained in any of the Loan Documents to the contrary
notwithstanding, the Company, the Agents and each Bank hereby agree that (X) no
Bank shall have any right individually to realize upon any of the Collateral
under any Collateral Document or to enforce the Guaranty, it being understood
and agreed that all powers, rights and remedies under the Collateral Documents
and the Guaranty may be exercised solely by the Administrative Agent for the
benefit of the Banks in accordance with the terms thereof, and (Y) in the event
of a foreclosure by the Administrative Agent on any of the Collateral pursuant
to a public or private sale, any Agent or any Bank may be the purchaser of any
or all of such Collateral at any such sale and the Administrative Agent, as
agent for and representative of Banks (but not any Bank or Banks in its or their
respective individual capacities unless Majority Banks shall otherwise agree in
writing) shall be entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Obligations as a credit on
account of the purchase price for any Collateral payable by the Administrative
Agent at such sale.
ARTICLE XII
MISCELLANEOUS
SECTION 12.1. AMENDMENTS. No amendment, modification, termination or
waiver of any provision of this Agreement or of the Notes, or consent to any
departure by the Company therefrom, shall in any event be effective without the
written concurrence of Majority Banks; PROVIDED that no such amendment,
modification, termination, waiver or consent shall, without the consent of each
Bank (with Obligations directly affected in the case of the following clause
(i)): (i) extend the scheduled final maturity of any Loan or Note, or extend the
stated expiration date of any Letter of Credit beyond the Maturity Date, or
reduce the rate of interest (other than any waiver of any increase in the
interest rate applicable to any of the Loans pursuant to the Default Rate) or
fees thereon, or extend the time of payment of interest, principal or fees
thereon, or reduce the principal amount thereof, (ii) release all or
substantially all of the Collateral, release all or substantially all of the
Subsidiaries that are party to the Guaranty from the Guaranty except as
expressly provided in the Loan Documents, (iii) amend, modify, terminate or
waive any provision of this Section 12.1, (iv) reduce the percentage specified
in the definition of Majority Banks, or (v) consent to the assignment or
transfer by the Company of any of its respective rights and obligations under
this Agreement; PROVIDED FURTHER that no such amendment, modification,
termination or waiver shall (1) increase the Commitments of any Bank over the
amount thereof then in effect without the consent of such Bank (it being
understood that amendments, modifications or waivers of conditions precedent,
covenants, Events of Default or of a mandatory reduction of the Commitments
shall not constitute an increase of the Commitment of any Bank, and that an
increase in the available portion of any
60
Commitment of any Bank shall not constitute an increase in the Commitment of
such Bank), (2) no amendment, modification, termination or waiver relating to
the obligations of Banks relating to the purchase or participation in Letters of
Credit shall be effective without the written concurrence of each Issuing Bank
having a Letter of Credit then outstanding or which has not been reimbursed for
a drawing under a Letter of Credit issued by it and of the Administrative Agent,
and (3) no amendment, modification, termination or waiver of any provision of
Article XI or of any provision of this Agreement which, by its terms, expressly
requires the approval or concurrence of any Agent shall be effective without the
written concurrence of such Agent. The Administrative Agent may, but shall have
no obligation to, with the concurrence of any Bank, execute amendments,
modifications, waivers or consents on behalf of that Bank. Any waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given. No notice to or demand on the Company in any case shall
entitle the Company to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 12.1 shall be binding upon each Bank at
the time outstanding, each future Bank and, if signed by the Company, on the
Company.
SECTION 12.2. NOTICES. Except with respect to telephone notifications
specifically permitted pursuant to ARTICLE II, all notices, consents, requests,
approvals, demands and other communications provided for herein shall be in
writing (including telecopy communications) and mailed, telecopied, sent by
overnight courier or delivered:
(a) If to the Company and the Guarantors:
Comfort Systems USA, Inc.
777 Post Oak Boulevard, Suite 500
Houston, Texas 77056
Telephone No.: (713) 830-9600
Telecopy No.: (713) 830-9676
Attention: Jeff Wheeler
(b) If to the Administrative Agent:
Bank One, Texas, N.A.
910 Travis, 7th Floor
Houston, Texas 77002
Telephone No.: (713) 751-6243
Telecopy No.: (713) 751-6199
Attention: Cynthia Cady
or, in the case of any party hereto, such other address or telecopy number as
such party may hereafter specify for such purpose by notice to the other
parties.
(c) If to any Bank, to the address shown on the signature page hereof or
specified by such Bank (or the Administrative Agent on behalf of any Bank)
to the Company.
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All communications shall, when mailed, telecopied or delivered, be
effective when mailed by certified mail, return receipt requested to any party
at its address specified above, or telecopied to any party to the telecopy
number set forth above, or delivered personally to any party at its address
specified above; PROVIDED, that communications to the Administrative Agent
pursuant to ARTICLE II shall not be effective until actually received by the
Administrative Agent, and PROVIDED FURTHER that communications sent by telecopy
after 5:00 p.m., Houston, Texas time, shall be effective on the next succeeding
Business Day.
SECTION 12.3. NO WAIVER; REMEDIES. No failure on the part of any Bank
or the Administrative Agent to exercise, and no delay in exercising, any right
hereunder, under any Note or under any other Loan Document shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right, or
any abandonment or discontinuance of any steps to enforce such right, preclude
any other or further exercise thereof or the exercise of any other right. No
notice to or demand on the Company in any case shall entitle the Company to any
other or further notice or demand in similar or other circumstances. The
remedies herein are cumulative and not exclusive of any other remedies provided
by law, at equity or in any other agreement.
SECTION 12.4. COSTS, EXPENSES AND TAXES. The Company agrees to pay on
demand: (a) all reasonable out-of-pocket costs and expenses of the Syndication
Agent in connection with the preparation, execution and delivery of this
Agreement, the Notes, the other Loan Documents and the other documents to be
delivered hereunder, including the reasonable fees and out-of-pocket expenses of
counsel for the Syndication Agent with respect thereto and with respect to
advising the Syndication Agent as to its rights and responsibilities under this
Agreement, the Notes and the other Loan Documents, and any modification,
supplement or waiver of any of the terms of this Agreement or any other Loan
Document, (b) all reasonable costs and expenses of any Bank and any other holder
of an interest in the Notes, and the Obligations of the Company hereunder and
under the Loan Documents, including reasonable legal fees and expenses, in
connection with the enforcement of this Agreement, the Notes and the other Loan
Documents and (c) reasonable costs and expenses incurred in connection with
third party professional services required by the Syndication Agent, such as
appraisers, environmental consultants, accountants or similar Persons; PROVIDED
THAT prior to any Event of Default hereunder, such Agent will first obtain the
consent of the Company to such expense, which consent shall not be unreasonably
withheld. Without prejudice to the survival of any other obligations of the
Company hereunder and under the Notes, the obligations of the Company under this
Section shall survive the termination of this Agreement or the replacement of
any Agent and each assignment of the Notes.
SECTION 12.5. INDEMNITY.
(a) The Company shall and hereby does indemnify each Agent and each Bank
and each Affiliate thereof and their respective directors, officers,
employees and agents from, and hold each of them harmless against, any and
all losses, liabilities, claims or damages (including reasonable legal
fees and expenses) to which any of them may become subject, insofar as
such losses, liabilities, claims or damages arise out of or result from
any actual or proposed use by the Company of the proceeds of any extension
of credit hereunder or any investigation, litigation or other proceeding
(including any threatened investigation or proceeding) relating to the
foregoing or any of the other Loan Documents, including,
62
without limitation, any of the foregoing relating to the violations of,
noncompliance with or liability under any Environmental Law applicable to
the operations of the Company, any of its Subsidiaries or any of their
respective Property, and the Company shall reimburse each Agent, each Bank
and each Affiliate thereof and their respective directors, officers,
employees and agents, upon demand for any expenses (including legal fees)
reasonably incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
expenses incurred by reason of the gross negligence or willful misconduct
of the Person to be indemnified (the "INDEMNIFIED OBLIGATIONS").
(b) WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED
HEREUNDER SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL
INDEMNIFIED OBLIGATIONS: (I) ARISING OUT OF OR RESULTING FROM THE ORDINARY
SOLE OR CONTRIBUTORY NEGLIGENCE OF SUCH PERSON OR (II) IMPOSED UPON SAID
PARTY UNDER ANY THEORY OF STRICT LIABILITY. Without prejudice to the
survival of any other obligations of the Company hereunder and under the
other Loan Documents, the obligations of the Company under this Section
shall survive the termination of this Agreement and the other Loan
Documents and the payment of the Obligations or the assignment of the
Notes.
SECTION 12.6. RIGHT OF SETOFF. Without limiting the remedies provided
for in ARTICLE X, each Bank is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits held and other indebtedness owing by such Bank, or any branch,
subsidiary or Affiliate, to or for the credit or the account of the Company
against any and all the Obligations of the Company now or hereafter existing
under this Agreement and the other Loan Documents and other obligations of the
Company held by such Bank, irrespective of whether or not such Bank shall have
made any demand under this Agreement, its Note or the Obligations and although
the Obligations may be unmatured. The rights of each Bank under this Section are
in addition to other rights and remedies (including other rights of setoff)
which such Bank may have.
SECTION 12.7. GOVERNING LAW. This Agreement, all Notes, the other Loan
Documents and all other documents executed in connection herewith shall be
deemed to be contracts and agreements executed by the Company and each Bank
under the laws of the State of New York and of the United States of America and
for all purposes shall be construed in accordance with, and governed by, the
laws of said state and of the United States of America. Without limitation of
the foregoing, nothing in this Agreement, or in the Notes or in any other Loan
Document shall be deemed to constitute a waiver of any rights which any Bank may
have under applicable federal legislation relating to the amount of interest
which such Bank may contract for, take, receive or charge in respect of the Loan
and the Loan Documents, including any right to take, receive, reserve and charge
interest at the rate allowed by the law of the state where any Bank is located.
Each Agent, each Bank and the Company further agree that insofar as the
provisions of Article 5069-1.04, of the Revised Civil Statutes of Texas, as
amended, are applicable to the determination of the Highest Lawful Rate with
respect to the Notes and the Obligations hereunder and under the other Loan
Documents, the indicated rate ceiling of such Article shall be applicable;
PROVIDED, HOWEVER, that to the extent permitted by such Article, the
Administrative Agent may from time to time by notice to the Company revise the
election of
63
such interest rate ceiling as such ceiling affects the then current or future
balances of the Loans. The provisions of Article 5069-15.01 ET SEQ. do not apply
to this Agreement, any Note issued hereunder or the other Loan Documents.
SECTION 12.8. INTEREST. Each provision in this Agreement and each
other Loan Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise agreed to be paid, to the Administrative Agent or
any Bank, or charged, contracted for, reserved, taken or received by the
Administrative Agent or any Bank, for the use, forbearance or detention of the
money to be loaned under this Agreement or any Loan Document or otherwise
(including any sums paid as required by any covenant or obligation contained
herein or in any other Loan Document which is for the use, forbearance or
detention of such money), exceed that amount of money which would cause the
effective rate of interest to exceed the Highest Lawful Rate, and all amounts
owed under this Agreement and each other Loan Document shall be held to be
subject to reduction to the effect that such amounts so paid or agreed to be
paid, charged, contracted for, reserved, taken or received which are for the
use, forbearance or detention of money under this Agreement or such Loan
Document shall in no event exceed that amount of money which would cause the
effective rate of interest to exceed the Highest Lawful Rate. Anything in any
Note or any other Loan Document to the contrary notwithstanding, the Company
shall not be required to pay unearned interest on any Note and the Company shall
not be required to pay interest on the Obligations at a rate in excess of the
Highest Lawful Rate, and if the effective rate of interest which would otherwise
be payable under such Note and such Loan Documents would exceed the Highest
Lawful Rate, or if the holder of such Note shall receive any unearned interest
or shall receive monies that are deemed to constitute interest which would
increase the effective rate of interest payable by the Company under such Note
and the other Loan Documents to a rate in excess of the Highest Lawful Rate,
then (a) the amount of interest which would otherwise be payable by the Company
shall be reduced to the amount allowed under applicable law and (b) any unearned
interest paid by the Company or any interest paid by the Company in excess of
the Highest Lawful Rate shall in the first instance be credited on the principal
of the Obligations of the Company (or if all such Obligations shall have been
paid in full, refunded to the Company). It is further agreed that, without
limitation of the foregoing, all calculations of the rate of interest contracted
for, reserved, taken, charged or received by any Bank under the Notes and the
Obligations and under the other Loan Documents are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate, and shall be
made, to the extent permitted by usury laws applicable to such Bank, by
amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Notes and this Agreement all interest at any time contracted
for, charged or received by such Bank in connection therewith. Furthermore, in
the event that the maturity of any Note or other obligation is accelerated or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under applicable law may never include more than the
maximum amount allowed by applicable law and excess interest, if any, provided
for in this Agreement, any Note or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be refunded to the Company.
SECTION 12.9. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations, warranties and covenants contained herein or made in writing by
the Company in connection herewith and the other Loan Documents shall survive
the execution and delivery of this Agreement, the Notes and the other Loan
Documents, the termination of the Commitments
64
of the Banks and will bind and inure to the benefit of the respective successors
and assigns of the parties hereto, whether so expressed or not, PROVIDED, that
the Commitments of the Banks shall not inure to the benefit of any successor or
assign of the Company.
SECTION 12.10. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) All covenants, promises and agreements by or on behalf of the Company
or the Banks that are contained in this Agreement shall bind and inure to
the benefit of their respective permitted successors and assigns. Neither
the Company nor any Guarantor may assign or transfer any of its rights or
obligations hereunder.
(b) Any of the Banks may assign to or sell participations to one or more
banks of all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including all or a portion of its
Commitment, the Advances and the Obligations of the Company owing to it
and the Notes); PROVIDED, that the participating banks or other entities
shall be entitled to the cost protection provisions contained in Article
II and SECTION 12.4 and the Company shall continue to deal solely and
directly with the Administrative Agent in connection with its rights and
obligations under this Agreement and the other Loan Documents. Except with
respect to cost protections provided to a participant pursuant to this
paragraph and the items listed in SECTION 12.1 hereof, no participant
shall be a third party beneficiary of this Agreement nor shall it be
entitled to enforce any rights provided to the Banks against the Company
under this Agreement. Notwithstanding the foregoing, no Bank shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any
other Loan Document except to the extent such amendment or waiver would
(i) extend the final scheduled maturity of any Loan, Note or Letter of
Credit (unless such Letter of Credit is not extended beyond the Maturity
Date) in which such participant is participating, or reduce the rate or
extend the time of payment of interest or fees thereon (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the
amount of the participant's participation over the amount thereof then in
effect (it being understood that a waiver of any Default or Event of
Default or of a mandatory reduction in the Total Commitment, shall not
constitute a change in the terms of such participation, and that an
increase in Commitment or any Loan shall be permitted without the consent
of any participant if the participant's participation is not increased as
a result thereof).
(c) A Bank may assign to any other Bank or Banks or to any Affiliate of a
Bank and, with the prior written consent of the Company (so long as no
Event of Default exists) and the Administrative Agent (which consent shall
not be unreasonably withheld), a Bank may assign to one or more other
Eligible Assignees all or a portion of its interests, rights, and
obligations under this Agreement and the other Loan Documents (including
all or a portion of its Commitment and the same portion of the Loans and
other Obligations of the Company at the time owing to it and the Note held
by it); PROVIDED, HOWEVER, that (i) each such assignment shall be in a
minimum principal amount of not less than $5,000,000.00, or 100% of such
Bank's outstanding Loans, all Types of Loans and shall be of a constant,
and not a varying, percentage of all the assigning Bank's Commitment,
65
rights and obligations under this Agreement, (ii) the parties to each such
assignment shall execute and deliver to the Administrative Agent, for its
acceptance, an Assignment and Acceptance, substantially in the form of
EXHIBIT 12.10(C) hereto, in form and substance satisfactory to the
Administrative Agent (an "ASSIGNMENT AND ACCEPTANCE") and any Note subject
to such assignment and (iii) no assignment shall be effective until
receipt by the Administrative Agent of a reasonable service fee from the
assignee in respect of said assignment equal to $2,000.00. Upon such
execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which
effective date (unless otherwise agreed to by the assigning Bank, the
Eligible Assignee thereunder and the Administrative Agent) shall be at
least five Business Days after the execution thereof, (x) the Eligible
Assignee thereunder shall be a party hereto and to the other Loan
Documents and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Bank hereunder and under the other
Loan Documents and (y) the assignor Bank thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its
obligations under this Agreement and the other Loan Documents (and, in the
case of an Assignment and Acceptance covering all of the remaining portion
of an assigning Bank's rights and obligations under this Agreement and the
other Loan Documents, such Bank shall cease to be a party hereto).
(d) Notwithstanding any other provision herein, any Bank may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this section, disclose to the assignee or
participant or proposed assignee or participant, any information relating
to the Company furnished to such Bank by or on behalf of the Company.
SECTION 12.11. CONFIDENTIALITY. Each Bank agrees to exercise its best
efforts to keep any information delivered or made available by the Company to it
which is clearly indicated to be confidential information, confidential from
anyone other than Persons employed or retained by such Bank who are or are
expected to become engaged in evaluating, approving, structuring or
administering the Loans; PROVIDED that nothing herein shall prevent any Bank
from disclosing such information (a) to any other Bank, (b) pursuant to subpoena
or upon the order of any court or administrative agency, (c) upon the request or
demand of any regulatory agency or authority having jurisdiction over such Bank,
(d) which has been publicly disclosed, (e) to the extent reasonably required in
connection with any litigation to which the Administrative Agent, any Bank, the
Company or its respective Affiliates may be a party, (f) to the extent
reasonably required in connection with the exercise of any remedy hereunder, (g)
to such Bank's legal counsel and independent auditors and (h) to any actual or
proposed participant or assignee of all or part of its rights hereunder which
has agreed in writing to be bound by the provisions of this Section. Each Bank
will promptly notify the Company of any information that it is required or
requested to deliver pursuant to clause (b) or (c) of this Section and, if the
Company is a party to any such litigation, clause (e) of this Section.
SECTION 12.12. PRO RATA TREATMENT.
66
(a) Except as otherwise specifically permitted hereunder, each payment or
prepayment of principal, if permitted under this Agreement, and each
payment of interest with respect to an Advance shall be made pro rata
among the Banks.
(b) Each Bank agrees that if, through the exercise of a right of banker's
Lien, setoff or claim of any kind against the Company as a result of which
the unpaid principal portion of the Notes and the Obligations held by it
shall be proportionately less than the unpaid principal portion of the
Notes and Obligations held by any other Bank, it shall be deemed to have
simultaneously purchased from such other Bank a participation in the Notes
and Obligations held by such other Bank, in the amount required to render
such amounts proportional; PROVIDED, HOWEVER, that if any such purchase or
purchases or adjustments shall be made pursuant to this Section and the
payment giving rise thereto shall thereafter be recovered, such purchase
or purchases or adjustments shall be rescinded to the extent of such
recovery and the purchase price or prices or adjustments restored without
interest. Each Bank purchasing participations pursuant to this clause may
exercise all rights of collection, set-off and banker's liens with respect
to such participations as if such Bank were a holder of a direct Loan to
the Company.
SECTION 12.13. SEPARABILITY. Should any clause, sentence, paragraph or
Section of this Agreement be judicially declared to be invalid, unenforceable or
void, such decision will not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or parts
of this Agreement so held to be invalid, unenforceable or void will be deemed to
have been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein.
SECTION 12.14. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute one and the same
agreement. Any Subsidiary of the Company that executes this Agreement after the
date of this Agreement shall, upon such execution, become a party hereto as a
Guarantor.
SECTION 12.15. INTERPRETATION.
(a) In this Agreement, unless a clear contrary intention appears:
(i) the singular number includes the plural number and VICE VERSA:
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other words
of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(iv) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a
particular capacity excludes such Person in any
67
other capacity or individually, PROVIDED at nothing in this clause
is intended to authorize any assignment not otherwise permitted by
this Agreement;
(v) except as expressly provided to the contrary herein, reference
to any agreement, document or instrument (including this Agreement)
means such agreement, document or instrument as amended,
supplemented or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms
hereof, and reference to any Note or other note includes any Note
issued pursuant hereto in extension or renewal thereof and in
substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to any
Article, Section, Schedule or Exhibit means such Article or Section
hereof or such Schedule or Exhibit hereto;
(vii) the words "including" (and with correlative meaning "include")
means including, without limiting the generality of any description
preceding such term;
(viii) with respect to the determination of any period of time,
except as expressly provided to the contrary, the word "from" means
"from and including" and the word "to" means "to but excluding"; and
(ix) reference to any law, rule or regulation means such as amended,
modified, codified or reenacted, in whole or in part, and in effect
from time to time.
(b) The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
(c) No provision of this Agreement shall be interpreted or construed
against any Person solely because that Person or its legal representative
drafted such provision.
(d) In the event of any conflict between the specific provisions of this
Agreement and the provisions of any application pertaining to any Letter
of Credit, the terms of this Agreement shall control.
SECTION 12.16. SUBMISSION TO JURISDICTION.
(a) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW
YORK, IN NEW YORK COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT
OF NEW YORK AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING. THE
COMPANY AND EACH GUARANTOR FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
68
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED
MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN SECTION 12.2 AND
WITH RESPECT TO ANY GUARANTOR, AT THE ADDRESS PROVIDED ON SCHEDULE 6.16
HERETO, SUCH SERVICE TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH
MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT
OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION. THE SUBMISSION TO JURISDICTION CONTAINED IN THIS
SECTION IS NON-EXCLUSIVE.
(b) EACH OF THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN
ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH
COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 12.17. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND EACH
GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM OR RELATING TO ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 12.18. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT
(INCLUDING THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND THE OTHER LOAN
DOCUMENTS CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE
TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS
69
OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
[Remainder of page intentionally left blank]
70
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
BORROWER:
COMFORT SYSTEMS USA, INC.
By: /s/___________________________
J. Gordon Beittenmiller
Senior Vice President and
Chief Financial Officer
GUARANTORS:
ACCURATE AIR SYSTEMS, INC.
ACCU-TEMP LP, INC.
ACCU-TEMP, LLC
ACI MECHANICAL, INC.
ADAMS MECHANICAL SERVICES, INC.
ADAMS MECHANICAL, SERVICES, INC.
AIR POWER SYSTEMS, INC.
AIR POWER SYSTEMS, INC.
AIR SOLUTIONS, INC.
ALLSTATE MECHANICAL, INC.
AMERICAN REFRIGERATION CONTRACTORS, INC.
ARMANI PLUMBING & MECHANICAL
ATLAS AIR CONDITIONING COMPANY
ATLAS COMFORT SERVICES USA, INC.
BATCHELOR'S MECHANICAL CONTRACTORS, INC.
BCM CONTROLS CORPORATION
CEL, INC.
CENTRAL MECHANICAL CONSTRUCTION CO., INC.
CENTRAL MECHANICAL INC.
CONTRACT SERVICE, INC.
CS44 ACQUISITION CORPORATION
DESIGN MECHANICAL INCORPORATED
DYNASTAR, INC.
E.L. PRUITT COMPANY
EASTERN HEATING & COOLING, INC.
EASTERN REFRIGERATION CO., INC.
EDS, INC.
F&G MECHANICAL CORPORATION
FRED HAYES MECHANICAL CONTRACTORS, INC.
FREEWAY HEATING & AIR CONDITIONING, INC.
GMS AIR CONDITIONING, INC.
GOTHAM AIR CONDITIONING SERVICE, INC.
GULFSIDE MECHANICAL, INC.
H & H PLUMBING & HEATING, INC.
HARRIS GENERAL & MECHANICAL CONTRACTORS, INC.
HELM CORPORATION
HELM CORPORATION SAN DIEGO
HESS MECHANICAL CORPORATION
HILLCREST SHEET METAL, INC.
INDUSTRIAL COOLING INC.
JAMES AIR CONDITIONING ENTERPRISES, INC.
KILGUST MECHANICAL, INC.
KUEMPEL SERVICE, INC.
LAWRENCE SERVICE, INC.
LOWRIE ELECTRIC CO., INC.
MANDELL MECHANICAL CORPORATION
MARTIN HEATING, INC.
MAXIMUM REFRIGERATION & AIR CONDITIONING
CORPORATION
MEADOWLANDS FIRE PROTECTION CORP.
MECHANICAL SERVICE GROUP, INC.
MJ MECHANICAL SERVICES, INC.
NOGLE & BLACK MECHANICAL, INC.
NORTH AMERICAN MECHANICAL, INC.
NORTH JERSEY MECHANICAL CONTRACTORS, INC.
OK SHEET METAL & AIR CONDITIONING, INC.
QUALITY AIR HEATING & COOLING, INC.
RADNEY PLUMBING, INC.
RIVER CITY MECHANICAL, INC.
RIVER CITY MECHANICAL, INCORPORATED
ROSS & ASSOCIATES
S&K AIR CONDITIONING CO., INC.
S. I. GOLDMAN
S.M. LAWRENCE COMPANY, INC.
SALMON & ALDER, INC.
SEASONAIR, INC.
SOUTHERN BLUEGRASS MECHANICAL, INC.
STANDARD HEATING & AIR CONDITIONING COMPANY
TARGET CONSTRUCTION, INC.
TECH HEATING AND AIR CONDITIONING, INC.
TECH MECHANICAL, INC.
TEMP-RIGHT SERVICE, INC.
TEMPRITE AIR CONDITIONING AND
REFRIGERATION, INC.
THE CAPITAL REFRIGERATION COMPANY
THE FAGAN COMPANY
THE HARVEY ROBBIN COMPANY
TRI-CITY MECHANICAL, INC.
TROOST SERVICE CO.
UNITED ENVIRONMENTAL SERVICES, INC.
WALKER-J-WALKER, INC.
WESTERN BUILDING SERVICES, INC.
WOODCOCK & ASSOCIATES, INC.
By: /s/______________________________
J. Gordon Beittenmiller
Vice President
Amount of Commitment: ADMINISTRATIVE AGENT/BANK:
$32,000,000.00 BANK ONE, TEXAS, N.A.,
as Administrative Agent and Individually,
as a Bank
By:/s/_______________________________
Name: _________________________________
Title: __________________________________
Address for Notice:
910 Travis, 7th Floor
Houston, Texas 77002
Attn: John Elan & Barry Kelly
Amount of Commitment: SYNDICATION AGENT/ BANK:
$32,000,000.00 BANKERS TRUST COMPANY
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
130 Liberty Street, 30th Floor
New York, NY 10006
Amount of Commitment: CO-AGENT/ BANK:
$29,000,000.00 CREDIT LYONNAIS, New York Branch
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
2200 Ross Avenue, Suite 4400 West
Dallas, Texas 75201
Attn: Blake Wright
Amount of Commitment: DOCUMENTATION AGENT/ BANK:
$32,000,000.00 NATIONSBANK
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
700 Louisiana Street
Houston, TX 77002
Attn: Richard Nichols
Amount of Commitment: BANK:
$12,500,000.00 THE LONG-TERM CREDIT BANK OF JAPAN, LTD.
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
2200 Ross Avenue, Suite 4700 West
Dallas, Texas 75201
Attn: Bruce Frey
Amount of Commitment: BANK:
$17,500,000.00 SOCIETE GENERALE
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
1111 Bagby, Suite 2020
Houston, Texas 77002
Attn: Thierry Namuroy
Amount of Commitment: CO-AGENT/BANK:
$25,000,000.00 NATIONAL CITY BANK OF COLUMBUS,
AS AND INDIVIDUALLY, AS A BANK
By:/s/_____________________________________
Michael J. Durbin
Assistant Vice President
Address for Notice:
155 East Broad Street, 3rd Floor
Columbus, Ohio 43251-0034
Attn: Michael Durbin
Amount of Commitment: BANK:
$15,000,000.00 STAR BANK, NATIONAL ASSOCIATION
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
425 Walnut Street
P.O. Box 1038
Cincinnati, Ohio 45201-1038
Attn: William J. Hronek
Amount of Commitment: BANK:
$20,000,000.00 UNION BANK OF CALIFORNIA, N.A.
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
445 South Figueroa St., 16th Floor
Los Angeles, CA 90071-1655
Attention: J. Scott Jessup
Amount of Commitment: BANK:
$15,000,000.00 BANK OF MONTREAL
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
115 South LaSalle Street, 12W
Chicago, IL 60603
Attn: Amy Dumser
Amount of Commitment: BANK:
$25,000,000.00 BANK OF NOVA SCOTIA
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
1100 Louisiana Street
Houston, TX 77002
Attention: Rick Hawthorne
Amount of Commitment: BANK:
$15,000,000.00 COMERICA BANK
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
4100 Spring Valley Road, Suite 900
Dallas, TX 75244
Attention: Mark Grover
Amount of Commitment: BANK:
$5,000,000.00 BANK POLSKA
By:_/s/_____________________________
Name: ______________________________
Title: _______________________________
Address for Notice:
470 Park Avenue South, 15th Floor
New York, NY 10016
Attention: Harvey Winter